On Monday Patricia Hewitt announced a 30 pence-an-hour rise in the minimum wage.

The minimum wage for workers over 21 is to rise by 7.1 per cent in October from £4.20 to £4.50 an hour - in line with recommendations from the Low Pay Commission.

Workers aged from 18 to 21 will see their minimum rate go up 20 pence to £3.80 an hour, provisionally rising to £4.10 in 2004.

A spokesman for the DTI, told ePolitix.com: "The comments on the ePolitix.com Forum go right across the spectrum - from those wanting no increase to those wanting a higher increase.

"There is no evidence that the introduction of the minimum wage, nor the previous up- ratings, have cost jobs. But, set at an irresponsible rate, it could happen.

"The Low Pay Commission, which is made up equally of business and union leaders, made a recommendation for next year based on the highest rate that would not harm employment. The recommendation for the year after next, is dependent on a fresh assessment of the economic conditions - so if the economy is significantly healthier than expected it could be higher; but if the economy is significantly weaker it may be lower.

"The youth rate and the consideration of 16/17 year old should be seen in the same light. We don't want to damage the employment prospects of young workers.

"The first is an increase of 7.1 per cent and the second is an increase of 7.8 per cent. By the time both come in, the number of people covered will have doubled - from just over a million now, to around 2 million. The number of people covered is what is important, not having a round figure on the rate.

"Equally, one shouldn't confuse 'pay' and 'income'. While the minimum wage today is £147 for a 35 hour week, the minimum for a family with two children - through tax credits - is a net £275, almost twice as much. The minimum for a couple in work without children is £183 and for a single adult over 25 is £154. A single parent working sixteen hours is guaranteed £179, the equivalent of £10.10 an hour after taxes - compared with a minimum wage of £4.20 an hour.

"The minimum wage is enforced by the Inland Revenue. Anyone who thinks they are not being paid the minimum wage should call the helpline on 0845 6000 678 or use the interactive website - which provides guidance for both employees and employers."

Forum Response: Institute of Directors

Ruth Lea, head of the IoD policy unit, said: "The proposal to raise the adult minimum wage to £4.50 this October and £4.85 in October 2004 is most unwise given the economic difficulties business faces.

"Many businesses, especially outside London and the South East, will find it increasingly uneconomic to take marginal employees on at these rates. This will undoubtedly jeopardise employment prospects for the low skilled - especially in the regions.

"We ask the government to consider the difficulties already experienced by employers and urge them to exercise restraint in sanctioning further cost increases and imposing yet further burdens on business."

Forum Response: Federation of Small Businesses

Bill Knox, FSB employment affairs chairman, said: "An increase of fifteen per cent over two years is way above inflation and outstrips average increases in earnings. This proposal will be detrimental to a huge range of small businesses tied into long-term contracts.

"These businesses are unable to pass on extra costs and are already having to absorb the forthcoming National Insurance increases as well as the leap in the cost of liability insurance."Small firms are under pressure to maintain the pay differentials between their junior and more experienced staff. So even in a business with one or two employees on the minimum wage, an increase way above the rate of inflation can have a big impact on the overall wage bill."

Forum Response: GMB

John Edmonds, general secretary for the GMB, said: "The introduction of the minimum wage is a great accomplishment of this Labour Party but no one can live on £4.50. I am disappointed that the government has chosen a level that is well below a living wage so that hard working British people will continue to struggle make ends meet.

"Our youth deserve to be paid the same rate as the person working beside them and to continue to pay them less is discriminatory and unfair."

Forum Response: Counsel and Care

Martin Green, chief executive for Counsel and Care, told ePolitix.com: "I welcome an increase in the minimum wage, but the minister needs to ensure that this is reflected in the funding packages of government, particularly at a local level. Residential care providers will be particularly badly hit.

"Local authorities are already seriously under funding this sector and increases in wages without increases in funding, will result in lower quality care and job losses"

Forum Response: Adecco

Richard MacMillan, MD for Adecco, told ePolitix.com: "Our experience is that a larger pay packet for temporary and permanent staff help companies improve staff retention and increase the effectiveness of staff attraction. This in turn can assist in reducing the costs associated with high staff turnover and recruitment."

