The Government has announced that the National Living Wage (NLW) will increase to £11.44 in April next year, rising from its current level of £10.42.
It has also announced that 21- and 22-year-olds will receive the NLW from April, bringing nearly 3 million more people into the wage bracket.
UKHospitality Executive Kate Nicholls said: “This is a significant increase in the National Living Wage, rising 10% and 28p more than originally forecast. Such a rise will have significant knock-on impacts on costs as businesses struggle to maintain appropriate wage differentials across all of their staff, including at more experienced levels.
If businesses are expected to deliver these wage levels, there must be action to drive down costs in other areas. The first priority on that list needs to be extending business rates relief and freezing the multiplier at the Autumn Statement.
“Without action on business rates tomorrow, many businesses will not even make it to April to deliver these wage increases and jobs will be lost. That scenario benefits no one.
“In the longer term, stronger consideration needs to be given to a lower rate of VAT for hospitality to create a more sustainable tax burden for a sector that employs 3.5 million people and delivers £93 billion to the economy.”