Employment Rights Bill

Baroness Wolf of Dulwich Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

Moved by

[Baroness Wolf of Dulwich]

181: After Clause 150, insert the following new Clause—
“Consideration of apprenticeships in consultations(1) In any consultation related to provisions in this Act, the Secretary of State must ensure that due consideration is explicitly given to the impact of such provisions on apprenticeships, specifically in relation to recruitment of young people by small and medium sized businesses.(2) For the purposes of this section, “small or medium-sized business” has the meaning given in section 7 of the Small Business, Enterprise and Employment Act 2015.”Member’s explanatory statement
This amendment seeks to ensure that the Secretary of State gives due consideration to the impact on apprenticeships in any consultation carried out in relation to provisions in this Act, such as the consultations proposed in the implementation roadmap: “Implementing the Employment Rights Bill: our roadmap to deliver change”, published in July 2025.

[Baroness Wolf of Dulwich (CB)]

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.

--- Later in debate ---

[Lord Leong (Lab)]

Good try.

My Lords, I am grateful to all noble Lords who have spoken. On behalf of these Benches, I wish the noble Lord, Lord Aberdare, all the best for his forthcoming retirement, which is not today; it will be on 31 August. We wish him well and he will definitely be sorely missed in this House.

I will address the amendments tabled by the noble Baroness, Lady Wolf of Dulwich. Amendment 181 proposes to insert a provision in the Bill to require that the Government give due consideration to the impacts on apprenticeships during consultation. Amendment 182 proposes a review process specifically on the impact on apprenticeships. Although these amendments rightly raise the importance of apprenticeships, they effectively duplicate what we are, and will already be, doing.

We know that our country’s greatest asset is its people, and apprenticeships are one of the most powerful ways, as stated by the noble Lord, Lord Goddard, that we can invest in that potential. They open doors, build confidence and provide a ladder of opportunity for those who might otherwise be left behind. Whether it is a young person taking their first step into the world of work or someone retraining for a new career, apprenticeships offer a route to success that is both practical and aspirational.

We are transforming the apprenticeship levy into a new growth and skills levy, giving learners and employers more flexibility. This will fund shorter apprenticeships and open up more tailored, responsive training options compared with the current system, where apprenticeships must run for at least 12 months. When we launch the consultations as described in the road map, every effort will be made to ensure that the consultations reach a wide audience. The Government are keen to hear from employers of all sizes and their representative organisations, as well as workers and their representative bodies, in order to understand the distinct perspective of these different stakeholders. They will play a crucial role in policy development. In developing options in our consultations, the Government will consider their potential impacts. The options analysts will, as is standard, consider the impacts on the labour market for different groups of workers and micro, small and medium businesses.

In addition, the road map shows that full implementation of the Bill will take years, so seeking to publish a review too early would prevent meaningful assessment of its effects, especially on young people.

The Government value apprenticeship, as I said earlier, and apprentices. We want to continue to engage with businesses that offer apprenticeship and encourage their contributions to forthcoming consultations, including on employment status, under the Bill. We will be happy to continue to engage with and meet the noble Baroness, Lady Wolf, to that end, and to listen to all young people and apprentices themselves.

These amendments are unnecessary and duplicative. Supporting young people and small businesses will already be at the forefront of our minds as we work to implement our reforms. I therefore respectfully ask the noble Baroness to withdraw Amendment 181.

[Baroness Wolf of Dulwich (CB)]

My Lords, I thank the Minister for his words and definitely accept the invitation to continue to talk to the Government about this issue and about how we might improve the current legal framework so that it encourages apprenticeships in a much more positive way. I totally accept that the Government are doing a large number of consultations already, and I am delighted to know that in that context the Minister thinks that our amendments are unnecessary, since that would imply that they are definitely going to look at apprenticeships. On that basis, with thanks, and looking at the time, I beg leave to withdraw the amendment.

Amendment 181 withdrawn.