Millions of workers get 'instant' pay rise under new Labour government

Some workers are set for an "instant" pay rise from the new Labour Party government in a major Cost of Living boost. After Sir Keir Starmer and the Labour Party won the General Election, defeating the Conservative Party, workers have been told to expect a pay increase.

Workers born in 2004, 2005 and 2006, as well as 2007 and 2008 have been told the Labour government plans to scrap the age brackets for the National Living Wage. The Labour manifesto says: “Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People’ in full – introducing legislation within 100 days.

"We will consult fully with businesses, workers, and civil society on how to put our plans into practice before legislation is passed. This will include banning exploitative zero hours contracts; ending fire and rehire; and introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal.

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“Labour will also make sure the minimum wage is a genuine living wage. We will change the remit of the independent Low Pay Commission so for the first time it accounts for the cost of living. Labour will also remove the discriminatory age bands, so all adults are entitled to the same minimum wage, delivering a pay rise to hundreds of thousands of workers across the UK.”

Business groups are already complaining that the 10% increase in the minimum wage — also known as the national living wage — that came into force in April is putting a strain on corporate budgets and limiting their ability to hire. Starmer’s Labour government, which took power after a landslide election victory last week, pledged to revamp the lower threshold for pay to reflect a “genuine living wage.”

“The implications for the BOE would be limited, but with risks of slower rate cuts if Labour delivered a sizeable increase in the Living Wage,” Goldman Sachs economists said in a note, adding that the policy is “probably the source of greatest risk for domestic companies with higher labor costs.”