Millions Of Workers To Receive Pay Rise In Reeves Budget

Millions of low-paid workers will receive inflation-busting pay rises when Rachel Reeves delivers her make-or-break Budget on Wednesday.

The national minimum wage and national living wage will both go up as the chancellor tries to tackle the cost of living.

However, Reeves will also increase a range of taxes as she tries to fill a £20 billion black hole in the public finances.

From April next year, the national living wage will increase by 4.1% to £12.70 an hour in a move which the Treasury says will hand around 2.4 million low-paid workers an extra £900 a year.

The national minimum wage for 16 and 17-year-olds will increase by 6% to £8 and hour, while it will go up by 8.5% to £10.85 hour for 18 to 20-year-olds.

In all, around 2.7 million workers will see their wages rise by up to £1,500 as a result.

The chancellor said: “I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes.

“Too many people are still struggling to make ends meet, and that has to change.

“That’s why today I’m announcing that we will raise the national living wage and also the national minimum wage, so that those on low incomes are properly rewarded for their hard work.”

Paul Nowak, general secretary of the Trades Union Congress, said: “With living costs stubbornly high an above-inflation pay rise will make a real difference to the lowest-paid.

“Putting more money in people’s pockets is good for workers and good for the economy as it goes straight back into our high streets and local businesses.”

Reeves has already confirmed plans to freeze rail fares and the cost of prescriptions, as well as continuing the triple lock for pensioners, as the government aims to put more money in people’s pockets.

In a boost for motorists, The Times has also reported that the freeze on fuel duty is to remain in place for another year at a cost of £3 billion to the Treasury.

Green levies will also be removed from energy bills to bring down the cost of gas and electricity for households.

The two-child benefit cap, which was introduced by the Tories, will be scrapped at a cost of around £3 billion a year.

However, the chancellor will continue the freeze on income tax thresholds, which will see more than a million workers dragged into higher tax bands as their wages go up.

Health secretary Wes Streeting has also confirmed that the sugar tax is to be extended, pushing up the price of milkshakes and a range of fizzy drinks.

Taxes will increase on pension contributions and the gambling industry, while council tax bills for the most expensive properties will also go up.

Local councils will also be given the power to impose a tourist tax on visitors to fund projects in their area.

Labour mayors Sadiq Khan and Andy Burnham welcomed the move, but it has been criticised by the hospitality industry, who say it will make the UK a more expensive tourist destination.

Kate Nicholls, chairwoman of UKHospitality, said: “Make no mistake – this cost will be passed directly on to consumers, drive inflation and undermine the government’s aim to reduce the cost of living.”