Apprenticeship Levy

Thérèse Coffey Excerpts

Wednesday 22nd November 2023 Westminster Hall

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to speak in this debate. I congratulate my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) on securing it and on the valid points that he made. I have not yet found time to read his New Conservatives’ paper, but I have a bit more time on my hands now, so I will make sure it becomes part of my reading material.

It is also a pleasure to follow my constituency neighbour and hon. Friend the Member for Waveney (Peter Aldous). He knows the work that we have put in. Indeed, some of the new courses have been put on in colleges in his constituency, which serve constituents of mine, and in Ipswich. Together, it is all about providing a pathway for people to access high-skilled, good-quality jobs with good salaries. That is why I commend the apprenticeship levy. I am conscious that there is a different apprenticeship system in the constituency of the hon. Member for Strangford (Jim Shannon), but his belief in apprenticeships is really important.

Last but not least of the Members who will be speaking today—I do not know quite so much about the hon. Gentleman just to my right, the hon. Member for Glasgow East (David Linden)—is the Minister for Skills, Apprenticeships and Higher Education, my right hon. Friend the Member for Harlow (Robert Halfon), who used to wear a ladder badge when he was in the Department before. He also tried to change the symbol of our party to the ladder to represent that aspiration. I must admit that, as an Environment Minister at the time, I was happy we kept the tree, but I think both symbols are good. We grow from seeds—as we know, a little acorn makes a grand oak. That is an important part of what we seek to achieve in supporting apprenticeships.

It is fair to say that the apprenticeship levy is an integral component of modern workforce development. In an era marked by technological advancements and shifting economic landscapes, a skilled and adaptable workforce has never been more critical. The apprenticeship levy, introduced just six years ago in the UK, stands as a testament to a proactive approach to addressing this need.

One of the most compelling aspects of the apprenticeship levy is its role in redefining the traditional route to career progression. By offering an alternative pathway to acquiring skills and qualifications, it presents an attractive option both for employers and for individuals seeking to expand their knowledge base. Apprenticeships provide hands-on training and allow people to earn while they learn, thereby bridging the gap between education and employment.

It should also be recognised that the levy is designed to be a tool that allows employers to be inclusive and diverse in the workforce they recruit. Such recruitment fosters an environment of equal opportunity, which not only benefits individuals seeking to enter the workforce, but enriches companies by bringing in a fresh perspective and innovative ideas that we may not get from people who have just gone down the traditional road.

I must admit that there are many good intentions behind the apprenticeship levy, and it has achieved so much. However—dare I say it, having now left Government —as plenty of Ministers and civil servants will know, in my time as Secretary of State for Work and Pensions in particular I was seeking to make reforms and have that debate in Government. Some progress was made, but I believe a lot more could still be done.

I believe without question that improving the system to make it more agile and adaptable to employers’ needs is critical to addressing the productivity challenge that we face. To give a simple example, as I have already had parts of these discussions with the Minister, I have seen consistently that we need to substantially increase the take-up of level 4 and 5 apprenticeships, which I believe is a good bridge going on from T-levels. Not everybody will necessarily be able to make it to degree-level apprenticeships, nor should they have to in order to recognise that they will still be getting a substantial salary. Meanwhile, they will fill key skill gaps between levels 3 and 6, which many industries are crying out for. We all know that part of the challenge is a combination of the provider and how employers can access some of that funding and structure accordingly.

Let me turn to some of the constraints. I appreciate that every policy gets criticised from a variety of angles, but the lack of flexibility has been a consistent complaint from many employers. I think the national health service had to be given an extra £120 million to boost the take-up of nurse apprenticeships. That was because the apprenticeship levy would not be allowed—is still not allowed, as far as I am aware—to cover back staff for that one day a week that people are off. I do appreciate that there have been some good changes recently. It is about not just the 20%, but the six hours, which, if someone is working full time, can still be less than 20% in terms of out-of-job training.

