Healey risks breaking minimum wage promise for younger workers

The Chancellor, John Healey, has sparked controversy by hinting that younger workers may not receive the same minimum wage as older workers ahead of the next election, potentially violating a Labour manifesto pledge. In 2024, Labour committed to abolishing age-based minimum wage bands, aiming to eliminate the disparity between the adult minimum wage and pay for 18 to 20-year-olds.

However, during last week's Budget, Healey announced that younger workers would share the same wage increase as their older counterparts, leaving a wage gap between the two groups this year. The pay for 18 to 20-year-olds in 2026 will increase to £11.27, while those over 20 will earn a minimum of £13.21 per hour.

Healey, in a BBC interview, suggested Labour might abandon its plan to close the wage gap before the next election, stating, "We'll take one step at a time." He emphasized that Labour remains committed to the objective but hinted that the plan to equalize wages might be postponed. He also hinted that the delay could be to encourage businesses to hire younger workers.

The chancellor stressed the need to balance the trade-offs between jobs and wages, aiming to engage businesses, trade unions, and the government together to address the "moral shame" of a million young people without prospects of employment.

Healey also hinted at potential significant cuts to certain public spending areas to reduce the country's debt, though the Institute for Fiscal Studies (IFS) questioned the feasibility of these cuts. Healey reiterated that his government is prepared to make hard decisions about priorities, but also mentioned that he would present ways to prepare for upcoming spending review decisions.