Tories call for 5-year freeze on minimum wage to tackle youth unemployment
Summary
A report from the Prosperity Institute, supported by Conservative shadow minister Andrew Sharpe, suggests freezing the minimum wage at £12.71 for five years to reduce youth unemployment. The report warns this freeze could reduce workers’ real earnings by nearly £9,000 over five years due to inflation but argues it could increase youth jobs by 270,000. Labour opposes the plan, saying it would hurt low-paid workers.Key Facts
- The report recommends a 5-year freeze on the national living wage at £12.71.
- This freeze could lower the purchasing power of minimum wage workers by 9% to 12% over five years.
- The report predicts a freeze might increase youth employment by about 270,000 jobs.
- It also proposes abolishing the Low Pay Commission, which advises on minimum wage changes.
- The Labour business minister criticized the plan, saying it would harm low-paid workers.
- The Low Pay Commission recently recommended a 4.1% wage rise for adults and 8.5% for youth wages.
- The government is expected to decide on minimum wage changes in October for the 2027/28 financial year.
- The Labour Party wants to give 18- to 20-year-olds the full minimum wage but faces pressure due to rising youth unemployment.
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