The current rates for the national minimum wage are listed on the HMRC website as follows:
· £5.73 per hour for workers aged 22 years and older
· A development rate of £4.77 per hour for workers aged 18-21 inclusive
· £3.53 per hour for all workers under the age of 18, who are no longer of compulsory school age
These will go up in October 2009 to the following values:
· £5.80 an hour for workers aged 22 and over
· £4.83 an hour for workers aged 18 to 21
· £3.57 an hour for workers aged 16 to 17
Now that is all well and good isn't it? This modest increase of 4p, 6p or 7p per hour depending on your age shouldn't hurt anybody. That is what I thought until I read the Low Pay Commission Report 2009 on the national minimum wage which, at point 8.97, states "We estimate that in total the Government will gain around £100 million from the 2009 minimum wage upratings". Table 8.4 on the next page lists the estimated exchequer yield and savings as follows:
Income tax £38,000,000
National Insurance £20,000,000
Working tax credit £22,000,000
Child tax credit £6,000,000
Income support £3,000,000
Housing support £3,000,000
Council tax benefits £9,000,000
Quite apart from the fact that these figures add up to the nice round figure of £100,000,000 I think it shows quite nicely why the government brought in the national minimum wage in the first place. After all, every little helps.
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