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date: 30 September 2009

embargo: 00.01hrs Thursday 1 October 2009

Nearly one million workers will benefit from minimum wage increase

Nearly one million workers will benefit when the national minimum wage (NMW) increases to £5.80 per hour today (Thursday) says the TUC.

Two in three of the 950,000 beneficiaries will be women, reinforcing the NMW's positive role in narrowing the gender pay gap.

The increase in the minimum wage should benefit the public finances by over £100 million, with workers paying £58 million more in income tax and national insurance and the Government saving £44 million on tax credits and in-work benefits.

TUC General Secretary Brendan Barber said: 'The minimum wage is one of this Government's greatest successes and low paid workers will be relieved to see it increase again this year.

'The raise is a modest one but it will put extra cash in the pockets of some of the UK's most low paid workers. The Low Pay Commission was right to withstand pressure from business to freeze the minimum wage during the recession.

'Raising the minimum wage has already helped hundreds of thousands of families without causing significant job losses and its success has shown that - despite scare-mongering from business - the economy can easily cope with sensible labour market regulation. Indeed, our current economic woes seem to be caused by too little regulation rather than too much.

'The recession was caused by very highly paid people damaging the nation's financial system. It would not be fair to make the low paid suffer a wage freeze while city bankers still get bonuses, and when there is no economic need to do so.'

Today's 1.2 per cent increase in the NMW (from £5.73 to £5.80) will be the tenth increase since it was introduced in April 1998. Over the last decade the NMW has increased by 61.1 per cent, compared to a 52.1 per cent growth in average earnings and a 34.9 per cent increase in the Retail Price Index (excluding housing costs) over the same period.

From today (Thursday) it will be illegal for employers to use tips left by customers in cafes, restaurants, hotels and bars to make up the minimum wage for their staff.

Brendan Barber said: 'This is a real success for unions in sectors where staff rely on tips. They have campaigned hard for some much-needed transparency in a very murky system.

'It's vital tipping and payment policy are clear to both workers and consumers.'

NOTES TO EDITORS:

Historical NMW rates

- From Thursday 1 October, the adult minimum wage will increase to £5.80 an hour from £5.73. Workers aged 18-20 will get £4.83 (£4.77) and those aged 16 and 17 will get £3.57 (£3.53).

- The low pay sectors make up about a quarter of the economy. Sectors with a high incidence of low paid jobs include; retail, hotels, catering, bars, textile manufacturing, hairdressing, cleaning, security, agriculture, food processing.

- The NMW is enforced by HM Revenue and Customs (HMRC). Employers can be fined up to £5,000 per offence under the National Minimum Wage Act. The Pay and Work Rights helpline gives advice on the minimum wage and other employment rights and can pass cases to the HMRC for enforcement. The number is 0800 917 2368.

- On 1 October the cap on Statutory Redundancy Pay will increase from £350 to £380 a week.

- 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 1 Oct 2009