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Brown: Minimum Wage To Rise By 21p

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http://news.bbc.co.uk/1/hi/business/7279199.stm

Minimum wage will rise to £5.73

Rising food and energy bills have put pressure on household finances

The national minimum wage will rise to £5.73 an hour in October, Prime Minister Gordon Brown has announced.

It will rise by 3.8% from £5.52. For 18 to 21-year-olds the rate will be £4.77, up from £4.60, while 16 to 17-year-olds will get £3.53, up from £3.40.

The government said that one million people would benefit from the increase, two-thirds of whom would be women.

Mr Brown said that the minimum wage had gone up by 60% since the policy was introduced by the government in 1999

Yes Mr subprime Minister minimum wage had gone up by 60% since 1999 but house prices have gone up by 300% so it is £11,918.40 pa for a 40 hour week! No wonder those who can work live on benefits. Who can blame them?

His minimum wage is lower than the official poverty income of £16K something!

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http://news.bbc.co.uk/1/hi/business/7279199.stm

Yes Mr subprime Minister minimum wage had gone up by 60% since 1999 but house prices have gone up by 300% so it is £11,918.40 pa for a 40 hour week! No wonder those who can work live on benefits. Who can blame them?

His minimum wage is lower than the official poverty income of £16K something!

:lol: & the Beeb have it on their web front page - http://news.bbc.co.uk/1/hi/business/default.stm - as ever - on message!!!

+ - http://news.bbc.co.uk/1/hi/business/7279199.stm

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I don't think you can fairly criticise the NMW for being low- it is one of the highest in the world. Enforcement is more of an issue.

What doesn't make sense is that half of it is taxed and "Nationally" insured at 33%! What's the point of a minimum wage where you lose substantial amounts in income tax?

Housing policy is a related, but separate, matter.

In fact, I don't think that the purchase price of houses is particularly relevant if you're on the minimum wage (except maybe if you're a second or third wage earner in your family)

What matters is rental costs- private and social housing. Anyone know how much they've gone up since 1999?

Edited by Greenenvy

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Anyone else opposed to the minimum wage as a market distortion that means less people overall are employed, encourages mass immigration of poor and the emigration of businesses, or is it just me?

Edited by agb41

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I wonder how many small businesses will face bankruptcy because of this government interference?

It's all very well for Gordon to pronounce that the minimum wage will rise, but he doesn't have to dip into his wallet to find the money.

I'm just glad that I gave up our business 18 years ago when even before Nu-lab got into office, the regulations on small business were becoming so onerous (if one wanted to be totally above-board) as to make life next to impossible. We only ever employed 5 or 6 people but that was enough to keep me awake at night. Now employers have to cope with tax credits, maternity and paternity leave and payments, child support deductions, student loan deductions - damn it! Small businesses have been turned into an extension of government bureaucracy at their own expense. No wonder entrepreneurs are becoming ever more thin on the ground.

Edited by Methinkshe

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I wonder how many small businesses will face bankruptcy because of this government interference?

It's all very well for Gordon to pronounce that the minimum wage will rise, but he doesn't have to dip into his wallet to find the money.

I'm just glad that I gave up our business 18 years ago when even before Nu-lab got into office, the regulations on small business were becoming so onerous (if one wanted to be totally above-board) as to make life next to impossible. We only ever employed 5 or 6 people but that was enough to keep me awake at night. Now employers have to cope with tax credits, maternity and paternity leave and payments, child support deductions, student loan deductions - damn it! Small businesses have been turned into an extension of government bureaucracy at their own expense. No wonder entrepreneurs are becoming ever more thin on the ground.

Tell me about it.

I've employed people for nearly 10 years. Four months ago, after a severe business disruption, I made all the staff redundant.

I'd have them back tomorrow if I could, but I certainly don't miss the paperwork involved with them or the expenses. The government now does anything it likes with a business - even down to deciding which legal products customers can and can't consume in their premises.

****** the public sector.

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so is the cost of living in this country therefore it is a joke to announce 21p increase in minimum wage that can offer nothing but poverty.

