Boris Johnson will announce a rise in the minimum wage to £9.42 an hour ‘within weeks’, it has been reported.
The hike would mean the annual earnings of someone on the ‘national living wage’ — the minimum wage paid to people over the age of 23 — would increase by 5.7%.
Currently, the hourly rate for workers in that bracket is £8.91 – equivalent to an average annual salary of just over £16,000.
To someone working 35 hours per week, the increase would be worth an extra £928 a year before tax, or around £77 a month.
According to The Times, the prime minister is weeks away from accepting the recommendations of independent advisers that the pay of the lowest earners should rise to £9.42 an hour.
Recommendations on the rate of the minimum wage are made each year by the Low Pay Commission (LPC).
A government source said that Mr Johnson, as other prime ministers had done, was likely to accept the commission’s recommendations in full, meaning the boost will come into force in April.
A new minimum wage of £9.42 would represent the third biggest annual rise since the 2008 financial crash.
The current minimum wage is £8.91 for those 23 and over, £8.36 for those aged 21 and 22, and £6.56 for 18 to 20-year olds.
Labour members voted for a minimum wage of £15 an hour at the party’s conference last week.
The vote is not binding and came amid a row that saw shadow cabinet minister Andy McDonald resign, claiming he had been told to vote against it.
The leadership did not encourage members to back or reject the motion.
But Sir Keir Starmer has said he stands by the party’s current policy of raising the minimum wage to ‘at least’ £10 an hour.
Mr Johnson is expected to announce the wage boost as part of a plan to ‘end Britain’s low-wage, low-growth economy’.
He was asked about the possible hike yesterday but left the matter open ended, telling ITV: ‘We will take guidance from the low pay commission, and we will see where we get to.’
However, he will hint at his plans for the economy in his keynote speech at the Tory party conference later today.
Speaking 11 years after the Conservatives entered Downing Street, Mr Johnson will say that his government is ’embarking now on the change of direction that has been long overdue in the UK economy’ and that ‘we are not going back to the same old broken model with low wages, low growth, low skills and low productivity, all of it enabled and assisted by uncontrolled immigration’.
Labour has hit out at the timing of the speech, which comes on the same day that the Tories will carry out its cut to the £20 per week Universal Credit uplift, which was brought in at the start of the pandemic.
The closing speech also comes against the backdrop of a supply chain crisis, a labour shortage that has seen military drivers drafted in to deliver petrol, warnings of empty shelves in shops at Christmas, France threatening to blockade ports over a Brexit fishing row and pigs culled due to a lack of abattoir staff.
However, the prime minister will today promise to end the failure by successive governments to grasp big issues and claim that unlike his Conservative predecessors, he has the ‘guts’ to change the direction of Britain and level up the country.
‘After decades of drift and dither, this reforming government, this can-do government that got Brexit done, is getting the vaccine rollout done and is going to get social care done,’ Johnson is expected to say.