Wales politics

National Living Wage 'to impact on Welsh firms'

Sara Jones

The National Living Wage will have a disproportionate impact on Welsh firms, the head of the Welsh Retail Consortium has claimed.

The claim follows warnings 900,000 UK retail jobs could be lost as a result of pressures facing the industry, including the new minimum wage.

Sara Jones told BBC's Sunday Politics Wales the job losses were most likely to fall in places like Wales.

The UK government said it was cutting taxes to help with the transition.

The changes, which come into force on 1 April, will see workers aged 25 and over earn a minimum of £7.20 an hour.

Currently the national minimum wage for all workers older than 21 stands at £6.70.

Ms Jones said the impact on employment had been "severely underestimated" with job losses likely in Wales "where we have a more economically instable environment".

"We're seeing accelerated rates of shop closures in Wales - we're also seeing higher rates of footfall decline," she said.

"I think it's critical that we need to take action now to prevent further loss of jobs and to also ensure we have a supportive environment that encourages investment.

"So now is the time for us to see reform of areas such as business rates, something that the Welsh Government has power over to do."

Colin Macdonald, managing director of Parsons Pickles, Burry Port

Mr Macdonald said the changes would increase his company's wage bill by £20,000.

He said: "It's not just the £7.20 it's gone up to. Obviously people who have responsibility and who are on that little bit more, we've got to put their wages up pro rata."

With further increases expected over the coming years Mr Macdonald said his company was now looking at automating its processes.

"When you start getting up to your £9 an hour it's going to be unaffordable from our point of view so it's going to affect jobs," he said.

A UK government spokesman said the new National Living Wage "will give a direct boost to over a million people".

"To help with the transition we are reducing taxes and employer national insurance contributions over £3bn a year in total by 2020 through changes to the employment allowance and lowering corporation tax to 17%.

"These measures will benefit over a million businesses."

A Welsh Government spokeswoman said: "We are delivering significant targeted support to reduce business rates bills for small businesses in particular.

"We also continue to provide businesses large and small with a range of advice, support and financial assistance which helps them to compete and grow and leaves them in a stronger position to pay their staff a living wage."

Watch Sunday Politics Wales on BBC One Wales at 11:00 GMT Sunday 20 March.

Related Topics

More on this story