Minimum wage set to jump to £6.50 per hour
THE MINIMUM wage is set to rise by three per cent to £6.50 per hour, after the Low Pay Commission yesterday recommended the increase in a long-awaited report to the government.
The report advises ministers that despite increases in the minimum wage over recent years its value has fallen due to inflation, but stops short of offering the £7 increase the chancellor has previously said he wants to see.
In a letter to business secretary Vince Cable the chairman of the commission, David Norgrove, warned that increasing the rate dramatically would put jobs at risk, as small firms continue to struggle to recover after the economic downturn.
“To achieve our shared aim of faster increase in the minimum wage without risk to the employment of the low paid, we believe it would be necessary to see rising real wages in the economy more generally; stable or rising employment … and an expectation of sustained economic growth,” he said.
James Sproule, chief economist at the Institute of Directors cautiously welcomed the report but added he is “concerned about the UK’s productivity, which has continued to fall in recent years.”