NEWS 1
YOU NEED TO KNOW
at a glance
l The British Retail Consortium published its Retail 2020 report on Monday, prompting headlines about shop closures on UK high streets.
l The BRC based its analysis on ONS data which did not include travel agencies as these are not categorised as retail in government data.
The National Living Wage starts on April 1
Bosses play down impact of new £7.20 living wage
Lee Hayhurst
lee.hayhurst@travelweekly.co.uk
The impact of the new National Living Wage on travel retailing was played down this week, although some agents are expected to struggle to fund the increase in wages.
Next month a living wage
for over-25s of £7.20 an hour – equivalent to a full-time salary of £13,104 a year – will replace the £6.70 minimum wage. The government wants to see the living wage rise to £9 an hour by 2020. The British Retail Consortium
warned this week the wage hike, along with a new Apprenticeship Levy, could see up to 900,000 retail jobs lost in the UK by 2025. However, Abta chairman Noel
Josephides, who is also chairman of Sunvil Holidays, said current pay in travel means the sector is “fairly well insulated against the National Living Wage”. Miles Morgan, managing
director of Miles Morgan Travel, described the proposed increase to £9 as “substantial”. “Our industry is not the
best-paid,” he said. “Miles Morgan staff are remunerated well, both in terms of basic pay and bonuses, but others are not. There are small margins in travel.” Morgan said agencies that had
survived recessions were strong enough to absorb the rise, but he warned it could be the “death knell” for those that were struggling. Luke Golding, Travlaw head of employment, reported some concern in the sector about the cost
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travelweekly.co.uk 3 March 2016
“The travel industry is fairly well insulated against the National Living Wage”
of complying with the living wage. “It is set at a slightly higher level
than the minimum wage and there is going to be a cost element and companies are, in some cases, going to struggle to pay it,” he said. Golding said agencies can be
exempt from paying the living wage if they employ staff on a self-employed basis, as some homeworking companies do. But firms that offer commission-
only employment terms are legally obliged to guarantee staff an income at the living wage level.
l However, the BRC said factors affecting high street retailers generally, such as the increasing cost of labour and falling cost of technology, are just as relevant to travel retailers.
l The report said “the rate of change in retail is set to quicken as the digital revolution reshapes the industry”, meaning there could be 900,000 fewer jobs in retail by 2025.
Golding warned companies that
fail to pay it can expect greater scrutiny as the government enacts what is a marquee policy. “I have not yet seen companies
get to the stage where they are taking steps to avoid paying the living wage, but there is concern about the increase,” he said. Abta said the issue of the
living wage was being left up to individual members due to its “diversity of membership”. However, it confirmed it was a
living wage employer. The association did express concern over the Apprenticeship Levy, which it said was too high. However, an Abta spokeswoman
said: “Many high street agencies will be exempt because only businesses with a payroll above £3 million will have to contribute.”
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