UK (Parliament Politics Magazine) – Deputy PM Angela Rayner seeks equal minimum wage for 18-year-olds, triggering backlash from firms facing rising taxes and youth employment challenges.
As reported by The Telegraph, Angela Rayner urges for increasing pay for 18-year-olds, even as employers warn it could reduce job opportunities for young workers.
The Deputy PM has proposed to scrap the £2 wage gap between 18 to 20-year-olds and older workers, a move supported by trade unions.
How does Labour aim to scrap age-based pay bands?
Young workers aged 18 to 20 earn less than those over 21, who receive at least £12.21 per hour. Ms Rayner has asked the Low Pay Commission to draft plans to eliminate the age-based pay gap in future recommendations.
Labour’s move comes as the party seeks to gain support from younger voters amid a rising surge for Nigel Farage’s Reform UK, which is currently leading in the polls. Last month, Ms Rayner announced plans to lower the voting age to 16 by the next general election.
The Low Pay Commission has been tasked with outlining a strategy to align the minimum wage for young workers with the full adult rate. Angela Rayner said the move shows Labour is acting on its pledge to end low pay.
During last election, Labour promised to
“remove the discriminatory age bands, so all adults are entitled to the same minimum wage, delivering a pay rise to hundreds of thousands of workers across the UK.”
What did Angela Rayner say about low pay and making work pay?
Angela Rayner stated,
“We promised to make low pay a thing of the past, and deliver a wage people can live on, and that is exactly what this government is determined to deliver.”
She said,
“We have already taken bold action to Make Work Pay with more than 3 million workers seeing a huge boost in their pay following our increase to National Minimum and Living Wage.”
Ms Rayner added,
“This remit is the next milestone in our plan to get more money in working people’s pockets, raise living standards in every part of the UK, and get our economy growing.”
Rachel Reeves’s views on fair pay and growth
Chancellor Rachel Reeves stated,
“We are delivering on our promise to make sure every worker receives a fair wage. Fair pay which supports working families is integral to our Plan for Change, because when working people are properly rewarded with more money in their pockets, businesses thrive and our entire economy benefits.”
She added,
“To ensure the right balance is struck between the needs of workers, business affordability, and the wider economy, the LPC is being asked to consult on several issues before recommending the new rates.”
Ms Reeves has lowered the threshold for employer National Insurance to £5,000, prompting concerns from business leaders who warn the change could discourage recruitment and add pressure to rising employment costs.
What did Jonathan Reynolds say about low pay?
Business Secretary Jonathan Reynolds stated,
“Low pay drags down living standards for our workers and in turn hurts our high streets and local businesses.”
She added,
“This Government’s Plan for Change will put money back in people’s pockets, with this new remit marking the next step in considering how we ensure a fair deal for our lowest paid workers while maintaining a competitive economy that boosts businesses and their employees alike.”
What did Kate Nicholls say about youth job risks?
Kate Nicholls, chair of UKHospitality, warned that raising the minimum wage for young workers could lead to job losses, especially as businesses face increasing tax burdens.
She said,
“We understand the Government’s objective of fair pay, but you can only have fair pay if you have got a job that actually pays,” she said. “At the moment, those jobs are being taxed out of existence due to changes in the NIC [National Insurance contributions] rate.”
Ms Nicholls stated,
“Now is not the time to make big jumps again in employment costs, when we have already seen 84,000 jobs lost in the hospitality sector over the last six months. You need to look at it in the context of the overall employment market, and of the economic environment. Now is not the time to be imposing significant additional costs.”
She argued that,
“the context has changed out of all recognition [since then] because of the change in the threshold on NICs, which is impacting on youth employment in particular and part-time work.”
Ms Nicholls added,
“All the warning signals on the labour market are flashing red. Now is the time for caution, not going too far.”
What did Jane Gratton say about youth employment?
Jane Gratton, from the BCC, stated,
“There are almost one million young people who are not in employment, training or education and it must be priority to engage them with the world of work.”
He said,
“Employers want to help but the rising cost of employment, following on from the National Insurance rise in April, is making that very difficult for many firms.”
Mr Gratton added,
“Any changes to the age threshold of the National Living Wage must take this into account. If wages rise too fast in this age group, it could lead to less opportunities and jobs for young people entering the labour market.”
What did Baroness Stroud say about the wage review?
Baroness Philippa Stroud, head of the LPC, said,
“We are pleased to receive our remit from the Government. Already, since the beginning of the year, we have spent significant time speaking with workers and employers, to understand the pressures in the economy and the effects of the most recent increases in the minimum wage. We have held a successful call for evidence and received detailed submissions from all sides.”
She added,
“Our recommendations on the minimum wage are always finely balanced. More than ever, it is important that we draw on first-hand evidence from those affected by our decisions. I look forward to working with the rest of the Commission over the autumn to reach a shared view on this evidence and deliver our advice to the Government in October.”
What did Paul Nowak say about raising the minimum wage?
TUC General Secretary, Paul Nowak stated,
“Boosting the minimum wage isn’t just good for workers – it’s good for business too. When low-paid workers have more money in their pockets they spend it locally – supporting shops, cafés and high streets.”
He added,
“The minimum wage has been one of the big success stories of the last 25 years – lifting pay at the bottom and proving the doom-and-gloom merchants wrong. But it’s important that it keep rising so that it better reflects what it actually costs to get by in Britain today.”
Minimum wage in the UK in 2025
- Ages 18–20: £10.00/hour — up 16.3%
- Ages 16–17: £7.55/hour — up 18%
- Apprentices: £7.55/hour (if under 19 or in 1st year)
- Full-time 18–20-year-olds could earn £2,500 more per year
- Full-time 16–17-year-olds may gain up to £2,000