Minimum wage: Low Pay Commission backs a 3% increase

Minimum wage: Low Pay Commission

backs a 3% increase


http://news.bbcimg.co.uk/media/image...7_73236136.jpg
Business Secretary Vince Cable says the minimum wage rise would be the first above-inflation hike in six years




The Low Pay Commission has recommended a 3% increase in the minimum wage to £6.50 an hour for adults.

It would be the first increase in real terms since 2008, if the government accepts the proposal.
The commission said it had to balance increased costs for businesses against doing more to help the lowest paid.
But it said the economic recovery justified the move, and that if it continued, 2014 would mark a "new phase" of larger increases.
"Provided the economy continues to improve, we expect to recommend further progressive real increases in the value of the minimum wage, restoring and then surpassing its previous highest level, so that 2014 will mark the start of a new phase - of bigger increases than in recent years," said commission chairman, David Norgrove.

Above inflation

According to his report, the proposed rise would increase the number of jobs covered by the minimum wage by more than a third, to about 1.25 million.
Since the economic downturn the minimum wage has risen faster than other wages, the commission noted.
But its real value, like average wages, has fallen because it has been exceeded by the cost of living.
Telling MPs about the proposed rise, Business Secretary Vince Cable said: "It is faster than inflation and that is the first time in six years that has happened."
Shadow business secretary Chuka Umunna MP welcomed the commission's recommendations.
"Labour said last year that we need to see above-inflation rises in the minimum wage to restore the value lost over recent years," he added.

'Insult'

TUC General Secretary Frances O'Grady said: "This is a welcome increase in the minimum wage, which starts to recover some of the ground it has lost since 2008.
"We hope this is the first in a series of bolder increases that will give real help to the low paid, and not just a pre-election boost."
However, the plans have not been universally well received.
The general secretary of the Unite Union, Len McCluskey, called it a "slap in the face for low paid workers."

At present, the minimum wage is £6.31 an hour for adults and £5.03 an hour for 18 to 20-year-olds.
Mr McCluskey added: "An hourly rise of 19p for adults is an insult when the minimum cost of living has increased by a staggering 25% since the beginning of the economic crisis."

Cautious welcome

Several employers' organisations, the EEF, the CBI and the Forum of Private Business gave the recommendations a cautious welcome.
The British Chambers of Commerce has surveyed its member companies on their attitude towards raising the minimum wage.
Its Executive Director of Policy, Dr Adam Marshall, said: "After years of pay restraint, companies now feel somewhat more confident when it comes to the question of pay.
"So while the Low Pay Commission's recommendation appears to be slightly higher than many employers had hoped, it represents a reasonable compromise."
The government usually accepts the Low Pay Commission's recommendations.
In January Chancellor George Osborne told the BBC he thought Britain could afford an above-inflation increase.
The commission's recommendations, which would apply from 1 October this year, also include an increase of 2% for workers aged 18-20 to £5.13 an hour.
Those aged 16-17 would see an increase of just under 2%, to £3.79 an hour.

http://www.bbc.co.uk/news/business-26355725

It should be a minimum increase of 10%.

How things can change in a few short months eh ?
Quote from BBC report above -

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In January Chancellor George Osborne told the BBC he thought Britain could afford an above-inflation increase.

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Quote from the Mail in January after a briefing from his office -

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The chancellor has thrown his weight behind a proposal that would raise the minimum wage from £6.31 to £7 an hour from October

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It then goes on to do an arse covering piece -

Quote:

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The Treasury made an assessment – though not technically a recommendation – of the impact of increasing the minimum wage to £7 from October. The commission is due to make a recommendation next month.

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To be fair on the government at least they sorted out the bankers bonuses......especially in the bank that we (taxpayer) own a major stake in.......Oh wait -

RBS Reaches Deal To Award £550m Bonus Pot
The state-backed lender reaches agreement on the controversial awards despite an £8bn loss, Sky News learns.
12:29am UK, Wednesday 26 February 2014
A Royal Bank of Scotland (RBS) sign is p

RBS has agreed a deal to pay £550m in bonuses to staff for 2013

Email

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is to pay approximately £550m in staff bonuses for 2013 after securing the agreement of the Treasury agency that is its biggest shareholder.

Sky News has learnt that the taxpayer-backed bank will disclose the sum - which is higher than previous reports had suggested - alongside its annual results on Thursday.

The bonus pot for 2013 is certain to reignite a row over pay at RBS because it will also announce a loss for the year estimated at £8bn, the biggest since its bail-out by the Government in 2008.

UK Financial Investments (UKFI), the body which manages taxpayers' stake in the bank, is understood to have signed off on the payments in recent days.

The sum of around £550m will represent a fall on the 2012 bonus pot of £679m of just under 20%, which Chancellor George Osborne is expected to cite as evidence that RBS is exhibiting restraint on bonus payments.

Last year's figure was further reduced by £72m to £607m because of the clawback of previous years' deferred bonuses, undertaken as a consequence of RBS's £390m fine for its role in the Libor-rigging scandal.

RBS is expected to have reduced the 2013 bonus pool by at least £25m under a commitment it gave 12 months ago to reduce bonuses in subsequent years.

It is unclear whether RBS will also announce a plan on Thursday to seek shareholder approval at its annual general meeting in May to allow it to pay bonuses worth double the value of senior employees' basic salaries.

Other UK banks are planning to do so, but RBS found itself at the centre of another political row last month when Labour leader Ed Miliband urged David Cameron to use the Government's stake to block any such request.

At the World Economic Forum in Davos, Switzerland, Mr Cameron told Sky News: "With our particular responsibility for RBS, I can tell you that I don't only want to see the level of pay and bonuses come down overall, I want to see it come down per-person, per-capita as well."

The Prime Minister said last month that new European rules on bankers' pay, which the Government is challenging, could exacerbate the riskiness of banks.

He said: "This European directive... in some ways might make things worse, because you could see rates of pay go up.

"You can claw back a bonus, the taxpayer can get the money back. You can't claw back [basic] pay."

Thursday's bonus announcement will come as Ross McEwan, RBS's new chief executive, unveils a plan that will mean the bank's 120,000-strong workforce shrinking to barely two-thirds of that number following the sale and closure of several business units.

RBS and UKFI declined to comment.
Source

Go for it Dave !

Sent from my GT-I9505 using Tapatalk

Those who received a 3% increase will be celebrating in the streets tonight...


... with a glass of tap water.