Increase in national minimum wage

Updated: 
Coins on poundsThe national minimum wage increases by 12p an hour tomorrow, with unions calling for bigger rises to make sure workers benefit from economic growth.

The adult rate goes up to £6.31, and by 5p to £5.03 an hour for 18 to 20-year-olds. The minimum for 16 and 17-year-olds increases by 4p to £3.72, while the apprentice rate goes up by 3p to £2.68, with the Government estimating that 890,000 people will receive a pay rise thanks to the changes.

Business Secretary Vince Cable said the Low Pay Commission recommended a rate which supported low paid workers without damaging their chances of getting a job.

"As signs of an economic recovery start to emerge, we need to do more to make sure that the benefits of growth are shared fairly across the board.

"That is why in addition to their ongoing annual remit, I am asking them (the commission) to extend their expertise to help the Government and business understand how we can deal with the issue of low wages in the economy. In particular I have asked them to look at what economic conditions would be needed to allow the national minimum wage to rise in the future by more than current conditions allow," he said.

From tomorrow, employers who fail to pay the statutory minimum will be publicly named and shamed under revamped plans announced last month to make it easier to clamp down on rogue businesses.

TUC general secretary Frances O'Grady said: "Years of below-inflation rises mean that the UK's lowest-paid workers are now facing an historic living standards crisis.

"As the recovery takes hold we will need to see far bigger increases to the minimum wage to ensure that ordinary people and not just the super rich benefit from economic growth.

"This will need more than any one-off pre-election boost - we will need sustained stronger rises if the real value of the minimum wage is to be restored."

The Resolution Foundation think tank said the minimum wage will be falling in real terms for the fifth year in a row despite the increase, because it is not keeping pace with rising prices.