The government announced that from October 2012 the adult rate of the minimum wage would rise by 11p, taking it to £6.19. This is a rise of 1.8 per cent, which is below the rate of inflation.

The government also announced that the minimum wage rate for young people would be frozen at their 2011 levels, £3.68 an hour for 16- and 17-year-olds and £4.98 for 18- to 20-year-olds.

While the rates were as recommended by the independent Low Pay Commission, it means that the national minimum wage is now worth less than it was in 2004. In a report for the Resolution Foundation, Minimum Wage: Maximum Impact, Professor Alan Manning of the London School of Economics, says that the caution about raising it in recent years is justified but he examines a number of options for reform including a higher rate for the over-30s.

For more details on the new minimum wage rates see the directgov website.

The report, Minimum Wage: Maximum Impact, can be found on the Resolution Foundation website