Land and estate agency GSC Grays, has said that the autumn statement announcement on raising the minimum wage could impact farm labour.
The Chancellor of the Exchequer, Jeremy Hunt, made his ‘autumn statement for growth’ yesterday, (Wednesday, November 22).
He announced that, from April 1, 2024, the National Living Wage will increase by 9.8% to £11.44/hour for eligible workers. For the first time this will include 21-and 22-year-olds.
The UK government will also increase the National Minimum Wage rates for young people and apprentices.
There will be a 14.8% increase for people aged 18-20 to £8.60/hour. People aged 16-17 and apprentices will receive a 21.2% increase to £6.40/hour.
GSC Grays said Britain’s farming businesses are already facing significant financial pressures and could be “seriously impacted” by the decision to raise the minimum wage.
Head of farm business at GSC Grays, Robert Sullivan, said: “The rise in the minimum wage will increase costs at a time when farmers, especially those operating smaller farms, are battling to afford and retain the necessary labour.
“The minimum wage rise could potentially make other industries more attractive to work in, so the only option farmers have will be to increase wages still further.
“Farm labour is becoming a very scarce commodity in the industry, and there is a great deal of concern as to where we are going to find replacements for existing farmers and farm workers who are going to retire in the next 5-10 years.”
Tax and business
Hunt announced that the weekly Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570 – will effectively be abolished, with no-one required to pay from April 2024.
The rate of Class 4 NICs on all earnings between £12,570 and £50,270 will be cut by 1p, from 9% to 8% from April 2024.
The UK government said the cuts to Class 4 and Class 2 together amount to a tax cut of £350 a year for the average self-employed person on £28,200, with around two million individuals to benefit.
Hunt announced a business rates support package worth £4.3 billion over the next five years with the aim of protecting small businesses that are “the backbones of communities”.
This includes a rollover of 75% retail, hospitality and leisure relief for 230,000 properties and a freeze to the small business multiplier, which will protect around 90% of ratepayers for a fourth consecutive year.
Farmers who have diversified their businesses could be impacted by this announcement.
