National Living Wage 'Puts 80,000 Jobs At Risk'

Convenience stores could lose nearly £166m as a result of George Osborne's new National Living Wage.

The analysis put together by the Association of Convenience Stores (ACS) and Oxford University's Said Business School calculated that 24,000 stores could be at risk of closure.

The minimum wage is currently £6.50 for those aged 21 and over, but under the Chancellor's new scheme this will rise to £7.20 from April 2016 onwards.

Although the new minimum will only apply to those aged 25 or over, the rate will gradually ratchet from £7.20 up to £9 by 2020.

The Office for Budget Responsibility (OBR) initially estimated that the move could cause 60,000 job losses in total, but it also added that this figure was determined by 'labour demand elasticity' and that up to 110,000 job losses could be possible.

The fact that the ACS calculates that 80,000 jobs in just the convenience store sector are at risk will be particularly worrying to the chancellor.

ACS chief executive James Lowman said: "We have always supported a national minimum wage, but the move to a higher compulsory national living wage will have a devastating impact on our sector.

"Our analysis only looks at the increase to a £7.20 national living wage from 2016, and as this rises to £9 by 2020 there could be far greater effect than even these figures suggest."

McColl's Retail Group which runs over 1,300 convenience stores across the UK has seen nearly 6% wiped off its market value since Mr Osborne announced the minimum wage reforms earlier this month.

Pub Groups have also heavily criticised the National Living Wage with Tim Martin, the chief executive of JD Wetherspoon, last week saying that it "will threaten the future of many more pubs ".

The Department for Business Innovation and skills said: "The OBR forecast an increase in employment of 1.1 million over the whole forecast period, with 700,000 of those coming after the National Living Wage is introduced in April 2016.

"The Government believes the new National Living Wage is affordable given the strength of the UK economy and labour market.

"We created two million jobs in the last Parliament. There is little evidence that National Minimum Wage rises to date have affected employment."