Government asks body to consult on axing ‘discriminatory' minimum wage age bands
It said the advisory body will consult with employers, trade unions and workers on narrowing the gap between the minimum wage rate for 18 to 20-year-olds, and the so-called national living wage – the UK minimum wage for workers 21 years and older.
The LPC will also be required to put forward 'recommendations on achieving a single adult rate in the years ahead'.
Chancellor Rachel Reeves said: 'To ensure the right balance is struck between the needs of workers, business affordability and the wider economy, the LPC is being asked to consult on several issues before recommending the new rates.'
Last year, Labour committed to removing these age bands to create a 'genuine' national living wage, as part of efforts to bolster employment rights.
Currently, the national living wage for workers aged 21 and older is £12.21.
Meanwhile, the minimum wage for workers aged between 18 and 20 is £10.
There is also a minimum wage for those aged under 18, and apprentices, of £7.55.
The Government said the change to the LPC remit will also ensure it actively considers the cost of living in its recommendations for changes to the minimum wage which are next applied from April 2026.
The LPC, which was founded in 1997, provides recommendations to the Government each October regarding how it believes the minimum wage should be changed.
The Government ultimately sets minimum wage rates for the following April after this advice.
Business Secretary Jonathan Reynolds said: 'Low pay drags down living standards for our workers and in turn hurts our high streets and local businesses.
'This Government's plan for change will put money back in people's pockets, with this new remit marking the next step in considering how we ensure a fair deal for our lowest-paid workers while maintaining a competitive economy that boosts businesses and their employees alike.'
Baroness Philippa Stroud, chairwoman of the LPC, said: 'We are pleased to receive our remit from the Government.
'Already, since the beginning of the year, we have spent significant time speaking with workers and employers to understand the pressures in the economy and the effects of the most recent increases in the minimum wage.
'We have held a successful call for evidence and received detailed submissions from all sides.'
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