Healey to announce minimum wage rise with slower increases for under-21s
Chancellor John Healey is set to announce a rise in the National Minimum Wage at the Budget, with younger workers receiving smaller increases than those over 21.
Chancellor John Healey is expected to announce a rise in the National Minimum Wage at the Budget, though younger workers will see slower increases than their older colleagues. Reports suggest the rate for those aged 18, 19 and 20 will rise broadly in line with the rate for workers aged 21 and over, but the pace of the increase for the youngest bands will be more gradual.
The move reflects a tension at the heart of Labour's approach to pay. The party's manifesto committed to scrapping what it described as «discriminatory» age bands and to raising wages for 18 to 20-year-olds so that young workers are paid the same as those over 21. The Budget announcement points to that goal being approached in stages rather than delivered immediately, with the rate for younger workers rising more slowly over the coming period.
Reports indicate the overall National Minimum Wage will rise by nearly 4 per cent, a figure that would apply across the age bands in broadly similar proportions. The increase is presented as a boost for low-paid workers at a time when living costs remain a pressing concern for households across the country.
The National Minimum Wage is the legal floor for hourly pay in the United Kingdom and applies to employees of different ages according to a set of rates. Changes to those rates are typically announced by the government at the Budget or in the autumn, and they take effect in the new financial year. Employers must pay at least the rate that applies to each worker's age, and the age bands are a central part of how the system is structured.
The decision on the pace of increases for younger workers is likely to draw attention from businesses, particularly those in sectors such as retail and hospitality that employ large numbers of 18 to 20-year-olds. Those employers will need to weigh the cost of the rises against the government's stated commitment to equalising pay across the age groups over time. Unions and campaigners for young workers are likely to press for a faster timetable, arguing that a slower increase for under-21s leaves that group behind.
Until the Budget statement is delivered, the precise figures for each age band remain subject to confirmation. The details will show how far the government intends to go in closing the gap between younger and older workers within the current parliament.
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