Tadweld apprentice in trainingThe recent wave of anti-business policies has hit UK companies hard. First came the Conservative Government’s decision to raise corporation tax from 19% to 25%, followed by Labour’s increases to National Insurance and the National Living Wage (NLW) in May 2025. For many SMEs, these changes have added tens of thousands of pounds to operating costs and contributed to the highest rate of business closures in three decades.
One area that has largely escaped attention until now is the impact on apprenticeships. These schemes, which date back to the Statute of Artificers in 1563, have long been the backbone of industries such as welding, plumbing, construction and manufacturing, and more recently hospitality and healthcare.
However, changes to funding in 2017 with the introduction of the Apprenticeship Levy, combined with a national push towards university education, caused a sharp decline in apprenticeship numbers. In fact, there were 170,000 fewer places in 2024 compared to a decade earlier. While recent attitudes have begun to shift, viewing apprenticeships as a genuine alternative to costly degrees, the latest increases in the minimum wage have made them prohibitively expensive for many businesses.
Chris Houston (pictured below), managing director of
Tadweld, a leading steel fabrication and engineering company, commented: “In 2023 the minimum wage for an apprentice welder was £6 an hour. While that may seem low, apprentices attend college one day per week and we pay them for that time too. They are in training for most of the time they are with us, working alongside a skilled fabricator, so we have always seen apprentices as an investment rather than an employee able to produce high volumes of work.”
Staggering 66% increase in two yearsHe added: “However, in 2024 the apprentice NLW increased to £7.50 an hour, and then in 2025 it increased to £10 an hour. That is a staggering 66% increase in two years. In 2026, NMW for under 18s will increase again to £10.85 which makes offering apprenticeships exceptionally expensive.”
>While the Apprenticeship Levy funds college training, employers argue that policymakers have overlooked the real cost of employing and developing apprentices. For SMEs, a 70% rise in wage costs has made the numbers impossible to justify.
Meanwhile, Alan Pickering, managing director at Scarborough-based manufacturer
Unison, said: “We have run an apprenticeship programme here at Unison for over 25 years and are very proud of the graduates from it who now hold significant roles in our business. This year will be the first year that we will not make a position available. Unfortunately, the recent changes have made it too expensive to train apprentices, and yet these guys and girls are supposed to be the future of British manufacturing. For someone who is passionate about the industry, it is incredibly frustrating.”
Mr Houston continued: “It seems such a shame that at the point we finally have the next generation more interested in vocational education, that central policy has made it so much harder for businesses to offer apprenticeship places.
“I would love to be proven wrong, but anything that makes it harder for industry to participate in training the next generation feels like a significant backward step. There is due to be demand for 35,000 new welder positions in the UK over the next five years but as a country we only trained 231 welding apprentices in 2024.
“The maths simply does not work, and Government need to evaluate how their collective decisions are currently making this even harder for industry.”