BBPA urges restraint on minimum wage increases

By Claire Churchard contact

- Last updated on GMT

Pay up: the Low Pay Commission has been urged to 'take caution' when increasing statutory wage rates
Pay up: the Low Pay Commission has been urged to 'take caution' when increasing statutory wage rates

Related tags: Minimum wage, National living wage, Bbpa, Low pay commission

The British Beer & Pub Association (BBPA) has urged the Low Pay Commission (LPC) to “take caution in increasing all statutory wage rates in April 2019” as pubs face a tough trading period.

Citing concerns about the ongoing impact of Brexit uncertainty and weak consumer confidence in pubs, the BBPA made the case for minimum wage restraint in its submission to the LPC’s annual consultation on increasing the national living wage (NLW) and national minimum wage (NMW).

Upward pressure on pay

It argued that an increasing NMW puts upward pressure on all wage rates as employers try to maintain pay differentials between junior and senior roles. The BBPA said: “Wages can contribute up to 30% of a pub's costs and each increase of 1% to the NLW adds £12m to the sector’s wage bill, which would be more beneficial to the industry if it could be reinvested to encourage growth.”

The BBPA has also called for “an exception for pub companies who cannot currently use Apprenticeship Levy funding to support their leased and tenanted pubs, as they do not employ the staff directly”. This call was prompted by ongoing concerns about future immigration policy and maintaining a talent pipeline for pubs, which often rely on employees from the European Union.  

The consultation submission urged support for zero hours or minimum guaranteed hours to ensure pubs have flexibility to manage the peaks and troughs in demand throughout the year.

“Flexible hours are necessary… and provide an important balance for both employers and employees who often have other priorities,” the BBPA said. “There would be a real law of unintended consequences if different pay rates were required for employees on [flexible] contracts.”

Job creation

BBPA chief executive Brigid Simmonds said: “The British brewing and pub industry is an important job creator for the nation, supporting 900,000 careers and providing vital employment opportunities for as many as one in 13 young adults.

"Many of these jobs are in pubs and there is little evidence to suggest that an increase to the NLW improves retention or productivity in our sector, where the potential for increased productivity through automation is limited.

“While we support, in principle, linear increases to the NLW and the Government’s desire to see increased wages across the economy, this needs to be balanced with the rising inflation that is driving up costs for businesses. It is vitally important to ensure that the industry doesn’t suffer from a significant increase in its wage bill that could hinder job creation and growth."

Related topics: Legislation

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