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Tuesday, 17 March 2015

Coalition announce rise in NMW - Labour say Ministers 'misled working families'

The Prime Minister, David Cameron, and the Deputy Prime Minister, Nick Clegg, have today announced that the National Minimum Wage (NMW) will increase by 3% to a new rate of £6.70 per hour, effective from October 2015. This is the largest real-terms increase in the National Minimum Wage since 2008, and over 1.4 million of Britain’s lowest-paid workers are set to benefit.

The Prime Minister and the Deputy Prime Minister have also announced that the National Minimum Wage for apprentices will increase by 57p an hour to £3.30. This is the largest ever increase in the National Minimum Wage for apprentices and will halve the gap with the National Minimum Wage rate for 16 to 17 year olds, which will be £3.87 an hour from October 2015. The government will also launch a consultation with businesses on the future of the National Minimum Wage rate for apprentices.

Prime Minister David Cameron said: At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out; that hard work is really rewarded; that the benefits of recovery are truly national. That’s what today’s announcement is all about – saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britain’s families; and a better future for our country.

Deputy Prime Minister Nick Clegg said: This is just one of the many ways in which we’ve created a fairer society whilst building a stronger economy. If you work hard, this government is behind you all the way. Whether you’re on low pay or starting your dream career through an apprenticeship, you will get more support to help you go further and faster.

Responding Shadow Secretary of State for Business, Innovation and Skills, Chuka Umunna, commented: "This 20p rise falls far short of the £7 minimum wage which George Osborne promised over a year ago. Ministers have misled working families who have been left worse off. Where under David Cameron we’ve seen the value of the minimum wage eroded, we need a recovery for working people.

Mr Umunna added: "Only Labour has set a more ambitious target for the minimum wage which would see a rise to £8 by 2020, restoring the link between hard work and pay. We would also act to ensure the National Minimum Wage is properly enforced where a Tory-led government has failed to get to grips with non-payment. Currently 15 per cent of apprentices are not being paid the legal minimum, rising to almost a quarter for 16-18 year olds.

"But the Tories have opposed our plans for better enforcement and an £8 minimum wage at every turn." Chuka Umunna added.

Also responding to the announcement, Green Party Spokesperson for Work and Pensions, Jonathan Bartley said: "Labour's rhetoric on the minimum wage is empty. Their aspiration to have a £8 an hour minimum wage at the end of the next Parliament is little different to what the other parties offer. It would be achieved to within a few pence anyway if the current rate of increase is maintained. No wonder it doesn't feature on Labour's new pledge card. Of greater concern is that this level would fall so far below a Living Wage, which even now stands at £9.15 an hour in London and £7.18 in the rest of the country - and will be significantly higher in 2020."

"The Green Party would make the minimum wage a Living Wage, with a target of £10 a hour. This would save £2.4bn each year in tax credits and generate another £1.5bn in income tax and national insurance contributions." Mr Bartley added.