Economic Growth and Employment

Gordon Marsden Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Mr Gordon Marsden (Blackpool South) (Lab)]

I thank all those who have participated in today’s debate. On this side, we heard sparkling presentations from my hon. Friends the Members for Ochil and South Perthshire (Gordon Banks), for Ellesmere Port and Neston (Andrew Miller), for Mitcham and Morden (Siobhain McDonagh) and for City of Durham (Roberta Blackman-Woods). We heard interesting contributions from Members on the other side of the House, too, including a speech from the hon. Member for Solihull (Lorely Burt), who appears to give our five-point plan two out of five, and a particularly stimulating speech from the hon. Member for Bedford (Richard Fuller)—I do not think, however, that it will put him on the Secretary of State’s Christmas card list.

It is clear that for businesses, councils and communities across England, this has been a wasted and frustrated year for growth in England’s regions under the Department’s watch. It has been a wasted and frustrated year for the entrepreneurs and communities who have found their ability to grow and innovate stifled through the Department’s inability to present a coherent framework for growth or to stand up for their interests against other Government Departments. In all three key areas that are vital to growth—supporting the local enterprise partnerships, making the regional growth fund work properly and securing regeneration funding from Europe—the Department has been weighed in the balance and found wanting. Time and again, the Department has failed to be the Department for growth.

As long ago as last September, the Minister of State, the hon. Member for Hertford and Stortford (Mr Prisk), felt the need to write to the Secretary of State to warn of the icebergs ahead. He listed the organisations that were anxious about the way the LEPs were being set up and the failure to make them more sufficiently business-orientated and he ended by warning that

“the danger is that the CBI and others become detached from this policy heralding likely failure in large parts of England”.

Who can forget that the Secretary of State himself famously described the process as Maoist and chaotic, while the former CBI director general, Richard Lambert, simply confined himself to saying that it was a shambles?

That should come as no surprise given that in June 2010 the Secretary of State went to the Northwest RDA, praised the work that it and other agencies had done and gave them assurances, only to have to confirm their abolition two weeks later after he lost the argument with the Chancellor, who wanted them axed. It was an early example of the loss of authority and dismemberment of decision making that his Department has endured ever since. BIS Ministers allowed a decade’s worth of expertise and local know-how to be lost almost overnight. Experienced RDA staff were let go before the LEPs were up and running and at the very time when they could have provided crucial assistance.

No wonder that even the Government’s growth tsar, Lord Heseltine, who heads up the regional growth fund, has come out and said that their hasty abolition of RDAs was a mistake. Not the least of the errors was the fact that this swept away all the informal architecture and channels of connection between business, further education, higher education and small employers that had been built up to boost growth in the English regions. We saw the cost of their hasty abolition when Pfizer announced the closure of its Sandwich plant in February. The South East England Development Agency had previously been able to act swiftly with a task force to help those affected to find jobs, but this time the Government failed to use that RDA even though it still had some people in post who could have given advice.

[David Mowat]

Will the hon. Gentleman give way?

[Mr Marsden]

No, I will not because there is not time.

The Government failed to put Sandwich in the initial list of enterprise zones or to approve any of Kent’s first-round RGF bids. We saw the same pattern of help being denied initially and then an enterprise zone being hastily cobbled together when disaster struck at Derby with Bombardier and with BAE at Warton and Samlesbury. The Department is behind the curve and out of touch with events on the ground.

Back in February, the Labour Front-Bench team made six proposals to support LEPs, such as giving them first refusal on assets, providing them with start-up funding, giving them powers over skills funding, allowing them to form larger groups for infrastructure projects and giving them a central role in the delivery of funding from the European regional development fund. The Government’s response, however, was to block them from receiving assets or even acquiring them by deferred payment. It was only the broad support across a whole host of business organisations for our direction of travel that pushed the Government into a climbdown over their proposed fire sale of RDA assets.

The Government have given only limited seedcorn funding to LEPs—about £6 million for 40. That remains inadequate and the future of LEPs, especially for those without enterprise zones as growth vehicles, remains fragile. The Government have also failed to address other key measures that would empower LEPs and give them the tools to do their job—despite repeated calls for the LEPs to be given more powers. As has been warned by the Federation of Small Businesses and, more recently, Centre for Cities in its report, the Government need to get a grip of underperforming LEPs before it is too late. There are real fears that entrepreneurs and local businesses in LEPs will simply walk away if they simply become talking shops—as the Forum of Private Business has warned in its briefing today.

We have always argued on principle that money intended for the regions should remain in the regions. That is the stark contrast between our real localism and the Government’s sham localism. They preach localism but when they had the chance to give LEPs additional powers in the Localism Bill they funked it. As growth in the economy has flatlined, the Department for Business, Innovation and Skills has become progressively enfeebled as it has lost turf battles to the Department for Communities and Local Government and the Treasury.

The Department for Business, Innovation and Skills still protests that the regional growth fund will save the day but, as my hon. Friend the shadow Secretary of State has so forensically detailed, there is no more fitting emblem for its failures than the regional growth fund. Right from the start, the Department’s grasp on the fund has been feeble and flawed. In rounds one and two it was hopelessly oversubscribed, but the only response of the Minister of State was “That’s life”. Well, he should tell that to the consortia and to businesses. He should tell it to those who have had to wait an age for the cheque in the post. No wonder Andrew Neil said so memorably on “Daily Politics” to the Secretary of State for Environment, Food and Rural Affairs, “The £1.4 billion fund has so far disbursed £5.8 million. Why is your Government so useless?” How many people does the Department have working on round two? The answer that was dragged out of them through parliamentary questions was that there are only 11 full-time staff working on the fund. We can do the maths ourselves. How long will it take 11 people to work through the 119 successful bids to the second round?

Small and medium-sized enterprises, which are a key element in growth across the regions, find themselves short-changed and unrepresented on a number of the boards. They are frozen out by the Government’s thresholds of £1 million minimum on RGF funding and £5 million on the business growth fund. No wonder there is such frustration. What is more, the growth fund seems to have hardly any regional input. All the decisions are being micro-managed by Whitehall civil servants. There is no regional consultation or input and no sign that local offices will play a meaningful role in the process. With the propriety of some of their decisions called into account, the Government have pulled down the shutters on the detailed parliamentary questions that we have tabled about the process and the conflicts of interests on the advisory panel. That is not surprising, as BIS presides over a scheme into which it does not put a penny. Despite proclaiming, as he has done again today, the number of jobs that will be created, the Secretary of State has admitted that they are merely going on their own estimates.

Despite the money that the Department for Transport has put into the growth fund, the fund has failed to look at new public transport projects or build on the importance of travel-to-work areas. The Government have abandoned the active industrial policy that, in our last years in office, we pursued, and that led to the successful carbon strategy pursued by One North East. Ministers from the Department for Business, Innovation and Skills should have done everything in their power to unlock the European funding that did so much good and boosted jobs and growth across the regions, but in this, as in other areas, they have been sidelined.

Why have the Government produced the Growing Places fund like a rabbit out of a hat? Is it because even the Chancellor and the Secretary of State for Communities and Local Government have given up on the Department for Business, Innovation and Skills? Once again, there will be no BIS input in the process—only tanks on its lawn from the Secretary of State for Communities and Local Government.

England’s regions are full of people with ambitions and ideas about how to bring growth to their area, but the indecision and powerlessness shown by the BIS ministerial team has short-changed them and failed to rebalance our economy or provide a plan for growth. They have failed to stand up for the needs of local businesses, whether it is small towns in Kent or former industrial areas in the north-east. They have gone too far, too fast, in scrapping the regional development agencies and their collaborative structures, and become mangled in lost turf wars with CLG and the Treasury. They are like a rabbit caught in the headlights, petrified of the markets, but there are positive things that could be done for the fight. Roosevelt famously said that there is nothing to fear but “fear itself”, and Lincoln said that when the

“occasion is piled high with difficulty…we must rise high with the occasion. As our case is new, so we must think anew, and act anew.”

The Opposition understand that, which is we have a five-point plan for growth. We understand that young people across England’s regions are crying out for the opportunities that our national insurance changes will provide by enabling us to build affordable homes and reduce VAT to 5% on repairs. We understand the need for an industrial strategy, and we understand the need for new ideas, and then, by thinking anew and acting anew, we will save our country.

Oral Answers to Questions

Gordon Marsden Excerpts

Thursday 27th October 2011 Commons Chamber

[Vince Cable]

I think my colleague is disarmingly tempting me to commit some indiscretion here. I have been to Lotus, but we did not discuss the regional growth fund bid. It is an outstanding company, and I am certainly aware that it has put in a bid.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Well, why do we not put the bunting out? Six months after 45 regional growth fund bids were submitted, only three have got the money, so there are only 42 to go. Perhaps the Secretary of State could tell us how many people in BIS it takes to change a light bulb. However, on 17 October, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) assured The Times that due diligence on the bids had taken an average of six weeks. These bids have all been waiting six months. Will the Secretary of State tell us when the bidders will get their promised money, as all these continued growth prospects have been put at risk because his Department has been asleep at the wheel?

[Vince Cable]

I definitely think we should put the bunting out for the regional growth fund. As I explained in my first answer to this question, more than half of all these projects are now under way. Factories have been built; jobs have been created—that is what it is about. As was made clear at the outset and as Lord Heseltine made clear a few days ago, the release of funding is a later stage in the process when due diligence has been completed. Are the Labour Front-Bench team seriously arguing that we should dispense with controls over the spending of public money in the private sector? I know they did that in government, but we are not going to do it.

Oral Answers to Questions

Gordon Marsden Excerpts

Monday 11th July 2011 Commons Chamber

[Tim Loughton]

My right hon. Friend makes a very important point and, as I say, those considerations will form part of the summit that my colleague is holding this Friday. He makes the point that every child is different, and we need to ensure that we provide tailor-made careers advice that is suitable and appropriate for the child. The new arrangements will give schools far greater flexibility to make sure that they are delivering what works to the children they know best.

[Mr Gordon Marsden (Blackpool South) (Lab)]

The Minister talks about outputs, but the reality is that we cannot look at them unless there is some input in the first place. People at my local schools in Blackpool are distraught that the Department has taken away the dedicated £200 million that was supposed to go into providing face-to-face guidance. How does he expect proper provision to be delivered if he is not investing any money in the first place?

