National Minimum Wage consultation

We have provided evidence to the LPC's (Low Pay Commission) consultation on the National Minimum Wage and National Living Wage.

Inflationary pressures

While we continue our strong support in principle for the NMW and NLW, any rate increases in the rates for 2023 need to take into consideration:

• The inflationary pressures faced by businesses.
• The continued need to prioritise economic recovery post Brexit and Covid-19.
• The Government Food Strategy which seeks to maintain or grow UK food production.
• The competitiveness of UK businesses against imported goods.

Accommodation maintenance and improvement costs

We also support further increases to the accommodation offset rate. The provision of accommodation is widespread within the sector and for those employers who apply the accommodation offset an increase would contribute towards maintenance and improvement costs.

Covid-19 and Brexit

As with recent NFU submissions to the LPC on NMW and NLW, consideration has been given to Covid-19 and Brexit.

In addition, there are other economic influences both domestically and internationally. These include the state of the labour market, rising fuel and other input costs, and the conflict in Ukraine.

Each year, the LPC (Low Pay Commission) gathers evidence on the effects on employers and workers of increases to the NMW (National Minimum Wage) and the NLW (National Living Wage). It also invites views on business conditions and the economic outlook in order to make its recommendations.

Read more about the consultation at Gov.uk: Low Pay Commission consultation 2022.

Topics covered in the consultation

The LPC is particularly interested in hearing evidence about:

• Affordability and effects of an increase in April 2023 to an NLW on-course rate of £10.32 within a range of £10.14-£10.50.
• The path of NLW to 2024, when it currently projects a rate of £10.95 for all workers aged 21 and over.
• Impacts of increases in the NLW on workers, employers, the labour market and economy.
• The impact on 23- and 24-year-olds of lowering the NLW age threshold to 23 last year; and the potential impact on 21 and 22 year olds of the eventual lowering to 21.
• Effects of this year’s large increase in the Apprentice Rate, which aligns it with the 16–17-Year-Old Rate.
• Awareness, use and impacts of the accommodation offset, which allows employers to deduct some accommodation costs from minimum wage pay.

You can see a full list of the consultation questions in the LPC consultation announcement letter published at the Gov.uk website: Low Pay Commission consultation letter

How to respond

The consultation was open until 6pm on 20 June 2022.

The LPC did not expect people to answer all the questions in the consultation unless they were able to. Respondents were advised to focus on the areas which were of most concern and, where you could, provide the most comprehensive evidence.

Responding directly to the LPC

You were asked to respond directly by emailing your views to [email protected] before the 6pm 20 June 2022 deadline.  

Sharing your views with the NFU

You were able to contribute to the NFU's official response to the consultation by 14 June 2022.