INDUSTRY officials from the region have expressed their fear that the rise in the minimum wage could send the wrong signals to workers.

The government has decided to increase the national minimum wage by seven per cent from £4.20 an hour to £4.50. But members of the engineering and manufacturing industry believe the decision could send the wrong message to employees who earn more than the minimum wage.

Ian Hughes, Director of Engineering Employers' Federation Yorkshire and Humberside, said very few workers in the engineering industry would be affected by the change.

He said: "We are not quibbling at the actual amount of increase or at the basic philosophy of a national minimum wage. What concerns us are the signals that this increase - and a similar one to come into force in October 2004 - will send to the workforce."

He said that much of the engineering industry was in recession and average pay settlements in the sector were running at an increase of 2.5 percent or less.

He said that giving employees at the bottom of the pay scale a pay rise at two or three times the rate of inflation, while more skilled workers would receive a far lower percentage rise, was a concern.

Updated: 11:18 Tuesday, June 10, 2003