'Training wage' may help economy grow

A BUSINESS group has called on the government to introduce a new £2.50-an-hour "training wage" for internships to help boost the economic recovery.

The proposal comes today from the Chartered Institute of Personnel and Development (CIPD), which said the wage should be paid for internships of three months or more. Its Blueprint for Growth also suggests extending the right to request flexible working to all employees, not just parents and carers.

John Philpott, chief economic adviser to the CIPD, said the government had yet to produce a coherent strategy for economic growth to sit alongside the spending cuts.

"The coalition needs to show greater urgency in implementing measures to help boost the long-run supply side capacity of the UK economy, which must include efforts to boost productivity by improving the way in which businesses manage the people they employ," he said.

The CIPD's proposals come as a survey of 500 manufacturing firms, published today by the Engineering Employers Federation (EEF), reveals that one in five fear that government austerity measures will have a negative impact on orders.

However, the EEF also predicts manufacturing growth of 3.5 per cent this year, with the mechanical engineering and metal products sectors boosted by high demand in export markets.

Lee Hopley, chief economist at the EEF, said: "Manufacturing now looks set to be at the heart of the rebalanced growth the economy needs with sectors most exposed to international markets likely to post the highest growth.

"But there are continuing risks to growth both here and abroad. To maintain momentum the government must keep its foot down on policies to accelerate growth."