Budget live: Reeves to raise minimum wage to £12.21 as ‘working people’ face tax rise

Sir Keir Starmer’s approval rating has collapsed more significantly after winning an election than any other prime minister in modern history, a new poll has shown.

Following the July election, which saw the Labour Party win a landslide majority of 174 seats, the prime minister approval rating reached a high of plus 11.

But by October, just days before Rachel Reeves’ Budget on Wednesday, new polling from More in Common showed that the prime minister’s personal approval rating has fallen to -38 – a net drop of 49 points.

The cost of a bus journey in the city will still be capped at £2, Mr Burnham has announced.

The hike will be announced at Rachel Reeves’ Budget on Wednesday as the government tries to plug a £22bn hole in the public finances.

But Mr Burnham said on Tuesday that Manchester would “proceed with our plan to introduce a new simpler, flatter fare structure based around a £2 single fare” at the start of January.

He added: “Because of the decisions we have taken, and the progress we have made, GM (Greater Manchester) is in a different position to other areas across England when it comes to bus funding and bus fares.”

Single bus fares in England have been capped at £2 outside London, where they are £1.75 per journey, for most routes since January 2023.

When Rachel Reeves became the first female chancellor since the post was created 800 years ago, there was no disguising her pride in her historic achievement.

In her very first speech to Treasury staff, she remarked on what a “huge privilege” it was. Beaming from ear to ear, she positioned herself as a standard bearer for “every young woman and girl” to demonstrate that “there should be no ceilings on your ambitions, your hopes or your dreams”.

Read Cathy Newman’s column here:

The Low Pay Commission, which recommended the minimum wage increase adopted by Rachel Reeves for tomorrow’s budget, has warned that businesses are beginning to struggle with wage rises.

Chairwoman Baroness Philippa Stroud said: “At the same time, employers have had to deal with the adult rate rising over 20% in two years, and the challenges that has created alongside other pressures to their cost base.”

She added: “The data show some signs of employers finding it harder to adapt to minimum wage increases.”

John Foster, the chief policy and campaigns officer at the Confederation of British Industry, said it is becoming “increasingly difficult for firms to find the headroom to invest in the tech and innovation needed to boost productivity and deliver sustainable increases in wages” due to rising minimum wage rates.

This may explain why Reeves has adopted a smaller increase than usual – it is the first time in nearly 10 years that it has not risen faster than typical wage growth.

The minimum wage has risen nearly 10 per cent in each of the past two years, a partial response to high inflation.

General secretary of the TUC Paul Nowak has said the government is “delivering on its promise to make work pay”.

He added: “This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.

“Low-paid workers spend more of their earnings in their local economies – so boosting their pay packets will benefit local businesses too.”

Mr Nowak also commended plans to bring the minimum wage for young peple into line with the adult rate. Younger workers currently face a “huge pay penalty” due to an “outdated and discriminatory system”, he said.

The change amounts to a £1,400 annual pay rise for a full-time worker on the national living wage. The government will also increase the minimum wage for 18- to 20-year-olds by £1.40 per hour as part of a plan to end the disparity between younger and older adult workers. In total, the change means 3.5m people workers on the minimum wage will receive a pay boost.

Read the full report by our political correspondents Archie Mitchell and Millie Cooke:

The minimum wage rise will be the first time in nearly a decade that it has not risen faster than typical wage growth, according to a leading economist.

“This smaller rise in the minimum wage – the first time in almost a decade when it has risen no faster than typical wage growth – is sensible in the context of an expected rise in employer national insurance contributions at the same time,” said Nye Cominetti, the principal economist at the Resolution Foundation think tank.

He said the Low Pay Commission should monitor the impact of higher minimum wage rates on employment, including the risk of firms switching to self-employed labour to minimise tax bills.

Chancellor Rachel Reeves has confirmed a 6.7 per cent increase to the minimum wage ahead of the budget announcement tomorrow.

Ms Reeves says the move is a “significant step” towards creating a “genuine living wage for working people”.

The increase was recommended by the Low Pay Commission, and adds £1,400 to the annual salary of a worker earning the minimum wage – otherwise known as the national living wage. But it does not match the £12.60 UK living wage which the Living Wage Foundation recommends.

The minimum wage will also raise for 18-20 year olds to £10 an hour, and for apprentices and those aged 16-17 to £7.55 an hour.

Deputy Prime Minister Angela Rayner said: “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18-20-year-olds on record.”