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The split in responsibility will also not be helpful, although it is a similar sort of structural change that I was arguing should not be reversed in another context a few moments ago. I cannot see how we can have the train for gain initiative—which has been successful in bringing youngsters who are in work into
apprenticeships—split off from the basic apprenticeships and the arrangements for schools, to which I hope more attention and priority will be accorded. I do not know how those two areas of responsibility will overlap or how they can be co-ordinated, but the split is not particularly helpful.
However, the Secretary of State for Children, Schools and Families has set a bold and achievable objective for a legal entitlement to an apprenticeship for youngsters. He has not said at what stage they will have that entitlement, but I would imagine that it will be at key stage 4, between 16 and 18, if not actually at 16. The great danger is that, while the aim and the vision are terrific—and the Queen’s Speech has more of both than it has been given credit for so far—making the vision a reality means making specific, practical and hard changes in the provision of vocational training from the moment children enter secondary school, up to, and especially in, key stage 4. One of the major problems with the present arrangements is that many children want apprenticeships, but cannot get them because the places in industry are not available. That has been a problem for a long time in this country—the argument has sometimes also been that the children are not fit for apprenticeships, and we need to tackle that—but it is beginning to show up in economies that have had more success with apprenticeships, such as Germany and Austria.
Ms Keeble: Is my hon. Friend aware of the YWCA’s “More Than One Rung” campaign? It tries to encourage young women and girls to go for better quality apprenticeships and to aspire to some of the non-traditional skills that have higher rates of pay and better long-term earning prospects.
Mr. Robinson: I am aware of that campaign, and it is one of the plethora of good programmes that we have. We have given them every encouragement and I should like to see them receive better funding, but it is more a question of national priority and focus.
There is a deep-seated problem in the culture of the education Department. It has been relatively successful in expanding further education, GCSEs and A-levels and, for all the faults and justifiable criticisms, that has been a success, broadly speaking. Where we have not succeeded is with the 40 per cent. of students for whom vocational training would be most appropriate. Vocational training does not fit the bill for everyone, but I am speaking in general terms and, so long as we leave that culture in the Department, we will not get the step change that we need. We think that it will take five years before we are able to give people legal entitlement to an apprenticeship: unless we start to prepare now, we will not make that a reality, and I want to make a simple proposal about how we might go about that.
Mr. Binley:
I find the hon. Gentleman’s speech immensely credible and welcome. His comments about the deep-seated culture of our educational establishment are absolutely right, and they disturb me enormously. I remind him of the tripartite system of secondary moderns, secondary technicals and secondary grammars. We allowed secondary technicals to wither on the vine, then we forgot the secondary in grammar and the modern in secondary modern. We created an elitist system based on academic
thinking whose continued existence leaves me immensely concerned, and the hon. Gentleman raises a vital point that we have to deal with.
Mr. Robinson: I am pleased that we can discuss such things in a cross-party manner, because they are national and cultural problems.
Let me digress for a second. I came up by the grammar school route: I was brought up in Balham, south London, and I knew that I would not go to the secondary modern, nor to technical school—that was even worse than the secondary modern. I had to get to grammar school, and a profession was the thing. Vocational education was out, and has largely remained so. It is an intractable cultural problem, reflected throughout industry, that 20 per cent. of young people leave education with no qualifications at all and that more than 40 per cent. do not go to university.
So what can we do about it? I shall speak specifically about apprenticeships, which could, in my book, address a fair chunk of the 40 per cent. who do not go to university. I am not saying that they would suit all the children coming through but, as has happened in Germany, they could increasingly help us to deal with the problem that I have identified.
Mr. Stewart Jackson: I am listening to the hon. Gentleman’s remarks with great interest, but feel that he has missed something out. As he will know from his interest in industry and commerce, we will not drive technical and vocational education forward among the 40 per cent. of young people whom he mentioned if local autonomy and power are not given to the sector skills councils.
Mr. Robinson: The hon. Gentleman refers to the SSCs, but I get all the acronyms mixed up. We have had many different attempts to solve the skills problem through outside agencies, but they are not working. He will have had read the report on skills by Reith—
Mr. Robinson: I am sorry, I mean the report by Sandy Leitch. The hon. Gentleman will know that Leitch’s criticisms of the learning and skills councils were very severe. Over the next five years, an independent body—a directorate or whatever people want to call it—should be set up and charged with preparing schools and the links between schools and industry.
A cultural change is needed in industry and in schools to prepare us for a significant increase in the number of apprenticeships. We need capacity in schools, in higher and further education and among part-time providers, as well as a willingness in industry to provide places for youngsters.
