Further wages rises are planned

Workers over 21 can expect to earn at least �4.50 an hour a rise of 30p.

In addition, the youth rate for workers aged between 18 and 21 increases from �3.60 to �3.80 an hour.

And ministers say more increases are on the way - despite complaints from some employers.

The increase in the main adult rate will benefit between 1.3 and 1.6 million workers.

'Scaremongering'

The increase in the minimum wage is around double the rate of average earnings growth and almost three times the rate of inflation.

But unions - who have repeatedly called for a �5 minimum - say it is well within what industry can afford.

The government has also dismissed complaints from some employers as "scaremongering".

Department of Trade and Industry secretary Patricia Hewitt said: "We are committed to eradicating poverty pay.

"Despite the scaremongering, which claimed jobs would be put at risk by the minimum wage, we now have record levels of employment."

Minimum wage rises April 1999 �3.60 (18-21's �3) Oct 2000 �3.70 (18-21's �3.20) Oct 2001 �4.10 (18's-21's �3.50) Oct 2002 �4.20 (18-21's �3.60) Oct 2003 �4.50 (18-21's �3.80) Source: Low Pay Commission

What is more, Ms Hewitt promised that as long as economic conditions remained favourable a planned increase in the main adult rate to �4.85 an hour would go ahead in October 2004.

However, firms claim that the latest round of minimum wage hikes are cranking up costs at a time when the economic activity is sluggish.

Wolverhampton & Dudley Breweries said on Monday that the minimum wage increase would cost them �1.6m a year.