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INCREASING the national living wage by just 59p an hour “makes a mockery” of ministers’ pledges to level up and fails to help families facing a cost-of-living crisis, Rishi Sunak was warned today.
Ahead of the Chancellor’s Budget this week, the Treasury confirmed that the legal minimum rate for workers over the age of 23 will increase from £8.91 an hour to £9.50 from April 1. For those aged 21 and 22, the minimum wage will rise from £8.36 an hour to £9.18.
But Labour, civil society groups and trade unions hit out at the measly increase, warning that much of it would be “swallowed up” by a rise in National Insurance contributions and inflation.
Resolution Foundation chief executive Torsten Bell rejected the government’s claim that the extra money would make full-time workers on the national living wage more than £1,000 a year better off, as “fast” rising inflation would eat up two-thirds of the rise.
TUC general secretary Frances O’Grady urged the government to “set its sights higher” and warned that families would struggle in the meantime before the rise is implemented.
“We need a £10 minimum wage now and we need ministers to cancel the cut to universal credit,” she said.
“This increase won’t come into effect until next spring, by which time many household budgets will have been hammered by rising bills and the universal credit cut.”
Unison general secretary Christina McAnea also stressed that working families “can’t afford to wait for next year.”
The rise falls well short of growing demands for a £15-an-hour minimum wage, which Labour delegates endorsed at the party’s conference last month. The motion was submitted by bakers’ union BFAWU and adopted by Momentum.
Commenting on today’s announcement, Mish Rahman, a Momentum member of Labour’s national executive, said that the wage increase “makes a mockery of their pledge to ‘level up’.
“We should be aiming for a £15-an-hour minimum wage and our movement must use our power in workplaces and communities across the country to force employers to pay a real living wage,” he said.
BFAWU national president Ian Hodson told the Morning Star that the claim that raising wages forces up prices was a “myth.”
He said: “The relation between pay and prices is and always has been a red herring, as are employers’ claims to be at risk of financial ruin if they pay above minimum wage.
“We need to build a better society. That means a real living wage of at least £15 for all workers, regardless of age and job security, and abolishing zero-hours contracts too.”
While the national minimum wage applies to everyone of school-leaving age, the national living wage applies to workers aged 23 and over.
Mr Sunak’s promises of extra cash for the NHS, expected to be announced tomorrow, also fell flat when healthcare figures and unions warned that they did not go far enough.
The Chancellor is set to announce that £5.9bn will be spent on the NHS to tackle the record waiting list of 5.7 million patients, with this going on “buildings, equipment and systems.” That sum is on top of the £12bn a year announced by the Chancellor last month.
Unions said that the funding would only produce results if the government also addressed crippling staff shortages in the health service.
“The recruitment and retention crisis is the biggest risk factor for NHS patients,” GMB southern region organiser and former nurse Helen O’Connor told the Morning Star.
“State-of-the-art buildings and technology are useless without skilled NHS staff who can deliver life saving treatment.
“The long-running deflation of staff wages is being completely ignored by a government hell bent on funnelling public money to the private sector.”
Unison head of health Sara Gorton echoed these concerns, saying that while a funding boost for new equipment was welcome, waiting lists can only shorten “if there are enough trained staff to analyse test results and care for patients.”
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