Minimum wage rates

Britain's largest business group has asked the Low Pay Commission to consider freezing the level of the minimum wage next October and not raise the adult rate above £5 until 2006.

Digby Jones, the director general of the CBI, the employers' body, urged caution following last month's increase in the adult minimum wage of almost eight per cent to £4.85 an hour.

Mr Jones said no one "could possibly have a clue" what effect the latest increase would have on jobs and the economy.

Government Response: Department of Trade and Industry

A DTI spokesman said: "The independent Low Pay Commission will be considering all of the representations made to it, including those from the CBI and TUC, and submitting its report to the Government by the end of next February.   We will then consider their recommendations very carefully."

 

Stakeholder Response: Forum of Private Business

 

Nick Goulding, chief executive of the FPB, said: "We cannot lose sight of the fact that the minimum wage has soared by 34.7 per cent over five years - a figure well above earnings growth.

 

"The minimum wage is now becoming dangerously high and any further increase could have a devastating affect on the small business community. Whereas big business can absorb the increase, as they employ relatively few staff on the minimum wage, it is actually small businesses that are hit hardest especially those businesses in poorer and remote areas.

 

"Above all it is an unwelcome additional pressure on businesses already being stung with a range of higher costs including increased employers' National Insurance contributions and rocketing levels of insurance premiums."

 

Stakeholder Response: Federation of Small Businesses

 

Daniel Mazliah, press officer for the FSB, said: "It is time for a real debate on the minimum wage. The FSB's 185,000 members are for the most part content with the level of the national minimum wage (NMW). A 2004 membership survey revealed that only two per cent of businesses felt the NMW significantly decreased their profitability.

 

"However the research did reveal pockets of unease in certain regions and sectors over the possibility of further rises. These include areas such as the South West and parts of