JD Wetherspoon hits out at government's Living Wage

James Nickerson
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Wetherspoon says the living wage will harm less affluent areas more (Source: Getty)

Pub chain JD Wetherspoon has become the most recent in a series of companies to hit out at the government’s Living Wage.

In the company’s preliminary yearly results, the pub chain said the government is putting pubs under financial strain.

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Chairman of JD Wetherspoon Tim Martin said by pushing up the cost of wages by a large factor, the government is “inevitably putting financial pressure on pubs, many of which have already closed”. He added:

This financial pressure will be felt most strongly in areas which are less affluent, since the price differential in those areas between pubs and supermarkets is far more important to customers.

Yesterday, high street retailer Next also warned against the Living Wage, stating it will cost the business £27m each year from 2016 until the end of the decade.

Earlier this week Whitbread, the parent of Costa Coffee and Premier Inn, also expressed concern when it said it had plans to raise prices in order to mitigate against “substantial” National Living Wage costs.

Read more: Next's share price climbs as profits and sales rise, but retailer warns that Living Wage will cost retailer £27m a year

Wetherspoon said it had already increased the minimum hourly rate for staff by five per cent in October 2014 and a further eight per cent at the end of July 2015, without the knowledge of the Living Wage.

However, the company used its results to voice concern about other government policies. Martin said: “We believe that pubs are taxed excessively and that the government would create more jobs and receive higher levels of overall revenue, if it were to create tax equality among supermarkets, pubs and restaurants.”

Supermarkets pay virtually no VAT in respect of food sales, whereas pubs pay 20 per cent - and this disparity enables supermarkets to subsidise their alcoholic drinks sales to the detriment of pubs and restaurants.

Wetherspoon is happy to pay its share of tax and, in this respect, is a major contributor to the economy.

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