Minimum wage increases to £6.31 across the UK

Vince Cable Business Secretary Vince Cable says more needs to be done so wealth is shared "across the board"

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The national minimum wage for adults increases by 12p an hour to £6.31 from Tuesday.

The rise, first announced in April of this year, follows the recommendations of the independent Low Pay Commission.

Unions are calling for a steeper jump, however, with the TUC general secretary Frances O'Grady saying a "far bigger increase" is needed.

"The UK's lowest-paid workers are now facing an historic living standards crisis," she said.

The rate for 18-to-20-year-olds is increasing by 5p to £5.03 an hour, while it is going up by 4p to £3.72 for the 16-to-17-year-old age group.

Business Secretary Vince Cable said he would ask the Low Pay Commission, which advises the government on the national minimum wage each year, to "look at what economic conditions would be needed to allow the national minimum wage to rise in the future by more than current conditions allow".

Cost of living

The Resolution Foundation, a think tank which focuses on standards of living, said that the minimum wage was in effect falling - in spite of the increase - because of the pace of inflation.

Inflation, measured by the consumer prices index (CPI) fell to 2.7% in the year to August, from 2.8% in July.

It means prices are still rising faster than wages, which rose by 1.0% on average over the same period.

The Office for National Statistics said the drop was due to air fares, petrol and diesel, and clothing prices rising more slowly than in August 2012.

Living wage?

In recent years wage campaigners have sought a so-called "living wage" for employees, arguing the minimum wage does not reflect the real costs of living, especially in the capital.

The Living Wage Foundation argues that companies should pay £7.45 an hour in the UK as a whole, and £8.55 in London.

Rhys Moore, director of the Living Wage Foundation, said: "We believe that a voluntary living wage, working alongside a strong national minimum wage, is the most effective way of getting to grips with the low-wage economy."

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