20/03/2006

Minimum wage to rise in October

The national minimum wage is set to increase from £5.05 to £5.35 per hour for adults from October.

The rate for workers aged between 18 - 21 will increase from £4.25 to £4.45, while workers aged 16 and 17 will see their hourly rate increase from £3 to £3.30.

The rises will guarantee higher pay for around 1.3 million workers.

Commenting on the rise, Trade and Industry Secretary Alan Johnson said: "It's right that at a time when our economy is generally strong with the longest ever period of sustained growth and nearly 2.4 million more jobs than 1997, that we continue to help those who get paid the least.

However, the CBI warned that companies were struggling to cope with the impact of the minimum wage increases. CBI Director-General Sir Digby Jones said: "The minimum wage jumped 12% between 2003 and 2005 - a rate of increase far in excess of average earnings growth. More and more companies are finding it difficult to absorb the rise so another 6% will be the last thing they need."

"The Commission shares our aim to help the low paid through an increased minimum wage, while making sure that we do not damage their employment prospects by setting it too high. They have concluded that there is no strong evidence to support the contention that the minimum wage has had any detrimental effect on employment levels in low paying sectors.

The British Chambers of Commerce warned that the increase could have an "adverse effect" on employment. David Frost BCC Director General said: "Businesses cannot cope with more costs which are damaging their ability to compete. We cannot continue increasing the minimum wage at the pace at which it has increased in recent years."

However, Mr Johnson said: "The (Low Pay) Commission shares our aim to help the low paid through an increased minimum wage, while making sure that we do not damage their employment prospects by setting it too high. They have concluded that there is no strong evidence to support the contention that the minimum wage has had any detrimental effect on employment levels in low paying sectors."

However, the outgoing Chairman of the Low Pay Commission, Lord Turner, said that the Commission had concluded that the phase in which the Commission was committed to increases in the minimum wage above average earnings was now complete. He said: "Looking forward, the Commission will start with no presumption that further increases above average earnings are required."

The government has also announced that it will accept the recommendation that salary sacrifice schemes, including those for childcare vouchers, should not count towards the minimum wage and also consider the recommendation that the Commission review the apprenticeship exemptions in 2008.

The government also said that it would take into account the recommendation that enforcement should be stepped-up in sectors that employ migrant workers when considering sectors for targeted enforcement action in the future.

Since the minimum wage was introduced in 1999, it has been increased every year.

(KMcA)

Related Northern Ireland Business News Stories
Click here for the latest headlines.

20 February 2017
National Minimum And Living Wage To Increase From 01 April
The National Minimum Wage and National Living Wage is set to increase from 01 April, 2017. Employers are reminded that from the start of April the National Living Wage for those aged 25 and over will be £7.50 per hour. Other increases include: • National Minimum Wage adult rate (21 to 24 years old) - £7.
30 September 2005
Minimum wage rises to £5.05 from Saturday
The increase in the National Minimum Wage will guarantee a small pay rise to more than 1.3 million workers from Saturday 1st October. The adult rate will increase from £4.85 to £5.05 per hour, while the youth rate, paid to 18-21 year-olds, will go up from £4.10 per hour to £4.25.
13 March 2018
National Minimum And Living Wage Rates To Increase
Businesses are being reminded that the National Minimum Wage and National Living Wage are set to increase from 1st April, 2018. Following the increase, the new rates include: • National Living Wage (25 years old and over) - £7.83 per hour • National Minimum Wage adult rate (21 to 24 years old) - £7.
01 October 2001
Minimum wage increases by 40p an hour
More than a million low paid employees across the UK were looking forward to receiving an extra £14 in their pay packet for a standard 35 hour week, when the new National Minimum Wage rates came into force Monday 1st October, 2001. The increases mean that the hourly rate for adults aged 22 and over will increase from £3.70 to £4.
30 September 2009
Mandelson Serves Up Fair Deal On Tips And Wages
New rules come into force tomorrow to ensure that thousands of workers get a fair deal on tips and wages. The changes make it illegal for businesses to use tips to bring staff pay up to minimum wage levels. They come into effect on the same day as new increases to national minimum wage rates which will benefit up to one million people.