6th November 2019
Employers that were braced to absorb substantial changes to the national living wage (NLW) in Budget 2019 have been handed a stay of execution.
The Low Pay Commission has held fire on recommending future NLW rates beyond 2020/21 and urged caution over the Treasury setting ambitious future targets.
Chancellor Sajid Javid previously pledged to raise the NLW to £10.50 an hour by 2024, and to lower the age threshold for those who qualify from 25 to 21.
But the Commission said that "a higher NLW target by itself will not end low pay, and will need to be accompanied by a broad slate of supporting policies".
Bryan Sanderson, chairman at the Low Pay Commission, said:
"Regardless of how far and how fast the minimum wage increases, we need the flexibility to recommend varying its path and the end date of any target if economic conditions are not favourable.
"The NLW cannot end low pay and alleviate poverty alone, and it should be seen as one element of a broader approach to these vital issues."
The NLW hourly rate for over-25s in 2019/20 stands at £8.21 and the 2020/21 rates were due to be announced in Budget 2019, which was due to take place today.
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