Labour in disarray over minimal wage pledge as Starmer makes an attempt to close down U-turn

Labour was in disarray over its minimum wage pledge last night as Sir Keir Starmer tried to shut down reports of an impending U-turn.

The Prime Minister insisted that the party would stick to its manifesto commitment to equalise the minimum wage between younger and older workers.

However, Chancellor Rachel Reeves twice dodged the question when asked whether she would delay plans to increase wages for 18 to 20-year-olds.

Their interventions follow reports in the Times that the pledge is under review over fears it is deterring companies from hiring young people.

Options being considered include slowing the rate of equalising the rates, or doing so only for workers over 20, it said.

In an attempt to shut down speculation about yet another U-turn, Sir Keir said the party’s pledge to ensure all adults are entitled to the same minimum wage would be kept.

‘We’ve made commitments to young people in our manifesto, and we will keep to those commitments, including the commitment that we would make sure that the living wage would go up this April, which I can absolutely confirm to you will happen,’ he said.

He did not set out a timeline for fulfilling this commitment, though said the living wage would increase in April.

During a visit to South Wales Sir Keri Starmer said: ‘We’ve made commitments to young people in our manifesto, and we will keep to those commitments’

Earlier, Ms Reeves twice dodged the question when asked whether she would delay plans to increase wages for 18 to 20-year-olds.

‘I do recognise that there are challenges, particularly around young people leaving school, college and university, the Covid generation of young people who did miss out on so much during those years,’ she said.

‘As a Government, we are determined to do everything we can to support them.’

On the BBC’s Today Programme, Welsh Secretary Jo Stevens said of the reports: ‘The Low Pay Commission says that the evidence does not show that there is a direct correlation between problems and the raising of the national minimum wage.

‘We came into work on a manifesto to make work pay, and that’s exactly what we’re doing.’

Employers must pay workers aged between 18 and 20 at least £10 an hour – a figure which will rise to £10.85 in April.

Older workers aged 21 and over must receive at least £12.21 – rising to £12.71.

But it has triggered warnings from retailers who warn that young people are struggling to get jobs due to increases in the minimum wage and employers’ National Insurance contributions.

According to the Office for National Statistics (ONS) figures, the unemployment rate for 16 to 24-year-olds surged to 16.1 per cent in the three months to December – the highest level since early 2015.

The British Retail Consortium (BRC), which represents brands including Marks & Spencer, Primark and Tesco, said that young people would lose out if youth wage rates are scrapped.

Helen Dickinson, chief executive at the BRC, said: ‘Government is right to be worried about the impact that equalising National Minimum Wage too quickly would have on employment, as too many young people might otherwise lose out on opportunities to those with more experience but the same pay.’

She called on the Government to reassess the impact of its tax hikes alongside its workers’ rights bill, to ensure that ‘together they encourage, rather than discourage, businesses from hiring young people, making a fragile labour market worse.’

It came as Gail’s boss Luke Johnson criticised Labour for making it ‘more expensive and more risky to employ people’.

He said the mood of UK employers is the ‘darkest’ he has ever seen as the surging minimum wage prices young people out of the jobs market.

The reports have triggered a backlash from Labour-supporting unions who said the party should stick to its original pledge.