The National Minimum Wage for apprentices will increase by 57p an hour to £3.30, the Prime Minister and Deputy Prime Minister announced today.
This increase, the largest ever seen for apprentices and 50p higher than the amount recommended by the Low Pay Commission, will come into force from October 2015.
Prime Minister David Cameron said:
“At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out; that hard work is really rewarded; that the benefits of recovery are truly national. That’s what today’s announcement is all about – saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britain’s families; and a better future for our country.”
Tis increase will halve the gap between the National Minimum Wage rate for 16 to 17 year olds, which will be £3.87 an hour from October.
The government is also putting employers in control of apprenticeship funding by introducing a new digital apprenticeship voucher. The voucher will give employers purchasing autonomy over the government contribution to apprenticeship funding.
The employer would register their details on a system being developed by the Skills Funding Agency including their type of business, the details of the apprentice and the apprenticeship standard being signed up to. The discounted rate, which could be up to 100% for 16 to 18 year olds, at which employers can purchase training would be calculated and the employer would be able to pass on the voucher code to the provider that is delivering the training for their apprentice. The provider would then reclaim the value of the voucher from the Skills Funding Agency
Over 1.4 million of Britain’s lowest paid adults will also benefit from an increase of their National Minimum Wage rate this autumn. The three percent rise to the new rate of £6.70 per hour is the largest real-terms increase since 2008.
Deputy Prime Minister Nick Clegg said:
“This is just one of the many ways in which we’ve created a fairer society whilst building a stronger economy. If you work hard, this government is behind you all the way. Whether you’re on low pay or starting your dream career through an apprenticeship, you will get more support to help you go further and faster.”
Despite the government’s comments about supporting low income workers, the TUC feel that minimum wage workers are likely to be hit by the Chancellor’s cuts.
Frances O’Grady, TUC general secretary, said:
“For the low paid to get a fair share of the recovery, this was a year in which we could have had a much bolder increase in the minimum wage.
“With one in five workers getting less than a living wage, this is nowhere near enough to end in-work poverty. Britain’s minimum wage workers should be very fearful of the billions of pounds of cuts to government help for the low paid that the Chancellor is planning if re-elected.
“Apprentices will welcome the increase to their minimum wage, which will reduce the shortfall in their minimum pay relative to 16 and 17 year-old employees. But there really shouldn’t be a gap at all. The TUC will continue to call on the Low Pay Commission to recommend a future increase that will match the apprentice rate to that for 16 and 17 year-olds.”