Deputy Prime Minister Angela Rayner is one of the most important supporters of the project. Employee The Employment Rights Bill said: “A decent day’s work deserves a decent day’s pay. “Our changes will help millions of low-income people meet their basic needs while delivering the biggest wage increase in history for 18-20 year olds.”

The minimum wage for apprentices and 16-17 year olds will also rise by 18 per cent to £7.55 per hour. This means that a total of 3.5 million workers are expected to receive a pay raise in April as a result.

TUC General Secretary Paul NowakHe supported the movement. He said: “This increase will make a real difference to the lowest-paid people in this country at a time when rents, bills and mortgages are high.

“Low-paid workers spend most of their earnings in their local economies, so increasing their pay packets will also benefit local businesses.”

He also welcomed plans to bring the minimum wage for young people to the same level as adults’ wages, saying young workers faced a “huge wage penalty” due to an “outdated and discriminatory system”. But the Low Pay Commission has warned that some businesses are struggling with minimum wage increases that have risen faster than inflation in recent years.

Baroness Philippa Stroud, chair of the Low Pay Commission, said: “The government has been clear about its ambitions for the national minimum wage and its importance in supporting workers’ living standards. “At the same time, employers have had to deal with the challenges created by the adult rate rising by over 20% in two years, among other pressures on their cost bases,” he added: “The data shows some signs that it is becoming harder for employers to adjust to minimum wage increases.”

John Foster, the CBI’s head of policy and campaigns, said the pressure of rising minimum wage rates would “make it increasingly difficult for firms to find the opportunity to invest in the technology and innovation needed to boost productivity and deliver sustainable increases in wages”. .

He said: “Politicians and business are united in ensuring people have access to well-paying, fulfilling jobs. The only sustainable way to achieve this goal—for the economy as a whole, not just for minimum wage earners—is through higher growth and productivity.

“The National Living Wage has proven to be a valuable tool to protect the incomes of the poorest in society and promote equality in the bottom half of the income distribution.

“But with productivity stagnating, businesses will have to adapt to this increase despite challenging economic conditions and increasing pressure on profit margins.”

The minimum wage has increased by almost 10 percent in the last two years, despite high inflation. Wednesday’s Budget is also expected to lead to an increase in employers’ national insurance contributions and impose extra costs on businesses in what the Conservatives describe as a “jobs tax”.

Nye Cominetti, chief economist at the Solution Foundation think tank, said: “This small increase in the minimum wage – the first rise in almost a decade that is no faster than the typical wage rise – makes sense in the context of the expected increase, as well as in employer national insurance contributions.” Suggesting that the government may want to be “more assertive” in the future, he called on the Low Pay Commission to monitor the impact of higher minimum wage rates on employment, “including whether firms are switching to a self-employed workforce to minimize their tax bills and employment rights obligations”.

Meanwhile, the Federation of Small Businesses (FSB) has called for additional support to help small employers cover the extra costs, including extending tax breaks for small businesses. Tina McKenzie, head of policy at the FSB, said: “Other business costs remain high at a time when many small businesses are still not rebuilding the reserves they need to use to get through the worst of the pandemic. “The Chancellor is committed to supporting small firms when it comes to business rates. The move would be welcome; it would free up money for business and investment rather than levying it as an essentially analog tax in the digital age.