Morrisons blames Labour tax hikes as cause of staff pay spat

Morrisons bosses are locked in a dispute over pay increases with the union Usdaw, who represent around 45,000 Morrisons staff.

Bosses at the Bradford-based supermarket have refused to offer a pay increase beyond the national living wage — the lowest rate it is legally bound to offer - according to reports.

In an email sent last week, Morrisons pointed towards Rachel Reeves' first budget in October 2024, saying her decision to increase employers’ national insurance contributions (NICs) and lower the threshold at which they are paid has significantly impacted the company.

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These changes came into force last year, along with a 6.7 per cent increase in the living wage - costing Morrisons an extra £200 million in costs, and limiting profitability, according to bosses.

The supermarket also blamed “a number of challenging conditions” over the past year, including steeper competition from other supermarkets, and the impact of a cyberattack last winter.

The national living wage for over-21s is due to rise again this year, by 4.1 per cent to £12.71 an hour in April.

Morrisons’ message comes after union bosses last week accused the supermarket of failing to enter “meaningful negotiations” over pay, highlighting they were not offering a rise above the national living wage.

Usdaw has called a ballot for next month, asking its members to reject the current offer.

It is understood that if an agreement cannot eventually be reached, the dispute “may lead to industrial action”, according to the union.