National living wage to rise to £11 an hour – but experts say it's not enough

Jeremy Hunt has announced that the national living wage will be increased to at least £11 an hour from next April.

Speaking at the Conservative Party Conference, the chancellor set out his plans to drive more people into work such as through increasing the national living wage and imposing tougher sanctions for benefits claimants.

Hunt has claimed the national living wage has lifted nearly two million people out of poverty after housing costs. Increasing the national living wage is welcome news, but there are fears it will short of the real living wage by April as prices keep increasing.

That’s a rate calculated by the Living Wage Foundation based on up-to-date living costs, taking into account the cost of bills, food and other measures. 

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Director of the Living Wage Foundation Katherine Chapman said: “A rise in the statutory national living wage from next April is welcome news for low paid workers, but may fall short of the real living wage next year, the only rate that is independently calculated based on the cost of living. The new real Living Wage rates will be announced later this month on the 24th October, where we expect a significant increase.  

Recent research from the Living Wage Foundation found 60% of people earning below the real living wage had used a food bank in the past year and nearly 40% were regularly skipping meals. 

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There are also fears that public sector industries will not be properly funded to support the increase. Neil Leitch, chief executive of the Early Years Alliance, said: “While we absolutely support the principle of all staff receiving a fair and reasonable wage, the fact is that without adequate government funding, this increase in the national living wage is likely to spell disaster for the early years.”

Leitch said that many early years professionals are on the national living or minimum wage, and any increase “will always have a huge impact on overall delivery costs in the sector”. But over the last six years, average early years funding rates have increased by just 14%, compared to a nearly 40% rise in the national living wage over the same period. 

“There is no question that those working in the early years are educational professionals who absolutely deserve a wage that reflects the value of the work that they do,” Leitch added, “but unless the government ensures that funding for the sector rises in line with wage increases, what should be a positive development for the sector could end up marking the final nail in the coffin for settings across the country.”

Ben Harrison, director of the Work Foundation at Lancaster University, a leading think tank for improving working lives in the UK, said: “It is welcome that the chancellor has announced the National Living Wage will increase to at least £11 per hour in April 2024. 

“But the government is seriously mistaken if they think toughening sanctions for some of the most vulnerable people in society will result in more people in good quality, secure and long-term employment.

“Pushing people into ‘any job’ will not alleviate worker shortages that some sectors are facing, and the Department for Work and Pensions’ own evidence from 2020 suggests sanctions are not effective and slow people’s progress back into work.

“To tackle persistent worker shortages amidst record long-term illness we need to avoid more punitive measures, and focus on tailored support for jobseekers with different needs, and a renewed drive to work with employers to increase the quality of jobs on offer.”

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