Gordon Brown, Chancellor of the Exchequer, won substantial changes to the minimum wage level, to whom the different rates will apply and to the timing of their introduction.
The Low Pay Commission had called for an adult rate of pounds 3.60 for those aged 21 and over from April 1999, and pounds 3.20 for 18- to 20-year-olds. After a series of prolonged and difficult negotiations, Mr Brown was able to water the recommendations down.
Yesterday, Margaret Beckett, President of the Board of Trade, announced that 18- to 21-year-olds would be covered by a minimum of just pounds 3 an hour which would increase to pounds 3.20 in June 2000. Ministers have not decided whether to increase the adult rate to pounds 3.70 an hour as recommended by the commission. The position of 21-year-olds will be reviewed in 1999 by the Commission, which has been given the brief of monitoring the minimum wage.
Asked whether she was disappointed that the changes had been forced through against her will, Mrs Beckett said the most important thing was the historic introduction of a minimum wage in a way which minimised any disruption. She attempted to brush aside what she regarded as esoteric media fascination with alleged ministerial differences.
But last night her hold on her job at the DTI was very much in the balance. Following her bruising row with Gordon Brown, Mrs Beckett is fighting to keep her Cabinet post. She does not want to be moved in Tony Blair's July reshuffle.
Her row with Mr Brown reached a crisis over the weekend, as she fought to secure some face-saving compromise from the minimum wage package. It was the second time in recent weeks she has been engaged in a fight with Gordon Brown. Her White Paper on trade union recognition fell short of the left wing's demands.
The charges against Mrs Beckett have been denied by her friends, who said she had fought off the Treasury, which wanted to scrap the Low Pay Commission after its report was delivered.
One of the reasons she has been damaged, say her friends, is that she refuses to have a "spin doctor".
Professor George Bain, who chaired the Commission - made up of employers, employees' representatives and academics - emphasised the fact that the unanimous recommendations were based on careful analysis and extensive consultation.
Rita Donaghy, a senior official with the public service union Unison, and one of the commissioners, said while she would have preferred the commission's report be accepted in full, it should be seen as providing the building blocks to eliminate poverty pay.
"It covers more than two million people and it's the biggest pay rise I've ever negotiated," she said.
Other trade unionists, however, were less enthusiastic. Bill Morris, leader of the Transport and General Workers' Union, said lower rates for young people would create second-class citizens.
Adair Turner, Secretary-General of the CBI, said the figures were at the top end of what was acceptable to business.
All 16- and 17-year-olds will be exempt from the law and so will all those participating in officially-approved apprenticeship schemes.Reuse content