Trade Union Bill

Debate between Earl of Courtown and Lord Young of Norwood Green

Thursday 25th February 2016 Lords Chamber

[Lord Young of Norwood Green]

I made the point in my contribution that we did not think that the wording was initially absolutely perfect, but there were constraints on the wording, as we have already heard, given the nature of the Bill. It would be useful to hear from the Minister that they would be willing to meet us to discuss the potential of improving employee engagement.

[The Earl of Courtown]

I am always willing to listen and to hold a meeting.

English Apprenticeships (Consequential Amendments to Primary Legislation) Order 2015

Debate between Earl of Courtown and Lord Young of Norwood Green

Tuesday 27th October 2015 Grand Committee

[The Earl of Courtown (Con)]

My Lords, this draft order is technical and makes relatively minor amendments as a consequence of the insertion of Chapter A1, relating to apprenticeships, into Part 1 of the Apprenticeships, Skills, Children and Learning Act 2009 by the Deregulation Act 2015. Chapter A1, among other things, defines an “approved English apprenticeship”, provides for approved apprenticeship standards which will set out the outcomes that those seeking to complete an approved English apprenticeship will be expected to achieve, and confirms that an approved English apprenticeship agreement is to be treated as a contract of service.

I shall explain the amendments this draft order makes to two pieces of legislation. The amendments are required as a consequence of the changes that I have just set out. It is important that these changes are made so that, where necessary, references within other primary legislation refer to the newly introduced “approved English apprenticeships”, “approved English apprenticeship agreements” and/or “alternative English apprenticeships”. First, the draft order makes two amendments to the Education Act 1996, in respect of provisions which set out certain duties of English local authorities relating to the education and training of persons over compulsory school age, so that apprenticeships under the new statutory apprenticeship scheme are treated in the same way as those under the previous statutory apprenticeship scheme.

Specifically, this means that when a local authority in England is making a determination in relation to the apprenticeship training needed to meet its obligation to provide suitable education and training to meet the reasonable needs of those over compulsory school age and under 19, and those over 19 for whom an education, health and care plan is maintained, it will be able to take into account the provision of approved English apprenticeships. In addition, when a local authority encourages employers within its area to participate in the provision of training to young people, that encouragement can include reference to an “approved English apprenticeship agreement”.

Secondly, the draft order amends the Education and Skills Act 2008 in respect of a duty on certain young people in England to participate in education or training in England, so that apprenticeships under the new statutory apprenticeship scheme are treated in the same way as those under the previous statutory apprenticeship scheme. Specifically, this means that a young person can discharge their duty to participate in education or training by participating in training in accordance with an approved English apprenticeship agreement.

Taken together, these measures will update the primary legislation in question to reflect reforms already made to the Government’s apprenticeships scheme. I commend this draft order to the Committee.

[Lord Young of Norwood Green (Lab)]

My Lords, I have nothing to complain about in the substance of what the Minister has just indicated. Raising the participation age makes sense. However, I have recently expressed my concern in at least one debate about the recent Ofsted report which said that a number of apprenticeships were failing to meet standards. That should be of real concern to a Government who I know are committed to apprenticeships and to raising their quality. The problem is that this is the old story about checking against delivery. There has never been a perfect situation where all apprenticeships were right, but the report from Ofsted is worrying. It distinguished between the kind of apprenticeships that you get in retail and social care, and those in engineering and other types of apprenticeships. It said that most problems were in those to which I referred first—in retail and social care.

I was discussing this issue recently with someone who has experience in this field. They told me that, for instance, in some cases the amount of time that training providers have for each apprenticeship is pitifully low. I cannot remember whether they were saying that it was an hour a week or an hour a month, but it was very low. If we are serious about improving the standards of apprenticeships and the perception that people have of them—that they are just as good a route as an academic one—we really cannot afford to be complacent.

I also raised on a previous occasion what was perhaps an even more worrying occurrence, where an apprentice was sent out one day to work in a factory and never returned home, as a result of an appalling industrial accident. I had an exchange of correspondence with the Minister but I cannot say that it made me feel any more sanguine about the treatment of young apprentices. He said that there is a duty on the employer: well, we know that. But surely there is also a duty on us all, and on the training provider, to ensure that if they send a young person to a particular location, they will have checked out whether the employer is reliable and responsible. I do not expect the Minister to give me all the answers today because this is not an easy problem to solve.

