date: 1 December 2008

embargo: 00.01hrs Tuesday 2 December 2008

Raise the minimum wage to £6.10,
says TUC

The TUC will today (Tuesday) call on the Low Pay Commission (LPC) to increase the national minimum wage (NMW) from £5.73 to more than £6.10 an hour from next October.

This year marks the 10th anniversary of the NMW, and presenting oral evidence this morning the TUC will urge the LPC to recommend the best minimum wage rates the economy can afford.

The TUC will also advise that the adult rate should be payable from 21 and not 22 as it is at present.

Commenting on the TUC evidence, TUC General Secretary Brendan Barber said: 'The minimum wage has never had any detrimental effect on the UK economy. In the current downturn there is a danger that the LPC might be too cautious in setting the new NMW rate.

'Everyone agrees that setting it at too high a rate would cost jobs, but people rarely consider the same is true of too low a rate.

'A low minimum wage would not only leave low paid workers - predominantly women - in poverty unnecessarily but would also leave them with less money to spend. This would leave consumer spending around £250 million below where it should be.

'Timing is also important. The LPC is currently considering the rate for the minimum wage to apply from 1 October 2009 and the Bank of England is predicting that the UK economy should be past the worst of the recession by next autumn.

'Unlike higher paying sectors of the economy, the number of low paid jobs in care, cleaning services and catering have increased. Setting a decent legal minimum for wages is a vital part of establishing a fairer system of work and fighting poverty in the UK. All the signs are that the UK economy can afford a £6.10 hourly wage.'

The TUC NMW evidence recommends that:

• The adult minimum wage should be more than £6.10 by October 2009 and at least £6.50 by October 2010;
• The adult rate should be paid at 21;
• The LPC should recommend an increase to the development rate for 18-20 year olds that exceeds the predicted growth in average earnings;
• In the medium term the rate for 18-20 year olds should be phased out and the full adult rate paid from 18;
• A series of increases in the rate for 16 and 17 year old workers that exceed the growth in average earnings are needed. The rate should be more than £4 per hour by October 2010;
• The current exemptions for apprentices aged under 19 or in the first year of their apprenticeship should be replaced with special NMW apprentice rates.

The TUC welcomes the Government's Vulnerable Workers Enforcement Forum which has pledged to remove the legal barriers which currently prevent Government agencies from sharing information about illegal practices, and establish a single point of contact for workers claiming multiple abuses of their rights.

The Employment Act 2008 will bring in tougher penalties from next April for employers who fail to pay the NMW, including unlimited fines for the worst offenders.

The TUC believes that this marks a very significant step forward for enforcement. However, there are still some loopholes to be closed. The TUC is calling for further action on:

• Enforcing the accommodation offset (where employers make workers pay for accommodation from their NMW earnings);
• Enforcing statutory holiday pay to ensure the NMW is not undermined;
• Protecting domestic workers and enforcing their rights;
• Enforcing the payment of employment tribunal awards;
• Closing the current NMW loopholes that exclude many seafarers from its protection;
• Opposing the creation of any further exemptions to the NMW in the voluntary sector; and
• Amending the law to ensure that the NMW rules are applied in full to casting agents.

NOTES TO EDITORS:

- Raising the NMW from £5.73 to £6.10 per hour would be a 6.4 per cent rise.

- A £6.10 NMW would mean: a gain of 37p per hour per adult worker; a gain for full-time workers (average 42.4 hours per week) of £15.69 per week (£815.88 per year); and a gain for part-time workers (average 19.4 hours per week) of £7.18 per week (£373.26 per year).

- The full TUC submission to the LPC is available at: http://www.tuc.org.uk/extras/lowpay.pdf

- All TUC press releases can be found at www.tuc.org.uk

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (800 words) issued 2 Dec 2008