Minimum wage rises to £5.73

The minimum wage is set to rise by more than 20p an hour, the government has announced.

From October workers must be paid a minimum of £5.73 an hour, up from £5.52.

Confirming the rise to MPs, Gordon Brown said this represented a 60 per cent rise since the Labour government first introduced the minimum wage in 1999, when it was set at £3.60 an hour.

Moreover, he said the government had proved critics wrong, having created three million new jobs when it was argued a national minimum wage would cost two million.

Workers aged 18 to 21 years old will also benefit from a rise from £4.60 an hour to £4.77 while the rate for 16- and 17-year-olds rises to £3.53.

The government said the move would benefit one million low-paid employees, two-thirds of which are women.

It estimates that, when combined with tax credits, the national minimum wage has guaranteed a weekly income of £292 for a family with one child and one full-time worker.

Business secretary John Hutton said: “The national minimum wage remains one of the most important rights introduced by the government in the last decade.

“Before it was introduced, some workers could expect to be paid as little as 35p an hour, our legislation has ensured that can no longer happen.”

He continued: “I am proud of the minimum wage; it makes a real difference to the lives of many of our lowest-paid workers and protects them from exploitation. It also creates a level playing field for business and boosts the economy.”

Paul Myners, chairman of the Low Pay Commission, said the rise in the minimum wage had been almost double the growth in prices since 1999.

“Despite many predictions to the contrary, job numbers in the industries most affected by the minimum wage have grown and grown significantly over the same period,” he added.

The government today also promised tougher penalties for employers flouting the minimum wage, to be introduced through the employment bill currently going through parliament.