Living Wage

Department for Business, Energy and Industrial Strategy written question – answered on 12th November 2020.

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Photo of Alison McGovern Alison McGovern Shadow Minister (Digital, Culture, Media and Sport)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment the Government has made of the potential effect of the planned increase in the National Living Wage from £8.72 to £9.21 per hour in April 2021 on (a) incomes and (b) public finances.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

The minimum wage rates are set on the expert and independent advice of the Low Pay Commission (LPC). This year, we asked the LPC to recommend the National Living Wage rate which should apply from April 2021 in order to reach two-thirds of median earnings by 2024, taking economic conditions into account.

The Government asks the Low Pay Commission to monitor the labour market and the impacts of the National Living Wage closely, advising on any emerging risks, to ensure that the lowest-paid workers continue to see pay rises without significant risks to their employment prospects.

We will announce the 2021 Minimum Wage rates in due course. A full Impact Assessment estimating the benefits and costs to employers and workers will be published alongside the legislation. We estimated that over 2 million workers benefitted from the increase earlier this year, which gave a full-time worker on the NLW an increase of £930 over the year.

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