There is speculation that the national minimum wage (NMW) might not be raised this year in response to the recession.
The Low Pay Commission (LPC), which advises the government on the minimum rate, is to delay its report so it can gather more data.
Normally the LPC would report in February and to date its proposals have been implemented in the following October. However, Peter Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform (BERR), has agreed to a request by the LPC to delay until May.
If the NMW is not raised this year it will be the first time that this has happened since it was introduced in 1999. However, the BERR is denying that it has requested or that it wants the NMW to be frozen and the LPC says that the report’s delay will not affect the date of any subsequent change.
“This year, the National Minimum Wage faces up to its first recession,” said Professor Sir George Bain, chairman of the LPC.
“By delaying its report until 1 May, the Commission will have access to two month’s additional data, including the Bank of England’s next Inflation Report, employee jobs figures for December 2008, GDP figures for the fourth quarter of 2008 and updates on average earnings.
“The delay will not have an impact on the planned date for implementation of the new rates, October 1 2009.”
Currently, the NMW is £5.73 for all workers aged 22 and over and £4.77 for most 18-21-year-olds.
© Crimson Business Ltd. 2009