Politics

Minimum wage to rise in 2021 budget

The national minimum wage for adults is to go up to £9.50 in this week’s budget, the Treasury has confirmed.

The rate, also know as the national living wage, is currently at £8.91 – meaning the rise represents 6.6 per cent increase.

The national living wage applies to workers aged 23 and over, with a lower rate in place for younger workers. Those aged 21-22 will also see an 83p increase, up to £9.18.

But 16-17 year olds will get just a 19p increase and 18-20 year olds a 27p increase. Apprentices will see a 51p increase to £4.81.

The government said the increases were “broadly consistent” with previous rises, which it said had impacted around 1.5 million to 2.5 million workers.

But the wage floor rise will come at the same time as the government increases national insurance contributions for low earners and cuts universal credit payments, meaning many workers will see little of the increase.

Announcing the increase, chancellor Rishi Sunak said: “This is a government that is on the side of working people. This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.”

The government has pledged to raise the adult rate to two thirds of median earnings by the end of the parliament – around £10.40.

Labour says it wants a minimum wage of at least £10. Keir Starmer’s leadership has resisted calls from his own members and unions to commit to gradually raising the rate to £15 an hour.

Bridget Phillipson, Labour’s shadow chief secretary to the treasury, said: “This underwhelming offer works out at £1,000 a year less than Labour’s existing plans for a minimum wage of at least £10 per hour for people working full-time. Much of it will be swallowed up by the Government’s tax rises, universal credit cuts and failure to get a grip on energy bills.

“It’s clear that Labour is the only party serious about improving the prospects of working people.”

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