The Labour Market and the Economy

Wednesday 22nd November 2017 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

The Government are pleased to accept all of the rate recommendations as set out in the Low Pay Commission’s autumn report 2017. The Low Pay Commission is an internationally renowned independent and expert body which conducts extensive analysis and stakeholder research in order to make its minimum wage rate recommendations.

The Low Pay Commission has recommended that:

The national living wage (for workers aged 25 and over) should increase from £7.50 to £7.83;

The rate for 21 to 24-year-olds should increase from £7.05 to £7.38;

The rate for 18 to 20-year-olds should increase from £5.60 to £5.90;

The rate for 16 to 17-year-olds should increase from £4.05 to £4.20; and

The apprentice rate (for apprentices aged under 19 or in the first year of their apprenticeship) should increase from £3.50 to £3.70.

The Low Pay Commission has also recommended that the accommodation offset increases from the current rate of £6.40 to £7.00 from 1 April 2018.

We welcome the Low Pay Commission’s recommendation of an increase to the national living wage rate such that it remains on path to reach 60% of median earnings by 2020.

Further to this, economic indicators have enabled the Low Pay Commission to be more ambitious when setting the youth rates, within its remit of recommending rates which do not damage the employment prospects of younger workers. Those entitled to the 21-24 age rate will see the fastest percentage increase since 2006. Similarly, those entitled to the 18-20 age rate will see the fastest increase since 2004.

These increases are due to come into effect from April 2018, subject to parliamentary approval. The Government intend to lay implementing regulations before Parliament in due course.

Copies will be available in the Vote Office and the Printed Paper Office and from the BEIS website at www.beis.gov.uk.

[HCWS266]