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Last updated:08 June 2015

Introduction of the National Minimum Wage

19th century coal minerOn 21 April 1999 the National Minimum Wage took effect, ensuring that all workers were paid a basic hourly rate - originally £3.60. The National Minimum Wage Act was a flagship policy of the Labour Party during its 1997 election campaign.

No national minimum wage existed prior to this date, although there were wage controls in place in specific industries. One of the main reasons for the Labour Party's Minimum Wage policy was the decline of trade union membership, coupled with an acknowledgement that those workers most vulnerable to low pay were rarely unionised in the first place.

The reasons put forward by Labour to support a National Minimum Wage fell into three broad categories:

Social - a Minimum Wage would attack poverty
Equity - a National Minimum Wage would reduce exploitation
Economic - extra demand in the economy would increase employment; a Minimum Wage could also boost investment and productivity.

Those most positively affected by the introduction of the National Minimum Wage were women, part- time workers, seasonal and casual workers, younger employees, people with disabilities, those working for small employers and those workers vulnerable to discrimination.