Morrisons plans to increase pay for 90,000 shop floor staff to £8.20 an hour from March, which is £1 more than George Osborne’s living wage.

The UK’s fourth largest supermarket said the decision is subject to a workers’ vote on November 12, but would cost £40m if implemented.

Some of the increase will be offset by changes to benefits, such as the end of extra pay for Sundays and paid breaks, but the like-for-like pay rise will still be 13%.

The increase will make Morrisons the highest payer of the UK’s biggest four supermarkets and follows Lidl’s announcement earlier this month that it would increase its wages to £8.20 an hour from October 1.