Overhaul to LPC remit to factor in cost of living and remove discriminatory age bands, in boost to young workers
In a shake-up of the system, the Labour Government has announced the Low Pay Commission (LPC) will scrap discriminatory age bands for Minimum Wage workers and will have to factor in the cost of living for the first time.
New Business Secretary Jonathan Reynolds has instructed the independent body to take the cost of living into account when making their suggestions in the future, in an overhaul of the LPC’s remit. Reynolds said, “our focus remains on putting more money in working people’s pockets and boosting economic growth.”
The move has been welcomed, with the Trades Union Congress saying the changes “will make a difference to millions.” The union body highlighted that 700,000 18-20 year-olds currently lose out on over £2,400 a year due to the age bands.
TUC General Secretary Paul Nowak said: “Young people face the same cost of living pressures as other adult workers and will welcome their pay being brought into line”.
The progress towards achieving a single adult rate is set to be gradual and will affect the minimum wage rate and National Living Wage.
“This is a positive step forward to addressing endemic hardship”, Morgan Bestwick, Senior Policy Adviser at the Joseph Rowntree Foundation (JRF) said of the changes.
The anti-poverty organisation said it could be a “transformative policy” as it would recognise that living wage isn’t a genuine living wage if it doesn’t improve living standards across the UK.
JRF also added that “this alone can’t meet the scale of the challenge when millions of people are going without essentials.” The charity called to see more people in work to have good and secure employment and that the government to outline a detailed plan to tackle hardship at source.
Chancellor of the Exchequer Rachel Reeves said: “The new LPC remit is an important first step in getting people into work and keeping people in work, essential for growing our economy, rebuilding Britain and making everyone better off.”
(Image credit: Flickr / UK Government)
Hannah Davenport is news reporter at Left Foot Forward
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