British Finance Minister Jeremy Hunt is set to announce an increase in the minimum wage during his annual Conservative Party conference speech. This move comes despite calls for tax cuts within his own party. However, extracts of the speech released by the party did not mention taxes, causing speculation among party members.
Conservative lawmakers, as well as senior minister Michael Gove, have been advocating for tax cuts ahead of the expected general election next year. However, Hunt has ruled out near-term tax cuts and instead has supported Prime Minister Rishi Sunak’s goal to reduce inflation.
The Bank of England has expressed concern over rising average weekly earnings for workers, as it poses a risk of inflationary pressures. In light of this, Hunt will announce an increase in the living wage, which is the minimum wage for workers over the age of 23. The living wage will rise to at least £11 ($13.42) per hour, up from the current £10.42.
Hunt stated, “We are waiting for the Low Pay Commission to confirm its recommendation for next year. But I confirm today, whatever that recommendation, we will increase it next year to at least £11 an hour.” This move aims to address the concerns surrounding inflation and ensure better wages for workers.
In addition to the minimum wage increase, Hunt will also announce a review to strengthen the benefit sanctions system. This review is expected to focus on making the system more stringent.
Former Prime Minister Liz Truss is expected to put pressure on the government to lower taxes in her intervention at the conference. Truss had to retract her tax-cutting plans at last year’s conference, which led to market turmoil and her subsequent resignation. Despite this setback, Truss has remained steadfast in her belief that lower taxes, particularly for businesses, are necessary for economic growth.
The announcement of the minimum wage increase reflects the government’s commitment to addressing income inequality and improving the living standards of workers. While some within the Conservative Party have called for tax cuts, Hunt’s focus on inflationary pressures and the well-being of workers demonstrates a balanced approach to economic policymaking.
Overall, the government’s decision to increase the minimum wage and review benefit sanctions aims to strike a balance between supporting workers and bolstering economic growth. These measures will likely be welcomed by those advocating for fair wages while also ensuring fiscal responsibility in light of potential inflationary risks.
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