Philip Hammond will hold a roundtable next week to discuss how to fight low pay, after reports he is looking at a significant increase to the minimum wage.
Sources close to the issue told the Observer he was aiming towards the “ambitious end” of what would be possible without hitting employment.
One proposal could see the minimum wage rise to 66 per cent of median earnings, which would meet the Organisation for Economic Co-operation and Development’s definition of low pay. This would allow Hammond to claim he had charted a course towards ending low pay in the UK.
HM Treasury said today he and Greg Clark would host a roundtable next week with business bodies and trade unions to “discuss how best to achieve our ambitious aims and improve lives and opportunities for the low paid”.
A spokesperson said: “Our ultimate objective is ending low pay, while ensuring that job opportunities are protected. The government has commissioned a review of the latest international evidence on the impact of minimum wages and will announce the independent Low Pay Commission’s remit at the end of this year.
One government source told the Observer: “The chancellor is very concerned about poverty and sees this as one avenue of tackling it.”
At the 2018 Budget the chancellor said the government wanted to end low pay. The government has appointed Professor Arindrajit Dube to undertake a review on the latest international evidence on the impacts of minimum wages. This will report later in the year.
More than two million people are enjoying a pay rise this year as the national living wage and minimum wage thresholds increased, the Treasury claimed last month.
The national living wage has increased from £7.83 to £8.21, which equates to around £690 per year and will affect 1.8m people.