The Government has revealed that the national minimum wage is to rise by 12p an hour to £6.31 for adults in a move deemed “sensible” by the British Retail Consortium.
The minimum wage will also rise by 5p to £5.03 for 18-to-20-year-olds from October after business secretary Vince Cable accepted the recommendation of the Low Pay Commission.
But Cable rejected the independent commission’s recommendation that the rate for apprentices should be frozen. Instead he stated that it would rise by 3p to £2.68 an hour.
Retail Prices Index (RPI) inflation currently stands at 3.2% and the Consumer Prices Index (CPI) at 2.8% and the increases are below current inflation levels.
British Retail Consortium director general Helen Dickinson said: “The Government has made a very sensible decision to show restraint by limiting this October’s increase to 1.9%.
“This strikes the right balance between helping workers on the lowest incomes and reflecting the realities of current conditions.
She added: “We strongly support the minimum wage as a floor for decent pay. 97.3 per cent of retail employees are paid above the minimum wage but an excessive increase would have affected related pay scales and priced young people in particular out of work.”
Association of Convenience Stores chief executive James Lowman said: “This increase will result in reduced employment and act as a barrier to growth for thousands of local retailers. In the current economic climate, the right decision for businesses would have been to freeze minimum wage.
“Our research has shown that retailers have little choice but to reduce staff hours and delay further business investment when the minimum wage is increased.”