National minimum wage 2010/2011: Government confirms October 2010 increase will go ahead as planned

A statement from Employment Minister Ed Davey was read out in Parliament this morning (Monday 21 June 2010), confirming that the 2010/2011 national minimum wage increase will go ahead as planned. According to the Guardian's Politics live blog (external website):

In a written statement to MPs, Ed Davey, the employment minister, said the Government was accepting the recommendations from the Low Pay Commission's 2010 report. Davey also said the rate for workers aged 18 to 20 would go up from £4.83 to £4.92, and that the rate for 16 and 17-year-olds would go up from £3.57 to £3.64. There will also be a single apprentice minimum wage rate of £2.50 an hour.

However, no hint was given as to whether the national minimum wage would be increased in subsequent years. The Guardian says:

Davey refused to commit the Government to maintaining spending on enforcing the national minimum wage until 2014, as the Low Pay Commission suggested. Davey said it would not be appropriate to commit the Government to future spending in this way.

The 2010/2011 national minimum wage increase - which will see the adult rate increase by 2.2% to £5.93 per hour (up from its current rate of £5.80 per hour) with effect from 1 October 2010 - was originally announced in Alistair Darling's final Budget on 25 March 2010.

However, as we have previously noted, there was a possibility that the coalition Government could have decided not to implement the LPC's recommendations. The fate of the 2010/2011 national minimum wage increase therefore represents one possible cut that will not now materialise in Chancellor George Osborne's emergency Budget speech tomorrow (Tuesday 22 June 2010).

XpertHR will be reporting on the full implications of Osborne's emergency Budget for UK employers as they happen tomorrow.

• Emergency Budget 2010: Follow the key points for HR on our live blog on Tuesday 22 June 2010

UPDATE: National minimum wage 2012/2013: What can we expect from the October 2012 national minimum wage increase? Given the current backdrop of ongoing economic uncertainty, subdued pay awards, rising unemployment and falling inflation, news of the annual increase to the national minimum wage for 2012/2013 (due to come into effect on Monday 1 October 2012) will be particularly closely watched. Here, we look at what might be expected from the national minimum wage increase for 2012/2013. This post will be kept updated as new information emerges on what we might expect from the national minimum wage in 2012/2013.

Update (Thursday 7 April 2011) >> National minimum wage 2011/2012 announced:

The national minimum wage adult rate will increase to £6.08 per hour for 2011/2012, with effect from 1 October 2011. This represents an increase of 2.5% from the 2010/2011 national minimum wage adult rate, which currently stands at £5.93 per hour (from 1 October 2010 to 30 September 2011). The 2011/2012 national minimum wage adult rate (at £6.08 per hour) is therefore set 15p per hour higher than the 20102/011 rate.

According to the Department for Business, Innovation and Skills (BIS) the national minimum wage rates for 2011/2012 will be as follows:

The following rates will come into effect on 1 October 2011:

• The adult rate will increase by 15p to £6.08 an hour;
• The rate for 18-20 year olds will increase by 6p to £4.98 an hour;
• The rate for 16-17 year olds will increase by 4p to £3.68 an hour; and
• The rate for apprentices will increase by 10p to £2.60 an hour.
  

Business Secretary Vince Cable comments:

More than 890,000 of Britain's lowest-paid workers will gain from these changes. They are appropriate - reflecting the current economic uncertainty while at the same time protecting the UK's lowest-paid workers. I would like to thank the LPC for doing a good job in difficult circumstances.

The BBC's Robert Peston comments via Twitter:

Today's announced increase in the minimum wage of 2.5% to 608p is considerably less than current rate of inflation.

Previous updates:

National minimum wage 2011/2012: How will the 2.5% increase to £6.08 for October 2011 stack up against inflation? With private sector pay expectations subdued, the 2011/2012 national minimum wage increase could prop up whole economy pay awards in the closing months of 2011. But how will it compare with inflation? It was announced on Thursday 7 April 2011 that the national minimum wage adult rate will increase to £6.08 per hour for 2011/2012, with effect from 1 October 2011. This represents an increase of 2.5% from the 2010/2011 national minimum wage adult rate, which currently stands at £5.93 per hour (from 1 October 2010 to 30 September 2011). The 2011/2012 national minimum wage adult rate (at £6.08 per hour) is therefore set 15p per hour higher than the 2010/2011 rate. The BBC's Robert Peston commented via Twitter that the "announced increase in the [national] minimum wage of 2.5% to 608p is considerably less than current rate of inflation."

National minimum wage 2011/2012: Freeze or cut rates for younger workers, says BCC

2011 Budget: Can we expect an announcement on the national minimum wage 2011/2012? Can we expect the national minimum wage rate for 2011/2012 (which will come into effect from 1 October 2011) to be announced in the 2011 Budget speech, which Chancellor George Osborne is set to deliver on Wednesday 23 March 2011? The national minimum wage 2011/2012 announcement will be highly anticipated, as this will represent the first time that the level of the national minimum wage will have been set under a Conservative Chancellor since the introduction of the national minimum wage in 1999.

National minimum wage 2010/2011: Why some 21 year-olds will be enjoying a 22.8% pay increase  The adult rate of the national minimum wage will be extended to 21 year-old workers from October 2010 (subscription required) (it is currently paid to workers aged 22 and over). This means that workers who have turned 21 prior to 1 October and who are receiving the national minimum wage when the 2010/2011 national minimum wage uprating comes into effect can look forward to an increase that is effectively worth (what is likely to prove to be) an inflation-busting 22.8%.