Minimum wage rises to 5.05

The UK's national minimum wage rises from 4.85 an hour to 5.05 tomorrow, in line with recommendations from the Low Pay Commission.

07:49 30 September 2005

The UK's national minimum wage will increase on October 1st by 20p, from 4.85 an hour to 5.05.

The government accepted the recommendations of a report from the Low Pay Commission on raising the minimum wage.

From tomorrow, adult workers must be paid at least 5.05 an hour, while the minimum wage for 18- to 21-year-olds rises by 15p to 4.25.

In February the government also provisionally accepted a call by the Low Pay Commission for an increase in the minimum wage to 5.35 and 4.45 in October 2006. The commission will report early next year about whether the UK is equipped to sustain a further increase in pay.

TUC general-secretary Brendan Barber welcomed the increase in minimum wage, claiming it would benefit more than a million workers, many of them women and part-time employees.

He added: "But, as ever, with each minimum wage increase comes the predictable wave of protests from business saying that it cannot afford another rise.

"Every year miserly bosses say any wage boost will be at the expense of jobs, but every year their predictions of doom and gloom fail to materialise."

Business leaders have criticised the proposed increases, claiming they are too high and will leave many firms struggling to pay their wage bills. Union leaders insist British companies can afford to pay staff more.

Director general of the British Chambers of Commerce (BCC) David Frost said: "Paying staff a fair wage is of course essential. However, the large increases seen in previous years have been well above earnings inflation.

"While businesses can just about tolerate the increase due to start on Saturday, the planned rise for next year to 5.35 is too risky.

"We have seen worsening economic climate and recent job losses in the distribution, hotels and restaurants sector. I urge the government to reassess the planned rates and take action to give our firms the relief they need."