Wetherspoon slams Government’s living wage

PUB GIANT JD Wetherspoon became the latest firm to warn over Government plans to boost wages for low-paid workers as it claimed the living wage would add “considerable uncertainty” to the under-pressure sector.

Wetherspoon chairman Tim Martin hit out at “capricious” Government initiatives after Chancellor George Osborne last week unveiled a compulsory living wage of £7.20 an hour for over-25s from April next year, rising to £9 by 2020.

Mr Martin said the summer Budget plans would see pubs put at an even greater disadvantage compared with supermarkets, as the industry already shoulders significant staff costs.

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Staff costs make up around 25 per cent - or 75p - of every pint sold for an average of £3 in pubs, according to Wetherspoon.

But it estimates staff costs only make up 10 per cent of a pint sold for less than £1 in supermarkets, meaning the increased wage bills from the living wage would hit pubs with “far greater force”.

His comments came as the group updated on trading, posting a 2.9 per cent rise in like-for-like sales in the 11 weeks to July 12, while total sales rose 6.5 per cent.

But it confirmed expectations for full-year pre-tax profits to remain flat.

There are mounting fears over the impact of the living wage in sectors that already face high staff wage bills, such as pubs, retailers and care homes.

Shares among retailers were sent reeling immediately after the Budget last week as investors feared the impact on results of increased costs, while experts have since warned over higher prices for consumers as firms seek to pass on the burden.

Wetherspoon, which has more than 930 pubs, added that it already paid fair wages to its staff, having agreed a 5 per cent minimum starting pay increase last October, followed by an 8 per cent increase due to take effect on August 3.