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May 12, 2009    

Minimum wage to rise from October

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by Kay Murchie

The Government has announced that the UK minimum wage will rise by 7p to £5.80 an hour from October, despite warnings to freeze the hourly rate.

According to the Government, almost one million people will benefit from the increase and the 7p an hour rise applies to workers aged 22 and over.

In the meantime, the rate for 18 to 21-year-olds will increase by 6p to £4.83 and for 16 and 17-year-olds will rise from £3.53 to £3.57.

The rise in the hourly rate comes after the British Chambers of Commerce (BCC) urged Chancellor Alistair Darling not to increase the national minimum wage due to the severity of the downturn and the growing job losses.

The BCC, along with other business leaders, called for the minimum wage to be left at current levels amid the economic downturn.

According to David Frost of the BCC, a freeze would have been more help to businesses, but he acknowledged that the rise was a “modest” one.

Commenting on the rise, Business Secretary Lord Mandelson, said: “The Low Pay Commission (LPC) has carefully examined the latest economic data before making their recommendations on the minimum wage rate, balancing the needs of workers and businesses in the current economic climate.”

“The Government agrees with this assessment and has accepted the recommendations for these new rates to take effect in October“, added Lord Mandelson.

In the meantime, chairman of the LPC, George Bain, said: “We believe that the Low Pay Commission’s recommendations are appropriate for this economic climate“.

The minimum wage was introduced in April 1999.

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