UK gov't overhauls low pay commission to boost worker pay

In a sweeping policy shift aimed at alleviating financial pressures on workers, the government has announced a major overhaul of the Low Pay Commission (LPC).

The revamped commission will now factor in the cost of living when setting minimum wage recommendations.

Business and Trade Secretary, Jonathan Reynolds described the reform as a "bold step" toward addressing the cost-of-living crisis and making work more rewarding.

"For too long working people have faced the worst of the cost of living crisis," Reynolds remarked.

"This is the first of many steps we will take to support more people to stay in work and improve living standards."

As part of the changes, the LPC will work to close the gap between the minimum wage for 18-20-year-olds and the National Living Wage, paving the way for a unified adult rate.

Chancellor of the Exchequer Rachel Reeves highlighted the economic significance of this reform. "For too long, too many people are out of work or not earning enough," Reeves said.

"This is an important first step in getting people into work and keeping people in work, essential for growing our economy."

The TUC welcomed the government's announcement, with General Secretary Paul Nowak stating, "Hard work should pay for everyone. These are significant first steps towards making the minimum wage a real living wage and will make a difference to millions."

Nonetheless, concerns about the potential impact on businesses were voiced.

Emma Jones, founder of Enterprise Nation, remarked, "Small businesses are the backbone of our economy, and we know they are facing unprecedented pressures. We wholeheartedly support the principle of a living wage for all workers and look forward to continuing to work with the Government to recognize the unique challenges faced by micro-businesses."

IKEA, a supporter of the Living Wage Foundation, also expressed approval. Peter Jelkelby, Chief Executive and Chief Sustainability Officer, stated, "People are at the heart of IKEA’s success, and we recognize the challenges they face from inflationary pressures and rises in the cost of living."

The government has committed to further efforts to enhance workplace rights, empower workers, and stimulate economic growth.