Osborne’s Living Wage adds 10p to price of a pint
GeorGe osborne was last night accused of imposing a ‘stealth tax’ on beer drinkers through the introduction of the National Living Wage.
It came after one of Britain’s biggest pub chains yesterday admitted it had hiked the price of a pint by 10p in order to pay its staff the increased hourly wage.
Young’s – which owns almost 220 pubs in London and the South of england – said it had decided to pass on the costs to drinkers rather than cut perks for staff.
It adds to the 52p per pint British drinkers already pay in tax – one of the highest rates in europe.
The price hike follows widespread criticism of the introduction of the £7.20 living wage – up from the £6.70 minimum wage – on April 1.
Though hailed by campaigners as a victory for lower paid workers, business groups have warned it will cost billions to implement and hit those who are supposed to benefit the hardest. A string of well-known firms, including Morrisons, Caffe Nero and Tesco, have already responded to the reforms by slashing staff perks – including extra pay for weekends – prompting criticism from MPs.
In all, the pub industry has predicted it will be saddled with an extra £35million wage bill this year.
The flat 10p price hike has seen a pint of Young’s ordinary rise from £4.15 to £4.25 in recent weeks, while Young’s Special has gone up from £4.30 to £4.40.
It cancels out the benefits of the Chancellor’s freeze on beer duty in last month’s Budget, and the cutting of the levy by 1p in each of the previous three budgets.
experts have warned price increases are also likely to be seen among coffee shops and retailers.
Veteran City commentator David Buik said: ‘The living wage is fully justified given the difference between the haves and the have nots. But it does have a... sting in the tail.
‘It is a stealth tax on beer drinkers and consumers in general. Inevitably coffee shops, pubs and retailers operating on thin margins will have to put up their prices if they don’t want to sack staff or cut perks.’ Young’s – which pays the living wage to 3,500 staff – told the Daily Mail it has taken the conscious decision to pass the costs on to its customers instead of slashing employee benefits. However the London-based firm said it had tried to minimise the impact on drinkers by also making savings elsewhere in the business.
Last night a pubs group appeared to urge landlords to be wary of hiking prices too much if they serve poorer areas.
Duncan Garrood, chief executive of Punch Taverns – which presides over more than 3,300 pubs, said: ‘our Publicans are responsible for setting beer prices.
‘We encourage them to be mindful of cost pressures and, if necessary, make changes to prices dependent on the specific demographic and marketplace they are working in.’
Labour MP Joan ryan said: ‘George osborne needs to get a grip on this – it’s insanity. He has promised Britain a pay rise. He did not say firms could cut perks for employees or pass on costs to consumers. This is a stealth tax.’