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5.23 pm
Baroness Sharp of Guildford: My Lords, I join other noble Lords in thanking and congratulating the noble Baroness, Lady Greengross, on introducing this very important and timely debate. I declare an interest as a member of the corporation of Guildford College, which is a further education college.
In some senses, this debate has been something of a reprise of a debate that we had last year on the Leitch report. The report, to which the noble Baroness, Lady Greengross, referred, by the All-Party Parliamentary Group on Corporate Responsibility, The Talent Challenge Facing the UK 2008 to 2020, reminds us of the challenge and the very ambitious targets set by the Leitch report which the Government have taken up. In some ways, the Apprenticeships, Skills, Children and Learning Bill, which was introduced in the House of Commons last week, picks up the challenge of the Leitch report and carries it forward.
The report by the all-party group also reminds us that today we face different circumstances. The Leitch report was written at a time when Britain was looking forward and expecting continuing growth. We are now in recession, and the all-party group reminds us that in a period of recession achieving those targets is all the harder but all the more important. As the report and many of those speaking today have reminded us, as we emerge from that recession, we need to be in a position to seize the opportunities presented for new enterprise. In order to do this, it is essential to make the most of our talents.
This debate about what Britain should do when it emerges from recession takes me back almost 30 years to when I was working in an organisation called the National Economic Development Office at the end of the 1970s and the beginning of the 1980s. I was working in the central secretariat of Neddy at the time and watching the indices of production, of sales and of inventories dropping through the floor in much the same way as today. We were confronted in that central secretariat by this whole question of why Britain’s productivity was so low compared to our competitors. The answer was then, as it is today, that we were on the cusp of a technological revolution, that we were using equipment that was often 20 years out of date and skills that were often 30 years out of date, and that we needed desperately to upgrade our education and training programmes, as well as to invest in new technologies.
If you think through that period, the message was that the future lay with brain not brawn and that a massive investment was needed to upgrade and improve our skills profile. In those days, only 14 per cent of the age cohort were going through university, and over 40 per cent of young people left school when they were 16. Massive investment was needed, in particular in science and technology, in the STEM subjects that we still come back to. So in a sense the problem was exactly the same as the problem we have today—that we have far too many people with low or no qualifications, and not nearly enough with the intermediate and the higher-level qualifications. In particular, we needed to concentrate on the STEM subjects, the technicians and the supervisors and down the lines, the teachers who were so important in growing that new generation.
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Much has happened over the last 30 years. We saw all kinds of initiatives—the YTS, the YOP, the TOP, the Manpower Services Commission, the GNVQs and the TVEIs. Significantly perhaps, until 1997, the proportion of GDP invested in education remained at or below 5 per cent. The proportion of GDP going to R&D fell from 2.5 per cent to 2 per cent. Since 1997 we have seen—I am glad to say this—a very considerable investment in education and training. We are now closer to somewhere in the region of 7 per cent of GDP. Sadly in R&D we have failed to raise it above that 2 per cent. Although the Government—and I have to say this—have done a good deal to put money, through the research councils, into academic science in particular, we have seen a continuing poor performance on the part of industry in relation to R&D. The exception has been—and the noble Lord, Lord Broers, mentioned this—a number of key manufacturing industries such as pharmaceuticals and aeronautics that continue to lead at the front. But many other industries have a very disappointing record in this particular area.
While we may have invested, the world has moved on very fast. As many of those who have participated in this debate have noted, Britain may have moved on, but other countries have moved on even faster. Our productivity still lags way behind our competitors. The OECD tables show us 17th among 30 OECD countries in terms of low skills and 20th in terms of the intermediate skills. Although we now have somewhere in the region of 35 per cent of young people under 30 holding degrees, we have fallen behind countries such as Singapore, Taiwan, South Korea and Finland, which have overtaken us and moved ahead of us. There is a continuing problem with productivity, and the answer remains that we need to invest in education and training. That should be, and in many senses has been, top of the agenda.
The report of the all-party group brings out a lot of very important issues which have been referred to today, including the continuing need for emphasis on the science and technology, engineering and mathematical subjects. Those are absolutely crucial to the taking up of new technologies, not only in the electronics field but in the creative fields as well. The marriage or fusion of the digital technologies and the creative arts is vital, and it is essential that we make this investment.