I do not want to set up a quango; the whole House is aware of my views on quangos. There will be no jobs for the boys—nothing of that kind. It would be a prescribed, five-year task to get the country’s education system ready to make a reality of the legal entitlement to an apprenticeship we shall be offering youngsters. It
is a tremendous and bold offer, but it will be lost in a quagmire of councils, initiatives, consultative bodies and all the rest unless we set up a single group, headed by a director.
The body should be independent of Government, reporting, if necessary, to both the Secretaries of State involved. It would obviously be created by Parliament, no doubt by statute, for a fixed five-year period to prepare the ground for the introduction of the legal entitlement. It would need only a small central staff, with devolution right down to schools and industry, especially small companies. It should have its own tight budget, but no extra money; the budget could be taken from all the other sectors where we spend so much—I forget how many billions a year we spend on skills. The body would report annually to Parliament so that we could monitor its progress.
If we leave the massive changes we want in the hands of Departments, we shall end up with the situation that resulted when we introduced the new deal. The mindset and culture are such that only by extracting responsibility for the changes and making it the direct charge of an independent body shall we achieve them.
Mr. Mark Hendrick (Preston) (Lab/Co-op): I was lucky enough to attend a state grammar school and then followed a technician apprenticeship before going on to university. When I was going through that process, there were many training boards—I held an engineering industry training board apprenticeship—but many of them were scrapped by the previous Tory Government. What does my hon. Friend think about bringing back the training boards and giving them the funds to which he refers?
Mr. Robinson: I agree. Scrapping training boards and thinking that training would automatically happen when the onus was on the employer was a great mistake. I agree entirely that it contributed to the problems we face now, especially in the interface between industry and schools. I do not want to write a blueprint for the proposed directorate, but it could look into the situation and reinstate training boards if appropriate. It would make decisions about organisational and personnel arrangements down the line.
The body would need a director with fire in their belly, someone who could drive the decisions through and, where necessary, fight turf wars to get the job done. I am sure that there would be several candidates to lead the group of people who would take on that job if charged by Parliament.
Many references have been made during the debate to the great Liberal Administration of 1908, Lloyd George’s coalition Government and the legislation after the second world war. The one thing that Lloyd George taught Churchill—the thing that made a difference when Lloyd George took over the direction of the war in 1916—was that he found the right person to deliver on munitions and on shipbuilding. He put his faith in those individuals; in fact, one of the reasons he did not get back in was because he had such a personal and personalised way of getting things done. He taught Churchill that lesson and we could learn it today; if there is a definable job that needs doing and if it has as much national importance as the delivery of that legal
entitlement, the most effective way forward is to charge a person and a group of people with undertaking it.
I do not have a blueprint and I do not know whether the idea will find any support in Departments, but when we discuss the legislation I hope there may be some support for my proposal.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. So far Back-Bench speeches have averaged more than 20 minutes. If we continue on that basis, half the Members who seek to catch my eye will be disappointed, so it follows that if the rate of speaking is halved everyone may be satisfied.
4.14 pm
Mr. Nigel Waterson (Eastbourne) (Con): I shall try to live up to your expectations, Mr. Deputy Speaker. It is a great pleasure to have the opportunity to speak in the debate on the Queen’s Speech. As always, it is a pleasure to follow the hon. Member for Coventry, North-West (Mr. Robinson). It seems that we grammar school boys have cornered the market in this debate, at least for the moment. He spoke with great knowledge and experience of the skills agenda, which is, as he rightly says, so important for the whole country’s future.
As I intend to speak on pensions, I am sure that the hon. Gentleman will not mind me reminding the House of his niche in recent British political history, for in the safe in his flat at the Grosvenor House hotel was locked the Government’s plan in opposition, before the 1997 election, to carry out the raid on pension funds, which has stripped some £100 billion or more from British pension funds. So his place in history is secure, and I think that his memoirs tell us that that was what happened.
I want to talk, as briefly as I am able to, about the pensions Bill that we are promised in the legislative programme for this Session. The main thrust of that Bill is the introduction of so-called personal accounts, following the Turner agenda of trying to reach the 7 million-plus people in this country who are not making any provision of their own for their retirement. However, the Christmas-tree effect is beginning to rear its head, whereby Ministers and civil servants of any Government are always tempted to hang other things on a Bill, knowing that they have a hard-won slot in the legislative programme. Clearly, another part of that Bill is growing by the day: the deregulation aspects on pensions, to use an umbrella term.