Didn't pensioners recently get a 30p per week increase in state pension ? If so, I be they'd like a 21p per hour increase.

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I think GB should up the minimum wage to £100 an hour. That way, everyone will get RICH! and this silly "credit crunch" nonsense will vanish overnight. All we have to do is get the royal mint to print off a big wad of notes... problem solved.

If GB is reading this, can I have Alastair Darling's job when he takes early retirement into his index-linked final-salary government pension please (his 20 years' service [instead of the private-sector average 40 years'] must surely be nearly complete by now)? As you can see, I'm easily as financially literate as him (or yourself, for that matter).

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Tell me about it.

I've employed people for nearly 10 years. Four months ago, after a severe business disruption, I made all the staff redundant.

I'd have them back tomorrow if I could, but I certainly don't miss the paperwork involved with them or the expenses. The government now does anything it likes with a business - even down to deciding which legal products customers can and can't consume in their premises.

****** the public sector.

Could you tell me something - I've been out of the loop for too long to know and can only pick up stuff secondhand, so to speak. If the government increases the minimum wage, this is a liability for the employer which also means that low paid employees will be entitled to less tax credit unless there is a commensurate increase? Therefore, the government is shifting the burden of topping up the wages of the low paid to the employer and removing it from the tax credit system/government. Am I correct?

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Could you tell me something - I've been out of the loop for too long to know and can only pick up stuff secondhand, so to speak. If the government increases the minimum wage, this is a liability for the employer which also means that low paid employees will be entitled to less tax credit unless there is a commensurate increase? Therefore, the government is shifting the burden of topping up the wages of the low paid to the employer and removing it from the tax credit system/government. Am I correct?

TBH with you, I really don't know. The accountant does all that stuff because, quite frankly, it confuses the hell out of me.

I've got more and more puzzled by the complexity of the tax system. My accountants tell me that keeping up with the changes in tax and benefit law is a nightmare for them - quite often, they'll phone government helplines and be given three different answers to the same question.

However, the scenario you pose sounds like the nature of this frigging government.

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2 things here:

1: I like how Gordo likes to deliver the "good news" himself but will send mohammed Alistair happily to slaughter with the new budget

2: Does this mean that he's given up totally on Inflation? in that case, wait for the IR cut bloodbath

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Nice little earner for the treasury - extra NI, extra income tax, less tax credits/other benefits to pay.

Private business has to cough up the money and the workers will benefit by about 20% if they are lucky - the government will take 80% through the extra tax and benefit reduction.

Looks a cunning plan on paper but Brown has never understood the real, long term damage his meddling, tax and spend policies cause.

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Therefore, the government is shifting the burden of topping up the wages of the low paid to the employer and removing it from the tax credit system/government. Am I correct?

It gets worse if you are. Modelling this, the Government is a monopoly supplier of least-cost labour, and they've just hiked the price. Margins in price-sensitive industry will thin (leverage will increase), while prices (and here's the really evil bit - associated taxes) in price-insensitive industry will rise.

So risk to private capital rises at the same time as the tax rake from it expands.

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I don't think you can fairly criticise the NMW for being low- it is one of the highest in the world. Enforcement is more of an issue.

What doesn't make sense is that half of it is taxed and "Nationally" insured at 33%! What's the point of a minimum wage where you lose substantial amounts in income tax?

Housing policy is a related, but separate, matter.

In fact, I don't think that the purchase price of houses is particularly relevant if you're on the minimum wage (except maybe if you're a second or third wage earner in your family)

What matters is rental costs- private and social housing. Anyone know how much they've gone up since 1999?

My annual rent increase letter came today. My rent will go up 7% , the maximum allowed by central government. The rent goes up every year, probably due to increased council pension commitments. At the moment I'm not claiming any benefits but fully intend to switch to part-time work by the end of the year and claim as much as I can. I believe that there comes a point when it is better to act to bring down the system rather than working to sustain it ...for me that point is coming rapidly into view.