Employers really do need to be listened to. I recall a visit that I made to Severn Trent as part of kickstart; I went with Boris Johnson. The chief executive, the excellent Liv Garfield, was pleading to see changes, because she believed that she would be able to produce at least 50% more apprenticeships that would help, whereas all the other costs associated with helping people to fulfil that apprenticeship route had been deemed prohibitive.

I am also very conscious that there is a substantial surplus that goes back to the Treasury. I recognise that that money is usually used for other sorts of skills, or indeed to help to access the route for smaller employers, but I think that there is still a gap there. This is not about trying to be easy on big businesses; if anything, we should be challenging them to make more use of the levy through their supply chains, which, again, is a flexibility that was introduced a few years ago. Nevertheless, I believe that it tends to be larger organisations that have the HR in place to address that. Alternatively, more of the levy needs to be used for those sorts of auxiliary services to facilitate this, as opposed to the small employer, who might be taking on one or two people and already has, dare I say it, enough to do.

I encourage the Minister—again, a little bit with my DWP hat on—to consider what has happened to the number of intermediate apprenticeships. I am very conscious that the number of higher apprenticeships has gone up, not just at levels 4 and 5 but at level 6, the degree apprenticeships, and indeed level 7. However, I ask the Minister to really interrogate what is happening, particularly with level 7 qualifications. I have heard stories, although I have not actually got the proof to back it up, that the police superintendents’ course had become a level 7 apprenticeship so that police forces could use their levy. That is not really what it is designed for.

My hon. Friend the Member for Waveney spoke about how apprenticeships should really be for new jobs and so on. I do not agree; I think that there should be an opportunity to change career within a company, or indeed to progress. One thing I hope has happened, given that there are far fewer intermediate apprenticeships, is that those people who have completed level 2 have gone on to advanced and higher apprenticeships. I hope that that has happened, but I am concerned that that might not be the case. I encourage the Minister to get the analysis for that.

Yes, the number of starts has fallen. Some of that will be linked to the costs of the different levels of courses that people are taking up; doing a level 5 or 6 will inevitably require substantially more funding than a level 2. Nevertheless, it is worth looking in detail at the analysis of whether we are really getting the transformation that this apprenticeship levy is meant to have.

My hon. Friends the Members for Waveney and for Stoke-on-Trent North have spoken about drop-out rates. It really is a worry that so many people are dropping out, although there may be very good reasons for that. I think a significant reason is that they go and get a job elsewhere, either because they have finished what they needed to do or because they want more money—let us be candid about that. Employers who do not offer just the bare minimum wage are much more enlightened, because they are more likely to keep their apprentices if they pay them a regular rate or at least something closer to it. On retention, there are too many complaints along the lines of “Oh, well—they finished it and they have gone elsewhere for more pay.” However, I appreciate that it is about more than that, and I am sure that my right hon. Friend will have a good answer.

I agree with the suggested reforms involving a shorter course to accelerate the transition where appropriate. We cannot get away from the issues that have been raised. When I went to visit Andy Street, we went to one of the HGV academies. Basically, Eddie Stobart said that it would guarantee a job to anybody who passes the sorts of course that are available through an apprenticeship; I think this one was a CPC. No more interviews—they just had to pass the course and get the job. There was a big take-up. I know that the Mayor would be keen for more options for providing that sort of apprenticeship or other aspects of professional qualification for skills that are highly in demand and are in short supply.

I encourage the Minister to see about the range of courses that are available. I think I am right in saying that the HGV course is available as an apprenticeship, but that the course to drive the smaller size of vans, which still require an additional driving qualification, is not. That is despite my best efforts to persuade the Department for Transport to take a Brexit bonus. Somebody who got their driving licence before ’97, as I did, can drive a C1 and a D1 without any further qualifications, whereas nowadays it costs about £2,500 or £3,000 to qualify. I appreciate that that is a slightly different debate.

Coming back on topic, I encourage the Minister to think about the really good flexibility that we have seen in the freelance industry and in the media sector. That is really welcome, and we could see what more could be done on aspects of the supply chain.