There is also a need to put emphasis on enterprise education in schools. My noble friend Lady Walmsley told us what is going on in schools, but we also need to bring in the soft skills mentioned by the noble Lord, Lord Hastings. It is important that we train our young people in those soft skills. There is a need to strengthen vocational training initiatives and especially apprenticeships. That was raised by many speakers, including the noble Baroness, Lady Wall, and my noble friend Lord Cotter, and I want to come back to it in a moment. There is a need for incentives to encourage both employers and individuals to invest in training and to recognise the benefits obtained from training. The noble Lord, Lord Puttnam, was absolutely right to say that in industries such as the film industry, which he knows, but also in the construction and construction engineering industries, a levy system helps to promote training, and perhaps we should look at
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The importance of good and impartial careers advice was not mentioned by many speakers, but it is significant that in a recent IAG survey only 24 per cent of teachers saw apprenticeships as being a good route. The noble Baroness, Lady Warnock, spoke of the need to rethink the benefits training equation and to recognise that, rather than penalise those who seek to retrain while on benefits, we should encourage them to do so. Perhaps, above all, there is a need to maintain these training initiatives through the recession.
I want to talk briefly about two things. The first is apprenticeships. For young people, going through an apprenticeship—the noble Lord, Lord Hastings, gave an example of this—is the most satisfying and fulfilling way of learning the skills that they need. Therefore, it is absolutely vital that the apprenticeship scheme goes forward and is successful. However, I want to raise one or two questions. Why does the new Bill that we have before us make life so complicated? Why does it require the sector skills councils to be reaccredited and revalidated? Why are the Government not backing the 14 to 16 young apprenticeship scheme? Why have they muddied the field by introducing the diploma as a third way between the academic GCSE and A-level and the work-based learning route of apprenticeship, establishing no clear pathway or progression route from the diploma into the apprenticeship? Why have they created the divide between the under-19s and the over-19s? At a time when we are anxious to see older people upskill and reskill, why do employers have to pay fees for those in their workforce who are over 19, whereas they are subsidised if they go through the Train to Gain route? All kinds of anomalies and complications have been introduced here which we need not have.
Finally, I should like to say something about the gender gap. It is a scandal that, for example, only 2.6 per cent of the apprenticeships in engineering are taken up by women. Women succeed at GCSEs and A-level and go on to universities, at many of which they top the degree lists, yet they do not fulfil themselves in the workplace. Why is that? All kinds of issues arise here but I pick up again the need for impartial careers advice. The hair and beauty industry mentioned by my noble friend Lady Garden is very important, but why do we see such a vast number of young ladies going into hair and beauty and the health and social care industries but not into the manufacturing and engineering industries? It is very important that they get proper impartial advice at the right age: 13 or 14. Other points put forward by the all-party group were the continuing need for flexibility in work patterns, in terms of the right to ask for flexible hours, to recognise difficulties that parents face in juggling young children and working and the difficulties of being reabsorbed into the workplace. The noble Baroness, Lady Warnock, suggested making it much easier for people to study part time. Women have been hit by the nonsense in the ELQ regulation. I hope that the Minister can give us some good news on that. I am sorry, I have gone over my time. I beg the House’s pardon. I wanted to make some of these points.
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5.35 pm
Lord De Mauley: My Lords, this has been a fascinating debate. There have been so many enlightening and helpful contributions from around the House. I am sure the Minister will agree that it is clear and encouraging that we are united in our belief that education, skills and training are key to our future, now more than ever. I take this opportunity to join other noble Lords in thanking the noble Baroness, Lady Greengross, for securing this important debate. I congratulate her and the All-Party Group on Corporate Responsibility on its report and apologise to her for arriving a moment after she started speaking.
I should declare an interest as a shareholder in an information technology support company, which has a deep interest in the highest level of skills in its workforce, as the result of the sale to it of a similar company that I ran and of which I was a substantial shareholder. I very much appreciate the words of the noble Lord, Lord Cotter, about the importance of the small business sector.
As unemployment escalates, we must invest in the most efficient and practical ways to ensure that people have the opportunity to maximise their talents, skills and employability. As the noble Baroness, Lady Greengross, said, we must improve on the current situation. It is vital that employers pull in the right direction. I am glad that my noble friend Lady Verma and other noble Lords were helpfully able to give us the perspective of the employer. Nevertheless, as the noble Baroness, Lady Greengross, also said, the Government must set the framework for this and help rather than hinder that process. Between 2001 and 2007, £7 billion was spent on basic skills courses. Despite this enormous investment, the Public Accounts Committee skills for life meeting on 29 January reported that large numbers of the adult working population are still functionally illiterate and innumerate. The noble Baroness, Lady Greengross, and my noble friend Lady Verma both mentioned this. The noble Baroness, Lady Sharp, referred to our poor position in international productivity league tables.
