National Minimum Wage Regulations 1999 (Amendment) Regulations 2005.   

I thank noble Lords for their input and I shall try to deal with the points that were raised. The noble Lord, Lord De Mauley, compared the current proposed uplift of 4.1 per cent with the rate of inflation. He questioned why it was in excess of inflation. I am aware of arguments that future increases should be pegged to the rate of inflation, but the Government reject that proposal because it would move low-paid workers backwards. It is better to see the increase in the light of what is happening to average earnings, which is what the 2005 uplift broadly represents. Issues were raised about competition and the impact on companies, particularly in the retail sector. In February this year, the British Retail Consortium said that it was pleased that the Low Pay Commission had taken its evidence into account in recommending this year’s increase. It had been complaining not so much about the 2005 increase, but had expressed concerns about the provisional increase for October 2006. That is why the Government have asked the commission to review the matter in the light of the state of the economy later in the year. As regards the impact on differentials, the Low Pay Commission found in its latest report that there was a concertina effect. In years when the rate increases have been relatively large, businesses have narrowed differentials, and then restored them in following years when the increases have been smaller. Overall, that is the judgment on the impact of differentials. The noble Lord, Lord Dholakia, raised several points. So far as regional differentials are concerned, that is not something which the Government wish to take forward. If noble Lords look at the data, they can see that there are as many disparities within a region as within regions. That is why we think it is right to tackle the matter on a national basis. As regards an increase in the rate to workers aged below 21, it is important that we take employment factors into account. Workers aged 21 and below face much less favourable employment rates than other adults. We are concerned that obliging employers to pay young workers the same adult rate could worsen the situation. It will obviously be kept under review but it is a judgment that has to be made in each case. We welcome the support and recognition that the system works well and, in particular, that it has helped in dealing with gender inequalities, although there is clearly more to do in that direction. I hope I have answered the points that noble Lords have raised but if there are further points I shall be happy to follow them up in due course. Subject to that, I commend the regulations to the Committee. On Question, Motion agreed to.