[Tim Loughton]

The hon. Gentleman will recall that funding for schools has been greatly protected, and now, by taking away the ring fences, we are making sure that schools can deliver the most appropriate, best-quality careers advice for the children they know best. That used to happen when I was at school under a Mr Herbert, although one could say that my ending up as a Member of Parliament does not suggest the best careers advice.

Employment (North-West)

Gordon Marsden Excerpts

Wednesday 6th July 2011 Westminster Hall

[Mr Gordon Marsden (Blackpool South) (Lab)]

As always, Mr Bayley, it is a great pleasure to serve under your chairmanship; I have done so on a number of occasions. I give thanks—spiritual or otherwise—for having been given the opportunity to introduce this debate, which is particularly timely given that we have just had a series of apprenticeship results and some major Government announcements on employment.

As I hope any MP would do, I want to start by singing the praises of my region and saying what it can do about employment. The north-west and its young people benefit from having a diverse, dynamic region with strong areas of sectoral employment. It is strong in manufacturing and in the service and creative industries, many of which are based in my constituency in Blackpool.

These issues are not just of historic importance. We have a proud history of achievement and innovation in industrial apprenticeships, but we also have new developments coming on stream. I particularly want to pay tribute to all the work that is being done to bring the BBC to Media City in Salford, Greater Manchester, thus building on the legacy of Granada Television. Of course, all such developments offer opportunities for young people to get not only skills but jobs in the region. The retention of young people in the region will build and strengthen our potential in the years to come.

Excellent work is being done to attract young people into fulfilling careers by a number of businesses, both large and small. In particular, I want to bring to the attention of Members today the work that is being done at BAE Systems. In my constituency, hundreds of people are directly employed at BAE and a large number of people are employed indirectly by BAE. Of course, the BAE apprenticeship scheme is frequently hailed as one of the best in the sector, because it gives young people real career opportunities that are comparable to those enjoyed by graduates.

In 2009, in my capacity as chair of the all-party group on skills, we conducted a major inquiry into progression through apprenticeships. One of the most vivid pieces of evidence was given by a young apprentice—a young man—who had actually worked for BAE at Warton. He had just completed his course and acquired a very good degree. He spoke before all the current discussion about fees in higher education and made the point that, as a result of being employed by BAE, he had come out of the system with a good degree, which would enhance his career prospects within BAE and without incurring the debt that some of his school contemporaries had incurred.

Of course, in the Blackpool area, we also have the nuclear skills complex, or academy. Again, it would be fair to say that, after a number of years of quiescence, the ability of that academy to take on young people has expanded. That is important to people in Blackpool, because a number of our people have been employed at the Springfields nuclear site.

I pay tribute to the National Apprenticeship Service in the north-west for working tirelessly to encourage businesses to take on apprentices and to encourage young people in the north-west generally to consider the options offered by apprenticeships. In 2009-10, more than 20,000 young people in the north-west started apprenticeships, and more than 500 of them were in Blackpool.

As MPs, we see the importance of apprenticeships most vividly when we go to particularly successful companies in our constituencies. Last week, I had the privilege of visiting a company called Ameon, which is a major construction-based business on the edge of my constituency in Blackpool. I quote from The Blackpool Gazette:

“The firm, which boasts a turnover of more than £20m, has created six new electrical apprenticeships…awarded to teenagers from Blackpool and Manchester”.

While I was at Ameon and talking to its very dynamic managing director, Robin Lawson, I was introduced to two young men who had been employed by Ameon and who had just completed their part-time degrees at the university of Central Lancashire. Again, those young men had gone through that system without incurring debt.

Of course, the north-west also benefits from a vibrant collection of universities, further education colleges, schools and sixth forms, including many in my own area. I pay tribute to the North West Universities Association for its sterling work in establishing the link between schools and universities.

As many north-west MPs know, there are also many excellent schemes that can offer young people opportunities to train and learn on the ground. For example, there are opportunities with some of the local volunteering teams. I found myself working on such an initiative with the Blackpool Circus school—a school that is very appropriate for Blackpool. Those teams help many young people into volunteering and training opportunities. The Get Started unit in Blackpool, which was funded by the local enterprise grant initiative established by the previous Government, has helped many young people in Blackpool into jobs and careers. Many of them work for small businesses or have become sole traders.

Like many local newspapers, my own local newspaper—The Blackpool Gazette—launched a campaign earlier this year to find 100 apprenticeships in 100 days. I was very pleased to attend the launch of that campaign and the newspaper achieved its target.

Those are all good things, but it would not be reasonable if I did not say that there are big problems in the north-west, particularly for young people in the region who are looking for career opportunities. Many local authorities in the north-west were hit with a double whammy in the cuts programme: first, the cuts last year in area-based grants and, secondly, the general comprehensive spending review cuts, which hit the north-west particularly hard. Area-based grants were historically used—certainly in my own local authority—to support youth work schemes and the voluntary sector. As a result of the cuts to those grants, the position is now nigh-on catastrophic.

On top of the cuts to area-based grants, there has been an 80% cut in the teaching grant in higher education and a 25% cut in capital funding for further education over four years. Again, those cuts could put severe pressures on schemes and training opportunities for young people.

The most striking and difficult change has been that in the all-age careers service. The Minister will know that I have paid tribute to him on previous occasions for the work that he has done on that service, so I hope that he will not take amiss what I am about to say; I say it not to him but to the Department for Education as a whole. As a result of removing the potential—not the actuality, but the potential—for face-to-face advice and closing off the vocational route for many people, I believe that there will be severe difficulties.

In Blackpool, as in many other places, the Connexions team has already been halved as a result of the budget reduction caused by the cuts programmes that I have talked about. I will just give some statistics on the effects of those cuts: £2 million was taken out of the budget by the outgoing Conservative administration in Blackpool earlier this year, which was a 50% cut; there was a 46% cut in full-time youth workers; a 48% cut in part-time youth workers; a 59% cut in Connexions posts in schools and colleges; and a 61% cut in posts for people working with young people not in education, employment or training. Of course, none of those cuts is exactly good news for young people and their careers.

In its 2009 report, the all-party group on skills highlighted the importance of quality information, advice and guidance to help young people towards vocational routes. That importance was also recognised in the Department for Children, Schools and Families “Quality, Choice and Aspiration” report, with which my hon. Friend the Member for Hartlepool (Mr Wright) was closely associated when he was in government. The Department for Education said in the past that it would, in principle, provide £200 million for careers provision via Connexions funding, but that funding seems to have vanished from the new service.

In June 2011, the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) responded to a written parliamentary question that I had submitted. He stated:

“The Department for Education is providing funding through the Early Intervention Grant to support access to impartial careers guidance for young people in the academic year 2011-12.”—[Official Report, 7 June 2011; Vol. 529, c.56-57.]

However, the Department’s website says that the early intervention grant is there to fund Sure Start centres, free child care for disadvantaged two-year-olds, short breaks for disabled children and targeted support for families with multiple problems. One is bound to ask just what will be left for careers provision after the money has been divided between all those worthy causes. I hasten to suggest that it is not the loaves and fishes fund, and I do not think that Ministers have yet demonstrated the ability to walk on water, so in both those respects the Department needs to look carefully and rapidly at the negative implications of the current situation.

The axing of the education maintenance allowance will also be a serious blow to young people right across the north-west. I met with young people from my constituency who came down to Westminster to protest against the abolition of the EMA, and they echoed the sentiment that I am sure many of my colleagues throughout the north-west have heard: the allowance was vital in that it gave them the opportunity to stay on in education. A survey that I conducted in local colleges showed that half the respondents felt that losing their EMA would affect their future plans, and I know from meetings with people at Blackpool and the Fylde college and with students in the sixth-form college that the potential the EMA offered was really valued. It remains to be seen whether the replacement that the Government have put in place will be adequate for purpose.

The Government decided not to continue the future jobs fund, despite having indicated before the general election that they might do so, and despite enthusiasm for the scheme. I saw in my constituency how well the scheme worked, with innovative placements such as a group of young people being given apprenticeship roles at Blackpool football club. I am not passing judgment too soon I hope, but it remains to be seen how such proposals will work out via the Work programme. The Government have not yet, it seems, got a handle on how to tackle the growing problems of youth unemployment, particularly in the north-west.

I want to turn to apprenticeships, because despite the positive progress being made—again, I pay tribute to the work being done by all concerned—there remains in the north-west a lack of apprenticeships for young people. The head of the National Apprenticeship Service himself admitted at a recent conference that there remained a chronic lack of apprenticeship places for school and college leavers. However, it is, of course, a question of pull as well as push. There can be apprenticeships—indeed, the Government have increased the number of places—but the question is: how will they be filled?

A City and Guilds survey at the beginning of this year showed that 31% of businesses in the north-west felt that in the current economic climate it was too risky to take on apprentices. That was the highest percentage among the English regions. At a time when the Government have ended the future jobs fund and the previous Government’s guarantees on opportunities for 16 to 24-year-olds, there is a real danger of young people being nudged away from training and from investment in their careers.

Meanwhile, the Secretary of State for Education has been distracted—that is the kindest word to use—over the micro-management of schools and has allowed a crowded and confused marketplace to surface for young people, with academies, free schools, studio schools, university technical colleges and free colleges all jostling in the mix. Is that not a distraction from what should be our clear goal of providing good quality vocational education to those who wish to take it up? How does that haphazard environment fit in with Alison Wolf’s recommendations to the Secretary of State on improving vocational employment? The Government need to strengthen and make clearer their plan to promote apprenticeship take-up, with a much stronger emphasis on work-based learning.

On the use of the voluntary sector, I can cite examples from my own constituency. Volunteer groups are involved with Stanley park. Army cadets play a major part in the organisation of the armed forces and veterans weeks. Fantastic work with disadvantaged young people is being done by the Prince’s Trust and the Lancashire fire and rescue service—again linked with Blackpool football club. All those initiatives provide tasters that offer young people pointers and other outlets for their careers; but ultimately, we have to get right the structures for that process and for that progression to apprenticeships or to whatever career option. University technical colleges might well have a role to play in that, but it is important that we have clarity.

