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6 July 2009 : Column 731

I am pleased that we have secured over 4,000 confirmed internships so far, and I hope the hon. Gentleman will do all he can to ensure that companies, businesses and organisations increase their number of internships. My Department is pledged to increase the number of internships. I am not sure what he has been able to do in that regard.

We are funding 29,000 graduate-level volunteering places through the organisation v. We are funding 3,000 extra places for graduate entrepreneurship training and help with business start-ups. In his contribution the hon. Gentleman spoke about an additional 25,000 masters places, but the truth is that postgraduates have been a great success under this Government. We currently have 450,000 postgraduate students and 300,000 of those are in STEM—science, technology, engineering or mathematics—subjects. Over the past 10 years, STEM masters have risen 90 per cent. The record there is good, as our international success demonstrates. We are ahead of the United States and Germany, according to the OECD. Indeed, we come fourth in the OECD in terms of producing science and engineering doctorates.

Mr. Hayes: The Minister spoke about people studying a second time. Was it a mistake to cut the funding from ELQ, given that many people now need to retrain? Does the right hon. Gentleman regret that and will he reverse it? Would not equivalent or lower professional qualifications give people a chance to find a new direction during the recession?

Mr. Lammy: We have had the debate across the Chamber before. The question in relation to equivalent level qualifications is whether—should I choose to do a third degree, or if the hon. Gentleman chose to do a second degree, should the people of South Holland and The Deepings cast him aside at the next general election— the state should fund our studies. My view, and our view, is that the state probably should not fund it: the hon. Gentleman should pick up the tab himself. However, there are strategically important subjects, and, if he decides that his several years in politics have not been worth while and he wants to take up engineering and make a serious contribution to the future of this country, perhaps we ought to consider funding that second degree. We have been strategic with the money, because we have rightly said that we should prioritise and fund those who do not have a degree at all in preference to those who are taking a second degree. That is a noble position, and it is the right one.

Stephen Williams (Bristol, West) (LD): The Minister referred to ELQ as equivalent level qualifications and then talked about second degrees, but of course ELQ stands for equivalent or lower qualifications. What about the detrimental effect that that £100 million a year cut has had, therefore, on university-delivered community education programmes, which not only give people a taste of learning but encourage others who have a degree but want to take a second, non-degree qualification—for instance, teachers who want to be trained in counselling to support a pupil? We talk a lot about equivalent degrees, but what about lower qualifications?

Mr. Lammy: We are bringing forward an increased number of postgraduate loans for people to take up, and the hon. Gentleman will recognise that we have
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increased the budget for higher education by 25 per cent. precisely to ensure that the increase in provision that he wants is in place. I was at Birkbeck, university of London, last week and it has benefited from the expansion, notwithstanding the ELQ policy, as has the Open university. We will continue to support people, and the question is: what are the priorities in an economic downturn and are we getting them right? I say that we are. We cannot fund everything, and we have to be cognisant and conscious of what people are happy to fund themselves with the right support and signposting from the Government.

Let me end by referring to another issue on which the hon. Member for South Holland and The Deepings spent some time—apprenticeships. I simply repeat very proudly that this Government rescued apprenticeships from near-collapse 12 years ago. We should never forget that the Conservative party tried to abolish apprenticeships, but now it has the brass neck to call for more apprenticeship places to be funded. I remember 18 months ago reminding the hon. Gentleman, across this Chamber, of the completion rates when the Conservatives were last in office, and let me remind him again: in 1997, just one quarter of apprentices completed their courses.

The Conservatives really pulled off a trick: not only did they run the programme into the ground, with the lowest number of apprenticeships that this country has ever seen, but they managed to establish a situation in which three quarters of apprentices did not complete their courses. We have got the completion rate up this year to 65 per cent. That is a real achievement, and it is a tribute to the examiners, employers and the young people themselves. We have also increased the number of apprenticeships. We have also discussed level 3 apprenticeships across this Chamber, and there are not only more level 3 apprenticeships this year than there were when the hon. Gentleman’s party left office, but more level 2 apprenticeships, so we will take no lessons from him on apprenticeships.

The hon. Gentleman said nothing about the guarantees that we have put in place for young people facing six or 12 months of unemployment. We have established a huge fund of £1 billion for future jobs, to prevent young people—particularly those from the most deprived areas—from going into unemployment. Instead of that, the hon. Gentleman has taken the money away from union learning reps, from those who lack the basic skills of literacy and numeracy and from those who did not get GCSEs in the first place. He has set his party against the CBI and the Institute of Directors—that is the sort of contribution that the Conservative party would make to young people and this country. That is why young people are safe in the hands of this Labour Government.

5.45 pm

Stephen Williams (Bristol, West) (LD): We are having this debate against the background of a deep and deepening recession. However, the 2009 recession does not necessarily have the characteristics of previous recessions. It is not necessarily characterised by large lay-offs in particular trades, such as shipping and steel. Furthermore, it will not necessarily be geographically concentrated and it is not the result of an external inflationary oil price shock. This recession is primarily the result of a heart attack in the banking sector. Just like natural heart attacks, it resulted partly from ignoring
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all the warning signs and partly from a failure to take preventive measures. The Government are culpable on both fronts.

