Farmers fear threat of higher wage hikes in 2020

Farm leaders have expressed concern over the implications of the national living wage (NLW) potentially rising to £9.61/hour in 2020-21.

The current NLW for over-25s is £8.21/hour, and is projected to rise to £9/hour in April 2020 under current legislation.

However, chancellor Philip Hammond is thought to be considering a further increase in the Autumn Budget to take effect from next year.

See also: Farmworkers need above-inflation pay rise to keep up with living wage 

It is understood he is considering whether the minimum wage could be set at 66% of median earnings, which would bring the minimum wage for over-25s to £9.61/hour, the highest minimum wage in the world.

A decision on whether the government will sanction a jump in the wage rate is not expected until the Autumn Budget, by which time there may be a new chancellor of the exchequer in position following the Tory leadership contest.

Separate agricultural wages boards (AWBs) are still in operation in Northern Ireland, Scotland and Wales, but England’s AWB was disbanded in 2013.

Business concerns

The Ulster Farmers Union (UFU) said it is worried that wage increases over the past three years have already outstripped inflation and a further significant rise could hurt farm businesses.

“This traction of wage increases is unreflective of where Northern Ireland farming currently stands, such is the impact of uncertainty regarding rising input prices as well as Brexit and ongoing commodity price volatility.”

The UFU said that in the years since 2016, the NLW has increased by 4.16%, 4.85% and 5.60% while inflation as measured by the Consumer Prices Index had been 2.7%, 2.4% and 2.1% over the corresponding period.

Wages board future?

Although minimum wages for agricultural workers in Northern Ireland are set by the Agricultural Wages Board (AWB), minimum rates have to meet the NLW and national minimum wage (NMW) requirements.

This means the rates for standard workers are pegged at the NLW and NMW rates, with workers on higher grades paid more accordingly.

The UFU said it questioned the point of an annual AWB negotiation, since it meant they were essentially negotiating a further, unwarranted increase to a wage rate which had already been subject to a statutory rise.