The British Retail Consortium (BRC) has responded to Vince Cable’s announcement that the National Minimum Wage will be increased by 1.9% in October.
BRC director general Helen Dickinson said: “The Government has made a very sensible decision to show restraint by limiting this October’s increase to 1.9%.
“This strikes the right balance between helping workers on the lowest incomes and reflecting the realities of current conditions.
“We strongly support the minimum wage as a floor for decent pay. 97.3% of retail employees are paid above the minimum wage but an excessive increase would have affected related pay scales and priced young people in particular out of work.”
But employer support organisation The Forum of Private Business was more critical of the plans to hike wages.
Head of Policy at the Forum, Alex Jackman, said: “In the current business climate any additional cost is an unwelcome one. However, we appreciate that for the second year running the Government has implemented an increase in the National Minimum Wage that is below inflation, and for this restraint employers will no doubt be thankful.
“Many of our members pay above the National Minimum Wage but we are in difficult economic times and the government has recognised that any increase has a wage inflation rate higher up the scale.
“To put the wage rise in context, at the Budget the Government announced an Employment Allowance to save all employers £2,000 on their staffing costs, to be implemented from April 2014.
“As the increase in National Minimum Wage comes into effect this October, today’s increase will mean a business employing nine or more full time members of staff on the minimum wage will see over half of that wiped out before it even comes in.
“Given this impact, the country categorically cannot afford the misleadingly titled ‘living wage’ in its current predicament.”