Taking these factors into consideration alongside low business confidence and the effects the National Living Wage is already having just three months in, particularly on the horticulture sector, the NFU has urged the Low Pay Commission to not make any recommendations on changes to the National Living Wage and National Minimum Wage for 2017.
The full response can be read here (NFU members only):NFU Response to LPC Consultation on NLW rates 2017
A survey of NFU members conducted for the consultation reveals that the impact of the Living Wage is most acute in the horticulture sector, and in particular the soft fruit and top fruit sectors where the ability to substitute labour for machinery is much more limited. The 2016 NFU National Living Wage survey revealed:
- 57% of horticulture businesses are already impacted by the National Living Wage
- The more seasonal / casual staff that are employed by a business the greater the impact: almost 80% of businesses employing over 20 workers say it has impacted and all businesses employing 101 or more employees say it has already had an impact
- 1 in 5 horticulture businesses are already making employment changes
- Nearly 40% of poultry producers are impacted
Looking at the future impacts, the NFU’s analysis shows that more businesses are also likely to be impacted . The analysis indicates that the impact remains most severe in horticulture with over two thirds of the industry affected by further increases to the Living Wage. It is also evidence that significant increases to the rate of the Living Wage will start to impact on other farming sectors, most notably poultry, with nearly 50% of poultry businesses impacted.
The LPC is due to report on its findings and a recommended 2017 rate for the National Living Wage and National Minimum Wage this autumn. Government will then decide whether to accept the recommendations before setting the minimum wage rate.
Alongside the consultation response the NFU has joined forces with other trade associations representing the interests of over 388,000 businesses employing around 4.5 million people, in writing to the new Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, urging caution over planned increases in the National Living Wage in the next four years. In the letter the group raises concerns that the current plan for increases in the National Living Wage will damage employment prospects in a wide range of sectors, and calls for the Low Pay Commission to be handed back the power to objectively assess the impact of wage rates on business. The letter has also called on the Secretary of State to create a new steering group to allow businesses to talk to Government about the impact of the Living Wage.
NFU Director of Policy Andrew Clark said “ The NFU is fully supportive of the principle of a living wage for all workers in the agricultural industry. We are, however, concerned about how this is working in practice. Where farmers are employing lots of seasonal workers to harvest crops, we are seeing worrying impact on how viable these businesses will be in the future and how this will affect people being able to buy British food – fruit and veg in particular. The UK needs a thriving farm economy creating jobs and growth so British farmers can continue to supply high quality food to the public. Wages need to be affordable for farm businesses so employment levels aren’t affected, our self-sufficiency is able to increase in fresh produce and our horticulture sector, in particular, can grow”.