Contribution
My Lords, I rise to move Amendment 102, in the name of my noble friend Lady Wolf of Dulwich, who much regrets that she is unable to be here today to move it herself. I was delighted to add my name to this very specific amendment, addressing what I am sure is an unintended consequence of the Bill. I am grateful to the noble Lord, Lord Knight of Weymouth, and the noble Baroness, Lady Garden of Frognal, both of whom have enormous expertise in apprenticeships, for adding their names as well.
Apprenticeships are key to developing the skills we need for achieving our national goals, including all the Government’s missions. The value and importance of apprenticeships is increasingly recognised, not least by young people and their families, but there are not enough apprenticeships available, and the majority are used by employers for upskilling or reskilling older people already in the workplace. We need many more apprenticeships for younger people, but the number of 16 to 24 year-olds starting apprenticeships has been declining. Only one in four young people in this age group who seeks an apprenticeship gets one, and the number of apprenticeships going to young people has declined from 41% in 2008 to 23%.
Small businesses have a crucial part to play in providing apprenticeships for young people. Some 70% of existing apprenticeships are in small businesses, and there is huge scope for small firms to offer many more apprenticeship opportunities. But it has proved consistently hard to persuade small employers to take on apprentices. One reason is cost, despite the extra payments available from government for small firms employing young apprentices, particularly if they have special needs. More important disincentives include the extra workload involved in training and supervising young apprentices, the amount of bureaucracy involved in navigating the apprenticeship system and, sometimes, the uncertainty about whether a firm will have a sufficient pipeline of work for the full term of the apprenticeship. There have been various schemes aimed at addressing these issues—group training associations, apprenticeship training agencies and now flexi-job apprenticeships—but in none of these cases has much impact been made on convincing more SMEs to offer more apprenticeships.
I believe there is a real danger that the day 1 employment rights set out in Clause 23 and Schedule 3 to the Bill could actually exacerbate this problem rather than helping to resolve it, by acting as a further significant disincentive to small employers considering taking on apprentices. My noble friend’s proposed amendment provides a closely targeted exemption for apprentices under 21 during a probation period of no more than six months, with a contract agreed by both the apprentice and the employer. This seems to me to be fair to both the employer and the apprentice.
For the employer, it helps to offset the high risk involved in taking on a young person who may—indeed, probably will—never have been employed before, and who may themselves decide within the first few weeks or months that the apprenticeship is not right for them. The existing risks and unknowns for an employer in taking on the costs, workload and duties of apprenticeships are hard enough to overcome without the additional burden of taking on full employment responsibility for an untried young person, probably in their first job, who may or may not turn out to have the attributes for or interests in that particular job.
These are not, after all, people with experience from previous jobs and a track record for a new employer to assess. Many of them may be among the almost 1 million young people currently defined as NEET—not in employment, education or training—whom the Government quite rightly are desperately keen to get into employment, for example through the planned youth guarantee. The amendment does not relate to people changing jobs, so it has nothing to do with labour market mobility, which this clause seems designed largely to promote.
I hope the Minister will be able to tell us what specific assessment the Government have made of the likely impact of this part of the Bill on the willingness of businesses, especially smaller businesses, to take on young apprentices. You would not need to talk to many small business employers to conclude that it could be very damaging. That would be bad news for such firms themselves, for our national skills needs, for the wider economy and, above all, for the potential young apprentices, who might miss out on attractive opportunities. This amendment would help to counter that, and I beg to move.