National Living Wage and National Minimum Wage: remit on the future of the national living wage
Published 27 April 2023
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1. National Living Wage and National Minimum Wage: Low Pay Commission research remit on the future of the National Living Wage
The government has a key manifesto commitment for the National Living Wage to equal two-thirds of median earnings by 2024 for workers aged 21 and over, taking economic conditions into account. We have separately issued the Low Pay Commission with a remit asking it to recommend a National Living Wage rate to apply from April 2024 which meets this target. This target is part of our wider objective of making the UK the best place possible to live and work, and to work towards a high wage, high skill, high productivity economy. This remit asks the LPC to conduct research to inform future minimum wage policy.
2. Evidence on the National Living Wage
It is key that we continue to make evidence-based decisions on the minimum wage. The government values the Low Pay Commission’s commitment to gathering evidence and making well-informed recommendations on the minimum wage, and the reputation it holds, here in the UK and internationally, for this work.
The government notes the findings of the Low Pay Commission’s National Living Wage Review (2015 to 2020), which collected evidence from the introduction of the National Living Wage to the beginning of the coronavirus (COVID-19) pandemic. We ask the Low Pay Commission to update this review through 2023 with the available evidence to inform government decisions.
The government asks the Low Pay Commission to also conduct wider stakeholder engagement, update the econometric evidence and gather other evidence, including international comparisons, on the National Living Wage, as it sees fit.
In this remit, we are only asking for research. However, we intend to continue to ask the Low Pay Commission to take into account the state of the economy, employment and unemployment levels and the wider labour market, business impacts, and relevant policy changes, when we seek future recommendations on minimum wage rates.
3. Timing
The Low Pay Commission is asked to provide a final report in response to this remit to the Prime Minister and the Secretary of State for Business and Trade by the end of December 2023.