Secondary Class 1 contributions: apprentices under 25

Part of Living Wage (Reporting) – in the House of Commons at 1:26 pm on 3rd February 2015.

Alert me about debates like this

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury) 1:26 pm, 3rd February 2015

I am grateful to the Minister for introducing Lords amendment 1, which was the main amendment made in the other place. As he said, it enacts the announcement made in the autumn statement that employer national insurance contributions for apprentices aged under 25 will be abolished from April 2016. The Opposition support the measure. There is agreement on both sides of the House and across party political boundaries that we need more apprenticeships; and that youth unemployment, and long-term youth unemployment, remain a problem not only for the individuals involved, but for the economy as a whole. We hope the measure helps to alleviate that somewhat.

The Minister said that there is a regulation-making power within the measure for the definition of “apprentice” and referenced the 2009 Act definition, which relates to an apprenticeship contract. That concern was raised in the other place when the measure was debated. Will he give the House more information about progress in discussions with the devolved legislatures about the definition to be applied? How confident is he that the provision will not be manipulated in a way that enables a reduction by companies of their tax liabilities? The lack of a definition of “apprentice” causes concern that that might arise.

The current quality of apprenticeships has come under scrutiny in this Parliament. A recent report from the Department for Business, Innovation and Skills showed that 15% of apprentices are paid below the national minimum wage, and that 28% of level 2 and level 3 apprentices who do not have a written contract are paid below the national minimum wage. We also know that one in five apprentices receive no formal training. Will the Minister consider a stipulation on quality when he looks at the definition of apprentice? That would go some way to alleviating some of the concerns raised about potential gaps in the measure that could lead to abuse, or to a proliferation of apprenticeships that are not of a high quality and that do not add too much to the future prospects of the young people engaged in them. It would be helpful to hear the Minister’s further comments on those points.