National Living Wage Announced By George Osborne...But Only For 25s And Over

National Living Wage Announced By George Osborne...But Only For 25s And Over
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A new National Living Wage was announced by George Osborne today – but only for those aged 25 and over.

In the first Tory-only Budget for 19 years, the Chancellor of the Exchequer revealed the new compulsory living wage would come in next April at the rate of £7.20 an hour.

The National Minimum Wage is currently £6.50 an hour for 21-year-olds and over, and so represents a sizeable increase for those who qualify.

The Chancellor also spelt out details of £12billion of welfare cuts, announcing severe restrictions on tax credits and the abolition of housing benefit for those aged between 18 and 21.

Speaking in the House of Commons this afternoon, Mr Osborne said: “We are moving Britain from a high welfare, high tax economy, to a lower welfare, lower tax society.

“The best way to support working people is to let them keep more of the money they earn.

“Because let me be clear: Britain deserves a pay rise and Britain is getting a pay rise.

“I am today introducing a new National Living Wage.

“We’ve set it to reach £9 an hour by 2020.

“The new National Living Wage will be compulsory, working people aged 25 and over will receive it and it will start next April, at the rate of £7.20.”

Today's Budget saw the Tories follow through on many of their manifesto pledges, especially around cuts to welfare spending.

The Chancellor announced all working age benefits would be frozen for four years, including tax credits and housing allowance.

Mr Osborne claimed a freeze was needed as since the economic crash of 2008 “average earnings have risen by 11 per cent, but most benefits have risen by 21 per cent.”

He added: “Those who oppose any savings to Tax Credits will have to explain how on earth they propose to eliminate the deficit, let alone run a surplus and pay down debt.”

The benefits cap will be reduced from £26,000 to £20,000 – except in London where it will be £23,000.

Young people were hit hard in the Budget, with 18 to 21 year olds losing housing benefit, and grants for university students from poorer backgrounds being replaced by loans.

The threshold at which people starting paying income tax will continue to rise, and from April goes from £10,800, to £11,000.

The higher rate of tax threshold was also increased, from £42,385 to £43,000.

Acting Labour Leader Harriet Harman said there were "measures in the Budget which we will give serious consideration to", but tore into his attack on tax credits.

She said: "At the heart of this Budget is his announcement – heavily trailed in the press, but curiously not mentioned in the election campaign – to cut tax credits for people in work.

"But doing that without an effective across-the-board plan for higher pay will make them worse off.

"He’s saying he’ll cut welfare and wages will magically go up; we say, get wages up and the welfare bill will come down.

"We heard the announcement on the national minimum wage and the living wage, but without tax credits, even the living wage is not enough for a family to live on."

Labour leadership candidate Andy Burnham asked in a Facebook post: "What is George Osborne’s problem with young people?"

"In the last Parliament, he made them bear the brunt of the early cuts and today he’s done the same. This was not a One Nation Budget, but the Two Generations Budget – cementing the divide between young and old," he said.

