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Although I might not go quite as far as the right hon. Gentleman in calling the new deal a “calamity”, I hope that we can all accept the finding of the recent report from the Social Market Foundation. It said that the recent performance of the new deal had been less than impressive and that the number of job outcomes had “dropped significantly”. I hope that we can make common cause on the new deal, as the Minister’s predecessor, the present Financial Secretary to the Treasury, wrote the foreword to the report and welcomed it.

It is welcome that the Government have recognised the problems with the new deal, and that they have decided, in effect, to abolish the substance of the new deal programmes. We want to take a constructive approach to bringing help to unemployed and economically inactive people. We have brought forward our own proposals, and I commend them to the Minister. We have advocated the early assessment of people’s needs, tailoring support to individual needs, sustained support, mentoring, getting people into sustainable jobs—an important thing in the present economic climate—and putting in place the funding mechanism that I have mentioned already and that will enable all that to be achieved.

Of course, equipping people with the right skills will be very important in helping them to find work. It will also help to keep people in work who have found work after being unemployed, and help those who have yet to enter the labour market. Skills are vital for obtaining work and for making progress once in work. The Minister may have wanted to say a little more about skills if time had permitted, but the Opposition have brought forward our own very significant policy proposals in that regard.

We are conscious of the background to the problem and of the challenges ahead, and recognise that much remains to be done to ensure that skills are as widespread as possible in our country. We understand that there are 5 million adults who are functionally illiterate, and several hundred thousand young people who are not in any kind of education, employment or training.

John Penrose: It was welcome to hear the Minister set out a couple of examples of how the Train to Gain budget will be refocused. As far as I can see, the Train to Gain process has involved an awful lot of certification of people who already have skills, and not much in the way of the creation of added-value skills. In many cases, it has created a huge deadweight cost, with Government money used to pay for training that was already going to happen under existing company budgets.

Mr. Clappison: My hon. Friend makes his point extremely well. Far too much of what has been claimed to have been achieved has been the assessment and certification of skills that people already have. That has taken precedence over giving people the skills that they need, especially in the work place. I am very interested
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to hear that the Train to Gain money is to be refocused. I am not sure what that means in this context, but doubtless we shall find out in the fullness of time.

It is common ground between us that more needs to be done to help people to reach higher levels of skill. Last year, the Secretary of State for Innovation, Universities and Skills accepted that we must do better if we are to be competitive in a global economy and to offer new opportunities. To achieve that, however, we need to have the right framework in place.

I remember when the Bill that became the Learning and Skills Act 2000 passed through this House. It established the learning and skills councils to fulfil the role of providing people with skills and apprenticeships, and replaced the training and enterprise councils, even though they had a successful track record of devolving responsibility to the local level and involving private enterprise. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) played a large part in setting up the TECs, and I recall him describing the LSCs as being merely a change for change’s sake.

On top of that, we now have more change. Just a few years on, it seems that the LSCs were not the answer after all. They are to be replaced by three new bodies, to add to the pantheon of bodies that are involved in the provision of training and further education. The Government now say, as the Secretary of State the Secretary of State for Innovation, Universities and Skills put it, that they want to put

That is precisely where employers were before the Government interfered with the training network in the first place.

We have brought forward our proposals on skills. Putting skills in the work place and putting employers in charge of providing them is at the core of our proposals. We want to bring help to small and medium-sized enterprises to enable them to do that. We want the process to give special help to them and to the people whom we now call NEETs—not in employment, education or training. We also want to give a better deal for adult community learning.

We have a very wide agenda on skills. We recognise that there is a need for fresh thinking on the subject, and we will provide it.

12.59 pm

Kelvin Hopkins (Luton, North) (Lab): I came along to make one or two interventions, but I am pleased to have the opportunity to make a slightly longer speech. I am a co-chair of the all-party group on further education and lifelong learning, and I am glad to see my fellow co-chair, the hon. Member for Weston-super-Mare (John Penrose), in the Chamber. I used to teach in further education, and have a long-term interest in skills; I used to read and write a lot about the subject in my time as a trade union research officer. I have always had a deep concern about the poor skills of so many of our fellow countrymen and women when it comes to employment.

In recent years, the Moser report has pointed out that half the population are not functionally numerate. Indeed, 50 per cent. of the population do not understand what
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50 per cent. means. We have a problem that has not been addressed at school level, let alone at training level. During the 1980s and 1990s, the National Institute of Economic and Social Research undertook lots of research comparing us with other countries. It found that in Germany, apprentices would typically have many hours of pedagogy—rigorous teaching—every week. When that was explained to those who led the training and skills industry in Britain, the response was, “Well, that wouldn’t be appropriate in the British context.” That was just a cop-out; they were not prepared to undertake that level of skills provision.

