Wetherspoon Chief Warns of Economic Strain Over Minimum Wage Hike Plans

Sir Tim Martin chair of JD Wetherspoon has delivered a sharp critique of government plans to increase the national living wage under Chancellor Rachel Reeves upcoming November budget Describing the move as an unthinking retreat from market forces Martin highlighted the mounting pressures faced by the hospitality sector since 2019 With energy costs doubling and wage bills surging he argued that the industry is contending with relentless cost escalation at every stage of its supply chain

Reeves is set to unveil measures lifting the national living wage from twelve pounds twenty one to at least twelve pounds seventy per hour alongside proposals to extend this rate to workers aged between eighteen and twenty one The government frames this as an effort to improve living standards but industry leaders caution that businesses are stretched to breaking point Retailers and hospitality groups now warn that new wage increases come on top of higher national insurance contributions and a lowered payment threshold from the previous budget Wetherspoon has forecast an additional sixty million pounds in annual costs solely from these changed national insurance terms

Alex Reilley executive chairman of Loungers echoed these concerns noting that labour costs have risen almost thirty per cent in just three years Reilley labelled a further increase unsustainable without serious pro business measures He warned that continued cost inflation could drive further closures threaten jobs and accelerate the decline of high street and town centre businesses Recent closures at Pizza Hut and bar operator BrewDog were cited as cautionary examples

Breweries and other employers worry about the impact on youth employment William Lees Jones of Manchester brewery JW Lees pointed out that when firms invest in first time employees higher wage commitments make recruitment decisions much tougher He recommended abolishing the apprenticeship levy to help ease the strain on business finances A senior figure in the retail sector acknowledged the benefits of lifting minimum pay but lamented the recent uptick in business failures and the dampened appetite for investment

Representatives for small businesses are asking for prudence urging the chancellor to consider a higher employment allowance before proceeding with further increases to statutory pay Their message is that job creation itself could be put at risk if the government fails to strike the right balance

Officials at HM Treasury stress their continued support for the hospitality industry through measures such as lower business rates more flexible outdoor dining and alcohol duty cuts They maintain that a bolstered national living wage will benefit three million workers reduce staff turnover and boost overall productivity whilst still providing tailored support to vital community businesses like pubs

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