The National Minimum Wage will increase by 1.8 per cent from October 2012, but youth rates will remain unchanged.

The Government has accepted the Low Pay Commission’s (LPC) recommendation to raise the adult wage from £6.08 to £6.19 an hour. Youth rates will stay at £4.98 for 18–20 year olds and £3.68 for 16–17 year olds. The minimum pay for apprentices has, however, increased by five pence from £2.60 to £2.65 per hour.

The Confederation of British Industry has welcomed the announcement, arguing that it will support many businesses across the country.

“With youth unemployment at its highest level for a generation, we must take great care not to price young people out of a job. Freezing the minimum wage will help reduce one of the barriers to employers deciding whether or not to take on a young person,” commented Katja Hall, CBI Chief Policy Director.

Business Secretary, Vince Cable, agreed. He said: “In these tough times freezing the youth rates has been a very hard decision – but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”

Although the LPC was unanimous in its decision; Chair of the Commission, David Norgrove, believes that it struck the right balance between the needs of workers and the challenges facing employers.