Forum Response: Barnardo's

Neera Sharma, principal policy officer for Barnardo's, told ePolitix.com: "We welcome the increase in the minimum wage but would urge government to base the level at which the minimum wage is set on research into the minimum income that families need to ensure that they do not fall under the poverty line.

"3.8m children are living in poverty today, a significant proportion in low-earner households, and if these children are to be lifted out of poverty the level at which the minimum wage is set needs increasing. We are also concerned at the lower rates for people under 21 as many of these will be young parents with childcare responsibilities. Finally, we would welcome an extension of the minimum wage for 16/17 year olds."

Forum Response: Novas-Ouvertures Group

A spokesman for Novas-Ouvertures Group told ePolitix.com: "Despite today's increase, which we welcome, the minimum wage remains merely a survival wage.

"The wage increase does little to address the fundamental problems behind the cycle of disincentive that many people who use our services fall into. Our service users continue to find it difficult to break the cycle of homelessness and long-term unemployment by taking on work at the minimum wage.

"We would urge the government to consider further increases to the minimum wage in tandem with a reform of the way in which housing benefit is so closely tied to employment status."

Forum Response: BUPA

Mark Ellerby, managing director for BUPA Care Services, said: "BUPA is supportive of the work of the Low Pay Commission (LPC) and we believe care workers should be paid more for the essential contribution they make in delivering quality care. However, the recently announced increase in the National Minimum Wage (NMW) of 7.1 per cent for workers over 21 and 7.7 per cent for those aged 18 - 21 is almost three times the rate of inflation and twice the average increase in national earnings. This will have a severe impact on the care home sector.

"Currently staff costs represent on average 50 per cent of turnover in a typical care home and significantly more in homes delivering specialist care. Therefore the care home sector will not be able to meet wage increases of this level and increases in National Insurance from 1 April without significant increases in fee levels from local authorities.

"The increase in the NMW comes at a time when care homes are already under extreme financial pressure. In addition to the increases in the NMW and National Insurance, local authority fee rates have fallen in real terms in each of the last five years. Last year 10,000 beds were lost as a direct result of under funding and a report by the Joseph Rowntree Foundation stated that Local Authorities were under-funding care homes by up to £85 per person per week.

"As outlined in our submission to the Low Pay Commission in October, BUPA would like to see a long-term programme of increases in NMW culminating in a £5 minimum wage in October 2005. The care home sector urgently requires additional funding to meet spiralling staff costs and prevent further meltdown."

Forum Response: Usdaw

Sir Bill Connor, general secretary for Usdaw, told ePolitix.com: "In an ideal world we would have liked the government to be more courageous, but this increase, which is about seven per cent, is still a significant step in the battle against low pay in the UK.

"Many low paid workers, the majority of whom are women, will benefit from this significant improvement. Thousands of workers still rely on the annual increase in the NMW to deliver higher take home pay and this is a step in the right direction.

"We welcome the government's commitment to look at bringing 16 and 17 year old workers under the NMW's umbrella. This should be done as soon as possible. Far too many young workers are at risk of being exploited by unscrupulous employers."

Forum Response: The Association of Chartered Certified Accountants

Robin Jarvis, head of the small business unit for ACCA told ePolitix.com: "While ACCA welcomes the continued long lead-in time which allows businesses to prepare for changes to the National Minimum Wage and the clear guidelines it provides employers and employees, the new increase will however have a significant effect on many small firms.

"For example, businesses in sectors with low profit margins and long working hours such as the hotel and catering industry will be particularly effected."

Forum Response: British Retail Consortium

Bill Moyes, BRC director-general, said "By provisionally accepting a recommendation to raise the NMW to £4.85 in early 2004, the government is breaking its promise to not make rises in NMW without due regard to the economy, levels of employment and inflation. This follows from a recent significant increase in the level of the NMW.

"The Low Pay Commission is also disregarding its terms of reference because there is no way it can evaluate the impact of the NMW so far in advance in such a rapidly moving, changeable economic climate. It is setting a target and creating an expectation that may prove unaffordable in the future, especially for small and medium-sized retailers.

"When we come to 2004, £4.85 may be an excessive increase, pitched at far too high given the conditions at that time. It would become a tax on jobs and job creation, leading to recruitment being cut, hours reduced and existing jobs being lost across the whole industry - ending the retail sector's ability to create jobs and power the economy."