The Chancellor has indicated that the National Minimum Wage should be increased to £7 per hour.
George Osborne has made clear that he supports an increase even if the Low Pay Commission, the body established to set the Minimum Wage, disagrees.
It is thought that the increase would come into effect from October, just months before the general election.
The Chancellor said: “I believe Britain can afford an above-inflation increase in the Minimum Wage so we restore its real value for people and we make sure we have a recovery for all and that work always pays.”
Meanwhile business secretary Vince Cable is set to significantly increase the penalties for firms that fail to pay the minimum wage. Under new plans the fine for non-compliance would increase to £20,000 from £5,000. Employers would also be charged an additional penalty of 100 per cent of the wages owed, up from 50 per cent.
Mr Cable said: “Anyone entitled to the National Minimum Wage should receive it. Paying anything less than this is unacceptable, illegal, and will be punished by law.
“So we are bringing in tougher financial penalties to crack down on those who do not play by the rules. The message is clear – if you break the law, you will face action.”
What do you think? Should the minimum wage be increased? Can you afford to pay more? Let us know in the comments.