The Association of Colleges just yesterday produced a booklet entitled “Sticks & Carrots: Will Every 16 and 17-Year-Old Stay in Education or Training?” It rightly draws attention to the four things that are key to the policy being best implemented:

“Consistent and sufficient funding…to help Colleges and other education institutions support those who stay in full-time education… Good and appropriate careers advice—

which—

“requires the support of Ofsted and teachers in order to create rigorous standards for Information, Advice and Guidance… The right learning opportunities - We should not assume that all young people wish to stay in ‘academic’ education”.

The final key thing mentioned is financial support and transport, which picks up the point I made a few moments ago.

It is also important to take note of what the report says about the take-up and supply of apprenticeships. It states that the majority of new places have been for adults between the ages of 18 and 24, and that fewer than 5% of 16 and 17-year-olds are apprentices.

We need stronger pathways for work-based learning for young people in the north-west. Much more can be done, and is being done, to promote such work-based training, and I want to refer briefly to the work of the Manufacturing Institute, which is an independent charity founded by north-west manufacturers and universities. The institute’s “Make It” campaign has been working with some 20,000 young people across the north-west, and its partners include Jaguar Land Rover, Siemens, Tetra Pak and James Walker. It aims to give young people in schools and colleges a taster experience, and in the past year, eight enterprise challenge days were sponsored by manufacturing partners and a further three days held in partnership with Education Business Solutions in Manchester high schools.

There are good things going on, but the message needs to go out from the Government to young people in the north-west that vocational education and qualifications are truly valued by them. I am afraid that the hoo-ha around the Secretary of State’s English baccalaureate and the critical comments by Government Members about vocational education have not entirely helped in that respect. The Government need to listen and to get the various agencies to engage with schools more, to give them practical assistance to promote face-to-face encounters and instruction and also some funding, otherwise this will end up like the freedom to dine at the Ritz. The Government need to look thoughtfully at what Wolf says about matching work-based learning to far more partnerships with the voluntary sector and schools.

We need to ensure that teachers understand more clearly what vocational educational routes are out there. Sadly, much of the research and many of the surveys that have been done show that there is still a long way to go in persuading many teachers that a vocational educational route is right for their students. That is especially true in places such as the north-west. We have three types of area challenge. City regions such as Manchester and Liverpool have strong and persistent NEETs levels and skills shortages alongside ambitious regeneration plans. In peripheral seaside and coastal towns such as Blackpool, transients—young people coming into and leaving the town—are key in terms of skills levels. We also have second-level towns and in-between areas, which will not necessarily benefit from the critical mass of jobs and opportunities in the travel-to-work areas. All those areas must have progression and links.

Tony Blair talked about “education, education, education”, but I believe that our watchwords—the Minister has already heard this, so he will have to forgive me—should be “progression, progression, progression”. Our young people in the north-west must be equipped for a working life in which they will change jobs or careers probably four or five times. The situation was not like that for my father, who signed up as an engineering apprentice just before the second world war at the age of 14 with the famous engineering company Crossley and was told by my grandfather that he would have a job for life. Young people will have to be adept at picking up bespoke skills on the job and acquiring the enabling and personal skills that will ease subsequent transfers and take them toward opportunities that include self-employment as well as working for traditional large employers.

To address all that, we need not just proper resources but a proper strategy for progression. So far, the Government have done too little to make those links and enable our young people and their talents to stay in or come back to the north-west. Joined-up pathways to career opportunities will be key to a combination that will enable the north-west’s young people and economy to enjoy the fulfilment, dynamism and achievement to which its history points it.

Oral Answers to Questions

Gordon Marsden Excerpts

Thursday 9th June 2011 Commons Chamber

[Mr Prisk]

My private office might be less than happy if I suggest I should visit, so I probably should not, but I can say that it sounds like an important bid. It also sounds as if improvements were needed for the second round, and I encourage the applicants—perhaps accompanied by my hon. Friend—to talk to the RGF team so that they can hone their bid and the spa can be successful in the future.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Has not the regional growth fund story so far been one of too far, too fast, with the RDAs scrapped and funding shredded by two thirds? Now it is too little, too late, as local enterprise companies have been denied RDA assets or proper bid resources, in whole areas of England small businesses have been excluded from a 10-times oversubscribed first round, and no extra money has been put in the budget—we would have given £200 million more from a bankers’ bonus tax. The rejection letter that nine out of 10 RGF applicants received from the Department told them that they could

“request limited feedback on your unsuccessful bid”.

What new limited feedback will the Minister’s officials have for those missing out this time?

[Mr Prisk]

I have already spelled out to the House the opportunity for prospective bidders to make applications to renew their bids, and they are doing that now. I am sorry that the hon. Gentleman thinks that that does not have any merit. It is fascinating to be criticised by the Opposition for going too fast. The first round was successful, and we levered in some £2.5 billion of private sector investment—a 5:1 ratio on public investment. If the Labour party is not happy with that, it needs to re-examine its priorities.

Apprenticeships (Small Businesses)

Gordon Marsden Excerpts

Thursday 9th June 2011 Westminster Hall

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Davies. I begin by congratulating, and not just in the customary way, the hon. Member for Gloucester (Richard Graham) on bringing an extraordinarily important subject to the Chamber today. His speech had depth and breadth; it was extremely expansive and dealt with many of the most important points. It is inevitable that the general approach we take to apprenticeships is concentrated on the challenge we face in dealing with apprenticeships in small and medium-sized businesses. Whether we call them micro-businesses, sole traders or people who are starting out on their own, the issue is magnified in that area. The hon. Gentleman has therefore done the House and the Chamber a service by the breadth of his remarks.

The hon. Gentleman talked about apprenticeships not being to do with manufacturing alone, which is true, and under the previous Government that diversification of apprenticeships, which is continuing, was important. The current Government have inherited that rising curve in apprenticeships, taken by the previous Labour Government from a base of 65,000 in 1997. The occasion is not one for trading loads of statistics or being partisan, but it is incumbent on Members to remember that the abolition of Train to Gain released to the present Government a significant amount of money, some of which they have chosen to use in the expansion of apprenticeships, which we welcome. The challenge for all of us, in whatever position, is to ensure that the expansion of apprenticeships is a success and continues.

It is important to look at the elements of policy continuity and, in particular, I pay tribute to the Minister for how he and his colleagues have continued to support Unionlearn. The routes into apprenticeship are many and varied, and we have heard today about some of those ways and how some can be improved. Undoubtedly, one of the best ways of persuading people into apprenticeships or taking up skills at whatever age is the support, endorsement and encouragement of their peers. In that respect, the work of Unionlearn has a great deal to teach us, whether or not we are talking about unionised environments. In the same way, many of the contributions this afternoon, in particular the last one, have stressed the need for such a process to be understood across the board.

The challenge we face is the one given to us by the Federation of Small Businesses, with figures on numbers and take-up that people have quoted in some detail today. Small businesses are crucial to growth. The hon. Member for Gloucester talked about that, and about the importance of taking on GTAs. He and other Government Members were somewhat sceptical about the former future jobs fund, but although we live in a three-minute universe, they ought to remember that their own Chancellor announced in the Budget earlier this year what some of us might regard as a pale imitation of the future jobs fund. We wait to see how that carries through. The hon. Gentleman made a valuable point at the end of his speech about incentives. I was particularly interested in the idea of the graduation of incentives over a three-year period, which many of us are familiar with from commercial practice, not least in hiring builders, and there is a lot to be said for that.

I congratulate other Members who spoke this afternoon. The hon. Member for Burnley (Gordon Birtwistle) talked about the importance of peer endorsement in apprenticeships and about the problem with skilled manual workers. Again, that is not a new problem but one flagged up by successive Select Committees, and it was a key issue in the Leitch report, to which all parties subscribed.

The hon. Member for Nuneaton (Mr Jones) raised issues about the careers service and the exposure of young people to the working environment, which is also important. Again, it is not a new issue. Some years ago, when I was a member of the Education and Skills Committee, we went to two places in the United States to look at training in schools, in Boston and North Carolina, which had good examples of training in units in a secondary school. In such a unit in North Carolina, most of the young people—very much from a blue-collar background—subsequently got jobs with the Bell Telephone Co., which had sponsored the unit. There are some lessons for us in that, with interesting echoes in such ideas of recent years as studio schools or the university technical colleges, of which Lord Baker has been such a strong advocate.

I was delighted to hear the contributions of the hon. Members for Wyre Forest (Mark Garnier) and for Bradford East (Mr Ward). The hon. Member for Wyre Forest was particularly interesting and illuminating on his experience with the space company, which, in terms of where apprenticeships can take someone, I have found replicated in my own neck of the woods; a large number of people in Blackpool work for British Aerospace in one capacity or another. His reminder that it is a good idea not to make a false comparator—either apprenticeships or universities—was valuable. Whatever the value of higher level apprenticeships in their own right, we ought to be putting far more emphasis on ensuring that universities accept and look at vocational qualifications, and take themselves through to that level.

It is always a great pleasure to hear the hon. Member for Bradford East, who is extremely knowledgeable and passionate in this area. I was glad to hear what he had to say about his experience of the future jobs fund. It is true that in many areas it was not simply public sector-led. The statistics for my area of Blackpool mirrored those given by the hon. Gentleman. I vividly remember visiting Blackpool football club where six young people had been taken on under the future jobs fund, giving a similar success story.

I make one more point lightly and in not too partisan a fashion: I hope that hon. Members will see that the previous Government never made a commitment to or objective of 50% of young people under the age of 30 going into university education. If we look at the detail, we see that it was about some form of training or further or higher education. I make that point and pass on, but I am proud of the work that the previous Labour Government did to bolster apprenticeships and the apprenticeship system, making them an attractive option for businesses of all sizes. As I said, the results speak for themselves.

We set up the National Apprenticeship Service in 2009, as a national body playing a key role in overseeing the apprenticeship programme, providing information to potential apprentices and helping to match them with employers. We also introduced national apprenticeship week. It is a pleasure to hear today from so many Members that they have taken advantage of the hook of that week—throughout the rest of the year as well—to promote apprenticeships in their own constituencies. It is a good opportunity for doing that.

In my constituency, in February this year, my local Blackpool newspaper, The Gazette, sponsored an apprenticeship drive across the Fylde. I spoke at the launch of the drive and supported it, and it reached the sort of target figures of 100 to 150 apprenticeships, to which reference has been made. In my work as a Member of Parliament, I have seen the success of apprenticeships not only for very large companies such as BAE Systems, but also for small and local organisations. The Blackpool Pleasure Beach has taken on a number of apprentices successfully, as have many construction firms, or the dental practice in my constituency that I visited this year, which has just taken on two apprentices.

