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Empey opposes National Minimum Wage regional rates

11 September 2007

Sir Reg Empey, Minister for Employment and Learning, today responded to a debate in the Assembly on the National Minimum Wage.  

Following the publication of reports by two independent UK think-tanks, there has been speculation in the media about the possibility of replacing the National Minimum Wage with varying regional rates.  

As a reserved matter, the NI Assembly does not have responsibility for National Minimum Wage policy.  However, as Minister for Employment and Learning, Sir Reg today underlined his opposition to regional minimum wage rates.  He asserted that such a policy would lead to a reduction of the level of the National Minimum Wage in Northern Ireland: “Any cut in the current modest level of the minimum wage would be a real injustice for working individuals and would only serve to make poor people poorer and increase the number of working households that are in poverty.  

“Lowering the minimum wage would run counter to the Executive’s policy of developing a high value-added economy.  Improved levels of economic growth and prosperity will only be achieved if we compete by becoming more innovative and exploiting higher skills levels, leading to productivity growth and higher wages.”

The Minister underlined to his Assembly colleagues that he was not aware of any plans by the British Government to pursue proposals to vary the rate of the National Minimum Wage according to region.  He also reported that no such recommendation had been made by the Low Pay Commission, the independent body set up to advise Government on the National Minimum Wage.

NOTES TO EDITORS:

1.The National Minimum Wage (NMW) Act 1998 introduced a minimum wage for the UK in April 1999.  Under Schedule 3 to the Northern Ireland Act 1998, the NMW is a reserved matter.  

2.Almost all UK workers have a legal right to a minimum level of hourly pay under the Act, regardless of the work they do or the type of business they work for. The level of pay is set based on the recommendations of the Low Pay Commission. The rates, which vary according to age, are:

From October 2006

Workers Aged 22 & over:£5.35  (increases to £5.52 from 1/10/07)

Workers Aged 18 to 21:£4.45  (increases to £4.60 from 1/10/07)

Workers Aged 16 to 17:£3.30 (increases to £3.40 from 1/10/07)

3.The Low Pay Commission is an independent statutory body set up to advise and make recommendations to Government about the NMW. In so doing, they:

  • undertake research;
  • monitor, evaluate and review the NMW and its impact; and
  • consult and take evidence from a wide range of organisations, including direct engagement with employers, employees and representative organisations throughout the UK.

4.There have been two recent reports that have attracted interest on the issue of a regional NMW: firstly, a report for The Economic Research Council by Professor David Smith, University of Derby. The Economic Research Council (ERC) is a registered charity, with no direct link to government, set up to generate discussion and debate about economic issues, particularly monetary practice.

Secondly, the Institute of Public Policy Research (IPPR) called for Government to ask the Low Pay Commission to consider a higher National Minimum Wage for London, though not for NMW regionalisation in the rest of the UK.

5. Media enquiries to the Department for Employment and Learning Press Office on 028 9025 7872.

6. Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.