Chancellor upsets everyone with Living Wage rise

Rishi Sunak
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Chancellor Rishi Sunak (pictured) announced a rise in the National Living Wage from £8.72 to £8.91 an hour in his Spending Review (25 November 2020).

The new rate – a 2.2% increase – will be extended to workers aged 23 and over from April 2021.

Earlier in November, the Living Wage Foundation announced a new rate of £9.50 per hour for the ‘real’ Living Wage.

Sunak’s announcement managed to upset both sides of the employer/employee divide.

The Federation of Independent Retailers (NFRN) said the increase will have a negative impact on thousands of small businesses and threaten jobs.

Calling the rise “a kick in the teeth,” NFRN National President Stuart Reddish said: “We would all like to pay our staff more, but the headline increase in the wage rate does not include the increase in national insurance and pension contributions that employers also have to pay.

“Given that many of the items on sale in our 11,000 members’ stores – particularly newspapers and magazines – are price marked, retailers are unable to increase prices to cover these additional payrolls costs.”

Conversely, retail trade union Usdaw expressed disappointed that low paid workers will not get the full minimum wage increase they were promised –the Government had previously projected a rate of £9.21.

Usdaw General Secretary Paddy Lillis commented: “There needs to be lasting and fundamental changes to the way society views our lowest paid workers. We need a new deal for the workers: a minimum wage of at least £10 per hour, an end to insecure employment, respect for shopworkers and action to ensure that retail jobs are no longer underpaid and undervalued.”

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