Business groups ‘satisfied’ with rise in minimum wage
A number of business groups have welcomed the latest rises in the National Minimum Wage. The increases, which take effect from October 2008, were announced by the Prime Minister, Gordon Brown. For adults, the minimum wage is set to rise from £5.52 an hour to £5.73 an hour, a 3.8 per cent increase. The hourly rate for 18 to 21-year-olds will increase from £4.60 to £4.77, while the rate for 16 and 17-year-olds will go up from £3.40 to £3.53. Mr Brown told the Commons that the minimum wage had risen by 60 per cent since its introduction in 1999. It is estimated that some one million low paid workers will gain from the increase, the majority of them women. John Hutton, the Business Secretary, said: “The National Minimum Wage remains one of the most important rights introduced by the Government in the last decade. Before it was introduced, some workers could expect to be paid as little as 35p an hour, our legislation has ensured that can no longer happen. “I am proud of the minimum wage; it makes a real difference to the lives of many of our lowest-paid workers and protects them from exploitation. It also creates a level playing field for business and boosts the economy.” Paul Myners, chairman of the Low Pay Commission, said: “This increase means that the minimum wage will have risen by 59 per cent since it was introduced in April 1999 - almost double the expected growth in prices over the same period. Despite many predictions to the contrary, job numbers in the industries most affected by the minimum wage have grown and grown significantly over the same period." Business reaction to the news was largely positive. The Federation of Small Businesses said it was satisfied with the in-line with inflation move. Alan Tyrrell, the FSB’s employment chairman, said: “The FSB has previously welcomed the introduction of a sensibly set national minimum wage. We are pleased that the Government and the Low Pay Commission have heeded the FSB’s past concerns when increases were well above the rate of inflation. A sensibly set National Minimum Wage is in the interests of both employers and employees.” Chris Hannant, head of policy at the British Chambers of Commerce, welcomed what he described as a measured increase in the minimum wage. He said: “It is reassuring for employers that the national minimum wage will not increase above average earnings. As we move into more uncertain economic times and credit is squeezed, businesses, particularly smaller enterprises, will be operating on tighter margins. It’s important that the Low Pay Commission ensures fair pay, but it must continue to balance this against the ability of employers to cope with the additional financial burden.” The CBI believed the move struck the right balance. John Cridland, the CBI’s deputy director general, commented: “Over the last few years the Low Pay Commission has taken the right stance by not increasing the minimum wage by more than the growth in average earnings, whilst also taking into account the prevailing economic climate and firms’ ability to pay. “At a time of considerable uncertainty for businesses and with economic growth already slowing, we welcome today’s moderate approach.” Date:6 March 2008
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