Sometimes it is not easy for a Government of any hue to persuade small and medium-sized businesses to look at apprenticeships. I know that from my own experience of running a small business with eight employees for 12 years before I came into this place. I know, as no doubt do many hon. Members who have spoken, about the multiplicity of factors and pressures on small businesses when they are trying to decide what to do: cash flow, marketing, promotion, lease arrangements. The list gets longer every year.

Of course there must be a receptive environment for small businesses to take on apprentices, and they must believe that it is worth expending the time, but that raises big issues about the structure of apprenticeships, and whether they are sufficiently structured to be useful to and easily accessible by small and medium-sized businesses. I do not want to be misunderstood. I am not suggesting that we abandon the traditional apprenticeship structures to which the hon. Member for Bradford East rightly referred.

My father undertook a traditional apprenticeship for a large company, Crossley Brothers, which is sadly now less well known than it was. It was a major factor in the engineering world certainly into the 1960s, and to the present day. Such apprenticeships have their value, but we must also consider the new type of apprenticeship. There are big decisions to be made and discussions to have about the value or otherwise of a modular approach, about delivery of apprenticeships on the job rather than outside at a further education college, and so on. Such matters must be taken into account when considering what benefits will encourage small businesses to take on apprentices.

Despite the Government’s announced additional investment in apprenticeships, many businesses still believe that there are major deterrents. A City and Guilds survey—I was at its launch during national apprenticeship week earlier this year—showed that 80% of employers still believe that there are barriers to hiring apprentices, and one in five believe that the current economic climate makes it too risky to take on an apprentice. A couple of other statistics are relevant to what hon. Members have said today. Just under half of employers would be encouraged to have an apprentice if more Government funding were available per apprentice—whether that would be a deciding factor, of course, is always the key question—and 26% wanted the recruitment process to become simpler and less time-consuming.

Those statistics are interesting, and have been supplemented recently by a major survey of 500 employers across the board, not just SMEs, by the Chartered Institute of Personnel and Development. Its findings are interesting and specific, and slightly contradict what City and Guilds said, because they showed that two thirds of those not offering apprenticeships reported that it was inappropriate for their organisation. Again, the point about how to market apprenticeships and present them to companies comes to mind. One in six said that they were not offering apprenticeships because of a recruitment freeze, budget restraints or the economic climate. Interestingly—I am not saying that one side or the other has the last word—less than 5% said that they were put off by too much associated bureaucracy or insufficient public funding.

Whatever the case, major challenges must be overcome. It may be relevant to the example about the value of soft skills—I do not like referring to soft skills because that may suggest that they are not important; I prefer to call them enabling skills, but that is a matter of nomenclature—that the CIPD survey showed that apprentices were rated highly for enthusiasm, work ethic and presentation, but that their creativity, innovation, initiative and customer service skills were less impressive. There may be some messages there about the school system.

The statistics from the Federation of Small Businesses, as many hon. Members have said, are worrying for the reasons that have been described. It is particularly valuable that the FSB not only provides such data, but regularly monitors attitudes and feedback from its membership. I understand that the latest report is due out tomorrow, and it will be particularly interesting given the current fluid nature and uncertain prospects for growth. Similar statistics came from the CBI/EDI educational skills survey, which was published last month. It showed that apprenticeship growth is increasingly concentrated in large companies.

That is on a par with the Government’s need urgently to consider tailoring apprenticeships better towards the need of SMEs. It is a two-way process, which the Government must take on board and, with the National Apprenticeship Service, be alert to the changes and modifications that employers report. They must allow employees to complete the course-based elements of their apprenticeships. I do not exempt further education colleges from that process because, certainly in my neck of the woods, it is important, particularly when bringing in people who must do a lot of juggling with their work-life balance, that delivery of off-job apprenticeship course work is as close to their work or living place as possible.

[Laura Sandys]

I was pleased to welcome the Minister to my local further education college, Thanet college, which has been extremely helpful and important to me in the recruitment of an apprentice I have just taken on. FE colleges are embedded in their communities, and play an important role as ambassadors for the apprentice system. They support employers who may not understand the system effectively. Does the hon. Gentleman agree?

[Mr Marsden]

I absolutely agree. In my neck of the woods, Blackpool and The Fylde college has done sterling work in that area. There is sometimes an issue about colleges understanding the need to deliver some of their training closer to the workplace if possible and closer to the living space if possible of the people they are trying to reach.

[Mr Hayes]

indicated assent.

[Mr Marsden]

I see the Minister nodding, and I suspect that as he represents a rural constituency he understands such issues.

The process is a two-way one, but the Government must consider the unintended consequences of their decisions elsewhere. In their hasty abolition of the regional development agencies, many of the bodies that oversaw local skills and employment policies were swept away. The new local enterprise partnerships have no powers in those areas, as skills policy remains under central control from Whitehall.

The Federation of Small Businesses and other business organisations have been critical of the Government’s failure to give local enterprise partnerships the tools to do the job. Included in that is the concern of the Federation of Small Businesses that there are not enough representatives from small and medium-sized businesses on local enterprise partnership boards. Allowing them to have a greater voice is important in terms of real input in tailoring and structuring skills policy locally, and that includes apprenticeships. Indeed, by their nature, small businesses understand the life-changing impact of apprenticeships, and how that must be balanced against day-to-day needs. We must remember that although much has been said, rightly, about the challenge of youth unemployment, we also face the challenges of demographic shift in the next 10 to 15 years, the projections in the Leitch report, and the particular needs of work-life trade-off if we are to attract older people to become involved with apprenticeships. That includes women in particular. There are impressive models from organisations such as B&Q and British Gas, but we need to see how those good practices can be replicated to their counterparts in small business.

Finally, I want to look at pre-apprenticeship preparation, which has been mentioned by one or two hon. Members, and in particular by the hon. Member for Bradford East in the context of the first job agreement—the FJA. Information, advice and guidance is crucial to inform people about the opportunities provided by apprenticeships, and if young people do not get such advice, SMEs may be deprived of many suitable candidates. It is vital that the Government have a framework that can deliver quality information, advice and guidance. In truth, however, there are still real problems with the new all-age careers service.

I know that the Minister has done his best to take forward such issues in the Department for Business, Innovation and Skills. Nevertheless, to echo earlier remarks, the Department for Education remains singularly unfocused on the need for financial support and for the necessary information, advice and guidance to be provided face to face. I urge the Minister to press his colleagues further on that.

What proposals does the Minister have to monitor completion rates more effectively? What conversations are his officials having with organisations responsible for qualifications about the balance between modular and more traditional structures for apprenticeships? Such things will be key in determining the attitudes of small businesses when taking on apprentices. We all agree that apprenticeships have a very real worth for businesses and apprentices, but the Government must recognise that one size does not fit all. If SMEs are to help lead sustainable economic growth and recovery, they must have the tools to achieve it. We must ensure that apprenticeship frameworks and mechanisms are accessible to all the small businesses that hon. Members have quite rightly praised today, and not only to the big companies that have the money and resources to take on apprentices.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is an immense pleasure to serve under your chairmanship, Mr Davies, and it is always a pleasure to speak opposite the hon. Member for Blackpool South (Mr Marsden), who presents his case with typical flair and fairness.

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate. Over the past year, he and I have had a number of discussions about apprenticeships, and whenever we have done so, he has shown a commendable interest in and enthusiasm for the subject. He has also brought to my attention a series of ideas, reflected in his opening remarks today, about how we can further our policy to expand the number of apprenticeships available. I had the pleasure of visiting Gloucester rugby club with him and taking part in an apprenticeship fair that he had helped organise. It was a splendid occasion, and I know that he plans to take that forward with a number of similar events in his constituency that will be targeted at under-represented groups. Such work is highly commendable.

I am grateful to all hon. Members who have contributed to the debate. As the hon. Member for Blackpool South said, many interesting points have been raised, and I shall try to address as many of them as I can in the time available—I have rather more time today than Ministers usually have when responding to such debates, which is welcome.

To place my remarks in context, let me stress to hon. Members that—make no mistake—apprenticeships are a flagship policy for the Government. It is true that the previous Government made progress on apprenticeships, and I shall say more about that in a moment. It is equally true, however, that apprenticeships have never been more central to public policy than they are today. The programme to build more apprenticeships in Britain than ever seen before in our history is supported by the Prime Minister, the Chancellor and all Ministers with responsibility in the area. That is not merely rhetoric—though I have nothing against rhetoric—and it is illustrated by the fact that, despite financial constraints that were, it is fair to say, unusual in their severity, over the current spending period the Government have dramatically increased the funding available for apprenticeships.

The hon. Member for Blackpool South was kind enough to acknowledge that one of the first things that I did on entering the Government was to transfer £150 million of deadweight Train to Gain funding into apprenticeships to fund an additional 50,000 places.

[Mr Marsden]

But what happened to the rest of it?

[Mr Hayes]

I will come to that in a few moments. When I announce the details of the statistical first release to the House at the end of the month, I am confident that they will show substantial progress and achievement. As hon. Members will know, provisional data already in the public domain suggest that we have made remarkable progress, despite the difficult economic circumstances in which, as has been said, some firms might not usually be expected to consider training or employing new staff.

The commitment that I have articulated was confirmed in the Budget, when the Chancellor announced a further £180 million of funding for apprenticeships. That will enable us to create 40,000 places for young unemployed people, taking them from disengagement to re-engagement, and an additional 10,000 places for advanced and higher level apprenticeships that are focused on SMEs.

The work that I am doing with the Department for Work and Pensions has been mentioned. To an unprecedented degree, I am working with my colleagues to ensure that the welfare reforms being introduced, and particularly the Work programme, marry with the work we are doing on training, skills and apprenticeships. It is important that the 100,000 additional work placements that have been secured have a close relationship with subsequent training and that the system is progressive. The experiences that people gain as they move from disengagement to re-engagement should lead to further learning and training and ultimately to work.

