Philip Hammond is considering increasing the minimum wage to £9.61 an hour to help lift millions of workers out of low pay, according to reports.
Sources told the Observer that the Chancellor was looking to secure a legacy of ending low pay by pushing the minimum wage as far as possible without damaging employment levels.
Hammond is believed to be proposing an increase to the minimum wage to 66 per cent of median earnings, in line with the Organisation for Economic Co-operation and Development’s definition of low pay. By ending low pay, he hopes to tackle poverty.
According to the Observer, the Chancellor has already met with the TUC to discuss his plans and is understood to have meetings scheduled with other unions.
The National Living Wage (NLW), which applies to those aged 25 and over, is already on target to increase to around £8.67 in April 2020. This is the equivalent of 60 per cent of median earnings.
The Low Pay Commission (LPC) is currently consulting on next year’s minimum wage rates and how they will be shaped beyond 2020. In the 2018 Budget, the Chancellor stated his intention to give the LPC a new remit beyond 2020. As such, in its consultation it is inviting views on how the existing target for the NLW has worked and on potential future arrangements.
