Hospitality leaders: Living Wage shows Government's 'contempt' for businesses

The rise in the minimum hourly rate of pay for over 25 year-olds featured heavily in discussions at the Hospitality and Tourism Summit in London yesterday (28 June).

According to the Office for National Statistics (ONS) one third of all employees in hospitality were earning below the NLW at its introduction on 1 April, meaning the sector has faced one of the largest cost increases of any industry.

Nick Varney, chief executive of the British Hospitality Association (BHA) and head of Merlin Entertainments, said the change typified the Government’s lack of engagement with the industry.

“At best it shows a stunning naivety and at worst shows contempt for a large number of businesses,” said Varney.

“Everyone wants to pay fairer wages to their staff, but it is simply not acceptable to drop this legislation on the fourth biggest employer in the economy with no consultation.”

According to the BHA the hospitality industry created almost 600,000 jobs over the course of the last Parliament, but Varney warned that rising wages risked a reversal of the industry’s employment gains.

“We give people that entry level opportunity that other industries don’t…[but] if people become more expensive due to employment legislation there is a probability that there will be fewer jobs,” he said.

Andrew Selley, chief executive of Bidvest Foodservice, told the Summit that the rise had actually cost his business three to four times more than was expected.

Wages have had to rise across the company to ensure that those working night shifts and in cold stores are paid more out of fairness, Selley said.

Ranjit Mathrani, chairman of London restaurant group MW Eat, added that it was ‘disgraceful’ that the industry had not been consulted over the change and that politicians needed to offer businesses ‘mitigation’ in other areas to counter the costs.

Action needed​

Varney said it was crucial for the industry to enhance its voice within Parliament to counter further regulation, and renewed calls for the creation of a dedicated Tourism minister.

“We need to shout louder and get someone in Government to speak for us,” he said.

“We have a lot of shared aims [with the Government] but we don’t have anyone to sit around the table. Nearly all roads lead to the Treasury and the Chancellor and that is a very hard door to get open.”

But there was also positivity that things could be different with a new leadership post-Brexit.

Mathrani said: “There is a moment of change in Government, lets not assume anything is set in stone.”