Manufacturers urge Low Pay Commission to boost apprentice pay

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Scrapping of current ‘Apprentice Rate’ would provide major boost say employers

Britain’s manufacturers are calling for a major pay boost to apprentices by urging the Low Pay Commission (LPC) to scrap the current ‘Apprentice Rate’ and, instead, align it to age-specific wage rates.

Responding to the Commission’s consultation on the National Minimum Wage (NMW) which closes today, EEF the manufacturers’ organisation believes that the current system is complex and confusing for employers and, has no impact on their recruitment plans for young people. As a result, the current rate dismissed by employers who offer the market rate to attract, and retain, the best candidates for quality apprenticeships.

According to EEF, if the LPC adopts the recommendation all Apprentices would see a significant boost to pay, in particular under-19s and first year Apprentices. For example a first year Apprentice would see their pay jump from £2.86 per hour to £5.03 per hour.

In its submission, EEF is also calling on the Low Pay Commission to set out more clearly what it sees as the ultimate level of the NMW that they would wish to reach. The LPC is respected by manufacturers for its independent, impartial and balanced approach, providing a national minimum wage rate that is simple to understand and comprehensive enough to cover practically all workers. EEF believes it should continue to perform this task and not be subject to political interference..

With improving economic conditions, manufacturers agree that the time is approaching for the national minimum wage to rise faster in real terms. But any such rises must be based on social economic evidence, and the ability of businesses to pay. The LPC must look at the key conditions of stable or rising employment and an expectation of sustained economic growth, but also consider additional policy costs such as pensions and possible changes to holiday pay calculations.

Commenting, EEF Head of Employment Policy, Tim Thomas, said:

“There is an opportunity to create some clear winners such as young apprentices by abolishing the apprentice pay structure and replacing the Apprentice Rate with a learner’s age specific rate. Apprentices would see a significant boost to pay and employers will no longer be faced with a complex and confusing pay structure.”

“The Low Pay Commission has to date demonstrated a real ability to weight up a delicate balance in recommending a wage floor which does not negatively impact on employment or growth and protects the lowest paid, and should continue to do so whilst government addresses wider causes of low pay.

“What the LPC must do is give businesses greater certainty and direction on where the national minimum wage will go, and the pace it will get there. Its recommendations for pay in 2014-15 must cut through the current political noise on the national minimum wage.

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