Ministers are insisting that the national minimum wage will apply to jobless youngsters taking part in the New Deal programme - albeit at a lower rate.
As the CBI and the TUC make their submissions to the newly-created Low Pay Commission, the Government has decidedthat young people will be paid the "normal rate for the job". That means jobless18- to 24-year-olds on work placements will be paid a special statutory minimum pay limit for all trainees.
The news emerges when the overwhelming majority of submissions to the commission, which will advise the Government on the national minimum wage, call for a "training rate". Employers in particular are concerned that businesses are not discouraged from taking on trainees by being forced to pay the full rate which is expected to come into force at the end of next year or early 1999.
The Government, however, could be heading for a clash over the minimum wage with the CBI, which will today urge the commission to exempt anyone on the Welfare to Work scheme which includes participants in the New Deal.
The CBI will say that a general minimum set in line with the now defunct Wages Council rates - equal to around pounds 3.20 an hour - would be unlikely to cause significant job losses. However, it says a rate of pounds 4.40 - favoured by some unions - would have a "serious impact on jobs and inflation".
A submission from the TUC, revealed last month in The Independent, calls for "somewhat above pounds 4 an hour".
- Barry Clement, Labour EditorReuse content