In areas where the cost of living is high, the hourly rate rises to pounds 4.At McDonald's closest rival, Burger King, management is planning to review pay levels on 8 January. Greenall's, the hotels and leisure group, employing some 3,000 staff, increased its minimum rate by 3.1 per cent to pounds 3.67 an hour and all other rates by 3 per cent, also from 1 October.Civil service agencies are adopting a similar policy by striking deals which have a minimum "underpinning" rise. In the hotel and catering industry recent settlements include a deal at Stakis Hotels, employing some 12,500 staff, which has added 3.2 per cent to its minimum rate bringing it up to pounds 3.58 for staff aged 21 and over. However, it adds: "In other instances the decision to raise minimum rates was influenced by the prospects of a national minimum wage."It is likely that by the time the law is enforced, most medium to large companies will be unaffected by the statute.The IDS report follows the news that McDonald's burger-flippers are to receive rises of up to 8 per cent. The 1 August deal at the Valuation Office gave staff a minimum rise of pounds 550 as part of a settlement which added 3.8 per cent to the pay bill.In the textile, clothing and footwear sectors, minimum earnings levels have been increased by a higher percentage than other rates.The research group points out that higher minimum rates were the consequence of union campaigns. British industry is introducing what amounts to a nationwide "floor" to pay more than a year before a national minimum wage is to be introduced. An increasing number of employers are weighting pay increases towards the lower end of wage structures in order to escape the ignominy of being "caught" by the legislation.The Low Pay Commission is expected to recommend a rate for the statutory minimum this spring and it is likely to come into effect in 1999. Most observers believe it will be struck at around pounds 3.50 at today's prices.Fresh evidence of employers up-rating their lower paid workers comes in the latest edition of Income Data Services' IDS Report.
According to Mr Warrington, this is because the UK market was largely driven by big stocks. "Almost half the growth came from around half a dozen stocks, largely in the banking and pharmaceutical sectors," he explained. Barrie Clement, Labour Editor, predicts that by the time the law is introduced only small businesses will be affected. "Underperformance is not surprising as active managers were generally underweight in these stocks.". More companies are giving their lower paid workers a wage boost ahead of legislation introducing a national minimum wage.
They have also had cash returned to them as companies bought back their own shares. In anticipation, they have moved more of their assets into cash. According to WM Company, the investment performance consultancy, pension funds now have cash holdings of almost pounds 30bn, equal to 6 per cent of their assets. This is the highest proportion they have held in cash for the past 20 years. The growing cash pile partly reflects fund managers using the past year's strong equity markets to take profits on their investments. The company already has a one third stake in another 500 megawatt gas fired station under construction.. British pension funds still expect a correction in the stock market over the coming year, even though the widely predicted crash failed to materialise in 1997. Overseas profits grew to pounds 67m in the first half of 1997-98.In October National Power made its first step into Eastern Europe, paying pounds 100m for a 48 per cent stake in Elektrarny Optavice, a Czech power group.The agreement gives National Power control in a power station and indirect links with electricity distributors.
