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Government approves New minimum wage rate

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BIS Department for Business Innovation and Skills - Expert Author

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Issued 07 April 2011

Department for Business, Innovation and Skills   (National)

The Government has today accepted the independent Low Pay Commissionís (LPC) recommendations for this yearís National Minimum Wage (NMW) rates.

The following rates will come into effect on 1 October 2011:

  • The adult rate will increase by 15p to £6.08 an hour;
  • The rate for 18-20 year olds will increase by 6p to £4.98 an hour;
  • The rate for 16-17 year olds will increase by 4p to £3.68 an hour; and
  • The rate for apprentices will increase by 10p to £2.60 an hour.

Business Secretary Vince Cable said:

"More than 890,000 of Britainís lowest-paid workers will gain from these changes. They are appropriate - reflecting the current economic uncertainty while at the same time protecting the UKís lowest-paid workers. I would like to thank the LPC for doing a good job in difficult circumstances."

Chairman of the LPC David Norgrove said:

"We welcome the Government's acceptance of our recommendations. The Commission was again unanimous, despite all the economic uncertainties. We believe we have struck the right balance between the needs of low-paid workers and the challenges faced by businesses."

As announced in the Budget the Government will invite the LPC in its next report to consider the best way to give business greater clarity on future levels of the National Minimum Wage, including consideration of two-year recommendations. This could provide greater certainty for businesses, reduce risks and help them plan employment and investment decisions.

Notes:

1. The Low Pay Commission was established following the National Minimum Wage Act 1998 to advise the Government on the National Minimum Wage. It is made up of representatives from all sides of industry. For more details and copies of the report see Ė http://www.lowpay.gov.uk/

2. The LPC makes recommendations to the Government in its annual report. This Government has accepted all of its recommendations, which were as follows:

  • We recommend that the adult rate of the National Minimum Wage be increased by 15 pence to £6.08 an hour from 1 October 2011.
  • We recommend that the Youth Development Rate be increased by 6p to £4.98 an hour and that the 16-17 Year Old Rate be increased by 4p to £3.68 an hour from 1 October 2011.
  • We recommend that the Apprentice Rate be increased by 10p to £2.60 an hour from 1 October 2011.
  • We recommend that the accommodation offset should increase from £4.61 to £4.73 per day from 1 October 2011.
  • We recommend that the commissioning policies of local authorities and the NHS should reflect the actual costs of care including the National Minimum Wage.
  • We recommend that the Government takes steps to raise awareness of the rules applying to payment of the National Minimum Wage for those undertaking internships, all other forms of work experience, and volunteering opportunities. In addition, we recommend that these rules are effectively enforced by HMRC using its investigative powers.

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© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2011-04-08 10:11:21 in Business Articles

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