This is all the more galling when one learns that, in certain cases, the Government have had to find solutions from overseas to plug the skills hole. The noble Lord, Lord Puttnam, gave us a shocking example. Another is that immigration rules were recently relaxed because the nuclear power industry needed to fill 60,000 jobs and there was a national shortage of people with the right skills. Perhaps the Minister can explain what action is being taken to make sure that the right skills training and education is being implemented so that in this time of economic crisis, we will have the workforce with the necessary skills to fill the nearly 200,000 posts that are expected to be required for the 2012 Olympics, to which the noble Baroness, Lady Garden, referred. Lack of training has meant that, as the UK Statistics Commission discovered, up to 80 per cent of new jobs since 1997 have gone to migrant workers. Indeed, whatever would we have done without them?
In further education, we see a deteriorating situation. Between 2005-06 and 2006-07, the number of learners over 19 in all publicly supported provision fell from
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controls further education, meaning that the system is at risk of strangulation. Recognising this, the Government have pledged to replace the bureaucratic Learning and Skills Council. They propose, however, to bring in three new bodies: a skills funding agency, a national apprenticeship service and a young people’s learning agency. Concerns have been raised by some of those responsible for running the system that this will exacerbate some of the existing problems of bureaucracy. My noble friend Lady Verma and the noble Lord, Lord Cotter, referred to that. How much will the new bodies cost?
The Government have recently told us that participation in the apprenticeship system as a whole has increased; indeed, the word “renaissance” has been used. But of course this must be taken in context. The Government claim that the number of apprentices in learning has increased dramatically; indeed, the Minister argued that when answering a question that I asked a few days ago. However, the reality is that the number of people being trained to the vital level 3 is now lower than it was a decade ago. The Adult Learning Inspectorate has warned that,
“some apprentices can potentially achieve the full requirements of the apprenticeship framework without having to set foot in a workplace”.
This is echoed by Ofsted, which has recently confirmed that many of the new apprenticeships created by the Government are merely virtual. I hope that the Minister will be able to explain that.
At the beginning of this year, the Prime Minister announced a new target of 35,000 apprentices for next year. We welcome that, and hope that the Government will be able to meet it. However, this scheme must be quality-driven as well as target-driven. Do the Government have any plans to help to increase the provision of level 3 apprenticeships? As my right honourable friend David Cameron said in a speech on 10 February, we need a change both in jobs and in training. Our current training system is based on the assumption of a growing economy and a system delivered by big bureaucracy and top-down targets. We need more front-line skills building and to do much more to help those who have been made redundant to get back into work as soon as possible.
We must look to the future. It is vital, as several contributors to the debate, including the noble Baroness, Lady Walmsley, have said, that our young people are given all the support that they need to achieve their potential at school. The noble Lord, Lord Hastings, spoke of inspiring aspiration. They should also be given high-quality careers advice—the noble Baroness, Lady Greengross, and the noble Baroness, Lady Sharp, quite rightly emphasised that—to help them start their working lives.
In 2004, the proportion of 16 to 18 year-olds not in education, employment or training was 9.6 per cent. Despite a government drive to reduce this proportion to 7.6 per cent by 2010, it had increased to 10.5 per cent by the end of last year. What are the Government doing now to make sure that this percentage falls?
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As my noble friend Lady Verma rightly said, it is crucial that we not only support young people about to enter work but also pursue a policy of lifelong learning to help those already working. Once again, this was mentioned by the noble Baroness, Lady Greengross, as well as by the noble Lord, Lord Broers, who gave us a fascinating insight into the technical and engineering area, so vital to our future success. What are the Government doing to help people retrain, reskill and develop their talents to maximise their employability? Has any consideration been given to bringing back funding for ELQs, which the Government cut in June last year and which were designed to address exactly this problem? The noble Baroness, Lady Greengross, my noble friend Lady Verma and the noble Lord, Lord Puttnam, among others, raised that. What do the Government think about the Conservative idea of a community-based, all-age careers advice service? Do they have any plans to implement such a proposal?
We are all in this boat together and we all want to win in the drive to upskill and reskill to put us in the best possible position to emerge from the downturn. We must do that. I ask the Minister to take on board all the ideas raised in the debate and use them to ensure that in future we achieve real success.
