Living wage: One-third of shop workers to miss out

Sector seeks to play down fears over Budget fallout after falls in retail shares

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Around one million workers in retail could miss out on the Government’s so-called living wage pay rise to £9-an-hour by 2020 because they are under 25 years old, the Independent understands.

The British Retail Consortium, which represents most of the high street’s stores, said of the 3 million workers in the sector, a third were under 25 and could miss out on the wage rise, while seeing their working tax credits slashed. The shop workers’ union Usdaw attacked the Government’s decision to implement an age threshold, as retailers started playing down the impact of the wage rises, pointing out their young workforce.

The sector also attempted to play down fears that it would be the hardest hit from the Budget fallout, although Next, Sainsbury’s and Sports Direct were all in the top five biggest fallers on the FTSE 100.

Debenhams also suffered a 4 per cent fall after analysts suggested half of all its employees will see pay rise at the department store, with its wage bill jumping 11 per cent, or by £10m.

Bosses at Primark and SuperGroup started the retail fight back, with both pointing out their young workforce would leave them relatively unscathed.

John Bason, finance director of Associated British Foods, parent company of Primark, said: “The living wage will increase our Primark wage bill but it is something we can live with.

“We have Primark in nine countries across Europe and they have varying wage levels, with Germany in particular, higher than the UK.

“We are also working out the numbers because the living wage will apply to those over 25 and, obviously, like most retailers we have many staff under that age.”

At SuperGroup, the company behind fashion brand SuperDry, chief executive Euan Sutherland also allayed fears, suggesting the changes would have “no impact on our numbers” also due to the age of his staff. However, Usdaw said it would hope retailers would continue paying staff equally, regardless of age, following years of negotiations with the unions to ensure parity across workers.

John Hannett, Usdaw General Secretary, warned: “Usdaw has successfully negotiated an end to age-related pay with all the major retailers that we have an agreement with. So the Government’s announcement of a new pay scale for those over 25 is unwelcome and out of touch with good employment practices.” The British Retail Consortium also hit out at the Government and a report by Morgan Stanley said retailers, pub companies, bookmakers, tour operators and hoteliers would suffer hardest from the wage rises.

A spokeswoman for the BRC said: “It’s always extremely galling to be accused of being a low pay industry when we’re employing an enormously large number of young people who may not be able to get into other industries.

“Workers can also very quickly rise up the career ladder in this industry, while the average store manager is actually paid more than the average solicitor. It doesn’t matter if they have low qualifications, because progress in retail is based on merit.”