The UK minimum wage will rise next year, according to finance minister Jeremy Hunt, who will make the announcement at the Conservative Party’s annual conference on Monday, as the country prepares for a general election.
The increase, which will take effect in April of next year, comes amid the worst cost-of-living crisis in a generation, with the government fighting stubbornly high inflation and widespread industrial unrest.
Wages for the UK’s lowest earnings would rise to at least £11 an hour ($13.4), representing a £1,000 annual gain for a full-time worker, Hunt will tell party members in the northwestern city of Manchester.
The chancellor of the exchequer will also announce proposals for a crackdown on people claiming out-of-work benefits payments while failing to look for work.
“Work must pay,” Hunt was expected to tell the conference, according to extracts of his speech released in advance.
“Whilst companies struggle to find workers, around 100,000 people are leaving the labour force every year for a life on benefits.
“It is a fundamental matter of fairness. Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing,” he was due to say.
Prime Minister Rishi Sunak’s party is currently trailing the opposition Labour Party in the polls, with an election looming next year.
The British leader has to call a vote by January 2025 at the latest.
But Hunt said there would be no crowd-pleasing tax cuts this year, although he did not rule them out for 2024.
“We’re being honest with people, there is no short cut to tax cuts,” he told the GB News television channel, which is supportive of government policy.
“If I gave a big tax cut this year, it would be inflationary, because we’d be putting money in people’s pockets, which would boost up demand, which would ultimately mean prices would go up as well.
“So this is not the right time.”
Hunt’s address comes as hospital physicians begin their latest round of strike action, as the state-run National Health Service battles with massive backlogs caused by the epidemic and years of underfunding and understaffing.
On Monday, junior doctors (those below the consultant level) and consultants will strike together for the first time in three days to demand salary raises above inflation.
“I think these strikes are completely unacceptable,” Sunak said.
The long-running strike follows walkouts by other health workers such as nurses and ambulance drivers.
Others in the economy, ranging from lawyers and teachers to port employees and train drivers, have also launched walkouts.
Hunt’s announcements coincide with a recent strategic shift aimed at drawing clear lines with Labour.
Sunak proposed last month a big reset to green policy aiming at achieving net-zero carbon emissions by 2050, which is considered as a populist ploy to win over voters.
The revised policy also delayed a prohibition on the sale of new gasoline and diesel vehicles from 2030 to 2035.
The softening of the policies will ease pressure on homeowners, landlords and motorists hit by the cost-of-living.
But they have drawn criticism from opposition lawmakers, environmental campaigners and the car industry.