Summary: We will end low pay by setting a new target for the National Living Wage, benefitting over 4 million workers by giving a pay rise of over £4,000 to the average full-time worker on the National Living Wage.
- We believe that people’s hard work and talents should be rewarded fairly. We have made great progress in boosting wages and cutting taxes but too many people across our country still suffer from low pay, but we must do more.
- We will end low pay and help families with the cost of living by introducing a new target for the National Living Wage to reach two thirds of median earnings over the next five years, and extending it to all workers from the age of 21.
- This means that, on current forecasts, the National Living Wage will be £10.50 by 2024, benefiting over 4 million workers and giving a £4,000 pay rise to the average full-time worker on the NLW – are backing hardworking families in every part of this country.
Background
- We already have a proud record tackling low pay. We introduced the National Living Wage, which applies to those aged 25 and over, in 2016. We have set a target for the NLW to reach 60 per cent of median earnings by 2020. However, low pay is widely defined as being less than two thirds of median earnings.
Our solution
- The Chancellor is setting a new target for the National Living Wage to reach two-thirds of median earnings within five years if economic conditions allow, ending low pay. The NLW will also be extended to workers aged 21 and over within five years, starting with an extension to workers aged 23 and over from April 2021.
- Together, and based on the latest projections, these announcements mean that the National Living Wage is set to be £10.50 in 2024 and will benefit over 4 million people. By 2024, a full-time worker on the National Living Wage will see an increase in their annual pay of over £4,000 a year compared to the earnings of a full-time worker on the current National Living Wage.
Conservative record
- The introduction of the National Living Wage in 2016 delivered the fastest pay rise for the lowest earners in almost 20 years. On 1 April we increased the NLW by 4.9 per cent, to £8.21 an hour.
Q: Doesn’t the OBR project that this will lead to job losses?
When the National Living Wage was introduced, the OBR predicted 60,000 fewer jobs as a result. However, employment is at a record high and unemployment is at a near record low. Job losses have not materialised.
