Government announces increase in minimum wage

Government announces increase in minimum wage

	Published : Mon, 20 Mar 2006 20:05 By : Richard Owen Print this Story

LONDON: The national minimum wage for adult workers in the U.K. will rise by 30 pence to 5.35 pounds an hour from October, the government announced Monday.

Workers in the age group of 18-21 will get a 20-pence increase to 4.45 pounds and hour, while those in the 16-17 age group will get a 30-pence rise to 3.30 pounds an hour.

Some 1.3 million workers will be benefitted by the increases, which have been recommended by the Low Pay Commission in 2005.

Trade and industry secretary Alan Johnson said it is the right time to implement the increases as the economy is generally strong, with the longest ever period of sustained growth and with 2.4 million more jobs than in 1997.

The Confederation of British Industry criticised the increases, saying it will seriously damage businesses and employment prospects. The British Chambers of Commerce, which represents smaller companies, said the minimum wage stipulation had cost 39,000 jobs in hotels and restaurants during the first nine months of 2005.

Brendan Barber, general secretary of the TUC, welcomed the announcement.

The government is likely to go by the Low Pay Commission view that any further large increases would place an unnecessarily large burden on employers and would not effect any hikes in the minimum wage in the immediate future.

Johnson said the proposed increases were necessary to help low-earners and that these would not have an impact on employment levels. He added that there is no strong evidence to support the contention that the minimum wage has had any detrimental effect on employment levels in low paying sectors.

The minimum wage was introduced in April 1999 and set at 3.6 pounds an hour for workers aged 22 and over. It was last increased in 2005 by 4 per cent to 5.05 pounds an hour. In the previous two years, there was a 15.5 per cent total increases when the inflation remained around 8 per cent.

An increase in the minimum wage was poll promise by the Labour party in the last general elections.