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10.18 am

Stephen Williams (Bristol, West) (LD): We have had a good debate, albeit the Back-Bench speeches have finished slightly earlier than normal. I congratulate the hon. Member for Blaydon (Mr. Anderson) on securing a debate on this important topic. In the interests of Front-Bench fraternity, I welcome the new Minister with responsibilities in this area to his first debate on skills. I am sure that it will be the first of many, particularly in this part of the House of Commons.

The hon. Member for Blaydon mentioned the report—which I confess I have not read but would be interested to see—produced by the Coalfield Communities Campaign and others, which he said was called “What a Waste”. I empathised with a great deal of what he was saying, drawing on both that report and the experiences of his constituency. I cannot claim to represent an area of declining industry. Bristol, West does not fit that description at all. However, I did grow up in what was then, at least, a mining village, Abercynon, and Mountain Ash in south Wales. My father left school at 15 to work in a coal mine. Both my grandfathers worked in a coal mine. Three of my four great-grandfathers also worked in the south Wales mining industry. Therefore, I at least have that personal heritage and understanding of growing up in a community that was badly scarred and damaged by the 1980s downturn in the coal and steel industries.

The hon. Gentleman mentioned the long-term effects of mass unemployment, which can be felt to this day. Employment opportunities that had been around for generations suddenly disappeared, and he mentioned the long-term health problems, including mental health problems.

Mr. Anderson: My father worked in the south Wales mines, and the decline in the 1980s was not the first in the mining industry. There was also a huge decline in the 1960s, when new industries were put in place in the new towns, and a lot of education was provided through new technical colleges. The difference in the 1980s was that there was absolutely no support and no help, and that is the real reason why the problems that we have now are becoming endemic.

Stephen Williams: The hon. Gentleman is right. We should not spend too much time on the industrial history of south Wales, although I studied it as part of my geography A-level. We went to Cwmbran, which was a new town that had been constructed in the 1960s. As a Cardiff Member, the Minister will be familiar with these issues.

The hon. Member for Blaydon mentioned the long-term social effects of the unemployment experienced in the 1980s. He also mentioned crime and drugs, which were new problems resulting from the despair in communities.

Mr. Clapham: One statistic relating to Barnsley stands out hugely in the debate. In 1975, the crime level in Barnsley was 15 per cent. below the national average. In 1995, it was 15 per cent. above the national average. In between, we had experienced something that we had not previously seen—the influx of drugs into the town.

Stephen Williams: The hon. Gentleman makes a telling and pertinent point.

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The hon. Member for Blaydon mentioned the skills gap, which is the topic of the debate. He mentioned Leitch’s 2020 targets for our skills base, which are extremely ambitious and stretching in many ways. However, he rightly said that in many communities—whether in the north-east, south Wales or other areas that share the characteristics that he mentioned—the skills gap is even wider, and we are even further from achieving the ambitious targets in the Leitch report. As he rightly said, it is important that people are not left behind in the current recession, but enabled to reach those ambitious skills targets.

The hon. Gentleman mentioned the important role of community groups. Another characteristic of previous recessions, including in the 1980s recession, as I saw for myself in my village, is that a community’s entire infrastructure can be pulled away. If one industry, such as coal mining, is closed down, an awful lot goes with it, including the social clubs, the music bands, the first aid centres and the informal training provided in the community.

My hon. Friend the Member for Rochdale (Paul Rowen), who has had to go to a Statutory Instrument Committee, mentioned the characteristics of his constituency and particularly the declining textile industry. He also said—many economists have commented on this—that much of the focus of current Government policy is on reducing unemployment by inducing employers to take people from the dole queues, rather than on stemming the increase in unemployment by subsidising employers to keep existing employees in work. I was interested to hear examples of practice in Germany and Wales, where regional governments have not tried to take people from the dole queue, but have subsidised training in companies to keep people in their existing jobs so that they can meet their existing obligations.

My party would support such an approach. We advocate redirecting the growth in the Train to Gain budget towards subsidising employers’ off-the-job training costs so that they can maintain in employment apprentices who are working in the industry. It would be a tragedy if people who had entered into modern apprenticeships—several contributors to the debate have praised these programmes—lost their places simply because their employer could no longer support their employment, which is an essential and integral part of the apprenticeship.

Mr. Clapham: The hon. Gentleman mentioned his party’s industrial policy. Does his party also agree that the architecture of the RDAs will be essential to creating new jobs in the new industries that will emerge as we come out of the current recession?

Stephen Williams: I had actually noted down the point that the hon. Gentleman made about the RDAs in his speech and I was coming to it next, but I will deal with it now. Yes, I agree that RDAs could play an extremely important part, particularly in encouraging new industries. However, in my region, the South West of England Regional Development Agency has had its budget cut this year. If ever there were an inopportune moment to cut an RDA’s budget, it would seem to be now, but my RDA’s budget has nevertheless been cut. As a Bristol MP, I have had a letter from the RDA saying that as a result of the cut in its capital budget it is no longer able to support some of the projects that it
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had hoped to fund in my constituency, such as the regeneration of Stokes Croft, which is one of the gateways into the city centre. Of course, all RDAs are also affected by the downturn in the property market, because they depend, to some extent, on land sales to finance their capital programmes. The effects of the recession, as well as Government cuts in RDAs’ budgets, are having a detrimental impact on the ground.

