Unions hit out at 21p rise in minimum pay

THE government yesterday announced a 21p-an-hour increase in the national minimum wage, but drew criticism from trade unions, who called for a much bigger rise.

The adult rate will rise from 5.52 an hour to 5.73 from October, boosting the pay of almost a million workers, two-thirds of them women.

Gordon Brown, the Prime Minister, said the statutory rate will have risen by 60 per cent since it was introduced at 3.60 in 1999. He said some people had warned that a national minimum wage would cost two million jobs, but three million jobs had been created.

The hourly rate for workers aged 18-21 will increase from 4.60 to 4.77, while the statutory wage for those aged 16-17 will go up from 3.40 to 3.53.

Unions called for a "bolder approach" and said the rise should have been higher, but business groups welcomed the "moderate" rises. Paul Kenny, the general-secretary of the GMB, said: "In view of rising prices of food, energy, water, transport and travel, this increase is not enough to meet bills."

Dave Prentis, the Unison leader, said: "A much more realistic figure would be a minimum wage of 6.75 an hour, which would lift many more families out of poverty."

Tony Woodley, joint leader of Unite, said: "While we welcome the Low Pay Commission's efforts to stand firm against siren calls from the CBI for a freeze in the minimum wage, a 3.6 per cent rise is well below RPI inflation and projected pay increases, which stand at 4.1 per cent."

However, John Cridland, the deputy director-general of the CBI, said: "At a time of considerable uncertainty for businesses and with economic growth already slowing, we welcome today's moderate approach."

Chris Hannant, the head of policy at the British Chambers of Commerce, said: "It is reassuring for employers that the national minimum wage will not increase above average earnings."