The National Minimum Wage (NMW) is to rise from £5.35 to £5.52 an hour from October this year, the government has announced.
Trade and industry secretary Alistair Darling said he had accepted the level recommended by the independent Low Pay Commission, which will also mean increases from £4.45 to £4.60 for 18- to 21-year-olds, and from £3.30 to £3.40 for 16- to 17-year-olds.
The new rate means the minimum wage has gone up by almost 30% more than inflation since it was introduced in 1999.
Darling said: “More than a million workers, two-thirds of them low paid women will benefit from this announcement. Just 10 years ago home workers could be paid as little as 35p an hour, cleaners £1.30 an hour and security guards £2.25 an hour. It’s bad for families and just plain wrong.”
EEF, the manufacturers’ organisation, welcomed the modest increase in the wage.
David Yeandle, deputy director of employment policy, said: “We are pleased that the government has recognised the additional costs that many employers paying the NMW will face when statutory annual holiday entitlement increases in October 2007.
John Cridland, CBI deputy director-general, said: “With interest rates and inflation rising this is not the year for unaffordable wage increases. Last week the chancellor made sensible decisions on public sector pay, today government has applied that same caution to the private sector.”
In January new measures were introduced to provide tougher enforcement of the minimum wage.