Thursday, April 01, 2021

Raising the national living wage

 

  • This has been an extraordinarily difficult year for millions of people, and as we recover from the pandemic, the government is determined to put more money into the pockets of the UK’s lowest-paid workers.
     
  • That is why the National Living Wage was increased today to £8.91 an hour – an above inflation pay rise equivalent to £345 extra per year for someone working full-time – and the age eligibility reduced to 23 years old, meaning more than 2 million people will get a pay rise from today.
     
  • This will help to protect the lowest paid and put more money in the pockets of hard-working families – supporting our recovery as we build back better from this pandemic.


The government is doing this by: 

  • Increasing the National Living Wage to £8.91 an hour, supporting hard-working families through this difficult time. This is a 2.2 per cent increase in the NLW, above inflation and the equivalent of £345 extra per year for someone working full time. This increase strikes the right balance between supporting the living standards of the lowest paid, while ensuring businesses can thrive as the country continues to recover from Covid-19.
     
  • Expanding eligibility for the National Living Wage, meaning more people can benefit from a high wage. For the first time, more younger people will be eligible for the National Living Wage, as we have lowered the age threshold from 25 to 23.
     
  • Boosting the National Minimum Wage for all under 23 year olds, ensuring everyone can benefit from a decent wage. These increases include:

    • A 2.0 per cent increase for 21-22 year olds, from £8.20 to £8.36 an hour.
       
    • A 1.7 per cent increase for 18-20 year olds, from £6.45 to £6.56 an hour.
       
    • A 1.5 per cent increase for under 18 year olds, from £4.55 to £4.62 an hour.
       
    • A 3.6 per cent increase to the Apprenticeship Wage, from £4.15 to £4.30 an hour.
       
  • Increasing the wages of the lowest paid by £5,400 over the last decade, putting more money in the pockets of hard-working families. This year’s increase means the annual earnings of a full-time worker on the NLW will have increased by around £5,400 more annually than they would have been on in 2010.  
     
  • Maintaining our target to raise the National Living Wage to two-thirds of median earning by 2024, protecting the living standards of the lowest paid. We remain committed to delivering on our manifesto commitment to increase the National Living Wage to two-thirds of median earnings by 2024, and today’s increase allows progress to continue to be made towards it.  
     
  • Cutting the cost of living for UK workers, helping people to keep more of the money they earn. Last month’s Budget introduced new measures to cut down on the cost of living by freezing fuel duty for the eleventh consecutive year – saving an average car driver £12.84 per tank and a cumulative £1,600, and freezing all alcohol duties, saving drinkers £1.7 billion.

The Conservative government has protected jobs and livelihoods through the pandemic:

  • Protecting over 11 million jobs through our furlough scheme, supporting people’s incomes through the pandemic. Our furlough scheme has supported 11.2 million jobs across the UK, worth £53 billion, and to provide further certainty, we have extended the scheme until the end of September.
     
  • Supporting 2.7 million self-employed workers, providing them with security and stability through the pandemic. We have delivered £18.9 billion to support 2.7 million self-employed workers to date, and will introduce two further grants to support them as we continue to cautiously ease lockdown restrictions.
     
  • Delivering billions of support for businesses, getting them through the pandemic so they are ready to bounce back. Our business loan schemes have provided £70 billion of support to 1.5 million companies – and measures such as the business rates holiday and temporary VAT cut have helped to support businesses through the pandemic.
     
  • Launching our £2 billion Kickstart Scheme, helping to level up skills and opportunity across the country. Our £2 billion Kickstart scheme has created over 120,000 opportunities for young people, and we have also doubled the number of Work Coaches; introduced the Lifetime Skills Guarantee to fund Level 3 Qualifications for all adults; and doubled the incentive payment to small businesses to take on apprentices of any age to £3,000, alongside £126 million to triple the number of traineeships next year.

This builds on our world leading measures to enhance worker’s rights in the UK:

  • Introducing the National Living Wage in 2016, giving the lowest paid workers the security of a higher wage to provide for themselves and their families.
     
  • Banning exclusivity clauses in zero hours contracts, giving gig economy workers more control over the hours they work.
     
  • Introducing Shared Parental Leave and Pay in 2014, giving parents flexibility in who takes time away from work in the first year of their child’s life.
     
  • Scrapping the Swedish Derogation, a legal loophole which allowed some firms to pay agency workers less than permanent staff.
     
  • Extending the right to a day one statement of rights to all workers, to make sure everyone knows their rights at work.

Other Key points: 

  • The Resolution Foundation have said the National Living Wage has been one of the key factors in driving down low pay. ‘While low pay on this measure had been in decline since 2013, it was the introduction of the National Living Wage (NLW) in 2016, increasing the minimum wage for workers aged 25 and over from £6.70 to £7.20, that drove the biggest annual fall in low pay since the late 1970s’.
     
  • The UK has stronger employment rights standards than the EU. The EU has no requirement for a living wage and no minimum requirement for sick pay. The EU’s minimum standard for maternity leave is just fourteen weeks, compared to fifty-two weeks in the UK, and the EU’s minimum annual leave requirements is just twenty days, compared to a minimum of twenty-eight days in the UK.

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