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The Low Pay Commission welcomes the government's decision to ...
The Low Pay Commission welcomes the government's decision to

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

that the government has not accepted their recommendation that 21

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

commission, said:

'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 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).

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