By Jonathan Davies
The Business Secretary Vince Cable outlined plans to give the lowest paid apprenticeships a £1.06 pay rise under a Liberal Democrat government at the party conference in Glasgow today (Monday).
Supported by the Conservatives, it is thought the policy could be implemented by October 2015, if it is approved by regulators.
Writing to the Low Pay Commission, Vince Cable has recommended combining the minimum wage for apprentices and 16/17 year olds. It would mean apprentices being paid at least £3.79, up from £2.73.
Speaking at an event at the party conference on Sunday, Mr Cable said "completely unnecessary that low income people will be punished, that the working poor should be punished, to give tax relief to people at the top end of the income scale", referring to the Conservatives plans for income tax.
Katja Hall, CBI deputy director-general, said: "Apprenticeships are a vital route for young people to get a step on the career ladder and are part of the answer to solving the UK's skills crisis. Yet too few apprenticeships at the moment go to the young and relatively unskilled. Companies already pay their share into training, so raising the cost of taking these young people on would be unwise and put off many smaller firms from getting involved."
John Allan, National Chairman, Federation of Small Businesses, said:
"We support increases to the apprentice minimum wage rate and a narrowing of the gap with the youth rate. But this should happen gradually, not in one fell swoop.
“Consolidating the apprenticeship rate and 16-17 year old rate will simplify things for employers but Government should take advice from the low pay commission before setting the rate.
“At a time when the Government is calling for more employers to take on apprentices, it is also increasing the cost of doing so. If this is to happen then it is vital ministers strike the right balance or they risk failing to achieve their goals."
Tories 'obsessed by cuts'
Vince Cable accused the Conservatives of being "obsessed" with spending cuts.
"The Tories are ideologically obsessed by cuts. They see it as a way of destroying public services and the welfare state, which they detest," he said.
Mr Cable said the £25bn worth of spending cuts George Osborne says are needed would "do great harm". "We can categorically not go along with this," he added.
The Business Secretary said higher taxes would be needed, but said increasing public borrowing for the purpose of investment was a "no brainer".
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