[Mr Hayes]

Even a Minister as confident as I am would not wish to disagree with my hon. Friend, because he is so highly regarded both in his constituency and in the House. None the less, I must say in fairness that the previous Government made progress on completions—I do not like to say things in the House that I cannot say with candour. Although it is true that completions, both under the previous Government and this Government have posed a challenge—as described by the hon. Member for Blackpool South—considerable progress was made by the previous Government. Furthermore, to be ever more generous and even more self-deprecating, let me say that it will be a challenge for us to maintain completion levels as we expand the programme. One risk of a rapid expansion in apprenticeships is that we will need to be careful about starts and completions. As more people are drawn into the system by the energy that we invest and the resources we provide, unless we are careful, there is a risk that the number of completions will suffer. As has been suggested, I am working closely with my officials and we must monitor the situation through the NAS and look at what measures we can put into place to ensure completions.

I do not want to move too far from the main thrust of my argument, but one such measure might be to look at outcome payments for large apprenticeship providers—in other words, to work with those large providers and ensure that payment is made on completion. I am in discussion with a number of major national companies that are extremely interested in engaging in such a system, and we will pilot such a scheme with a number of significant apprenticeship providers. That is one of the things that we can do with regard to completions, but my hon. Friend the Member for Nuneaton was right to draw that issue to hon. Members’ attention, as was the shadow Minister, the hon. Member for Blackpool South.

The difficulty for me in all this is that I have invested a considerable amount of my political reputation on the basis that we will indeed create such numbers of apprenticeships. That might be described as a bold move. The shadow Minister and possibly others would be disappointed if I was not poetic at some time in this speech—I was going to say “performance”, but I do not want to undersell myself—and it was Ezra Pound who said:

“If a man isn’t willing to take some risk for his opinions, either his opinions are no good or he’s no good.”

The risk that I have taken in respect of my opinions is indeed the risk about our endeavours to grow apprenticeship numbers dramatically, but we have to take such risks if we believe that something is right, as Pound suggested, and I do believe that this is right for reasons that I shall detail as I respond to the debate.

[Mr Marsden]

Will the Minister give way?

[Mr Hayes]

I will happily give way. Is the hon. Gentleman going to quote Pound?

[Mr Marsden]

The Minister will be relieved, possibly, or disappointed to hear that I have no intention of swapping literary quotes with him. Before we lost the thread of the previous useful exchange with the hon. Member for Nuneaton (Mr Jones), I wanted to ask the Minister whether part of the consultations or part of the consideration of how we make progress on completions will cover whether certain structures of apprenticeship cause more problems between start and completion.

[Mr Hayes]

Yes, I think that there will be consideration not only of structures, but of whether there are sector-specific problems, whether there are problems with certain kinds of apprenticeship and frameworks and whether there is an issue about different ages of apprentices. The hon. Gentleman will know—indeed, the whole House knows—that we are focusing, as I described earlier, on apprenticeships as a means of re-engaging people who are disengaged. The hon. Member for Bradford East (Mr Ward) described the length—and I might say the difficulty—of the journey that some people make to re-engagement. It is a tough set of challenges for people who were failed by the system first time round. Sometimes, the path to the destination that they seek and we seek for them will be relatively stony. Small bite-sized chunks of learning, delivered in a way that is highly flexible and accessible, are often the way of dealing with that, and we may well need to consider structure in that context.

The hon. Member for Blackpool South will also know that I will announce in the autumn progress on our access to apprenticeships policy. We recognise that many young people in particular do not have the prior attainments necessary to begin even a level 2 apprenticeship. We need to create a ladder for those young people, so that they can acquire the core skills necessary for them to progress subsequently to further training and employment. He is right to say in that context that the form, character and pace of learning need to be appropriate to the circumstances of those learners.

The net effect of the commitments that have been given by the Government is, I believe, that we will create more apprenticeships than ever before in this country. To put that in firmer terms, as the Prime Minister himself has said, we expect to create 250,000 more apprenticeships during the lifetime of the spending period. That will constitute extraordinary growth in the number, compared with what Labour projected. We expect to exceed the previous Government’s target by 250,000. That is extraordinary, unprecedented growth in the number of apprenticeships.

There has never been that kind of growth in this country. However, there are precedents elsewhere. Meeting my French counterpart some time ago, I was interested to learn that the apprenticeship system in France has metamorphosed in the last 20 or so years. The French apprenticeship system was in the doldrums 25 years ago, but the concentration, investment and commitment of successive French Governments have meant that France, like Britain now, sees apprenticeships as critical to delivering the skills necessary to build a competitive economy. Therefore, we know that that can be done with political will and determination, backed by resource.

I have said on many occasions that practical skills and those who learn them remain scandalously undervalued in our society. It has been said in the debate that many people, including some employers, still view apprenticeships as somehow not quite good enough. That is partly about careers advice and guidance and the perception of the routes available, particularly to young people. The matter was raised by the shadow Minister and others, including my hon. Friend the Member for South Thanet (Laura Sandys). By the way, I was delighted to join her in her constituency when I visited Thanet college. I will take this opportunity to say that the work that that college is doing with Canterbury Christ Church university is extraordinarily important in developing a practical route to higher learning for many of the constituents whom my hon. Friend so competently represents.

The advice and guidance that people receive will shape their choices about the learning and employment routes that they take. One should not underestimate the influence that that advice has, particularly on young people, as I said. The truth is that people such as us are particularly advantaged in those terms, or at least our children are. The familial networks and social contacts that my children enjoy will mean that they get pretty good advice about the options available to them at school, college and university and in work. That is not true of the very large number of people who do not enjoy those familial and social contacts. Professional advice and guidance are very important in rebalancing the quality of the advice that is available to those who are most under-represented in higher education—those who start with the most disadvantages.

On that basis, I am determined to develop an all-ages careers service, as hon. Members know. That service will bring together careers professionals to a degree that has not been known previously, with a common set of professional standards and training and consequent accreditation, to deliver high-quality, independent and empirical advice and guidance, including advice and guidance on vocational learning options and practical and technical jobs.

It has been said in the debate—I think that it was said by the hon. Member for Bradford East, my hon. Friend the Member for South Thanet and other hon. Members—that the advice given in schools is often inadequate. It is fair to say that it is patchy. Some schools do this rather well; many do it less well. However, what characterises the advice is that it is usually prejudiced by the academic experience of the person offering it. It is a big ask of teachers to be excellent pedagogues and also experts on every kind of career option. It seems to me to be much better for schools to secure independent advice. That is why the Government are putting a Bill through the House—it is progressing from the Commons to the Lords as we speak—that will put a statutory duty on schools to secure just such advice. There will also be unprecedented professional competence.

I am pleased to say, as I hinted teasingly at Question Time in the House earlier today—actually, it was the Secretary of State who revealed it—that we will be working with the Department for Work and Pensions to co-locate the national careers service in Jobcentre Plus from this autumn. We will pilot that process and then have a speedy roll-out. The national careers service, with separate branding, will be available to people in Jobcentre Plus, offering the very kind of empirical advice that I have described. In addition, I will hold discussions with representatives of colleges to consider co-location in our network of further education colleges.

As well as that, I am considering how funding can be provided in a way that incentivises professionals in the careers industry to be bolder and to reach out with a new commercial zeal—of course, the independent advisers are businesses, too—to provide quality advice. That will make so much difference, particularly for those who do not usually get good advice from elsewhere.

I shall say a little more about the perception of apprenticeships and practical learning. We too often undervalue vocational competence. Practical skills and craftsmanship remain objects of admiration for most Britons, but not so among the chi-chi class, the glitterati and the chatterati, who see practical skills as somehow beyond their scope or their understanding.

The Government’s will reflects the people’s will in this, and I am determined, not merely because it is essential for economic purpose but because it is right socially and culturally, to ignore the overtures and shrill complaints of what I might call the haute bourgeoisie liberal establishment—I do not mean the Liberal Democrats, of course; in this context it is liberal with a small l—and make the case for practical vocation and technical learning and practical vocational and technical competency. We must once again value craft. We must elevate the practical.

Part of this concerns the aesthetics of apprenticeships. During adult learners week, I was able to announce a range of measures designed to raise not only the status of apprentices but their self-esteem and the worth that apprenticeships confer. Those measures include the introduction of graduation ceremonies to give public recognition of apprentices’ successes and the creation of alumni networks to allow former apprentices to stay in contact and continue to exchange ideas and experiences.

My hon. Friend the Member for Harlow (Robert Halfon) made a convincing case for a society of apprentices, and we shall look closely at that. I very much welcome my hon. Friend the Member for Gloucester’s acknowledgement of the importance of celebrating apprentices and their achievements, and that was reflected in the comments of the hon. Member for Burnley (Gordon Birtwistle). Hon. Members will be glad that, later this month, the national apprenticeship awards, which I shall attend, will celebrate the achievements of apprentices and employers from all over the country.

I turn now to some of the specific raised by my hon. Friend the Member for Gloucester. He said that small and micro-businesses take on apprentices not only to drive up growth but to drive down youth unemployment. He is right. Apprenticeships are good not only for growth but for re-engagement in the economy and for social mobility, social cohesion and social justice. You know as well as any Member, Mr Davies, that social justice, in the spirit of Disraeli, lies at the very heart of Conservatism.

My hon. Friend asked for recognition of the fact that, for many reasons, including business confidence, recruiting apprentices is a challenge for small businesses. I recognise that, and I assure him that I am in no way complacent about the work that must be done to meet that challenge. That is why I have asked the NAS to report to me regularly on the progress that it is making, particularly in that field. We are constantly pushing to do more.

My hon. Friend sought a commitment that we would consider ways to increase small business take-up, possibly through group training associations and apprenticeships training agencies. The Growth and Innovation Fund will allow the development of more GTAs and ATAs. I cannot say too much about that, because the bids have not been considered yet and the results have not been announced. However, my hon. Friend will be pleased to know that a large number of applications relate to the areas that he has mentioned. I am a keen supporter of the GTA model, and I am carefully considering how, and in what circumstances, we might see further role-outs of that model to reduce the burden on small employers of taking on an apprentice.

My hon. Friend spoke about providing some form of incentive to small employers to take on an apprentice that have not done so before. He will be aware that he echoes the observations that Alison Wolf made in her report to the Department for Education on vocational education. She recommended that targeted subsidies should be issued to some employers in some circumstances. Although I cannot confirm any details today, I am not unsympathetic to that view. That will not come as a surprise given that it was in the Conservative manifesto, which I wrote before the election—I must say that I wrote that part, not the whole of it.

