Chancellor fails to guarantee minimum wage pledge for younger workers

Labour looks less likely to meet its manifesto pledge to equalise the minimum wage for younger workers before the next election, after the chancellor failed to guarantee the rise within that timeframe.

John Healey said on Sunday the government was still committed to the increase but failed to spell out when it would be achieved. In the budget, a rise in the minimum wage was handed to adults and under 20s, but there was no larger rise for younger workers, which would have been needed for a move towards equalisation.

Speaking on the BBC’s Sunday with Laura Kuenssberg programme, he said he would “take it one step at a time” amid fears that a rise could exacerbate youth unemployment.

Labour’s 2024 manifesto committed to closing the gap on pay for 18- to 20-year-olds. Last week’s budget saw a blanket increase of 3.9% for both bands.

Some senior MPs – including the housing secretary Angela Rayner while she was out of government – have previously expressed concern at the slow pace of the equalisation. In June, Rayner warned the government it must deliver on the promise.

Healey said on Sunday the government was still committed to the eventual equalisation.

“I legislated as a new MP for the national minimum wage when we first brought it in [in 1998], and so we’re going to have to continue to make those trade-offs between jobs and wages,” Healey said. But he denied Labour would break its manifesto commitment.

“There’s no question about whether or if. It’s a question of when. It’s a question of how fast. And I want to make sure that we can look hard at those trade-offs that inevitably 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 a contribution to this country for the future.”

Healey also told the BBC he was prepared to keep the spending cuts – some more than 2% year-on-year – planned for before the next election in the last spending review.

Some thinktanks including the Institute for Fiscal Studies have criticised how the government’s deficit reduction plans seem predicated on making unpopular cuts that are unlikely to be enacted at a crucial electoral moment.

“We will carry that through to the 10-year plan and the spending review next year,” Healey said. “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.”

Speaking on GB News on Sunday, the chief secretary to the Treasury, Emma Reynolds, said the government would not make “crude cuts” to welfare to balance the books, because of the costs that would incur elsewhere.

“We will set out proposals in the new year, and then we will legislate to bring the welfare bill down in a fair and sustainable way, and according to our values as a Labour government. I know that other parties, such as the Conservatives and Reform, claim that they can do crude cuts to welfare,” she said.

“The Conservative government didn’t manage to do crude cuts because they know full well that if you push people into crisis, then you end up pushing costs into a different part of the public sector. So that’s not the right way to do it because, frankly, this isn’t realistic.

“The prime minister and the chancellor and the whole government is very clear that we do need to bring the welfare bill down, and we’re also not running away from difficult decisions.”