Liberal Democrat business secretary Vince Cable has revealed plans to increase pay for thousands of apprentices.
The proposal would mean a single national minimum wage for 16-17-year-olds in employment and first year apprentices will be presented to the Low Pay Commission (LPC).
The scheme would boost first year apprentices pay by more than £1 an hour.
Dr Cable hopes the proposal will draw more young people into apprenticeships. He said: “The National Minimum Wage has successfully protected the incomes and jobs of the lowest paid workers in the UK.
“This year it will see the first above inflation rise in the minimum wage since the recession.
“Thanks to the Lib Dems, apprenticeships are helping to create a stronger economy and opportunities for young people. I want the minimum pay for apprentices boosted by £1 an hour.”
The proposal to the LPC would see wages rise from £2.73 to £3.79 an hour on current rates. This will also help employers by simplifying pay structures.
In June 2014, Vince asked the LPC to consider whether the structure of the apprentice rate could be simplified to ensure apprentices get paid the right wage.
The LPC will make their recommendations, alongside the 2015 national minimum wage rates, in the Spring of 2015.
Government will then decide on any changes to the structure, based on the LPC’s recommendations.
Katja Hall, CBI deputy director-general was concerned that bumping up the cost for employers could deter firms from taking on young trainees:
“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.”
On the employment status review Hall added: “Business wants to see that we maintain a flexible labour market that delivers for both employees and firms because it creates new jobs and helps people get into work.
“Companies and workers value the range of flexible employment practices on offer and we should seek to preserve this, but both parties should be clear about their rights under the terms of contract and any examples of poor practice should rightly be rooted out.”