National living wage to rise to ‘at least’ £11 per hour

Kirstie Pickering anticipates Jeremy Hunt's announcement as the Tories address the UK minimum wage and explores the implications of a rise for SMEs.

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The national living wage is set to rise to ‘at least’ £11 per hour from April 2024, the chancellor is expected to announce today.

The increase will be announced by Jeremy Hunt at the Conservative Party Conference, which is currently taking place in Manchester, where he is expected to applaud the move to support two million of the lowest paid workers.

The current living wage – which is set for those aged 23 and above – is £10.42 per hour.

Every year, the government consults with the Low Pay Commission, an independent body that advises the government about the national living wage and the national minimum wage, on the rise. The Commission is yet to confirm the rise, but it estimated the rate needed to meet the government’s target is between £10.90 and £11.43.

Hunt is expected to say: “We promised in our manifesto to raise the national living wage to two thirds of median income – ending low pay in this country. At the moment it is £10.42 an hour and we are waiting for the Low Pay Commission to confirm its recommendation for next year.

“But I confirm today, whatever that recommendation, we will increase it next year to at least £11 an hour, a pay rise for over two million workers.”

The Conservatives say this means the annual earnings of a full-time worker on the national living wage will increase by £1,000.

Another blow to businesses

While the rise is good news for workers, it’s another blow to small business owners already struggling financially and who will now need to increase spending on wages. Is there any better news on the horizon for SMEs?

Unfortunately, not yet. Prime Minister Rishi Sunak has said he wants to cut taxes, but refused to say when – meaning an imminent tax cut for businesses looks unlikely.

Tax levels in the UK are at their highest since records began 70 years ago and are unlikely to come down soon, according to the Institute for Fiscal Studies in research published last week – which is bad news for SMEs already struggling to make ends meet.

Despite widespread support for an extension, business rates are currently still set to increase in April 2024 under the government’s “multiplier,” which is linked to inflation. 

Business rate relief was first introduced in March 2021 following a challenging pandemic and post-pandemic operating environment, with a £13.6bn support package and business rates freeze following in autumn 2022.

Whilst the pandemic is no longer the main threat to small businesses, the challenges created by high energy prices, cost of living costs and interest rates remain significant. SMEs are looking to the government for a lifeline – and hope that it could come, instead, from the chancellor’s Autumn Statement on November 22.

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Mid shot of Kirstie Pickering freelance journalist.
Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.

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