Plans to boost pay for thousands of apprentices have been unveiled by Liberal Democrat business secretary Vince Cable. A proposal to create a single national minimum wage for 16 to 17-year-olds in work and first year of apprentices will be presented to the Low Pay Commission (LPC). It would mean around 31,000 apprentices in the first year of their programme will benefit from a pay rise of more than £1 an hour. Vince Cable hoped the move would encourage more young people to take up an apprenticeship.
He is expected to say: "The National Minimum Wage has successfully protected the incomes and jobs of the lowest paid workers in the UK. This year it will see the first above inflation rise in the minimum wage since the recession. Thanks to the Lib Dems, apprenticeships are helping to create a stronger economy and opportunities for young people. I want the minimum pay for apprentices boosted by £1 an hour."
The proposal to the LPC would see wages will rise from £2.73 to £3.79 an hour on current rates. This will also help employers by simplifying pay structures. In June 2014, Vince asked the LPC to consider whether the structure of the apprentice rate could be simplified to ensure apprentices get paid the right wage. The LPC will make their recommendations, alongside the 2015 national minimum wage rates, in the Spring of 2015. Government will then decide on any changes to the structure, based on the LPC’s recommendations.
Liam Byrne MP, Labour's Shadow Minister for Universities, Science and Skills, responding to Vince Cable's announcement, said: "You can't trust a word the Lib Dems say. Under this Government the number of young people taking apprenticeships is falling while more than a quarter of apprentices are not receiving the apprentice minimum wage. Ministers need to get a grip and ensure the rules are properly enforced. The Tories and Lib Dems have failed to back Labour's plans for a more ambitious target for the National Minimum Wage and for better enforcement by giving local authorities new powers and introducing heftier penalties for employers who break the rules."
Commenting on a rise in the National Minimum Wage Rate for apprentices Katja Hall, CBI deputy director-general said: "Apprenticeships are a vital route for young people to get a step on the career ladder and are part of the answer to solving the UK's skills crisis. Yet too few apprenticeships at the moment go to the young and relatively unskilled. Companies already pay their share into training, so raising the cost of taking these young people on would be unwise and put off many smaller firms from getting involved."
Also responding to Vince Cable's announcement the TUC General Secretary Frances O’Grady said: "This is the right thing to do for both young workers and the economy and will help encourage more young people into apprenticeships. We also need to crack down on those employers responsible for illegally underpaying more than a quarter of apprentices and must raise the quality of apprenticeships to make them higher skilled. The TUC has been calling for a review of bogus self-employment and the abuse of employment contracts for many years. This review is welcome, if long overdue, but it will need teeth to crack down on the widespread abuse of many vulnerable workers and achieve real reform."
