AN INCREASE in the minimum wage of just £1.50 would boost Britain’s economy and create tens of thousands of new jobs, according to a new independent report yesterday.

The increase would benefit 4.6 million of Britain’s lowest-paid workers by an average of £1,400 per year, add £2.1 billion to public finances and potentially generate at least 30,000 new jobs, says the report.

The current hourly minimum wage is £6.31 for people over 21, £5.03 for those aged 18-21, £3.72 for under-18s and £2.68 for apprentices.

From October 1 there will be a paltry increase lifting the minimum to £6.50, £5.13, £3.79 and £2.73 respectively.

The report, commissioned by Unite and prepared by economist Howard Reed, formerly of the Institute for Fiscal Studies, will form the basis of the union’s submission to the government’s low-pay commission.

Unite general secretary Len McLuskey said the £1.50 increase would “get people out of poverty and get some real growth into our economy, not this phoney one fuelled by a housing bubble.

“This report shows that this is both affordable for employers, would in fact create not cost jobs, and is a great deal for the national finances. It need not be put off any longer.”

The report states that the increase would help poorest families the most, with the biggest gainers in the bottom 60 per cent of income distribution.

The biggest group of beneficiaries would be retail workers — more than 900,000 would benefit — and workers in the hospitality industry, in which 750,000 would benefit. In addition, 190,000 cleaners would see a boost to their incomes.

peterlazenby@peoples-press.com