ChancellorJeremy Hunt is expected to use his speech to Tory party conference to confirm an increase in the national living wage to at least £11 an hour from next April.
The Conservatives said the move will benefit two million of the lowest paid, with Mr Hunt also expected to announce ministers will look again at the benefit sanctions regime in a bid to get the unemployed back into work.
It comes as Rishi Sunak resisted calls from fellow Tories to commit to tax cuts in a pre-election giveaway and vowed to prioritise reducing inflation rather than taxes.
Cabinet minister Michael Gove was among those calling for tax cuts before the next election, while former prime minister Liz Truss is among dozens of Tory MPs who have said they will refuse to vote for new tax rises.
The Government had already set a target for the national living wage to reach two-thirds of median hourly pay by October next year.
The Low Pay Commission estimates the rate required to meet that target should be between £10.90 and £11.43, with a central estimate of £11.16.
Mr Hunt is expected to say: “That’s the Conservative way of improving the lives of working people. Boosting pay, cutting tax.
“But today, we go further with another great Conservative invention, the national living wage.
“We promised in our manifesto to raise the national living wage to two-thirds of median income – ending low pay in this country.
“At the moment it is £10.42 an hour and we are waiting for the Low Pay Commission to confirm its recommendation for next year.
“But I confirm today, whatever that recommendation, we will increase it next year to at least £11 an hour.
“A pay rise for over two million workers.
“The wages of the lowest paid over £9,000 a year higher than they were in 2010 – because if you work hard, a Conservative Government will always have your back.”
Prime Minister Rishi Sunak said the Government is “sending a clear message to hardworking taxpayers across the country – our Conservative Government is on your side”.
The Chancellor will also warn things have gone in the “wrong direction” since the pandemic when it comes to people out of work.
Efforts to encourage parts of the population back into the workplace, in a bid to boost productivity, have been an ongoing concern for ministers.
Mr Hunt and Work and Pensions Secretary Mel Stride are expected to use November’s Autumn Statement to set out proposals to make it harder for people to claim benefits if they refusing to take “active steps” to move into work.
Mr Hunt will say the “safety net” of social security “depends on fairness to those in work alongside compassion to those who are not”.
Miss Truss will also speak out at the conference where she is expected to call on the Tory leadership to do more to boost housebuilding, with a speech to party members set to urge a revival of “Conservative values”.
The former prime minister will use her appearance on the fringes of the Tory conference in Manchester to urge the Conservative leadership to position itself as the “party of business again” by slashing corporation tax.
Her appearance at a so-called growth rally will see Ms Truss argue “we need to make the case for Conservatism again” and “do more to revive Conservative values and show that they deliver”.
It is the latest public intervention by the former prime minister, whose time in office was brought to an abrupt end last year after her mini-budget received a disastrous reception.
