Britain's minimum wage for workers aged 18-20 will rise by 3.9 per cent to around £11.27 an hour under measures announced in the Budget, the BBC understands. That rise tracks the increase for workers aged 21 and over, whose National Living Wage is set to climb from £12.71 to £13.20 an hour.

The smaller increase for younger workers marks a slowdown from Labour's previous two years in power, when the government raised the rate by 26 per cent in pursuit of a manifesto pledge to remove "discriminatory age bands" and pay all adults the same minimum wage.

Business Secretary Jonathan Reynolds said the equality commitment "still applies but we were always clear it could happen over time" and that the government had to balance "good wages" with "the pressures on the labour market."

Andrea Egan, general secretary of the union Unison, called the decision "deeply unfair." She said 20-year-old care workers, teaching assistants and security guards "do the same work as their older colleagues" and "must be paid equally."

The Budget also includes measures Chancellor John Healey described as "breathing space" for families struggling with living costs. The government will remove import tariffs on 100 food items, including plant-based drinks and certain vegetables. The Treasury estimates this could save households up to £21 per year, or 40p per week, when combined with tariff suspensions introduced in June.

Business Secretary Reynolds told the BBC the combined savings across existing and new tariff removals would reach around £500 million annually.

Other changes include making permanent a 55p per mile tax-free mileage allowance for those driving up to 10,000 miles for work, a rise from 25p. Self-employed fathers will receive two weeks of paternity pay for the first time, worth up to £194 weekly. The government will also allow carers to earn more without losing their entire allowance, replacing it with a taper mechanism from 2030.

Fuel duty will remain frozen, with the existing 5p discount continuing. That discount was introduced in 2022 for a 12-month period but has been extended repeatedly since then.

The Conservatives criticised the measures. Shadow chancellor Andrew Griffith said the "everyday fixes" had been "wiped out by higher borrowing costs, taxes and inflation," calling the tariff cuts "an insult to families hammered by Labour's tax rises."