Tory ministers today claimed they will raise the minimum wage to £10.50 an hour for all people over 21 by 2024.
The ‘National Living Wage’ – currently £8.21 for people over 25 – will be extended to people over 21 who currently get £7.70, Chancellor Sajid Javid announced.
And future rises will be pegged to two-thirds of median earnings, higher than the current target of 60% of median earnings.
There was no immediate announcement for people under 21, who currently get just £6.15 an hour if they are aged 18 to 20. If they’re under 18 it’s just £4.35.
Labour’s plans are much more generous, offering a £10-an-hour minimum wage for all workers including under-18s from next year.
It comes after the Tories missed their original target to make the rate hit £9 an hour by 2020.
Chancellor Sajid Javid told the Tory conference: “Over the next five years, we will make the UK one of the first major economies in the world to end low pay altogether.
“To do that, I am setting a new target for the National Living Wage – raising it to match two-thirds of median earnings.
“That means, on current forecasts, this ambitious plan will bring the National Living Wage up to £10.50 – giving four million people a well-earned pay rise.
“And to help the next generation of go-getters get ahead, we will reward the hard work of millennials too by bringing down the age threshold for the National Living Wage – to cover all workers over the age of 21.
“The hard work of the British people really is paying off, and it’s clear it’s the Conservatives who are the real party of labour. We are the workers’ party.”
It emerged earlier this year that millions of workers would £615 a year worse off than the Tories promised they would be under a £9 minimum wage.
Official forecasts predicted the National Living Wage, the minimum for over-25s, would hit £8.63 an hour from April 2020.
That is 37p short of the level George Osborne claimed it would hit when the ex-Chancellor launched the rate in 2015.
Ex-Chancellor Mr Osborne launched the National Living Wage in 2015, boasting: “We’ve set it to reach £9 an hour by 2020.”
But small print showed it was actually pegged to 60% of median earnings, which then grew less quickly than expected.
Previous OBR figures predicted the National Living Wage was set to reach £8.90 an hour in 2021, £9.19 in 2022 and £9.49 in 2023.