Clause 21
Education and Skills Bill
6:15 pm
John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)
I beg to move amendment No. 31, in clause 21, page 11, line 27, at end insert—
‘(4) The Secretary of State shall, within 12 months of the coming into force of this section, publish an assessment of the implications of the duty imposed by this section on the employment prospects of 16 and 17 year olds.’.
The Committee has become accustomed to me speaking to amendments in the context of the explanatory notes. Indeed, perhaps people are grateful to me because it saves them trawling through their own papers. The explanatory notes state that clause 21
“places a duty on employers not to employ a person unless they have taken reasonable steps to check that the person has made appropriate arrangements to participate in relevant training or education. For example, an employer would check that a potential employee could produce a letter from a learning provider indicating that he or she had enrolled on a course. It provides for an exception to this if the contract is made conditional on the person making arrangements to undertake appropriate education or training, in which case they must have done so before employment commences. This enables an employer to have a role in a young person’s decision about the type of education or training to pursue.”
The amendment suggests that within 12 months of this coming into force, the Secretary of State will
“publish an assessment of the implications of the duty imposed by this section on the employment prospects of 16 and 17 year olds.”.
The reason for the amendment is that there is considerable doubt about two things, which we heard expressed very clearly in the evidence sessions by both the Institute of Directors and by the academics who came to visit, notably Professor Alison Wolf. The first issue is that of the cost to employers of this business, which, in their judgment has been underestimated by the Government, and I shall return to that in a moment. The second problem is the potential effects on the employment of 16 and 17-year-olds. Alison Wolf was outspoken on that subject. She said that she thought that a typical employer would resist employing 16 and 17-year-olds as a result of the legislation, because they would bring with them the additional burden and responsibility of training or education.
The cost of employer checking is much higher in the IOD’s estimation than the Government assume. The IOD says:
“Government figures estimate that the process of employer checking is a single exchange of paper between an employee and employer, which will take ten minutes”
and would therefore cost £16.8 million nationally.
“In reality this process will actually require a mixture of discussion, checking, altering of work rotas and/or addressing employees’ needs.”
The IOD projects that it will cost more than double that figure—its top estimate is that it could cost up to £68 million per year. The administrative burden also accounts for what it calculates to be a 32 per cent. hike in the Department’s imposition on business. That is entirely contrary to current Government policy that the Minister has articulated of reducing the administrative burden on business by 25 per cent. The consequential, unintended impact of the clause could be that employers only employ people older than the proposed compulsory age—precisely Alison Wolf’s argument.
That is especially true in the case of small and medium-sized businesses. I suspect that very large organisations, as so often with bureaucratic or administrative burdens, have the capacity to absorb the extra costs in a way that small businesses do not. For example, a small training business that employs a 17-year-old to work in numerous different jobs, will spend less time on tasks such as marketing and business, and more on burdensome administration. Therefore it is important that we review the impact of the clause after 12 months. We must find out whether the Minister is right, and the Government’s estimates are borne out, or whether the IOD and Alison Wolf are more accurate in their estimation of the detrimental effect on the employment of young people, and on the cost of businesses in respect of checking their new obligations. The amendment does just that, and I hope that the Minister will accept it in the spirit in which it is offered.