Living wage change ‘to cost workers £500’ a year

James Dornan: downgrade. Picture: Andrew Cowan
James Dornan: downgrade. Picture: Andrew Cowan
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The Chancellor’s “downgrade” to the National Living Wage will cost workers over £500 a year by 2021, research carried out for the SNP by the Scottish Parliament’s Information Centre suggests.

Philip Hammond’s predecessor George Osborne promised that the minimum wage, rebranded as the ‘National Living Wage’ for over 25s, would be over £9 an hour by 2020.

Poor growth and productivity forecasts have caused that planned pay rise to be pushed further back.

In March the UK government expected the NLW to reach £9.10 by 2021, but forecasters predict it will only reach £8.83 by then.

Comparing forecasts with those made in last week’s budget, SPICe calculated that low-income workers will lose £527 a year by 2021.

SNP MSP James Dornan said: “As the Institute for Fiscal Studies has reported, workers across the UK face seeing no real terms pay increase for the best part of two decades.

“This latest downgrade will leave low paid workers with over £500 less in their pockets than we expected.”

A UK government spokesman said: “Scottish full-time workers will earn £600 extra a year thanks to our increase to National Living Wage. We are also freezing fuel duty and cutting tax.”