Baroness Carberry of Muswell Hill (Lab)

The noble Lord, Lord Sharpe, will not be surprised to hear that I do not agree with his interpretation of the Government’s announcement yesterday of a major drive to create hundreds of thousands of jobs for young people and to radically transform apprenticeships. I suggest that it demonstrates that this Government are not reckless with the youth unemployment market and the economy. I would like to reinforce the opening remarks of the Minister about the way that the regulations before the House this evening came about. Without labouring the point, they were the product of the painstaking examination of evidence by the Low Pay Commission, a tripartite body featuring representatives from businesses large and small, labour market economists and experts and representatives of workers. I can attest to the thoroughness of that exercise that takes place year after year because I did it myself 11 times. The commission, as has been said, is excellently chaired by the noble Baroness, Lady Stroud. As it is directly relevant to these regulations, I shall quote briefly from her letter to the Government making recommendations to apply from April this year. She wrote: “Having comprehensively considered the available evidence base”, the Low Pay Commission’s judgment was that the recent national living wage increases “have not had a significant negative impact on jobs”. On young people specifically, the Government, as the noble Lord, Lord Sharpe, has reminded us, had asked the commission to extend the national living wage to 18 year-olds, but to do this by balancing concerns about youth unemployment. The letter from the noble Baroness, Lady Stroud, said that the Low Pay Commission acknowledged “a concerning rise in the rate of young people not in education, employment or training”. These were not reckless recommendations. The Low Pay Commission also acknowledged: “Young people are also more likely to work in hospitality and retail, which have seen significant falls in vacancies and employee numbers” at realistic assessment. It said, however, that minimum wage effects were “difficult to separate out … from other pressures on these sectors”. It said that there was not enough evidence to say that previous increases in the minimum rate for 18 to 20 year-olds had “affected young people’s employment overall”. It is not me saying this; it was the Low Pay Commission. The commission opted for caution and recommended waiting until 2028 or 2029 to lower the national living wage threshold to 18, and then only subject to economic conditions. It was similarly cautious and careful with the apprentice rate, keeping it the same as the rate for 16 and 17 year-olds and increasing it to only £8 an hour. The Low Pay Commission’s wisdom and caution is reflected in the regulations before your Lordships’ House this evening. I ask the noble Lord, Lord Sharpe, to think again about his amendment and about the effects of seeking to deny the lowest paid in our society a few more pounds in their wage packets.