Chancellor John Healey has not guaranteed that the equalisation of the minimum wage for younger workers will happen within the timeframe set out in the Labour Party manifesto. On Sunday, he said the government remains committed to the increase but did not specify when it would be achieved, according to the BBC.
In the Budget, the minimum wage increase was allocated to adults – at £13.21 – while an increase to £11.27 was planned for those under 20. Closing the gap towards equalisation would require a larger increase for younger workers. Last week’s Budget introduced a general increase of 3.9 per cent.
The 2024 Labour manifesto pledged to reduce the pay gap for those aged 18 to 20. Healey told the programme Sunday with Laura Kuenssberg that they would 'take it step by step' due to fears that an increase could worsen youth unemployment. 'There is no question of whether or if. The question is when. The question is how quickly,' Healey said. He denied that Labour would break its manifesto promise.
Healey also highlighted that it is 'legislatively like being a new MP for the national minimum wage when we first introduced it [1998], and so we will have to continue to make those compromises between jobs and wages'. He added that he wants to take the business sector and trade unions with him, as well as the government, because the current situation is a 'moral shame for this nation, a million young people written off, with no prospect of being helped into work and contributing to this country for the future'.
Some senior MPs, including housing minister Angela Rayner when she was out of government, have previously expressed concern about the slow pace of equalisation. In June, Rayner warned the government that it must fulfil its promise.
Healey also told the BBC that he is prepared to maintain planned spending cuts – some greater than 2 per cent a year – forecast before the next election in the final spending review. Some think tanks, including the Institute for Fiscal Studies, have criticised what appears to be government deficit reduction plans predicated on unpopular cuts that are unlikely to be implemented at a key election moment. 'We will do that through a 10-year plan and a spending review next year,' Healey said. 'But in the Budget I also set out ways in which we are preparing and the work we have in hand to prepare for those spending review decisions.'
Chancellor of the Exchequer Emma Reynolds spoke on GB News on Sunday. She said the government would not make 'blunt cuts' to social care to balance the budget, due to the costs this would cause elsewhere. 'We will set out proposals in the new year, and then we will legislate to reduce social care costs in a fair and sustainable way, and in line with our values as a Labour government,' Reynolds said.
Reynolds added that other parties, such as the Conservatives and Reform, claim they can make blunt cuts to social care. 'The Conservative government failed to make blunt cuts because they know well that if you push people into crisis, then you end up pushing costs into another part of the public sector,' she said. 'So that is not the right way to do it because, frankly, it is not realistic.' She added that the prime minister, the chancellor and the whole government are very clear that they must reduce social care costs and that they are not running away from difficult decisions.
