implement the commission's original recommendation that the national
minimum wage should be raised to£3.70, and its acceptance of the
commission's second report. Commissioners expressed disappointment
year olds should be covered by the full adult minimum wage rate. But
they are very pleased to be asked to continue their work in
monitoring the impact of the minimum wage, and review its level for
Responding to the government's announcement that it would implement
the commission's original recommendation that the level of the
minimum wage should be raised to£3.70, George Bain, chairman of the
'We are very pleased that workers on the national minimum wage are
now guaranteed a pay rise in October. We were confident in our
first report that by June 2000£3.70 would be a manageable rate
for employers and the economy. Our second report confirms that the
introduction of the minimum wage has been a success, and that the
£3.70 rate is affordable and sensible.'
Professor Bain also welcomed the government's acceptance of the
commission's second report, put to the prime minister and secretary
of state for trade and industry in December 1999.
'Our second report, which is a full assessment of the introduction
of the minimum wage, based on economic analysis, wide-ranging
research and extensive consultation, clearly demonstrates that
the minimum wage has been introduced successfully. We make a number
of recommendations and suggestions to help the minimum wage settle
in which the government has accepted.'
But the commission expressed disappointment that the government had
not accepted its recommendation on 21 year olds.
'We were asked specifically by government to consider the position
of 21 year olds. We found the economic evidence, and employer
practices, overwhelmingly clear: the vast majority of 21 year olds
are already paid at least the£3.60. For those very few paid under
£3.60 (only some 10,000 in the whole economy) we were confident
that the rise to the full adult rate would not adversely effect
employment prospects. We are sorry that the government has chosen
to reject a unanimous and sensible recommendation.'
The government announced that it has invited the commission to
continue to monitor the minimum wage, and report in time for
recommendations to be implemented by October 2001. The commission
warmly welcomed this remit as a clear endorsement of its role, which
is to make independent recommendations based on analysis,
consultation and deliberation.
The government's remit entirely reflects the commission's own
judgment, set out in its report, that 'during 2000 there will be
further data, and a full picture of the impact of the impact of the
minimum wage on the economy and low-paid workers, from which to make
sensible recommendations on a future rate.The UK's first national
minimum wage has had a successful introduction. Through further
consultation, research, and analysis, and through discussion and
debate, the commission hopes to contribute to its successful future.'
The commission's full and detailed second report, 'The National
Minimum Wage: The Story So Far', covers all aspects of the minimum
wage's implementation. It concludes that 'the national minimum wage
has been introduced successfully, with no significant adverse effects
on the economy. Large numbers of low-paid workers have benefited,
particularly women, and the national minimum wage, together with the
Working Families' Tax Credit, will benefit low-income families.
Low-paying sectors have adapted well. This success needs to be built
on. Levels of compliance should be improved, and the minimum wage
will need to be uprated.'
The Low Pay Commission is a statutory non departmental advisory
public body to which the secretary of state can refer matters
relating to the national minimum wage.
The Low Pay Commission's second report evaluating the introduction
of the national minimum wage 'The National Minimum Wage - The Story
So Far' has been published by The Stationery Office Limited (Orders
through the Parliamentary Hotline Lo-Call 0845 7023474). It is being
made available on the internet at www.lowpay.gov.uk. A report summary
can also be obtained in English by telephoning 0870 150 2500 quoting
URN: 00/596 (Bengali URN: 00/612, Chinese URN: 00/611, Gujarati URN:
00/610, Hindi URN: 00/609, Punjabi URN: 00/608, Urdu URN: 00/614,
Welsh URN: 00/613).