Business Secretary Vince Cable announced today increases to the National Minimum Wage (NMW) from October, including a rise to the amount apprentices are paid an hour.
From 1 October 2013, the rate for adults (21 years and over) will increase by 12p to £6.31. Wages for 18-20 will rise by 5p to £5.03 an hour and 16-17 year olds will see their wages increase by 4p to £3.72 an hour.
Apprentices will get an additional 3p, increasing their hourly rate to £2.68. The Government’s decision to increase apprentices' wages goes against recommendations made by the independent Low Pay Commission (LPC) to freeze the rate following concerns that a significant number of employers are not paying apprentices enough.
Mr Cable said, ‘Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC’s recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board.’Commenting on the news, Dave Prentis, Unison general secretary, said, 'Any relief for the lowest paid is welcome, but the government could have and should have gone further and announced a higher baseline for wages. This would have had the knock on effect of boosting our economy.
'It is a disgrace that 28,000 hardworking local government staff now earn less than the rate which the Government accepts is the minimum any worker in the UK should be paid.
'Among these workers are carers, school meals workers, and cleaners, all doing essential, demanding jobs that keep our communities running. It is no surprise that morale in local government is at rock bottom. What message does it give to these people about how their hard work is valued when they are paid at bargain basement levels?'
He added, 'It is time for local government employers to show their workforce some respect, as well as some compassion, and come back with a decent pay offer this year.'
In contrast, the Forum of Private Business has argued that the increase in NMW could prove costly for employers.
Alex Jackman, head of policy, said, 'We appreciate that for the second year running the government has implemented an increase in the National Minimum Wage that is below inflation, and for this restraint employers will no doubt be thankful.
'Many of our members pay above the National Minimum Wage but we are in difficult economic times and the government has recognised that any increase in NMW has a wage inflation rate higher up the scale.
'To put the wage rise in context, at the Budget the Government announced an Employment Allowance to save all employers £2000 on their staffing costs, to be implemented from April 2014. As the increase in National Minimum Wage comes into effect this October, today’s increase will mean a business employing 9 or more full time members of staff on the minimum wage will see over half of that wiped out before it even comes in.
'Given this impact, the country categorically cannot afford the misleadingly titled ‘living wage’ in its current predicament.'