Rishi Sunak could ditch minimum wage increase as plans deemed ‘unaffordable’

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Rishi Sunak, Chancellor of the Exchequer, is currently reckoning with the economic crisis brought about by the pandemic. After commencing the job in February 2020, the Chancellor has offered a wide range of support measures to those who have been affected by the crisis. Furlough and the Self-Employed Income Support Scheme have helped millions, however, the cost to the economy has been undoubtedly significant.

A number of weeks ago, Britain sunk into a recession, meaning an uphill battle for economic recovery.

And one way the Chancellor is reportedly looking to recoup the high costs from the last few months is by shelving plans to increase the minimum wage.

At present, the minimum wage – the legal amount Britons are required to be paid at the least – stands at £8.72 per hour.

But this amount was expected to increase to £9.21 in April.

However, the country may now be unable to afford the increase to minimum wage due to the impacts of COVID-19.

The government is now set to introduce an “emergency brake” to the minimum rate of pay, according to reports from the Telegraph.

The newspaper revealed members of the Low Pay Commission, tasked with advising the Chancellor on increases to minimum wage, have said such an increase may not be possible for many companies to reach.

As such, it could trigger increased unemployment, an issue which is already feared due to the ceasing of government support measures in October.

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Bryan Sanderson, the Chairman of the Low Pay Commission told the Telegraph: “We’ve listened carefully in recent months to the views of employers and trade unions.

“We’ll continue to look at the latest economic data over the autumn, before agreeing with recommendations on next year’s minimum wage rates in late October.”

The age at which Britons become eligible for the National Living Wage is currently set at 25.

This was expected to decrease to 23 next year, providing more people with the opportunity to unlock higher earnings.

And the age was set to drop further to 21 by 2024 according to plans.

However, it is as of yet unclear how the government will proceed on the issue of the minimum wage.

The Low Pay Commission estimated that there were two million workers paid at or below the minimum wage in April 2019 or about seven percent of all workers.

As such, a lack of increase could have a palpable effect on this group.


Some of those who would be affected are individuals who claim Universal Credit – available to people on a low income as well as those who are out of work.

Any plans to shelve the minimum wage increase are expected to be announced in the Chancellor’s autumn Budget.

And indeed, other momentous changes are expected at Mr Sunak’s update, with the Chancellor expected to attempt to raise funds to tackle the ongoing crisis.

Express.co.uk has contacted the Treasury for comment on the minimum wage.

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