The NLW for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour from April 2017, a 4.2% increase. Treasury estimates suggest that in total, earnings for a full-time worker previously on the NMW will have increased by over £1,400 a year since the introduction of the NLW in April 2016.

The NMW pay rates for 21 to 24 year olds will increase from £6.95 per hour to £7.05. For 18 to 20 year olds, the rate will go up from £5.55 per hour to £5.60, while 16 to 17 year olds will have a similar 5p increase, up from £4.00 per hour to £4.05.

For apprentices, the pay rate will rise from £3.40 per hour to £3.50.  All the rate increases are in line with the recommendations of the Low Pay Commission.

In addition, Hammond announced the government is to provide £4.3m in extra funding to strengthen NMW enforcement.  This will fund new HMRC teams to proactively review those employers considered most at risk of non-compliance with the NMW.

The government will also provide additional support targeted at small businesses to help them to comply; and a campaign aimed at raising awareness amongst workers and employers of their rights and responsibilities.

Caroline Artis, EY managing partner for London, warned of the potential impact of the increased pay rates in the capital, taking in to account other changes announced by the Chancellor.

‘As if forecasting for next year wasn’t hard enough for London business, with Brexit and the US election results to digest, the Autumn Statement has added an unexpected rise in the minimum wage together with a hike in employers national insurance and a restriction on using losses and offsetting interest costs.

‘If you add the uncertainty around a supply of workers once we leave the EU it will be a tough few years for those businesses which employ high numbers of people in the capital.’