Tynwald has approved a 9.9% increase in the minimum wage despite concerns at the impact this could have on small businesses in the island.

The single hourly rate will rise from £12.25 to £13.46 from April 1 next year.

Tynwald also approved an increase in the hourly rate for young workers from £9.55 to £10.76.

The increase had not been supported by the Minimum Wage Committee which warned about the impact on employment, inflation and the costs and competitiveness of businesses.

Similar concerns were raised by the island’s Chamber of Commerce which said the increase - which is three times the current rate of inflation - would lead to jobs being shed and hours reduced.

The rate rise is the first to be brought in under a new mechanism that links the minimum wage to 66% of median earnings.

Douglas North MHK John Wannenburgh tabled an amendment calling for Treasury to bring forward proposals to increase the personal allowance threshold at the same time.

And an amendment from Ramsey MHK Lawrie Hooper suggested that the minimum wage should increase to £13 an hour from April and then to £13.76 from October next year.

He argued that from April 2027 the rate should increase annually in line with the Living Wage - which had been government policy until Tynwald approved the new mechanism in July.

Both amendments were defeated.

Arbory Castletown and Malew MHK Jason Moorhouse warned that businesses are ‘closing their doors and blaming costs’.

But Enterprise Minister Tim Johnston said his motion would provide 'certainty' for businesses.

Tynwald voted to increase the single hourly rate by 17 votes to seven in the House of Keys, and eights votes to zero in the Legislative Council.

The minimum wage increases were among the last motions to be debated at this month’s Tynwald sitting, which concluded at 7.20pm on Thursday.