National Minimum Wage
National Minimum Wage
National Minimum Wage
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Executive Summary<br />
30 We intend to review the accommodation offset arrangements as part of our 2013 Report,<br />
and have found no reason this year to adjust the offset relative to the minimum wage.<br />
We recommend that the accommodation offset be increased by 9 pence to £4.82 a day<br />
from 1 October 2012.<br />
31 The labour market position of young people has continued to worsen in 2011. Employment<br />
of young people has continued to fall, and unemployment to rise. However, there is debate<br />
about exactly how far pay is a factor. Employment of young people is more sensitive than<br />
that of adults to the economic cycle. With this in mind we reluctantly recommend freezing<br />
the rates for young people, which may increase their relative attractiveness to employers.<br />
Accordingly, we recommend a Youth Development Rate of £4.98 an hour and a 16-17 Year<br />
Old Rate of £3.68 an hour from 1 October 2012.<br />
32 In 2010 we were prudent in our first recommendation for the Apprentice Rate. Last year we<br />
saw some scope to increase it, to £2.60 an hour, while preserving the differential between<br />
it and the 16-17 Year Old Rate. In 2010/11 apprenticeship starts have increased for all age<br />
groups, and we believe there is a room for a further, smaller increase. We recommend that<br />
the Apprentice Rate be increased by 5 pence to £2.65 an hour from 1 October 2012.<br />
We have no presumption in respect of our decision next year, when we expect to have<br />
a larger evidence base which we will review carefully.<br />
33 We have examined a number of ways of indicating what rate recommendations might be<br />
expected in the future. A substantial majority of consultees, from across the spectrum of<br />
employers and workers, opposed these ideas. We agree with them that the disadvantage of<br />
constraining ourselves to positions which by definition cannot be based on timely evidence<br />
outweighs any benefit in increased clarity, particularly in the present uncertain business<br />
environment. On a separate point, stakeholders did indicate strong support for the publication<br />
of our report and the Government’s response as soon as possible.<br />
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