Healey risks breaking minimum wage promise for younger workers

- Published

The Chancellor, John Healey, has suggested that younger workers might not receive the same minimum wage as others before the next election, potentially breaking a Labour manifesto promise.

In 2024, Labour said it would remove "discriminatory age bands", vowing to end the gap between the adult minimum wage and pay for 18 to 20-year-olds.

But in last week's Budget, Healey said that younger workers would see the same increase as older workers, leaving a gap between the two rates this year.

Pay for 18 to 20-year-olds in 2026 will rise to £11.27, while over-20s will be paid a minimum of £13.21 an hour.

In a BBC interview to be broadcast on Sunday, Healey was asked if younger workers would be paid the same as older workers, when it comes to the minimum wage, by the time of the next election?

"We'll take one step at a time," he said, suggesting that Labour might abandon its plan to close the gap before the next election.

It is a change that is likely to anger the unions and some on the left of the party.

Healey added that Labour was still committed to the ambition, but hinted the plan to equalise wages might be delayed, partly to encourage businesses to employ younger workers.

"There is no question about whether or if, it's a question of when - it's a question of how fast," he said.

"I want to make sure we can look hard at those trade-offs that are there between jobs and wages."

"I want to take business, I want to take trade unions with me, and with the government, because together we have to get into what at the moment is a moral shame on this nation. A million youngsters - written off without any prospect of being helped into work and making contributions to this country for the future."

The chancellor also suggested that he is willing to make potentially big cuts to some areas of public spending, to get the country's debt falling.

The budget documents spell out real-terms reductions to some government departments in the years to come.

The likelihood of the government following through was questioned by the respected independent number cruncher, the Institute for Fiscal Studies (IFS) this week.

But asked if he would make big cuts, Healey said: "We've already demonstrated we are prepared to take hard decisions about the priorities in government."

Pressed on whether he would make cuts of more than 2% a year to some government departments, he added: "We will carry that through to the 10-year plan and the spending review next year."

"But in the budget I also set out the ways that we're preparing and the work we've got under way to prepare for those spending review decisions."