Minimum wage rises to £4.10
05 March 2001
The increase in the minimum wage from £3.70 to £4.10 an hour from 1 October could have an impact on pay differentials and hit hospitality businesses in remote areas, the British Hospitality Association (BHA) has warned. Trade and industry secretary Stephen Byers announced the rise in the House of Commons this afternoon, in line with a recommendation from the Low Pay Commission. Byers said it would mean that someone on the minimum wage and working a 40-hour week would see their earnings increase by £16 a week. Someone working 25 hours a week would see a £10-a-week increase. The Low Pay Commission will make its recommendation on the youth rate of £3.20 later in the year. Martin Couchman, deputy chief executive of the BHA, said £4.10 was "broadly what we were expecting". He warned that the rise could have an impact on pay differentials in the industry. "Someone earning, say, £4.20 an hour and in a superior position or with more experience may suddenly find they are on the same money or only slightly more than someone below them." Couchman also said there could be an impact on hospitality businesses in remote areas such as the Highlands of Scotland, mid-Wales and parts of the south-west of England. He admitted that the original introduction of the minimum wage in April 1999 had had little impact on the industry, except in remote areas such as these. "Overall, it's mainly been taken on the chin by employers, but this time round the impact might be greater." Couchman did welcome the fact that the announcement had been made early, rather than in July as planned. "We've been given six months notice and that will allow people to make their adjustments." Byers said the number of jobs in the hotel and catering sector had risen by 14,000 between March 1999 and September 2000, indicating that the minimum wage had not (as critics had argued) cost jobs in sectors with a high proportion of low-paid jobs.
