MINIMUM WAGE will go up to £7.50 in next 3 years

A mechanism has been put in place to ensure that the minimum wage will increase from £6.75 to £7.50 over the next three financial years, said the Chief Minister. 

He went on: The increases will be staggered at the rate of 3.9% this year, which is double inflation, 3.7% next year and 3.4% the year after that. This will equate to 25p per hour increase over the next three financial years and will be well ahead of anticipated inflation in the period. Should inflation, exceptionally, have the effect of increasing the minimum wage beyond £7.50, the greater of the two increases will apply.

This year therefore, the minimum wage will rise by an inflation busting 3.9% to be £7. Next year, in Financial Year 20/21, it will go up again by 3.7% to £7.25. In the following financial year 21/22, it will go up again by 3.4% to £7.50. At the end of the three year period of rises to £7.50, the minimum wage will continue to rise by inflation. This EXCEEDS the minimum amount by which employee representative organisations asked us to increase the minimum wage. I know that they will be very pleased with this inflation busting increase.

Additionally, this gives workers on the minimum wage the certainty that their hourly rates will continue to rise every year for five years. They have never had that certainty before, in particular when members opposite were in power and the hourly wage rate sometimes did go up at all for some years.

This measure delivers the most generous ever increase in the minimum wage in any ten year period, however it is measured. No government in Gibraltar’s history has ever increased the minimum wage more.

The way I have announced the measure will also enable businesses to plan and for that reason I am happy to tell the House that this increase and the manner of our introduction of it was the subject of discussion in consultation between us and the Chamber and Federation.

In essence, this amounts to a five year escalator for the minimum wage. It sets out where the minimum wage will be this year and for the rest of the lifetime of the next Parliament if we are returned to office. It gives businesses and entrepreneurs the ability to plan in respect of those posts where the salary is paid in keeping with this House’s measure of what the minimum age should be.

I am happy and proud to be able to tell the House that at those rates the minimum wage in Gibraltar is comfortably in the top third of the group of 22 countries in the EU that have a minimum wage. This is known as the Group 3 Tier.

Additionally, we do not just want to ensure that we are raising the amounts payable per hour for each worker. We want to ensure that our labour market is increasingly progressive and fair. In this respect we have done considerable work in partnership with Unite the Union on how labour conditions should change.