Bradford business leaders have given a cautious welcome to the Government's announcement of a minimum wage.

They said the level of £3.60 an hour from April 1999 was a "happy medium" for the city's industry. But union members said they believed the rate was set too low and young people were being forced into the poverty trap.

A phased rate will be introduced for workers aged 18 to 21 who will receive an initial rate of £3, rising to £3.20 in June 2000.

John Watson, president of the Bradford Chamber of Commerce, said the rate was a "tolerable" level for local employers.

"We were never in favour of the principle of a minimum wage at all but it's something the Government has decided to do," he said. "The level of £3.60 is tolerable for the time being. What worries us is that many people are campaigning to have it raised much higher which would have a damaging effect on jobs in Bradford.

"The city's economy is mainly made up of low-cost manufacturing and the impact of the minimum wage on the city is far greater than any of our competitor cities."

He added: "It comes at a time when many manufacturers are laying off workers and Bradford is one of the few places in the country where unemployment is starting to rise again. I'm pleased there is a lower level for young people as employers might not have been keen to offer them jobs and training. Overall I think that £3.60 is something we can live with."

Eric Hudson, president of the Bradford Chamber of Trade, said it was positive news although there were some problems.

"It will be difficult for some small shops in the city who employ part-time workers," he said. "But generally shops doing reasonably well shouldn't find a problem with it.

"It's a happy medium particularly for the North/South divide. If the level was set on a southern rate it would have been much harder for some businesses to cope.

"£3.60 comes somewhere in the middle and the majority of firms in the area should be able to afford it. The problem could be that some smaller shops won't be able to increase their prices and will have to lay people off."

Sandy Fraser, head of health for Unison in Yorkshire, said that they welcomed the principle but felt that the figure was too low.

"A minimum wage is something that we have been campaigning for many years," he said. "We would have liked to see it set higher and we will continue to campaign for a higher level to get people out of poverty.

"We're also concerned that the reduced wage for young people is quite wrong. Having a two tier minimum wage will help make young people even poorer."

Eddie McTigue, secretary of the Communication Workers' Union in Bradford, said: "We support the idea but believe that the figure should continue to be raised. £3.60 is not enough but it's a start. The level for young people is terrible news and they should be on the same pay as everyone else."

Nationally, union leaders welcomed the general principle of a minimum wage but said that the chosen level was far too low. The £3 an hour for 18 to 21-year-olds was 20p less than recommended by the Low Pay Commission.

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