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The 4.2 per cent increase keeps the National Living Wage on course for the 2020 goal. The recommendation was a finely balanced decision. On the one hand, it is a significant increase at a time of average pay growth of around 2 per cent and should help protect low-paid workers from the higher inflation likely to result from the depreciation of sterling. On the other hand, it is lower than we previously projected and should help manage risks to employment.

And I confirm again that the government has no plans to introduce further welfare savings measures in this parliament beyond those already announced.

The adjusted level reflects the fact that pay growth and forecasts have been weaker than expected and a relative target automatically moves in line with them. A material worsening in economic performance and prospects would lead us next year to consider whether to recommend slower increases than needed to stay on a straight line path.

Our goal is to make it easier for businesses to work with defence and make defence business more attractive to a wider range of suppliers, which is why this external consultation is so important.

This Autumn Statement responds to the challenge of building on that strength, while also heeding the warnings in the OBR’s figures, as we begin writing this new chapter in our country’s history.