National Living Wage will rise to £10.50 per hour by 2024, Sajid Javid announces
3 min read
The National Living Wage will rise to £10.50 an hour for all workers over the age 21 within five years, Sajid Javid has announced.
The Chancellor confirmed the hike from the current level of £8.21 in his keynote speech to the Conservative Party conference.
He said the policy would make the UK "the first major economy in the world to end low pay altogether".
At the moment, the National Living Wage only applies to workers aged 25 and over.
But the Chancellor said the Government wanted to “reward the hard work of all millennials” by reducing the threshold by four years.
Mr Javid said: “In 2016, we introduced the National Living Wage, giving Britain’s workers the biggest pay rise in two decades.
"In April, we increased the rate again, making 1.8 million workers better off, putting the number of low paid workers at its lowest level in four decades.
"Today, I’m delighted to announce that we will take this much further. Over the next five years, we will make the UK the first major economy in the world to end low pay altogether.
"To do that, I am setting a new target for the National Living Wage: raising it to match two-thirds of median earnings.
"That means, on current forecasts, this ambitious plan will bring the National Living Wage up to £10.50, giving four million people a well-earned pay rise."
He added: “And to help the next generation of go-getters to get ahead we will reward the hard work of all millennials too, by bringing down the age threshold for the National Living Wage to cover all workers over the age of 21."
But afterwards the Treasury was accused of not having the numbers to back up the policy announcement, with officials unable to say what the economic impact would be for businesses.
In a briefing after Mr Javid's speech it was claimed the change will benefit four million people to the tune of around £4,000 a year.
But when it was suggested this meant a £16billion annual cost in extra wages paid by employers, officials said they "wouldn't use that figure at all", then declined to say what the cost would be.
And journalists were repeatedly told more information would be provided in the future as officials were unable to give answers to detailed questions about the policy.
After suggestions this was just a political announcement ahead of an expected election and was rushed out, senior Treasury sources said it has been "part of a long process" and was "subject to an enormous amount of thinking" before it was unveiled.
They said the issue was "personally important to the Chancellor", and rejected the suggestion it would hurt business, saying they were "not particularly worried about it costing jobs" as given the UK's high levels of employment it was a "good time to do it".
And the change struck the "right balance between addressing people's cost of living and maintaining a pro-business environment".
But Labour’s John McDonnell called it a “pathetic attempt at catch-up by the Conservatives” which “will fool nobody”.
The shadow Chancellor said: "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."
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