MS: Minimum Wage

[Katherine West]

Minister of State for Business, Innovation, and Skills: Rt. Hon. Nicholas Boles

Mr Speaker,

Today I am publishing the Low Pay Commission’s annual recommendations on minimum wage rates, and to confirm that the Government will accept the recommendations and refer their recommendation on data quality to the UK Statistics Authority. I would like to thank the commissioners for their work and their report.

As a result of these decisions, I can confirm that the Government will, from 1 October 2008:

- Increase the rate of the adult minimum wage (currently paid to those over 21 years old) from £5.52 per hour to £5.73 per hour
- Increase the youth development rate (currently paid to those between 18 and 21 years old) from £4.45 to £4.77 per hour
- Increase the young persons rate (currently paid to 16 and 17 year olds) from £3.30 to £3.53
- Move 21 year olds from the youth development rate to the adult rate

These increases are higher than the rate of inflation or general wage growth in the economy. A full time worker on the minimum wage will earn £8.40 more a week, or £437 more every year as a result. 21 year olds will be better off by more than £50 a week and more than £2,5000 a year. That these increases are possible in the current economic climate reflects the Government’s steady hand at the tiller of the economy, which is supporting growth, employment, and stable inflation.

I have asked that the Low Pay Commission report again to the Government ahead of the next Budget and as part of that report that they consider the case for and recommend a rate of a new minimum wage for apprentices.

I commend this statement to the House.

[Brown]

Mr. Speaker,

While the Minister is correct that this minimum wage increase is technically above inflation--it is just above inflation. Does the Minister believe that this pittance of an increase is sufficient to ensure that hardworking British citizens who earn minimum wage can have a sustainable livelihood?

[Katherine West]

Mr Speaker

The rise is more than double the rate of inflation and significantly more than the real or nominal increase last year, so I reject the premise of the right honourable gentleman's question.