Keep apprenticeships affordable, says CBI

Apprenticeship wages should not be set at such a level that they price people out of training, it has been argued.

The Low Pay Commission is to decide early next year whether apprenticeships should be brought under the national minimum wage rules.

But the CBI has said that any minimum wage for apprentices should be realistic and cautious if it is not to deter firms from offering apprenticeships in the first place.

Currently, the minimum weekly wage for apprentices in England is £95, although the average weekly wage is £170, significantly higher than for apprentices across the UK’s EU competitors.

Pushing up the minimum rate yet further, or complicating it by paying an hourly rate or differentiating apprentices by age, the employers’ organisation said, would only result in further cuts in apprenticeships as firms struggle with the recession.

Although the CBI accepted that, in order to improve national enforcement methods, apprentice pay should be brought into the national minimum wage, it recommended that it should be pegged at the current weekly apprentice rate, as set by the Learning and Skills Council.

The minimum weekly pay for apprentices in Scotland, Wales and Northern Ireland is £55, £50 and £40 respectively, so adopting the £95 rate would already represent a near doubling in the minimum pay rate.

In an effort to tackle unemployment amongst the young, the CBI also wants to see a subsidy of £2,500 for firms that offer additional apprenticeships to young people, or employ an apprentice for the first time, and a £25 million fund for employers who train more apprentices than they need for the benefit of their sector.

Katja Hall, the CBI’s director of employment policy, said: “The rising level of youth unemployment is alarming and we cannot afford to lose a generation of young people. Apprenticeships are an excellent path to employment but their availability would be constrained if a minimum wage was set too high.

“Young people must not be priced out of apprenticeships in a difficult jobs market. If apprentices join the national minimum wage system they must do so at the right level and in a way that employers can understand. Otherwise firms will simply reduce their apprenticeship intake in a bid to survive the recession and protect other jobs.”

Ms Hall added: “Employers invest significantly in an apprentice’s training, ensuring that they develop the skills to give them a great start to their careers, and young people benefit from a significant wage premium when they qualify.”