Going going gone - Wisbech auction house announces closure and blames National Living Wage for decision

Maxey auction

Maxey auction - Credit: Archant

The new National Living Wage has dealt a hammer blow to a Wisbech auction house which is blaming the compulsory pay rise for a decision to close this autumn.

John Maxey in the auction hall

John Maxey in the auction hall - Credit: Archant

Maxey Grounds and Co announced this afternoon (Thursday) its auction hall in Cattle Market Chase will no longer be viable when the new pay scheme for those on low incomes is introduced from April.

John Maxey, senior partner at Maxey Grounds and Co, said the wage rise will substantially increase the costs of their auction business, making it unsustainable.

Up to 10 staff are likely to lose their jobs when the auction hall, adjacent to the rugby ground closes, this October.

Mr Maxey, who regularly conducts sales of fruit, vegetables, horticultural produce, antiques and poultry at the auction hall, said the decision was a difficult one to make, especially as the firm has been auctioneers for over 100 years.

He explained autumn and winter is a quieter time for the auction hall which is why the decision was made to close this year rather than wait until April when the first pay rise is introduced.

Mr Maxey said: “The decision is related directly to the first of these pay increases. It is a very labour intensive business and pay is the biggest part of our costs.

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“Demand for horticultural plants has fallen because of the increasing availability at places like DIY stores and supermarkets combined with the fact gardens are getting smaller, but costs continue to rise.

“We have maintained the auctions for as long as possible because it has long been an important part of the business dating back to the cattle market in the 1800s. I have had some sort of involvement in the auctions since I was five-years-old when I use to run the sheets. So it is a very sad day.”

Closure of the auction house at the end of October does not affect the estate agents business. The firm has three estate agents offices in Fenland.

There are currently 10 staff employed at the auction house both full and part-time and discussions are on-going to see if some of those can be re-deployed in the property business.

Mr Maxey said: “The new Living Wage will see the minimum wage rise by around 40 per cent over the next four years, this at a time when public sector wages are rising at just 1 per cent. Next April’s rise will see the minimum rate of pay go up from £6.50 an hour to £7.20, that is an increase of 10 and three-quarters per cent.

“There will be further 10 per cent rises cumulatively over the four years taking it to £9 an hour and together with the auto-enrolment pension scheme it just makes our costs unsustainable.

“We have looked at alternatives including adjusting the way we operate but there was no feasible way of doing it. Closure is a decision we didn’t want to make, but the economics left us no choice.”

And Mr Maxey fears there will be other businesses in a similar situation when the pay increases start to come in.

“I’m sure it will have a significant impact on other industries locally particularly farming and factory lines,” he said.