My hon. Friend the Member for Rochdale and the hon. Member for Barnsley, West and Penistone (Mr. Clapham) mentioned the important role of FE colleges. I will not dwell on that topic too long, because we have discussed it many times in Westminster Hall and on the Floor of the House. However, Barnsley college has probably been mentioned more than any other college in such debates.

The Minister is new to his post, and his predecessor did not exactly cover himself in glory when responding to the concerns expressed by hon. Members from all parties about the FE college capital programme. I am sure that the Minister will earn the respect of many colleagues if he engages positively with the unfortunate issues raised by that programme and points to a clear way forward. If he does, he will also give hope to colleges such as Barnsley, which has been largely demolished, judging by the pictures that the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) has shown me.

Bob Spink: May I ask the hon. Gentleman to point out to the Minister that, notwithstanding its wonderful sylvan setting, South East Essex sixth-form college and colleges like it, which are there to provide young people with education and training opportunities and to skill them up for the future, have also suffered tremendously in the LSC debacle, and they should not be forgotten?

Stephen Williams: The hon. Gentleman rightly says that we have seen a debacle under the auspices of the LSC, although there has also been a lack of good oversight on the part of Ministers, who should not be let off the hook. I have met several college principals and the associations that represent them, and although the hon. Gentleman tells the story from the perspective of his constituency—we have also heard about Barnsley—I am afraid that a cry for help can be heard from many parts of the country, where colleges have been encouraged to be ambitious in their capital bids, only to see the rug pulled from under them.

Bob Spink: Is the hon. Gentleman as interested as I am to learn what the Conservative party’s policy on funding all the LSC’s promises to colleges around the country would be if it were to form the next Government?

Stephen Williams: I am always interested to listen to the hon. Member for South Holland and The Deepings (Mr. Hayes), and we will shortly have an opportunity to hear from him—probably at length—about Conservative party policy on the issue.

Let me finish dealing with the points that have been made. The hon. Member for Barnsley, West and Penistone talked about the effects that despair can have on communities. He was rightly concerned about the election of two British National party members to the European
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Parliament, including, of course, one in his region of Yorkshire. I am sure that, whatever our differences on the topic, we are united in saying that we must find a way to reach out to people who felt that the only way they could express their despair through the ballot box was by voting for a fascist party. That should worry us all.

The debate is taking place against the background of a deep recession. Previous recessions, which I have already described, were characterised by sudden downturns in single industries, which affected an entire community, leading to mass unemployment in the area concerned, and often long-term unemployment as well. One of the depressing statistics from that last recession in the 1980s was that many of the men, in particular, aged over 40, who lost jobs then did not return to full productive work, in what could have been useful working lives of another 20 or more years. We must work hard in the present recession so that that stark statistic is not repeated. That is why engagement with the skills needs of older workers in the current or potential work force will be vital. The hon. Member for North-West Leicestershire (David Taylor), who I think has gone to attend a Committee, referred to age discrimination.

The Leitch report was mentioned in the debate, and I said earlier that it had some stretching targets for 2020. However, it brought out very clearly the fact that, because of the demographic change in the work force, 70 per cent. of the 2020 work force to which the targets relate have already left formal education. It will therefore be vital to work not only with people who are currently in full-time education, but with the current work force. There will be a constant need for retraining, and new opportunities need to be explored.

The present recession is different from previous ones that we have discussed. A financial heart attack has affected the entire economy. Workers in the banking and insurance industries, which are very important in my constituency, are suddenly out of work. There is retail gloom, and many retail chains that were common sights in our high streets have gone out of business; and the housing and construction bubble has, of course, burst as well. However, the restriction on credit by the banks is likely to affect the whole manufacturing and small business base. We must ensure, because of the huge injection of taxpayers’ money into the capital base of the banks, that they will lend to manufacturing and small business.

Bridging the skills gap that is the topic of the debate is the key to the future. I have mentioned older workers, but we should also think about gender differences: the opportunities that girls and young women feel are open to them, and those that boys feel are open to them. We should think about the differences in participation—the number of women taking part—in engineering, which is a key element in many of the relevant areas. Good information, advice and guidance are crucial to ensuring that young people take up the educational programmes that could lead to those productive careers.

I want briefly to mention that we need to be worried, too, about boys’ attainment in the relevant areas. There is a gap in attainment between boys and girls, which is not narrowing. The biggest gap affects white working-class boys. In the areas that we have talked about, whether south Wales, Yorkshire or the north-east, it is largely
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white working-class boys who feel the despair of unemployment. That is where there is the biggest attainment gap in schools.

