Bungling Labour backtracks on manifesto vow to equalise minimum wage for under-21s after youth jobs crunch

John Healey is poised to water down Labour's vow to equalise the minimum wage for under-21s.

The Chancellor is expected to announce a 3.9 per cent rise in the minimum wage when he delivers the Budget tomorrow.

That would take the national living wage level from £12.71 to £13.20.

However, Mr Healey will reportedly not announce a bigger hike to the minimum for workers aged 18 to 20 - abandoning the trend since 2024.

The move is being seen as backtracking on Labour's manifesto, which promised to end 'discrimination' in minimum wage rates, although it did not give a fixed timetable.

Businesses have raised alarm that the boosts have made it harder for them to employ young people. 

The Government has also heaped pain by increasing national insurance contributions. 

Almost a million young people are now classed as 'NEET' - not in employment, education or training.

Currently those aged between 18 and 21 are entitled to a minimum hourly rate of £10.85. For 16 to 17-year-olds the rate is £8. 

The separate living wage in London is £14.80. 

The apparent Budget shift comes despite Angela Rayner previously talking up the need to keep the pledge.

The 2024 Labour manifesto promised to 'remove the discriminatory age bands, so all adults are entitled to the same minimum wage, delivering a pay rise to hundreds of thousands of workers across the UK'. 

Asked in June about the commitment to equalise minimum wage rates, Ms Rayner - a backbench MP at the time - said: 'If you challenge me - where did it all go wrong - I think it's where we've deviated away from our promises to the electorate. 

'We made promises, we were elected on that mandate. I think we should work with the Low Pay Commission to deliver that.' 

Mr Healey admitted in an interview last week that there was a 'trade-off between the level of the minimum wage and the employment rate' and he was 'acutely conscious' of the impact on young people's prospects.

Kate Nicholls, the chair of UKHospitality, told the Times: 'Stepping off the accelerator on the national minimum wage for young people is welcome. 

'We warned the government that moving too quickly on equalisation would damage job opportunities at entry level.' 

Ms Nicholls said hospitality still faces a 'double whammy' from the minimum wage and national insurance rises.