RISHI Sunak is expected to announce a rise to the national minimum wage in his budget speech this week.
The Chancellor is to reveal a 59p rise to the lowest pay levels, going from £8.91 to £9.50 an hour.
The changes will come in from April 1, and will also see young people and apprentices have their wages rise.
People aged 21 and 22 will have a minimum wage level of £9.18 per hour, from £8.36, and apprentices will have to be paid a minimum of £4.81 an hour, up from £4.30.
The latest annoucnement comes as Mr Sunak finalises his much-anticipated budget this week, with announcements set to include additional spending for the NHS and business.
He said the rise to minimum wage showed that the Conservatives were a "government that is on the side of working people."
He added: "This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.”
However Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury, said the rate was "underwhelming" and did not meet Labour's previous commitment to raise the minimum wage to at least £10 an hour for full time workers.
She said: "This underwhelming offer works out at £1,000 a year less than Labour’s existing plans for a minimum wage of at least £10 per hour for people working full-time.
"Much of it will be swallowed up by the Government’s tax rises, universal credit cuts and failure to get a grip on energy bills.
“It’s clear that Labour is the only party serious about improving the prospects of working people."
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