The Buffalo Brief

Minimum wage set to rise but 18-20 year-olds will not get bigger increase

BBC Business · Oct 27, 10:01 AM CT

BBC Business reported that chancellor John Healey will reveal the new pay rates in the Budget, and has also announced measures to help households with the cost of living.

The same report said that the rise in the minimum wage is expected to be announced in the Budget, but 18-to-20 year-olds are set to see lower increases than in previous years, the BBC understands.

It also noted that pay for younger workers will rise in line with the increase in minimum pay for employees aged 21 years and over.

The account added that however, the increase for younger workers is lower than that seen in the previous two years, when Labour raised the rate to meet a manifesto promise that it would remove "discriminatory age bands" with all adults entitled to the same minimum wage.

Further in the report, chancellor John Healey is also announcing measures to give families what he is calling "breathing space" with the cost of living.

The dispatch went on: "Of course, you want not just good wages but good work, " he added.

"It is a balance of making sure the pressures on the labour market are taken into account.".

The Times reported that the National Minimum Wage for 18-to-20 year-olds is likely to rise by 3.9% from £10.85 an hour to around £11.27.

That is a smaller rise than the 26% increase the Labour government has put in place for younger workers since returning to power in 2024.

Even after the reported rise, the rate remains below the National Living Wage for older workers, which is currently £12.71 an hour.

It is set to rise by 3.9% to £13.20, the Times said.

Andrea Egan, general secretary of the union Unison, said it was "deeply unfair" to keep paying different rates for the same job.

"Twenty year-old care workers, teaching assistants and security guards do the same work as their older colleagues," she said.

"They don't pay less in the supermarket or at the petrol pump.

The government has also announced a number of measures, including removing import taxes on some food and ending the so-called cliff-edge for those receiving carer's allowance payments.

It says removing tariffs from 100 food items could save households up to £21 per year - or 40p a week - when combined with existing tariff suspensions that were introduced in June.

"We're not going to say it is everything," Reynolds told the BBC, but taken alongside the changes implemented in the summer on goods such as pasta, fruit juice and tuna, he said it would save around £500m a year.

Allowing carers to earn more than an existing earnings limit without losing their entire allowance, replacing it with a taper mechanism instead.

Speaking to the BBC's Newscast, Healey said: "None of this is going to change the world.

But if it helps around the margins and its action the government can take, then I want try and fix it.".

The government will also freeze fuel duty again in the Budget, the BBC understands.

The 5p duty discount is also set to continue.

That discount was first introduced in 2022, and was due to last 12 months, but has been extended ever since.

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The government said removing tariffs on fertiliser aimed to help farmers, while changes to import levies on kerosene is targeted at households that rely on heating oil.

The Treasury said it would publish on Wednesday a full list of the products that will have tariffs removed.

A tariff is an import duty paid by domestic businesses buying products from overseas.

Asked why the government was making it cheaper to buy goods from abroad rather than cutting business costs for UK firms, Reynolds said: "Where you can make a reduction in the cost of importing goods into the UK, when you think you can balance that with your domestic economic interests, that's a decision we will take.".

But Balwinder Dhoot, director of sustainability and growth at the Food and Drink Federation (FDF), said: "It's more expensive to make food and drink here in the UK than in many of our close neighbours, as businesses face such high energy costs.".

The Conservatives said the government's "everyday fixes" had already been wiped out by higher borrowing costs, taxes and inflation.

Shadow chancellor Andrew Griffith said: "Shoppers face rising costs at the till and families are struggling to make ends meet, but Burnham's plan is cheaper gherkins.

This is an insult to families hammered by Labour's tax rises.".

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The Buffalo Brief wrote this from the public report by BBC Business. Nothing was added past what that report said.

Reported by BBC Business. https://www.bbc.co.uk/news/articles/c6d93gq1xdgno?at_medium=RSS&at_campaign=rss