My Lords, this proposed new clause may not at first sight seem as if it is appropriate for this Bill or for the scope of the Department for Education. I would concede the second point, but not the first, and I hope that I can demonstrate that that is not a contradiction in terms. The new clause would enable families eligible for child benefit to receive that benefit for children aged under 20 who are undertaking apprenticeships.
The landscape of apprenticeships is changing, and from April the introduction of the levy will mean a greater focus on giving young people key skills and up-skilling current employees. Apprenticeships are receiving greater support from government than for generations, and the numbers of young people starting them are increasing exponentially. So it felt odd to read in a survey that more than 90% of 18 to 24 year- olds were not interested in starting an apprenticeship. It seems that apprenticeships still have a significant image problem. The survey results showed that not just young people but two-thirds of people aged over 55 thought that going to university would always be a much better career option. The biggest reason for this was said to be poor careers advice being given at school.
That is not the only reason why young people may be discouraged. In some cases, their parents may actually prevent them taking up apprenticeships because of the economic consequences. In one sense at least, apprentices are treated as second-class citizens, with those from the most disadvantaged backgrounds being denied thousands of pounds of financial support that is
available for college and university students, according to a survey carried out by the National Union of Students. The research, which that body carried out in conjunction with the Times Educational Supplement, revealed that apprentices are also excluded from a number of means of support available to their counterparts in further education institutions.
In April, the apprentice national minimum wage will increase by a whopping 10%—I am sorry, I wish it were by that, but it is by 10p to £3.50 an hour. A college student with one child could be eligible for more than £10,000 a year in financial support and their families could receive thousands more. Apprentices, including those on the minimum wage earning as little as £7,000 a year, are not entitled to any of this. As well as being ineligible for Care to Learn childcare grants—again, unlike further education students— some apprentices also miss out on travel discounts, council tax exemptions and student bank account packages.
The reason is that apprenticeships are not classed as approved education or training by the Department for Work and Pensions. This means that, in the case of apprentices who live with their parents, their families could lose out by more than £1,000 a year in child benefit. Families receiving universal credit could lose more than £3,200 a year. Why should families suffer as we seek to train the young people desperately needed to fill the skill gaps in the economy? University students receive assistance from a range of sources, from accessing finance to discounted rates on council tax. Apprentices currently receive none of these benefits. The system must be changed so that both are treated equally and there is genuine parity of esteem between students and apprentices.
A large number of examples of apprentices being unable either to take up their apprenticeship or to complete it have been reported by further education colleges to the Association of Colleges. I would like to highlight one case involving a young man aged 16 at the time, who was enrolled in a full-time carpentry and joinery programme at New College Durham. He came from a disadvantaged area within County Durham, where he lived with his mother, a single parent, and his half-sister. From the outset of the programme, he made it clear that he was very keen to transfer to an apprenticeship and enquired weekly at the apprenticeship office about possible vacancies. Within a matter of weeks, he was offered a work trial with one of the employers with whom the college worked. The employer told the college that he was pleased with the commitment and work ethic demonstrated by the young man and offered him an apprenticeship, which was enthusiastically accepted. Soon after starting it, though, the college received a phone call from the employer saying that he would not continue to employ the young man, as his mother had been in contact to say that she would lose her housing benefit due to her son being classified as employed. Despite his disappointment, the young man continued on the full-time programme and completed his level 1 diploma but, understandably, the employer was disgruntled due to the wasted time and effort and stipulated that he would not again interview a potential apprentice from a welfare-dependent background. That really is a sad story.
We need to bear in mind such situations when we think about the extension of apprenticeships. Barriers surely should not be put in the way of young people who genuinely want to start an apprenticeship and see it through, better themselves and help the economy in broader terms. As the National Society of Apprentices said in its submission to the Public Bill Committee in another place, “It seems inconsistent—to put it mildly—
“that apprentices are continually excluded from definitions of ‘approved’ learners, when apprenticeships are increasingly assuming their place in the government’s holistic view of education and skills (which this Bill itself represents through unifying apprenticeships with technical education)”.
To repeat, there should be genuine parity between all educational and apprenticeship routes.
The risk of losing out financially can and does deter some of the most disadvantaged young people from becoming apprentices. The Government need to act to close this loophole and, although I accept that it is not within the Minister’s gift to do so, I suggest that he might at least signify his understanding of the position in which some apprentices find themselves—many of them from the kind of backgrounds where we are trying to attract more apprentices than is currently the case. That would help to reach the Government’s target of 3 million apprentices by 2020 and to ensure that every young person attracted to starting an apprenticeship was not prevented from doing so for financial reasons. I beg to move.
3.45 pm