Bungling Labour backtracks on manifesto vow to equalise minimum wage for under-21s after youth jobs crunch
Chancellor John Healey is expected to raise the National Living Wage by 3.9 per cent in the Budget, from £12.71 to £13.20 an hour, while holding back from a larger increase for workers aged 18 to 20. The reported decision would slow Labour’s manifesto pledge to remove age bands and give all adults the same minimum wage, amid concern that higher wage costs are limiting young people’s job opportunities.
The article says workers aged 18 to 21 currently receive at least £10.85 an hour, while the rate for 16- and 17-year-olds is £8; the separate London Living Wage is £14.80. Healey has acknowledged a trade-off between minimum wage levels and employment, and UKHospitality says wage and National Insurance increases are putting pressure on the sector. The article also reports that almost a million young people are not in employment, education or training.
In short
- The National Living Wage is expected to rise 3.9 per cent.
- Labour may delay equal minimum wage rates for adults.
- Employers cite pressure on entry-level jobs and costs.
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The case for
Equalising the adult minimum wage would honour Labour’s manifesto commitment and ensure younger adults receive the same legal floor for their work as older colleagues. Supporters can argue that fair pay helps young people meet living costs and that employers should compete through productive, sustainable jobs rather than relying on lower rates for younger staff.
The case against
Holding back the increase could protect entry-level opportunities if higher wage costs make employers less willing or able to hire young people, particularly in sectors already facing pressure from wages and National Insurance. Advocates of a gradual approach can argue that, with many young people outside work, education or training, preserving a lower starting rate may help them gain experience and a foothold in employment.
Explained simply
The National Minimum Wage sets the legal hourly pay floor, with rates that vary by age. Workers aged 18 to 20 have a lower minimum rate than adults aged 21 and over, while 16- and 17-year-olds have a lower rate still; the London Living Wage is a separate voluntary benchmark.
Labour pledged to remove these age bands so adults would receive the same minimum wage. The debate centres on how quickly to do that: higher pay can raise young workers’ incomes, while employers say higher wage costs may affect how many people they can hire.
The issue matters as many young people are outside work, education or training. Hospitality businesses, which employ many younger workers, have also raised concerns about wage and National Insurance costs.