Small businesses face the second of three planned rises in the minimum wage to take place in a 12 month period.
The Federation of Small Businesses (FSB) is calling on the Government to extend the employment allowance to help small businesses stretched by rising wage costs, and to avoid job losses.
The increase in the National Minimum Wage takes place less than a month after the FSB’s influential quarterly Small Business Index report showed confidence is in negative territory for the first time in four years.
This has been as a result of three consecutive quarters of decline. At the same time, labour costs were cited as the largest rising cost for small businesses, with 42 per cent reporting this as a concern.
Looking at the specific impact of ongoing Government interventions on wages and pensions, FSB Northern Ireland expert and spokesperson on residential care, Trevor Gage, voiced particular concerns.
He said: “Mounting pressures on the private nursing home sector have been further evidenced this week, with another provider going into administration. Care Circle group provide significant employment and services in the Dunmurry, Cookstown and Ballymena areas, so this threat to jobs is of real concern.
“The sector is facing spiralling payroll costs, as the lack of Registered Nurses has driven up salaries and escalated the cost of agency nurses. Additionally, the costs of complying with legislative requirements of the living wage and workplace pensions are placing intolerable burdens on many businesses.”
Mr Gage added: “Unless the government takes swift action to extend the employment allowance, and also to address the current inequities in the sector, then further operators will move out of the market, resulting in job losses and damage to an essential service for our elderly population at a time when demand is ever-increasing.
“It is impossible to be expected to provide 24 hour nursing care along with accommodation, catering and laundry services for the sums provided by the state.”
The FSB is calling on the Chancellor to consider a significant uprating of the Employment Allowance from its current £3,000 level. This has already helped to boost pay levels and incentivise job creation, and could be the lifeline many smaller firms need due mitigate fast-rising labour costs.
