Under-18s to get minimum wage

Workers under the age of 18 will receive the national minimum wage for the first time, while the rate for adults is expected to rise to more than £5 an hour next year.

Workers under the age of 18 will receive the national minimum wage for the first time, while the rate for adults is expected to rise to more than £5 an hour next year.

Ministers will announce next week that 16- and 17-year-olds will qualify for a minimum wage of about £3 an hour, a move that will benefit tens of thousands of young people. The minimum pay for 18- to 21-year-olds, currently £3.80 an hour, is expected to rise to £4.10 and the adult rate from £4.50 to £4.85 an hour.

The Government will portray the rises as an example of its "social justice" agenda and hopes it will appeal to the Labour Party and trade unions, who have long campaigned for a minimum wage of £5 an hour. But the move has caused a squabble among ministers over who should get the credit by making the announcement.

Gordon Brown, the Chancellor of the Exchequer, had intended to make the minimum wage an important plank of his Budget next Wednesday. But Tony Blair jumped the gun during Prime Minister's Questions yesterday. Mr Blair trailed the rise in the adult rate to £4.85 an hour in October and hinted strongly that young workers would benefit for the first time. He said: "I hope next week we will be able to say more about the national minimum wage and its impact on young people, which will no doubt find support at least on this side of the House."

Patricia Hewitt, the Trade and Industry Secretary, intends to make the formal announcement before the Budget, probably on Monday, because she believes the issue comes under her department's remit. About 1.6 million people will be helped by the rise in the rate for workers aged 22 and above. The 7 per cent increase is well above inflation, but the Low Pay Commission, which advises on the rate, has backed the move. Another increase is due to be announced in a year, in the run-up to a general election, which is expected to take the figure to about £5.20.

The commission has also given its approval for the introduction of a new lower rate for young workers. The Government asked it to investigate the proposal after unions complained that young people were being exploited. Ministers were anxious to pitch the level of the wage at a cautious rate so it did not deter teenagers from continuing their education.

Research by the commission found the average hourly rate payable to 16- and 17- year-olds was about 80 per cent of the £3.50 youth minimum rate. There was evidence that some employers in low-paid industries, such as hairdressing, were using apprenticeships, which are not covered by the minimum wage, to pay significantly less than the legal minimum. The commission said: "Some employers are using the exemptions available in relation to modern apprenticeships to offer very low rates of pay. This may lead to these opportunities been less valued by young people."

Mr Brown, who is keen to expand the number of apprenticeships, may seek to close this loophole in his Budget.

Unions have accused firms of pitching vacancies at 16- and 17-year-olds to cut costs. One survey cited a trainee painter and decorator in Kent who was paid £1.25 an hour, a car valet in Cheshire offered the same amount and an office junior in Plymouth paid £1.50 an hour.

In the Commons, the Labour MP Liz Blackman said many young people in her Erewash constituency in Derbyshire "have no earnings potential and are open to exploitation by some unscrupulous bosses who pay them a pitiful wage for often quite responsible jobs".

Mr Blair criticised Michael Howard, the Tory leader, who claimed while he was Employment Secretary that a national minimum wage could cost two million jobs. "Some people said unemployment would go up. Actually, we have one and three quarter million more jobs in the British economy," Mr Blair said.