Govt considers pay freeze for lowest earners

An “emergency brake” may be applied to annual rises to the National Living Wage, according to a report in The Telegraph.

The newspaper said a u-turn on the plan to increase the rate, which serves as a national minimum wage for people aged 25 and over, was being discussed by government ministers and officials from the Low Pay Commission.

It is currently scheduled for the National Living Wage to be lifted from £8.72 to £9.21 in April 2021.

The Low Pay Commission warned that Coronavirus “clearly represents a very challenging set of circumstances for workers and employers alike, and will require us to review whether an emergency brake is required”, the Telegraph said.

If such a plan is approved in a Low Pay Commission meeting at the end of October, it will be announced in Chancellor Rishi Sunak’s Autumn Budget.

One alternative option would be to raise the National Living Wage by a smaller amount to keep pace with inflation, while it may also be recommended that the government’s target of raising the rate to two-thirds of the median wage by 2024 is pushed back to 2025 or later.

The government had also promised to make the National Living Wage available to those aged 23 and above, but it is unclear whether that proposal would still go ahead.

But Frances O’Grady, General Secretary of the TUC, said a freeze on the minimum wage would be “totally wrong”.

“Many key workers who have got us through this crisis – including care workers and supermarket staff – are on the minimum wage,” she said.

“The government must not renege upon its commitment to raise the minimum wage. Millions of low-paid workers are struggling to make ends meet. That’s not right during a pandemic – or at any time.”