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Mr Bayley, may I welcome you back to the Chair? You must be delighted by our rapid progress this morning, as we have already got halfway through clause 2. We have had an opportunity to give an initial airing to concerns about the Bill’s effects on young people who would otherwise be in employment. In particular, we have been able to address concerns that I expressed earlier about the loss of job opportunities for 16 or 17-year-olds, the type of qualifications that they would be required to undertake, and whether those would be useful and valuable.
I did not make the claim in my speech to which the Minister alluded, that young people would be forced into particular posts. No doubt that comment was prepared before I delivered my speech. We are grateful to the Minister for his response to speeches from Opposition Members. No doubt, Alison Wolf and others will go away and look with great interest at the points made by hon. Members. The Minister’s comments will inform our later debates, when we will have a chance to come back to his claims on the important issue of costings, which will undoubtedly be challenged. I only wish that we could pull Alison Wolf back in for another evidence session and some exchanges with the Minister, but I am not sure that our proceedings would allow for that.
On the two fundamental matters that were raised this morning, I am still concerned that the Minister has not registered our worries. On the issue of whether the qualifications that people will be obliged to take will be valuable, at the beginning of his contribution, the Minister referred to young people who do not go into “good honest jobs”—I cannot remember his exact characterisation. He referred to people who do not end up with large exotic cars, such as BMWs, that they would otherwise be able to drive away after their period in work and training. He is setting a rather high and unrealistic bar for everybody engaged in the labour market. Many young people in employment who do not undertake education and training are doing work that gives them valuable skills, and re-engages them after a period of alienation in formal education: they benefit enormously from that experience. Who knows what they may go on to do later in life? The key issue is whether they would be better off, if they were obliged to take one of the qualifications to which the Minister alluded. It is our contention that they would not, because of the value of some of the qualifications and because the job may not exist, which I will come on to in a minute.
I cannot help feeling that we have not yet bottomed out the issue of what qualifications the Department assumes those young people will take. If the Minister has had a chance to read Alison Wolf’s paper, he will know that Professor Wolf claims that the Government are unduly optimistic about the composition of the qualifications that they will take. On page 27 of her pamphlet, she produces a useful summary of the types of qualification that she thinks many young people will end up taking and she questions whether all of them will have the economic value that the Government claim. She also makes the valuable point that there may be some young people get pushed into using up their level 2 qualification entitlement at an early age, although they may want to take those qualifications later and benefit from them more significantly. I hope that we will be able to look at the Minister’s comments about the compositional issues around those qualifications, and that we will be able to compare the different claims that have been made. That that may strengthen our position when we raise other points about the matter further on in the debate.
The Minister also sought to address issues about the labour market and the number of young people who would lose job opportunities that they would otherwise have. The Government acknowledge that something like 1,680 jobs for 16 or 17-year-olds will not be there as a consequence of the Bill’s introduction. I cited a figure of 5,550, and I apologise if it was inaccurate; I was citing evidence that we took from some of the witnesses. I will not mention, to spare their embarrassment, which particular witness it was, but one of our witnesses referred to 5,500, but I am happy to correct that figure, if it is inaccurate and 1,680 is the right figure.
I also referred to the group of youngsters particularly affected by the measure as those in smaller businesses, but the Minister clarified that it is a particular type of small business. I am happy to acknowledge—and it is a useful clarification—that we are talking about a more discrete group. I am happy to do so, because it rather makes my point, which is that the Government have been looking at a very narrow segment of the 16 and 17-year-old population in employment as the vulnerable segment. On page 23 of her paper, Alison Wolf sums up which group of 16 and 17-year-olds the Government assume would be adversely affected by the Bill. I am happy for the Minister to correct me if I am wrong, but it appears from what Alison Wolf’s claims—and I think the Minister confirmed this—that the relevant group of businesses
“is taken to be those which are very small (fewer than 50 employees), and where no job related training is reported (using the LFS definitions) and where the employed teenager is currently paid less than the minimum wage for an 18 year old.”
The Government have therefore taken a very modest, specific segment of the labour market, and claimed that for that sector, the Bill will have significant employment consequences: 50 per cent. of the jobs in that very small subgroup will be wiped out. The complementary aspect is that, presumably, no other jobs are going to be lost in other, larger companies or companies with different characteristics in terms of training and the wage levels of the young people working there.
We are still left with the question I asked earlier about whether those assumptions are realistic. The Government have got down to a figure of only 1,680 by defining the at-risk group of youngsters in a very particular way, and Alison Wolf’s analysis claims that there are a number of significant risks, not least if the Government fail to raise the participation rate to 90 per cent. in the first place.