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Minimum wage: Brown caves under union pressure

Under pressure from the unions, Labour has agreed to extend the adult minimum wage to 21-year-olds. At the moment, the full minimum wage of £5.52 applies only to workers aged 22 and over. Those aged between 18 and 21 get £4.60 and 16 to 18-year-olds get £3.40.

“It sounds like Brown is consolidating his grip on the old Labour stalwarts as the pressure mounts,” says Goodman. “While the FPB supports the proposed changes to the national minimum wage, a right for unpaid leave – even for family emergencies – could be harmful for small businesses.”

Goodman reckons the government has gone one step too far at a time when businesses are already struggling to stay afloat. “After the temporary agency worker’s ‘compromise’ and the extension of maternity/paternity leave, this just heaps further administration on the working relationship between employers and employees.”

Laura Tenison, the entrepreneur behind £18.5m-turnover maternity and childrenswear company JoJo Maman Bébé, agrees: "It’s absurd for the higher level of minimum wage to start at 22 years old and I fully agree that the rate should be reduced to 21, in line with our social acceptance of when a young person becomes an adult.

"However, we must accept that businesses are really struggling in the current economic climate – and this will only add to the rising costs."

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