Healey to raise minimum wage by 3.9 per cent in Budget

Summarised from 2 outlets · Updated 26 Oct, 19:20 · Archive

Chancellor John Healey is expected to increase the national living wage for over 21-year-olds to £13.20 per hour.

Chancellor John Healey is expected to announce a 3.9 per cent increase to the minimum wage in the Budget on Wednesday. The national living wage for workers aged 21 and over will rise from £12.71 to £13.20 per hour. The national minimum wage for younger workers aged 18 to 20 will increase from £10.85 to £11.27 per hour, matching the 3.9 per cent rise.

Labour's manifesto promised to scrap the "discriminatory" age bands for minimum wages and to equalise pay between younger and older workers by 2030. The rise continues a narrowing of the gap: the minimum wage for younger workers rose by 8.5 per cent this year, reducing the difference to £1.86 per hour. However, the 3.9 per cent increase suggests the government is slowing the pace of equalisation, moving away from its manifesto commitment.

Business leaders have warned that rapid minimum wage increases discourage hiring of younger workers. Youth unemployment has become a concern, with unemployment for 16 to 24-year-olds exceeding 16 per cent for the first time in over a decade, and numbers of young people not in education, employment or training exceeding a million earlier this year. The TUC has disputed these warnings, pointing to analysis showing 85 per cent of young workers are already paid above the minimum wage. The Low Pay Commission, an independent body, makes recommendations to the government on minimum wage levels.

How it is being reported

• John Healey set to announce Budget minimum wage rise - but slower hikes for younger workersLabour's manifesto committed to scrapping "discriminatory" age bands, and to increase wages for 18 to 20-year-olds so young workers are paid the same as those over 21The Mirror · 26 Oct, 18:58
• Healey to ‘increase minimum wage by 3.9 per cent’Chancellor John Healey will reportedly hike the minimum wage by nearly four per cent at the Budget, setting the floor for wages for all over 21-year-olds at £13.20 for the next year. Healey is expected to deliver a huge pay increase of 3.9 per cent to low-wage workers on Wednesday, according to The Times. However, [...]City AM · 26 Oct, 18:08

In this story: John Healey · Labour · Low Pay Commission · TUC · United Kingdom

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