The recession leads us into uncharted waters. It will hit all sectors of the economy, including financial services—obviously—and retail. Familiar names will disappear, and have disappeared, from our high streets. The construction industry is having a particularly painful time and, as the hon. Member for South Holland and The Deepings (Mr. Hayes) said, graduates face an uncertain future. They are also leaving university with a large burden of debt.

The Government themselves have said that they do not know how the recession will pan out; that, at least, was their excuse for not providing us with a comprehensive spending review that would have enabled us to know the context of the tough choices that all three parties will face at the next general election. Perhaps the Government are not providing it because they can predict the political future of the next six to nine months and do not want clarity about the tough choices that they will face.

In this recession, unemployment will affect every community around the country. Before I came to this debate, I looked at the House of Commons Library synopsis of unemployment figures by constituency. My own constituency of Bristol, West is often characterised as a reasonably prosperous part of the country, and it certainly has a diverse economy. In May 2008 unemployment there stood at 1,079 adults; by May 2009—the latest month for which we have figures—unemployment there had soared to 2,042 adults. That represents an increase of 123 per cent. over those 12 months. That unemployment figure is still lower than that of 1997, but it is heading rapidly back towards it. In the neighbouring seat of Bristol, North-West, unemployment is already higher than it was 12 years ago.

The recession will hit every age group—but particularly young people, the subject of this debate. Young people have been the main victims of the recession so far. The Government’s own statistics show that 40 per cent. of those currently unemployed are under 25, despite the fact that that age group represents only 14 per cent. of the labour force. In 1997 one third of the unemployed came from that age group. In the past 12 years, the employment prospects of young people have worsened.

When he became Prime Minister, Tony Blair talked of his ambition to build a “young Britain”; I think he even got someone else to write a book of that title for him. In fact, after 12 years of a Labour Government we have worsening unemployment prospects for young people, despite the billions that the Government have spent over that period.

Mr. Hayes: The picture is even worse than the hon. Gentleman paints it, because we have not only that situation but a Government who are reconstructing the funding and management of skills, creating a byzantine structure that is a mixture of Jackson Pollock and Heath Robinson. Is it not time that there was an end to reorganisation and a start to greater clarity about the Government’s intentions for young people, to tackle the problems that he describes?

Mr. Williams rose—

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Mr. Deputy Speaker: Order. Before the hon. Gentleman responds, may I say to the House that although we started this debate with quite a lot of time to spare, that time is now rapidly running out and several Members are still seeking to catch my eye? I would be grateful if all those concerned would bear that in mind.

Mr. Williams: I think that the record will show that over the past four years the contributions by this Front-Bench spokesperson have usually been somewhat briefer than those of the mover of the motion, but I shall endeavour to speed up.

The hon. Member for South Holland and The Deepings may be tempting me down the path of the announcement on quangos made by his leader. As regards the Higher Education Funding Council, perhaps he is catching up with the policy announcement that we made six months ago. It would be much better to have one adult learning council bringing together the whole panoply of quangos that exist in this sector so that we have some strategic leadership. Every employer or employer representative group that I meet says that one of the things that they most lament about the Government’s record is the labyrinthine system that they have constructed in the skills sector, which makes it incredibly difficult for employers to negotiate their way round it, and equally difficult for potential employees to find out which might be the most appropriate training route for them.

As the hon. Gentleman observed, the number of 16 to 24-year-olds not in education, employment or training has now hit 935,000—and the rise has largely been concentrated among the over-18s. He also mentioned social mobility. It is important to note that only a negligible proportion of NEETs are children of graduates. Only 1 per cent. of the children of professional parents become NEETs, but the proportion is 7 per cent., rising to 11 per cent., among the children of those with a routine occupation. After 12 years of a Labour Government, we still have a fairly immobile society.

Let me turn to graduate unemployment. This weekend, Bristol university had celebrations for the centenary of the granting of its charter. This week, graduation parties will be taking place in Bristol—and, I am sure, in universities all over the country. However, those celebrations over the champagne, cake and sandwiches, which many of us remember, will be tempered by the conversations taking place among those brand-new graduates. People will be asking each other, “What job are you going to?”—that is certainly what I remember from 20 years ago—but they will also be wondering about their employment prospects. This will probably be the most gloomy set of graduation parties ever, as people have to admit to each other that despite their achievement they still have no job to go to.

We should remember that this cohort of new graduates are from the top-up fees generation—the first people to leave the higher education funding regime with £9,000 of fee-related debt that they will have to pay off during their working career. What a total change from the prospects that they thought must have been opening up in front of them back in the autumn of 2006 when they commenced their studies.

