Former Chancellor and Prime Minister Rishi Sunak has said that his decisions to hike the national minimum wage backfired as he called for a quango overseeing low pay to be abolished.
Sunak appeared to admit that his decision to increase the national living wage has contributed to job struggles faced by young people.
In an article for The Sunday Times, Sunak took a swipe at business chiefs for failing to “get publicly involved” over wage growth debates as he called on ministers to take greater accountability.
The current framework on wages sees the government set a remit for the Low Pay Commission (LPC) on the cost of living and hourly earnings, with the quango then making a recommendation on wage growth.
The current government has also urged the LPC to gradually narrow the gap between pay bands for 18 to 20-year-olds with adults, though the move has been heavily criticised by economists who say businesses have become less likely to employ young people.
Sunak said the quango should be abolished, with ministers taking full control and accountability over setting the national living wage.
He said that he took the wrong decision to follow the LPC’s recommendations as wage increases had outstripped productivity gains.
Sunak wrote: “I decided that for a multimillionaire chancellor to overrule the LPC without any covering fire wasn’t politically sensible — and so let that pay carry on rising. I now wish I’d been braver and acted anyway.”
Sunak calls for living wage overhaul
He also called on Chancellor Rachel Reeves to freeze the rates of statutory wages until 2030 and to link national living wage to productivity.
The remarks come against a bleak backdrop for young workers. In January to March 2026, the unemployment rate for 16 to 24-year-olds hit 16.2 per cent, up from 14.2 per cent the year before, with 729,000 young people out of work.
Meanwhile, nearly a million — 957,000 — were classed as Neets (not in education, employment or training) in the final quarter of 2025.
The minimum wage has been aggressively ratcheted up under successive governments. Under Sunak, the national living wage rose from £8.91 in 2021 to £11.44 by April 2024 — a near-10 per cent increase in a single year.
Reeves has continued the trajectory, with the NLW rising to £12.71 per hour from April 2026, accepted in full from the LPC’s recommendation.
Several business groups have flagged that April’s jump in the NLW combined with higher employer National Insurance contributions last year created a “perfect storm” of cost pressures for businesses.