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Summer Budget 2015
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LONDON, UNITED KINGDOM - JULY 08: Chancellor of the Exchequer George Osborne (C) poses for photographers outside 11 Downing Street in London, England before presenting his summer budget to Parliament on July 8, 2015. (Photo by Tolga Akmen/Anadolu Agency/Getty Images) (credit:Anadolu Agency via Getty Images)
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LONDON, ENGLAND - JULY 08: The Chancellor of the Exchequer George Osborne (2nd R) and his treasury team Greg Hands, David Gauke, Damian Hinds, Harriet Baldwin and Lord O'Neill of Gatley present the ministerial red box up to the media as he leaves 11 Downing Street on July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stuart C. Wilson/Getty Images) (credit:Stuart C. Wilson via Getty Images)
Chancellor Of The Exchequer George Osborne Presents Tory-Majority Government U.K. Budget(03 of25)
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George Osborne, U.K. chancellor of the exchequer, holds the dispatch box containing the first budget by a Tory-majority government in almost two decades, outside 11 Downing Street in London, U.K., on Wednesday, July 8, 2015. Osborne, whose election campaign played heavily on Tory values of economic prudence and the need for more austerity to eliminate the budget deficit, will draw on his newly granted authority to press ahead with plans to slash a further 12 billion pounds ($19 billion) from welfare costs. Photographer: Jason Alden/Bloomberg via Getty Images (credit:Bloomberg via Getty Images)
The First Conservative Budget Since The Election(04 of25)
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LONDON, ENGLAND - JULY 08: The Chancellor of the Exchequer George Osborne holds his ministerial red box up to the media as he leaves 11 Downing Street on July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Peter Macdiarmid/Getty Images) (credit:Peter Macdiarmid via Getty Images)
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British Chancellor of the Exchequer, George Osborne holds up the Budget Box as he poses for photographs with his ministerial team outside 11 Downing Street in central London, on July 8, 2015, before unveiling the government's budget to parliament. British finance minister George Osborne will announce austerity cuts in the budget on Wednesday, although the first all-Conservative budget for 20 years is expected to be less harsh than previously feared. AFP PHOTO / BEN STANSALL (Photo credit should read BEN STANSALL/AFP/Getty Images) (credit:BEN STANSALL via Getty Images)
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LONDON, UNITED KINGDOM - JULY 08: Chancellor of the Exchequer George Osborne (C) poses for photographers outside 11 Downing Street in London, England before presenting his summer budget to Parliament on July 8, 2015. (Photo by Tolga Akmen/Anadolu Agency/Getty Images) (credit:Anadolu Agency via Getty Images)
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LONDON, UNITED KINGDOM - JULY 08: Chancellor of the Exchequer George Osborne (2nd L) poses for photographers outside 11 Downing Street in London, England before presenting his summer budget to Parliament on July 8, 2015. (Photo by Tolga Akmen/Anadolu Agency/Getty Images) (credit:Anadolu Agency via Getty Images)
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Prime Minister David Cameron congratulates Chancellor of the Exchequer George Osborne after he delivered his Budget statement to the House of Commons, London. (credit:PA/PA Wire)
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Conservative MPs wave their order papers after Chancellor of the Exchequer George Osborne delivered his Budget statement to the House of Commons, London. (credit:PA/PA Wire)
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Works and Pensions Secretary Iain Duncan Smith as he listens to Chancellor of the Exchequer George Osborne deliver his Budget statement to the House of Commons, London. (credit:PA/PA Wire)
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Chancellor of the Exchequer George Osborne deliver his Budget statement to the House of Commons, London. (credit:PA/PA Wire)
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Chancellor of the Exchequer George Osborne delivers his Budget statement to the House of Commons, London. (credit:PA/PA Wire)
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LONDON, ENGLAND - JULY 08: Protesters gather outside the Houses of Parliament as the Chancellor of the Exchequer George Osborne delivers his Budget to the house on July 8, 2015 in London, England. The Chancellor presented his summer budget to Parliament today, announcing £12 billion in welfare cuts. (Photo by Dan Kitwood/Getty Images) (credit:Dan Kitwood via Getty Images)
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LONDON, ENGLAND - JULY 08: Protesters gather outside the Houses of Parliament as the Chancellor of the Exchequer George Osborne delivers his Budget to the house on July 8, 2015 in London, England. The Chancellor presented his summer budget to Parliament today, announcing £12 billion in welfare cuts. (Photo by Dan Kitwood/Getty Images) (credit:Dan Kitwood via Getty Images)
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LONDON, ENGLAND - JULY 08: Secretary of State for Energy and Climate Change Amber Rudd (L) departs 10 Downing street prior to The Chancellor of the Exchequer George Osborne presenting his ministerial red box to the media on July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stuart C. Wilson/Getty Images) (credit:Stuart C. Wilson via Getty Images)
