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Minimum wage should be £6.94, report recommends | |
(about 17 hours later) | |
The government should have a minimum wage target of £6.94 and create a powerful watchdog to help workers out of low pay, a nine-month inquiry chaired by Sir George Bain, the architect of the policy has suggested. | The government should have a minimum wage target of £6.94 and create a powerful watchdog to help workers out of low pay, a nine-month inquiry chaired by Sir George Bain, the architect of the policy has suggested. |
The report was published on the day Vince Cable, the business secretary, announced the minimum wage would rise by 19p – or 3% – to £6.50 an hour and signalled there would be bigger increases in future years. | The report was published on the day Vince Cable, the business secretary, announced the minimum wage would rise by 19p – or 3% – to £6.50 an hour and signalled there would be bigger increases in future years. |
Cable said a million people would see their annual pay increase by as much as £355 in the first real-terms cash rise since 2008. | Cable said a million people would see their annual pay increase by as much as £355 in the first real-terms cash rise since 2008. |
The rise from October is expected to be the first of several above-inflation rises after a Treasury report said the minimum wage should be restored to pre-crisis levels. | |
David Norgrove, chairman of the Low Pay Commission, said: "Provided the economy continues to improve we expect to recommend further progressive real increases in the minimum wage, so that 2014 will mark the start of a new phase - of bigger increases than in recent years - in the work of the Low Pay Commission | |
However, in his report, Bain recommended a more radical overhaul for the minimum wage, saying the Low Pay Commission's role is currently too passive. | |
His study, along with a group of academics assembled by the Resolution Foundation said the minimum wage should ultimately be 60% of the median hourly earning, instead of the current level of around 55% of £11.56. | |
It also recommended that the Low Pay Commission should be made into a powerful new watchdog with the ability to support the ambition of lifting low salaries. | |
The new body would publish analysis that shows whether certain sectors could afford to pay more than the minimum wage and a separate proposed affordable wage for London | |
George Osborne, the chancellor, has said he ultimately wants the minimum wage to rise to £7. |
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