Millions of staff in line for pay rise as minimal wage hike confirmed
Rachel Reeves said the cost of living was the ‘number one issue’ for Brits and the lowest paid deserved to be properly rewarded as she unveiled the changes ahead of the Budget
Millions of low-paid workers will see a boost to their pay packets next year, the Chancellor has announced.
Rachel Reeves said the cost of living remained too high as she unveiled the changes for around 2.7 million workers ahead of tomorrow’s Budget.
From April, the National Living Wage will rise to £12.71 per hour for workers over 21-years-old, an estimated annual hike of £900 for around 2.4 million of the lowest paid. The National Minimum Wage for 18 to 20-year-olds will also increase by 8.5% to £10.85 per hour.
The move will boost annual earning by £1,500 for a full-time worker – and will narrow the gap between the age bands as ministers seek to establish a single adult rate. The National Minimum Wage for 16 to 17-year-olds and those on apprenticeships will rise by 6% to £8 an hour.
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Ms Reeves said: “I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes. Too many people are still struggling to make ends meet. And that has to change.
“That’s why today I’m announcing that we will raise the National Living Wage and also the National Minimum Wage, so that those on low incomes are properly rewarded for their hard work. These changes are going to benefit many young people across our country, getting their first job.”
Paul Nowak, General Secretary of TUC, said: “The government is delivering on its promise to make work pay. With living costs stubbornly high an above-inflation pay rise will make a real difference to the lowest-paid.
“Putting more money in people’s pockets is good for workers and good for the economy as it goes straight back into our high streets and local businesses.
“And sticking with plans to scrap youth rates is absolutely the right call. Young workers have bills like everyone else and deserve a fair day’s pay for a fair day’s work. It’s right they see a larger rise as youth rates are phased out.”
Baroness Philippa Stroud, who chairs the Low Pay Commission said: “The recommendations published today are a product of diligent study of the evidence, careful reflection and significant negotiation. Our advice balances the Government’s ambitions with the need to protect the economy and labour market, with rates that are fair and realistic.”
But business leaders said firms were struggling to keep up with rising costs. Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said: “People are at the heart of every thriving business, and employers want to ensure their workforce is happy, engaged and well paid.
“However, every above-inflation wage increase leads to higher business costs, lower investment and fewer opportunities for individuals. Making employment more expensive risks deepening the jobs crisis among young people.
“There’s a limit to how much additional cost employers can bear without something having to give. With unemployment rising, the Government needs to use tomorrow’s Budget to ease cost pressures for business.”
