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Low Pay Commission

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Truscott): My right honourable friend the Secretary of State for Trade and Industry has made the following Written Ministerial Statement.

Last summer the Government asked the Low Pay Commission to produce their next report on the national minimum wage by the end of February 2007. The Government are today publishing that report.

I would like to thank the chair of the commission, Paul Myners, for the important role he has played in what is the first report under his chairmanship. I would also like to thank all the commissioners for their hard work. It is particularly appropriate to acknowledge the hard work and contributions made over the years by those commissioners who are stepping down from office this year.

The main recommendations put forward by the commission concern the rates of the minimum wage. The commission has recommended the adult hourly rate of the minimum wage should be increased from £5.35 to £5.52 in October 2007. The commission has recommended increasing the development rate, which covers workers aged 18 to 21 years old, from the present £4.45 to £4.60 in October 2007, and the 16 to 17 year-old rate from £3.30 to £3.40, again from October 2007.

The Government have accepted these recommendations. The Government also accept:

the recommendation that they should work more collaboratively with other organisations to raise awareness;the recommendation that the next sector for targeted enforcement should be one with a high concentration of migrant workers. We have chosen the hotel sector for the third year of the programme. We will build on our work by targeting hospitality more generally in year 4;

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the recommendation relating to social care that we should continue to make clear that the commissioning policies of local authorities should reflect the costs of care provision; and to monitor practice, examine the reasons for any uneven provision, and, if appropriate, provide further guidance;the recommendation that the accommodation offset should increase to £4.30 per day in October 2007; andthe recommendation that the Government should ask the commission to report in early 2008 on recommended rates for October 2008.

The Government will consider:

the recommendation of introducing a penalty to apply to any employer found to have underpaid the minimum wage;the recommendation that the commission should carry out a full review of the apprenticeship exemptions in their next report.

The Government reject the recommendation that 21 year-old workers should be paid the adult rate. The most recent data on employment continue to show the employment rate of 21 year-olds is more closely aligned to 20 year-olds than to those aged 22 years and above. We believe moving 21 year-olds on to the adult rate would risk damaging their employment prospects.

I have placed copies of this Statement, the report by the Low Pay Commission, and the Government's individual response to the commission's recommendations in the House Libraries.

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Pensions: Institutional Review

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My honourable friend the Minister of State for Pensions Reform (James Purnell) has made the following Statement.

On 16 January, the Government appointed Paul Thornton to undertake an independent external review of pensions institutions. The purpose of the review—announced in the May 2006 pensions White Paper—is to look at how the responsibilities of bodies involved in workplace pensions are arranged to ensure they support existing government policy, fit with their reform proposals, and wider developments.

I am pleased to advise the House that Paul Thornton today published a consultation paper with an invitation for contributions by 31 March. A copy is in the House Library. The document sets out the emerging issues and evidence presented so far, with the aim of encouraging further discussion and building consensus on the way forward. I encourage stakeholders to contribute: it is vital that institutional functions are arranged in the most efficient and effective way in order to support work-based saving and to complement our pension reforms. The consultation paper will be available on the department's pensions reform internet site later today. Paul Thornton will report to Ministers with recommendations by spring 2007.

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