Contribution
My Lords, I will speak to Amendments 181 and 182 in my name and those of the noble Lords, Lord Aberdare and Lord Knight, and the noble Baroness, Lady Garden. I thank my fellow sponsors, and the noble Lord, Lord Londesborough, for so ably standing in for me in Committee.
Apprenticeship is central to this Government’s policies and to this country’s future. Yesterday, I had the privilege of being part of the Economic Affairs Committee’s annual session with the Chancellor of the Exchequer. One of the things she said—and I am quite sure truly meant—was that she wants more young people to get apprenticeships. Unfortunately, the Bill is likely to reduce, not increase, the opportunities for young people to become apprentices. I am absolutely sure that this was not intended by the Government, but we need to take note of it and start thinking fast about how to offset the impact.
Apprenticeship for young people is in a very poor state. As recently as 2008, 41% of apprenticeship starts were among young people aged under 19. This has now fallen to just 23%. Young people typically start off with what are called intermediate apprenticeships, but these are in decline too, both absolutely and proportionately—crowded out by higher apprenticeships, which are equivalent to university qualifications. The latest figures show a continuing drop, down from 162,000 intermediate starts in 2023 to 143,000 in 2024—that is a 12% fall in just one year.
Moreover, around half of our current starts now involve people who are over 25, and large numbers of these older apprentices were already working for their employer before they became an apprentice. This is especially true among the large employers, which account for a growing proportion of apprenticeships, whereas it is small employers which are more likely to take on young apprentices, and they who are decreasingly likely to do so. Moreover, the more deprived an area, the more likely it is that there will be no big employers— sure enough, the decline in apprenticeship numbers has been most marked in disadvantaged regions.
All this is happening against a background of many young people being in neither education, employment or training—NEET. I had seen a figure of one in 10, but the Chancellor yesterday referred to one in eight; whichever it is, it is far too many. So we need more openings for young apprentices. But there is a serious danger that the Bill will make large employers even more inclined to give apprenticeships to existing employees, with whose employment they take no risks, rather than hiring new young apprentices. Where employers do take on young people, they will play it very safe.
But what about the rest of young people? What about the young people who make up the growing number of NEETs? Small and medium businesses are the main employers of young apprentices. It is their apprenticeship recruitment which, as I have just pointed out and as was pointed out in Committee, has been plummeting in absolute and relative terms. Small businesses find our current apprenticeship regime burdensome and bureaucratic, and often too expensive: they do not have HR departments or lawyers on tap. At the moment, many feel under intense pressure, and business confidence figures reflect this. So, in this environment and in this context, giving young apprentices full employee rights from day one, with no provision of a probationary period, is a further turn of the screw. Taking on an untested young person is always risky, and the Bill would make it much more so.
I recognise that there is no simple way to make an exception for apprentices or to find a way that recognises that they are in key respects as much students as they are workers. Unfortunately, in this country, unlike many others, apprentices have no special legal status. In law they are simply normal employees who happen to have an apprenticeship training agreement. My noble friend Lord Aberdare highlighted this in his speech in Committee and, as so often, identified the key issue. This is still his last but one day, and at midnight it will become his last day in the House. He will be greatly missed.
At present it would be very difficult for the Government to make an exception for apprentices or treat them differently, and we need to change the situation as a matter of urgency and look to other countries’ apprenticeship laws for guidance. I also think that unless we get a clearer picture of how the Bill’s measures are impacting employers, especially small employers, we will not have a clear picture of exactly what needs to change and how. We need evidence and details, and that will enable us to see the best remedy. That is why we have tabled Amendments 181 and 182. I hope very much that the Minister will be able to respond positively and commit to monitoring the impact of the Bill’s measures, especially day-one rights, on employers’ willingness to employ apprentices, and especially on the situation with SMEs and young people. I beg to move.