Minimum wage should be 'frozen' to save jobs

With the national minimum wage marking its tenth anniversary this week, the British Chambers of Commerce (BCC) has called for a freeze in any increase this year.

The adult rate of the minimum wage has risen by 59 per cent since its introduction in April 1999, from £3.60 to the current rate of £5.73.

Automatic penalties for employers who underpay came into force on 6th April, ensuring that anyone caught flouting the law faces a stiff penalty.

Peter Mandelson, the Business Secretary, said of the anniversary: “The minimum wage has been a huge success for 10 years and is there to help make sure that workers are treated fairly, whatever the economic climate.

“Before it was introduced, there was no limit on how little employees could be paid and I am sure that no-one could now imagine a return to those times.”

While acknowledging the important role the minimum wage has played, David Frost, director general of the BCC, argued that holding the current rates during the recession would help stave off further job losses.

Mr Frost said: “We are fully supportive of the national minimum wage, and over the last decade of economic growth it has been right to see it increase.

“However, we are now in a deep recession and business cash-flow is being hit. We know this because unemployment is rising and looks set to reach 3.2 million next year. Freezing the minimum wage until the economy recovers will provide much needed breathing space for hard-pressed employers and will help save jobs.”