Politics

Sajid Javid leaves Labour clueless after pledging more ambitious minimum wage than Corbyn


Sajid Javid

Sajid Javid announces the new minimum wage (Image: Press Association)

Industry experts said it could also mean an extra £333 a year being saved by workers into their retirement pots. In his first party conference speech as Chancellor, Mr Javid heralded the start of a “decade of renewal” for the country. “Over the next five years, we will make the UK one of the first major economies in the world to end low pay altogether,” he said. Mr Javid said the Conservatives were the only party that could “truly deliver for workers”. Under the plans, the national living wage will be pegged against average earnings, matching it by two thirds.

It would mean wages increase to £10.50 an hour by 2024 on current forecasts, £1.05 more than expected if the reforms were not introduced. 

This year the payment rates is £8.21 for the over 25s.

The age threshold for earning the full rate will drop to 23 in two years and then to 21 within five years.

It will mean a pay rise of £4,000 a year by 2024 for the average full-time worker on the living wage.

“On current forecasts, this ambitious plan will bring the national living wage up to £10.50 – giving four million people a well-earned pay rise,” Mr Javid said.

Sajid Javid

The chancellor in the House (Image: Press Association)

Pensions experts said the increase in the living wage will mean workers pay more into their retirement pots through the auto-enrolment system.

Jon Greer, the head of retirement policy at wealth management firm Quilter, said: “They may not realise is this pay rise will also bring with it benefits for their retirement, as thanks to auto-enrolment these workers will also see their pensions contributions rise. 

“Not only will they be putting more money away for retirement, but it also means their employers and the government, in the shape of tax relief, will top these contributions up by more too. 

“This could result in an extra £333 each year being saved for retirement by someone on the national living wage at its new rate.” 

But business leaders raised concerns about the impact of a higher wage bill on smaller firms.

Mike Cherry, the chairman of the Federation of Small Businesses, warned some companies could go bust from the extra pressure.

He said: “While it is welcome that the Chancellor is giving businesses five years to adapt, this increase will leave many small employers struggling and, without help, could make some small firms unviable.

“Those in sectors with tight margins and which are heavily labour-dependent, such as the care sector, retail or hospitality, will be particularly badly hit without support.

“Four in ten small employers say operating costs are rising due to employment costs.

“The Chancellor must now find ways to help those smaller businesses to meet his ambition, without deterring them from expanding and hiring more employees.”

Mr Javid also announced plans to cut the red tape faced by struggling businesses.

A spokesman for the Chancellor said the government was “not particularly worried about it costing jobs”.

He said: “It’s the right balance between addressing people’s cost of living and maintaining a pro-business environment.”

The Chancellor confirmed plans for an “infrastructure revolution” with investment in roads, buses and broadband.

“Our roads are the arteries of our country. We will soon launch the new roads investment strategy with £29 billion committed to strategic and local roads over the next five years,” he said.

“And today we are getting the shovels out early on several important road projects.”

Jeremy Corbyn

Jeremy Corbyn has been outfoxed by the Tories (Image: Getty)

The Chancellor’s announcements came after allegations around the Prime Minister’s personal life overshadowed the start of the conference.

Boris Johnson was forced to deny claims that he squeezed the thigh of a female journalist under the table during a private lunch.

During a visit to a cash and carry business in Manchester, the premier dismissed suggestions his alleged conduct was distracting from the party’s annual gathering and hinted the storm could be linked to opponents of Brexit.

“I think I would make one general comment. I think there is a lot of people who basically want to stop us delivering Brexit on October 31.

“But I have to tell you we are not going to be deterred from that ambition. We are going to get on and do it, we are going to get us over the line.

“I think that that is the best thing for the country because it’s been going on a long time now, this row over Brexit.”



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