Stephen Byers confirmed yesterday that the government is to increase the minimum wage to £4.10 - which will deliver a £16 per week rise to workers on the rate.

Business is said to be concerned at the 11 per cent rise - fearing that it will hit small businesses and could lead to increased inflation.

The Tories said the increase, which will affect 1.5 million voters in Labour's heartlands, was an election ploy.