WORKERS will lose over £500 a year due to the Chancellor's "downgrade" of the national minimum wage in his budget, campaigners claim.

SNP MSP James Dornan said Philip Hammond had reneged on plans to raise the rate for over 25s to £9 per hour by 2020, which Hammond's predecessor George Osborne had promised.

The UK Government had said the rate, rebranded as the "national living wage", would reach £9.10 by 2021. However, it is now expected to reach only £8.83 by then – short of the original timetable.

Dornan said figures from the Scottish Parliament’s Information Centre (SPICE) show this will cost low-income workers £527 a year by 2021.

Under existing rules the statutory living wage for over 25s is £7.50, while the legal minimum wage for under 25s is £7.05.

Dornan said: “Philip Hammond’s budget was yet more bad news for ordinary families across Scotland. That is an astonishing indictment of Tory policy.

"But for the lowest paid the picture is even more bleak. This minimum wage downgrade shows how bad the Tory mismanagement of the economy has been – and how big a hit their hard Brexit will be for living standards.

“The Tories boasted about their plans to raise the minimum wage to £9 – which was welcome, although well short of the real Living Wage – but the timetable keeps being pushed further and further back.

“This latest downgrade will leave low paid workers with over £500 less in their pockets than we expected in the spring. That’s the real life consequence of Tory misrule – and why Scotland should have the real economic powers to reject Tory austerity.”

In response to Dornan, a UK Government spokesperson said: "Scottish full-time workers will earn £600 extra a year thanks to our increase to national living wage."

Meanwhile, Labour leader Jeremy Corbyn claimed average earnings are set to be £858 a year lower than previously thought by 2022 as workers "bear the brunt" of the UK Government's economic mismanagement.

Corbyn, who will appear alongside Scottish Labour leader Richard Leonard in Glasgow tomorrow, vowed he would end a "rigged" system.

Hammond's spending plans came ahead of the Scottish Government's budget on December 14.

Trade union leaders called on finance secretary Derek Mackay to reverse austerity measures in his budget and to increase public sector pay.

Scottish Trades Union Congress General Secretary Grahame Smith said newly-devolved tax powers should be used to make top earners pay more to fund public services.

“The Chancellor's budget was a complete car crash," he said. "He could have begun to reverse the damage of austerity but instead chose to continue policies which are deeply damaging to the social fabric of the UK. He was all but silent on the issue of public service pay."

He added, “However, inevitably, eyes now turn towards the Scottish budget. We expect public service workers from across Scotland to converge on Holyrood on Scottish budget day to demand a budget which protects public services and halts the year on year decline in public sector pay.

“The STUC will be bringing forward tax plans which can deliver a measure of stability to public services and halt the decline in workers’ pay."