Thank you for contacting me about zero-hours contracts and the lowest paid workers.
I welcome that the Government is committed to supporting the lowest paid workers for their hard work and valuable contribution to the economy. The introduction of the National Living Wage (NLW) has delivered the fastest pay rise for the lowest earners in 20 years.
The Chancellor announced in the 2020 Spending Review that he would accept the recommendations from the independent Low Pay Commission to increase the National Living Wage in 2021 by 2.2 per cent, from £8.72 to £8.91 an hour, with it extended to apply to those aged 23 and over from April 2021. I am pleased that the Government is committed to lowering the age threshold of the National Living Wage to age 21 and over by 2024, and will continue to monitor economic conditions.
In addition, the Government has also accepted the Low Pay Commission's recommendations for the other National Minimum Wage (NMW) rates to apply from April 2021 including:
- increasing the rate for 21 to 22-year-olds by 2.0 per cent from £8.20 to £8.36 per hour
- increasing the rate for 18 to 20-year-olds by 1.7 per cent from £6.45 to £6.56 per hour
- increasing the rate for 16 to 17-year-olds by 1.5 per cent from £4.55 to £4.62 per hour
- increasing the rate for apprentices by 3.6 per cent from £4.15 to £4.30 per hour
- increasing the daily accommodation offset rate by 2.0 per cent from £8.20 to £8.36.
While not suitable for everyone, I believe that zero-hour contracts have a part to play in a modern, flexible labour market because, for a small proportion of the workforce, that may be the kind of contract that is right for them. Two-thirds of workers on these contracts do not want more hours.
However, it is important to make sure that those benefitting from the flexibility of these contracts are not exploited by unscrupulous employers and I welcome that action has been taken in this regard. In 2015, the Government legislated to ban exploitative zero hours arrangements meaning it is now illegal for employers to include exclusivity clauses in these contracts.
I hope this is helpful in highlighting the steps that are being taken to support the lowest paid workers.
Thank you again for taking the time to contact me.