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>>Back to Press notice index
Press Release 17 February 2000 LOW PAY COMMISSION PRESS NOTICE The Low Pay Commission welcomes the Government's decision to implement the Commission's original recommendation that the National Minimum Wage should be raised to £3.70, and its acceptance of the Commission's second report. Commissioners expressed disappointment that the Government has not accepted their recommendation that 21 year olds should be covered by the full adult minimum wage rate. But they are very pleased to be asked to continue their work in monitoring the impact of the minimum wage, and review its level for 2001. Responding to the Government's announcement that it would implement the Commission's original recommendation that the level of the minimum wage should be raised to £3.70, George Bain, chairman of the Commission, said: "We are very pleased that workers on the National Minimum Wage are now guaranteed a pay rise in October. We were confident in our first report that by June 2000 £3.70 would be a manageable rate for employers and the economy. Our second report confirms that the introduction of the minimum wage has been a success, and that the £3.70 rate is affordable and sensible." Professor Bain also welcomed the Government's acceptance of the Commission's second report, put to the Prime Minister and Secretary of State for Trade and Industry in December 1999. "Our second report, which is a full assessment of the introduction of the minimum wage, based on economic analysis, wide-ranging research and extensive consultation, clearly demonstrates that the minimum wage has been introduced successfully. We make a number of recommendations and suggestions to help the minimum wage settle in which the Government has accepted." But the Commission expressed disappointment that the Government had not accepted its recommendation on 21 year olds. "We were asked specifically by Government to consider the position of 21 year olds. We found the economic evidence, and employer practices, overwhelmingly clear: the vast majority of 21 year olds are already paid at least the £3.60. For those very few paid under £3.60 (only some 10,000 in the whole economy) we were confident that the rise to the full adult rate would not adversely effect employment prospects. We are sorry that the Government has chosen to reject a unanimous and sensible recommendation." The Government announced that it has invited the Commission to continue to monitor the minimum wage, and report in time for recommendations to be implemented by October 2001. The Commission warmly welcomed this remit as a clear endorsement of its role, which is to make independent recommendations based on analysis, consultation and deliberation. The Government's remit entirely reflects the Commission's own judgment, set out in its report, that "during 2000 there will be further data, and a full picture of the impact of the impact of the minimum wage on the economy and low-paid workers, from which to make sensible recommendations on a future rate.The UK's first National Minimum Wage has had a successful introduction. Through further consultation, research, and analysis, and through discussion and debate, the Commission hopes to contribute to its successful future." The Commission's full and detailed second report, "The National Minimum Wage: The Story So Far", covers all aspects of the minimum wage's implementation. It concludes that "the National Minimum Wage has been introduced successfully, with no significant adverse effects on the economy. Large numbers of low-paid workers have benefited, particularly women, and the National Minimum Wage, together with the Working Families' Tax Credit, will benefit low-income families. Low-paying sectors have adapted well. This success needs to be built on. Levels of compliance should be improved, and the minimum wage will need to be uprated." 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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