Minimum wage could ‘cut number of apprenticeships’

Plans to set a national minimum wage (NMW) for apprentices could lead to a reduction in the number of apprenticeships offered by employers, business groups have warned.

Last week Business Minister, Pat McFadden, confirmed that the Government has asked the Low Pay Commission (LPC) to consider introducing a minimum wage for apprentices.

However the Chartered Institute for Personnel and Development (CIPD) has criticised the move, claiming that a mandatory minimum rate could jeopardise Government targets to boost apprenticeship numbers in the UK.

‘There is the issue at the moment about us being in the recession and how much organisations can afford,’ commented Charles Cotton, reward adviser at the CIPD. ‘If the wage level goes up, organisations may cut back on the number of apprentices they have.

Many employers couldn't afford an increase in the current environment.’

Other professional bodies, including the Confederation of British Industry and the British Retail Consortium, have also expressed concerns over the decision.

Under the current legislation, apprentices under 18 years of age are exempt from the NMW, as are those aged 19 or older who are in the first year of their apprenticeship.

Learning and Skills Council apprentices are currently guaranteed a weekly pay rate of £80, which will increase to £95 in August.

Launching the pay review, Mr McFadden said: ‘The new arrangements must give apprentices a fair deal and protect them from exploitation, but at the same not impose undue burdens that would deter businesses from taking them on.’

The LPC has been asked to report its recommendations to the Prime Minister and Secretary of State for Business, Innovation and Skills by the end of February 2010.