Government sets new Low Pay Commission remit
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Issued 21 June 2010
The Government has today written to the Low Pay Commission (LPC) setting
out the remit for their 2011 Report.
As with previous years the LPC will monitor, evaluate and review the
National Minimum Wage (NMW) and its impact, and review the levels of each of
the different minimum wage rates.
This year the LPC is also asked to pay particular attention to:
· the competitiveness of small firms; and
· the employment prospects of young people, including those in
apprenticeships and internships.
The LPC will report to the Prime Minister and the Secretary of State for
Business, Innovation and Skills by the end of February 2011, with their
recommendations for October 2011.
The Government has also today announced its response to the
recommendations in the LPC’s 2010 report and laid regulations to bring these
into force.
The new rates, which will come into effect on 1 October 2010 will be:
· £5.93 per hour for low paid workers aged 21 and over, increased from
£5.80;
· £4.92 per hour for 18-20 year olds, increased from £4.83; and
· £3.64 per hour for 16-17 year olds, increased from £3.57.
For the first time there will also be an apprentice minimum wage of £2.50
per hour. The new rate will apply to those apprentices who are under 19 or
those that are aged 19 and over but in the first year of their
apprenticeship.
Employment Relations Minister Edward Davey said:
“The increases to the National Minimum Wage this year are appropriate for
the economic climate. They will strike a balance between helping the lowest
paid whilst at the same time not jeopardising their employment.
“The Low Pay Commission estimates that around 970,000 people stand to
benefit from these increases.
“Workers on the National Minimum Wage are disproportionately likely to be
employed by small firms and so it is right the Low Pay Commission considers
their competitiveness when they make their recommendations for next year.
SMEs will be vital to our economic recovery”.
Notes
1. The Low Pay Commission was established following the National Minimum
Wage Act 1998 to advise the Government about the National Minimum Wage.
Commissioners have backgrounds in business, trades unions and academic
labour relations. For more details, and copies of the full report, see
http://www.lowpay.gov.uk/
2. When the minimum wage was launched in 1999, the main rate was £3.60.
3. The LPC makes recommendations to the Government in its annual report.
In addition to the rate increases, the Government has accepted the
recommendations that:
there should be a single apprentice minimum wage rate of £2.50 per hour
for those apprentices currently exempt from the National Minimum Wage; there
should be specific guidance on the National Minimum Wage for the
entertainment sector; andthat HMRC investigates whether contract and agency
cleaners in the hotel sector are receiving their entitlement under the
National Minimum Wage for their hours worked.
4. The Government notes the Commission’s recommendation that there should
be a commitment, as a minimum, to maintaining current funding in real terms
for monitoring and enforcement of the National Minimum Wage until at least
March 2014.
5. The accommodation offset will rise from £4.51 per day to £4.61.
6. The Pay and Work Rights helpline number is 0800 917 2368. As well as
receiving and investigating complaints about non-payment of the minimum
wage, the helpline offers advice and information in more than 100 languages.
7. The Low Pay Commission estimates that just over 950,000 people stand
to benefit from the increase.
8. The remit for the Low Pay Commission’s 2011 report is to:
Monitor, evaluate and review the NMW and its impact, with particular
reference to:
the effect on pay, employment and competitiveness in the low paying
sectors, with particular reference to the competitiveness of small firms;
the effect on the pay structures and employment of different groups of
workers, including in particular different age groups, women, ethnic
minorities, people with disabilities and migrant workers.
Review the labour market position of young people, including those in
apprenticeships and internships.
Review the levels of each of the different minimum wage rates and make
recommendations for October 2011.
Review the arrangements for the apprentice minimum wage.
Report to the Prime Minister and the Secretary of State for Business,
Innovation and Skills by the end of February 2011.
About the Author
© Crown Copyright. Material taken from the Department for
Business, Innovation & Skills. Reproduced under the terms and conditions of the
Click-Use Licence.
