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Nurseries Will Close After A Hike in National Wage

1st October 2019 By Admin Leave a Comment

The proposed national wages rises are likely to cause significant damage across the early year’s sector. 

Sajid Javid announced at the Conservative Party Conference that there would be an increase in the National Living Wage to £10.50 within the next five years. 

Nurseries Will Close After A Hike in National Wage

At the time of writing this, the National Living Wage for people aged over 25 is £8.21. The Chancellor has also revealed that there are plans to lower the age at which people become eligible for the National Living Wage from 25 to 21. 

Sajid Javid said that this change would “reward the hard work of all millennials”.

These proposed plans will be delivered in two stages. 23-year-olds would qualify for the rise in 2021 and 21-year-olds by 2024.

The announcement from Sajid Javid follows from a survey by Nursery World in September which revealed that more than one in ten early years practitioners live in poverty with a household income of £17,000 or less.

However, the Federation of Small Businesses (FSB) has expressed concerns that this plan could make small businesses unviable, and we could see lots of companies going bust.

Mike Cherry, National Chairman of the FSB, said:

“While it is welcome that the Chancellor is giving businesses five years to adapt, this increase will leave many small employers struggling and, without help, could make some small firms unviable.

“Those in sectors with tight margins and which are heavily labour-dependent, such as the care sector, retail or hospitality, will be particularly badly hit without support.”

These concerns are not just from the Federation of Small Businesses, but they have been supported by sector organisations such as PACEY and the National Day Nurseries Association (NDNA). 

This pay rise will not only affect early years settings but every single small business throughout the country. 

What do you think about the proposed wage increase? Will you be affected by the wage increase either as a business owner or as an employee?

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