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The Department of Trade and Industry has confirmed that the National Minimum Wage will rise from £4.20 to £4.50 an hour from October 2003, with a further rise to £4.85 an hour pencilled in for October 2004. These rises represent increases of 7.1% and 7.8% respectively: by comparison, inflation is running at 2.7% and earnings growth in the economy as a whole at 3.7%.

The Youth and Development Rate will rise from £3.60 to £3.80 an hour in October 2003, and to £4.10 in October 2004 (rises of 5.6% and 7.9% respectively). However, the Government has rejected a Low Pay Commission recommendation that 21-year-olds should be entitled to the full, rather than the youth, rate. But it is considering setting a special rate for 16- and 17-year-olds, who are at present outside the National Minimum Wage scheme altogether.