Minister insists Labour not committed to living wage for over-18s before election, despite manifesto pledge

Good morning. Last night Alan Milburn suggested that he would like the government to drop its commitment to pay all people over the age of 18 the national living wage. The former Labour health secretary was speaking after he published a major report on the rise in the number of young people not in education, employment or training (Neet) and he implied that when the final report is published in the autumn, with policy recommendations, it will propose changes to the national living wage/minimum wage system to encourage more firms to hire young people. A change to the “discriminatory age bands” policy seems to be quite high up his list of demands.

For the record, this is what Labour said in its manifesto.

double quotation markLabour will also make sure the minimum wage is a genuine living wage. We will change the remit of the independent Low Pay Commission so for the first time it accounts for the cost of living. Labour will also 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.

The TUC said yesterday that cutting the minimum wage for young workers would be a mistake – setting the scene for a fierce Labour internal battle over the manifesto pledge.

This morning, in an interview on the Today programme, Torsten Bell, the pensions minister, hinted that Milburn may get his way. Milburn, the TUC, and everyone else who has read the manifesto, probably assume that, when Labour said it would “remove discriminatory age bands”, it meant by the end of this parliament.

But it didn’t, Bell claimed. He said:

double quotation markThe manifesto sets out that the we should move the rates together over time. It doesn’t set a timeline on that because that’s the important role of the Low Pay Commission.

When the presenter, Justin Webb, said put it to Bell that people understood that as meaning by the end of this parliament, Bell replied:

double quotation markNo, that’s not what it says in our manifesto, Justin. But it’s an understandable mistake. It’s a long document.

Webb asked him to confirm that Labour is not committed to equalising the rates by the end of this parliament. Bell replied:

double quotation markThe manifesto commits us to equalising the rates. We’re absolutely committed to doing that. I’ve been a big proponent of the minimum wage over the last 25 years …

We’re going to do it in a way that relies on the Low Pay Commission to provide independent advice on how that can happen, and in general how increases in the minimum wage happen but in a way that doesn’t affect employment levels.

And if you look at what the Low Pay Commission said in their annual report, they didn’t find evidence that previous increases in the minimum wage for young people had had an effect on their employment. But it is right that we stay alive to that. It’s right that we keep looking at the evidence.

Asked again if the government was committed to the pledge, Bell said:

double quotation markI’ve already said the answer is yes, we’re committed to our manifesto that we stood on and we will deliver it. But that manifesto did not set out the timeline.

Milburn is likely to be more happy about this answer than the trade union movement.

At the moment it looks as if it will be a relatively quiet Friday. Pat McFadden, the work and pensions secretary, is on a visit this morning, and Nicola Sturgeon, the former Scottish first minister, will be at the Hay literary festival this afternoon. But last night Keir Starmer and Andy Burnham both published long and interesting responses to Tony Blair’s critique of the Labour government. Peter Walker wrote a story about them here.

But there is more to say about the Starmer and Burnham essays, and I will be having a detailed look at them shortly.

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The Ministry of Defence is not properly addressing the risk of losing £1.5bn a year through fraud, a committee of MPs say today.

The Commons public accounts committee has published a report calling for a change of culture in the way the MoD tackles fraud.

double quotation markThe Ministry of Defence is at significant risk of fraud and economic crime, with high expenditure, complex procurement, and a global workforce split between the armed forces and civil service. But over the last four years it has recouped on average just 48p for every £1 it spent tackling fraud – well below the government’s expectation of saving £3 for every £1 spent.

So far, the department has not responded to the fraud threats it faces with the degree of focus and leadership that we would expect, and it cannot demonstrate that it is doing enough to protect valuable public funds that should be available to bolster the UK’s defence capability.

The department has reported that its potential exposure to fraud can reach £1.5bn a year. But it also told us that this estimated figure is only an academic construct. It could not tell us when it will have a more reliable estimate of the scale of the problem, but later told us that it will take at least a year to develop one.

Geoffrey Clifton-Brown, the Conservative MP who chairs the committee, said:

double quotation markThere must be a radical change of culture within the MoD if the flow of funds lost to fraudulent activity is to be stemmed. The apparent normalisation of fraud in the procurement process is symptomatic of a wider issue; there is no overarching strategy within the MoD of how to tackle fraud and economic crime.

In response, an MoD spokesperson said the figures in the report “primarily relate to a period under the previous government”.

double quotation markWe are turning that around, and last year we saved £1.34 for every £1 spent on counter-fraud measures, significantly increased on 33p for every £1 spent in 2023/24, and we expect this to be further improved this year.

We have zero tolerance for fraud and corruption and we will continue to strengthen our controls, exploiting the latest technology to prevent and detect fraud and protecting taxpayers’ money as we help keep the UK secure at home and strong abroad.

Tens of thousands of new work experience and training placements from construction to hospitality will be available for young people as part of government efforts to tackle the joblessness crisis, the Press Association reports. PA says:

double quotation markThe 300,000 new placements over the next three years are backed by some of Britain’s biggest employers, Pat McFadden, the work and pensions secretary, said.

These include Manchester and Gatwick airports, and the government has vowed placements will reach young people across the country.

The placements, also expected to include health and social care, have been confirmed just a day after a report warning of the risk of a “lost generation”.

The number of the UK’s 16 to 24-year-olds not in employment, education or training – known as Neets – rose to more than a million, figures published yesterday confirmed.

Former Labour cabinet minister Alan Milburn, who was tasked with leading the review into Neets, wrote that lack of work experience is “the single most-cited barrier to work amongst young people”.

His report said: “At present, the provision of work experience is an afterthought for many schools. Students are often told to find their own placements. Unsurprisingly, those without strong networks and connections are more likely to miss out.”

The review author said the “first rung of the career ladder has thinned” and is now “simply out of reach” for many young people.

He added: “That places them in a hopeless catch-22 where employers ask for work experience but the opportunities for young people to gain it have narrowed or gone.”

The Department for Work and Pensions said the 300,000 placements will comprise of work experience and what are known as Sector-based Work Academy Programmes (Swaps).

The latter are short government-funded programmes for jobseekers claiming benefits, offering training, hands-on experience of the workplace and a guaranteed job interview, the department said.