Figures from GLA Conservative Tony Arbour suggest that making the Living Wage compulsory could cost UK businesses £4bn – the equivalent of 213,247 jobs in the hospitality sector. Instead, he is calling for wages to be raised through VAT cuts in the hospitality sector.
GLA Conservative Assembly Member, Tony Arbour, said:
“We need to think practically about how get more Londoners on the Living Wage. It’s an ideal win-win situation for business, employees and the public purse. It puts more cash into people’s pockets and improves working conditions.
Common sense measures needed
“But forcing firms to sign up to this, especially start-ups and small businesses – such as B&Bs, restaurants and coffee shops – will only hurt them and may even put them out of business. What we need instead are common-sense measures designed to ease the burden on business and boost pay for employees, such VAT cuts in the hospitality sector.
“I will work with the Mayor of London and lobby the Government to make sure pay can be boosted without the need for price hikes or sackings. These tax cuts will pay for themselves through reduced dependency on in-work benefits and increased tax-revenues.”
Counter-productive
Jean-Phillipe Tessier, restaurant owner, Greenwich, said: “In France, where I come from, there is too much tax and regulation which stifle business owners like myself. That’s why I came and invested in the UK. My restaurant has been running for six months and I employ five people on £7 per hour. On busy days, they can easily double this figure in tips. A blanket mandatory London Living Wage would be counter-productive. It just wouldn’t work in this industry.”
Peter Duggan, Bar owner, Tower Hamlets:“I employ 8 people and pay them between £6.50 and £8.00 per hour. I value them immensely and want to hold on to them, in order to do that, I know I need to pay them the best I can. I feel terrible that I can’t yet pay them the London Living Wage but frankly if it is made compulsory, it would put me out of business. I would have to cut staff in order to meet the increased wage bill which is unthinkable, as the customer demands great service. And we need people in order to fulfil this. I have to increase sales anyway in order to make a fair living wage for myself. We’ve been going for three years and we’re still constantly on the line. I pay myself £10k a year even though I do six-day weeks. What would help people like me is a VAT cut for the hospitality sector. I pay about £7k a quarter just in VAT, it’s a killer.”