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Hackney business owners split over new ‘National Living Wage’

PUBLISHED: 12:24 08 April 2016 | UPDATED: 12:28 08 April 2016

Earning the London Living Wage: A barista at BL_NK in Curtain Road (Picture: Valerie Browne)

Earning the London Living Wage: A barista at BL_NK in Curtain Road (Picture: Valerie Browne)

Archant

Hackney’s small business owners are divided over George Osborne’s new “national living wage”, brought into force this month.

Tim Sperryn, owner of BL_NK (Picture: Valerie Browne)Tim Sperryn, owner of BL_NK (Picture: Valerie Browne)

Workers over 25 must be paid £7.20 an hour, rising to £9 an hour by 2020 – effectively an increase in the minimum wage that was previously £6.70.

The “national living wage” is unrelated to the Voluntary London Living Wage Foundation’s recommended hourly rate of £9.40 an hour. More than a fifth of Hackney’s workforce earn less than this higher figure.

Jens Harder of Well Street Kitchen (Picture: Valerie Browne)Jens Harder of Well Street Kitchen (Picture: Valerie Browne)

The East London Trade Guild’s Krissie Nicolson claimed the new law would negatively affect start-ups.

“Although we condone paying the London Living wage,” she told the Gazette, “the compulsory National Living Wage will have a detrimental effect on a number of small businesses, especially when they are starting out.”

The National Living Wage in numbers

£6.70

The old minimum wage (hourly rate) for workers over 25

£7.20

The new “National Living Wage” (hourly) for over-25s - tje equivalent, give or take, of a £14,100 salary

£9

The hourly NLW for over-25s by 2020, to be reached incrementally over the next four years

22%

of Hackney’s population earn less than the London Living Wage Foundation’s recommended hourly rate of £9.40 an hour

Jens Harder, who owns Well Street Kitchen, said he couldn’t “even bear to think how the business would have got off the ground if the minimum wage was £9 an hour”.

“If I had the option of two people applying for a position, I might look more favourably on employing the under-25 because I wouldn’t need to pay them as much,” he added. “I had a quick check and all my baristas are under 25 but sometimes I do employ kitchen porters [who are] a bit older.

“I might have to resort to hiring under-25-year-old kitchen porters now, which is a terrible repercussion because it’s those guys who most probably have families to support.”

The phased-in compulsory wage increase was announced in last year’s autumn statement to offset cuts to housing benefits and working tax credits, effectively transferring support for low-income workers from government top-up schemes to employers.

Tim Sperryn, owner of BL_NK in Curtain Road, said he always paid staff of all ages a rate above the Voluntary London Living Wage.

“It’s important that [my staff] have enough money to live in London,” he said. “I benefit with a very low sick rate and happy staff who over-deliver. You can’t cut the engine room to be more profitable at the top end.”


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