UK200Group member comments on concern that NLW will create a ‘labour light’ services sector
A member of the UK200Group of independent accountancy and law firms has today commented on fears that the replacement of workers with machines will increase if businesses find National Living Wage (NLW) too expensive. The concern came from John Cridland, outgoing head of CBI, who said NLW was a ‘gamble’ as, despite the worthy aim, it risked a ‘labour light’ services sector as companies struggled to keep pace. He pointed to a possible scenario in which businesses took away people to ‘replace them with machines’.
Duncan Montgomery, tax partner, UK200Group member firm Whittingham Riddell, said:
“The NLW is not the biggest issue for many sectors, a fairer tax credit system would encourage greater working hours, not the 16.1 mean for part-time staff. This would reduce compliance and overhead costs and increase quality of work if the same people were working additional hours in the same role. Service sector jobs may be under threat, but only in a minor way compared to the changes that have already happened. You only have to consider the impact of automated telephone systems on the consumer’s relationship with business to see that automation with some transfer of effort to the customer has swept away many jobs and roles that were likely NLW level but had high customer contact and were valued by the customer themselves.”