Perhaps I can just touch on an issue that has attracted some excitement and comment in the media recently: the nature of the political consensus on pensions. I am personally always a bit wary about consensus if it is too cosy and too shallow, because that ends up delivering policies and legislation that do not stand the test of time and might not deliver what they are designed to do. Just to be quite clear, the official Opposition’s attitude has always been the same—it has not altered one iota—and it is that consensus is not a blank cheque. We are in this for the right reasons. Clearly, any decision that is made or ducked now will have an effect 40 years or more down the road. That is
the nature of pensions policy. We are also in it for more selfish reasons; it might well fall to us to implement some of the changes when in government.
We agree on the basic direction of travel set out in the Turner report, which suggested trying to encourage people who are not saving for their retirement to start to do so, but we have rightly voiced concerns, not only our own, but those that have been expressed to us by the industry and expert independent commentators—for example, the highly regarded Pensions Policy Institute.
As we limber up for the latest pensions Bill—the great thing about my job is that there is always another pensions Bill just around the corner—there is a danger with pensions legislation that we are fighting the last war, not the next war. I remember serving as a very young, fresh-faced Back Bencher on the Committee that considered the Pensions Act 1995, which was all about Maxwell, of course, but also about dealing with the enormous surpluses that had been building up in pension funds. Of course, we have not had to grapple with that problem too much in the past few years; but again, it might begin to appear in the not-too-distant future.
I mention our concerns about personal accounts, and a lot of them are interconnected and relate to means-testing. At the moment, nearly half of pensioners retiring are subject to means-tested benefits, and if we carry on as we are—even the Government recognise that we cannot do so—by the middle of the century, 75 per cent. or more would be on means-tested benefits. That causes the deep problem of whether it is worth people’s while to save for their retirement and whether they will be any better off, because of the widespread means-testing in the benefits system. That issue relates to advice. We back, and always have done—even before the Government did—the notion of auto-enrolment, which means that people in workplaces should automatically be enrolled into personal accounts. That has enormous advantages—not least in keeping down the costs of the scheme, an important issue.
However, auto-enrolment also brings problems, because it will not benefit a significant minority of people who would be much better off opting out of personal accounts. Again, the Pensions Policy Institute has done excellent work on the at-risk groups in that regard. Much more thinking needs to be done on the advice that such people receive; Otto Thoresen is continuing his review into the nature of generic advice, that great oxymoron. Those people need advice about the extent to which they may be no better off because of means-testing and thought needs to be given to what can be done to reduce levels of means-testing in the system in that respect. There is a toxic mix of the most complicated pensions and benefits systems in the world.
Another big issue for us, on which I shall touch again in a moment, is that of levelling down—the erosion of more generous existing pension provision by the introduction of personal accounts. However, I come back to the issue of less well-paid people, who may have interrupted work patterns and may be at risk by being auto-enrolled into personal accounts. Various policy options are being considered by bodies such as the PPI. There is the method of giving such people advice so that they have the information at their
fingertips to make the right decision on whether to opt in or out. Suggestions have been floated that whole groups—perhaps low earners or older people—should not be auto-enrolled, but swept up in an automatic non-enrolment because they would probably not get high returns, if any, from the system. There has been much debate about increasing levels for trivial commutation and the capital disregard, but the cost of that is not insignificant: £500 million, rising perhaps to £2 billion a year.
In the past couple of days, another proposal has been floated, again by the PPI, which is doing excellent work for B&CE, which runs an excellent niche pensions scheme within the building industry. The proposal is to have a pension income disregard. Today may not be the day, but if Ministers have had the chance to consider that proposal, it would be useful if they gave some idea of their likely reaction to it. The basic proposal is that the first £12 a week of private pension income should be disregarded in any calculation of means-tested benefit. John Jory, the deputy chief executive of B&CE, is spot-on when he says:
“Someone who saves for their retirement must be demonstrably better off than someone who doesn’t.”
The Government’s current proposals create a real danger for many people in that respect. We are talking about people with low earnings, those with broken working histories, older people with low earnings and no prior savings, the self-employed and, perhaps above all, those who are likely to be renting accommodation in retirement because of the effects of housing benefit. I have not had the chance to read the whole paper, but it seems that the cost is likely to be somewhere around £600 million on top of the existing means-tested benefits budget. The proposal would certainly reward deeper study, not only by Opposition parties but by Ministers.
I said that I would touch briefly on deregulation—a wide term to cover a series of legislative options. Personal accounts, of course, will be the new kid on the block. However, without deterring those who should be auto-enrolled, we have to get it across to people that the level of contributions inherent in personal accounts will not deliver a particularly comfortable retirement. That is where the danger of levelling down arises: employers may well think twice about doubling or nearly doubling overnight their participation rates in an existing scheme. It may make economic sense to shut the scheme—if it is not closed already, of course—and point employees in the direction of the Government-approved personal accounts scheme.
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