Amid the glut of press releases that Real Business received from the Department of Business, Innovation and Skills overnight, one particularly caught our eye this morning: “New £5.93 minimum wage rate and new rate for apprentices announced.”
As a cheat-sheet, the new rates, which will come into force on 1 October 2010 will be:
£5.93 per hour for low paid workers aged 21 and over (a 2.2 per cent increase on the current £5.80 rate);
£4.92 per hour for 18-20 year olds (a 1.9 per cent increase on the current £4.83 rate); and
£3.64 per hour for 16-17 year olds (a two per cent increase on the current £3.57 rate).
In addition, the government announced the introduction of an apprentice minimum wage of £2.50 per hour, applicable for apprentices aged under 19 or those that are over 19 but in the first year of their apprenticeship. “Since the National Minimum Wage was introduced, millions of low paid workers across the country have benefited by having their wages increased,” comments business minister Pat McFadden, calling the measures “a welcome increase for workers”. But what about employers? Although the government professes to encourage bosses to encourage apprenticeships, has it asked them what effect the compulsory minimum apprenticeship rates will have? Charlie Mullins, the former apprentice-turned-entrepreneur founder of Pimlico Plumbers – which currently employs ten apprentices – believes that the new minimum wage for apprentices will only succeed in discouraging businesses from employing trainees: “Where does the government think businesses are going to get the money to pay for this minimum wage?” he asks. “I’m a huge advocate of apprenticeships, in fact, I’d love to have more in my business, but how am I supposed to fund them?” Mullins adds that when he asked Ed Balls and Lord Alan Sugar for some government help to pay apprentices’ wages, he was “completely ignored”. “And now these morons are making it even dearer for us to take on apprentices – what planet are they on? Oh, and by the way, did anyone hear anything from the good Lord yesterday?” “Small businesses are under tremendous pressure, whatever the Budget was supposed to make people believe. This is just another problem the Government could do something about, but instead have laid it squarely at the door of business owners.”
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