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Press Release 05 March 2001 LOW PAY COMMISSION RECOMMENDATIONS WILL MAKE A DIFFERENCE FOR LOW PAID WORKERS ‘We are delighted that the Government has agreed to implement our recommendation that the main rate of the National Minimum Wage should increase to £4.10 per hour from 1 October 2001 and £4.20 per hour from 1 October 2002.’ Professor George Bain, Chairman of the Low Pay Commission, was commenting on the first volume of the Commission’s third report which recommended increasing the main national rate to £4.10 per hour. This was published today by Stephen Byers, Secretary of State for Trade and Industry. Professor Bain went on to say: ‘Our recommendation, which reflects the unanimous agreement of the Commission, came after extensive consultation and discussion with employers and trade unions and after examining a wealth of evidence about the impact of the introduction of the minimum wage, the prospects for the economy and trends in earnings and prices.’ ‘We were concerned to make sure that we continued to take a prudent approach in recommending an increase to the main rate. Our assessment of the impact of what we are recommending is that it will make a real difference to low-paid workers and will be affordable by efficient businesses and by the economy.’ ‘As we announced at the end of January, we have brought forward our recommendation on the main rate so that employers would have as much notice as possible to plan for changes. This was a point urged on us by employers during our consultation.’ ‘As well as recommending a rate for 2001, we believe that the minimum wage should continue to be updated regularly, and not lose its value. Business has also said to us that it would welcome a degree of certainty to plan for the future. But we were aware that businesses in low-paying sectors, and smaller firms, would need to absorb and adapt to the increased costs. We considered it prudent, therefore, to recommend a small further increase for October 2002 before the minimum wage is reviewed in full again. We have therefore recommended that the minimum wage should rise to £4.20 per hour in October 2002.’ Professor Bain also added that the second volume of the report would address the question of young people and the age at which workers became eligible for the main rate. He added: ‘We have certainly not lost sight of the importance of the minimum wage to young people and the second volume of our report, which will be published in May, will deal with the youth labour market and make further recommendations about the Development Rate from which they will benefit. It will also discuss compliance and enforcement of the minimum wage, the interaction with the tax and benefit system and our ideas for uprating the minimum wage in future.’ 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 four 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 Holdings Ltd; Professor William Brown CBE, Professor of Industrial Relations, University of Cambridge; David Coats, Head, Economic and Social Affairs Department, Trades Union Congress; John Cridland, Deputy Director-General, Confederation of British Industry; Paul Gates OBE, General Secretary, National Union of Knitwear, Footwear and Apperal Trades; Ian Hay OBE, Chairman, Food Trade Association Management Professor David Metcalf, Professor of Industrial Relations, London School of Economics; 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 subject to confirmation in early 2004 - there should be further increases to £4.85 and £4.10 from 1 October 2004. Low Pay Commission Elizabeth House 39 York Road London SE1 7NQ Tel. 020 7855 4553 | |
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