Call to exempt apprentices from minimum wage rate

THE LOW Pay Commission's long-awaited report urges ministers to make a series of exemptions from a recommended national minimum wage of pounds 3.60 in order to boost vocational training.

All 145,000 employees on formal apprenticeship schemes should be exempt from the rate, including 100,000 adults aged 18 and over, according to the commission's memorandum to the Government, which is still unpublished.

And for up to six months workers on other accredited training programmes may be paid the "lower development rate" of pounds 3.20 which applies to all 18 to 21-year-olds. This lower minimum will also cover unemployed people between the ages of 18 to 25 who have taken up the employment option under the New Deal programme and are being trained.

In what will be seen as a "fudge" by trade unions, the summary of the report says that the "development rate" for 18-21-year-olds will be monitored with the longer term expectation of linking it only it to formal accredited training.

Most unions have argued that lower rates should only apply to those undertaking training. Many employees' leaders are bitterly disappointed that the law will not apply to 16 and 17-year-olds.

In another section, the commission contends that all "payments based on output", including tips and gratuities paid through the payroll should count towards the statutory minimum. The only benefit-in-kind that will be used in calculating the statutory minimum is accommodation.

The decision on whether to accept in full or part the report has been delayed because of a clash between the Treasury and the Department of Trade and Industry. Gordon Brown, Chancellor of the Exchequer, has been seeking greater exemption for participants in the New Deal so that more employers are encouraged to take on young people, but Margaret Beckett, President of the Board of Trade, wants to implement the recommendation.

Commissioners calculate that 2 million people will benefit from the new statutory minimum but that the wage bill will only increase by half a per cent.