I turn to agriculture. I represent a rural constituency. The Minister and I have had a separate discussion about the provision available through T-levels for certain sectors. I commend Suffolk New College, which has established Suffolk Rural College to try to keep the pipeline of agricultural workers open. There are definitely challenges around the funding levels given for different elements.

I know that the Department has been generous in giving capital grants. If we want to train people to be welders, there need to be colleges that have that sort of equipment readily available. Let us think about the rural college that needs to keep a herd of 30 cattle going in order to provide the equipment for people to work with.

We need diversity. Let us not just think about IT, admin and, dare I say it, traditional manufacturing. Let us think about wider elements, access to the levy and new routes that can help that to happen. The reasons why those courses is no longer being provided or offered really need to be investigated.

I know that the Minister is passionate about the issue. With the kickstart scheme that I worked on and helped to design, I feel that there was definitely a lot more flexibility. It was able to use Government grants in order to provide for people to have that ladder. Frankly, kickstart was a lifeline. I ask him to think about things we have done that worked surprisingly well, and to bear it in mind that although I fully support the fact that we are trying to get quality apprenticeships, we must make it easier for people to start and finish. This could be a further supply-side reform that would really help to unlock the growth that we need. I know that business would welcome it if he looked at these issues again.

The apprenticeship levy was critical in providing a pathway for individuals to realise their potential and for businesses to thrive in that ever-evolving landscape. The regulation and the design of the scheme needs to evolve to keep at pace. This is a commitment. It is not just a financial levy; it is a recognised commitment to invest in the future and in people of all ages. The Minister will know that the number of older people taking up apprenticeships has increased significantly. A future in which skills, talent and opportunity intersect to create a stronger and more resilient workforce is what UK plc needs.

Free School Meals

Thérèse Coffey Excerpts

Wednesday 21st October 2020 Commons Chamber

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

We

“are far more united and have far more in common than that which divides us.”—[Official Report, 3 June 2015; Vol. 596, c. 675.]

I think that feeling has come through in many of the speeches tonight made by right hon. and hon. Members. It came through even where there was anger about some of the different policy approaches that could be taken. I think the House is absolutely united in wanting to do the best for vulnerable children.

Social justice has been at the absolute heart of every decision that the Government have taken to help the people of this country get through this pandemic together. Whether it is about trying to do our best to save lives and livelihoods, about devising the shielding scheme where we provided 4.2 million food boxes to people, or about making sure that schools were kept open by my right hon. Friend the Secretary of State for the most vulnerable children in society, those are the approaches that we have taken in trying to make sure that we can get through this pandemic together.

It is a truism that when the Labour party has left government, unemployment has always been higher than when it went into office. That is not the same for Conservative Governments. The Conservative approach is that the best way out of poverty is through work. What we have also done in the time that we have been in office since 2010 is to make a shift away from the cliff edges that happened under the tax credit system, where people made rational decisions that they would be better off not working than working. We have turned that on its head so that people will be better off in work unless they cannot work.

I am very conscious that in every constituency it is highly likely that we will see unemployment rising in a very difficult and challenging way, particularly for the sectors that we know about such as hospitality and similar, and where we have put much greater national restrictions. Right here, right now, this Conservative Government are standing behind the people and businesses of this country to help them when they need it most. In terms of our schools, I have already pointed out that we had extra support throughout the year, including through holiday activities. In terms of supporting employees, we have had the furlough scheme, which will take us through to the end of October, through half-term. It has cost, and is costing, taxpayers £53 billion to provide that support for families right across the country. There will be a new job support scheme with enhanced measures for those parts of the country where stricter and more radical public health changes need to be made, in order to help to tackle this virus. Amid all that, I am very proud of the people that work in my Department for the support that they have given to vulnerable people across the country, making sure that we have got money to people when they needed it in terms of the welfare state.

