19 Mar 2012 09:51 AM
Government approves new £6.19 Minimum Wage Rate

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

The Government has today accepted the independent Low Pay Commission’s (LPC) recommendations for this year’s National Minimum Wage (NMW) rates.

The following rates will come into effect on 1 October 2012:

The adult rate will increase by 11p to £6.19 an hourThe rate for 18-20 year olds will remain at £4.98 an hourThe rate for 16-17 year olds will remain at £3.68 an hour andThe rate for apprentices will increase by 5p to £2.65 an hour.

Business Secretary Vince Cable said:

"I believe that the recommendations of the Low Pay Commission strike the right balance between pay and jobs, and have therefore accepted all the rate recommendations. The Low Pay Commission has done a good job in difficult circumstances.

“In these tough times freezing the youth rates has been a very hard decision - but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”

Chair of the LPC David Norgrove said:

“We welcome the Government's acceptance of our recommendations on the rates for the National Minimum Wage. The Commission was again unanimous, despite all the economic uncertainties and the different pressures on low-paid workers and businesses. We believe we have struck the right balance between the needs of these workers and the challenges faced by employers.”

It was also announced today that David Norgrove has been reappointed as Chair of the LPC. His reappointment was made under the terms of the Code of Practice and other guidance issued by the Commissioner for Public Appointments. He will serve a second spell as Chair for a further term of four years from 1 April 2012 to 31 March 2016.

Notes to editors:

1. The Low Pay Commission was established following the National Minimum Wage Act 1998 to advise the Government on the National Minimum Wage. It is made up of representatives from all sides of industry. For more details and copies of the report see http://www.lowpay.gov.uk/

2. The LPC makes recommendations to the Government in its annual report. The Government has accepted the following recommendations:

· that the adult rate is increased by 11 pence to £6.19 an hour from 1 October 2012

· 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

· that the Apprentice Rate be increased by 5 pence to £2.65 an hour from 1 October 2012

· that the accommodation offset should be increased by 9 pence to £4.82 per day from 1 October 2012

· 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.

The Government has noted the following recommendations:

· 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.

· 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.

3. The LPC monitors and evaluates the impact of the NMW, with particular reference to the effect on pay, employment and competitiveness in low paying sectors and small firms; the effect on different groups of workers; the effect on pay structures; and the interaction between the minimum wage and the tax and benefit systems. The Commission reviews the level of the NMW adult rate and the development rates and makes recommendations, if appropriate, for change.

4. The Government published the remit for the LPC’s 2012 Report in June 2011, asking them to specifically consider the position of young people. The remit can be found here http://www.lowpay.gov.uk/

5. David Norgrove studied in Oxford and Cambridge. He has a BA Modern History, Diplomas in Economics, and Accounting and Finance, and an MSc in Economics from LSE. He has had a distinguished career in both private and public sectors, including as Marks and Spencer Executive Director for Clothing and International; Chairman of the Marks and Spencer Pension Scheme and 16 years in the civil service.

6. The appointment will require a commitment on average of two days a month and will include chairing monthly meetings in London, Commission Visits and representing the Commission. Remuneration is on the basis of a daily rate of £523.11, which is currently unclaimed by David Norgrove.

7. All appointments are made on merit and political activity plays no part in the selection process. However, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. David Norgrove has declared no such political activity.

8. He currently holds the following public appointment as a Trustee of the British Museum, ending April 2012, which is unpaid.

9. BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.


BIS Press Office

Henry Tanner
Phone: 020 7215 5947