Tory ‘Living Wage’ Could Lead to Tax Payer Subsidy for Health Firms That Can’t Afford Expensive Staff

Yesterday it was supermarket chain ASDA. Today it is the health care sector. Barely months after the Tories announced the introduction of a national living wage, another casualty of what looks certain to be a dramatic rise in labour costs has issued a dire warning against it.

Five of the biggest care home providers in the UK have written to Chancellor George Osborne to warn that the plan will cost the sector £1 billion by 2020, the BBC reports.

From April next year a minimum rate of £7.20 per hour will apply for workers aged over 25, rising to £9 in five year’s time.

Four Seasons Health Care, Bupa, HC-One, Care UK and Barchester said they supported a national living wage but claimed that as staffing accounts for 60 per cent of care there would need to be efforts to rescue the care system.

Martin Green, the chief executive of Care England which represents the industry, told the BBC: “Without adequate funding to pay for the National Living Wage, the care sector is at serious risk of catastrophic collapse.” He said there was a “grave and very real possibility” that a provider could fail within the next two years.

Mr Green added: “We want to work with the government to find a fair solution that will ensure the care sector can provide a safe and comfortable environment for older people who live in care homes.”

The UK Homecare Association made a similar warning last month. It published an open letter saying services to care for people in their own homes would become “unviable”when the full impact of the wage restructure was implemented.

Breitbart London reported similar concerns yesterday when supermarket chain ASDA said its sales took a 4.7 per cent hit in the second quarter as the “worst storm in retail history” shakes the UK retail sector. the drop was linked to current and projected labour costs.

The Leeds-based company, which employs 160,000 staff, warned that it would take a hit of “a few tens of millions” from the Cameron government’s introduction of the new national living wage from next April.

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