Reports suggest that new PM Rishi Sunak is set to increase the national minimum living wage by the largest margin in recent history. The reveal is expected to happen today (17th November 22) as he sets out the new budget for 2023 as part of his Autumn Statement.
The news will come as a hopeful message for many who have been rocked by the sheer rise in the cost of living. However Chancellor Jeremy Hunt’s reveal of the new budget is awaited with apprehension, following the disastrous Truss/Kwarteng budget reveal in September this year (2022). The latter only managed to achieve further destabilisation of the national economy, and cost the government £30 billion.
More people than ever before are feeling the pinch, with many choosing between heating and eating causing fears of cold homes this Christmas. Shoppers have been switching from established giants Morrison’s in favour of budget-conscious Aldi, the latter upsetting the status-quo by replacing Morrison’s as the UK’s 4th biggest supermarket chain.
Who will benefit from the increase?
The reality is, that while the increase would certainly help some, the fact it is a living wage increase, not a minimum wage increase, means that the benefit will only extend so far. Currently only one in ten people work for a living wage employer, and while the living wage movement is gaining traction, companies choosing to uphold the standard are in the minority.
Despite the above, it is estimated that around 2.5 million people will benefit from the increase, which will see the living wage go up to £10.42 per hour, and £11.95 for Londoners. This is a nearly 10% increase, although it is expected that proposed increases to taxation may reduce some of the impact at certain levels of society.
In addition to the living wage increase, it is believed Sunak will also give those on means-tested benefits, such as universal credit, cost of living payments worth £650; disability benefit recipients £150; and pensioner households £300. The plans, which extend existing support, will result in some households benefiting from all three payments.
The Prime Minister and Chancellor Jeremy Hunt have said they will prioritise the poorest communities, and that middle-income and wealthier households will pay the price of tax rises in the Autumn Statement. Sunak Pledged to put fairness and compassion at the heart of his statement.
Sunak said at the G20 summit in Bali:
An uphill battle
Even alongside the energy price cap, pledges to increase benefits in-line with inflation, living wage increase, and cost-of-living payment schemes, the struggle is far from over. The ultimate cost of these initial savings are massive.
The benefit increase will cost £11 billion, and the energy price guarantee even more. This means deeper spending cuts and bigger tax rises elsewhere will be needed to balance the books. Energy prices are set to jump up further, from £2500 to £3100 by April 2023.
While this is better than the £4006 we would have faced without the energy guarantee, it does little to offset the increases elsewhere including food, fuel and almost every other retail item on our shelves. At least you can trust that your favourite vaping products won’t be going up in price – we’re always going to be 1 bottle, for £1!