Comparisons were made between apprentices in France and Britain. It was found that apprentices in France knew basic mathematics, and when they took a very simple mathematical test they could get all the questions right in a few minutes. In Britain, a comparable group of apprentices could not do any of the sums at all. There were serious problems at a very basic level. Those problems are still there. I will say to my right hon. Friend the Minister that the Government have recognised that and are trying to deal with it, particularly at school level, but we have not got there yet. My concern is that we have not much considered the interface between the teacher or lecturer and the apprentice, schoolchild or student. We do not deal with the issue at that level.

Mr. Heald: I do not know whether the hon. Gentleman remembers the report by the Institute for Fiscal Studies and the Centre for the Economics of Education on the extent to which qualifications give a person an earnings advantage in the labour market, but its findings on level 2 national vocational qualifications were stark: they had no impact at all, although level 3 qualifications did. Does he not agree that there is a strong lesson there on how we build apprenticeships and the sort of qualifications that really count to employers?

Kelvin Hopkins: My concern is that we have a lot of qualifications, but underneath the qualification the level of skill is often inadequate. German factory workers can typically not only do mathematics but speak a foreign language. They can handle a foreign language, and their language, very well. We are failing in that. The OECD has shown time and again that the gulf between the best educated—the highest achievers in Britain—and the lowest achievers is wider than that in almost any other country in the developed world. We have to address that problem.

There has been a lot of debate about the fact that we are facing a recession, in which there will be unemployment. There will not be jobs. It is obvious that supply-side reforms, welcome though they are, will not solve a demand-side problem. I am glad to say that last weekend, the Chancellor mentioned the great John Maynard Keynes again. I used to teach economics, and Keynes used to be highly regarded—in fact, I still regard him highly—but we have been through a period of madness in which lesser brains have dominated the economic policy agenda. About 15 years ago, I had a debate over lunch with a former deputy economic adviser to the Treasury. I asked him a simple economic question; he could not answer it and lost his temper. I suspect that Keynes would not have done that. According to last night’s Evening Standard, even Bertrand Russell found Keynes’s intelligence intimidating. I do not think that
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any of the monetarists intimidate me. We have to look to some of the Keynesian recipes, used in the ’30s to solve our problems. When the economy recovers, we will need people to be skilled. The modern world cannot rely on people just picking things up on the job, without being able to do mathematics or even handle their own language very well. We have to tackle those basic skills problems.

There are many small companies, and many more smaller companies today, and some apprenticeships cannot be sustained by them. They are fearful of taking on an apprentice because they fear that once the apprentice is trained, he or she will get a job with someone else who pays better. One case that I have written to Ministers about concerns those in the historic vehicle restoration business. Apprentices in that business are highly skilled, but as soon as they are trained, they can get much better paid jobs in the motor sector looking after insurance repair jobs. People in that field are very highly paid; of course, insurance companies pay well for cars to be repaired. Apprentices have to be sustained properly in such small companies. The only way to ensure that is to place a levy—based on turnover, not headcount—on all companies, so that the whole economy pays to sustain apprenticeships, particularly among small companies. I hope that I can urge my right hon. Friend the Minister to persuade his friends in other Departments that the issue is important.

I have said most of the things that I wanted to say. Many other Members want to speak—

Mr. Burns: Really?

Kelvin Hopkins: Perhaps hon. Members came just to listen to my speech, but I guess that they do want to speak. I am grateful to have had this opportunity, and hope that some of my points will be taken on board.

1.5 pm

Paul Rowen (Rochdale) (LD): I too welcome the Minister to his position. It is the first time that we have debated together. I welcome the opportunity to debate this issue, given the context: last week, the largest rise in unemployment for 17 years was announced, bringing the figure up to 1.79 million. It is likely to rise to more than 2 million by Christmas, so the issue is obviously important.

I begin by concentrating on what the hon. Member for Luton, North (Kelvin Hopkins) said. It is true that, when it comes to skills, this country has let itself down in the past. The Leitch review set us ambitious literacy and numeracy targets. In 2005, some 85 per cent. of adults were classed as numerate, and 79 per cent. as literate; we are planning to get that figure up to 95 per cent. Those are ambitious, difficult targets.

