This is one of the flagship measures of the budget which will be presented on Wednesday by Rishi Sunak, the British finance minister. Pressed to help low-paid young workers and driven by the labor shortage, the Treasury announced Monday, October 25, that the budget would include an increase in the hourly minimum wage that will pass, from 1is April 2022, from 8.91 pounds per hour to 9.50 pounds (11.26 euros) for employees over 23 years of age. This increase means that a full-time worker will receive 1,074 pounds (1,273 euros) more per year before taxes. For employees aged 21 to 22, it will drop from 8.36 pounds to 9.18 pounds (10.88 euros) per hour. For apprentices, it will drop from 4.30 pounds to 4.81 pounds (5.70 euros) per hour.
“It is a government that is on the side of the workers. This salary increase (…) puts us on the path to our goal of ending low pay by the end of this term ”, commented Rishi Sunak. A fund of 500 million pounds to help the most modest to cope with energy and food bills this winter was also announced in early October following a drop in social minimums.
Rachel Reeves, Chancellor of the Exchequer of the Labor shadow cabinet, replied on Twitter that “This offer amounts to 1,000 pounds (1,185 euros) per year less than Labor plans for a minimum wage of at least 10 pounds an hour for people working full time”. She added that“Much will be swallowed up by government tax hikes, cuts in universal credit and the failure to keep energy bills under control.”
This works out at £1,000/year less than Labour’s existing plans for at least £10 an hour for people working full-ti… https://t.co/t2Eql9bb89
Weighted down by massive government aid to cushion the shock of the pandemic, the government deficit last year reached 14.9% of the UK’s gross domestic product (GDP), the highest ratio since the end of the second World War.
To bring the public accounts back into the green, Rishi Sunak has already announced a historic tax increase which will involve an increase in social security contributions of 1.25% from April 2022 intended for the health system, and an increase of six points corporate tax, at 25%, from 2023.
But businesses fear being hit by further tax hikes, and employers’ organization Confederation of British Industry warns: any further increase “Risk of slowing down economic recovery”. Conversely, a group of 30 British millionaires sent an open letter to the Chancellor asking him to pay more taxes: “We have the means to contribute more (…). The cost of recovery cannot fall on young people or the lowest incomes. “
The IMF is forecasting 6.8% growth for the UK this year, the fastest pace in the G7. But the rebound is less spectacular than it seems because British economic activity had the most brutal drop in the G7 last year, almost 10%, and the recovery is showing signs of slowing down, penalized by labor shortages, struggling supply chains and skyrocketing energy prices.
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In the United Kingdom, an increase in the minimum wage announced for 2022