EEF, the manufacturer’s organisation, has called for the introduction of a formula to determine future increases to the National Minimum Wage (NMW), to give employers “some form of certainty about its potential impact”.

It is not the first time the EEF has called for such a formula. In previous years they have made the same request, saying that any formula that is eventually introduced should be fixed and “based on movements in basic pay across the economy”.

David Yeandle, the head of employment policy at EEF, explained: “In these difficult times, it is even more important for manufacturers to have greater certainty about future increases in the national minimum wage and the potential direct and indirect impact on their business.

“Increases in line with basic rates of pay across the economy will help to achieve this objective and ensure that future increases in the national minimum wage reflect the economic circumstances of the time.”

At the start of this month, the NMW was raised from £5.73 to £5.80 per hour, an increase of 1.2 per cent. This was the lowest raise since the NMW was introduced over a decade ago in April 1999. To put this in perspective, the annual NMW increases enacted between 2000 and 2008 ranged between 2.4% and 10.8%.

However, although the increase is low compared with past rises, the 1.2% boost is actually above the whole economy headline pay award as determined by pay specialists IRS.

With the Low Pay Commission set to publish its recommendations on the 2010/2011 NMW increase early in the new year, affected parties will await next year’s increase with a high degree of interest.

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