Minimum wage: The Low Pay Commission backs a 3% increase

Business Secretary Vince Cable Business Secretary Vince Cable says the minimum wage rise would be the first above-inflation hike in six years

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The Low Pay Commission has recommended a 3% increase in the minimum wage to £6.50 an hour for adults, Business Secretary Vince Cable has told MPs.

Mr Cable said it would be the first increase in real terms since 2008 if the government accepts the proposal.

"It is faster than inflation and that is the first time in six years that has happened," he said.

General secretary of the Unite Union, Len McCluskey said: "This increase is a slap in the face for low paid workers."

Start Quote

I believe Britain can afford an above-inflation increase in the minimum wage”

End Quote George Osborne Chancellor of the Exchequer

At present, the minimum wage is £6.31 an hour for adults and £5.03 an hour for 18 to 20-year-olds.

Mr McCluskey said "An hourly rise of 19p for adults is an insult when the minimum cost of living has increased by a staggering 25% since the beginning of the economic crisis."

The government usually accepts the Low Pay Commission's recommendations.

In January Chancellor George Osborne told the BBC "I believe Britain can afford an above-inflation increase in the minimum wage, so we restore its real value for people, and so we have a recovery for all, and work always pays."

Cautious welcome

However, TUC General Secretary Frances O'Grady said: "This is a welcome increase in the minimum wage, which starts to recover some of the ground it has lost since 2008.

"We hope this is the first in a series of bolder increases that will give real help to the low paid, and not just a pre-election boost."

Several employers' organisations, the EEF, the CBI and the Forum of Private Business gave the recommendations a cautious welcome.

The British Chambers of Commerce has surveyed its member companies on their attitude towards raising the minimum wage.

Its Executive Director of Policy Dr Adam Marshall said: "After years of pay restraint, companies now feel somewhat more confident when it comes to the question of pay.

"So while the Low Pay Commission's recommendation appears to be slightly higher than many employers had hoped, it represents a reasonable compromise."

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