Had economic circumstances been different, and given that the coalition partners share a view on the matter, we might well have put measures of that sort into place, but we live in tough times, and it is not possible to do all that we might have done or might have wanted to do. Nevertheless, Alison Wolf’s proposals shed fresh light, and we will be considering them in detail, mindful of the deadweight costs that are always associated with financial support for employers.

My hon. Friend mentioned bureaucracy, transparency and flexibility in the system, and he asked for my assurances on those matters. My officials are working on plans greatly to simplify the apprenticeships system, and to make it as easy as possible for employers of all shapes and sizes to take on an apprentice. Indeed, a taskforce led by major employers has just reported to my officials on the subject. It will use the recommendations of real employers with relevant experience to make such changes a reality. As I have said, we are piloting outcome payments for large employers and developing a toolkit for smaller employers to guide them through the process. Smaller employers often say, as my hon. Friend will acknowledge, that the process is confusing; they are not sure where to turn, or which steps they need to take and when. Bringing the information together in a highly accessible form will counter some of those doubts and answer some of those questions.

My hon. Friend knows that I wrote to all Members during national apprenticeship week in February, urging as many as possible to take on apprentice in their offices. An apprentice works alongside me in my ministerial office—I was with him today—and my Parliamentary Private Secretary, my hon. Friend the Member for Bromsgrove (Sajid Javid), has just taken on an apprentice—he is a model of all that is best about the 2010 intake of Members, and I urge all hon. Members to do the same. I would, of course, be delighted to host a reception for Members from across the House with their apprentices not only to celebrate their commitment to the programme but, more importantly, to advertise the apprenticeship brand. If we take steps forward in that regard, we can reasonably ask others to do the same.

As for funding, I will refer that matter to my right hon. Friend the Chancellor of the Exchequer who will no doubt respond to my hon. Friend personally. [Laughter.] I jest, Mr Davies. I will of course look at whether my Department can fund such a reception, but the hon. Gentleman cannot expect me to give a detailed commitment at this stage. Certainly, in November, we will be hosting a parliamentary reception in partnership with the NAS for exemplar apprentices, apprenticeship employers, a number of other key partners and a selection of employers who wish to recruit apprentices.

An important factor in raising the status of and demand for apprenticeships is the perception among prospective apprentices and their employers of where an apprenticeship can lead and what an apprentice can become by engaging in an apprenticeship. That is about not only advice, guidance and the aesthetics around apprenticeships, but the promotion of apprenticeships. The kind of fair that my hon. Friend ran in Gloucester and that other hon. Members are now running in their constituencies are immensely important in raising the profile of the brand and in countering some of the mis-assumptions about apprenticeships that might prevail among employers or learners.

I warmly support the 100 apprenticeships in 100 days initiatives that have been run across the country. We will look at other ways in which to promote apprenticeships. We are always keen to be innovative, creative and imaginative, and I assure hon. Members that the NAS is considering a range of ways in which to advertise the virtues of apprenticeships in every way.

Last year, we published in the national press the names of all those people who had achieved higher apprenticeships in the same way in which we publish the names of people who achieve degrees and postgraduate qualifications. That is the kind of thing that I mean when I discuss new ways in which we can celebrate success. Such ambitions have been broadly welcomed by employers as steps in the right direction. In the final analysis, the impact of an expanded and improved apprenticeships system on learners’ lives and on our collective prospects for economic growth depend most of all on employers’ willingness to take on apprentices. Government can only do so much. We celebrate the 85,000 employers who currently take on apprentices, and we should recognise their commitment to those people—their willingness to invest in individual futures.

Many larger employers appreciate just what a boost apprentices can give to a company. During the course of this year, we have seen a welcome number of larger businesses pledging to create or expand apprenticeship programmes. My hon. Friend is right to point out that smaller employers can face particular problems in that regard. It has been said by a number of hon. Members, including my hon. Friend the Member for Nuneaton, that small businesses are critical to the success of this project, and that is because they are critical to the success of our economy more generally. They are the very backbone of the British economy. Working with very small businesses to help them to deal with some of the burdens and hurdles associated with apprenticeships is a priority for the Government.

Research has shown that SMEs tend to be less aware of apprenticeships and their benefits than larger firms. I pay tribute to those SMEs that take on apprentices, which form the majority of apprenticeships. None the less, we must go further. The remedy for some of the difficulties lies with my Department and the NAS, and we are working determinedly together to reduce to a minimum, consistent with quality assurance, the bureaucratic pressures associated with training an apprentice. We have already acted to provide special help for the increasing number of SMEs, such as those in advanced manufacturing and digital industries, which require high-level skills. The 10,000 additional high-level apprenticeships will be focused largely in SMEs. We are also offering new grant funding and will support businesses coming together as consortia to build advanced and higher-level apprenticeship schemes to address skills gaps. That could include setting up new training frameworks and delivering joint apprenticeship training.

My hon. Friend the Member for Wyre Forest (Mark Garnier) made a bold bid on behalf of the Kidderminster business enterprise zone. Although I cannot comment on the detail of that, I acknowledge his well-known commitment to his constituency.

The shadow Minister spoke about the structure of schemes. There is an argument for a modular approach. We will consider that, because it is particularly relevant to micro-businesses, the virtues of which have been advertised by many Members.

It is important to recognise that employing an apprentice might not always be possible for every small business. As my hon. Friend the Member for Gloucester has pointed out, that is one good reason to look seriously at GTAs and ATAs. Such measures will help to ensure not only that we provide more apprenticeships, but that apprenticeships are available in a wider range of companies and a larger number of specialisms than ever before. That is important for rural communities. My constituents simply cannot travel long distances to large companies to do apprenticeships, which they might be able to do more easily in an urban area. Therefore, the roll-out to more companies, especially small companies, has disproportionate significance in those kinds of constituencies.

The commitment that the Government have made to apprenticeships is unequivocal and unabated. That is good news for the people and businesses of Gloucester and for people up and down the country. Apprenticeships embody everything that this Government and I personally stand for. Politics is about ideas, but ideas stripped of feeling and heartfelt sentiment are cold, arid and sorry things. My heart-felt commitment to apprenticeships is not something for which I apologise. Benjamin Disraeli said:

“Never apologise for showing feeling. When you do so, you apologise for the truth.”

The truth is that apprenticeships deliver both for our economy and for a wider social purpose. By extending apprenticeship opportunities, we will feed social mobility. This ladder of opportunity will enable the most disadvantaged to climb to highly skilled, highly paid and respected employment.

However, in the end, what we earn is less significant than what we do and what we are. The worth and purposeful pride that people gain from an apprenticeship and from acquiring a competence that has economic value are immensely important in building a society that works. Every business can play a vital part in fulfilling this vision, and I will work to ensure that the barriers in their way are pulled down. Together we can create a society where all feel valued because each is valued. I am talking about a bolder, better and bigger nation—a British future as glorious as Britain’s past.

English for Speakers of Other Languages

Gordon Marsden Excerpts

Tuesday 3rd May 2011 Westminster Hall

[Mr Gordon Marsden (Blackpool South) (Lab)]

I congratulate my hon. Friend the Member for Lewisham East (Heidi Alexander) on the comprehensive and passionate way in which she has put her case—and, indeed, the case of so many Members on both sides of the Chamber today. She conveyed with great passion and conviction her points about the particular impact on women, which were echoed by so many, and about whether the Minister had realised that two thirds of ESOL students were women. She also made points about the practicalities of the co-funding, about why the Departments are treating ESOL differently from various other Skills Funding Agency funding streams, and about economic activity.

My hon. Friend’s passion and conviction have been shared by the other contributors. The hon. Member for Bradford East (Mr Ward) urged the Minister to look at the cost-benefit analysis of ESOL and focused, very importantly, on economic inequality. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) talked about listening to what the Association of Colleges has said about sliding scales of fees. The hon. Member for Cities of London and Westminster (Mr Field) reminded us that the issue is broader than just further education and used, I think, the phrase “knocking heads” with the Home Office—that is a challenge for the Minister.

My hon. Friend the Member for York Central (Hugh Bayley) made the very important point that the big society will fail if it does not include new entrants, and that ESOL is very important in that process. My hon. Friend the Member for Stretford and Urmston (Kate Green) urged the Minister to look at the design of the ESOL programme, and my hon. Friend the Member for Ealing, Southall (Mr Sharma) made the point that many women come to England to find a voice and that we are in danger, with the legislative changes, of locking them into silence.

My right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) made some very important points about the role of single parents, and my hon. Friend the Member for Sheffield Central (Paul Blomfield) said that the importance of the equality impact assessment was still not recognised by the Government, even at this late stage. My hon. Friend the Member for Hayes and Harlington (John McDonnell) talked about how ESOL overcomes division and isolation, and my hon. Friend the Member for Slough (Fiona Mactaggart) made a very important point about the future of Britain—about mothers and children—and said that the issue is part of lifelong learning, about which I know the Minister is passionate.

My hon. Friend the Member for Hammersmith (Mr Slaughter) talked about how ESOL was fundamental to the life and success of FE colleges, and I shall say a little more about that shortly. My hon. Friend the Member for Islington North (Jeremy Corbyn) made another important point about community-based, as well as college-based, teaching. In my own constituency of Blackpool South, many of the groups that we want to meet simply will not or cannot go to colleges, so that point is very important.

The Minister has had a cornucopia of advice and fervour today, and I think that he will recognise all the points made. ESOL courses play a key role in helping people who have arrived in the UK to learn and develop English and to integrate into our society. The Minister will know, because of his own portfolio, that that is important in equipping them to contribute to the communities in which they live, not just through their integration, but also through their skills, their taxes and their economic activities.

As we have heard several times today, no less a person than the Prime Minister has banged on about the issue in recent speeches and has rightly identified the understanding of English as a key element. Yet paradoxically, at the very time when he is being so fervent with the rhetoric, the impact of some of his Ministers’ decisions will make the job much harder. Their decision to remove ESOL funding for learners on inactive benefits—in other words, not on jobseeker’s allowance or employment and support allowance—will hit many people on low incomes. They are precisely the sort of people that ESOL courses would help, by improving their language skills and, in turn, helping them in the job market and to feel further integrated into our society, rather than being stuck on the perimeter. It is worth remembering that, alongside these changes, the £4.3 million learner support fund that gave colleges the discretion to help with fees has been scrapped, as has the funding uplift that gave ESOL courses 20% more than courses in other subjects.

