ACS has responded to the publication of the Low Pay Commission’s new remit for 2024, calling for the LPC to have more discretion over wage recommendations to account for economic shocks and changes in the labour market and business confidence.
In 2024, the National Living Wage reached the Government’s longstanding target of two thirds of median earnings, but the future trajectory of the NLW and NMW rates beyond 2024 have been uncertain until now. The Government has confirmed that it intends to maintain the two-thirds median earnings relation to National Living Wage rates for 2025 and has asked the Low Pay Commission to make recommendations on that basis.
In the document setting out the LPC’s remit for 2024, the Government reiterates its intention to raise minimum wage rates as high as possible without damaging employment prospects, specifically asking the Commission to ‘monitor and evaluate’ levels of the development rates (under 18 and 18-20 year old rates) to achieve that goal. However, the remit explicitly states that the Government is not seeking to make any revisions to the age threshold for the full National Living Wage rate.
In making its recommendations for the minimum wage rates, the Low Pay Commission is asked to take into account the state of the economy, employment and unemployment levels and the wider labour market, business impacts, and relevant policy changes.
The LPC have also published a paper “National Living Wage Beyond 2024”, exploring options for how the statutory wage rate should be set in the future and how to address one-side flexibility in the labour market. The LPC recommend the government chose one of two models for setting the National Living Wage in future; adopt a new target for the NLW to reach or move to a “Principle Based” approach where the Low Pay Commission have more discretion over setting the rate.
ACS chief executive James Lowman said: “We welcome ongoing dialogue with the Low Pay Commission and government on how wage rates should be set in the future, as these decisions directly impact wage budgets for convenience retailers. Our preference is the LPC to have more discretion and flexibility over setting wage rates to account for economic shocks, changes in the labour market and business confidence.
“The convenience sector offers local, secure and flexible work that benefits employees and retailers. We want to see more done to promote the sort of good work we offer in our industry, but we must ensure that further regulation as suggested by the LPC does not inadvertently damage genuinely flexible employment opportunities with responsible employers.”
The convenience sector is a significant local employer, providing secure, flexible jobs for over 437,000 people across the UK. Figures from the 2023 ACS Local Shop Report show that 95% of colleagues in convenience are employed on a permanent contract, with 84% reporting that they feel very or somewhat secure in their jobs.
The Low Pay Commission is set to make its recommendations for minimum wage rates by October ahead of new rates coming into force the following April. ACS will be engaging with the Low Pay Commission throughout their evidence gathering process.
