National living wage: Chancellor Jeremy Hunt expected to announce rise in pay at Conservative Party Conference

The living wage is set to increase in the UK with Chancellor Jeremy Hunt expected to make an announcement on the new pay rise at the Conservative Party Conference in Manchester.

Hunt is expected to take to the stage this afternoon (Monday 2 October) to announce that the national living wage will increase to at least £11 per hour. This will mark an increase from £10.42 per hour.

The government had already set out to increase the national living wage to match the same level as two-thirds of median hourly pay. The target for this was to increase pay by October 2024.

The Low Pay Commission has estimated that the living wage would need to be set between £10.90 and £11.43 for this to match. The central estimate given by the commission is £11.16 per hour.

Hunt is due to take the stage in Manchester this afternoon, where he will lay out plans to increase the living wage. He is expected to say: “We promised in our manifesto to raise the national living wage to two-thirds of median income – ending low pay in this country.

“At the moment it is £10.42 an hour and we are waiting for the Low Pay Commission to confirm its recommendation for next year. But I confirm today, whatever that recommendation, we will increase it next year to at least £11 an hour.

“A pay rise for over two million workers. The wages of the lowest paid over £9,000 a year higher than they were in 2010 – because if you work hard, a Conservative Government will always have your back.”

An announcement around the approach to the benefits sanction scheme is also expected in the Chancellor's speech. The government hopes that reevaluating the scheme will help to get those unemployed back into the work force.

Hunt is due to tell the crowd in Manchester: “I am incredibly proud to live in a country where, as Churchill said, there’s a ladder everyone can climb but also a safety net below which no-one falls. But paying for that safety net is a social contract that depends on fairness to those in work alongside compassion to those who are not.

“That means work must pay, and we’re making sure it does. From last year, for the first time ever, you can earn £1,000 a month without paying a penny of tax or national insurance."

He will add: “But since the pandemic, things have been going in the wrong direction. Whilst companies struggle to find workers, around 100,000 people are leaving the labour force every year for a life on benefits.

"As part of that we will look at the way the sanctions regime works. It is a fundamental matter of fairness. Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing.”

The Chancellor, alongside Work and Pensions Secretary Mel Stride, will use the Autumn Statement - due to be released on 22 November - to detail in-depth plans around making it harder for those not taking "active steps" in moving into employment to claim benefits.