UK National Minimum Wage

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Both Labour and Conservatives plan to raise the minimum wage, Labour fastest.

Robert Joyce, deputy director of the Institute for Fiscal Studies says "these are really big ambitious plans".

For some employers this will push up their wage bills, especially in food and accommodation, he says. Critics say it could push up unemployment as a consequence, although that never seems to happen.

"This history of minimum wage is one of repeated warnings" over unemployment, he says, "followed by reassurances after minimum wage rises have happened that doesn't seem to have materialised."

But you can't have infinitely high wages without some effect, he maintains.

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The Chancellor has also been discussing the Resolution Foundation report out today which suggests low pay could be eliminated in the UK in the next five years or so.

Progress in reducing low pay over the last few years is explained in part by the introduction and steady increase in the level of the minimum wage.

So the question is, should the minimum wage continue to rise after 2020?

"We would only do that if we can be confident that we can do that without damaging the employment prospects of people with lower skills," says Mr Hammond.

He points out that initial fears back in the 1990s that the minimum wage would cost jobs were never realised, but says that doesn't mean further rises might not be damaging. So he's commissioning a review.

"The key challenge is to support businesses so they can raise their productivity performance as the wages of their employees rises," he says.

"Then you get a virtuous circle, where increases in the minimum wage incentivises improvements in productivity, which in turn allows employers to to pay higher wages still.