Compulsory living wage could cost 200,000 hospitality jobs

Making the so-called living wage compulsory could put 213,247 jobs in the hospitality sector at risk, a Greater London Assembly (GLA) member has said. 

GLA Conservative Tony Arbour, who calculated the figures, has said that making the living wage compulsory could cost UK businesses £4bn and has called for wages to be raised through VAT cuts in the hospitality sector.

Arbour said: “We need to think practically about how get more Londoners on the living wage. It’s an ideal win-win situation for business, employees and the public purse. It puts more cash into people’s pockets and improves working conditions.

“But forcing firms to sign up to this, especially start-ups and small businesses – such as B&Bs, restaurants and coffee shops – will only hurt them and may even put them out of business. What we need instead are common-sense measures designed to ease the burden on business and boost pay for employees, such VAT cuts in the hospitality sector.

“I will work with the Mayor of London and lobby the government to make sure pay can be boosted without the need for price hikes or sackings. These tax cuts will pay for themselves through reduced dependency on in-work benefits and increased tax-revenues.”

Earlier this year the Cut Tourism Campaign, which is fighting for VAT on hotels and attractions to be cut from 20% to 5%, was supported by 60 MPs and The Sun newspaper.