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An increase in the national minimum wage will have a negative impact on thousands of small businesses, warns the Federation of Independent Retailers (NFRN).

Rather than boosting many shop workers’ incomes, the proposed increase of 2.2 per cent to £8.91 an hour, announced by the Chancellor Rishi Sunak in his Spending Review, will have the opposite effect of threatening jobs in the sector.

NFRN National President Stuart Reddish explained: “We would all like to pay our staff more, but the headline increase in the wage rate does not include the increase in national insurance and pension contributions that employers also have to pay.

“Given that many of the items on sale in our 11,000 members’ stores – particularly newspapers and magazines – are price marked, retailers are unable to increase prices to cover these additional payrolls costs.

“Independent retailers have already been hit hard by the COVID pandemic, with many having to reduce staff levels and hours and take on more of the work themselves. This increase to the national minimum wage will only make matters worse.

“At a time when small businesses need help and support more than ever, this move by the government feels like a kick in the teeth for those that are already struggling to survive.”

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