Mr. Lammy: This is an opportunity for me to ask the hon. Gentleman, who has flip-flopped on this issue on several occasions, what is, today, the official position of the Liberal Democrats in relation to top-up fees.

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Mr. Williams: I am entirely happy to provide the Minister with that clarification. The official position today is the same as it was yesterday, a year ago, and at the time of the 2005 general election. My party remains opposed to the tuition fees method of funding higher education; at the next general election I, like all my fellow candidates, will be standing on that platform. Just as at the last general election, our manifesto will be a fully costed document in which we set out how we would fund our commitments to students and graduates.

In 2007, 6 per cent. of graduates were still unemployed after six months; in 2008, that figure had risen to 8 per cent. We do not know what will be the relevant statistic for the current cohort of graduates, but everyone expects it to be significantly worse. As was widely reported over the weekend and in this morning’s newspapers, the Association of Graduate Recruiters has said that graduate job prospects are down by 24.9 per cent. this year. That is affecting employers across the piece, whether they are blue-chip companies or professional firms.

Only last week I spoke to a colleague in chartered accountancy who said that the number of graduate entrants into that profession, which is an enormous employer of graduates from across many different disciplines, is down by a third in many firms. As we might expect, the numbers are down in banking and financial services. The numbers going into engineering are down by 40 per cent.; as we know, the construction downturn is affecting all our constituencies. I would not like to be a new architecture graduate at any of the graduation parties taking place around the country. People who invest a significant slice of their life in qualifying to be an architect—much longer than for many other degree programmes—are entering an uncertain future.

Overall unemployment is also predicted to increase. Most economists agree that at some point in 2010 unemployment is likely to reach 3 million again. That brings back memories for many of us in the Chamber. The Minister has mentioned his memories of the early 1990s. I am sure that some of his colleagues, like my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) and myself, will also remember the misery of the 1980s. [ Interruption. ] Yes, perhaps even the 1970s. If this Government are still in office, Labour MPs should hang their heads in shame when we reach the statistic of 3 million people being unemployed. What a record for a Labour Government. Will they be going on marches for jobs and publishing pamphlets condemning the Government of the day, as happened in the 1980s? I somehow doubt it.

What has been the Government’s response, particularly for young people? A couple of measures were announced in the Budget. First, there was the jobs or training guarantee. However, as my hon. Friend the Member for North Southwark and Bermondsey pointed out earlier, there are many uncertainties around that programme. In order to qualify for it, a person not only has to be under 25 but must have been unemployed for more than a year. Moreover, it is not intended to start until some time early next year. It is completely uncertain how many people will benefit from it and whether it will really make a difference to young people. As my hon. Friend said, someone who is currently in work or in an apprenticeship wants protection now, rather than having to wait for a year in unemployment before relief is afforded to them.

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There was also the announcement of the future jobs fund, involving 150,000 jobs; at least a number was put on that proposal. It specified that 50,000 of those places should be in sectors such as social care—that is a worthwhile area, but one of the debates that we will have at the next general election is about the size of the state—and that another 50,000 should be in so-called growth sectors. The example given was hospitality. I do not know what world the Government live in, but I would have thought that hospitality is not usually a growth sector against the background of a recession: that is a triumph of hope over experience. It also seems to be a triumph of spin over fiscal reality. The Government are keen to announce large sums of money for initiatives when there is not much clarity as to when they will start or what they will deliver, but at the same time they are cutting existing budgets—those of the regional development agencies, for instance. The South West of England Regional Development Agency has had its budget for this year cut, which means that some of the programmes that it would have funded in the city of Bristol, such as the regeneration of Stokes Croft, have had to be chopped.

Young people leaving school or college who wish to enter higher education this year will face uncertainty as they await their A-level results. We know that the Government have cut the growth in the number of places, but why has that happened? We had a statement last week from the new Department for Business, Innovation and Skills about next year’s student maintenance support settlement. I remembered last year’s announcement, when the Government botched their figures. Their predictions for the number of people who would qualify for student support were completely wrong. That is why they are having to cut the planned growth in the number of places this September.

It is extraordinary to do that against a background of recession, because we know from all previous recessions that the typical response, especially of young people, is to try to shelter in education and training. It is also extraordinary when there is a bulge in the number of young people expecting to go to university. The number of 18 to 21-year-olds is about to peak, before it falls for the rest of the decade. What an extraordinary time to restrict the number of places in higher education.

The Million+ group, which represents most of the post-1992 universities, has rightly pointed out that clearing, which has been a facet of higher education for as long as I can remember, is unlikely to be a feature this year. That will damage many universities that have had a successful record of widening participation. I also fear the effect on the fair access proportions in our research-intensive universities if they have to turn away marginal applicants.

The Minister said that higher education places were an academically competitive process. Of course they are, but his response to the situation appeared to be—he can tell me if it is not—that someone who does not succeed this year can by all means come back next year. That will not give much relief to young people who get their A-level results this year and then find they do not have a place.

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