10p increase in minimum wage an insult to workers, say unions

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Plans to raise the minimum wage by 10p an hour were dismissed as an insult yesterday by unions. Patricia Hewitt, the Secretary of State for Trade and Industry, announced the adult hourly rate would rise in October from £4.10 to £4.20, and from £3.50 to £3.60 for those aged 18 to 21.

She said the minimum wage had "dramatically boosted" the incomes of more than one million of the lowest paid. But John Edmonds, general secretary of the GMB, said: "Workers struggling on the lowest wages will view this increase as an insult. The minimum wage should be one of the great successes of the Labour Government, so we have to ask how it is that ministers have allowed it to become such a public relations shambles.

"At a time when the emphasis is supposed to be on protecting the low paid, the timing of this announcement could not be worse."

Unison called for the minimum to be a "living wage", starting at £5 an hour, and the youth rate to be abolished. Dave Prentis, its general secretary, said: "Just because you are under 22 doesn't mean you pay less for essentials such as food, shelter and clothing."

The minimum wage went up 40p last October and the Government promised then it would rise another 10p if economic conditions allowed.

Ms Hewitt said the combined increases were equivalent to £900 a year for someone on a 35-hour week. She also said it had had none of the detrimental effects on the economy some critics had predicted. Sir George Bain, chairman of the Low Pay Commission, which recommended the rises, said: "If the national minimum wage is to retain its value as a wage floor for low-paid workers, it needs to be uprated regularly."

¿ David Willetts, the Tory pensions spokesman, accused the Government of ignoring a crisis caused by a £5bn "stealth tax" that forced closure of many final-salary schemes. But Alistair Darling, the Secretary of State for Work and Pensions, said the reasons were falling share values and people living longer.