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Business Update

Volume 648: debated on Monday 29 October 2018

I am writing to inform the House that the Government are pleased to accept all the Low Pay Commission’s recommendations for the new National Living Wage and National Minimum Wage rates, which will come into force in April 2019.

The Low Pay Commission is an internationally renowned independent and expert body which conducts extensive analysis and stakeholder research to make its recommendations.

The Low Pay Commission has recommended that:

the National Living Wage (for workers aged 25 and over) should increase from £7.83 to £8.21;

the rate for 21 to 24-year-olds should increase from £7.38 to £7.70;

the rate for 18 to 20-year-olds should increase from £5.90 to £6.15;

the rate for 16 to 17-year-olds should increase from £4.20 to £4.35; and

the apprentice rate (for apprentices aged under 19 or in the first year of their apprenticeship) should increase from £3.70 to £3.90.

The Low Pay Commission has also recommended that the accommodation offset increases from the current rate of £7.00 to £7.55 from 1 April 2019.

We welcome the Low Pay Commission’s recommendation of an increase to the National Living Wage rate such that it remains on path to reach 60% of median earnings by 2020 subject to sustained economic growth.

The new National Living Wage rate of £8.21 will be the highest ever UK minimum wage and benefit around 2.4 million workers.[1] From April 2019, a full-time minimum wage worker will see their earnings increase by over £2,750 over the course of the year, compared to when the NLW was introduced in in April 2016.

The Low Pay Commission’s recommendations for the National Minimum Wage youth rates are well ahead of forecast inflation.

These increases are due to come into effect from April 2019, subject to parliamentary approval. The Government intend to lay implementing regulations before Parliament in due course.

A copy of the response will be available from the BEIS website at:

[1] Details to be provided in the Low Pay Commission’s upcoming 2018 report.