5.45 pm
The Parliamentary Under-Secretary of State, Department for Innovation, Universities and Skills (Lord Young of Norwood Green): My Lords, I, too, extend my grateful thanks and appreciation to the noble Baroness, Lady Greengross, for initiating this debate and for presiding over the all-party parliamentary group report. It is an excellent report, which gave us a lot of food for thought and raised issues in a very constructive way. In thanking the noble Baroness sincerely for that report, I shall try to touch on a number of the issues that it identified. We have had a wide-ranging debate and if I had an hour or so to spend I could touch on every point that was made; if I skip lightly over one or two, it is not because they were not valuable and interesting but because I am time-limited and conscious of not only the time but the day, so I hope that noble Lords will forgive me.
The Skills for Life strategy has been mentioned by a number of contributors to the debate. The importance of making progress on literacy, numeracy and other skills was first identified by the noble Lord, Lord Moser, who drew our attention to the problems in his report. It was then identified once again by the noble Lord, Lord Leitch, in his report. Clearly, there is no room for complacency but, in times as difficult as these, we ought to acknowledge the progress that has been made. I prefer to see the glass as half full rather than half empty. If we do not make what I call a contextual analysis, there will be a feeling of, “Why bother, as we will never make any progress at all?”. That is not the case. We have massively increased investment in education and training and we are seeing some returns.
We spend £1 billion a year on Skills for Life. The Leitch report set out our targets: 95 per cent with functional literacy by 2020, which reflects the standards
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An enormous number of people have contributed to that progress, such as those in FE and schools. My noble friend Lady Wall drew to our attention the huge role that union learning reps have played in encouraging adults back into learning, often tempting them with the bait of IT skills when we know that some of the skills that they lacked were not just IT but literacy and numeracy.
The noble Baroness, Lady Greengross, asked about requiring employers to give written reasons for turning down requests from employees for time off for training. I listened carefully to the points that my noble friend Lord Puttnam made on training levies. We are where we are on them; where they are working in the construction industry, as the noble Baroness, Lady Sharp, reminded us, they work well. We are trying to change the climate, culture and behaviour.
I draw noble Lords’ attention to two important changes. First, the education Act that we only recently passed raised the participation age and meant that every young person between the ages of 16 and 18 cannot go into that terrible vacuum of joining an employer who provides no training at all—if we assume that that person enters the world of work. That was an important step change. Another change was on the right of employees to request time for training. Yes, it is a cautious step forward, but it is a step forward. I assure the noble Baroness, Lady Greengross, that we will ensure that there is a written response to employees’ requests for time off for training. We are not yet in the state that I would like us to be in, whereby we could guarantee that every employer participated in training, but we are making progress towards that essential goal.
Lord Puttnam: My Lords, I am sorry to interrupt my noble friend’s flow. I do not think that he will have an answer, but he could write to me. We are in new and uncharted territory. I, and I am sure the House, should like to know under what circumstances the Government would be prepared to revisit the issue of statutory levies, or are there no circumstances whatsoever under which that will be revisited?
Lord Young of Norwood Green: My Lords, all that I can say is that I will take away that question. I would not say that there are no circumstances in which that would happen, and I take the point that my noble friend makes about the uncharted territories that we are in. However, we are spending more than we have ever done before; look at what we are spending on
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In my maiden speech, I took the time to muck up the Latin for “There is more than one way to skin a cat”, although I cannot remember it now. I would never say never, because that would be imprudent at this rostrum. All that I would say to my noble friend is: look at the whole panorama of what we are doing on training. The debate on “to levy or not to levy” will continue, and I have no doubt that it will be continually assessed, but I draw his attention to the significant overall efforts that we are making on training.
I cannot resist attempting to respond to the contribution of the noble Baroness, Lady Garden. First, her speech was excellent; anyone who can quote Tacitus in this debate is pretty good in my book. The noble Baroness, Lady Sharp, lamented the fact that so many young women choose hairdressing and beauty. I was at an FE college in Crawley recently, where all the auto trade apprentices were, of course, male. When I turned my head to look at the catering group, I noticed that every single student was female. We know that we have a gender gap; we have plans, and we have addressed the issue in a publication that I recommend to noble Lords if they have not had the chance to look at it, World-class Apprenticeships: Unlocking Talent, Building Skills for All. That was our response to the Leitch report and it made real attempts to address our gender gap in apprenticeships through developing critical masses of people. It addressed not only the gender gap but, as someone else mentioned, the ethnicity gap. The LSC is embarking on work to address those issues. I agree with the noble Baroness on that.
I could not help smiling in relation to hairdressing. While we have not solved all the problems, it is still an occupation which does not pay people what they deserve. We made some strides when we introduced the minimum wage. That had a profound effect on that occupation and was an important step forward.
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