Queen's Speech Proposals: Minimum wage promise to be fulfilled

Click to follow
The Independent Online
One of the key policies which will set apart the new government from the previous administration will be the establishment of a statutory minimum wage.

The Queen's Speech next Wednesday will set out plans for the creation of a Low Pay Commission, under the chairmanship of an independent labour market expert.

Among the 15 commissioners will be representatives of both employers' and employees' organisations, especially those representing sectors where pay is comparatively low.

The Commission will be expected to take into account economic circumstances and the need for the eradication of "poverty pay" in arriving at a figure. The establishment of a statutory minimum will be denounced as inflationary and likely to cause job losses by the Tory opposition.

It is hoped a recommendation on the rate will be made before the end of the year and that the statutory minimum will come into operation in 1998.

The Speech will make clear that the wage will apply to all employees, whether full or part-time, temporary or casual and whether they work from home. There will be no regional or sectoral rates.

Ian McCartney, Trade and Industry Minister, is also known to be keen that the rate should also apply to the long-term unemployed who take advantage of a new community work programme.

It is expected that the minimum - backed by a range of financial sanctions against employers who pay workers below the statutory level - will be between pounds 3 and pounds 3.50 an hour.

The Labour Party calculates that pounds 3bn of taxpayers' money is used to subsidise low wages through the payment of "in-work" benefits.

While the biggest unions are calling for a rate at half-male median earnings - calculated at pounds 4.26 an hour - the TUC has set its sights lower at around pounds 4.

Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, warned this week at his union's annual conference in Jersey that the rate should not be too high for fear of sending a "shockwave" through the economy. Mr Jackson stressed that his members would seek to maintain their pay differentials over lower-paid colleagues.