Following reports earlier in the day, it was confirmed last night (29 October) that the National Living Wage, the minimum wage for those 21 and over, will rise by 6.7% to £12.21 per hour from April next year.
The increase is higher than the Low Pay Commission’s central estimate of 5.8%, which was set out last month, and well above the current inflation rate.
The minimum wage rate for 18 to 20-year-olds will rise 16.3% to £10 per hour, reflecting the Government’s plans to eventually establish a single adult rate.
The 16 to 17-year-old rate will rise 18% to £7.55, with the same increase applying to the apprentice rate.
According to UKHospitality, the increases will add £1.9bn to the hospitality wage bill.
“These wage rises are well above expectations, and make the Budget even more important,” says Kate Nicholls, chief executive of UKHospitality.
“Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage – threatening jobs, future investment, price increases for consumers, and business viability.
“Businesses will be approaching today’s Budget with even more trepidation following this news. Our companies desperately want to be able to support higher wages for staff but what is being asked of them is simply unsustainable if taxes are going to shoot up at the same time.
“In light of this, it’s paramount that the Budget includes targeted measures to support the high street and the cost burden it is facing. That must start with addressing the broken business rates system and implementing a lower, permanent and universal level for hospitality.”
Businesses have been bracing themselves for the Budget, with the Chancellor also expected to announce a rise in National Insurance contributions (NICs) for employers.
UKHospitality has been calling for the Chancellor to make the tax burden for the sector ‘more sustainable’ in the Budget, primarily through the introduction of a lower, permanent and universal multiplier on business rates for hospitality.
Earlier this month, the trade body warned that the rates burden on the hospitality sector is set to increase to £914m if current relief ends as planned on 31 March next year.
Some 170 hospitality bosses have backed a letter, written by UKHospitality, calling for a lower level of business rates for the sector.
