Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential impact of the National Insurance rate, Minimum Wage and Employment Rights Act on the unemployment rate.

This government is committed to evidence-led policymaking which supports our aims to increase both the rate of employment, as well as the attractiveness of work.

From April 2026, the National Minimum Wage for those aged 18 to 20 increased to £10.85 per hour and the National Living Wage for those aged 21 and over increased to £12.71 per hour. These rates were set following the recommendations of the independent Low Pay Commission, which considers labour market analysis, pay data, stakeholder evidence and the cost of living.

The Government has also committed to aligning the 18 to 20 National Minimum Wage rate with the National Living Wage rate. Our most recent LPC remit, for the minimum wage rates for April 2027, ensures that the Low Pay Commission will retain flexibility over the pace and timing of this alignment while prioritising the employment prospects of younger workers.

We have sought to balance these reforms to encourage employers to take on new talent. Employers are not required to pay Employer National Insurance Contributions for employees under-21s and for under-25 apprentices, on earnings up to £50,270.

The Government has also more than doubled the Employment Allowance from £5,000 to £10,500, protecting the smallest businesses and charities from the impact of changes to employer National Insurance contributions.