Conservatives Propose Five-Year Minimum Wage Freeze to Cut Youth Unemployment

Shadow Business Minister Andrew Sharpe and the Prosperity Institute have proposed a five-year freeze of the national living wage at £12.71 to combat rising youth unemployment. The proposal suggests that freezing the wage and abolishing the independent Low Pay Commission could increase youth employment by approximately 270,000 people.

The report acknowledges that this policy would erode the purchasing power of low-paid workers by 9% to 12%, leading to a cumulative loss of about £8,900 over five years. Along with the wage freeze, the proposal recommends returning employer national insurance contributions to pre-April 2025 levels and reinstating the two-year qualifying period for unfair dismissal.

Labour Business Minister Kate Dearden rejected the proposals as "tin-eared," claiming the Conservative party is determined to make the lowest-paid workers worse off. Meanwhile, the Low Pay Commission disputed the premise of the report, stating it is not aware of robust evidence that higher youth rates have contributed to deteriorating labour market outcomes for young people.