Millions to get pay rise worth up to £1,400 a year from next April

Rachel Reeves has announced a pay rise for millions of low-paid workers with a boost to the national minimum wage. The national minimum wage will go up to £12.21 an hour in April after the chancellor confirmed a 6.7% increase, with more than 3 million low-paid workers in line for a pay rise.

Labour Party MP Reeves described the move, worth £1,400 a year for an eligible full-time worker, as a “significant step” towards delivering on Labour’s manifesto promise to introduce a “genuine living wage for working people”. It will mean that the national minimum wage for over 21s will increase from £11.44 to £12.21 an hour - a boost of £1,400 a year for a full-time worker. Deputy PM Angela Rayner declared: "A proper day’s work deserves a proper day’s pay."

Unions insisted that businesses could absorb the change. The TUC general secretary, Paul Nowak, said: “This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high. The independent Low Pay Commission has looked at a range of economic evidence before making this recommendation. They know employers can absorb this increase.

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“Every time the minimum wage goes up there are some voices who predict this will drive up unemployment. Every time they are wrong.”- But John Foster, chief policy and campaigns officer at the Confederation of British Industry, said: “Politicians and businesses are united in wanting to ensure people have access to well-paid, fulfilling work.

“The only sustainable path to achieving that aim – not only for those earning the minimum wage, but right across the economy – is higher growth and productivity. The national living wage has proven to be a valuable tool for protecting the incomes of the poorest in society and has supported equality in the lower half of the income distribution.

“But with productivity stagnant, businesses will have to accommodate this increase against a challenging economic backdrop and growing pressure on their bottom line.”