To sum up, we must ensure the quality of apprenticeships; not just talking about it, but ensuring that we have a system and a process in place so that we can say with confidence to young people and their parents that when they embark on an apprenticeship, not only will the quality of the training be first class but the safety of the young person will be assured. I think that we have a lot to do in this area. If we are serious about pushing the target up to 3 million—I assume that the Government are serious—which is very ambitious, we should note that a number of people have expressed their concerns by saying: never mind the quantity, it is the quality that we have to ensure. I am just as keen as the Government to increase the number of apprenticeships, but I would like an assurance that the Minister will check that we have put the right procedures in place to ensure both the quality and the safety of apprenticeships.

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[The Earl of Courtown]

If that is not available by the end of this debate, I will write to the noble Lord.

There was also concern over the quality of apprenticeships, raised by the noble Lord, Lord Young. We are improving quality. This is central to our reforms. Employers are developing new standards to ensure that apprenticeships meet the skills needed by their sectors. The published trailblazer quality statement sets out a range of measures to retain and improve quality, including the requirement for all apprenticeships to last at least 12 months. The new standards will replace existing complex frameworks, with short, simple, accessible standards written by employers in a language they understand. Quality and safety, the two underlying points raised by the noble Lord, Lord Young, must be at the front of these reforms.

My noble friend Lord Hodgson asked whether the order had any effect on the Enterprise Bill going through the House. It does not.

I welcome this debate on the issues that have been raised and I thank noble Lords for their contributions.

[Lord Young of Norwood Green]

I heard what the Minister said—that the Ofsted inspection related to previous frameworks—but that still does not reassure me that we have got a grip. Just because employers write a short, simple description of training does not give me any reassurance that we really have a handle on quality.

The noble Lord is right in saying that this is an hors d’oeuvre—although I would not like to refer to it in that way, because it sounds a bit flippant. I was giving the Minister the opportunity to go away and have a look at this matter, because I intend to raise it again on the Enterprise Bill. I urge him to have a careful, close look—never mind that we have “new frameworks” or that the employer is writing these new, simple standards. I do not quarrel with that, provided that there is a genuine programme. My concern is that here we have training providers, who go and find an employer, and the supervision after that is pretty minimal, as I have been told. We need to ensure that there is a process whereby we can guarantee every single employer has been fully investigated, has a track record in applying a proper training programme and is not just exploiting young people for cheap labour—and also that there is a safe working environment.

I am not asking the Minister for a response here today, as that would be unreasonable, but I am trying to provide him with an opportunity to go away and have a look at the process. If he can come back to me between now and that part of the Enterprise Bill with some written information, it would further the debate.

[The Earl of Courtown]

I thank the noble Lord, Lord Young, for that point. Yes, this matter will be looked at very carefully before the next stage of the Enterprise Bill, and I shall discuss it with the Minister taking it through this House.

National Minimum Wage (Amendment) Regulations 2015

Debate between Earl of Courtown and Lord Young of Norwood Green

Thursday 16th July 2015 Lords Chamber

[The Earl of Courtown (Con)]

My Lords, the purpose of these regulations is to increase the hourly rate of the national minimum wage for all workers and to increase the maximum amount for living accommodation that counts towards minimum wage pay, in line with recommendations from the Low Pay Commission.

The national minimum wage is designed to protect low-income workers and provide an incentive to work by ensuring that all workers receive at least the hourly minimum rates set. The minimum wage also helps businesses by ensuring that competition is based on the quality of goods and services provided and not on low prices based on low rates of pay. Following advice from the Low Pay Commission, the Government are uprating the minimum wage from 1 October 2015 so that the adult rate will be £6.70 per hour. Young people aged between 18 and 20 will earn £5.30 and those between 16 and 17 will have a minimum wage rate of £3.87 per hour. This represents an increase of 3% for the adult rate and similar increases for the youth rates. This is the largest real increase to the adult rate since 2006, and low-paid workers will enjoy the biggest cash increase in their pay packets since 2008. It also means that the adult rate will be closer to the average wage than ever before. The adult rate increase will benefit more than 2 million low-paid workers on the national minimum wage, and will mean that full-time workers on the adult rate will receive an additional £416 a year in their pay packet.

