National Minimum Wage

Stakeholder Views
Chapter 5: Setting the Rate
5.35 We again sought views on the minimum wage from stakeholders. We received 76 responses
to our formal consultation from the UK administrations, employers and their representative
organisations, trade unions, youth organisations and from individuals. In addition, we
undertook a visits programme to eight locations around the UK and heard oral evidence from
33 organisations over two days in November 2011. The Secretariat also held numerous
informal meetings with interested parties.
Adult Rate
5.36 Views on the adult rate from October 2012 again fell roughly into two camps. Those
representing employer organisations stressed the difficult and uncertain economic
environment and urged caution, with a large number calling for a freeze. Others, mainly trade
unions, emphasised evidence that by October 2012 some economic growth could be
expected and supported increasing the rate in order to reverse the fall in its real value due
to high inflation.
5.37 A large number of employer organisations, particularly those representing small businesses
again called for the adult rate to be frozen from October. The Federation of Small Businesses
(FSB) said an increase ran contrary to business needs in the current climate and the wage
should be frozen until we entered a period of substantial and sustained business growth. The
Association of Convenience Stores (ACS) recommended a freeze on the basis of evidence
from its members that clearly identified the impact the minimum wage was having on their
ability to expand, maintain staffing hours and maintain competitiveness. While in the
hospitality sector, the Association of Licensed Multiple Retailers believed that in the current
economic climate a freeze in the NMW in 2012 would be appropriate. In oral evidence the
Registered Nursing Home Association also called for the rate to be frozen.
5.38 As well as highlighting the state of the economy and impact this has had on individuals’
discretionary spend (particularly in the retail and hospitality sectors), many business
organisations raised other cost pressures. These included the increases in utilities and
business rents as well as transport and other input costs. A large number also commented
on the additional cost burdens arising from regulatory change, including the new pension
reforms from October 2012. We look at pension reforms later in this chapter.
5.39 Some organisations, while calling for a freeze, said if there were to be an increase, it should
be kept to a modest level. The National Hairdressers’ Federation (NHF) said that, against the
difficult economic backdrop, any increase would put enormous further and undue pressure
on hairdressing salons that could lead to redundancies. It said there was a compelling case
for the minimum wage to be kept at the current level but if it did have to be raised, it should
only be by a modest amount. The National Day Nurseries Association (NDNA) said
members sought stability in the wage, with either a freeze or an increase not exceeding
wage inflation. In the hospitality sector, the British Hospitality Association, British Beer &
Pub Association, and Business In Sport and Leisure, said in oral evidence that there was a
case for more caution.
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