Government confirms new minimum wage rates

The Government has today confirmed its response to the recommendations in the Low Pay Commission’s (LPC) 2010 report and laid regulations to bring these into force.

The new rates, which will come into effect on 1 October 2010 will be:

• £5.93 per hour for workers aged 21 and over, increased from £5.80;
• £4.92 per hour for 18-20 year olds, increased from £4.83; and
• £3.64 per hour for 16-17 year olds, increased from £3.57.

For the first time there will also be an apprentice minimum wage of £2.50 per hour.  The new rate will apply to those apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship.

The Government has also written to the Low Pay Commission (LPC) setting out the remit for their 2011 Report.

As with previous years the LPC will monitor, evaluate and review the National Minimum Wage (NMW) and its impact, and review the levels of each of the different minimum wage rates.

This year the LPC is also asked to pay particular attention to:

• the competitiveness of small firms; and
• the employment prospects of young people, including those in apprenticeships and internships.

The LPC will report to the Prime Minister and the Secretary of State for Business, Innovation and Skills by the end of February 2011, with their recommendations for October 2011. 

Employment Relations Minister, Edward Davey, said:

“The increases to the National Minimum Wage this year are appropriate for the economic climate. They will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment. 

“The Low Pay Commission estimates that around 970,000 people stand to benefit from these increases. 

“Workers on the National Minimum Wage are disproportionately likely to be employed by small firms and so it is right the Low Pay Commission considers their competitiveness when they make their recommendations for next year. SMEs will be vital to our economic recovery."