Government must not backslide on national living wage rises, says think-tank

Workers will lose up to £1,000 a year if the Government "backslides" on future increases to the national living wage, a leading think-tank is warning.

The Resolution Foundation said women, the young and older workers are most likely to lose out if increases by 2020 are watered down.

The rate of £7.20 an hour for adults was introduced earlier this year, with a target of being worth 60% of typical hourly pay by 2020.

Some trade associations have written to Business Secretary Greg Clarke urging him to exercise caution because of the economic "uncertainties" the UK is facing.

Conor D'Arcy, policy analyst at the Resolution Foundation, said: "The national living wage is a hugely popular policy that is set to deliver a pay rise to six million of Britain's lowest paid workers and play a pivotal role in the Prime Minister's vision for an economy that works for everyone, not just the privileged few.

"Understandably, some businesses are unhappy about a higher minimum wage, particularly amid the post-referendum uncertainty. But backsliding on the Government commitment is unnecessary given the in-built flexibility of the policy to adjust to changing economic circumstances. It would also be costly for millions of low paid workers, so the Prime Minister should stick to her guns.

"The Government's attention should instead turn to the huge task of implementation. This should be ensuring that its upcoming industrial strategy includes the less glamorous but hugely important sectors like retail and hospitality, which are at the coalface of Britain's huge low pay challenge."

A Department for Business spokesman said: "The Government is committed to building an economy that works for all and the national living wage is a key part of this. The Low Pay Commission will be recommending the national minimum wage and living wage rates that should apply from April 2017 later this year."