The Government has today asked the Low Pay Commission to prepare a further report on the operation of the National Minimum Wage. The Commission welcomes the new remit and will be pleased to continue its work monitoring the impact of the minimum wage and offering recommendations to the Government on future rates and other issues. This work will be carried out under the chairmanship of Adair Turner.

Adair Turner said,

“I am pleased that we have been given a wide ranging remit for our work and that the National Minimum Wage continues to help many low paid workers without any major adverse impact on employment or the economy.

“I attach great importance to the independence of the Commission and we will be consulting widely before making our recommendations to the Government next year.

“I am also very pleased to welcome Ian Brinkley onto the Commission.  With his background in labour market economics I am sure he will make a significant contribution to the Commission’s deliberations. Ian replaces David Coats, to whom I would like to offer my sincere thanks for the contribution he has made to the Commission’s work.”

As part of its work programme the Commission is seeking evidence from employers, workers and their representatives, as well as academics and Government Departments. The deadline for receiving written submissions is 25 October, but the Commission would welcome earlier material. The Commission is finalising a programme of original research into specific aspects of the minimum wage. Commissioners will also continue to visit various parts of the country in order to hear first hand how businesses and workers are affected by the minimum wage.

Notes to Editors

1.       The Low Pay Commission is a statutory body whose role is to advise the Government on the National Minimum Wage.

2.       The Commission has produced five reports.  These are available from the Stationery Office Bookshops or the Commission’s website at: http://www.lowpay.gov.uk

3.       The members of the Low Pay Commission are:
Adair Turner (Chairman), Vice Chairman, Merrill Lynch Europe;
Professor William Brown CBE, Professor of Industrial Relations, University of Cambridge; John Cridland, Deputy Director-General, CBI; Paul Gates OBE, General Secretary, KFAT; Ian Hay OBE, Chairman, Food Trade Association Management; Professor David Metcalf, Professor of Industrial Relations, London School of Economics; Baroness Margaret Prosser OBE, Former Deputy General Secretary, Transport and General Workers Union; and Angie Risley, Human Resources Director, Whitbread PLC. 

4.      The National Minimum Wage for those over 21 is £4.50 per hour. For those aged 18 to 21 or over 21 but in the first six months of a new job with a new employer and receiving accredited training, the rate is £3.80 per hour. The Government has accepted the Commission’s recommendation that there should be further increases to £4.85 and £4.10 from 1 October 2004. A minimum wage for 16 and 17 year olds of £3.00 an hour will also be introduced in October 2004.

Low Pay Commission
Lower Ground Floor
1 Victoria Street
London SW1H 0ET
Tel. 020 7215 6052

LOW PAY COMMISSION

Terms of reference for the 2005 report

The Low Pay Commission is asked to:

·         continue to monitor and evaluate the impact of the national minimum wage, with particular reference to the effect on pay, employment and competitiveness in low paying sectors and small firms; and the effect on pay structures; and   

·         review the levels of each of the different minimum wage rates and make recommendations, if appropriate, for change.

In making its recommendations for any future rate changes, the Commission should have regard to the wider social and economic implications; the likely effect on employment levels, especially within low-paying sectors and amongst disadvantaged people in the labour market; the impact on the costs and competitiveness of business; and the potential costs to industry and the Exchequer.

When evaluating the impact of the national minimum wage to date, the Commission is asked to report on the effect that the minimum wage has had on the gender pay gap and the pay of ethnic minority and disabled workers since its introduction. 

The Commission is asked to report to the Prime Minister and the Secretary of State for Trade and Industry by the end of February 2005.