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The national minimum wage for adults is to rise to £5.80 an hour as
from October.
The
government has accepted the Low Pay Commission’s recommendation of
a 7 pence increase from £5.73.
Other
hourly rates are also to rise. The rate for 18 to 21-year-olds will
increase from £4.77 to £4.83, while for 16 and 17-year-olds the
rate will go up to £3.57 an hour from £3.53.
In
addition to the rate changes that will come into effect this year,
the government has said that, as from October 2010, the adult rate
of the minimum rate will be extended to include 21-year-olds.
The
date set for the submission of the LPC’s recommendations on the
new rates for the minimum wage was moved from February to May in
order to allow Commissioners to take the latest economic evidence
into account during their deliberations.
The
LPC also proposed that information should be made available about
those employers who have shown a wilful disregard for the minimum
wage laws. The government said it would look at the practical issues
involved.
George
Bain, the chairman of the LPC, commented on the decision: “These
are very challenging times for the UK and unprecedented economic
circumstances for the minimum wage. We believe that the Low Pay
Commission’s recommendations are appropriate for this economic
climate. They reflect the need to protect low-paid workers’ jobs
as well as their earnings.”
Lord
Mandelson, the Business Secretary, added: “The Low Pay Commission
has carefully examined the latest economic data before making their
recommendations on the minimum wage rate, balancing the needs of
workers and businesses in the current economic climate.
“The
government agrees with this assessment and has accepted the
recommendations for these new rates to take effect in October.”
Business
groups had been arguing the case for holding the minimum wage at its
current levels for this year but were not too dismayed by the
moderate increase.
David
Frost, the director general of the British Chambers of Commerce,
said: “We pressed for a freeze to the minimum wage because of the
severity of the downturn and the daily loss of jobs. We are pleased
that the increase is only a modest one, and it shows that the Low
Pay Commission and the government have largely understood the
seriousness of the situation. However, a freeze in the NMW would
have been more help to business.”
John
Cridland, the CBI’s deputy director-general, commented: “This
moderate increase recognises that many businesses are struggling,
and helps protect jobs at a time of rising unemployment.
“Over
the past decade, the minimum wage has risen faster than average
earnings and inflation, and a sensible, cautious approach now will
help ensure this landmark piece of legislation continues to improve
the lives of low paid workers for many years to come.” |
