U.K. Government Approves New £5.73 ($11.30) Minimum Wage Rate

U.K. low paid workers can look forward to a fuller pay packet from October, after the Prime Minister today announced the adult National Minimum Wage (NMW) rate will rise from £5.52 to £5.73. The rate for 18-21 year olds will also increase from £4.60 to £4.77, while the 16-17 year old rate will rise from £3.40 to £3.53.

Nearly one million low paid employees, two thirds of them women, will benefit from the increase.

The Government has also boosted funding for enforcement of the NMW and is planning tough new penalties for rogue employers who underpay staff as part of the Employment Bill, now before the Parliament.

Business Secretary John Hutton 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.”

Since October 2007 the minimum wage for adults, combined with Working Tax credits and other benefits, has guaranteed an income of at least £292 a week for families with one child and one full-time worker.

When the National Minimum Wage was launched the main rate was £3.60. Since then it has increased at substantially more than the rate of inflation, while the number of jobs in the economy has risen by over two million over the same period.

Chairman of the LPC, Paul Myners 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.”

The Government has announced new measures which aim to enforce the minimum wage and crack down on rogue employers. These include:

* A fairer method for dealing with national minimum wage arrears, calculated so that workers do not lose out as a result of underpayment.

* Toughening up penalties for those who break the law, increasing the maximum penalty for non-payment of the NMW to an unlimited fine. The most serious cases of non-compliance will be tried in a crown court.

Since 1999 the Government has helped tens of thousands of workers recover more than £27 million in unpaid wages.

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