National Minimum Wage (Amendment) Regulations 2015 — House of Lords, 2015-07-16
Topic: Labor
Anthony Young (Labour, Centre-left): My Lords, I thank the Minister for his explanation of the draft statutory instrument. I welcome the proposals, although I see a certain irony when I look at the Conservative Party’s track record on the national minimum wage, which has gone from one of, shall we say, opposition to enthusiastic espousal. Nevertheless, this is welcome, and we are going beyond it now to the national living wage. I was going to ask for some further information on how the Minister sees that impacting on the national minimum wage, but he has given us an assurance that that will be the subject of a later debate, so I will not go into that area I want to focus on the apprenticeship rate. It is of course good news that the Government have gone beyond the recommendation of the Low Pay Commission by an extra 50p, but I have some concerns in this area. The question of apprenticeships, especially for young people, has attracted my interest over a number of years. If I have a complaint, it is not about the Government’s enthusiasm for apprenticeships, which I acknowledge, but about their conflating the overall figures. We get a very large figure, but when we examine the number of apprenticeships for young people, there is a significant reduction. Because youth unemployment is still a significant problem, we need to focus not just on the rate that young apprentices receive but on the availability of apprenticeships A recent investigation by the Local Government Association and the IPPR found that the majority of apprenticeships are being used to train older workers who are existing employees and are having little or no impact on youth unemployment. Almost four in 10 employers do not regard the qualifications that the Government describe as being apprenticeships in the same way, while 93% of those aged 25 or over who completed apprenticeships last year already worked for the employer beforehand. I am not complaining about the reskilling of more mature workers—we know there is a need for workers to constantly upgrade their skills in an environment where technology is constantly changing. My concern arises when we hear figures such as 2 million and then find that, in fact, the vast majority of those people are already employed. I question whether those should be given the title of apprenticeships. I am not the only one—the Richard report made a similar comment The other concern I have is that an alarming number of apprentices are still not receiving their legal minimum wage. I have some information from the Library, which I hope the Minister will agree is a safe and independent assessment. I will quote a few points: "Looking only at Level 2 and 3 apprentices for whom compliance can be assessed, 15 per cent were paid below the appropriate NMW. (Across all apprentices results indicate that 78 per cent of all Level 2 and Level 3 apprentices across Great Britain were paid at or above the NMW" That means that 22% were paid below it, so there is a very significant number of young people whom employers are illegally paying less. What are the Government doing about that? This is not a new problem, it has been going on for a while. I do not expect perfection and do not expect it to be solved overnight, but I feel that we owe young people a response from the Minister which shows that, first, the Government treat this seriously and, secondly, they will put in place the means to resolve the issue There are some other instances: "Young apprentices will be more likely to be earning less than the minimum wage, with nearly a quarter (24 per cent) of Level 2 and Level 3 16-18 year olds having non-compliant pay levels, compared with 20 per cent of 19-20 year olds, 17 per cent of those aged 21-24, and eight per cent of those aged 25 or older" The younger you are the more likely you are to be exploited, unfortunately. This is the message that we are getting. On the question of formal training on the apprenticeship, the information shows: "Eight in 10 (79%) apprentices have received formal training of some kind" That means that 21% did not. We had an assurance from the Government that they were going to crack down on apprenticeships that were not really apprenticeships, so there is still a lot of work to be done. This continues: "This figure was derived by combining the proportion of apprentices that trained with an external provider and apprentices saying that they received formal, off-the-job training, and represents a significant, if small, increase from the figures in 2013 (77%) and 2012 (76%)" It has gone up a little, but more than 20% are still not getting any formal training.