Healey signals young workers may wait longer for equal minimum wage

Chancellor John Healey has suggested that younger workers may not reach the same minimum wage as older workers before the next election, putting Labour’s manifesto promise to end the age-based pay gap in doubt.

Labour pledged in 2024 to remove what it called “discriminatory age bands”. But in an interview with the BBC, Healey said the government would take “one step at a time” when asked whether the rates would be equal by the next election.

From 2026, the minimum wage for 18- to 20-year-olds will rise to £11.27 an hour, while the rate for workers over 20 will be £13.21. Healey said Labour remained committed to equalising the rates, but indicated the timetable could be delayed, partly to encourage businesses to hire younger workers.

“There is no question about whether or if, it’s a question of when – it’s a question of how fast,” he said. He added that he wanted to weigh the trade-offs between jobs and wages and bring businesses and trade unions into the discussion.

The gap was also set to remain after the latest Budget’s pay rise. The Budget’s measures for young people included a higher minimum wage for 18- to 20-year-olds, but did not close the difference with the over-20 rate.

Healey called the number of young people without work and with no prospect of help into employment “a moral shame on this nation”. The BBC report also said he was willing to make substantial cuts to some areas of public spending to reduce government debt, and quoted him saying the government would carry planned reductions into next year’s spending review.