April 07, 2011
On Thursday 7 April 2011, the Government announced new rates from 1 October 2011 for the National Minimum Wage (NMW) in line with the Low Pay Commission (LPC) recommendations.
The main adult rate (age 21+) will rise by 2.5% to £6.08 an hour (from £5.93); the rate for 18, 19 and 20 year olds will rise by 1.2 per cent to £4.98 (from £4.92); the rate for 16 and 17 year olds will rise by 1.1 per cent to £3.98 (from £3.64); and the rate for apprentices aged under 19 (or over 19 in the first year of their apprenticeship) will rise by 4.0 per cent £2.60 (from £2.50).
Business Secretary Vince Cable said:
“More than 890,000 of Britain’s lowest-paid workers will gain from these changes. They are appropriate – reflecting the current economic uncertainty while at the same time protecting the UK’s 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.
The LPC has again been unwilling to increase the offset to a more economically viable level and it will go up by 2.6 per cent to £4.73 a day (from £4.61). We told the Commission last autumn that the offset now represented barely a third of the economic cost of providing accommodation, compared with around a half ten years ago.
The LPC has also called on HM Revenue and Customs (HMRC) to enforce effectively the rules on NMW for those on internships and to report back on the outcome of its investigation into whether agency cleaners in hotels are being paid the full NMW.