Widespread backing for minimum wage rise

Widespread backing for minimum wage riseThe Low Pay Commission (LPC) has recommended to the government that the adult rate of the National Minimum Wage (NMW), for workers aged 21 and over, should rise by 3% to £6.70 from October 2015.


The LPC says this would protect low-paid workers without damaging the economy. It would be the largest real-terms increase in the NMW since 2007.


David Norgrove, chair of the LPC said: “Sharp increases in the minimum wage would put jobs at risk – not least bearing in mind pressure on low-paying sectors and small firms. We do believe however that the continued recovery, and in particular the impressive growth in employment of the low paid, should this year allow a further increase in the real and relative value of the minimum wage.”


In addition, the LPC has recommended:



  • an increase of 3.3% to £5.30 for 18-20 year olds;

  • an increase of 2.2% to £3.87 for 16-17 year olds;

  • an increase of 2.6% to £2.80 for apprentices (in the first year of an apprenticeship or anyone aged 16-18).


The LPC’s proposal has been welcomed by business groups. “Most businesses should be able to afford this rise,” said John Allan, FSB national chairman.


Dr Adam Marshall, executive director of policy and external affairs at the British Chambers of Commerce said: “A 3% rise will be a welcome boost to many staff, and comes at a time when firms are healthier, more confident and more able to afford an above-inflation rise.”


This announcement comes after the government named and shamed 70 firms for not paying the minimum wage as part of a new regime that came into force in October 2013. The latest group of employers owed workers a total of £157,000.


The government also announced that it is to increase HMRC’s £9.2 million enforcement budget by £3 million, funding more than 70 extra compliance officers.


Jo Swinson said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable. We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker rather than per employer.”


Also this week, the GMB has called for the directors of these companies to be placed on a “wage offenders register” at Companies House and be deemed unfit to hold further directorships. In addition, it has suggested that enforcement rules should be changed so that trade unions can make complaints to HMRC on behalf of members.


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