NLW rises by 40.5% in 5 years

By Amelie Maurice-Jones

- Last updated on GMT

Rising rates: We take a look back at national living wage across five years (Credit: Getty/Hispanolistic)
Rising rates: We take a look back at national living wage across five years (Credit: Getty/Hispanolistic)

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The national living wage (NLW) is set to rise to “at least £11” next April, meaning it will have soared by nearly 40.5% in the past five years.

Speaking at the Conservative Party Conference in Manchester on Monday 2 October, Chancellor Jeremy Hunt announced the NLW would be increased from £10.42 per hour to “at least £11”, equating to a pay rise for some 2m workers across the country.

The NLW​ is the lowest amount workers aged 23 and over can be paid per hour by law, and currently sits at £10.42 an hour.

This means NLW is set to increase by at least 12.36% next year. .

From April 2018 to March 2019, NLW wage sat at £7.83. This means if NLW rises to £11 next spring it will have increased by almost 40.5% over five years.

The rates are decided by the Government each year, with their decision influenced by the advice of independent advisory group, the Low Pay Commission.

The British Institute of Innkeeping chief executive Steve Alton said: “Our sector provides fantastic opportunities for local skilled employment, with incredible training and development opportunities & rapid career growth.

"We support fair pay for everyone, but the pressure of increased wages for our members is adding yet another cost into their small businesses which simply is not sustainable for many.

“After several years of chronically high inflation in food and drink, and unfair energy contracts and huge price increases, they now need urgent investment and support from Government to be able to survive and thrive.

"Without it, we stand to lose these essential pub businesses, providing local employment, supporting local supply chains, and delivering tax revenue into the treasury.”

Wage increases

From April 2022 to March 2023 NLW wage sat at £9.50 for those 23 and over.

Before April 2021 NLW was for those aged 25 and over. From April 2020 to March 2021 the national living wage was £8.72, and in the comparable period from 2019 to March 2020 it was £8.21.

UKHospitality chief executive Kate Nicholls said the people that work in hospitality are the lifeblood of venues across the country and it is right that they are paid fairly for their valuable work.

She continued: “Businesses in the sector strive to do just that but there will be concerns that such an increase in the National Living Wage is yet another cost that will further squeeze businesses margins and, ultimately, viability. This is in addition to wages rising by 12% in the sector over the past year, according to our recent member survey.

“Addressing the cost pressures hospitality businesses are facing is the bare minimum we need to see from the chancellor at the Autumn Statement. A commitment to extend business rates relief and freeze the multiplier is essential to avoid a billion-pound bill that could tip many businesses over the edge.”

In his speech, Hunt said the Government was focused on “bringing down inflation”, adding the level of tax was currently “too high”.

The chancellor also announced the Government would look at the way the benefits sanctions regime works as well as a freeze to civil service hiring, which he said would save £1bn a year.

However, the Night Time Industries Association chief executive Michael Kill called the move​ “nothing short of a slap in the face” for businesses that are “already struggling”.

Hard hit

One Suffolk-based operator told The Morning Advertiser​ pubs would not be able to “absorb” an increase to the NLW as the sector continues to face “unrivalled pressure”.

He said: “There is a cost and a consequence to everything. The whole hospitality sector will agree our beleaguered team members need to be paid more.

“But just like doctors, nurses and a whole host of other hard pressed and highly valued workers, the obvious question is how will such further increases be paid for?

“The truth is most employers in hospitality will not be able absorb the cost of meeting this increase as margins have been already slashed - it will have to follow through into increased prices for most in the sector.”

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