UK employers approve of increases to National Minimum Wage

UK employers have given overwhelming support for the latest increases to the National Minimum Wage (NMW).

Nine out of 10 agree with the most recent increase in the adult hourly rate, to £4.85 from 1 October 2004, according to the latest research from Personnel Today’s sister publication IRS Employment Review.

However, when asked at what level the minimum rate should be set, almost half of the survey’s respondents said £5 an hour. Almost a quarter stated that £4.85 an hour is the appropriate rate, while another quarter assert that the minimum hourly rate should be above £5.

Only a very small minority (1.6 per cent) of respondents favour an NMW of below £4.85, while less than one in 10 believe that there should be no set minimum rate.

The research is based on responses from the views of 129 private and public sector senior remuneration and HR managers in UK organisations.

IRS Employment Review pay and benefits editor, Sheila Attwood said: “While our survey shows overwhelming support for the latest increases, trade unions and employers’ federations are divided over the scale of future increases to the NMW.

“Just how high those future increases should be is hotly contested. While a quarter of the respondents who stated that the adult minimum wage should be above £5 an hour are from organisations whose minimum rate is currently at £4.85, many organisations told us that pay increases to accommodate the NMW were funded out of company profits or through increasing prices.

“This suggests that while there is support for more uplifts, many organisations have few surplus funds available to absorb the cost of rises above the rate of inflation.”

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