Labour is set to backtrack on its manifesto vow to equalise the minimum wage for 18-20s in Healey's Budget

Chancellor John Healey is expected to announce tomorrow that the minimum wage for 18-to-20 year-olds will rise by just 3.9% — in line with the increase for older workers — representing a break from Labour's two-year approach of steeper hikes aimed at narrowing the age gap. The hourly rate is understood to be heading from £10.85 to around £11.27, still well below the £13.20 national living wage for over-21s. Nearly one million young people currently fall into the NEET category — not in employment, education or training. Business Secretary Jonathan Reynolds maintained that equalisation 'still applies but we were always clear it could happen over time.'

Unison general secretary Andrea Egan called the decision 'deeply unfair', saying 20-year-old care workers 'don't pay less in the supermarket'.

Angela Rayner had previously championed keeping the equalisation pledge, opening a fresh fault line in Labour on the eve of the Budget.

Long-term jobless people are reportedly already rejecting Labour's £1.2bn back-to-work scheme outright.