LETTER : Benefits of minimum wage

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The Independent Online
Sir: The Institute of Economic Affairs' articles on the national minimum wage are very wide of the mark of industry's views on the subject ("Warning on minimum wage", 23 June).

Businesses in every sector support the principle of a national minimum wage. This has been confirmed in recent surveys by Reed International and the British Services Association. Employers recognise the many positive benefits that a national minimum wage will bring. A minimum wage encourages firms to train and enhance the skills of their workforce, in order to compete in terms of quality and not simply on cost.

Increasing output, motivating staff and boosting local economies are other reasons why this Government is committed to introducing a minimum wage, and why it has received widespread support. Of course the training that young people receive in new jobs will need to be borne in mind and the Labour Party's pledge to business promises to take account of this and not to penalise occupational training.

We have also made it clear that the national minimum wage will be introduced at a sensible level, taking into account the economic conditions at the time.

The Government has appointed Professor George Bain, a distinguished and proven negotiator in industry, as chairman of the Low Pay Commission. He will take on board the views from all sectors of business on the level and implementation of the minimum wage before making his recommendations to us.

The fact that his appointment was warmly welcomed by employers and employees alike demonstrates that this process has got off to an excellent start.


Minister of State

Department of Trade and Industry

London SW1