Living wage 'is final straw' as plans scrapped
A businessman who owns a chain of supermarkets and petrol stations in the north west says he has cancelled a £2m investment due to soaring costs and the advent of the National Living Wage.
Kenny Bradley owns seven Spar shops and petrol forecourts in Co Antrim and Co Londonderry, and is currently developing Northern Ireland's second Applegreen service station near Ballymena.
He spent £300,000 on a plot of land adjacent to his Kilrea store and was planning a major expansion of the site, creating up to 30 jobs. But he has decided to put the project on hold, claiming that £180,000 is being wiped off his bottom line this year.
"It's because of the amount of uncontrolled costs all happening at the same time," said Mr Bradley, who started his business in Garvagh 20 years ago. "Reval 15, the Department of Finance and Personnel's revaluation of business properties, was disastrous for us this year. We suffered a massive 40% increase in our rates across all the sites. We're weren't expecting that. I know many other businesses who were similarly affected."
Mr Bradley said the Government's new auto-enrolment system for employee pensions is also adding costs. "It's a very complex system and difficult to manage. In fact, it costs more to set up than it does to make the contributions. A lot of businesses are forced to pay someone else to manage it for them, and that's a whole other cost."
But it's the proposed introduction of the National Living Wage that was the final straw for Mr Bradley. In July, Chancellor George Osborne surprised everyone - not least business owners - when he announced that, from April next year, employees will be entitled to earn a minimum of £7.20 per hour, rising to £9 an hour by 2020, replacing the £6.50 minimum wage. It will mean a pay rise for millions of people, but business leaders say it could also cost thousands of jobs and put growth and investment at risk.
"I never saw it coming," said Mr Bradley. "I employ 150 people who earn at least the minimum wage, more for those in supervisory positions. I'm not against the living wage at all, but it should be introduced regionally. The cost of living in Great Britain, particularly in London and the South East, is much higher than in Northern Ireland. The Living Wage should not be brought in as a blanket policy across the entire UK. The economy in the south of England might be roaring, but Northern Ireland's is not.
"What worries me now is that if no-one predicted the Living Wage, what else has Osborne got up his sleeve for businesses? That's why we've put off the investment at Kilrea. We had the land purchased, planning permission was in place and we were ready to go, but the immediate future is just too uncertain and we just don't have the confidence." Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association (NIIRTA) said: "It is the cumulative impact of all these costs and red tape which narrows margins and restricts their growth potential. A number of our members have indicated that expansion plans for their businesses are being put on hold as they struggle to afford to pay these crippling costs. Unless the issue of high costs is addressed, the creation of jobs and new investment will be reduced at a time when Government needs to do more to support our private sector."
Mr Bradley added: "Small business owners are on their own, we don't have grants and support from Invest NI. If you have a loan, you have to repay it, no matter what your costs are."