The centrepiece of the Government’s skills policy in the past has been Train to Gain. I note what the Minister said earlier about refocusing that, and moving £50 million from the Train to Gain pot and using it to deal with unemployment. The Train to Gain pot, which will be £1 billion by 2011, has been consistently underspent. A statement was issued recently, which I have not seen, to say that £350 million of that money will be refocused on small and medium employers. I would certainly welcome more information on how that will happen. It
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is quite clear that employers have not taken up the Train to Gain money because of the often bureaucratic and difficult process that they had to go through to access it. I welcome anything that makes that process easier.

It is true that in a period of recession—I heard what the Secretary of State said on the subject last week—we have to learn the lessons from the previous recession before deciding what to do. It should not just be a case of paying people benefit once they are unemployed, as happened in the past. We need to do more to help them to find employment and to do gainful work.

Mr. Drew: My area has a particular problem: young people of no fixed abode come to it to look for work. They are in a double bind. The situation is different now because of the lack of affordable housing in places such as Stroud. Will the hon. Gentleman accept that the problem is not just about finding someone a job? Often it is about finding them accommodation so that they can get a job.

Paul Rowen: I agree, and later I shall come to what we can do to deal with those two problems. This month, the number of jobseekers has risen from 31,800 to 929,900. I accept the point that the Minister made: people are moving in and out of those figures. Nevertheless, the large number of long-term unemployed is an issue of concern.

I want to talk a little about what the Government can and should do to get more people back into work. I want to use as an example some of the work that my local council in Rochdale has done to get people into work, because that is vital. Rochdale has set up a joint project with Oldham called J21, which is tied to the development of the large industrial development at Kingsway. Between them, members of the Kingsway recruitment team have trained 1,300 people and helped get them into work over the past two years.

In Rochdale and elsewhere, however, there has been a large increase in the number of redundancies. I do not know whether the Minister saw the announcement last week by MFI that a number of its stores would close. After the receiver looked at which stores were viable, the closure of 86 stores was announced. That announcement was made in a national newspaper—the Daily Mirror—last Friday. If employers are to issue redundancy notices by that method, it brings into question how such things are done and what is the right way of going about it. There was no warning to the employees who were affected: they read it in the newspaper. If unemployment is going to rise, we must make sure that we have mechanisms in place to deal with that. The Minister’s commitment not to close Jobcentre Plus offices in areas with high unemployment is therefore welcome.

John Penrose: I am glad that the hon. Gentleman mentioned redundancies. Does he agree that, particularly with the announcement of redundancies for people who are middle-aged or older in the jobs market, it is unfortunate that in the past couple of years the Government have begun to focus further education funding on training for people who are under 19 and certainly under 25? FE’s traditional role to reskill people in their 30s, 40s and 50s after involuntary redundancy has been lost, and that will impact materially on the ability of those people to retrain and to get jobs in this difficult economic climate.

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Paul Rowen: I completely agree, which is why I am interested in knowing what the Minister meant when he spoke about refocusing Train to Gain. In the next few years, we will not be talking so much about upskilling as about reskilling.

In that context, I wish to raise the issue of adult apprenticeships. The Government put £25 million into that pot last year, and the figure will rise in a couple of years to £90 million. Given what we are going through, the Minister needs to look at whether that pot of money can be substantially increased. By comparison, nearly £1 billion is being spent on youth apprentices—I have no problem with that, and welcome the provision for more youth apprentices—but more adults will be unemployed, so there is a definite need to ensure that the issue is addressed.

I am running out of time, but I believe two more things must happen. We need to make sure that we achieve better links with housing and that we use different projects to do so. The Chancellor has said that projects will be brought forward, and I should like commitments to be written into those projects to—

Mr. Deputy Speaker: Order. The hon. Gentleman has used up his time allocation.

1.13 pm

Mr. Oliver Heald (North-East Hertfordshire) (Con): I begin by welcoming the commitment of the Liberal Democrat spokesman, the hon. Member for Rochdale (Paul Rowen), to the Conservative policy of strengthening and increasing the number of apprenticeships. We started doing that in government, as it was Lord David Hunt who came up with modern apprenticeships schemes as a way of improving young people’s education. It is something on which the Government, to give them their due, have built, but we would like to expand it still further.

John Penrose: Does my hon. Friend agree that an awful lot of the Government’s claimed increase in the number of apprenticeships is, in fact, a rather creative piece of accounting, because modern apprenticeships were all level 3 and above, whereas the figures for what are now called higher apprenticeships have dropped substantially since 2001? All the increases have taken place in modern apprenticeships at level 2, which offer substantially less valuable employment opportunities.

Mr. Heald: I agree. I was going to make the point that level 2 does not really hack it, and that we need to provide apprenticeships at level 3. We must move people at level 2 to level 3 if we are to achieve gains in employability and the amount they can earn, which is increased by having better qualifications.

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