Chancellor Jeremy Hunt is poised to deliver a significant announcement during his address at the Tory party conference. He is expected to confirm an increase in the national living wage to a minimum of £11 per hour, effective from April next year.
This move, championed by the Conservatives, is set to benefit around two million of the lowest-paid individuals. Additionally, Mr. Hunt is likely to reveal that the government will reevaluate the benefit sanctions system as part of its strategy to reintegrate unemployed individuals into the workforce.
This announcement comes at a time when Rishi Sunak has resisted calls from fellow members of the Conservative Party to commit to pre-election tax cuts, emphasizing a focus on reducing inflation over tax reductions. While some, including Cabinet minister Michael Gove, have advocated for tax cuts before the upcoming election, numerous Tory MPs, including former Prime Minister Liz Truss, have pledged to oppose new tax hikes.
The government had previously set a target for the national living wage to reach two-thirds of median hourly pay by October next year. The Low Pay Commission estimates that this target should fall between £10.90 and £11.43, with a central estimate of £11.16.
Mr. Hunt is expected to state, “This is the Conservative approach to enhancing the well-being of the working populace: elevating wages and reducing taxes. At present, the national living wage stands at £10.42 an hour, awaiting the Low Pay Commission’s recommendation for next year. However, I affirm today that irrespective of that recommendation, we will raise it to at least £11 an hour next year—a wage increase benefiting over two million workers.”
He further highlights, “The wages of the lowest earners are now over £9,000 per year higher than they were in 2010. This underscores our commitment that if you work diligently, a Conservative Government will consistently support you.”
Prime Minister Rishi Sunak emphasized that the government is “sending a clear message to hardworking taxpayers across the nation: our Conservative Government stands with you.”
In addition to the wage increase, Chancellor Hunt will express concerns about the direction of unemployment since the pandemic. Encouraging segments of the population to return to the workforce to enhance productivity has remained a significant concern for the government.
In November’s Autumn Statement, Mr. Hunt and Work and Pensions Secretary Mel Stride are expected to present proposals aimed at making it more challenging for individuals to claim benefits if they refuse to take “active steps” toward finding employment. Mr. Hunt will underline that the social security “safety net” is reliant on a balance between fairness for those employed and compassion for those who are not.
