Living wage helps case for Sunday trading

Growers and garden retailers hope for more Sunday trading to offset 'disproportionate impact' of the National Living Wage.

Garden centres: greater Sunday trading would generate more income
Garden centres: greater Sunday trading would generate more income

The new National Living Wage (NLW) could be used by the horticulture industry to argue its case in areas such as Sunday trading in talks with Government.

The NLW has emerged as the main concern for growers and garden retailers. Despite a good year they feel the wage hike, announced in last month's Budget, will have a "significant and disproportionate impact" on them.

It will start at £7.20 an hour and rise to £9 by 2020, replacing the £6.50 minimum wage. Growers say production costs could rise by 15 per cent as a result and are looking at cutting staff and increasing automation and staff productivity.

Higher wages will push up National Insurance and pension contributions, sick pay, maternity leave pay, overtime rates and bank holiday working rates as well as pushing up wages for better paid staff, say horticulturists.

HTA chairman and Growforth managing director Stan Green said income gained from increases in Sunday trading hours, which currently do not allow for any Easter Sunday trading, also outlined in the Budget would be "minimal compared to the relative costs".

But the HTA believes there is a way to link the two issues to the industry's advantage and is asking for feedback to a Government consultation at by 31 August.

Green added: "We're all looking through every aspect, including more mechanisation. We have to look at ways to be more efficient to reduce the net effect on the business so at best it will be nil and at worst a slight negative.

"Horticulture as a whole is labour-intensive so the minimum wage increase will have a significant and disproportionate impact."

Green said the hike took the HTA by "surprise" and has required redirection of HTA funds to research the impact on costs to members. It has led many members to put their operational plans in "the melting pot".

The HTA is looking for partner organisations from the service, building and hotel industries with whom to campaign. Green suggested the increase in costs to horticulture would be seven-to-10 per cent.

Newey Group managing director Alex Newey said the NLW is "a huge concern because, let's be clear, we're working in a low-margin business in a low-margin industry. This will inevitably increase the cost of production - it's unavoidable. There are only two alternatives. Either we find more economies in production or we have to put prices up. It sounds simple but it's a fact. You can't just absorb it.

Newey is not against the "substantial increase", he pointed out, but because wages are "not far off 50 per cent of costs, if 50 per cent goes up by 10 per cent that can't be ignored."

Woodlark Nurseries managing director Colin Edwards said the NLW is "a real concern" and could mean a 10-15 per cent increase in wage costs. He uses mature agency staff because they work better than youngsters in repetitive jobs but the nursery will now need to grow crops cleaner with less waste to offset the extra costs.

British Protected Ornamentals Association chairman Simon Davenport said: "You can't start pushing one group up without affecting others."

Association of Professional Landscapers (APL) national business manager Phil Tremayne said maintaining pay differentials "is the biggest challenge" and hinders investment in training, machinery and higher-paid staff. Members requested that the HTA/APL "lobby Government to try and bring landscaping in line with the building trade when it comes to property value".

Institute of Groundsmanship (IoG) chief executive Geoff Webb said the highest-profile acceptance of the living wage announcement to date has been from the Premier League but only applies to full-time staff.

"The IoG will, as part of a revised strategy and consultation, look at the reaction to the living wage in future questionnaires and direct feedback such as the annual salary survey," he added. "We have previously stated that wages on offer at entry level are not attractive."

Sunday opening - Easter restriction still key

The Government recommended a relaxation in Sunday trading in the recent Budget, but that did not include Easter Sunday, which could be worth up to £12m to garden centres.

The HTA, along with other retail groups, plans to lobby the Department for Business, Innovation & Skills, saying members will have to swallow minimum wage rises and boost productivity to pay them.

HTA director-general Carol Paris said: "I think as an industry it is challenging for us to be able to pay the living wage. That's not to say people in an ideal world wouldn't want to but we need to increase productivity, and one way retailers could do that is with the relaxation of Sunday trading law and particularly trading on Easter Sunday. Easter Sunday trading would be a boon for the economy."

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