3% Increase on the National Minimum Wage
In October 2015, the national minimum wage is going to rise by 3% which is effectively 20p for each hour, after an announcement from the government revealed this plan. This means it will be £6.70 for each hour- this the largest rise in real terms for seven years. In data released alongside the announcement, it has been revealed that over 1.4 million workers will benefit from the increase.
Further to this, the demographic of 18-20 year olds will see their minimum go up from £5.13 to £5.30 which is also a 3% increase. Those aged 16 and 17 will have a 2% hike to £3.87 per hour. Moreover, apprentices will have a significant 20% increase on their base wage, reaching £3.30 for each hour.
The announcement comes after the organisation named the ìLow Pay Commissionî recommended a number of alterations. However, the commission did suggest that apprentice wages go up by only 7p an hour and the government have responded by being much more positive and putting it up 57p.
The prime minister, David Cameron, commented on the announcement and the reasons behind this increase: ìAt the heart of our long-term economic plan for Britain is a simple idea- that those who put in, should get out, that hard work is really rewarded, that the benefits of recovery are truly national.î
He went on to state: ìThatís what todayís announcement is all about, saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britainís families and a better future for our country.î
Nick Clegg, the leader of the Liberal Democrats and the deputy prime minister, Nick Clegg echoed the positive sentiments of Mr Cameron. He stated: ìWhether youíre on low pay or starting your dream career through an apprenticeship, you will get more support to help you go further and faster.î
However, a lot of the changes fall short of what many political figures were calling for. Early in 2015, Vince Cable who is Business Secretary and a major figure in the Liberal Democrat party had implored the Low Pay Commission to recommend the government increase the minimum rate by a much more significant £1 for each hour worked.
However, despite Mr Cable acknowledging this lesser increase was in effect a ìsmall sumî it did give a ìsignal that we want young people to see it (apprenticeships) as a promising career, as increasing numbers are.î
Labour have criticised the fact that the minimum wage has stagnated since 2010 and that if they were to win in the general election, the minimum wage would go up significantly to £8 per hour.
Chuka Umunna, who is the shadow business secretary, commented on his partyís intention to raise the minimum wage further: ìThis is our aspiration. We are more ambitious for the British people than this lot in office.î
Nigel Farage, the leader of UKIP, was equally pessimistic about the state of the national minimum wage, arguing that the ìminimum wage had become the maximum wageî for a huge amount of British employees. He went on to argue: ìRather than helping people on low pay it has put a glass ceiling on them.î
The director general at the Confederation of British Industry, John Cridland, commented on the increase: ìItís positive that the government has accepted the independent Low Pay Commissionís recommendations on the adults and youth rates. The commission struck a careful balance, helping many low-paid workers without damaging their job prospects.î
He went on to argue: ìTherefore itís disappointing that the government has rejected the LPCís recommendation on the apprentice rate. The national minimum wage has been one of the most successful policies of recent years, thanks to the independence of the commission-its politicisation is worrying.î
Despite the range of opinions over the correct approach to the national minimum wage, this subject is set to be revisited a number of times as it becomes a political livewire in the lead up to the general election.