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Highlights:
- Co-op CEO warns that potential national insurance hikes could significantly increase costs.
- Real living wage increases will raise pay rates to £12.60, further adding to wage pressures for businesses.
- Khoury-Haq calls for government collaboration with businesses to balance fair pay and profitability.
Shirine Khoury-Haq, CEO of The Co-operative Group, has raised concerns over the potential financial impact of a rumored increase in employer national insurance contributions, which may be announced in next week’s Budget. Khoury-Haq said that such a change would significantly affect businesses like the Co-op, potentially adding millions of pounds to its operational costs. This comes as the Co-op's wage bill is already on the rise due to higher wages for employees.
The Co-op has already been grappling with a growing wage bill, which increased by £100 million following the last rise in real living wages. The latest increase, announced by the Living Wage Foundation, will see the voluntary real pay rate increase by 60p to £12.60 per hour, with those in London receiving £13.85 per hour. The new rates, which are above the legal minimum wage of £11.44 per hour, are expected to benefit nearly half a million workers across 15,000 employers.
While Khoury-Haq supports fair wages, she called on the government to provide advance notice and work closely with businesses to ensure any changes to employer national insurance contributions are implemented thoughtfully. She highlighted the need for balance between paying employees fairly and maintaining the profitability required to sustain business operations.
The Living Wage Foundation’s director, Katherine Chapman, emphasized that low-paid workers have been the hardest hit by the cost-of-living crisis. The foundation revealed that 3.7 million low-paid workers continue to struggle, with 42% having less than £10 left each week after covering essential expenses.
Khoury-Haq echoed this concern, noting the challenges of managing wage increases alongside rising operational costs. She urged the government to work collaboratively with businesses to find solutions that support both workers and employers.
