Hackney business owners split over new ‘National Living Wage’

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

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.

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.”

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.”