I am afraid that, as with so many other policies, the Department seems to have rushed in and then stopped to ask the questions later. It is very much like “Alice’s Adventures in Wonderland”: sentence first, trial later. Only now, after the policy has been announced, a matter of months from the changes coming into force, has the Department commissioned a specific equality impact assessment.

I urge the Minister to listen to everything that has been said today and to make that assessment a real basis for real change. How could his Department sign off on changes as fundamental as these without a proper assessment of how they could affect the disadvantaged and the vulnerable, and exacerbate the gender bias in progression and employment? I hope that he already has his officials working on a plan to counteract some of those anticipated problems.

The changes to ESOL funding are, however, only the tip of a large iceberg. The restriction of fee remission to only those on active benefits is being applied across the board by the Skills Funding Agency as part of the harsh funding settlement that the Minister’s Department was dealt by last year’s comprehensive spending review, and Lsect—a learning and skills analysis company—estimates that the move could affect up to 25% of the adult provision currently funded by the SFA. That works out at some 300,000 learners.

Last year’s Government skills strategy was called “Skills for Sustainable Growth”, but what exactly is sustainable in cutting back on support that would enable low-income earners to take courses to improve their skills and job prospects? Those are surely vital aspects of building a balanced and sustainable economy. Someone working 30 hours a week on the minimum wage, for example, who has an annual income of £9,050 and receives working tax credits, will no longer qualify for full fee remission, thanks to the changes being brought in by the Government. I believe that the policies will nudge people away from, rather than towards, work, and that they point to a fundamental and potentially fatal disconnect between the Government’s policies on skills and welfare.

It is clear from discussions that I have had with many of the key stakeholder groups, who were not consulted on the potential impact of ESOL change, that they are driven by the waste as well as the unfairness. I attended and spoke at a meeting in this House at the end of March, at which the University and College Union, the Association of Colleges, the Association of Teachers and Lecturers, the Refugee Council and a number of individuals eloquently expressed their frustration with the Government on this issue. I urge the Minister to take on board not just what he can do in his own Department, but what he can and needs to do with the Home Office and the Department for Work and Pensions, to prod them into rowing back from this ill-advised course of action.

The ESOL learning cuts could be, as others have said today, another blow to FE colleges, which have already had to cope with a 25% cut in their resource grant over the CSR period and the possible disastrous drop in enrolment thanks to the abolition of the education maintenance allowance. The cutting of ESOL funding could put college courses at risk, and in turn jeopardise lecturers’ positions, and that is reflected in a recent UCU-Unison survey that shows that 60 of the colleges surveyed were already planning to cut courses over the next year.

The Minister is, as others have been, fond of referring to FE as moving away from being a Cinderella sector. However, he knows—because he and I were in Birmingham at the Association of Colleges conference, where it came up time and again from the floor—that many of the colleges that right hon. and hon. Members here represent are very worried about the story’s ending. The confusion that the Department for Business, Innovation and Skills has caused over ESOL sums up the muddled thinking and lack of joined-up thinking across the Departments, with sweeping changes being made before their impact has been considered.

The Prime Minister has talked the talk on promoting cohesion and integration, but the Minister’s Department is failing to walk the walk. The issues being thrown up in ESOL provision will replicate themselves as general FE colleges across the country suffer the implications. The consequences will be serious for those who want to gain the skills to improve their career prospects and move on with their lives.

The issue is about the big society and moving forward. I urge the Minister to listen to what has been said today, delay the introduction of the policies, consider alternatives and convene the group that has been discussed. As I said, the Prime Minister has been eloquent on the subject. On 2 February, in response to a question on ESOL from one of his own Back Benchers, the hon. Member for Keighley (Kris Hopkins), he said:

“I completely agree, and the fact is that in too many cases”,

learning English

“is not happening. The previous Government did make some progress…I think we need to go further.”—[Official Report, 2 February 2011; Vol. 522, c. 856.]

Are the cuts the sort of going further that we need? I think not. The Minister is rightly fond of literary quotations. I remind him of the words of Siegfried Sassoon’s poem “The General”, about Tommies on the western front:

“‘He’s a cheery old card,’ grunted Harry to Jack…

But he did for them both by his plan of attack.”

If the Minister does not wish himself or his Prime Minister to be associated with such an outcome, he needs to think, persuade and act fast.

Oral Answers to Questions

Gordon Marsden Excerpts

Monday 21st March 2011 Commons Chamber

[Mr Gibb]

I appreciate the recruitment difficulties experienced in west Norfolk, and I am encouraged by the work being undertaken by Norfolk county council, supported by the National College for Leadership of Schools and Children’s Services, to develop local solutions to meet the demand for head teachers. On pay, my hon. Friend will be interested to know that a further remit will be issued to the School Teachers Review Body later this year, asking for recommendations on how the pay and conditions system can be made less rigid. That work will build on the current extensive flexibilities, which will allow schools to pay, attract and retain teachers.

[Mr Gordon Marsden (Blackpool South) (Lab)]

18. What assessment he has made of the effects of reductions in local authority funding for education on the provision of information, advice and guidance for students at secondary level in Blackpool.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

We want to be helpful to local authorities and schools by giving them information on the changes taking place to careers guidance and the time scale for change. To that end, we will make an announcement shortly regarding the Government’s approach to careers advice and guidance.

[Mr Marsden]

I thank the Minister for that reply, but does he not realise that as a result of the Government’s cuts the Connexions service in Blackpool, and up and down the country, is already being shredded? Does he not realise that that needs to be addressed if he wishes to give emphasis to the policies he is proposing? Otherwise, when he has his new, all-age careers service, there will not be much of Connexions left for it to connect to.

[Mr Hayes]

The hon. Gentleman knows that local authorities will retain their statutory duty for all but careers, and the all-age service will make an immense difference in social mobility. It will give people a chance to fulfil their potential and be the best they can be. I do not want to be excessively critical, but I have to say that in many cases Connexions just did not do that adequately.

Oral Answers to Questions

Gordon Marsden Excerpts

Thursday 17th February 2011 Commons Chamber

[Mr Prisk]

The whole point about partnerships is that local priorities will lead, not central diktat. That is why we believe in ensuring that we enable partnerships to come forward and that they judge the issue on how they break down the local barriers to growth. We are committed to ensuring that the economy grows; these will be excellent vehicles to achieve that locally.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Well, we are clear what LEPs and businesses are asking for, even if Ministers are not. We believe that assets and funding intended for local growth in our regions should stay there. We have put forward a detailed strategy on skills and access to European and regional development agency money—the tools that LEPs need to do their job. But the Secretary of State is not passing any assets on, and is twisting the arms of RDAs over it. Today’s Local Government Chronicle reveals the west midlands RDA disposal plan—more than half its assets up for sale. The north-east regional development plan that I have seen says the RDA has been told that it must help address the fiscal deficit. How can the Secretary of State now deny that he is flogging off our local family silver to keep the Treasury happy? Has he not left LEPs in the lurch?

[Mr Prisk]

We got there eventually, Mr Speaker.

The RDAs have brought forward assets plans, which the Government are looking at. In the growth plan, we set out clearly how we will deal with them. The idea that we will be selling off the silver is a nonsense. I am sorry that Labour Members have nothing positive or intelligent to say about the matter.

Government Skills Strategy

Gordon Marsden Excerpts

Wednesday 19th January 2011 Westminster Hall

[Mr Gordon Marsden (Blackpool South) (Lab)]

I, too, congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate. I also congratulate him on his clear and evident pride in his local college and on the work that he is already doing in Parliament to promote issues relating to apprenticeships. We have had a thoughtful and inclusive debate, which has not been rabidly partisan. I want to continue in that way, but I nevertheless want to pick out some of the implications and unintended consequences of the Government’s skills strategy, which gives Labour Members real concern.

I want briefly to comment on what the hon. Gentleman has said. He has discussed skills deficits, particularly in construction, and the NEETs problem. It is fair to say that none of us in any party and, for that matter, none of the experts has a magic wand to deal with that problem. We can argue about the rights and wrongs and about the needs behind the Government’s current economic policies, and we will, but I merely say—I invite the Minister to touch on this—that it is inevitable that those policies will sharpen the challenge that we face and increase the number of people in the category that we are talking about, at least in the short term. For example, we have seen that with some of the rises in unemployment. We also need to be careful that changes in administration within skills policy, and related issues in the Minister’s portfolio, do not, however well-intentioned, unintentionally exacerbate the problems of NEETs, because of their speed and the lack of a proper transition period.

It is particularly interesting that the hon. Member for Harlow has discussed access to loans, which other hon. Members have also mentioned. I want to touch on how the process will pan out, and put one or two questions to the Minister. At this point, all I want to say is that some people who have been mentioned, such as older people and single mothers, are, because of their backgrounds, precisely the ones who will need most nurturing and support in entering the process. As I have said before and will continue to say, the Government, or certain people in the Government—not least Business, Innovation and Skills Ministers—are keen on the concept of nudging people. We all nudge people, sometimes inadvertently on the tube, but it is highly relevant to the debate on the Government’s skills strategy to point out that sometimes—again, I am not imputing malevolence of plan or thought—the net effect of policies is to nudge people away from things, as well as to nudge people towards them.

It is interesting that the hon. Members for Harlow and for Newton Abbot (Anne Marie Morris) have raised concerns about the EMA. I congratulate them on referring to practicalities such as transport and support equipment. Those issues have, of course, been taken up by individuals and colleges. The same concerns have been expressed to me at the colleges in my constituency, Blackpool sixth-form college and Blackpool and the Fylde college, and they also show up in surveys conducted by the Association of Colleges and the 157 Group. If the Minister and I were not here in delightful surroundings under your chairmanship, Mr Hood, we would undoubtedly be in the main Chamber listening to the arguments about the Government’s current position on the EMA. What I took from the remarks of the hon. Members for Harlow and for Newton Abbot, as well as from other interventions, were concerns not only about the change itself, but about the process of change and the transition period. The Minister will want to comment and reflect on those remarks.

