Affordability key to Living Wage

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Responding to today’s Budget Statement, the ALMR has welcomed moves to encourage investment in businesses and urged the Government ensure that debate around the new National Living Wage takes into account overall employment costs.

ALMR Chief Executive Kate Nicholls said: “It is encouraging hearing the Chancellor talk about the need to create more jobs and giving employers greater powers to invest in their staff and businesses – and we are delighted that the Chancellor has responded positively to our calls for a higher Annual Investment Allowance and training tax credit to underpin this. Licensed hospitality has shown how much investment in communities and people it can deliver over recent years and we need to make sure that this can be sustained, not undermined, if we are to play our part in delivering the additional jobs and apprenticeships the Chancellor wants.

“For that reason, we need to make sure that the Government takes into account legitimate business concerns in future discussions regarding the new National Living Wage – and crucially how it will relate to the NMW for younger workers. We need a thoughtful approach that will take into account the amount our workers take home, their total earnings and benefits such as pensions not just the headline hourly rate. We also need some sensitivity surrounding the timetable for introduction, with wage rounds currently planned around April.

“The Chancellor acknowledged that the change would hit employment in certain sectors and we would urge him to go further and faster in introducing changes to National Insurance Contributions for small businesses and in cutting corporation tax. It will be critical for the timings of the changes to be aligned and restricting these changes only to the Employment Allowance will limit the impact. We would like to see the abolition of jobs taxes extended from under 21s to under-25s.
“The Chancellor is right, the best way to help the lower paid workers is to allow them to keep more of the money they earn and the changes announced to Personal Allowance are set to put an extra £900 per year in the pockets of our workforce and consumers. Measures such as these have the dual effect of aiding both businesses and staff and we urge the Government to bear this in mind when he comes to consult on the National Living Wage. Having a higher hourly rate benefits no one if it is at the expense of a job.

“Finally, the Chancellor spoke of the need to increase training and create more jobs across the economy. Pubs doubled the number of apprenticeship starts last year and crucially all our training results in a real job at the end of it. We need to reduce the red tape surrounding apprenticeships and putting employers in the driving seat and rewarding those who invest in training through the PAYE regime is good news and something we have been campaigning on for some time. It is encouraging to see these acknowledged as vital areas for investment.

“The Government is clearly eager to provide businesses with a platform in which to invest. The key going forward must be that any increased costs are proportionate, sustainable and take into account the wider costs of doing business.”



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