The Chancellor, Philip Hammond, is rumoured to be thinking of raising the National Living Wage to a whopping £9.61 per hour in a move to end low wages. At present, the National Living Wage is £8.21 per hour and is expected to rise in April 2020 to around £8.60 per hour.
At the current rate of increases, the National Living Wage would not pass £9.50 until 2024 at the earliest. But under Hammond’s proposals, which won’t be announced until later this year, a large rise could be on the cards much sooner than that. A rate of £9.61 would push the UK’s rates to the highest anywhere in the world.
At present, the UK National Living Wage is the fourth highest, with only Ireland, France and Luxembourg having higher rates. Responsibility for setting the National Living Wage and other minimum wage rates currently lies with the independent Low Pay Commission. They have to balance decisions about fair rates of pay against the possibility of big rises leading to job losses. The Treasury has commissioned a study into the effects of increases to minimum wages, although earlier studies suggest that increases do not significantly affect employment levels. The remit of the Low Pay Commission is also under review.
Hilary Hall, NHF/NBF chief executive said, “these increases are only rumours at present. The UK is about to go into a period of massive uncertainty due to Brexit and no-one yet knows what the economic impact of that will be. We can be certain though that within the hair and beauty industries, unaffordable wage rises will simply continue the growing trend towards ‘self-employment’. It’s important to remember that the self-employed have no employment rights and are not protected by minimum wage legislation. We therefore call on the Low Pay Commission and the government to be very cautious indeed before recommending further big rises to minimum wages.”