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

BCC: Suspend or lower national minimum wage youth and development rates

The BCC sets out its stance on the national minimum wage rates for 2011/2012 in the BCC 2011 Budget submission (PDF format, 456K). It says:

National Minimum Wage: youth unemployment now stands at over 20%. It is imperative that the Government incentivise youth employment by suspending or lowering the Youth and Development Rates of the NMW. As an alternative, a reduced rate of employers' NI for 1-2 years could also be considered for smaller private-sector companies taking on young people.

The BCC does not set out any recommendations for its desired increase to the national minimum wage adult rate (which is paid to workers aged 21 and over, and currently stands at £5.93 per hour). The current 2010/2011 national minimum wage rates paid to workers aged under 21 (effective from 1 October 2010 to 30 September 2011) are as follows:

• The 2010/2011 national minimum wage "youth development rate" (for workers aged 18 to 20) stands at £4.92 per hour for 2010/2011.
• The 2010/2011 national minimum wage youth rate (for workers aged 16 and 17) is £3.64 per hour.
  

BRC calls for maximum 1.7% increase to national minimum wage for 2011/2012

The British Retail Consortium (BRC) has called for an increase of "no more than 1.7%" to the national minimum wage for 2011/2012.

It also wants the Government to provide 18 months' notice of each year's national minimum wage increase, rather than the current six months, in order to give employers more time to prepare.

If implemented, the maximum 1.7% increase requested by the BRC would take the national minimum wage adult rate from its current 2010/2011 level of £5.93 per hour (effective from 1 October 2010 to 30 September 2011) to around £6.03 per hour for 2011/2012 (the year from 1 October 2011 to 30 September 2012).

The BRC's recommendations on the national minimum wage for 2011/2012 are set out in the BRC 2011 Budget submission (PDF format, 1.5MB).

UPDATE (Friday 7 October 2011): National minimum wage 2011/2012 increase to £6.08 per hour comes into effect The national minimum wage adult rate increases to £6.08 per hour for 2011/2012 with effect from 1 October 2011. This represents an increase of 2.5% on the 2010/2011 national minimum wage adult rate, which previously stood at £5.93 per hour (from 1 October 2010 to 30 September 2011).

The future of the national minimum wage: Two-year increases & removal of income tax burden in prospect? What might we expect from future annual increases to the national minimum wage? It is possible that we will see major change to the national minimum wage over the coming years. Potential changes include: the introduction of two-year national minimum wage increases; and an increase of the minimum income tax threshold to remove income tax obligations from workers on the national minimum wage.

Update (Sunday 8 May 2011): 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."

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.

See also:

• Pay and Work Rights Helpline contact details On the Directgov website. Directgov says: "The Pay and Work Rights Helpline gives confidential help and advice on the NMW and can handle calls in over 100 languages. If you aren't being paid the NMW you can contact the Pay and Work Rights helpline or use the online enquiry or complaint form."
• Calculating the National Minimum Wage: How to check your pay On the Directgov website. Directgov says: "Almost all workers are entitled to be paid at least the National Minimum Wage (NMW). To check if you are being paid the NMW rate you need to know your pay reference period and what elements of pay count towards the NMW."
• National minimum wage: Rates and thresholds for employers Latest info from the HMRC website.
  
• National Minimum Wage 2011 (XpertHR benchmarking subscription required) The XpertHR benchmarking survey on the national minimum wage for 2010/2011. The survey looks at the following: the impact of the national minimum wage; how employers have adjusted to the national minimum wage; and at their views on the statutory pay floor.
• International minimum wage update 2011 (Subscription required) Twenty out of 27 EU member states have a national minimum wage. In January 2011, according to the latest Eurostat data, monthly minimum wage rates ranged from €1,758 in Luxembourg to €123 in Bulgaria - more than a 14-fold difference. At €1,139, the UK's minimum wage was the EU's sixth highest.
• Low Pay Commission sets out evidence for its 2011/2012 national minimum wage recommendations (Subscription required) The 2.5% increase in the national minimum wage from October 2011 is in line with the modest rises made to the pay floor seen over the past few years. The 12th report of the Low Pay Commission sets out the evidence it considered in making this year's recommendations.
  
• National minimum wage (Subscription required) From XpertHR's statutory rates service.
• Low Pay Commission Visit the Low Pay Commission (LPC) website for further information on the national minimum wage for 2011/2012, and for previous years.
• Low Pay Commission 2011 Report (PDF format, 4.1 MB) Download the 2011 LPC report, which sets out the LPC's complete research and recommendations on the 2011/2012 national minimum wage increase.
• The National Minimum Wage rates Complete details of current and future national minimum wage rates from the Directgov website.
• National minimum wage to rise 2.5% to £6.08 The BBC reports on the 2011/2012 national minimum wage increase.