Earlier this month, the Government revealed it had set out new considerations for the Low Pay Commission (LPC) when recommending next year’s national living wage (NLW) and national minimum wage (NMW).
The LPC will consult with employers, trade unions and workers on narrowing the gap between the 18 to 20-year-old rate of the NMW and NLW before putting forward recommendations on achieving a single adult rate in the years ahead.
Last year’s Budget saw NLW increase by 6.7% to £12.21 an hour, which came into force in April 2025.
NMW for 18 to 20-year-olds also saw a rise from £8.60 to £10 an hour - a 16% hike and the largest increase on record.
Should the recent proposals go ahead, it would mean workers aged 18 and over would all earn the same.
Marc Bridgen, owner of the Dog at Wingham highlighted how the change would affect his Kent pub.
“The impact on the business is another increase in our wage cost to state the obvious, but I also don’t think it’s fantastic to 18 to 21-year-olds. It gives them a competitive advantage,” he said.
“If you’ve got an 18-year-old who you can train up and that [opportunity] is gone because we have to pay more, it will make it harder for 18, 19, 20 and 21-year-olds to get the experience to kick start their career.”
Increase cost nightmare
He added: “It’s a nightmare for employers to increase our cost base. Younger people have less experience and should be paid less, that’s how it is.
“Hospitality is a huge employer of young people who are already getting service charge as well. They’re earning good money for their age.”
Multiple operator Heath Ball of Frisco Pubs echoed Bridgen’s comments around pushing up the cost of trading.
“It’s difficult because you’re giving them a chance at a career and a job who have no experience. It’s expensive,” Ball said.
“They [staff] should be paying you for the amount of effort it takes, you train them how to act so they can get a job somewhere else.
“It’s difficult. I get what the Government is trying to do but it’s pushing up the cost of business.”
Basing wages on the skills employees bring to the business would be a better move, according to Rob Barr from the Onslow Arms in Loxwood, West Sussex.
Introducing a single wage rate wouldn’t be a good decision, he highlighted.
Growth warning
Barr said: “It teaches people the wrong habits. I do believe in a system where we should be upskilling the team and rewarding them for it. Whether that’s for an hourly scheme, weighted Tronc systems or in-house progression scheme.
“[A single wage rate is] unfair to those who are aged 22 and up. I do believe in a high wage, high skilled economy but at a step level that is sustainable.”
Moreover, owner of the Unruly Pig in Bromeswell, Suffolk, Brendan Padfield said the move was a further attack on small businesses and hospitality.
“It perhaps speaks volumes that HM Government’s press release has a supportive quote from Paul Novak the TUC General Secretary but not one from business,” he added.
“This is yet further proof the Government has lost the plot. They recognise that to pay for the public sector, UK economic growth is absolutely essential, yet this further expense will just help further kill growth.
“It is generally recognised last year’s Budget national insurance and minimum wage increases has just fed inflation and caused job losses. Our inflation rate now compares very unfavourably with comparator countries and growth is at best feeble.
“But to burgeon businesses with yet further expense would be the death knell for lots of small businesses. The last Budget was economically incoherent as it killed growth. This further attack on small businesses and hospitality in particular shows Labour’s true colours as economically incompetent.”
Furthermore, earlier this month (August), UKHospitality warned against a rapid increase in wage rates without considering the broader economic context.
Chair Kate Nicholls said: “The ambition is right, but the timing and pace of increases must be carefully considered.
“The remit’s publication is already six months later than usual, forcing adjustments to forecasting and planning.
“Despite this, it’s positive this is a maintain remit, not a lower one, as is the recognition of taking into account the wider macro-economic circumstances and challenging labour market.”
