By Daniel Hunter
The Government has today (Monday) accepted the independent Low Pay Commission’s (LPC) recommendations for this year’s National Minimum Wage (NMW) rates.
The following rates will come into effect on 1 October 2012:
- The adult rate will increase by 11p to £6.19 an hour
- The rate for 18-20 year olds will remain at £4.98 an hour
- The rate for 16-17 year olds will remain at £3.68 an hour and
- The rate for apprentices will increase by 5p to £2.65 an hour.
"I believe that the recommendations of the Low Pay Commission strike the right balance between pay and jobs, and have therefore accepted all the rate recommendations. The Low Pay Commission has done a good job in difficult circumstances," Business Secretary Vince Cable said.
“In these tough times freezing the youth rates has been a very hard decision - but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”
Chair of the LPC David Norgrove welcomed the fact that the government had accepted the recommendations.
“We welcome the Government's acceptance of our recommendations on the rates for the National Minimum Wage," he said.
"The Commission was again unanimous, despite all the economic uncertainties and the different pressures on low-paid workers and businesses. We believe we have struck the right balance between the needs of these workers and the challenges faced by employers.”
Katja Hall, CBI Chief Policy Director, said businesses will welcome the news.
“Businesses will welcome the approach taken to this year’s National Minimum Wage rates," she said.
"The moderate rise in the adult rate and the freeze in the youth rates will come as a relief to the many hard-pressed firms right across the country.
“Retailers, care homes, hospitality, and other consumer-facing businesses are experiencing particularly tough conditions, so it’s good that the LPC listened to the CBI’s advice and made sure its recommendations preserve jobs and support the fragile recovery.
“The LPC also listened to businesses on the youth rates. With youth unemployment at its highest level for a generation, we must take great care not to price young people out of a job. Freezing the minimum wage will help reduce one of the barriers to employers deciding whether or not to take on a young person.”
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