Chancellor of the Exchequer Sajid Javid has announced his intention to lower the age threshold for the National Living Wage to 21, accepting advice from the Low Pay Commission.
In his speech to the Conservative Party conference yesterday, the Chancellor announced his intention to reduce the age threshold for the National Living Wage (NLW), so that it applies to those aged 23 and over from 2021, and to those aged 21 and over within five years. He also pledged to raise the government’s ‘National Living Wage’ to £10.50 within the next five years.
This follows a review of the youth rates of the National Minimum Wage (NMW) carried out by the Low Pay Commission (LPC) over the past year. The LPC made its recommendations to the UK Government in August.
The LPC will publish its full report on the NMW youth rates, as well as its advice to the Government on the future of the NLW, in due course. The government will set out more details on the future policy framework for the NLW, including the role of the Low Pay Commission, at the Budget.
Bryan Sanderson, the Chair of the LPC, said: “We are very pleased that the Government has accepted our advice to lower the age of eligibility to the National Living Wage from 25 to 21.
“Doing so in a phased approach balances ambition for the pay of young people with caution towards the impacts on businesses and the most vulnerable workers in this group.”
Commenting on the Conservatives’ living wage annoucement, John McDonnell MP, Labour’s Shadow Chancellor, said: “This pathetic attempt at catch-up by the Conservatives will fool nobody.
“Labour will introduce £10 as a minimum as soon as we take office and, rising with living costs, it will mean everybody over 16 years of age will be earning comfortably more than £10.50 an hour by 2024.”
Katherine Chapman, Director of the Living Wage Foundation, said: “Today’s announcement is welcome news for millions of workers who are set to receive a pay rise. However, nearly 6000 employers across the UK are already going further than the legal minimum and paying a real Living Wage that covers the cost of living.
“The real Living Wage remains the only independently calculated wage rate based on the cost of living. That means that as household bills continue to rise, people working for Living Wage employers will always receive a wage they can live on.
“With 6 million still paid less than the Living Wage, and struggling to make ends meet, good employers are taking action now by signing up to the real Living Wage.”
Responding to Chancellor Sajid Javid’s announcement on the minimum wage, TUC General Secretary Frances O’Grady said: “The TUC has long campaigned for a minimum wage of over £10, and an end to the discrimination young workers suffer from lower rates.
”But the Chancellor’s pre-election promise should be taken with a huge bucket of salt. This pledge would be overwhelmed by a no-deal Brexit. If we leave the EU without a deal, jobs will be lost, wages will fall, and our public services will suffer.”
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