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Call for minimum wage to be increased

Ministers yesterday came under increasing pressure to set national minimum pay rates considerably in excess of pounds 4 an hour after the publication of official figures showing a continuing surge in wage inflation.

Some of the country's biggest unions will be calling for a statutory minimum set at pounds 4.61 following the publication of the latest National Earnings Survey.

Based on previous National Earnings Survey data - and a formula calculated on half male median earnings - unions were urging a rate of pounds 4.42.

As disclosed in The Independent, the TUC's executive committee on Wednesday approved a confidential document calling for a minimum wage of "somewhat more than pounds 4 an hour".

The latest government statistics, which show average earnings for full- time workers increasing by 4.6 per cent - up from 4.2 per cent - will give the more left-wing unions ammunition to "up the ante".

The mounting pressure on the Government comes ahead of next week's Labour conference where senior party officials will be anxious to delete any mention of specific figures from the motions to be debated.

Government officials calculate that a rate of pounds 4.61 would mean pay increases for some 4.5 million employees. More than one-fifth of employees earn below the rate - 13 per cent of full-timers and 47 per cent of part-time workers.

Another more moderate TUC interpretation of the formula would give a figure of pounds 4.12 under yesterday's NES figures - up from pounds 3.96 under previous data.

Both figures would prove unpopular with the business community. In a survey published yesterday the British Chambers of Commerce found that more that six out of 10 firms would be affected by a minimum of pounds 4.25. The first response of more than half of the respondents would be to cut jobs, the survey found.

The chambers submitted their findings to the Low Pay Commission, set up by the Government to advise on the level of the minumum wage which is expected to be introduced in late 1998 or early 1999.