In particular, it is important to stress that £9.3 billion is not a small amount of money compared to what was injected into the welfare system when we had the last financial crisis. It is giving families an extra £20 a week, and that takes those families right through to Easter next year. It is important that we try to make sure that we have that targeted support, which is why, in addition to the councils that received £500 million extra earlier in the year, an extra £63 million was specifically given to councils, because our social workers know the families in their areas who are at risk and can get that extra help to them. Of course, with the Barnett formula, all the devolved nations have had extra funding as well.

We are in a situation where the Government have firmly stood behind the most vulnerable children and people in the country, and I am very proud of our Government for doing that.

[Zarah Sultana (Coventry South) (Lab)]

There are 3,829 children in Coventry South who receive free school meals. Talking to their parents, I know how valuable that provision is—how they depend on it, and how their kids would starve without it. So I ask the Minister and MPs on the Government Benches: “If you vote against the motion, if you let kids go to sleep hungry at night, how do you not feel any sense of shame?”

[Dr Coffey]

Some of the hon. Lady’s hon. Friends made important speeches. The hon. Member for Blaydon (Liz Twist) spoke in praise of the holiday activities and food in the summer. We share her view on that; it is one of the schemes that we funded. The hon. Member for Coventry North West (Taiwo Owatemi) was absolutely right in her passionate conviction that we are here to do what we can to help children in society; and that is what we have been doing—not least by improving children’s educational attainment, to enable them to have a genuine future career.

My hon. Friends the Members for Bassetlaw (Brendan Clarke-Smith) and for Stoke-on-Trent North (Jonathan Gullis), who have experience as teachers, said that a major part of our approach should be to improve the chances of families. That is why the Government are working together—we are working with my hon. Friends in other Departments—not only on identifying what we can do to help the most challenged families in society, but on tackling the cost of living. Yesterday, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy announced the extension of the energy price cap, and we shall continue to do more. Nearly a million pensioners are getting £140 off their energy bills later this year without lifting a finger; that is what we are doing to help people.

The hon. Member for Hornsey and Wood Green (Catherine West), who was praised by her near neighbour the hon. Member for Hampstead and Kilburn, spoke about the benefits of a hot meal in the middle of a school day that helps children learn. Yes, we agree. We have provided that, and extended it to the youngest children automatically. My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) is right that we must continue to focus on those children who are in protection plans, and those families who are suffering drug abuse and family breakdown, and we need to keep a focus on making sure that we support the child in the whole.

We are actually in quite a different situation from where we were earlier in the year, when we were in a national lockdown, with a very strong “stay at home” message, and people’s lives were highly restricted. The virus was new; it was scary. We were—and still are—continuing to learn how to handle the situation, but together as a Government we have tried to ensure that we continue to put the vulnerable first. We are in a different situation now. We are not in the same measures of lockdown. More people have come off the furlough scheme and are now back in work—they can work from home or go to work. Schools are open. The NHS is treating many more people, not just the people with coronavirus. So we need to encourage life to continue as it is. That is why we have put those enhanced measures into tier 2 and tier 3. I congratulate the leaders of the councils who have decided to take that offer of support from the Government, to ensure that they can help the people who they represent.

It is really important that we continue to come together as a House to recognise the support that has gone in. That is why we tabled the amendment to today’s motion, recognising that we have undertaken significant ways to help the most vulnerable children in society. I am very keen to ensure that we keep that focus on the most important of our generations for the future, so that people do not fall through the cracks. That is why I and my right hon. Friend the Secretary of State for Education and Ministers across Government, including the Prime Minister, say regularly that there will be nobody left behind, and that we will do our best to strive every day to save the lives and livelihoods of people in this country.

We really must consider, genuinely, what should be uniting us today. I am very conscious that Labour Members may think that theirs is the only way to approach this issue. I say gently to them: recognise the support that has been given to the families that you represent; recognise the £9.3 billion in welfare alone, never mind the furlough income that has been there, and is continuing to help people. So, right here, right now, let the House come together, support the amendment and show a united message to the people of this country that we shall support, and continue to support, the most vulnerable people in our country.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.