Scots agricultural businesses warn of potential wage pressure

New minimum wage proposals must take the current “exceptional times” into consideration, NFU Scotland has warned.

NFUS submitted its thoughts in response to the Low Pay Commission (LPC) consultation on increases to National Minimum Wage (NMW) and National Living Wage.

The LPC is expected to publish its recommendation in October for 2021 wages. The UK National Minimum Wage rose from £8.21 to £8.72 on April 1, 2020.

The submission from NFUS was informed by feedback from more than 100 members who responded to the union’s 2020 Employment and Wages Survey.

The work of the LPC has both a direct and indirect impact on Scottish farm businesses. For Scottish agricultural workers, minimum standards continue to be set by the Scottish Agricultural Wages Board (SAWB), whilst minimum pay for workers in diversified parts of businesses, for example processing or hospitality, may be set by the national wage regulations.

The LPC consultation explored aspects such as:

  • The economic outlook of businesses as we enter 2021;
  • Affordability of any change to minimum rates of pay and implications on businesses and employment;
  • The impact of changes to minimum rates of pay on apprentices or young workers; and
  • Accommodation offset rates.

Although the consultation has officially closed, the LPC is still accepting written submissions due to exceptional circumstances. Individuals who would like to contribute can access the consultation on the LPC website.

In its submission, NFUS highlighted the continued complexity of minimum standards within Scottish agriculture by having two separate pieces of legislation to comply with – SAWB and NMW.

Looking ahead, the union urged the LPC to consider the uncertain economic outlook for agriculture, including challenging market conditions following Brexit and the unknown economic implications of Covid-19.

A roundtable meeting will be held today (Thursday, July 2) for NFU Scotland members to share their views with Low Pay Commissioners.

Tom French, chairman of the union’s Legal and Technical Committee, said: “We are grateful for the opportunity to contribute to the consultation.

The outstanding response from members to our survey highlights how concerned members are over wages and they will have an opportunity to feed in those views at the roundtable discussions tomorrow.

“Any changes to National Minimum and Living Wage must be delivered in light of unprecedented levels of uncertainty being driven by both Brexit and Covid-19.

“It is in our economic interests that businesses, and therefore employment, must be protected and flexibility around wages be introduced to ensure businesses have time to adapt to our post-Brexit future.”