The introduction of the minimum wage has led to pay levels being compressed, “destroying differentials and removing rewards and incentives for improving skills”, according to a report by Oxford University.

The study, commissioned by the British Retail Consortium, found that 96 per cent of workers in the hospitality industry and 75 per cent of retail and wholesale workers earned the minimum wage, which is due to rise from £5.35 to £5.52 an hour in October.