Finally, the Government believe that it is important to improve the attractiveness of apprenticeships for young people by delivering a wage that is comparable to other choices of work. That is why we are increasing the minimum wage for apprentices by 21%—a 57p an hour increase to £3.30. This means that someone working full time on the apprentice rate will be £1,185 better off per year than last year. This is a departure from the Low Pay Commission’s apprentice rate recommendation of a 7p increase to £2.80. We would not depart from such a recommendation unless we felt strongly that our approach would benefit apprentices in the UK. In our view this increase to £3.30, alongside wider reforms, will encourage more young people to consider apprenticeships as a credible alternative to both higher education and jobs without training.

Since its introduction in 1999, the national minimum wage has been successful in supporting the lowest-paid UK workers. It has increased faster than average wages and inflation without an adverse effect on employment. It continued to rise each year during the worst recession in living memory and is now closer to the average wage than ever before. The Low Pay Commission has proven that a rising minimum wage can go hand in hand with rising employment. This increase is carefully managed through advice from the Low Pay Commission. The Government’s 2015 remit asked the Low Pay Commission to make recommendations for these new rates based on maximising the wages of the low paid without damaging employment opportunities.

The Low Pay Commission recommendations follow consultation with business and workers and their representatives, together with extensive research and analysis. The Low Pay Commission consists of three commissioners from employer backgrounds, three from employee representative backgrounds, and three independents. Its recommendations reflect the objectives of both employers and unions, and are unanimous. The Low Pay Commission has stated in its report that we are now in a period of faster real increases in the national minimum wage, provided that the economic recovery continues.

The Chancellor announced in the summer Budget the introduction of the national living wage for those aged over 25. The Government’s ambition is for the national living wage to reach £9 by 2020. However, the national living wage is not the purpose of today’s debate. It is for implementation from April 2016, and the Government will bring forward the regulations to bring it into effect in due course. Those regulations will also be debated in this House.

The Government believe that the rates set out in the regulations before you today will increase the wages of the lowest paid while being affordable for business. I commend these regulations to the House.

[Lord Young of Norwood Green (Lab)]

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.

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[Lord Young of Norwood Green]

Before the noble Lord sits down, while I welcome that, given the circumstances—that it was a government-supported training provider—surely there ought to be some further review of the actual process of allocating young people to these employers. Of course, we know where primary responsibility lies, but if we are entrusting young people to a training provider and they are allocating them to an employer, never mind what the primary responsibility of the employer might be, the provider also has a primary responsibility. The reassurance I am seeking from the Government is that they will go away and look at exactly what training providers are doing. What are the checks, balances and procedures to ensure that this does not happen again? I would welcome some report back at a later stage.

[The Earl of Courtown]

Yes, I will write to the noble Lord on that issue, but I can assure him that my colleagues in the department will be looking very carefully at what has been said this evening.

The noble Lord, Lord Stoneham, asked about the Low Pay Commission and its future involvement with the national living wage and the national minimum wage. The Government published the Low Pay Commission’s new remit on 8 July 2015. The Government are asking the Low Pay Commission to recommend the level of the path of the national living wage going forward, with the target total wage reaching 60% of median earnings by 2020. The Low Pay Commission will also continue to provide recommendations for the other national minimum wage rates, as it has done previously.

The Government are committed to the national minimum wage because of the protection that it provides to low-paid workers and the incentive to work that it provides. The regulations that we have been discussing today support the Government’s commitment to delivering fairness, supporting business and delivering world-class apprenticeships. I believe that they are fair and appropriate. The increase in the adult rate will maintain the relative position of the lowest paid while also being one that business will be able to afford. I commend the regulations to the House.

Care Sector: Apprenticeships

Debate between Earl of Courtown and Lord Young of Norwood Green

Monday 6th July 2015 Lords Chamber

[The Earl of Courtown]

My noble friend is quite right. I think the noble Baroness mentioned older people leaving the profession. As I understand it, the current figures are flattening out and improving, and there is more retention of people approaching retirement age.

[Lord Young of Norwood Green (Lab)]

My Lords, is the Minister confident that there really is an attractive career path for young people going into the care profession, whether in homes or in domiciliary care, and that there really is a pathway through to nursing in this vital vocational route, taking into account that demand in this area will expand significantly?

[The Earl of Courtown]

I think that the fact that, as I mentioned, there has been in excess of 250,000 new apprenticeship starts in the care sector in the last three to four years speaks for itself.