National Minimum Wage

National Minimum Wage
5.51 Generally organisations representing business urged the Commission to be cautious in
respect of any future uprating. The CBI argued that the Apprentice Rate was in its infancy
and should be frozen, in line with the youth rates, until its effects could be properly assessed.
The BCC and the Unquoted Companies Group also counselled against raising the Apprentice
Rate. The FSB, however, while proposing a freeze in the other minimum wage rates,
suggested there should be an increase in the Apprentice Rate to £123 per week, a level
which it said was roughly in line with the 16-17 Year Old Rate (£3.68 from October 2011).
The FSB said that its members would take on more apprentices if they were incentivised
by an upfront payment or wage subsidy.
5.52 In the low-paying sectors, the Hair and Beauty Industry Authority remained concerned that
the current economic situation meant businesses in the hairdressing industry were operating
with low margins. With labour costs the biggest single outlay, it said any increase in these
costs would further restrict the number of available apprenticeship places. As set out above
in the section on the adult rate, the NHF believed there was a case for freezing the minimum
wage. In the childcare sector NDNA said it would be concerned about further changes to the
minimum wage which put more barriers in the way of young people moving into work. The
Business Services Association encouraged a continued cautious approach to increasing the
Apprentice Rate.
5.53 Those organisations representing workers believed there was room for an increase in the
Apprentice Rate. The TUC said it advocated an iterative approach, with a significant uplift as
soon as there was enough evidence to warrant this. It argued that the Apprentice Rate
should be increased to what it considered to be a cautious target. It estimated a rate of
£2.80 would currently benefit around 15 per cent of apprentices, and allowing for likely uplift
in pay, might cover around 10 per cent in October 2012.
5.54 Other union organisations also supported a rise. The GMB called for the Apprentice Rate
to be increased at the very least in line with RPI (£2.69). Usdaw said that apprenticeships
needed to have attractive rates of pay to be seriously considered by young people and called
for the rate to be increased by at least the same percentage increase as the adult rate. Some
trade unions continued to maintain the policy principle that apprentices, like all other workers,
should be paid at the same NMW rate from age 16. Unite said it regarded the NMW as a
national baseline wage for all workers in the UK regardless of level, age or legal status.
It believed that the Apprentice Rate (as well as the youth rates) should increase by more
than the adult rate to help reduce the differential between the rates. UNISON called for the
Apprentice Rate to rise to match the existing youth rates in 2012.
5.55 Among organisations representing young people, NUS called for the Apprentice Rate and
other NMW rates to be harmonised at the level of the adult rate. Platform 51 said the wage
must increase well above the current rate as it was not enough to live on and created a
disincentive for young people to train when they could work for higher rates of pay.
142