Labour minimum wage to have lower youth rate

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Indy Politics

Labour Editor

Employers will be allowed to pay young people lower rates than adults under Labour's plan for a national minimum wage.

The news emerged yesterday as the party launched a new campaign over "poverty wages", arguing that low pay now costs taxpayers pounds 2.4bn in benefits.

Harriet Harman, Labour's employment spokeswoman, is understood to have rejected an option of extending the full minimum pay rate to teenagers or leaving them out completely. The lower rate is meant to provide an incentive to employers to take on teenagers and spend money training them.

Labour is also thought to have ruled out differing regional minima or variations by industrial sector. But a "London weighting" is possible.

Party officials are working on an enforcement and inspection system but Ms Harman believes wages can be monitored through the benefit system. Those on low pay often receive housing benefit, family credit, income support or council tax benefit.

Ms Harman yesterday discounted the suggestion that employers would refuse to serve on a low-pay commission under Labour. Howard Davies, director-general of the CBI, and employers outside his organisation had been clamouring to be represented to influence decisions.

Ms Harman said although the new rate would be introduced after assessing economic conditions, there was no question that a Labour government would not introduce it. She said more than 1 million people earned less than pounds 2.50 an hour.

Phillip Oppenheim, Employment minister, said the economy could only afford to increase pay if productivity improved. "The minimum wage is not a magic wand which politicians can wave to raise wages without any cost to jobs."

Labour's reluctance to spell out the details of the policy was "dishonest and deceitful".