New industries for the future, such as carbon capture and storage, the electric cars that the hon. Member for Blaydon referred to, and wind turbines, such as those that could be installed off the west coast in the area that I represent, have been said to be essential to our meeting our 2020 climate change targets. However, none of that can be achieved if we do not bridge the current yawning gap affecting good STEM skills—science, technology, engineering and maths. That is a skills gap that the Government should address urgently.

10.34 am

Mr. John Hayes (South Holland and The Deepings) (Con): I welcome the debate, and I welcome the new Minister to his post. I think that he is the fourth skills Minister I have faced. I have seen off several others, and look forward to our relationship in that spirit.

Skills matter. They matter for our economy, because they improve our productivity, and so our competitiveness, and they matter for individuals, because there is little that is more significant than the confidence that stems from the acquisition of skills through training. Most of all they matter for society, because they nourish social cohesion by feeding social mobility, and so offer the kind of social justice that is wanted by all hon. Members who have taken part in the debate—and, I hope, all hon. Members in the House. At a time when unemployment has hit its highest total for 12 years and about 100,000 people are being added to the number every month, one might have thought that the skills gaps would no longer be a pressing problem. However, last week, a CBI-KPMG survey of London business revealed that even during the downturn, skills shortages remained a major concern and could hamper economic recovery. Four in 10 of the capital’s businesses still say they have problems finding the right talent, despite rising unemployment, and traditional sectors such as those we have heard about today are among those reporting the biggest skills shortages, with 52 per cent. of businesses in energy, manufacturing and construction reporting a problem.

We heard about manufacturing from the hon. Member for Rochdale (Paul Rowen) and from the hon. Member for Blaydon (Mr. Anderson), whom I congratulate on securing the debate, and who made a strong and persuasive case for his constituents. He argued forcefully, with reference to the Leitch report, that unless we fill the skills gap, our economy will falter and fail—of course he is right. Skills shortages are still a significant problem because a mismatch remains in skills policy between provision and need. We must align skills policies much more closely with the needs of businesses and individuals. Only 28 per cent. of respondents to the survey that I mentioned found Government schemes such as Train to Gain beneficial, and 45 per cent. said that they were neither relevant nor useful. That is shocking, but it should not be a surprise, because the Opposition have been arguing for some time that the investment in skills is misplaced because it is unresponsive to need and insensitive to the wishes of business.

Mr. Clapham: The hon. Gentleman will be aware that in the 1980s, when many of the older industries that we have talked about disappeared, little was put in their place. As a result, despite social mobility arising from
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education policy, there is still a lag, dating back to that time, that affects people whose skills were not transferable. That is the group of people we must reach. That means new jobs using, for example, the regional development agencies. What is the Conservative party’s policy on RDAs and on using their architecture to create jobs?

Mr. Hayes: I was barely mature in the 1980s—actually, it is my birthday today. I was just a stripling—a child. However, I understand that it is critical to social mobility that we enable people to gain new skills and to change skills as the economy changes. Advanced economies become ever more dynamic in their skills needs, and rather than holding an archaic view of those needs, we need an ever more responsive and sensitive demand-driven system.

I do not want to get into a debate about the RDAs, but in the brief time available I shall point out—I think it will excite and reassure the hon. Gentleman—that the Conservative Opposition are completely committed to skills. We prioritise them not just because of the difference that, as I have said, they make to the economy, but because we understand the difference that they make—especially in areas such as the hon. Gentleman’s constituency, but throughout the country—to individuals, families and communities.

A survey by the Learning and Skills Network in April 2007 found that only 4 per cent. of employers thought that Train to Gain met their needs effectively. The Select Committee on Innovation, Universities, Science and Skills concluded in its report on the 2008 departmental report by the Department for Innovation, Universities and Skills that Train to Gain lacked “any real employer enthusiasm”. A recent report by the United Kingdom Commission for Employment and Skills on future skills needs entitled “Ambition 2020” contends that long-term unemployment trends will continue and that there will be a structural shift away from mass production industries to high-end manufacturing and higher level skills at level 3 and above.

The focus of current provision does not necessarily fit those projections. Government policy is to fund fully the training of apprentices under the age of 19, and to part-fund apprentices aged 19 and over. The Government ask employers to contribute about 50 per cent. of those people’s training costs, but the Minister must know that that policy acts as a disincentive for employers to take on young people aged 19 to 24 who are not in education, employment or training. It also acts as a barrier to progression, as those who complete a level 2 apprenticeship after their 19th birthday might find their employers unwilling to contribute to the training costs of an advanced apprenticeship. That is a concern, given that UKCES projections indicate that there will be significant under-achievement on the level 3 target set out in the Leitch review, as we heard from the hon. Member for Blaydon. UKCES also reports that the Government will fail to meet its level 2 target, so there will be insufficient improvement in the lower levels of qualification.

We need radical refocusing of skills funding and skills policy, and apprenticeships should be at the heart of that radical change. All apprenticeships should match the standards of the best and confer real and practical competence, which will boost employability. All should provide the opportunity to progress. We want to make it much easier for companies to be involved in apprenticeships.

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