Low Pay Commission
Printable version E-mail this to a friend

Low Pay Commission's 2012 Report

Low Pay Commission's 2012 Report

News Release issued by the COI News Distribution Service on 19 March 2012

The Low Pay Commission today welcomed the Government's acceptance of its recommendations on rates for the National Minimum Wage (NMW) from October 2012.

From 1 October 2012, the adult minimum wage rate will increase from £6.08 to £6.19 an hour, the Youth Development Rate will remain at £4.98 an hour and the 16-17 Year Old Rate will remain at £3.68 an hour. The Apprentice Rate will increase from £2.60 to £2.65 an hour.

The Chair of the Low Pay Commission, David Norgrove said:

"Our recommendations this year are, as ever, based on extensive economic evidence and take account of the prospects for the UK economy. Although the economy is forecast to grow through 2012 and 2013, the expected pace of growth is uncertain and is likely to be low. We believe our recommendations for October 2012 balance the needs of low-paid workers against the challenges facing businesses, particularly small businesses.

The position of young people in the labour market is a cause for concern. Their employment prospects continue to suffer more than those of other workers. Our recommendations to freeze the youth rates were made reluctantly, and may help to increase the relative attractiveness of young people to employers.

For apprentices, over the past year apprenticeship starts have increased for all age groups and we have recommended a 5p increase in the Apprentice Rate.

Business told us that the NMW simplification they want is not change to the law, but clear and accessible advice about it. We have concerns over the quality and availability of guidance on the NMW so have recommended improvements to the guidance.
We are very concerned over the apparent low levels of awareness of rights and obligations under the NMW and also that the policy announced last January of publicly naming wilful infringers has not been used. We would like to see the Government take actions to raise awareness, and also to make frequent use of naming policy to show that those who infringe the NMW get caught and punished."

Notes to Editors

1. The Low Pay Commission is a statutory body whose role is to advise the Government on the National Minimum Wage.

2. Low Pay Commission submitted its report to the Government on 15 February 2012, in accordance with its remit. The Government published and responded to this report on 19 March 2012.

3. The 2012 Report is the Commission's thirteenth report. All reports are available from the Stationery Office Bookshops or the Commission's website at: http://www.lowpay.gov.uk.

4. The members of the Low Pay Commission are:
David Norgrove (Chair), Chair of PensionsFirst and Deputy Chairman of the British Museum; Susan Anderson, consultant to the CBI on employment issues and a member of Acas Council; Professor Bob Elliott, Professor of Economics and Director of the Health Economics Research Unit at the University of Aberdeen; Neil Goulden, Director, Neil Goulden Consulting Ltd; John Hannett, General Secretary of the Union of Shop, Distributive and Allied Workers; Peter Donaldson, Managing Director of D5 Consulting Ltd; Professor Stephen Machin, Professor of Economics at University College London and Research Director, Centre for Economic Performance, London School of Economics; Frances O'Grady, TUC Deputy General Secretary; and Heather Wakefield, National Secretary for UNISON's Local Government Service Group.

5. A full list of this year's recommendations follows.

National Minimum Wage Rates
We recommend that the adult rate of the National Minimum Wage be increased by 11 pence to £6.19 an hour from 1 October 2012 (paragraph 5.83).

We recommend a Youth Development Rate of £4.98 an hour and a 16-17 Year Old Rate of £3.68 an hour from 1 October 2012 (paragraph 5.86).

We recommend that the Apprentice Rate be increased by 5 pence to £2.65 an hour from 1 October 2012 (paragraph 5.87).

Accommodation Offset We recommend that the accommodation offset be increased by 9 pence to £4.82 a day from 1 October 2012 (paragraph 5.84).

Simplification We recommend that in order to make operating the National Minimum Wage as simple as possible for all users, the Government puts in place, and maintains, effective, clear and accessible guidance on all aspects of the minimum wage particularly where there is significant evidence of ignorance or infringing practice. As a first step, the Government should undertake a review of all existing guidance (paragraph 4.54).

Compliance We recommend that the Government should not only have a process for naming infringers but should also make frequent use of it. The Government should also actively seek other publicity opportunities which will help to signal that those who infringe the National Minimum Wage get caught and punished (paragraph 4.94).

We recommend that the Government should more actively communicate both the rates themselves, and rights and obligations under the National Minimum Wage. Communication activities about the minimum wage should not be subject to the Government's marketing freeze (paragraph 4.117).

Low Pay Commission
6th floor
Victoria House
Southampton Row
London WC1B 4AD
Tel. 020 7271 0451
Web: http://www.lowpay.gov.uk


NDS Enquiries
Phone: For enquiries please contact the issuing dept

Carrie Aitken
Phone: 0207 271 0451

Insight Paper: RegTech - Learnings from Regulators