Belfast Telegraph

Ulster pubs chain founder says proposal to introduce national living wage should be scrapped

By Erinn Kerr

A Northern Irish businessman has warned that a "national living wage" could drive pubs out of business.

JD Wetherspoon founder Tim Martin is calling for the plans to be scrapped on the grounds that it would mean further pub closures, especially in less affluent areas.

The Belfast-born company chairman also claimed that raising the minimum wage would not make the country richer.

His comments came as his pub group reported a 25% fall in pre-tax profits to £58.7m for the year to July 26, despite a rise in like-for-like sales of 3.3%.

Mr Martin told the Guardian it was impossible to predict how many pubs might close as a result of being forced to bring in the national living wage.

He said: "It is especially in the less affluent areas where the price differential between pubs and supermarkets have widened.

"My real point is that this has been taken out of the economic arena and put into the political arena where politicians do things for populist reasons and perhaps short-term ones."

George Osborne announced a "pay rise" for Britain in his summer budget with a promise to introduce a higher minimum wage of £7.20 in April.

He also predicted that workers over 25 would see their pay rise to £9 per hour by 2020.

Mr Martin warned that investment in the industry could be affected if it became clear that "important issues" such as the minimum wage were to be decided by one or two senior politicians.

He explained that pub wages represented about 30% of sales and a pint purchased in a pub at the national average price of about £3.50 represented about 85p in wages. In contrast, he said, a pint bought in a supermarket, at an estimated price of £1, would only represent about 10p of supermarket wages, since their wage percentage and selling prices are lower than pubs.

Mr Martin has long campaigned about the disparity between pubs being charged 20% VAT on food sales while supermarkets are charged nothing, allowing the big grocers to subsidise alcohol sales.

He has also fought against plans to scrap zero-hours contracts after it emerged that 80% of Wetherspoon's employees were on them. These types of contracts do not require the employer to offer any guarantee of work, yet staff can be called on at short notice, making it difficult for them to hold down more than one job. However, Mr Martin has defended his position on the controversial contracts, saying his staff were still entitled to benefits like holiday and maternity pay.

Wetherspoons increased the minimum hourly rate for staff by 5% in October 2014 and by a further 8% at the end of July 2015.

In addition, the group said it paid about 40% of profits as a bonus or via free shares, over 80% of which is paid to people who work in its pubs.

Belfast Telegraph