The First Conservative Budget Since The Election(16 of25)
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LONDON, ENGLAND - JULY 08: Chancellor of the Exchequer George Osborne leads his Treasury team (from left) Commercial Secretary to the Treasury Lord ONeill of Gatley, Exchequer Secretary to the Treasury Damien Hinds, Financial Secretary to the Treasury David Gauke, City Minister Harriett Baldwin and Chief Secretary to the Secretary Greg Hands out of No11 Downing Street in London today to deliver his first budget of the new Conservative governmenton July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stefan Rousseau - WPA Pool /Getty Images) (credit:WPA Pool via Getty Images)
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LONDON, UNITED KINGDOM - JULY 08: Chancellor of the Exchequer George Osborne is seen outside 11 Downing Street in London, England before presenting his summer budget to Parliament on July 8, 2015. (Photo by Tolga Akmen/Anadolu Agency/Getty Images) (credit:Anadolu Agency via Getty Images)
The First Conservative Budget Since The Election(18 of25)
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LONDON, ENGLAND - JULY 08: Chancellor of the Exchequer George Osborne leads his Treasury team (from left) Commercial Secretary to the Treasury Lord ONeill of Gatley, Exchequer Secretary to the Treasury Damien Hinds, Financial Secretary to the Treasury David Gauke, City Minister Harriett Baldwin and Chief Secretary to the Secretary Greg Hands out of No11 Downing Street in London today to deliver his first budget of the new Conservative governmenton July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stefan Rousseau - WPA Pool /Getty Images) (credit:WPA Pool via Getty Images)
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Police stand guard at the entrance to Downing Street in central London, on July 8, 2015, following a protest. British finance minister George Osborne will announce austerity cuts in the budget on Wednesday, although the first all-Conservative budget for 20 years is expected to be less harsh than previously feared. AFP PHOTO / BEN STANSALL (Photo credit should read BEN STANSALL/AFP/Getty Images) (credit:BEN STANSALL via Getty Images)
The First Conservative Budget Since The Election(20 of25)
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LONDON, ENGLAND - JULY 08: Chancellor of the Exchequer George Osborne leads his Treasury team (from left) Commercial Secretary to the Treasury Lord ONeill of Gatley, Exchequer Secretary to the Treasury Damien Hinds, Financial Secretary to the Treasury David Gauke, City Minister Harriett Baldwin and Chief Secretary to the Secretary Greg Hands out of No11 Downing Street in London today to deliver his first budget of the new Conservative governmenton July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stefan Rousseau - WPA Pool /Getty Images) (credit:WPA Pool via Getty Images)
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Protesters against the budget and the government's public spending cuts demonstrate outside the Houses of Parliament in London today. (credit:Stefan Rousseau/PA Wire)
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Protesters against the budget and the government's public spending cuts demonstrate outside the Houses of Parliament in London today. (credit:Stefan Rousseau/PA Wire)
Summer Budget 2015(23 of25)
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Protesters against the budget and the government's public spending cuts demonstrate outside the Houses of Parliament in London today. (credit:Stefan Rousseau/PA Wire)
The First Conservative Budget Since The Election(24 of25)
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LONDON, ENGLAND - JULY 08: Home secretary Theresa May departs 10 Downing street prior to The Chancellor of the Exchequer George Osborne holding his ministerial red box up to the media on July 8, 2015 in London, England. The Chancellor is presenting his summer budget today to Parliament and is expected to announce £12 billion in welfare cuts. (Photo by Stuart C. Wilson/Getty Images) (credit:Stuart C. Wilson via Getty Images)
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Protesters against the budget and the government's public spending cuts demonstrate outside the Houses of Parliament in London today. (credit:Stefan Rousseau/PA Wire)

In his budget statement, which lasted longer than an hour, Mr Osborne laid out further measures to show "Britain is open for business".

This included cutting corporation tax from its current level of 20 per cent to 18 per cent in order to attract business to the country.

In an attempt to encourage more in-work training, the Chancellor also announced an apprenticeships levy on big businesses, which organisations could claim back from as they employ trainees.

Simon Walker, Director General of the Institute of Directors, praised the "boldness" of introducing the Living Wage.

He said: "Introducing a national living wage at a significantly higher level than the minimum wage was a dramatic announcement, but in return, companies have been provided with a cut to corporation tax and an increase in the employment allowance.

"We should not understate the boldness of this move, and many businesses will have been taken by surprise, but the IoD accepts that after several years of slow wage rises, now is the time for companies to increase pay."