Key facts
- A five-year freeze on the minimum wage is proposed to combat youth unemployment.
- The national living wage would be frozen at £12.71.
- The Low Pay Commission would be abolished.
- Purchasing power for minimum wage workers could decrease by 9% to 12% over five years.
- Labour criticized the proposals as "tin-eared" and out of touch.
A Conservative shadow minister has endorsed a thinktank's report proposing a five-year freeze on the minimum wage to address youth unemployment. The Prosperity Institute's paper suggests maintaining the national living wage at £12.71 and abolishing the Low Pay Commission, arguing this could lead to 270,000 more young people in work. However, the report acknowledges this would erode minimum wage workers' purchasing power by 9% to 12% over the period, equating to a loss of nearly £9,000. The proposals also include returning employer national insurance contributions to pre-April 2025 levels and reinstating a two-year qualifying period for unfair dismissal. Labour has criticized the recommendations as "tin-eared" and out of touch with the struggles of low-paid workers.