John Healey ‘must do 1 thing’ to save pubs and chippies as he hikes minimum wage

Small businesses warned Labour it must slash VAT to protect jobs following rumours that minimum wage will increase once again next April. John Healey is poised to hike the adult minimum wage by 3.9% in today’s Budget, bringing the new hourly rate to £13.20 from next April, up from £12.71. The pay for 18 to 20-year-olds will increase to roughly £11.27. Ministers must offset the move with an urgent VAT reduction to save employment since the “high input costs and a heavy tax burden are taking their toll”, warned the President of the National Federation of Fish Friers, which represents the fish and chip industry.

Andrew Crook explained: “As an industry, we always believe that our hardworking teams should be paid well – they work in busy environments and often unsociable hours. That being said, we also know our members and the rest of the hospitality sector are under extreme pressure currently.

“We hope the Chancellor has been listening to the sector and announces measures to unlock its growth potential, which will mean we can not only absorb these wage increases but also look to extend our trading hours and employment opportunities. This is a huge budget for the sector and the country as we cannot afford any more false starts.”

To halt a wave of closures, industry bosses widely want VAT slashed from 20% to 10%, broadly in line with Europe. Mr Crook stressed that reform, possibly targeted at smaller firms, remained the “most effective lever” available to tackle the rising costs.

Harry Niazi, who owns Olley’s Fish Experience in Herne Hill, London, also supported the wages but agreed soaring prices must be addressed. “The pressure comes from the costs surrounding us. One of my suppliers said their fuel bill has increased by £2,000 a week. Suppliers and small businesses can absorb only so much before customers face higher prices, or businesses have less money for recruitment, training and investment,” he said.

The pressure is already biting. In June, the Express revealed a fifth of chippies planned to close within a year due to spiralling energy bills, ingredients, and staffing overheads.

Figures from the British Beer and Pub Association (BBPA) showed nearly two pubs closed every day during the first three months of the year across England, Scotland, and Wales, with profits “wiped out by a disproportionate tax burden and huge costs”.