National Minimum Wage (Amendment) Regulations 2026

Earl of Effingham Excerpts

Tuesday 17th March 2026 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Sikka, who makes the powerful point that there are enough resources in this country for everyone to have a decent life, and for us to look after climate and nature, if we share those resources out fairly.

I thank the Minister for introducing this SI. However, while I agree with the noble Lord, Lord Sharpe, in regretting this SI, I am going to depart in the 180-degree opposite direction from the noble Lord on the Tory Front Bench’s reason for doing so. The noble Lord was keen to quote the Tony Blair Institute. He is quoting an institute that takes its name and leadership from a Prime Minister who saw the wage share—that is, wages as a percentage of total national income—fall significantly; from the 1960s to the 1980s, it was around 60%, but in the late 1990s it fell as low as 51%. Yes, the Blair Government brought in a minimum wage, but then they allowed its real level to decline and workers to suffer, so the noble Lord’s comments were entirely in line with that Blairist approach.

I want to pick up some comments made by the Chancellor in introducing this measure. She said that

“the economy isn’t working well enough for those on the lowest incomes”,

and I agree. She said:

“Too many people are still struggling to make ends meet”—


with which I also agree—and that those on low incomes are not

“properly rewarded for their hard work”.

Again, I entirely agree, but this SI does not take us nearly as far as we need to go in those directions. Where might we actually go?

It is interesting that the statement talks about the national living wage. That term came in when George Osborne gave in to the argument of the Green Party and said there should be a real living wage and rhetorically, if not in practice, introduced the term. However, the so-called national living wage is not the real living wage. The real living wage is calculated by the Living Wage Foundation, and it is £13.45 an hour across the UK compared to the national figure of £12.71, or £14.80 in London. I am sure the Benches around me will say, “Businesses can’t afford to pay that”, but the real living wage is paid by more than 16,000 UK businesses that have chosen to transform their workers’ lives and raise the bar to a basically decent level of work. Nearly half a million employees are covered by this, and the range of employers credited by the Living Wage Foundation includes half the FTSE 100 big household names, including Nationwide, IKEA, Everton Football Club and Aviva, as well as many thousands of small and medium-sized enterprises.

I have a direct question for the Minister. Alongside this announcement is the suggestion that the increase in the rate for 18 to 20 year-olds may slow in future. I note that Labour made a manifesto commitment that the so-called national living wage would apply equally to all adults by the end of this Parliament. Is the Minister prepared to repeat that commitment tonight?

The noble Lord, Lord Sikka, has powerfully made the point that when 18 to 20 year-olds go to Tesco to buy their dinner, or when they pay their rent, they can ask for a discount because they are young but are, astonishingly, unlikely to get it. More than that—you have workers who are doing exactly the same job, shoulder to shoulder in the warehouse or in the shop, but one of them is paid less than the other simply because of their age. That simply cannot be right.

My final point is that the real living wage still does not take us nearly far enough. The Joseph Rowntree Foundation has for a long time calculated the minimum income standard. This is enough to ensure that people who are working get enough to live a decent life, as identified by the people of Britain. These are real measures of how the Government—and this SI—are not going nearly far enough.

At the current levels, a couple with two children where one parent is working full-time on the national so-called living wage and the other is not working reach 66% of the minimum income standard in 2025. That is actually worse than it was in 2024; it is a 1 percentage point decline. A single working-age adult working full-time on the national living wage reaches 76% of the minimum income standard for 2025, compared with 77% in 2024—so, again, a 1 percentage point decrease. We are going in the wrong direction.

I have one final point. I am aware that Jeremy Hunt no longer speaks officially for His Majesty’s Opposition, but he is of course still a Tory MP. He told Radio 5 yesterday that the kinds of measures that we are all looking towards to deal with energy bills—the Government helping in this crisis situation—are unsustainable. He said:

“We are going to have to wean ourselves off the habit”.


But the reality that that fails to acknowledge is that, after decades of workers getting less and less of the share of the product of their labours, they do not have any reserves left for the next shock. People have been left on the edge, and I am afraid that this SI does nothing like enough to help them re-establish stability and security in their lives.

[The Earl of Effingham (Con)]

My Lords, following on from my noble friend Lord Sharpe, I ask the Minister, the noble Lord, Lord Leong, who has vast, successful business experience, why he thinks that Sir Tony Blair said, via his institute, just two weeks ago that Labour’s policies—such as this SI—are

“harming growth and undermining young people’s job prospects”.

[Lord Hannett of Everton (Lab)]

My Lords, I declare an interest. My colleague behind me was a member of the Low Pay Commission. I served 11 years on the Low Pay Commission. In fact, I remember its introduction and the howls of despair, sometimes from people who should have known better. Today the Low Pay Commission is in existence. Every party and every Government have accepted not only its recommendations but have actually said it would be a retrograde step to remove legislation that protects—I repeat, protects—the most vulnerable. I often wonder what the rates would be if we had never had the Low Pay Commission: if it was left to the generosity of politicians and employers. It was required, it was needed, and it has sustained its value consistently.

Sometimes there is a lack of understanding of how the commission reaches an agreement. My noble friend Lady Carberry touched on it. It is a tripart commission consisting of economists, employers and trade unions, and it is an evidence-based commission. I emphasise that. It is not something where you pick a figure because you think it is what people should earn. It has to be argued for in a responsible way by taking evidence from stakeholders such as employers, trade unions and entrepreneurs, and you arrive at a settlement. The commission debates heavily the effect on employment, including youth unemployment, but, if we are about anything in politics, it has to be about values as well. It has to be about protecting the lowest paid in society, who require support. The commission has survived so long because it has proved its case. Every recommendation has been accepted, including by the previous Government, and, if it had not been introduced, I repeat that I wonder what the rates of pay would be.

I say to the Minister that, when I listen to many of the views being expressed in the Chamber about regulations that improve the life of the low-paid worker, everything is going to be the straw that breaks the camel’s back. I heard this for years when I was on the commission. But it has survived and gone from strength to strength. I regret the noble Lord’s amendment to the Motion, and I concur with everything my noble friend the Minister said in his introduction.