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Employers seek cap on minimum wage

27 October 2004
Employers seek cap on minimum wage

Hospitality industry employers have called for a cap on the £4.85 minimum wage amid fears that further rises could force job cuts and hit competitiveness.

In a cross-sector survey of 1,200 businesses by the British Chambers of Commerce (BCC), more than 77% of respondents from the hospitality industry either agreed, or strongly agreed, that further increases in the minimum wage would have an effect on staffing levels, and nearly all (97%) called for a cap.

The Federation of Small Business has also identified a "small pocket of unease" among its hospitality industry members over future rises.

A major gripe is that recent increases have exceeded the rate of inflation - this month's rise of 35p to £4.85, for those over the age of 21, equates to a 7.7% increase.

James Horler, chief executive of restaurant chain La Tasca, said: "If the minimum wage goes to £5.25 an hour next year we don't think we could afford it with our current set-up.

"This clearly is a serious issue for the industry."

Although Horler supports the idea of a minimum wage, he branded the current system unfair.

He reckons different jobs should have different minimum levels, as in the USA, to prevent front-of-house staff earning more than back-of-house staff, after gratuities.

However, not all those surveyed were opposed to further increases. Jackie Allen, human resources manager at hotel chain Accor in the UK, said: "We've put our minimum wage up to £5. I think it's a good thing if it's pushed up further."

The publication of the BCC survey, on 25 October, came as the latest consultation by the Low Pay Commission, which advises the Government on minimum wage levels, drew to a conclusion.

BCC director-general David Frost said: "The survey results show that the rate has now reached a level that will have an impact on business effectiveness. Further such increases will harm our competitiveness and could result in job losses."

Source: Caterer & Hotelkeeper magazine, 28 October 2004

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