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 You are in: Special Report: 1999: 04/99: Minimum wage  
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EDITIONS
Minimum wage Tuesday, 30 March, 1999, 17:54 GMT 18:54 UK
Stranglehold on prosperity
Dr Ian Peters, Deputy-Director General of the British Chambers of Commerce (BCC), argues that the national minimum wage risks sinking British business under a tidal wave of red tape.

Time is money. The national minimum wage (NMW) is the flagship of the government's Fairness at Work agenda. It enshrines in law the right for every employee to claim a minimum level of pay for every hour worked.

Thousands of low-paid workers will celebrate this legal landmark - but the hangover could be a cruel one, both for employers and employees.

The NMW is just the latest in a raft of regulations introduced by New Labour since the general election.

Small firms (SMEs), the engines of job creation in the UK, face the biggest hurdles in this regulation steeplechase. Time is money indeed, and the cumulative burden of administering new regulations takes time, costs money, and could ultimately cost jobs.

Minimum wage
The government is only just beginning to wake up this truth. The Secretary of State for Trade and Industry Stephen Byers has of late evinced clear acknowledgement that red tape is strangling the goose that lays the golden egg.

Mr Byers has even seen fit to give the issue of red tape "summit" status, calling in the BCC and other small business representatives, to debate the problems, and identify potential solutions. This is a welcome step forward.

Where the NMW is concerned, the key problem for business lies in the timing and clarity of the guidance essential for businesses to comply fully.

Mounting confusion

And the problem is set to worsen. Calls to the BCC's Chamber Advice Line service, which aims to help small firms through the regulatory mire, have shot up by 25% over the last 5 months.

Much confusion remains over employee definition. Businesses, for example, that have some workers on piecework, some hourly and some homeworkers may find that the costs of learning the regulations and applying systems which show they comply, add up to more than any additional wages they may have to find.

Even the government seems confused - just three weeks before the introduction of the national minimum wage the Department of Trade and Industry issued its Detailed Guide to the National Minimum Wage.

On page one of this "detailed" 112-page guide however, paragraph three states: "The information contained in this booklet gives only general guidance and should not be regarded or relied upon as a complete and authoritative statement of the law."

As a result, the Chamber Advice Line has had to produce a guide to the guidance for employers. The BCC will continue to pressure ministers to reduce the legislative burdens on business.

We believe that the first job of the proposed Small Business Service should be to review the burdens imposed on small firms by measures including the NMW, the Working Time and Parental Leave directives, in order to give employers and jobs a chance.


For DTI guidance on the national minimum wage call 0845 6000 678. For a detailed guide telephone 0845 8450 360 or use the BCC's Chamber Advice Line for further information on 01274 593302.

Links to more Minimum wage stories are at the foot of the page.


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