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BHA calls for "constructive dialogue" with Treasury over National Living Wage

09 July 2015 by
BHA calls for "constructive dialogue" with Treasury over National Living Wage

The British Hospitality Association (BHA) has called for "constructive dialogue" with the treasury having been stunned by the chancellor's introduction of a new National Living Wage.

To be launched from April 2016, the compulsory measure will require employers to pay working people over the age of 25 at least £7.20 an hour, rising to £9 an hour by 2020.

Though the chancellor said it would only have a "fractional impact" on jobs, BHA chief executive Ufi Ibrahim, chief said the measures would likely mean job losses in hospitality businesses.

"We were very surprised the chancellor made this announcement without consultation," she said. "Despite the chancellor trying to alleviate the pain with adjustments to corporation tax and employment allowances, these changes do not go far enough to reduce the impact on SMEs and mitigate potential job losses across the industry."

Ibrahim added that hospitality had created one in five jobs in the last parliament, but for this performance to continue the industry needed the support of the government.

She said: "As an industry employing a large number of individuals earning more than national minimum wage and less than the proposed living wage, we have tried to have a constructive dialogue with HM Treasury on building towards the living wage without job losses."

Ibrahim pointed out that the industry is already struggling to compete with European neighbours due to higher rates of VAT, and called for further measures to counterbalance the effects of a 20% VAT rate and new pressures on wage bills.

"While we are analysing the potential impact of the Chancellor's announcement, constructive dialogue with HM Treasury is now imperative to identify measures to counterbalance the government's ambitious agenda with the realities of running a high service and very low margin business," she said.

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