9 December 2008
The TUC has called on the Low Pay Commission to increase the national minimum wage from £5.73 to £6.10 an hour from next October, and to at least £6.50 by October 2010.
The 6.4 per cent boost is aimed at fighting poverty and ensuring a fairer system of work but could also boost the economy, said TUC general secretary Brendan Barber. “A low minimum wage would not only leave low paid workers - predominantly women - in poverty unnecessarily but would also leave them with less money to spend. This would leave consumer spending around £250 million below where it should be.”
Timing is also important, he said, arguing that the new rate would come in next autumn when the Bank of England is predicting that the UK economy should be past the worst of the recession.
"Unlike higher paying sectors of the economy, the number of low paid jobs in care, cleaning services and catering have increased. All the signs are that the UK economy can afford a £6.10 hourly wage.”
But the Business Services Association cautioned against the rise. BSA chief executive Mark Fox said the move is "unwise and threatens employment prospects" for those in work and looking for work.
“A 13.4% increase over two years is way out of line with what most people could reasonably expect and certainly what most companies in the industry could afford," he said. "Such an increase would add a huge extra burden on companies providing business and outsourced services across the private and public sectors at a time when there is no credible forecast showing when the end of the recession may come.
“We urge the TUC to be moderate and restrained and to enter into dialogue with us about the impact of any increase.”
The TUC also called for the adult rate to be payable from 21 and not 22 as it is at present.
The Employment Act 2008, which comes in next April, will introduce tougher penalties for employers which fail to pay the minimum wage, including unlimited fines for the worst offenders. But the TUC is calling for more including:
- Enforcing the accommodation offset (where employers make workers pay for accommodation from their minimum wage earnings)
- Enforcing statutory holiday pay to ensure the NMW is not undermined
- Protecting domestic workers and enforcing their rights
- Enforcing the payment of employment tribunal awards
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