 |
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low Pay Commission
8th Floor
Oxford House
76 Oxford Street
London
W1D 1BS
General enquiries:
020 7467 7207
Press enquiries:
020 7467 7279
E-mail:
lpc@lowpay.gov.uk
|
|
|
|
| |
|
|
| |
Introduction
>>Back to main report index
In response to representations that business needed as much notice as possible of forthcoming changes to the National Minimum Wage, we announced in January 2001 that we would submit our third report early to the Government in two volumes. This second volume addresses a number of important aspects of the minimum wage, including its treatment of young people and training, its impact on incomes, implementation issues, the accommodation offset, compliance and enforcement, and the future review process. Our conclusions and recommendations on these matters continue to be based on wide-ranging consultation and analysis.
1.1 We announced in January 2001 that we would submit our third report early to the Government in two volumes, the first in March and the second in May 2001. We brought forward our report in response to concerns expressed, mainly by employers but also by trade unions, that business needed as much notice as possible of forthcoming changes. We delayed the submission of this second volume to June because of the announcement of the general election and the subsequent dissolution of Parliament.
1.2 In the first volume of our report we assessed the impact of the National Minimum Wage nearly two years after its introduction and recommended that the main rate should be increased to £4.10 per hour from October 2001 and to £4.20 per hour from October 2002. The Government announced that it accepted the recommended increase for October 2001 and that, subject to the economic conditions prevailing at the time, it accepted the recommended increase for October 2002.
1.3 In this volume we report on young people and training, compliance and enforcement, the impact of the minimum wage on incomes, some implementation issues, and the process for future reviews. In Volume 1 we looked at the impact of the minimum wage on different sectors and groups and noted that the gender gap narrowed by a full percentage point between April 1999 and April 2000; we now consider how certain sectors and groups have fared in more detail.
1.4 The Government asked us to consider whether there was a case for increasing the Development Rate, and changing the age at which workers become entitled to the adult rate. The treatment of young people has always been a challenging issue for us. We have been aware of the strength of feeling about the inequity of a lower rate for young adults, but we have had to balance concerns about equity with consideration of the likely impact of any changes to the current arrangements on young people's employment prospects. We recommend a way ahead for the longer term in respect of the age coverage of the youth Development Rate. We also consider the impact of the current arrangements on those aged under 18, apprentices, and older workers receiving training in a new job. And we recommend an increase in the Development Rate that we believe is affordable and fair.
1.5 Our terms of reference also asked us to consider whether there was a case for making any change to the maximum accommodation offset, which has remained unchanged since the introduction of the National Minimum Wage. This issue has been of significant concern to those employers (mainly in the hospitality and voluntary sectors) who provide accommodation for their staff. We addressed the issue in our previous two reports and in a special review in March 1999. In this report we recommend an increase in the maximum accommodation offset.
1.6 The Government has already made a significant effort to promote enforcement, and generally compliance appears to be high. We welcome the Government's approach to publicising the National Minimum Wage and to helping workers enforce their entitlement to it. And we encourage the Government to do more in those areas where significant problems continue to occur.
1.7 Employers need a measure of predictability on when changes to the minimum wage will occur, and low-paid employees should have confidence that its value will not be allowed to wither on the vine. Hence we have also made recommendations on a process for reviewing the minimum wage in the future. We believe that this will help to ensure that it continues to be an effective wage floor benefiting low-paid workers and the economy.
1.8 This volume includes appendices that describe the extensive consultation we undertook, the research we commissioned and the findings from our employer survey on the impact of the National Minimum Wage on young people and on the New Deal. We also provide background information on the interaction between the minimum wage and the tax and benefits system, on minimum wage systems in other countries and on government training initiatives.
1.9 In summary, this second volume of our third report addresses a number of important aspects of the minimum wage, notably the treatment of young people and the future review process. As with the first volume of our third report, our conclusions and recommendations are based on wide-ranging consultation and analysis.
1.10 Throughout the two volumes of our third report we have proposed the next steps for the National Minimum Wage so that it continues to make a difference. Some of our recommendations are immediate, for implementation in October 2001. Others look further ahead: for example, our recommendations on the future uprating of the minimum wage. The National Minimum Wage is developing. We have learned from our experience and will continue to do so. We are pleased to have contributed towards bringing the National Minimum Wage to this stage, and look forward to assisting its future progress.
|
| |
|
|
| |
|
