Low Pay Commission (Hansard, 21 June 2001)

§ Ms Hewitt

The Low Pay Commission (LPC) submitted volume II of its third report to the Government on 11 June. The Government are today publishing the report and the detailed Government response to its recommendations.

The Government are required by law to lay a report before each House of Parliament explaining their response to the LPC's recommendation. That report has now been laid. It says that: The Government accept the recommendation to give the LPC a permanent role in monitoring the minimum wage. The Government accept the recommendation to increase the development rate from £3.20 an hour to £3.50 an hour on 1 October 2001. The Government accept the recommendation to make a further increase to £3.60 an hour on October 2002, subject to the economic situation remaining favourable. The Government do not accept the recommendation to apply the adult rate of the minimum wage to workers aged 21. The adult rate will continue to apply from a worker's 22^nd birthday. The Government note the recommendation for biennial reviews commencing with a report in February 2003. The LPC will be given full terms of reference in due course. The Government agree that when reviews are undertaken they should be over a two year period, in advance of the relevant budget. The Government accept all the remaining LPC recommendations.

The detail of the recommendations, and the explanation of why the recommendations for 21-year-olds has not been accepted, can be found in the full Government response placed in the Libraries of each House. The Regulations affecting the changes which the Government have accepted are subject to the affirmative procedure and will be debated in both Houses shortly. The Government have prepared a regulatory impact assessment which is also published today, and copies have been placed in the Libraries of the House.

The Government agree with the LPC that a strategic, longer-term programme of research needs to be established. To this end the LPC is being provided with a new remit to enable it to continue to monitor and evaluate the impact of the NMW, and especially to commission longer-term research. This will help inform the Commission's analysis and recommendations to be included in its next report.