The hon. Member for Harlow has discussed university technical colleges, a concept with which I, like him, am familiar. Lord Baker bent my ear on the subject in my previous incarnation as chair of the all-party parliamentary group on skills, as he has successfully bent the ears of many others. Lord Baker is, like me, a historian, and he feels strongly that it is a matter of completing unfulfilled business from the Education Act 1944. The only thing that I say—again, I invite the Minister to make observations on this point—is that it is laudable and entirely desirable that there is a renewed emphasis on how best to provide vocational education to the 14-to-19 range and on the mechanisms for doing so. However, the problem is that the field is now getting crowded. There are proposals for university technical colleges, and there are long-standing proposals for studio schools, which the Secretary of State for Education warmly endorsed at the recent launch of the first tranche. I declare an interest in the sense that the local authority in Blackpool is strongly bidding for a studio school. Of course, the Prime Minister also made observations only a few days ago about the concept of free schools for 16 to 19-year-olds.

I make no comment on some of the ideological conflicts that may arise in that context; I merely point out that if there is a market including UTCs, studio schools and free schools for 16 to 19-year-olds, there will have to be a lot of careful adjustment and thought about the implications for sixth-form and further education colleges. I hesitate to use the words “Maoist and chaotic” in that context, because they have, of course, already been used, rather tellingly, to describe the way in which the Government—sadly, this involves the Minister’s Department—are proceeding with local enterprise partnerships. However, I want to stress the importance of not getting into a mess over a plethora of options in the relevant area. The last thing that any of us wants is for the new-found enthusiasm in all parties for the strengthening of vocational education to be dissipated by arguments about structure.

[Mr Andrew Smith]

I want to reinforce my hon. Friend’s argument. Is it not crucial that the core mission and function of further education colleges, and their ability to deliver it, should be buttressed, supported and enhanced? That should include such issues as inequality in funding per student, as between FE and schools. The previous Government started to narrow that discrepancy, but it should be removed altogether.

--- Later in debate ---

[Mr Marsden]

My right hon. Friend is right on that point. I shall spare the Minister’s blushes, but he has committed to continuing that process. Indeed, he emphasised that point from the floor when questions were raised about it at the conference of the Association of Colleges in Birmingham in November. The devil is in the detail, and the questions of how the aim is to be achieved within funding regimes through the Skills Funding Agency and how it relates to other possible views within the Government must be resolved. I have no doubt about the Minister’s personal commitment to proceeding with that aim, but my right hon. Friend has made a valid and important point.

The hon. Members for East Londonderry (Mr Campbell) and for Upper Bann (David Simpson) have made valuable interventions. They both made the important point that we should view apprenticeships, training and outreach work not only as economic activity but as a vital activity for social cohesion. I am particularly interested and impressed by what the hon. Member for Newton Abbot has said about the activities of her college in going out on to the street and trying, in the words of the Good Book, to compel them to come in.

There is a broader underlying issue, with which all of us have fought in recent years. It concerns not only the fundamental mission of further education colleges or apprenticeships, but how and where that mission is carried out. Some of the most valuable work that has been done via the splendid Blackpool and the Fylde college in my constituency has been done not on the main campus sites but in a city learning centre adjacent to one of the main housing estates. In reality, particularly in areas where people may be juggling two or three different types of job or responsibility, which is particularly true of women, the siting of, and immediacy of access to, training and further education matter a great deal. The hon. Member for Newton Abbot has discussed her constituency, and I am sure that what I have described is as true in rural constituencies as some urban ones, if not more so. Even in my constituency, some people on the estate who benefited from outreach courses would not have found it easy to get on a bus and travel 2 or 3 miles to take standard college classes. I entirely agree with what the hon. Lady has said, and I hope that the Minister will take that on board in developing future policy with colleges.

My right hon. Friend the Member for Oxford East (Mr Smith) has made valid and crucial points about how the skills strategy will fit with local enterprise partnerships, and I will return to that issue later. He made other key points that the Minister needs to respond to. The first is the concern that he expressed about skills shortages. That concern might seem perverse at a time when—let me put it bluntly—the demand for skills in the current economic situation is certainly not uniformly high. However, the truth is that even with modest growth generally and in certain areas in particular, because of the reasons that he gave, demographic changes will affect particular skill groups. We know from the Leitch report and various other things that we face a significant demographic challenge in the next five to 10 years, because the cohort of younger people available for skills training will reduce sharply. Of course, that will put even more emphasis on some of the points to which my right hon. Friend has referred. The comments that we have heard about skills shortages are significant.

I turn, with some gravity, to the Government’s skills strategy, on which I want the Minister to comment. Picking up my previous point about my right hon. Friend’s speech, the introduction of tuition fee-style loans for all those taking level 3 qualifications and the part-funding for a first level 2 qualification will seriously hit the strategy for retraining and reskilling older workers, if they are not handled carefully.

Questions have been put to the Department for Education and Skills and to the Minister himself about how much, under the current circumstances, colleges can be expected to charge when they increase fees for courses. I accept that we do not live, pace one or two things that have been said about the Secretary of State for Communities and Local Government, in a Stalinist “plan and provide” world. However, we need to have a little more assurance about the sums of money that people will have to borrow to fulfil a mainstream apprenticeship course. In an article in The Guardian at the end of last year, the Minister referred to a sum of about £9,000 over that period of study, but it would be helpful if he were to comment on the modelling by which the Government made that assessment.

Of course, if there is a potential impact of increasing fees, in terms of reducing enrolment, it will come at a time when colleges face a 25% reduction in the further education resource grant from the Department for Business, Innovation and Skills during the spending review period. Ministers have said that that reduction is nowhere near the “grim reaper” that has descended on the higher education sector, which is perfectly true. Nevertheless, that reduction and the potential impact of axing the EMA—both the Association of Colleges and the 157 Group have said that axing the EMA will have a significant impact on the number of people applying to college—mean that FE colleges may find themselves under real pressure as a result of Government decisions.

The Government have said that they want to get people back into work—how could we not want to get people back into work? However, the issue of how the Government expect to do that if they are going to remove the support for course fees from anyone who is not on active benefits is a live one. Even those claiming active benefits over the age of 24 will have to take out tuition fee-style loans to take level 3 courses. I have an open question, not a rhetorical one, about that issue; what incentive will there be for those people to take out a sizeable loan when there is no guaranteed income stream to repay it?

As has already been said and as—I am afraid—is the case with so many things that this Government are doing, they are in danger of wielding several sticks before offering a number of carrots. The fees for some level 2 and level 3 courses will be introduced as early as 2011-12 and the fees for the majority of those courses will be introduced in 2012-13. However, the Government say in their own statistics, which accompany the skills strategy, that they do not envisage the new loan structure being in place in full until 2013-14. That is one of the points that the Association of Colleges has raised in its briefing note to Members for today’s debate. However, the Association of Colleges has also raised the separate issue of the impact of the restrictions relating to benefits entitlement, which my right hon. Friend the Member for Oxford East has also raised. The Minister will know, because it was the subject of a question and answer session that he participated in at the Association of Colleges conference in Birmingham in November, that that issue is of great concern to colleges.

We support the Government’s aim to help more people off welfare and into work, and we understand the desire to focus efforts on those receiving active benefits. However, I remind the Minister that on a number of occasions he and I have talked about the importance of enabling skills to the life chances of people. There are real concerns, particularly in relation to some of the impacts of the restrictions on employment and support allowance, that, as I said earlier, people might find themselves being “nudged” away from participation in education and training rather than being “nudged” towards it.

Like me, hon. Members may find it curious that the Government preach localism, but that their new skills strategy effectively gives the power to set these plans nationally to the Skills Funding Agency. When we were in government, we talked about the crucial role that regional development agencies can play in this field. I also note, having heard the favourable comments that the hon. Member for Harlow made about the college in his own constituency, that Harlow recently opened a new £9.3 million university centre for higher education. Of course, that project, like the project in my constituency at Blackpool and the Fylde college, was partially funded by grants from the RDA. I am not here to argue the case for RDAs, but now that they have gone there appears to many people, including myself, to be a black hole in the connectivity of support for the successor bodies to the RDAs, including local enterprise partnerships.

Many business groups, including the British Chambers of Commerce, have commented on that lack of co-ordination between those in charge of skills policy and local enterprise partnerships. I remind the Minister that his colleagues in the Department for Communities and Local Government did not even put local enterprise partnerships in the Localism Bill when they introduced it, and they have resolutely refused, or at least been unwilling, to talk about establishing links in that respect.

[Robert Halfon]

I thank the hon. Gentleman for his measured and thoughtful remarks. Regarding RDAs, although it was welcome that part of the money for the college in my constituency came from the local RDA, at the end of the day that money is taxpayers’ money. That money does not necessarily have to pass through the RDA to reach Harlow college or Harlow; it could easily go through local councils or through the other mechanisms that he has mentioned. The support that Harlow college received is not necessarily a case for the RDA.

[Mr Marsden]

I was merely making an observation, and I was not saying that the RDA is the only mechanism by which this money can be redistributed. Of course, there were also other grants that contributed to the college. I was making the point that the RDA is a mechanism that supported that type of college development. Not only is the current level of economic activity across the country failing to replicate that support, but we do not even have secure promises about how local enterprise partnerships themselves will be supported and funded, so that they can provide similar support or access funding from the private sector. That is one of my concerns.

Finally and briefly, I turn to the issue of apprenticeships. The Government have been keen to trumpet the success of apprenticeships and their ambitions for them. I yield to no one in my delight that the Minister has made so many strong points about apprenticeships. However, we must remember that the pledge that there will be an extra 75,000 apprenticeship places applies only to adult apprenticeships. At a time when youth unemployment remains high and the Government have chosen to end schemes such as the future jobs fund and our September guarantee of a college place, training or a job for all those aged between 18 and 24, one must wonder what capacity there will be in business to provide these extra apprenticeship opportunities. Indeed, Members have touched on that issue in the debate today. Just as one can nudge people away from things as well as nudging them towards them, we need to take into account push and pull factors. It seems to me that no amount of ministerial criticism of Train to Gain can take away from the fact that axing the scheme leaves a serious gap in work-based training provision.

Finally, the Government are rightly putting an emphasis on level 3 money going in, but there is still a massive demand across the country for level 2 apprenticeships in leisure, tourism, catering and other applied service industries, and it is vitally important that they are not neglected. They need to ensure that they provide what employers want from apprenticeships, as opposed to what might fit their own agenda for the sector, however noble their intentions.