Plans to increase the minimum wage for 18 to 20-year-olds to the same level as for other adults could be delayed, Sky News understands.
In its 2024 election manifesto, Labour committed to “remove the discriminatory age bands, so all adults are entitled to the same minimum wage, delivering a pay rise to hundreds of thousands of workers across the UK”.
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But Sky News understands the government is considering delaying the pledge – although it is committed to doing it eventually.
Reports suggest the potential delay is over fears the higher cost of employing young people could put off firms from hiring them and worsen youth unemployment.
New figures released on Tuesday showed the UK’s unemployment rate rose to 5.2% in October to December last year, the highest it has been in almost five years – while the rate for 16 to 24-year-olds was 16.1%, the highest level since early 2015.
Almost 950,000 people of that age were not in employment, education, or training in July to September last year.
Speaking in Cardiff, Prime Minister Sir Keir Starmer confirmed the government’s commitment to equalising the youth minimum wage.
But companies say measures taken by the government, such as increasing employer National Insurance contributions, have made it more expensive and riskier to hire new staff in industries which would typically hire young people, such as hospitality.
Chair of the Federation of Small Businesses, Tina McKenzie, told Sky News: “If [the government] think that small employers can handle [increased costs], as well as the increase in the minimum wage, then good luck.
“Take your head out of the sand and realise if you continue to increase costs of employment and you make hiring young people more difficult for small employers,…
