Independents ‘will face ruin’ with increased living wage pledge
Many small chains and independent contractors “will face ruin” with the chancellor’s pledge to increase the national living wage to £10.50 by 2024, a pharmacy accountant has said.
Speaking at the Conservative party conference last week, chancellor Sajid Javid pledged to “give four million people a well-earned pay rise”, by increasing the national living wage from £8.21 to £10.50 over the next five years.
The government will also bring down the “age threshold for the national living wage” – which currently covers employees aged 25 and over – “to cover all workers over the age of 21”, Mr Javid said.
Chartered accountant and a partner at Silver Levene LLP Umesh Modi said although the chancellor’s pledge is “an admirable goal” and many of the larger multiples will be able to “weather the storm”, small chains and independent pharmacy contractors in England “will face ruin”.
“Many contractors are already struggling to make ends meet. How will they pay higher wages?” Mr Modi told C+D last week (October 3).
“Costs have increased significantly over the last few years and with non-inflationary-linked pharmacy funding to 2023-24, this additional burden will decimate many contractors and other businesses unless there is cost relief elsewhere.”
It could lead to some contractors “making further redundancies”, which is “unfair and counter-productive for the whole economy”, Mr Modi said.
“Mr Javid should think about reducing the red tape and administrative burden of running a business and giving business owners room to breathe,” he added.
In August, Lloydspharmacy’s CEO Toby Anderson “implored” the government to treat pharmacies the same as GPs by reimbursing their business rates.