Chancellor Rishi Sunak ‘is set to cancel proposed 5.6% rise in the national living wage for two million workers’ amid fears it could force firms hit by Covid-19 out of business
Chancellor Rishi Sunak is set to cancel a proposed five per cent rise in the national living wage for two million workers, amid fears it could put firms out of business.
Hourly rates were due to rise from £8.72 to £9.21 - in April, but the chancellor is set to cancel those plans amid fears over the impact it will have on businesses already struggling in the wake of the Covid-19 pandemic.
The minimum pay rate will instead rise by around two per cent, in line with inflation, to £8.90 an hour, he is expected to reveal on Wednesday.
It means many low-paid workers, including men and women working on the front line in care homes and other areas, will not see an increase in their pay in real terms.
Rishi Sunak is set to scrap a five per cent rise in the national living wage when he announces his spending review on Wednesday
Mr Sunak's plan comes following a recommendation from the Low Pay Commission, which according to The Times, said the the previous proposal was unaffordable.
Anyone over the age of 25 is eligible for the national living wage, those younger are paid the national minimum wage. However the minimum age limit for the former is set to drop to 23 come April.
Public sector workers are set to have their pay frozen as well.
Frances O'Grady, general secretary of the TUC, said: 'Rowing back on this planned pay rise is no way to treat those who kept the country going through this pandemic.
'After their dedication through this crisis, the very least our low-paid key workers deserve is the pay rise they were promised.'
The Chancellor of the Exchequer's spending review on Wednesday will be a chance to announce a £275million boost to the UK's criminal justice system, while tens of millions of pounds will be invested in a state-of-the-art anti-terrorism unit in London.
Pressure on the justice system has seen 'Nightingale' courts open to deal with a backlog in cases brought about by the pandemic.
Frances O'Grady, general secretary of the TUC, said low-paid key workers 'deserve the pay rise they were promised'
Justice Secretary Robert Buckland said: 'We're already seeing the backlog fall in magistrates' courts and this extra funding will accelerate the recovery and add the capacity we need to cope with the increased demand expected from recruiting 20,000 police officers.'
Announcing the anti-terror unit, Mr Sunak told the Mail: 'Our police and intelligence agencies do an extraordinary job every day to protect us all from terrorist activity.
'Bringing these partners together to form a world-leading operations centre will enable them to work more collaboratively to disrupt threats, allowing the Government to deliver on its first and foremost duty to keep the public safe.'