Rishi Sunak will announce an increase of the national minimum wage and stop paying public sector workers when he delivers his Budget later in the week, as claimed today.
On Wednesday, the Chancellor will present his spending plans and there is growing hope that he will take action after the pain from the pandemic.
A salary boost of almost five million workers would be possible by lowering the minimum wage and unfreezing public sector wages.
Mr Sunak hinted at changes yesterday when he said setting a ‘new pay policy’ will be ‘a topic for next week’s spending review’.
Rishi Sunak will announce an increase in national minimum wage and unfreeze public sector wages when he presents his Budget later this week. This was claimed today.
A salary boost of almost five million workers would be possible by lowering the minimum wage and unfreezing public sector wages
Estimates suggest that around 2.6 million public sector workers, including teachers and police officers, had their salaries frozen during the coronavirus crisis.
The Sun reported that the freeze would be lifted and that a significant increase in the minimum wage is expected.
The minimum wage is currently worth £8.91 an hour for people aged 23 and over.
For people aged 21 to 22 it is worth £8.36 an hour and for 18 to 20-year-olds it is worth £6.56.
Sources told The Sun that the main hourly rate could go up by as much as 54p to £9.45.
That would be worth approximately an extra £1,000 a year to people in full-time work.
Such an increase would put the minimum wage on course to hit £10 an hour before the 2024 general election.
Boris Johnson’s claims that the UK will become a high-wage, high-skill economy would be strengthened by the lifting of the minimum wage and the unfreezing of public sector pay.
Based on the advice of the Low Pay Commission, the minimum wage level was established.
According to reports, the organisation will present its report and recommendations today to the Chancellor.
While employees will welcome any increase in minimum wage, the Treasury is concerned about the potential impact on small businesses.
Yesterday, Mr Sunak hinted at changes in the pay front during an interview with Andrew Marr on BBC Radio.
Around 2.6 million public sector workers (including teachers, police officers, and civil servants) had their pay frozen by the coronavirus crisis.
Asked if public sector pay will increase, he replied: ‘That will be one of the things that we talk about next week in the spending review.
“Obviously, over the past year we made a decision to have more targeted approach to public sectors pay since there were large increases in the previous year and the private sector saw pay decreases last fiscal year. People were also on furlough.
“We thought that this was fair and reasonable. We’ll now have to establish a new pay policy, and that will be the topic of next week’s spending review.