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Something to celabrate then for burger flippers and bog cleaners .

Something to celebrate for us all then, as no-one can be sure they will not have to chase after a menial job at some time in their life.

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I used to run a small business as well. We employed 6 people up to the middle of last year. Now we've made them all redundent. (although we paid them more than minimum wage).

The economic downturn didn't help - but as the other posters pointed out the cost and burden of regulation is mind boggling. Every day I would walk into the office to find yet another pack from a govt dept asking for money or information.

Wether it was health & safety, cencus, HMRC, the council etc etc..... The burden on small businesses has definately increased dramatically over the last few years.

Its just no longer worth the risk anymore - now i'm in the process of moving abroad!

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i would add we have never paid the minimum wage in all the companies history.

We are only just about to start for new starters, we have no choice.

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Anyone else opposed to the minimum wage as a market distortion that means less people overall are employed, encourages mass immigration of poor and the emigration of businesses, or is it just me?

This does appear to be the excuse/refrain given by most employers. However this did not happen when the minimum wage was introduced, and employers made the same argument then. The fact of the matter is that most minimum wage jobs are in service sectors which cannot readily be outsourced or done away with. Office cleaners, bar staff, hotel maids etc, cannot be done away with. UK wages have more or less stagnated over the past decade while there has been gradual continual increases in profits. Clearly they can afford to pay a higher minimum wage but because of global wage arbitrage and the pressures this has placed on workers, will only do so when forced to. There will of course be some exceptions to this.

If it has had any effect on emigration of businesses it has been minimal. The businesses which have emigrated generally have paid more than the minimum, and have left because of the low costs in the countries they have shifted to. This of course has included wages, but there is no way uk plc can compete for jobs that pay 1 GBP per hour or less i.e with china.

It probably has helped increase mass immigration, but the only other option would be no minimum wage, where wages would be driven down for our poor until it reached a point where it is not competitive for immigrants to come to the UK. This would also result in massive displacement of the uk working poor onto benefits, not that it is not high already. Better by far to put controls on immigration, an issue which is one of many NuLabour have made a complete botch job at.

Edited by alexw

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I used to run a small business as well. We employed 6 people up to the middle of last year. Now we've made them all redundent. (although we paid them more than minimum wage).

The economic downturn didn't help - but as the other posters pointed out the cost and burden of regulation is mind boggling. Every day I would walk into the office to find yet another pack from a govt dept asking for money or information.

Wether it was health & safety, cencus, HMRC, the council etc etc..... The burden on small businesses has definately increased dramatically over the last few years.

Its just no longer worth the risk anymore - now i'm in the process of moving abroad!

Completely agree, thefinalbear.

I am sick and tired of this interfering petty little nation run by nanny bureaucrats and self-policed by snitching sheeple.

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If it has had any effect on emigration of businesses it has been minimal. The businesses which have emigrated generally have paid more than the minimum, and have left because of the low costs in the countries they have shifted to. This of course has included wages, but there is no way uk plc can compete for jobs that pay 1 GBP per hour or less i.e with china.

Not while Chinese capital is being lent to UK consumers at hysterically low real rates anyway. The credit extended allows your minimally affected business to continue selling without price reduction to consumers whos real incomes are falling.

Lets see how long your minimally affected service-sector businesses continue trading once the monetary tap slams shut.

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Therefore, the government is shifting the burden of topping up the wages of the low paid to the employer and removing it from the tax credit system/government. Am I correct?

Why should government subsidize businesses by topping up the wages they pay to their employees in the first place??

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I've only worked low wage jobs thus far in my life (I'm 24). I think most low wage jobs pay a bit over the minimum wage anyway, the range I've noticed is around £5.70 - £6.05. Some were under that of course, but most jobs that I ever looked at were in that range. This is in Norfolk (mainly) aswell, which is a low wage area relative to many other parts of England. I could be wrong, I'm not basing this on stats - just my own observations which could obviously be flawed.

So, in short, the rise wont affect most people very much.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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