Today Britain gets a Pay Rise, thanks to the Conservative Government

First announced by the Chancellor in his Summer Budget last year, the new National Living Wage delivers a key part of the Conservative Government’s plan to move towards a higher wage economy.

In some parts of the country, a fifth of the entire workforce will benefit directly from today’s increase.  It will mean a £900 cash increase for a full-time worker on the current National Minimum Wage and by 2020, 2.9 million workers are expected to benefit directly.  The Office for Budget Responsibility (OBR) estimating that in total, up to 6 million people could see a pay rise as a result of a ripple effect causing pay to rise further up the earnings distribution.

To coincide with the day the National Living Wage comes into effect, new analysis launched by the Chancellor today (1 April 2016), also demonstrates that the measure will provide a particular boost for women across Britain.  It shows that the new National Living Wage is expected to eradicate the gender pay gap for the lowest paid by 2020.  This analysis demonstrates how the National Living Wage will move Britain an important step closer to achieving the government’s ambition to end the gender pay gap for all working people within a generation.

From today, the National Living Wage will give around 900,000 women and half a million men an immediate pay rise in their hourly earnings.  By 2020, this translates to 1.9 million women and 1 million men directly seeing a rise in their pay.  The gender pay gap at the 10th percentile of the earnings distribution – including those working part-time – is expected to fall from 5.6% currently to zero by the end of the decade.  Over the next five years women earning the National Living Wage will see their pay rise by over a quarter and growing more than 1.5 times faster than the salary of an average worker.

This builds on the government’s efforts to back women at every stage of their lives, where significant progress has already been made.  More women in work than ever before as well as the lowest gender pay gap since records began.

The government has also committed to providing 30 hours of free childcare a week for working families with 3 and 4 year old children, extended the right to request flexible working to all employees, and introduced a new system of flexible parental leave.  It has also moved to ensure employers do the right thing by insisting that all large employers publish their gender pay gap.

The Chancellor said, “I said last year when I announced plans for the National Living Wage that Britain deserved a pay rise.  Today, I’m proud to say Britain is getting one.

“So I’m delighted that 1.3 million people across Britain will benefit from the biggest wage increase in eight years thanks to the new National Living Wage.

“The National Living Wage will play a central role in moving Britain to a higher wage, lower tax, and lower welfare economy.  It will also mark the end of the gender pay gap for some of our lowest paid and hardest working people.”