Minimum wage rise is latest burden for hosts

by Tony Halstead Pubs face a big increase in employment costs from 1 October when the national minimum wage goes up by 30p an hour. The increase to £4.50 per hour will also impact on wage differentials, with JD Wetherspoon claiming the combined effect will add £2m to its annual wage bill. Managed pub operator Laurel said a further proposed increase up to £4.85 in 12 months' time could mean a review of its policy of paying staff above minimum wage levels. And independent brewer Daniel Thwaites has warned that minimum wage increases and other payroll taxes "cannot be funded through thin air". Federation of Licensed Vic-tuallers Associations chief executive Tony Payne believes many tenants and licensees of smaller pubs will cut down on recruitment and work extra shifts themselves as the increased costs begin to bite. From 1 October, the minimum wage will rise from £4.20 to £4.50 with rates for 18 to 22-year-olds rising from £3.60 to £3.80. Laurel, which employs 10,000 people, says its own annual pay review takes place at the same time. "While our pay rates will continue to be above minimum levels if the rate rises to £4.85 next year, as indicated, we would have to reassess whether we could still afford to maintain this policy. "We want to treat our people well, but we can only run so far ahead as far pay levels are concerned," said human resources manager Keith Luxom. A spokesman for Lancashire brewer and pub operator Thwaites said: "This increase is just another in the round of rises felt through employment and legislation changes. When we set our annual budget all this has to be weighed into the equation, and unfortunately it is the consumer who inevitably pays in the end." Managing director Paul Baker said that the Government couldnot impose financial burdens and expect companies to find the extra money through thin air. Payne said small pub businesses had seen staff overhead costs increase dramatically over the past five years. "In 1998 staff costs accounted for about 8% of the turnover of a typical small pub, but today the figure has risen to 13%. It means licensees are looking hard at their staff overheads and inevitably are putting in more hours themselves," added Payne.