UNIONS will fight Chancellor Rishi Sunak’s plan to slash a proposed national minimum wage (NMW) rise that is to be confirmed in his spending review tomorrow.

Transport union RMT has not ruled out balloting for industrial action over the expected “assault” on wages for the lowest-paid, many of whom have been praised by ministers as “key workers” essential to keeping the country going during the pandemic.

A proposed 5.6 per cent rise in the NMW — which the Tories have branded the “national living wage” — is set to be scrapped for millions of workers, as business groups have said it could put firms out of business.  

The minimum hourly rate for workers aged 25 and over was set to rise from £8.72 to £9.21 in April 2021, but now Mr Sunak is only expected to increase it by 2 per cent to £8.90 an hour.

The lower increase could see low-paid workers working 40 hours a week lose out on more than £640 a year before tax and national insurance compared with the plan to increase NMW by 5.6 per cent.

RMT general secretary Mick Cash said: “It would be an absolute disgrace if the lowest paid in our industry, including cleaners and other contracted support staff, faced an assault on their pay rates despite having worked tirelessly throughout the Covid pandemic to help keep services running and key workers moving.

“RMT will work with the TUC and the wider labour movement to defend pay and to fight off any attempt to freeze or cut wages. ‎That campaign will need to utilise every tool at our disposal including industrial action as and where required.”

The Unite union called on Mr Sunak to “drop the threat” to the NMW as it would be a “massive snub to people who’ve gone the extra mile to keep services running and the public safe during this crisis.”

General secretary Len McCluskey said that the Chancellor should “jettison the tired orthodoxy of wage austerity,” adding that it would be “economic madness” to further harm the economy.

He said: “These five million public-sector workers, in the main low waged and women, don’t keep their cash in the Cayman Islands away from the taxman’s grasp. They spend it in our shops, helping our struggling high streets.  

“Attacks on their wages raises only peanuts in the scheme of things yet will cause huge harm, so drop this threat, Chancellor.”

Labour’s shadow chancellor Anneliese Dodds accused the government of hypocrisy, in having clapped for key workers during the pandemic before U-turning on plans for a higher pay rise.

She added: “It’s another irresponsible choice by a Chancellor who’s choking off any chance of recovery by hitting workers in their pockets.

Senior leaders of the TUC and 18 unions have called on Mr Sunak to give the workers a pay rise to reward their efforts during the pandemic.

The call comes as reports suggest next year’s public-sector pay settlements — also to be announced tomorrow — will be based on “pay restraint” (freezes or below-inflation rises), except for NHS workers. 

In a letter to the Treasury sent earlier this week, the unions said a pay rise was a “matter of justice” for firefighters, teaching assistants, care workers, refuse collectors and public-sector key workers.  

They point out that over the last 10 years, many public-sector workers have seen a real-terms pay cut of more than £3,000 a year.  

TUC general secretary Frances O’Grady said: “Freezing pay will give workers less money to spend on their local high street.  

“If the government is serious about levelling up Britain, it shouldn’t be levelling down public-sector pay.”