On 3rd August 2015 the Bishop of St Albans, Rt Revd Alan Smith, received answers to written questions on the government’s plans for a National Living Wage, and on the income pressures faced by young people:
The Lord Bishop of St Albans: To ask Her Majesty’s Government whether they plan to bring the National Living Wage in line with the rate recommended by the Living Wage Foundation by incorporating adjustments for cost of living and support received through tax credits.
Baroness Neville-Rolfe: The Government wants to move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society. That means placing more emphasis on support to families on low incomes by reducing income tax through increases in the income tax personal allowance level and increasing wages, than on topping up low wages through tax credits.
The National Living Wage will not be linked to the rate recommended by the Living Wage Foundation. The Low Pay Commission has been asked to provide recommendations regarding the level of the National Living Wage in the future and an assessment of the pace of increase to reach the Government’s ambition of 60% of median earnings by 2020. In making its recommendations on the National Living Wage, the Low Pay Commission takes into account a wide range of evidence from across the economy.
The Lord Bishop of St Albans: To ask Her Majesty’s Government whether they are considering introducing a distinct London rate for the National Living Wage, following the principle established by the Living Wage Foundation for both a recommended national and London rate.
Baroness Neville-Rolfe: The UK has a national wage policy and we do not plan to introduce a regional wage policy. It is right that workers across the country should benefit from the new National Living Wage. The Low Pay Commission takes into account a wide range of evidence from across the economy in making its recommendations on the level at which rates should be set, and will continue to do so. This means there is a level playing field and that wage policy is simple for employers to understand and meet their responsibilities under the law.
The Lord Bishop of St Albans: To ask Her Majesty’s Government what plans they have to address income pressures on people aged under 25 in the light of the additional costs of student maintenance, reduced access to housing support and their ineligibility for the new National Living Wage.
Baroness Nevill-Rolfe: The overall maintenance support available to students in loans will increase to the highest level ever for students from low-income households. The Government will also continue to provide maintenance loans to students from all backgrounds to cover the costs of living while studying. These loans are only repaid once borrowers’ earnings rise above £21,000.
The priority for younger workers under 25 is to gain skills and experience and secure work – something that is already reflected in the National Minimum Wage rate structure where the youth rate is currently £1.40 lower than the adult rate. Wages tend to increase through the early 20s as workers gain more experience. Therefore, the wages of younger workers will continue to be underpinned by the core National Minimum Wage as recommended by the Low Pay Commission at the highest possible level without affecting employment.