National minimum wage update

The Low Pay Commission was put in place in July 1997, and is hoping to make a recommendation on the UK's first national minimum wage by Spring 1998.

The timetable for the introduction of the UK's first national minimum wage (UK9704125F) is becoming clearer. The signs are that the Government will be bringing forward legislation in autumn 1997. In the meantime, the new Low Pay Commission (LPC) will consider the level of the minimum wage to recommend to ministers. The hope is that its recommendation would be available by the late spring of 1998, to allow the Government to announce the national minimum wage in the summer, to become operational by October of the same year. Strictly speaking, as with the Pay Review Bodies in the public sector (UK9702104F), the government will not be bound to implement the LPC's recommendation. It is recognised, however, that to reject it would to undermine the whole process and its own credibility.

The composition of the LPC has also been settled. It is to be chaired by Professor George Bain, director of the London Business School and a former director of the Industrial Relations Research Unit at the University of Warwick. Other members of the LPC, which is smaller than anticipated, include a representative from each of the Confederation of British Industry and Trades Union Congress, four further employer and trade union representatives (two from each) and two independent academics.

The Trades Union Congress has said that it is "very happy" with the composition of the LPC, which held its first meeting on 28 July, but there has been considerable criticism from other quarters. These include complaints from the Conservative opposition and the Institute of Directors about the under-representation of SME s (small and medium-sized enterprises), and from the Engineering Employers' Federation about the lack of a representative from manufacturing. Meanwhile, the Institute of Personnel and Development has expressed the concern that, given its composition, the work of the LPC will be dominated by the academic members who are both labour economists.