Minimum wage to rise by 12p from October
On Monday the government announced the minimum wage would increase by 12p an hour to £6.31 for adults. It will also rise by 5p to £5.03 for 18 to 20 year olds.
Business secretary Vince Cable said the government announced the changes based on a recommendation of the Low Pay Commission. The Commission also said that the rate of pay for apprentices should be frozen, but Cable announced a 3p per hour increase, taking minimum apprentice wages to £2.69 per hour.
The increases are below current inflation levels. Retail Prices Index inflation currently stands at 3.2% and the Consumer Prices index at 2.8%.
Business Secretary Vince Cable said: “The independent Low Pay Commission plays a crucial role in advising the government when setting the national minimum wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
“We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board.”
Ian Murray MP, Labour’s shadow minister for employment relations, consumer and postal affairs, welcomed the minimum wage increase, but said: “The government needs to do more to enforce the minimum wage in workplaces and get tough on rogue employers who break the law, and there are still concerns on the implications of recent changes to the Commission’s remit,” he said.
However not everyone was happy with the increase. Mike Cherry, national policy chairman of the Federation of Small Businesses said: “The increase in the national minimum wage is unwelcome in today’s economic climate. We understand the Government must strike a balance between boosting consumer spending and economic growth, however they must ensure the UK’s small businesses stay competitive at a time when the economy remains fragile.
“There will be businesses that operate on thin margins, who will struggle with any increase to the minimum wage.”