Today I am announcing the Government’s response to the Low Pay Commission's 2016 report and recommendations on the National Minimum Wage.
The main recommendations put forward by the Low Pay Commission are about the rates of the National Minimum Wage from October 2016.
The Commission has recommended that the adult hourly rate of the National Minimum Wage (for 21-24 year olds) should increase from £6.70 to £6.95. The Commission has recommended increasing the Youth Development Rate, which covers workers aged 18 to 20 years old, from £5.30 to £5.55 and increasing the rate for 16 to 17-year-olds from £3.87 to £4.00. It recommends that the apprentice rate should increase from £3.30 to £3.40. The Commission recommend that all of these changes take place from 1 October 2016.
The Commission has also recommended that the accommodation offset increases from the current £5.35 to £6.00 from 1 October 2016.
The Government accepts all of the rate recommendations.
On the subject of compliance and enforcement of the National Minimum Wage, the Low Pay Commission’s report recommends that the Government considers introducing a requirement on employers that the payslips of hourly-paid staff include a clear statement of hours being paid for, and that the Government introduces a formal, public protocol for HM Revenue & Customs to handle third-party whistleblowing on breaches of the National Minimum Wage.
The Government is committed to the effective enforcement of the National Minimum Wage. As suggested by the Low Pay Commission, we will consider these options in full.
A copy of the Government’s response will be placed in the Libraries of the House.
I am also pleased to announce that the Government has today written to the Low Pay Commission setting out the remit for their 2016/17 Report. The Commission is asked to recommend the National Minimum Wage rates and the National Living Wage rate that will apply from April 2017 as well as an indicative rate for the National Living Wage for April 2018.
This statement has also been made in the House of Lords: