House of Commons

Monday 19th December 2011 Commons Chamber

Monday 19 December 2011

The House met at half-past Two o’clock

Prayers

Monday 19th December 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 19th December 2011 Commons Chamber

The Secretary of State was asked—

[Caroline Dinenage (Gosport) (Con)]

2. What expertise women can provide and which roles they can fill on board Royal Navy submarines.

[Harriett Baldwin (West Worcestershire) (Con)]

6. If he will take steps to encourage women in the Royal Navy to apply to serve on Vanguard and Astute class submarines.

[The Secretary of State for Defence (Mr Philip Hammond)]

I announced to the House on 8 December that women will be recruited into the Royal Navy submarine service. All submariner roles will be open to women, and this new opportunity to serve will enlarge the talent pool from which the submarine service will recruit. All male and female applicants will be assessed against the same criteria. All applicants will receive the same training. I am confident that there will be sufficient interest from female personnel to serve on board Royal Navy submarines.

[Caroline Dinenage]

I welcome that news from the Secretary of State and the confirmation of what many of us know: that women can do everything that men can do. [Hon. Members: “Hear, hear!”] But better. Can the Secretary of State please expand on when it is most likely that women will first be put into training and service on submarines?

[Mr Hammond]

Let me say, Mr Speaker, that if my wife is to be believed, not only can women do everything that men can do, but they can do two things at a time, while men can do only one thing at a time. I hope that this will contribute to the efficiency gains that we need to make in the Royal Navy and elsewhere. I can tell my hon. Friend that female officers will serve on Vanguard class submarines from late 2013, followed by ratings in 2015, and that women will be able to serve on Astute class submarines as both officers and ratings from about 2016.

[Harriett Baldwin]

I pay tribute to all those who have the fortitude to serve on submarines underwater for many months at a time, particularly at this time of year. Can the Secretary of State say whether there will be any cost to the public purse from adapting submarines to accommodate both sexes?

[Mr Hammond]

Yes, there will be an estimated cost of about £3 million in total, to provide appropriate accommodation and emergency air supplies, so that should any female submariner be found to be pregnant while on board, she will be able to breathe from a discrete air supply until she can be medically evacuated.

[Nicholas Soames (Mid Sussex) (Con)]

Have any trials been conducted for this project? I generally welcome the principle entirely, particularly given the great success of women on board all other ships, but does my right hon. Friend not think that it might be worth while conducting a lengthy trial in simulated conditions before the plan goes ahead?

[Mr Hammond]

I would say two things to my right hon. Friend. First, the only reason why women were not eligible for the submarine service was that until recently the best medical evidence suggested that there could be a risk to foetal health. It is now clear that that risk does not exist. I would also say that the United States navy has made the change already, and has found the arrangements to be perfectly satisfactory.

[Amber Rudd (Hastings and Rye) (Con)]

3. What food and entertainment his Department plans to provide to service personnel on operations during the Christmas period.

[The Minister for the Armed Forces (Nick Harvey)]

Where the security situation allows, troops and support staff in Afghanistan will be served an English breakfast, a traditional turkey lunch with trimmings and a buffet supper. The Scots band will tour UK bases and there will be a carol concert in Camp Bastion. A variety of arrangements are similarly in place for those deployed elsewhere. Christmas decorations have been delivered to Camp Bastion already, and boxes of welfare and morale-boosting goods have arrived from UK4U, in addition to what is provided by the MOD.

[Amber Rudd]

Last weekend I spoke to my constituent Valerie Hindson, whose son, Lance Corporal Joel Hindson, is serving with 1st Battalion The Princess of Wales’s Royal Regiment in Afghanistan. She is concerned about Christmas provision for him, because he is not at Camp Bastion, but out at a patrol base. Can my hon. Friend reassure me, and the friends and family of many brave men and women, that extra effort will be made to reach those out at patrol bases, as well as those at Camp Bastion?

[Nick Harvey]

Yes, I can certainly give my hon. Friend that assurance. Special Christmas packages are going out to all forward operating bases and patrol bases. In most cases there is a chef on site and proper catering facilities to ensure a Christmas lunch. That will not be possible for a small number of people in very remote locations, but even in those cases, special Christmas provision is being made.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

For purposes of comparison, will the Minister tell the House how much will be spent on food and entertainment for Ministry of Defence Ministers and officials over the same period?

[Nick Harvey]

To the best of my knowledge, no such funds are being spent at all.

[Bob Stewart (Beckenham) (Con)]

As the patron of the Forces Children’s Trust, which looks after service orphans and widows, may I gently remind the Minister that it would be nice if the Ministry of Defence were to encourage all units, when they are having their Christmas celebrations, to look after the people who have lost loved ones within the unit? I am sure that that is happening, but a gentle reminder would not go amiss.

[Nick Harvey]

My hon. Friend makes a good point. I share his confidence that commanding officers and those responsible for the welfare of troops will have this in mind, but when there are opportunities to offer such reminders, we will certainly do so.

[Nic Dakin (Scunthorpe) (Lab)]

4. What steps he is taking to mitigate the effects of redundancy on those leaving the armed forces. 7. What steps he is taking to support service personnel through the process of resettlement.

[Toby Perkins (Chesterfield) (Lab)]

13. What steps he is taking to support service personnel through the process of resettlement.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

In addition to the tax-exempt compensation and, for many, an immediate pension, the welfare of those leaving the services is very important to the Ministry of Defence. We have in place a robust and effective resettlement system that helps our service personnel on a number of levels, and allows them to serve knowing that they will receive professional and tailored assistance on leaving. The MOD fully understands that making the transition from the armed forces into civilian life can be daunting, and we remain committed to supporting service leavers in taking this important step.

[Nic Dakin]

I thank the Minister for his reply. Given the increased challenges for those going through the resettlement process, will he commit to including an update on the success of the process in the Secretary of State’s annual report on the military covenant?

[Mr Robathan]

That is an extremely good point. The hon. Gentleman may be aware that we estimate that 96% of ex-forces personnel find employment within 12 months, and that 93% of the total do so within the first six months. He has made a good point, however, and we will see whether it is possible to do as he asks.

[Susan Elan Jones]

May I ask the Minister whether the new Cabinet Committee will allocate new funds to tackle the important issue of homelessness among veterans?

[Mr Robathan]

We are very concerned about anyone being homeless, and the Ministry of Defence is especially concerned about homeless veterans. One should, however, make absolutely certain that one deals in facts. While any individual being homeless is a concern, we reckon that approximately 3% of those who are found homeless on the streets in the United Kingdom are ex-service personnel. Indeed, I commend to the hon. Lady the organisation Veterans Aid, based in Victoria, which I visited recently. It does fantastic work with ex-service personnel who are homeless.

[Toby Perkins]

The country is already facing a significant housing shortage, massive increases in unemployment and real difficulties relating to primary school intake numbers. Is this not absolutely the worst time for 17,000 of our service people to be entering that housing and jobs crisis? Is that not a pretty shabby way to treat people who have served our country so well?

[Mr Robathan]

May I gently say to the hon. Gentleman that we are not happy to be making people redundant from the armed forces? Unfortunately, however, we have a serious financial situation in this country, as I think he and everyone on the Opposition Benches will recognise, and we have to address that. Regarding housing, he will know that my right hon. Friend the Minister for Housing and Local Government has announced that he is in discussion with local authorities to ensure that ex-service personnel get to the front of the queue, because they might have local connections. He is consulting on that issue at the moment. Regarding employment, I have just said that ex-service personnel are eminently employable and that they are valued by the employment market, and I think that those leaving the services will, God willing, not find it too difficult to find a job.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Over Christmas, will my right hon. Friend find time to think about the difference between those in the armed forces who are made redundant and those in the Ministry of Defence civil service who are made redundant? Members of the armed forces are frequently made redundant compulsorily, but that has not happened to a single civil servant so far.

[Mr Robathan]

My right hon. Friend will know that there have been a large number of applications from civil servants for the voluntary early release scheme. That is why very few people are likely to be compulsorily made redundant at the moment. Those in the armed forces have been less forthcoming with applications for voluntary redundancy, but only 40% of those taking redundancy are doing so compulsorily, the rest having applied for it.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend will know that it tends to be early service leavers rather than those who have served their full commissions who feature disproportionately in criminal justice and homelessness figures and mental health statistics, yet the resettlement facilities—such as they are—are focused very much on those who have served the armed forces for a long time. What can we do to redress the balance?

[Mr Robathan]

My hon. Friend speaks from his own personal experience, and he is absolutely right that early service leavers are often those who have the greatest difficulty. I would like to thank him again for his “Fighting Fit” report on the mental health needs of ex-servicemen, and indeed for his recent work on prosthetics. In fact, everyone—even someone who has served for a very brief period—gets some resettlement advice. Inevitably, those who have served for a brief period have less need to adjust, if I may put it that way, because their service has been so short.

[Mr John Redwood (Wokingham) (Con)]

Will the Minister look again at ideas put forward by me and others in the past to allow service personnel to buy a property while still serving in the armed forces, or to build housing equity before they leave, in order to avoid the problem of homelessness?

[Mr Robathan]

My right hon. Friend raises an excellent point. There are schemes that we are taking forward to ensure that people can get priority in some ways. For instance, my right hon. Friend may not know that until recently—in fact, this is still the case—a BFPO address may not count as a proper address for creditworthiness; we are taking steps to change that.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Daily Telegraph reported over the weekend that a further 150 trainee pilots may be sacked and have to go through the resettlement process. Will the Minister confirm that that is not correct?

[Mr Robathan]

I understand that the story to which the hon. Lady refers is, in fact, a rehash of a previous story. We very much regret making trainee RAF pilots redundant—but by reducing the number of aircraft we have reduced the number of pilots that we need. We have no plans for further redundancies from the RAF’s flying training pipeline.

[Mr Edward Leigh (Gainsborough) (Con)]

There are widespread reports in today’s press that the Government are planning a large cull of senior officers. I know it is a bit of a joke that there are now more admirals in the Royal Navy than major warships—but can the Government not solve this problem by increasing the number of warships instead of cutting the number of admirals?

[Mr Robathan]

I am grateful to my hon. Friend for his pre-Christmas question. Unfortunately, we have a slight problem with paying for the number of warships. I am sure we will bear it mind, but I have to say that the reduction in the number of senior officers has been spoken about at great length, including in the recent report by Lord Levene.

[Jeremy Corbyn (Islington North) (Lab)]

5. What expenditure on the Trident replacement he expects to have incurred by 2016.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

We expect to spend £3.9 billion on the successor submarine programme by the maingate decision-point in 2016. We have deferred the decision on the future warhead until the next Parliament. We are spending around £900 million a year at AWE—the Atomic Weapons Establishment—on capital investment and running costs to ensure that we can sustain the capabilities to maintain the current stockpile. As a consequence of this sustainment, we will also have the capability to design and produce a new warhead, should that be required. We expect to spend around £8 million over the next three years to examine the condition of the physical infrastructure at the naval bases and current communications systems for the successor submarines.

[Jeremy Corbyn]

By the Minister’s own figures, the Government are proposing to spend £5 billion on the submarine replacement and the preparations for a new missile system from AWE Aldermaston, which means that after the next election the new Parliament will be confronted with the decision whether to renew the Trident system, having already spent £5 billion on it. Does the Minister not think that we are walking—indeed, sleepwalking—into a massive expenditure, after that, of £25 billion on a replacement, plus the running costs? Is it not time we brought this vanity project to an end and cancelled the Trident system?

[Peter Luff]

No, I do not think that at all. In fact, not spending that money would prevent us from preserving the option for the next Parliament to take the decision. The hon. Gentleman is fond of pointing out the problems in respect of the capability for the nuclear deterrent, but let me assure him that the work we are undertaking will have benefits for other classes of nuclear submarines in future— particularly in respect of the primary propulsion systems, for example with the PWR3. There are real benefits from doing this work—not just for the security of the nation in the short term, but for the long term as well.

[Dr Julian Lewis (New Forest East) (Con)]

Given that both the Polaris and Trident submarines came in on budget and on time, is that not a good precedent for the successor system? Will the Minister take the opportunity to repeat in resounding terms the assurance that the Prime Minister gave to Conservative MPs when the coalition was formed—that Trident will be renewed, whether the Liberal Democrats like it or not?

[Peter Luff]

I believe that, notwithstanding the views of the hon. Member for Islington North (Jeremy Corbyn), no programme is subject to greater scrutiny in the House than the nuclear deterrent. That is one of the reasons for the accuracy of our costings. Let me assure my hon. Friend that the primary responsibility for our nation is the security of the country, that the nuclear deterrent is the ultimate guarantee of the country’s security, and that we stand firmly behind it.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Will the Minister tell us how many Government staff are working on his review of alternatives to the Trident system, when he now expects the review to end, and whether he has reached a final conclusion on whether its findings will be published?

[Peter Luff]

I cannot tell the hon. Gentleman off the top of my head exactly how many Government colleagues are involved in the review, but I will write to him about it. What I can tell him is that its findings will be available towards the end of next year for the Prime Minister and the Deputy Prime Minister to consider, and that, given that it will constitute a full and frank exploration of the alternative systems at a highly classified level, there are no plans to publish either the report or the information on which it draws. However, we are a long way from the end of the review, and it is therefore premature to speculate on how the final assessment might be used once it has been completed.

[Tessa Munt (Wells) (LD)]

What is the point of having a review if no one, except a select few, has an opportunity to look at its findings? Should not the Liberal Democrats, in particular, be allowed some access to that information? [Interruption.]

[Peter Luff]

As my hon. Friend the Minister for the Armed Forces says, I was of the view that the Deputy Prime Minister was a Liberal Democrat—and he will see the report.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

8. What arrangements were included in the recent memorandum of understanding with Turkey.

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

I signed a defence industrial co-operation memorandum of understanding with the Turkish Ministry of National Defence during the state visit of President Gül. The memorandum provides for a committee to be formed, to meet at least annually, and to be staffed by the Ministry of Defence, the UK Trade and Industry Defence and Security Organisation, and the Turkish Ministry of National Defence. It also establishes a framework for the potential acquisition of common defence equipment, for scientific and technical co-operation to meet the needs of both our armed forces, and for the development of joint projects.

[Eric Ollerenshaw]

Is that memorandum simply part of a wider recognition by the Government of the increasingly pivotal role that Turkey is gaining for itself in world affairs?

[Mr Howarth]

Turkey is indeed an important ally of the United Kingdom. Like us, it is an important member of NATO, and given that its economy is growing at five times the average rate of the eurozone, it is also an important economic player. In the context of defence, there is a great deal that we can exchange with Turkey, and I am delighted that a number of British companies, including BAE Systems, are investing in joint ventures there.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Minister agree that Turkey and Israel are the only two functioning democracies in the region—and will he therefore increase contact and co-operation with the military in both those countries, particularly with a view to containing, or indeed confronting, an Iranian nuclear bomb threat?

[Mr Howarth]

I can tell the right hon. Gentleman, who has considerable experience of foreign affairs, that we already co-operate closely with both Turkey and Israel. In this instance, however, I think that Turkey is the important country, and I am delighted that the treaty, which was also signed by my right hon. Friend the Secretary of State at the time of President Gül’s visit, will give United Kingdom forces access to training facilities in Turkey.

[Mr Julian Brazier (Canterbury) (Con)]

Will my hon. Friend join me in commending the very restrained and at the same time statesmanlike way in which the Turks have been handling the hideous problem on their borders that has been created by the barbaric behaviour of the Syrian Government?

[Mr Howarth]

Indeed. My hon. Friend has drawn our attention to a serious matter of concern to all of us in the House, and indeed to the wider community—what is taking place in Syria. The Turks are clearly important and concerned players because they share a border with Syria, and we are watching developments there with close interest.

[Jonathan Ashworth (Leicester South) (Lab)]

9. What recent discussions he has had on armed forces pay; and if he will make a statement.

[The Secretary of State for Defence (Mr Philip Hammond)]

I provided oral evidence to the Armed Forces Pay Review Body on 13 December. The discussion covered various aspects of the current remuneration package for members of the armed forces, as well as the broader economic context.

[Jonathan Ashworth]

I thank the Secretary of State for his answer. He will, of course, be aware that the pay freeze and changes to pensions are causing some concern, perhaps even anger in some quarters, not least among non-commissioned officers. Does he have any concerns in that regard, and does he have any contingencies in place should the changes to pensions and the pay freeze lead to an exodus of experienced personnel?

[Mr Hammond]

The Government recognise the unique and important role played by the armed forces, which is why we doubled the operational allowance to £5,280 tax free, why the incremental pay system will continue during and after the pay freeze, and why we have exempted the armed forces from the average 3% increase in pension contributions that public sector workers will pay. I recognise the concern that the hon. Gentleman expresses, and I have discussed it with the Armed Forces Pay Review Body. The proposals that the Chancellor announced in the autumn statement for continued pay restraint after the freeze include flexibility for the Ministry of Defence to address specific problem areas if we find we are losing, or failing to recruit, specialist staff.

[Mr David Nuttall (Bury North) (Con)]

What does my right hon. Friend think will be the effect on the morale of our armed forces personnel of their pay being frozen this year, while many people on benefits are being given a 5.2% increase?

[Mr Hammond]

My hon. Friend will recognise that by doubling the operational allowance for the armed forces, exempting them from the pension contributions increase and continuing the incremental pay system, we have sent a very important signal to them about the importance that we attach to them. I think that most members of the armed forces understand that we are facing some very tough decisions in order to get the MOD budget back on track and ensure a sustainable future for our armed forces, and that the restraint was necessary to achieve that.

[Mr Kevan Jones (North Durham) (Lab)]

Frozen pay, reduction in the pension and compulsory redundancies: can the Secretary of State explain how that squares with the Prime Minister’s statement in The Sun this morning that he intends to uphold the military covenant and support our servicemen and women?

[Mr Hammond]

I think that the hon. Gentleman was a member of the last Government, so he will be very clear about the scale of the financial problem that the MOD and the wider public sector face. The armed forces are playing their role in helping to correct the deficit and get this country back on track.

[Mr Philip Hollobone (Kettering) (Con)]

What discussions has my right hon. Friend had with the Department for Education about financial incentives to encourage retiring service personnel to take up teaching as a career, in order to get some self-respect and discipline taught to our young people in schools?

[Mr Hammond]

My hon. Friend will know that the Secretary of State for Education has announced the “troops to teachers” scheme. Work is ongoing to put the flesh on the bones of that proposal, and an announcement will be made in due course.

[Mr Jim Cunningham (Coventry South) (Lab)]

10. What assessment he has made of the likely effects on the defence sector of the aircraft carrier programme.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

Having visited Govan and Rosyth to see the Queen Elizabeth class carriers under construction, I know that the project is good news for the UK defence industry. It is anticipated that 7,000 to 8,000 jobs will be created or sustained at the tier 1 shipyards, with a further 2,000 to 3,000 jobs in the wider supply chain. Apprenticeship schemes have also been reinvigorated, with nearly 800 apprentices now involved in the project. Some £1.35 billion-worth of equipment subcontracts have been placed, the majority of which have been awarded to more than 75 different UK companies spanning the length and breadth of the UK. With an expected 50-year service life, there will be continued opportunities for UK companies to benefit from this project.

[Mr Cunningham]

I am sure that companies such as Rolls-Royce will welcome the Minister’s statement, but does he agree with the First Sea Lord that if a British aircraft carrier had been available during the Libyan mission, it would have been most cost-effective and efficient to use it?

[Peter Luff]

Actually, I do not fully agree with that. A carrier might well have been deployed, but the aircraft that were necessary to deploy the missiles we needed were the Tornados and Typhoons, and they did a first-rate job. That proved that the Government made the right judgment in the strategic defence and security review by deciding on a gap in respect of that particular capability.

[Sir Menzies Campbell (North East Fife) (LD)]

Does the Minister recall that an important factor in the decision to continue with the construction of the two aircraft carriers was the availability of the F-35, the joint strike fighter? Is he aware of reports that there is a delay in its development programme? What will be the impact on the effectiveness of the carrier force if there are no aircraft to fly off them?

[Peter Luff]

The world is full of rumours about the future of the F-35 programme; I hear a new one almost every day. It is true that a lot of questions are being asked, and those aircraft are very important to carrier strike capability, but I shall wait to see what actually happens, rather than joining in the speculation.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

In a written answer to me, the Minister put the estimated cost of converting one of the carriers to the catapult and arrestor system at about £1 billion. Can he therefore tell us whether the Chancellor’s announcement in the autumn statement of real-terms cuts in respect of procurement issues of almost £30 billion, extending into the first two years of the next Parliament, is apt, or whether the Prime Minister’s promise of a real-terms increase in defence spending of 1% will apply to this and other major projects?

[Peter Luff]

I can confirm that nothing has happened to our commitment to increase the equipment budget by 1% in real terms from 2015. I have to say that our job would be a great deal easier if the previous Government had not taken the decision to delay the carriers, thus adding an extra £1.3 billion of costs to the programme with no capability gain whatsoever.

[John Mann (Bassetlaw) (Lab)]

11. When he expects UK troops to be withdrawn from Afghanistan.

[The Secretary of State for Defence (Mr Philip Hammond)]

My right hon. Friend the Prime Minister told the House that UK force levels in Afghanistan will reduce from 9,500 to 9,000 by the end of 2012. By the end of 2014, the security transition will be complete and British troops will no longer be in a combat role. The UK and the international community are committed to Afghanistan for the long term, and a number of UK troops will remain after 2014, including in training roles at the UK-led Afghan national army officer academy.

[John Mann]

Does the Minister pay more attention to the German Foreign Minister, who wants us in Afghanistan for another 15 years, or to the people of Bassetlaw, who say that now is the time to bring our lads back home?

[Mr Hammond]

We have a clear plan for the completion of the mission in Afghanistan, which involves transitioning lead security responsibility to the ever more competent Afghan national security forces. That will be done over the next three years, resulting in the withdrawal of the overwhelming majority of our forces by the end of 2014 and the ending of our combat role. That is the position that most people in this country would want to see: a measured and properly controlled winding down of our involvement that protects the legacy that we have won with so much blood and treasure.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Will my right hon. Friend assure the House that any reduction in UK force strength in Afghanistan will be based on the improving situation on the ground, not on any political expediency?

[Mr Hammond]

The trajectory of the force draw-down to the end of 2014 will be determined by the evolution of events on the ground. No prior decision has been taken about the pattern of that draw-down other than that 500 troops will come out next year, as my right hon. Friend the Prime Minister has announced.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

It was widely reported in the press that the Secretary of State had proposed to the National Security Council a draw-down that was accelerated beyond that originally envisaged. Will he tell us what the time scale for decision making is in Afghanistan? I agree with him that this is a very complex theatre of operations, and we have an absolute duty to make things as right as we can as we exit from our combat mission in Afghanistan.

[Mr Hammond]

As the right hon. Gentleman will know, the National Security Council discussed strategy on Afghanistan last week and a number of different scenarios were considered. It is clear that we must have regard to the decisions that the United States has yet to make about the pattern of its force draw-down. We will want to look again at this issue once it is clear how and when the United States will draw down its forces, but we have made no fixed commitments, other than to reduce the force level by 500 next year and to be out of the combat role by the end of 2014.

[Bob Russell (Colchester) (LD)]

This time last year, 16 Air Assault Brigade was deployed to Helmand province. Many of those young soldiers were also there in 2008 and, based on the time line that the Secretary of State has given, I suspect that some of them be deployed yet again. However, none of those who joined the Army since February 2007 will be entitled to the Jubilee medal. Why not?

[Mr Hammond]

The simple answer is that the conditions of service requirement attached to that medal is five years’ continuous service. The hon. Gentleman is absolutely right that some members of 16 Air Assault Brigade might be deployed for one more Herrick tour before our operations in Afghanistan are complete, but the jubilee service medal is a separate issue and the conditions set for it are very clear.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

In this week before Christmas, our thoughts are with our forces who are separated from their families and in particular those families who continue to feel the loss of a loved one in Afghanistan.

The Bonn conference on Afghanistan cannot be considered to have been a strategic success. I am not blaming the Government for that failure—it was an international responsibility—and the Opposition remain committed to the Afghanistan mission, but for the Government, bipartisanship in Afghanistan cannot mean just getting agreement between the two parties in the coalition Government; it is also about persuading the public and Parliament. What else can the Secretary of State say about his early assessment of the levels of non-combat troop involvement from the UK that will be needed in 2015 in Afghanistan?

[Mr Hammond]

I am pleased to hear the right hon. Gentleman reiterate the Opposition’s support for the Afghanistan strategy, as it is vital that we go forward with a broad measure of consensus. On the post-2014 troop levels, no decisions have yet been made about the level of UK troops in a training, support and advisory role. We will want to take that decision nearer to the time, when we have seen what other international security assistance force nations propose to do and when the level of international funding for the Afghan national security force has been determined and committed to, so that the scale and competence level of ANSF forces can be seen clearly.

[Andrew Stephenson (Pendle) (Con)]

12. What steps he is taking to support research and development of military capability in the aerospace sector.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

I am committed to providing sustained support for science and technology across all aspects of defence. The Ministry of Defence has and will continue to invest in the aerospace sector, developing capability and undertaking research into new ideas. As part of that ongoing investment, I am pleased to announce today that we have placed a £40 million four-year research contract with BAE Systems to explore critical technologies and key systems integration for the UK’s next generation of highly capable air systems. The future combat air system research contract is expected to include significant benefits for the wider UK supply base.

[Andrew Stephenson]

I thank the Minister for that answer and, in particular, for the good news about BAE Systems. However, many companies based in Pendle and Lancashire are small and medium-sized enterprises. Will the Minister say a little more about what he is doing specifically to support SMEs in the aerospace sector?

[Peter Luff]

We have plans to do more to help SMEs and I had hoped to announce them in the White Paper that I was due to publish this month, but the pressure of Christmas business has delayed that until the new year. I can assure my hon. Friend that there will be good news in that for the SME sector and I also reiterate what I said in my original answer: the future combat air system contract will bring real benefits to small and medium-sized enterprises in the UK, including, I am sure, in my hon. Friend’s constituency.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister acknowledge that the British aerospace industry and sector are vital to British manufacturing and that the Department for Business, Innovation and Skills is at this moment conducting a rationalisation of procurement methods? Will he have an intelligent conversation with BIS about how procurement can be longer reaching and longer term in the defence industry?

[Peter Luff]

All my conversations with BIS are intelligent.

[Diana Johnson (Kingston upon Hull North) (Lab)]

14. What assessment he has made of the advice from the Armed Forces Pay Review Body; and if he will make a statement.

[Mr Speaker]

Now for an intelligent answer, from whichever Minister.

[The Secretary of State for Defence (Mr Philip Hammond)]

Apologies for the delay, Mr Speaker. The Armed Forces Pay Review Body reports annually to my right hon. Friend the Prime Minister and to me. Its next report is expected in early 2012.

[Diana Johnson]

In the 2010 election, the Liberal Democrats promised to raise the pay of our lowest paid soldiers by as much as £6,000. The coalition is now ignoring the Armed Forces Pay Review Body, which will mean a real-terms cut, and the operational allowance, as I understand it, will benefit only a third of our armed forces personnel. Should not promises made to our armed forces be worth more than another abandoned Deputy Prime Minister election pledge?

[Mr Hammond]

I have already said in answer to an earlier question that we have doubled the operational allowance. That is critical to troops on operations and is hugely appreciated. We have increased the pay of the lowest paid members of the armed forces, even during the pay freeze, by a fixed £250, which is a more significant percentage for those on the lowest pay levels. The hon. Lady can pontificate all she likes from the Labour Benches, but the problem that we are dealing with and that we have to deal with to give our armed forces the stability and confidence they want for the future is based on the legacy of debt from and undeliverable promises made by the previous Administration.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

15. What support is available at higher and further education level for young people who want to join the armed forces; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Further education support is provided to people who join the services, generally through apprenticeships which include nationally recognised vocational and academic qualifications. For those young people who wish to join the armed forces and have aspirations to continue in higher education, opportunities include the defence sixth-form college at Welbeck; bursaries and scholarships in secondary and further educational establishments; the defence technical officer and engineer undergraduate scheme; and cadetships for students reading degrees in specific professions, such as medicine or the law.

[Simon Hughes]

That is very welcome, but it is not as well known as it ought to be. Given that next month is the first cut-off date for people applying to go to university next year, will the Minister see if he can make sure that all those who have shown an interest in joining the armed services are told about the support opportunities open to them if they go into the services but also want to carry on in formal education?

[Mr Robathan]

I take the right hon. Gentleman’s point entirely and I agree with him, but those opportunities are quite well known. Some 41 years ago I took up a university cadetship at university, which was very welcome. People who wish to join the armed forces now know that they can get assistance at university and at other educational establishments.

[Jim Shannon (Strangford) (DUP)]

I, too, thank the Minister for his response. I am a member of the armed forces parliamentary scheme who has had the opportunity to attend many Army camps at locations across the United Kingdom. We were told that the MOD had a bursary scheme for those aged 16 to 18, and none of us was aware of that. Can the Minister assure us that it is his intention to raise awareness of the scheme across the whole of the United Kingdom, including Northern Ireland?

[Mr Robathan]

Certainly. We are not contemplating broadening the scheme to the armed forces parliamentary scheme, but bursaries do exist. I take the hon. Gentleman’s point on board, as I did the previous point. We should give the bursary scheme good publicity. However, I think he will find that there is considerable over-subscription to the bursary scheme, not under-subscription, because young people know about it and are a bit quicker than I am.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

16. What support his Department provides to armed forces veterans with mental health disorders.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Further—wrong one.

[Mr Speaker]

No. 16.

[Mr Robathan]

Yes. We will continue to work closely with the Department of Health on the mental health care of our former service personnel. That includes implementation of all the recommendations in the “Fighting Fit” report produced by my hon. Friend the Member for South West Wiltshire (Dr Murrison).

[Mr Speaker]

I am glad the right hon. Gentleman’s sense of humour has not deserted him.

[Stephen Phillips]

I am grateful to the Minister for that answer. Martin Pratt, about whom I wrote to my right hon. Friend in November, was a constituent of mine before his untimely death. He served his country in the SAS and his experiences were sufficiently traumatic that, long after he had left the Army, he suffered from severe post-traumatic stress disorder which ultimately led to alcoholism and the death of a much loved husband, father and grandfather. It seems clear that there is little understanding in the civilian medical community of such cases of later-life PTSD in military personnel, and very little joined-up thinking between agencies responsible for the care of veterans. I hope that my right hon. Friend can assure Martin’s family and the whole House that he will look into this case in detail with his colleagues in the Department of Health so that the lessons that plainly need to be learned are learned.

[Mr Robathan]

My hon. and learned Friend makes a good point. He will understand that it would be invidious of me to comment on an individual case, but he will understand that I have a particular regimental interest in Mr Pratt. This is a joint venture between the MOD and the Department of Health, and my hon. and learned Friend should have received—or he will receive it shortly; I have a copy here—a letter from the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), explaining what should have been available and what may not have taken place in this particular case. My hon. and learned Friend must see that letter himself. We are very concerned about this. We are pursuing the “Fighting Fit” report from my hon. Friend the Member for South West Wiltshire and we are putting in place many measures that will assist people who have PTSD and other mental health problems.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

At the end of last year, the strategic defence and security review announced 35 mental health nurses. Experience shows us that many of the cases that have been diagnosed as either PTSD or veterans with mental health problems date back to the first Gulf war. How confident is the Minister that we will have enough appropriately qualified nurses, and is it the intention to be able to cover all parts of the country?

[Mr Robathan]

It certainly is the intention to cover all parts of the country. I think that the hon. Gentleman shares my concern that people with mental health problems who have been in the services and who have been affected by their service are given particular care by the Department of Health, assisted by the MOD, and we are determined that that should happen. The extra mental health nurses are being rolled out and I think that most are already in place. That is a Department of Health responsibility, but most, if not all, are already in place, and we certainly take this very seriously. I do not know whether the hon. Gentleman has visited the King’s centre for military health research, but I recommend that he does so and that he talks to Professor Wesseley—the right hon. Member for East Renfrewshire (Mr Murphy)will know him—who does an excellent job there on our behalf dealing with mental health.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

17. What support his Department is providing to the families of service personnel during the Christmas period.

[The Minister for the Armed Forces (Nick Harvey)]

We aim to provide the highest level of welfare support to the families of deployed service personnel throughout the year. In addition, local commanders are able to use the family welfare grant to support families with funding for gatherings, children's Christmas events, day trips, pantomimes and coffee mornings. For example, 20th Armoured Brigade has set aside some £16,000 for that purpose. Unit welfare staff will remain on hand to provide help and support throughout the Christmas period.

[Oliver Colvile]

Earlier today, the military wives choir, which is based in my constituency, released its “Wherever you are” single, which I for one very much hope will be the Christmas No. 1. Will my right hon. Friend be willing to join me in urging the Treasury to give the VAT proceeds to its nominated charities, the British Legion and the Soldiers, Sailors, Airmen and Families Association?

[Nick Harvey]

I very much endorse the enthusiastic welcome that my hon. Friend has given the military wives choir, which comprises constituents both from his Plymouth constituency and my North Devon constituency. We wish it well with its “Wherever you are” single released today and hope that it will be the Christmas No. 1. Matters of VAT must be addressed to the Chancellor.

[Mr Speaker]

I am relieved that the Minister of State did not burst into song, but that may happen later in the day—who knows?

[John Glen (Salisbury) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Defence (Mr Philip Hammond)]

My departmental responsibilities are to ensure that our country is properly defended, now and in the future, through the delivery of the military tasks for which the MOD is mandated; that our service personnel have the right equipment and training to allow them to succeed in the military tasks; and that we honour our armed forces covenant. In order to discharge those duties, I have a clear responsibility to ensure that the Department has a properly balanced budget and a force generation strategy and a defence equipment programme that are affordable and sustainable in the medium to long term.

I am deeply aware that our people are the greatest assets of the armed forces, and I am sure that all Members of the House will want to join me in wishing all of them, especially those who are away from home over the festive period, a happy and a safe Christmas.

[John Glen]

I thank my right hon. Friend for his answer. Will he update the House on the status of the service chiefs' review of force generation and sustainability, which among other things was looking at harmony guidelines? I am sure that my right hon. Friend will be aware that if he adopted the Navy’s harmony guidelines, he would secure a significant saving across the MOD.

[Mr Hammond]

The single service chiefs are reviewing force generation issues in the light of the proposed change structure of the armed forces. The issues around harmony are different in the three services, and it is right that the individual services develop harmony guidelines that are right for their conditions and allow them to operate within their single service budgets.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

The Minister with responsibility for veterans has confirmed the proposals to cut MOD police by 50%, which has been described by the Defence Police Federation as “irresponsible and ill thought out”. There will be real worries about the impact on the protection of munitions stores and barracks. Will he guarantee that there will be no cut in MOD police numbers at the most sensitive of bases, particularly Faslane and Coulport?

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Security, particularly of our nuclear installations, is absolutely at the top of our list of priorities, but that does not mean that we cannot organise things better, which is what we are looking at. May I just say to the right hon. Gentleman that we struggle with the huge black hole in the money that he left us?

[Mr Peter Bone (Wellingborough) (Con)]

T2. If there was a terrorist attack on this country and the Prime Minister was killed, what would be the Secretary of State’s role in co-ordinating a military response and who would be in charge of the country? Would it be the Deputy Prime Minister?

[Mr Hammond]

As you would expect, Mr Speaker, robust arrangements are in place for dealing with any such contingency, but I will not talk about them in the Chamber today.

[Angus Robertson (Moray) (SNP)]

Last week the Russian aircraft carrier Admiral Kuznetsov and its support group were moored off the north-east coast of Scotland. Will the Secretary of State confirm that not a single fixed-wing UK maritime patrol aircraft was available and no appropriate naval vessels were able to deploy from a Scottish base because there are none in that category?

[Mr Hammond]

The hon. Gentleman rather narrowed the scope of his question at the end by saying “able to deploy from a Scottish base”. We operate the UK armed forces and our response is on a UK-wide basis. I will check the facts of the incident and write to him.

[Harriett Baldwin (West Worcestershire) (Con)]

T3. Cyber-security is an integral part of the nation’s defences, so may I invite the new Defence Secretary to visit the wide range of cyber-security firms located in cyber valley in Malvern in my constituency?

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

The Secretary of State and I have just carved up our diaries and I, as the Minister responsible for industry, equipment and science, will be prepared to make the long and arduous journey from Mid Worcestershire to West Worcestershire to visit those firms, hopefully at an early date.

[Paul Flynn (Newport West) (Lab)]

What steps is the Secretary of State taking to reduce tension between the west and Iran, as there is a possibility of a war between our two countries, the consequences of which would be unimaginable?

[Mr Hammond]

The Government’s policy remains one of both applying pressure and maintaining engagement with Iran in the sincere hope that the crisis can be resolved peacefully.

[Margot James (Stourbridge) (Con)]

T4. May I sing in unison with my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) in congratulating the military wives and crave your indulgence, Mr Speaker, on this festive occasion by presenting an advance copy of the disc, via my hon. Friend the Member for Devizes (Claire Perry) who is sitting in front of me, to the Secretary of State for his enjoyment on one of the long car journeys that I know he enjoys so much?

[Mr Hammond]

I am grateful to my hon. Friend. I had the great pleasure of meeting members of the military wives choir when they performed at Downing street a couple of weeks ago, and we wish them every success for a Christmas No. 1 next week.

[Dan Jarvis (Barnsley Central) (Lab)]

Does the Secretary of State believe that the utility of military force as an instrument of UK foreign policy is more relevant or less relevant than it was, say, 30 years ago, and how does he intend to reflect that in future UK defence policy?

[Mr Hammond]

That is a very deep but helpful question. The Government are clearly committed to integrating defence diplomacy with our wider diplomatic effort to ensure that the UK’s Government-wide objectives are best delivered through the use of all the assets available, including our defence assets, and my right hon. Friend the Foreign Secretary and I will publish our strategy for defence engagement in the new year.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

T5. I warmly welcome the Prime Minister’s announcement today that he is setting up a Cabinet Committee to deal with all matters relating to the armed services and veterans. I ask that the Committee prioritises housing issues, which are referred to often, and that there is an indication of how colleagues in this House and members of the armed services and their families outside can give evidence to the Committee.

[Mr Robathan]

I thank the right hon. Gentleman for his question, because I think that the announcement shows that we are prioritising the needs of our service, particularly ex-service personnel. I am absolutely certain that housing will be at the top of the list of matters that are discussed. It is a Cabinet Committee and so will not be taking evidence, but I am sure that it will receive representations and submissions, which will be very welcome.

[Alex Cunningham (Stockton North) (Lab)]

I am pleased that companies including Darchem Engineering in Stillington in my constituency still have contracts related to the new aircraft carriers, but with which of our partner nations’ carriers will the new carrier-variant aircraft be interoperable?

[Peter Luff]

One major gain of moving to the carrier-variant joint strike fighter is enhanced interoperability with our United States allies, in particular, but there will also be interoperability with the French. The change produces real opportunities for interoperability.

[Mary Macleod (Brentford and Isleworth) (Con)]

T6. I have recently urged Hounslow council to review its banding criteria for council housing for ex-service personnel. What discussions has my right hon. Friend had with the Department for Communities and Local Government and the Minister for Housing and Local Government to ensure that there is provision for ex-service personnel, who have done so much for this country?

[Mr Robathan]

I am very pleased to receive that question from my hon. Friend. The Minister for Housing and Local Government, as she will know, has a committee—of which I am a member—that discusses those matters, and as I mentioned earlier he recently announced a consultation on priority for ex-service personnel on social housing lists. The community covenants that we are taking forward are specifically with local authorities, so that service personnel leaving the armed forces are given assistance and receive proper recognition in social housing, as elsewhere.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The previous Government established the St Malo agreement with France, and the previous Secretary of State for Defence took it further. Will the current Secretary of State have words with the Prime Minister to ensure that his current attitude to France does not damage our important programme of defence co-operation?

[Mr Hammond]

I can reassure the hon. Gentleman that the Prime Minister’s attitude is that we have a commonality of interests in securing strong defence in Europe, and that bilateral relationships between Britain and France will be mutually beneficial to both countries. We are advancing our defence co-operation with France and expect to conduct a defence summit in February.

[Andrew Stephenson (Pendle) (Con)]

T8. I welcome the news that armed forces personnel will be used to aid security at the Olympics games, but will any of those returning from Afghanistan end up having their post-operational leave cancelled and, instead, be posted to Olympic duties?

[Mr Hammond]

Some of those returning from Afghanistan may at some point be involved in Olympic duties, but no one will lose their post-operational leave. Post-operational leave has to be scheduled anyway, and it will be scheduled around the requirements of the Olympic task.

[Caroline Lucas (Brighton, Pavilion) (Green)]

May I press the Minister for more detailed figures on the capacity being built at Aldermaston for a possible new warhead? When will he announce the specific breakdown of costs associated with that and, in particular, with the Octans and Orchard programmes, and will he do so through a statement to the House, rather than by slipping it out in a written answer?

[Peter Luff]

I do not know how often one has to say this: no expenditure at the Atomic Weapons Establishment is being incurred to enable a new warhead; it is to sustain the security of the existing stockpile. I do wish the hon. Lady would get this into her head: no money is being spent on new warheads.

[Mr John Baron (Basildon and Billericay) (Con)]

T9. The Secretary of State will understand the significance of the fact that only 3% of Afghan security forces are from the Pashtun south, particularly when it comes to how successful our handover will be in 2014. What progress is being made to improve the imbalance in ethnicities before our troops withdraw?

[Mr Hammond]

My hon. Friend is right to draw attention to that continuing issue. The Pashtun percentage in the ANSF is very much higher than 3%, but he is right that Pashtun recruits tend to be northern rather than southern. The ANSF has strategies to address that, and the situation is slowly improving, but it remains one of the important issues that has to be addressed if we are to create a stable and sustainable Afghan Government.

[Derek Twigg (Halton) (Lab)]

In the past week I have intervened in the case of a constituent who is being made redundant from the Army in a few weeks’ time, to ensure that he is able to get social housing and an educational place for his child. He had little help from the MOD, so will the Minister look again at what help is being given to those who are made redundant? Specifically, I have been told that education legislation does not prioritise those being made redundant, as it does those being given a new posting, and that is completely wrong.

[Mr Robathan]

I should be grateful if the hon. Gentleman wrote to me with the details of the case, which I will certainly take up. We remain committed to both social housing and educational benefits for those leaving the services, and I am not sure whether the situation to which he refers is correct, but I will pursue it if he takes it up with me.

[Stephen Gilbert (St Austell and Newquay) (LD)]

On Friday evening, I visited 781 squadron of the Air Training Corps, based in Newquay, and I saw the great work done there. What plans does the Minister have to develop and further support our cadet forces?

[Mr Robathan]

We absolutely believe in the value of our cadet and youth organisations, and not just the armed forces cadet organisations. The Air Training Corps does fantastic work. We are looking to expand, if we can, cadet organisations, particularly the combined cadet forces in all schools. However, the cost is quite large and we are short of money. Nevertheless, we are looking into the matter at the moment—indeed, as I speak.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

In his earlier reply, the Minister referred to the touching issue of homelessness. I spent the weekend with soldiers off our streets in my constituency; many homeless veterans are slipping through the net. What work will the Minister be doing, including with the devolved Administrations, to ensure that veterans on the streets are helped to adjust to civilian life again?

[Mr Robathan]

That is, of course, a matter for the devolved Administrations but we are in close contact with them, particularly over the covenant. The Scottish and Welsh devolved Administrations have accepted the covenant in full—I think the Northern Ireland devolved Administration have as well, although there are slight differences there. We certainly wish to see our ex-service personnel receive proper housing support in Wales, Scotland and Northern Ireland as well as in England. If the hon. Gentleman has a particular case in mind, I would be grateful if he wrote to me.

[Mark Lancaster (Milton Keynes North) (Con)]

I remind the House of my interest. Will the Minister confirm that no distinction will be made between “regular” and “reserve” when it comes to the qualification criteria for the Queen’s diamond jubilee medal?

[Mr Robathan]

My hon. Friend speaks with some passion, and he has spoken to me about the issue before. I can confirm that reservist personnel will receive the diamond jubilee medal if they qualify. I believe that we have made sure that the anomaly that took place at the Queen’s golden jubilee will not apply next year.

[Mr David Hanson (Delyn) (Lab)]

On service pay, the Secretary of State for Defence has again prayed in aid the operational allowance. For my benefit, will he confirm how many, in percentage terms, of our service personnel will receive that operational allowance over the next three years?

[Mr Hammond]

I am doing the maths on my feet; there are about 9,500 people in Afghanistan on a five-cycle rotation, so the answer is about 45,000 or 47,000 of our armed forces personnel.

[Mr Dominic Raab (Esher and Walton) (Con)]

Following the failure of the congressional committee to agree savings as part of the deal to raise the debt ceiling, the US military faces automatic spending cuts of up to $500 billion from 2013. What reassurances have Ministers sought specifically about the impact that that may have on UK-US co-operation in intelligence and counter-terrorism?

[Mr Hammond]

I assure my hon. Friend that we are having regular discussions with US counterparts; I am going to Washington immediately after the new year holiday. Whatever happens, our strong security and intelligence relationship with the US will continue. It benefits both parties and is at the very heart of our strategy.

[Mr Iain Wright (Hartlepool) (Lab)]

On Friday, I attended a ceremony to commemorate the 97th anniversary of the bombardment of the Hartlepools. It was the first direct attack on the mainland for centuries, and 118 people, including 37 children, were killed. Given the national and local significance of the event, what steps will the Government put in place to commemorate the centenary in three years’ time?

[Mr Robathan]

I pay tribute to those of my grandfather’s generation who did so much in the first world war—what they did is almost beyond our ken. The issue is to do with history, and for that reason the Department for Culture, Media and Sport leads on it. However, as the hon. Gentleman may know, my hon. Friend the Member for South West Wiltshire (Dr Murrison) has been appointed the special representative on the first world war and he will deal with all the commemorations. He will co-ordinate input from the Ministry of Defence, the DCMS and the Imperial War museum for the nation as we approach the centenaries of the 1914 to 1918 period.

[Elizabeth Truss (South West Norfolk) (Con)]

Given the sterling performance of RAF Marham servicemen in Libya and the strategic and economic advantages of the base, when a decision is made in the spring about basing for the joint strike fighter, will RAF Marham not be the ideal candidate?

[Mr Hammond]

I give my hon. Friend full marks for her persistence on behalf of her constituency interest, but I have to tell her that it is far too early to make a decision about where the joint strike fighter will be based.

Petition

Monday 19th December 2011 Commons Chamber

Mr Gordon Marsden (Blackpool South) (Lab)

- Hansard - - Excerpts

I have the pleasure and honour of presenting to the House a petition of more than 1,000 people from Blackpool South.

The petition states:

The Petition of residents of Blackpool South,

Declares that the Petitioners are concerned that the Government’s Health and Social Care Bill, with its proposed changes to the NHS, will adversely affect NHS services for residents across Blackpool South.

The Petitioners therefore request that the House of Commons urges the Government to amend the Health and Social Care Bill so as to secure existing levels of funding and service provision for NHS patients in Blackpool South.

And the Petitioners remain, etc.

[P000994]

Foreign National Offenders

Monday 19th December 2011 Commons Chamber

15:34

[Chris Bryant (Rhondda) (Lab)]

(Urgent Question): To ask the Secretary of State if he will make a statement on the Home Office report on the number of foreign national offenders who have committed crimes on release before being deported.

[The Minister for Immigration (Damian Green)]

This Government believe that foreign criminals should be returned to their home country at the earliest opportunity, and the UK Border Agency always seeks to remove them. Last year we removed more than 5,000 foreign criminals, 43% by the end of their prison sentence. Where there are barriers to early removal, the agency seeks to detain them to protect the public. However, the agency has to operate within the law. It must release foreign offenders when ordered to do so by the courts and release low-risk offenders where there is no realistic prospect of removal within a reasonable period. When this happens, the agency works closely with the police and the National Offender Management Service to reduce the risk of reoffending. Deportation action continues in all cases.

There are 3,940 foreign offenders in the community, 90% of whom were released by the courts. Deportation can be delayed for many reasons, including challenges under human rights legislation, the situation in the offender’s home country, and lack of co-operation by the offender or his home Government in getting essential travel documents. We are doing everything in our power to increase the number and speed of removals. We now start deportation action 18 months before the end of the sentence to speed up the deportation process. We are chartering flights to remove foreign offenders to many more long-haul and challenging destinations. We will change the immigration rules to cut abuse of the Human Rights Act 1998. We will open more foreign national-only prisons, and we will be able to remove more European offenders through the prisoner transfer agreement. The House can therefore see that we have already taken significant action to address this long-standing problem and intend to take further action in the months ahead which I hope Members on both sides of the House will support.

[Chris Bryant]

Well, quite the opposite, in fact. The trouble is that the rhetoric does not fit with the facts. We learned this weekend that a report has been sitting in the Minister’s hands for weeks and yet he had absolutely no plans to publish it. When was he going to reveal the true figures to this House? Will he publish the report, in full, this afternoon? Will he confirm that according to the report by the independent chief inspector of the UK Border Agency, John Vine, there were 3,775 foreign national offenders awaiting deportation in May this year, and that according to the secret internal Home Office report in his hands, that figure had leapt by September by nearly 500 to 4,238—higher than the number that the Minister just gave us? That equates to seven foreign criminals in every constituency awaiting deportation. Is not that an increase of 12.5% in just four months? Can the Minister tell us where these people are? To be precise, can the Home Office be precise about the whereabouts of every single one of these people? If not, then contrary to what the Minister says, he has absolutely no means of deporting any one of them.

Will the Minister confirm that the number of foreign national offenders deported has actually fallen this year—fallen, not risen—by more than 700, an astounding figure? Will he confirm that the number of staff at the UK Border Agency is being cut by 6,500? Will he confirm that foreign criminals who left prison this year and have not yet been deported have been arrested and charged with violent crimes? If so, how many; and does that include murder, kidnapping and violence to the person?

So far on the Minister’s watch, we have seen numbers of staff at the UK Border Agency going down, numbers of foreign national offenders deported going down, and numbers of foreign criminals in our midst going up. Does the Minister not realise that that is the wrong way round? I urge him to get a grip as soon as possible, to publish the figures, to publish his secret report, and to put a real plan in place to ensure that more, not fewer, foreign criminals are deported: fewer words, more action.

[Damian Green]

The problem for the hon. Gentleman is that he should think carefully before asking urgent questions about newspaper reports that he has not read very carefully. All the figures in the newspaper report that he is relying on start not in May 2010 but in March 2009, so they cover a large period when his Government were in power. He appears to have forgotten that under his Government foreign national prisoners were freed on a routine basis without even being considered for deportation.. Indeed, let me give him some figures to show what has changed for the better.

Between 1999 and 2006, 1,013 foreign national offenders were released from prison without consideration for deportation. In 2009-10 the figure was 64 and in 2010-11 it was 28. Over the past two years, all 92 have been considered for deportation and 10 have already been removed—a stark contrast with the complete failure under the previous Government.

[Chris Bryant]

Seven hundred fewer.

[Damian Green]

The hon. Gentleman asked about violent criminals. Again, I tell him in all friendliness that he should check his facts before he comes to the Dispatch Box. The report at the weekend mentioned three cases involving murder. I have checked the facts. One of those people was charged and acquitted, so was not a murderer at all. Of the other two, one was not only released from immigration detention under the previous Government, but committed the murder for which he was convicted under the previous Government. That is not the previous Government’s fault. People who commit murder commit a crime on their own responsibility. However, the hon. Gentleman should not attempt to distort facts and figures to serve a political purpose, particularly when he is on such weak ground.

Of the 90% of people who have been released by the courts, 60% were released under human rights legislation. We will change the immigration laws to stop the abuse of article 8 of the European convention on human rights.

[Chris Bryant]

Seven hundred fewer.

[Damian Green]

Having failed with his question, the hon. Gentleman is now trying again from a sedentary position, non-stop. I invite him to lead his party in supporting our legislation, when it is brought forward, to change the Human Rights Act so that it better reflects the British people’s view of what human rights should be.

May I correct one canard that the hon. Gentleman has repeated a lot, which is that this Government propose to cut the number of staff at the UKBA by 6,500? It has been a matter of a public document for more than a year that in the current spending review period, we will cut the number by 5,200. Again, I gently tell him to stop using the 6,500 figure, because the first 1,300 of those people were planned to be cut by the previous Labour Government.

[Mark Field (Cities of London and Westminster) (Con)]

The general public will find it rather unedifying to watch this blame game, when what they want is to be protected from dangerous foreign criminals who should have been kicked out of the country. Will the Minister tell us why, in his 18-month tenure, there has not already been a move to alter the human rights legislation to which he referred? What impact does he think that legislation has had on the severity of this problem, which clearly has not come about since May 2010 but has been around for some years?

[Damian Green]

The problem has indeed been around for some years. As I said in my introductory remarks, we have taken a number of measures to make the system more effective, the most important of which was to ensure that every foreign national offender who is in prison starts having their deportation considered 18 months before the end of their sentence. That is the most effective way to ensure that we do not have hundreds of people or, as in some cases, more than a thousand people falling through the cracks.

My hon. Friend is right about human rights legislation. I apologise if we have been too slow for his taste in bringing reforms forward. As he will know, we produced a consultation document some months ago suggesting changes to human rights legislation. Given the tenor of the exchanges so far, I expect our changes to receive support from both sides of the House.

[Keith Vaz (Leicester East) (Lab)]

The Minister will know that the Home Affairs Committee’s last report on the UKBA emphasised that the crucial relationship in respect of foreign national prisoners was that between the Prison Service and the UKBA. Fifty per cent. of such people have been waiting for up to two years for removal. The Minister has used the 18 month figure several times. Could we not start looking at deportation the moment the prisoner enters the prison system?

[Damian Green]

Obviously, the practical point is that it depends on the length of the sentence. As the right hon. Gentleman knows, if somebody is sentenced to more than a year they are up for deportation at the end of their sentence, so what he suggests effectively happens. I am grateful to him for both the Committee’s thoughtful reports and the tone of his question, which gets to the heart of the matter. There has to be better co-ordination between the Prison Service and the UKBA. We have taken significant steps towards achieving that, and I am sure that more steps need to be taken in future.

[Tony Baldry (Banbury) (Con)]

In many cases the trial judge makes an order for deportation as part of the sentence, but a significant number of offenders destroy their passports and paperwork in an attempt to frustrate deportation. Would two things be possible? First, the trial judge could be invited to make a finding of fact at the time of sentencing about the citizenship of the offender. Secondly, to follow on from the question asked by the Chair of the Home Affairs Committee, notice could be served on the offender’s high commission or embassy indicating that on completion of the sentence the individual would be deported to the country concerned, and inviting the full co-operation of that embassy or high commission.

[Damian Green]

I am grateful to my hon. Friend for those helpful and practical suggestions, some of which the UKBA already attempts to operate. He will be aware that most countries co-operate with the process entirely and are extremely helpful but, sadly, some countries are much less helpful. One measure that we are taking to ensure that the situation improves in the years ahead, as it needs to, is persuading Governments who are less keen than others on helping us with returns to be more helpful and co-operative about accepting their nationals back.

[Frank Dobson (Holborn and St Pancras) (Lab)]

When a prisoner is sentenced to imprisonment and deportation, why do we not just deport them straight away and save the expense of sending them to jail?

[Damian Green]

Successive Home Secretaries and Immigration Ministers have grappled with that suggestion. One problem is that we would need to know that offenders would be sentenced to some kind of equivalent term in their own country. Otherwise, we would have the terrible situation that somebody could commit a serious crime in this country in the full knowledge that the worst thing that would happen to them if they were caught and convicted would be that they were returned home free to their own country. I cannot believe that the right hon. Gentleman wants that to happen. That is why successive Governments have not taken that path.

[Charlie Elphicke (Dover) (Con)]

I have seen people in the Dover removal centre who have been there for three years, being held in stasis after having served their sentence. May I urge the Minister to take all measures possible to get such people out of the system as quickly as possible? It seems basically unfair that they should be incarcerated when they have served their sentence.

[Damian Green]

I take my hon. Friend’s point, and he is assiduous in his work on the conditions at the removal centre in his constituency. I can assure him that this Government—like the previous Government, to be fair—will keep people in detention after their prison sentence has finished only if they are thought to pose a danger to the wider community. I am sure he will appreciate that if such people cannot be deported immediately for the reasons that we have been discussing, but they pose a danger to the British public, the best place for them is in immigration detention.

[Mr David Winnick (Walsall North) (Lab)]

Is it not clear that the reason why the Home Secretary is not here to make the statement herself is that her Department is in such a shambles over matters relating to immigration control? Can the message be sent to her loudly and clearly that it is time she got a grip on her Department?

[Damian Green]

The hon. Gentleman has been here long enough to know that if the shadow Minister for Immigration asks an urgent question, it is answered by the Minister for Immigration. That is the way things work.

[Mr Peter Bone (Wellingborough) (Con)]

Would not the British Government prefer foreign nationals who come here, commit a crime and are put in prison to be sent home to their country early, rather than be kept in prison and let out again to commit further crimes?

[Damian Green]

As I explained to the right hon. Member for Holborn and St Pancras (Frank Dobson), it seems slightly perverse for anyone to want to send out a signal that if someone commits a serious crime in Britain, uniquely in the world they will get off with either no sentence or a very short one. We want people to know that if they commit a crime in this country, they will be caught and convicted. If they are convicted, they should serve a proper sentence. Of course it would be preferable if they could serve some of that sentence in their own country, and we have negotiated arrangements to that end with certain countries.

[Malcolm Wicks (Croydon North) (Lab)]

Following the murder of one of my constituents, and following the murderer’s being sent to prison, it was put to me by other constituents that this man—the murderer—might be a foreign national. I did not know whether that was true, so I wrote to ask the Minister. The Minister replied that he could not tell me and that the only way I could find out was to seek the permission of the murderer—no doubt because of human rights. Is not the Minister’s reply, and this situation generally, total nonsense? Sometimes it is the Member of Parliament who can track such individuals, to ensure that the Home Office is doing its duty.

[Damian Green]

I rather agree with the right hon. Gentleman. The amount of data protection that Ministers are required to observe may well seem absurd, and I can reassure him that I found it absurd as well. Indeed, those sorts of messages go out to Members of Parliament much less frequently than in the past, because I have changed the system.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Minister share with the House what specific steps he will take to prevent the misuse of human rights law from stopping the deportation of dangerous foreign criminals?

[Damian Green]

As my hon. Friend will know, we produced a consultation document a few months ago. He will have to wait for the final verdict on the deliberations, but he will be as aware as I am that the pleading of human rights—in particular family rights, under article 8 of the European convention on human rights—has been distorted beyond all measure, principally by courts in this country in this instance, rather than by the European Court. We want to send much clearer guidance to our judges, so that they know where the balance should lie between the rights of the individual and the rights of the community, because that balance has got completely out of kilter.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Can the Minister say how many prisoners who are due to be deported are currently detained in Scottish prisons? Also, when did he last speak to the Cabinet Secretary for Justice in the Scottish Government to ensure that this matter is dealt with as quickly as possible?

[Damian Green]

I speak to the Justice Secretary in the Scottish Government on a regular basis about various issues, because of the devolved powers in this area. I am afraid I do not have the exact figure that the hon. Lady asks for to hand, but I will write to her with it.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Minister name and shame the three countries from which most of the foreign nationals in question come and that are being the most awkward in facilitating their return to secure detention in their own countries?

[Damian Green]

Two were named in the weekend press, but they were not, in fact, the most awkward. Awkwardness is difficult to define. The two countries named were Jamaica and Nigeria, whose nationals account for most such prisoners. However, I should pay tribute to both countries’ Governments, who are considerably more co-operative now than they were. I visited Nigeria recently, where I visited a prison, part of which had been built by the British taxpayer specifically to make it easier for us to return Nigerian national prisoners to Nigeria. That is the kind of practical action we are taking.

[Mr John Spellar (Warley) (Lab)]

Did not the Minister’s reply to my right hon. Friend the Member for Croydon North (Malcolm Wicks) demonstrate exactly how he is failing in this job? He is just the mouthpiece for his civil servants, who are still pumping out the same old line. However, perhaps he can help us on a couple of issues on which he did not reply to the shadow Minister. Does he have a clue where the various prisoners are or how many are in the west midlands, for example?

[Damian Green]

At this moment it is quite difficult to say where every individual in this country is, or where any sub-set of those individuals is, because they may be travelling around. We put strict reporting arrangements on all who are released—both those released by the courts and the 10% released by the UKBA. We use electronic tagging and monitor them carefully so that we know where they are. That is why, as an example, we are in touch with all 92 individuals who were released without being considered for deportation over the last two years. We are pursuing deportation for all of them, and 10 have already been removed.

[Andrew Stephenson (Pendle) (Con)]

On 7 November, giving an answer in the House, the Minister said that there were 162 successful appeals by foreign criminals against deportation in October to December last year, of which 99 were allowed on article 8 grounds. Does the Minister agree that it is a bit rich of the Opposition, who introduced the Human Rights Act and who now oppose its reform, to bring this matter up today?

[Damian Green]

I am always willing to welcome repentant sinners, so if Labour Members were to support our reform of human rights legislation, I am sure that we would be delighted.

[Tony Lloyd (Manchester Central) (Lab)]

Notwithstanding the Minister’s answers on the reform of the Human Rights Act, Britain has a good reputation historically for not sending people back if there is a reasonable chance that they will face torture or death. Will he guarantee that that will still be the benchmark against which we will be measured?

[Damian Green]

Of course that will remain the law. The hon. Gentleman takes a close interest in these matters, and I am sure that he will recognise that there is something absurd about a situation in which “human rights” has become a boo phrase, and in which many people in this country regard human rights as something that gets in the way of justice. That is nonsense—

[Chris Bryant]

That is because of your speeches.

[Damian Green]

If the hon. Member for Rhondda (Chris Bryant) believes that, he really is completely out of touch with reality.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome the Home Office’s review of article 8 and the right to family life. Successful article 8 challenges to deportations are running at about 400 a year, and they include that of the man with no dependants who was convicted of killing my constituent, Bishal Gurung. Will the Minister tell the House when the Home Office review will report, and is he mindful of the evidence from the Lord Chief Justice and the President of the Supreme Court that changes of this nature would require primary legislation?

[Damian Green]

Obviously, we are mindful of all the representations we have received on the consultation. We will come to a conclusion within the next few months. My hon. Friend’s point is clearly a serious one, and we are looking carefully into the fastest and most effective method of achieving what I hope we all want to achieve.

[Nic Dakin (Scunthorpe) (Lab)]

The Home Office’s quarterly figures for the removal of foreign criminals from the UK show that, in the first quarter of 2009, the figures were consistently between 1,300 and 1,400, but that they fell to 936 and 1,056 in the last two quarters. Can the Minister explain that change in the numbers?

[Damian Green]

Some of the reasons relate to the fact that fewer people are coming into the system. Also, there is an increasing cohort of people who have been here a long time and who are therefore able to have lengthy legal processes. All the points that I have already mentioned are used by individuals to delay the process.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does the Minister know how many released foreign prisoners have had to be rearrested for the commission of sexual offences?

[Damian Green]

I do not know that figure off the top of my head, but if I find it, I will certainly pass it to the hon. Gentleman and put it in the Library of the House.

[Kevin Brennan (Cardiff West) (Lab)]

The figures seem to show a sudden drop in the last two quarters, down from 1,339 to 936 and then barely above 1,000. There seems to be something going on that is more significant than a long-term trend. Will the Minister look again at why the number of foreign national offenders being removed seems to have dropped off a cliff edge in the past six months?

[Damian Green]

I do not accept that characterisation. Indeed, as the hon. Gentleman says, the figure went down and it has now gone back up again. As I explained to the hon. Member for Scunthorpe (Nic Dakin), there are a number of reasons for the change, some of which are precisely related to the changes that we have introduced and will introduce to stop people using and abusing the legal system to enable them to stay in this country when they have no right to do so.

Banking Commission Report

Monday 19th December 2011 Commons Chamber

16:58

[The Chancellor of the Exchequer (Mr George Osborne)]

The Government are proposing the most far-reaching reforms of British banking in our modern history. Our objective is to make sure that what happened in Britain never happens again, that taxpayers are protected and that customers get a better service. Last year, the Business Secretary and I set up the Independent Commission on Banking to look at what has been called the British dilemma—that is, how Britain can be home to one of the world’s leading financial centres without exposing British taxpayers to the massive costs of those banks failing.

In the years leading up to the financial crisis, a failure of regulation contributed to the build-up of a debt-fuelled boom. Banks borrowed too much and took on risks they did not understand. When the bubble burst, these banks turned out to be too big to fail, and the last Government had to spend billions of pounds bailing them out. Of course, major financial institutions in other countries were bailed out by their taxpayers, but the British bail-outs were on a different scale. The Royal Bank of Scotland bail-out was the biggest in the world. The recent report of the Financial Services Authority on the failure of RBS attributed that to

“poor decisions made by the RBS management and Board”

against a backdrop of a regulatory regime that failed to stop them. The politicians responsible are named in the report.

This Government are determined to do better at protecting British taxpayers from the cost of failing banks, while at the same time acknowledging the importance of the financial sector to our country. Britain should remain home to one of the world’s leading financial centres and the home of global banks, but the strength of this industry is also a potential weakness to the economy if not properly regulated.

The sector supports nearly 1.4 million jobs—not just in the City of London but across the whole of the UK. The balance-sheet of our banking system is close to 500% of our gross domestic product, compared to 100% in the US and 300% in Germany and France. So while a European and international regulatory response to the crisis is important, we cannot rely on this response alone to make our banking system safe. We in this Parliament have to take action—and under this Government, we are.

We are putting the Bank of England back in charge of prudential regulation; we have created the Financial Policy Committee to look at risks across the financial system; and I welcome today’s report from the Joint Committee on the draft Financial Services Bill. I wanted proper pre-legislative scrutiny. That has happened, and we will respond in the new year so that we improve the legislation. We have also introduced a permanent bank levy on wholesale funding and we have introduced the toughest and most transparent pay regime of any major financial centre in the world. We also need to address the structure of our banks, however. That is why the coalition Government set up the Independent Commission on Banking. I again want to thank Sir John Vickers and the other members of the commission—Clare Spottiswoode, Martin Taylor, Bill Winters and Martin Wolf—for their impressive report.

The report made three main recommendations: first, that everyday high-street banking services should be separated from wholesale and investment banking activities, and that this be done via a ring fence; secondly, that banks be required to have bigger cushions to absorb losses without recourse to the taxpayer; and thirdly, that competition in the banking sector be strengthened by increasing the number of banks on the high street and the power of customers to switch accounts. When the final report was published in September, I made it clear that I welcomed these recommendations in principle and would return to the House by the end of the year. Today, I fulfil that commitment. Let me set out in detail how the Government plan to respond, and invite further views before we publish a White Paper next spring.

First, the Government will separate retail and investment banking through a ring fence. It is important to know that this ring fence will not prevent banks from failing, but it does mean that if banks get into trouble, those elements of the banking system that are vital for families, businesses and for the whole economy can continue without resort to the taxpayer, so the following will be in newly ring-fenced banks: the deposits of individuals and their overdrafts, and the deposits and overdrafts of small and medium-sized businesses. They will all be kept separate from riskier wholesale and investment banking, which will have to be outside the ring fence. Larger corporate deposits and lending and private banking can be either in the ring fence or outside. The ring-fenced bank will be legally and operationally independent; it will be able to finance itself independently and have its own board; and there will be limits on the amount it can lend to the rest of the group. The commission’s interim report proposed a de minimis exemption for small banks that were clearly not systemic, and we invite opinion on whether to proceed with that. Our objective is clear. We want to separate high-street banking from investment banking to protect the British economy, protect British taxpayers and make sure that nothing is too big to fail.

Secondly, we will make sure that banks have bigger cushions, so they are better able to withstand losses. The international Basel III requirement, which the UK was instrumental in negotiating, requires banks to hold minimum equity capital of 7%, and there is a top-up for systemically important banks. We will go further. Large ring-fenced retail banks will be required to hold equity capital of at least 10%, and there will also be a minimum requirement for the loss-absorbing capacity of big banks of at least 17%. This requirement will apply to the UK operations of British banks, and will also be applied to the non-UK operations of UK-headquartered banks unless they can demonstrate that they do not pose a threat to the UK taxpayer.

I can also confirm that the Government will introduce the principle of depositor preference: in other words, the principle that unsecured lenders to banks, who are better placed to monitor the risks that banks are taking on, should have to take losses ahead of ordinary depositors. We seek further views on the best way to implement this principle. This comes on top of the guaranteed protection offered by the Financial Services Compensation Scheme, which covers 100% of eligible deposits up to £85, 000.

Those proposals on loss absorbency will also strengthen the European single market. One of the greatest distortions to the single market in banking is the perceived implicit taxpayer guarantee for all European banks. Through these proposals, the UK is setting out a plan to remove that distortion for UK banks. The European Commission has indicated that it plans to consider what it can do to reconcile it at EU level. I welcome that, and the UK will engage actively in the debate.

This House and other member states have objected to the European Commission's proposals to impose maximum standards for bank capital. These proposals undermine efforts that we and others are making to improve financial stability and the single market, and bodies such as the International Monetary Fund believe that they also water down the international Basel III agreement, giving exemptions to globally active banks in certain European countries. Along with others, we will seek changes to ensure that the EU faithfully implements international agreements.

Thirdly, the Government will take action to increase competition in the banking sector. As a result of the disappearance of banks such as Bradford & Bingley and the last Government’s decision on the merger of Lloyds and HBOS, the banking sector is dominated by a handful of large banks. Last year, just four banks took 70% of the market share. We need new banks to enter the market and provide consumers and businesses with more choice. Last month the Government announced the sale of Northern Rock to Virgin Money, which creates a new competitor in our retail banking sector. In the coalition agreement we made it clear that we wished to foster diversity in financial services, including the promotion of mutuals. We welcome last week's announcement that Lloyds has identified the Co-op as preferred bidder for the divestment of more than 600 branches, which will create a strong challenger in the high street.

We will also make it easier for people to switch their current accounts. This recommendation from the Commission has received less attention from the media, but could be of huge benefit to millions of customers. The idea is that individuals and small businesses can switch to another bank within seven days, and all the direct debits and credits will be switched for them at no cost. The Government have secured the banking industry's agreement that it will implement these proposals by September 2013.

We will support the Treasury Committee's proposal to bring the Payments Council within the scope of regulation, and I can confirm that our financial services legislation next year will specify that one of the objectives of the Financial Conduct Authority is to promote effective competition in the interests of consumers. A new statutory competition remit will provide the FCA with a clear mandate for swifter, more effective action to address competition problems in financial services. Within months of the ICB report, legislation will be introduced to bring the change into force.

That brings me to timing. Some have questioned whether the Government will seek to delay implementation of these reforms—such questions come from people who never even contemplated reform when they were in office. In fact, the reverse is true. On the advice of Sir John Vickers and others, I will introduce separate legislation to implement the ring fence. The Government intend implementation to proceed in stages, with the final changes relating to loss absorbency fully completed by the beginning of 2019 in line with the Basel agreement, but I can confirm that primary and secondary legislation relating to the ring fence will be completed by the end of this Parliament in May 2015, and that banks will be expected to comply as soon as practically possible thereafter. The Government will work with the banks to develop a reasonable transition timetable.

Of course, there are both costs and benefits to these reforms. The Government estimate the total costs to UK banks to be between £3.5 billion and £8 billion, broadly in line with the commission’s estimate. Much of this reflects the cost to them of removing the subsidy that comes from any perceived implicit taxpayer guarantee, which is precisely what we intend. The cost to GDP is estimated by the Government at just £0.8 billion to £1.8 billion, slightly lower than the commission’s estimate. These are far outweighed by the benefits of the ICB’s recommendations. Even a relatively modest reduction in the likelihood or impact of future financial crises would yield an incremental economic benefit of £9.5 billion per year, such is the cost of financial crises to the economy. Since the wholesale arms of non-UK banks would be unaffected by these reforms and the principal recommendations relate to UK retail banking, the competitiveness of the City of London as a location for international banking will not be affected.

We are fixing the banking system to protect taxpayers in the future, but we also need to clear up the mistakes of the past. I have already mentioned Northern Rock and Lloyds, but the biggest call on the taxpayer was the bail-out of RBS. The Financial Services Authority’s recent report was a damning indictment of all that went wrong in this crisis, and those responsible are clearly identified in it. We need to deal with the mess they created. Despite promises from the previous Government that taxpayers would profit from the RBS bail-out, the Government’s shareholding is now worth around £27 billion less.

We are already reforming the regulatory structures that allowed these catastrophic failures to occur. Bonuses are a fraction of what they were four years ago. Early this year we placed a limit of £2,000 on cash bonuses for RBS and Lloyds. We have made it very clear that the bonus pool next year must be lower again, and more transparent. We are also clear that, at a time like this, the Financial Policy Committee’s advice should be followed: bank earnings should be used to build capital levels, not pay out large bonuses.

RBS itself has also made significant changes since 2008, including reducing the size of its investment bank by half, but I believe RBS needs to go further, and the management agree. We are the largest shareholders. Let me set out our view. RBS has already announced that it will further shift its business strategy towards its personal and SME customers and its corporate banking business which serves UK and international companies. We believe RBS’s future is as a major UK bank, with the majority of its business in the UK and in personal, SME and corporate banking. Investment banking will continue to support RBS’s corporate lending business, but it will make further significant reductions in the investment bank, scaling back riskier activities that are heavy users of capital or funding. RBS should emerge a stronger, safer bank able to maintain lending to businesses and customers, and which in time can be returned to full private sector ownership.

The British people are angry about what happened in our banks, and angry at the politicians who let it happen. This coalition Government see two parties working together to clear up the mess of the past and to create a banking system that protects taxpayers and serves customers better. Today we present the most far-reaching changes to banking in our modern history so that we can build an economy that works for everyone. I commend this statement to the House.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Let me start by thanking the Chancellor of the Exchequer for advance notice of his intention to give a statement but, as with the autumn statement, it is deeply disappointing that the statement, and the 75-page document, arrived with us only eight minutes before the Chancellor entered the House of Commons. One has to ask: do the Chancellor and the Business Secretary have something to hide?

I have a number of questions for the Chancellor. We have not had time to read the report so I hope he will make an effort to answer our questions today, but let me thank him for agreeing, at least in part, to our recommendation back in September that he produce an implementation plan for the Vickers commission by the end of the year. It is vital that the Government now implement these important banking reforms without foot-dragging or back-sliding or watering them down.

So will the Chancellor now agree to our second request, also made in September, and ask the Vickers commission to come back in 12 months’ time and publish an independent report on the progress that has been made in implementing its report?

Labour Members are determined to play their part in implementing these proposals in, as far as is possible, a cross-party spirit—taxpayers, customers and businesses, angry at banking recklessness which forced a multi-billion pound bail-out, will expect nothing less. We have apologised for the part that the last Government played in this global regulatory failure. In that same cross-party spirit, perhaps the Chancellor would like to take this opportunity to apologise too: for the role his party played in opposition, and he played as shadow Chancellor, in complaining of “too much regulation”, and for the then Leader of the Opposition calling, as late as spring 2008, for “lower taxes” and “less regulation” for the City. We all made mistakes and perhaps this Chancellor, who opposed financial regulation legislation, who opposed the nationalisation of Northern Rock, RBS and Lloyds, and who opposed Bank of England independence, should show a little more humility as well. If he does, I will, in a cross-party spirit, commend him for that.

I join the Chancellor in commending the excellent work of the pre-legislative scrutiny Committee on the draft Bill and of the Treasury Committee. We will study those reports in detail, and we will approach the Bill and the Chancellor’s reforms to the machinery of financial regulation with an open mind. However, like those Committees, we are concerned that his reforms could make decision making both more complicated and less transparent in future. There is a serious and still unanswered question as to whether there is sufficient accountability to match the massive new powers that the Chancellor plans to delegate to the Bank of England. His so-called “simplification” actually increases the number of deputy governors of the Bank of England from two to three.

Our fear is that he is replacing the tripartite system with a de facto quartet system—the Treasury, the MPC, the FPC and the PRA—with the FCA on the outside. Given that complexity—I can explain the acronyms; they are all different autonomous agencies in the Bank of England—can the Chancellor tell the House why he has still not published the promised memorandum of understanding between the Treasury and the different Bank agencies? I hope it is obvious to the Chancellor that the memorandum of understanding must specify that in any crisis the Chancellor must always hear the direct advice of all three deputy governors—alongside that of the Governor—most importantly that of the deputy governor who is also the chief executive of the independent regulator responsible for ensuring the stability of the banking system. In my view, that is essential if this new, more complex quartet system of financial regulation is to work in an effective and transparent way.

In responding to the Vickers commission, Labour set out three tests that will guide our view of banking reform—let me deal with them in turn. First, to protect taxpayers, we, too, support the commission’s radical reforms on ring-fencing and regulatory standards. Rather than delay, could the Chancellor explain why he is not at least making a start with reforms in the current financial regulation Bill, which will come before the House next year? Can he clarify to the House whether it is his intention to implement, in full, the Vickers recommendation on depositor preference? On the requirement on the biggest UK global banks to have the ability to absorb losses equivalent to between 17% and 20% of risk-weighted assets, can he explain why he is deciding to water down the Vickers proposal by not applying this rule to their full global balance sheets? Is he sure that this will not leave the taxpayer exposed?

The Business Secretary told the BBC yesterday that the Vickers report was being implemented in full, but what we have here is not an implementation report; it is a consultation paper before a White Paper in the spring. Already we learn that the Chancellor is not implementing the Vickers recommendations in full. Will he tell the House whether he really intends full implementation, or have the Liberal Democrats been sold a pup yet again?

On the second test of securing international agreement, given the Prime Minister’s decision 10 days ago to walk away from the negotiating table without securing any protections at all for financial services in those discussions, will the Chancellor tell the House whether he is confident that he can do a better job? In particular, is he confident that he will be able to get the necessary EU-wide agreement, which means a qualified majority vote, to implement the Vickers capital requirement proposals?

On the third test of delivering a banking system that supports the wider long-term interests of the economy, may I ask the Chancellor about competition and the supply of credit? On competition, we argued back in September that any delay or backsliding on competition would leave consumers and small businesses to pick up an unfair share of what he has confirmed is a multi-billion pound bill for tougher capital and regulatory standards. Developments since September have not been encouraging.

On Northern Rock, will the Chancellor reassure the House that his rather hurried trade sale will deliver over the coming years—in two, three, four and five years—a new challenger bank that will compete in the small business and mortgage markets? Will he assure the House that that will be the outcome? Will he confirm that it is as a result of widespread concern that the taxpayer will not get value from his loss-making sale that the National Audit Office has launched an investigation into that decision?

On the sale of Lloyds branches to support a new challenger bank, will the Chancellor explain to the House—perhaps he could explain it to the Business Secretary, too—why he has decided not to implement in full Vickers’s proposals to increase the size of branch sales from Lloyds on divestiture? Why has he not taken the advice of the Vickers commission on competition? Is it not overwhelmingly clear, as we argued back in September, that rather than waiting until 2015 the Chancellor should now commit to a review in 2013—two years’ time—of the impact on competition of these proposals?

The fact is that none of these long-term reforms can address the two immediate threats to the supply of credit and the stability of our already fragile economy and banking system. First, here in Britain, with rising unemployment and a flatlining economy depressing confidence, thousands of small businesses are now struggling—as Members on both sides of the House know and as I heard for myself in Leigh on Saturday—to access the credit they need to survive and grow, with net bank lending to businesses not rising but falling. Alongside the long-term reforms, will the Chancellor tell the House why, rather than cutting taxes for the banks, he is not acting now to ensure that UK banks start to act now to increase their lending to small businesses?

Secondly, finally and most gravely of all, the failure of all our political leaders across Europe to solve the euro crisis and in particular to get the European Central Bank to start doing its job as lender of last resort is now the biggest threat to banks in Britain, businesses in Britain and jobs in Britain. Ten days ago, the Prime Minister walked away. Will the Chancellor reassure the House that he has not walked away, too? Are he and the British Treasury seriously engaged in trying to solve what is now the gravest threat to prosperity in our country in this generation? Is anyone in the rest of Europe listening to the Chancellor any more?

[Mr Osborne]

First, I apologise if the right hon. Gentleman did not get the statement far enough in advance for him to read it. I am merely following the procedures that he laid down when he was at the Treasury.

Let me deal specifically with the points he raises in detail. First, on the financial services Bill which we will introduce in Parliament early in the next year, I did not talk about it in the statement because we will have the Second Reading debate, I hope, shortly after we come back in January, but it is an important part of what we are doing. I mentioned it in passing. It is about changing the regulatory system to put the Bank of England in overall charge of monitoring levels of debt and systemic risk in our economy—a responsibility that I believe should never have been taken away from the Bank of England back in 1997—and at the same time giving it the powers that it needs to act as a prudential regulator, without which it would not be able to identify those systemic risks.

The reason why I have not produced the memorandum of understanding is that I was waiting for the Joint Committee—the pre-legislative Committee—that has been looking into the Bill. I thought it would be completely inappropriate to produce the MOU before it had reported so, as I explained to the Committee, I was going to wait until I had its report. The report is only being published today and I hope fairly shortly to be able to produce that MOU, having taken into account what both it and the Treasury Committee say.

The right hon. Gentleman says this is all rather complicated. There is a simple principle, which is that the Bank of England is in charge of monitoring risks in our financial system—

[Ed Balls]

This plan is dangerous.

[Mr Osborne]

Well, we have tried the right hon. Gentleman’s approach and look what happened: the entire banking system collapsed. So with the greatest respect, his advice on what is a dangerous approach to regulation we will take with a pinch of salt.

I turn to the right hon. Gentleman’s other points. On international agreement, obviously it is extremely important that we are able to do this under European law. There has been an argument about this. We have a great deal of support. Countries such as Spain and Sweden have written to the Commission to urge it to allow countries to have their own national regimes that sit on top of the minimum capital requirements, and we are encouraged by the very recent Commission quote which says that “Vickers can be implemented fully in the UK in a way that is compatible with EU law”, but we will continue to make our argument. It is encouraging that both the European Commission and the European Parliament have expressed their keen interest in the Vickers report and are doing their own work on that. It is good to see us leading the international debate on that.

The right hon. Gentleman mentions competition. On Northern Rock, we welcome the National Audit Office investigation. It would be very surprising if the NAO did not do a report into such a financial transaction. It has done reports into all the previous financial transactions by this Government and the previous Government. I think what it will demonstrate is that this was a loss-making bank and the independent advice that we received was that it would go on losing money. The people who should be to blame for losing taxpayers’ money are sitting directly opposite me.

On Lloyds and the Lloyds branches, we have spoken throughout this process to John Vickers. Obviously, he can speak for himself and give his view, but we have kept him closely informed of what we are proposing. I think it is consistent with the intention in the report to create a strong challenger out of the divestment of the Lloyds branches.

Let me turn to the timetable that the right hon. Gentleman mentions. As I say, we will be implementing some of the competition requirements in the Vickers report—for example, the new competition remit for the FCA. That will be part of the financial services Bill that we introduce in January. We considered carefully whether to try and put all the Vickers requirements—the creation of the ring-fenced banks—into the financial services Bill that we are introducing early next year.

We did not think that was sensible. That was also the view of John Vickers, who recommended a separate piece of legislation. That is precisely what we are going to do, but our commitment is clear. We will have all the primary and secondary legislation, which is where quite a lot of the detail will be, through by the end of this Parliament. That is exactly what we want to see.

Finally, the right hon. Gentleman has been going around complaining that we are not doing enough, we are in danger of watering down Vickers, and the like. This is from the people who have opposed structural reform to our banking system. When I was sitting on the Opposition Front Bench as the shadow Chancellor under both the previous Chancellor of the Exchequer, who is in his place, and also under the Chancellor of the Exchequer before, who then became the Prime Minister, they opposed structural reform. They did not want to separate the banks. No doubt they can answer for themselves, but for the former City Minister who was in post when RBS made its bid for ABN AMRO, for the City Minister who was in post when Northern Rock was offering those 125% mortgages, for the City Minister who was in post when HBOS was making all those commercial property loans, for the former City Minister to complain that we are not doing enough is ridiculous. This is the man who advised that Fred Goodwin should get a knighthood and who told his boss to go and open the Lehman Brothers headquarters. That is his record, and his mealy-mouthed apology reminds me of that film “Whoops Apocalypse”—I am sorry, I just brought down the entire British economy; can we all please move on now. That is what he has done. Frankly, he has not made a substantive or interesting contribution to this debate on bank reform. Perhaps in the next few months he will.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

I am grateful to my right hon. Friend for his welcome for the Joint Committee report on the financial services Bill. Will he confirm that the legislation implementing recommendations on ring-fencing will be subject to pre-legislative scrutiny, but after that the banks will be required to implement ring-fencing without delay, whereas there is a strong case for allowing time for the requirements for higher capital adequacy to be built up to prevent intensifying the shortage of capital in the short term?

[Mr Osborne]

I will consider the case for pre-legislative scrutiny, and the House will consider it, closer to the time. Obviously there is a trade-off between getting the legislation through and having the pre-legislative scrutiny, but my right hon. Friend’s Committee has done a very good job. Not everyone here will have had a chance to read its report, but I have read its executive summary and I will read the full report tonight. It is an impressive piece of work and an advert for pre-legislative scrutiny. I repeat our commitment that we want all this legislation, primary and secondary, by the end of the Parliament.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I welcome the Vickers report and I am glad to hear that it is being implemented, but will the Chancellor be careful about overselling this? This would not have stopped the failure of Northern Rock or HBOS, and the idea that a future Government might decline to step in and rescue an investment bank if it failed is simply not credible. Look what happened to Lehmans when the Americans tried that. So these problems have not gone away. Will he accept that if his reforms of the Bank of England are to work, he has to look at the governance of the Bank, as the Treasury Committee recommended recently? The Bank made some bad mistakes in the past and we have to face up to that, just as we have faced up to the mistakes of the Financial Services Authority. Will he urgently accept the need for European Governments to shore up their banks, because there is very real risk, if we have a sovereign default in the next few weeks, that their banks will be affected because they are not adequately capitalised? If he is still on speaking terms with his opposite numbers, that is something that he should attend to very quickly.

[Mr Osborne]

I can assure the former Chancellor that we are still on speaking terms. Indeed, I had an hour and a half conference call just before I came into the Chamber, so I can promise him that a lot of speaking is still going on. The question he rightly asks is: where is the action? The eurozone has taken a number of important steps, but we still need to see a more credible firewall, which will enable it to stand behind its banks even more effectively.

On the right hon. Gentleman’s specific point about the Bank of England and whether this could have prevented what happened when he was Chancellor, of course institutions can get things wrong, and the Bank of England got things wrong in the run-up to the crisis, but it is sensible to try to have one body that is looking at both the prudential risks in individual firms and the overall systemic risks in the economy. The tripartite system clearly failed to do that. I do not think that before he became Chancellor it met in person at a principal level, or perhaps only once. The system did not work and many Committees of this House have pointed that out. For the Bank of England to have clear responsibility for monitoring risks is sensible. As to whether all this could have prevented what happened, I draw attention to two points. First, there are higher capital requirements in Vickers that would have better protected banks such as HBOS, and, secondly—the biggest challenge of all that he had to face—it is precisely the collapse of a large universal bank such as the Royal Bank of Scotland that Vickers is seeking to address. No one pretends that it is easy, but we believe, Vickers believes and many others believe, that the idea of ring-fencing the retail operations focused on the UK will give the Chancellor of the day greater opportunity to protect what really matters to the UK economy without having to resort to bailing out the entire institution.

[Mr Andrew Tyrie (Chichester) (Con)]

The House and the Chancellor will have heard the remarks made across the House about the need to strengthen the accountability of the Bank of England, which the Treasury Committee has already reported on, so I will not dwell on that. On the European angle, does he agree that the UK should be permitted to implement Vickers without awaiting the outcome of Commissioner Barnier’s latest announcement that he will review the merits of breaking up banks altogether, an idea explicitly rejected by Vickers, while at the same time not worrying about another of Mr Barnier’s curious and contradictory proposals, which is that a cap, as has just been mentioned, should be placed on the amount of capital UK regulators could demand of banks, which, if implemented, could prevent us from putting Vickers in place at all?

[Mr Osborne]

As I have said, I will return to the House early in the new year to address the issues that my hon. Friend’s Committee, other Members of the House and the pre-legislative Committee have raised about the accountability of the Bank of England and the accountability and responsibility of the Chancellor in a financial crisis. On his points about Europe, I understand that Commissioner Barnier, or the part of the European Commission that sits under him, is interested in the Vickers report and is looking at it, as is the European Parliament, which we welcome. On maximum harmonisation—in other words, not allowing individual countries with large banking systems to have their own regimes sitting on top of the EU minimum—that is something that other member states are concerned about. It was actually the Swedish Finance Minister who signed the letter that first raised concerns about that and got other Finance Ministers, myself included, to sign it, and the International Monetary Fund has also been very public in raising its concerns. We have not yet reached the point where the directive is about to be passed, but there is certainly a lively debate going on about it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. If I am to accommodate the level of interest in the statement, I will from now on require brevity, the textbook for which can be written by Sir Stuart Bell.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Building on my right hon. Friend the shadow Chancellor’s statement on bank lending to the small and medium-sized enterprise sector, has the Chancellor made any study at all of the impact of what he calls bigger cushions—raising capital requirements from 7% to 9%—on bank lending to that sector? Can he offer the House a guarantee that he will consider that as part of his consultation leading to his White Paper in the spring?

[Mr Osborne]

It is precisely to avoid a procyclical impact that the backstop for capital requirements is 2019, so there is quite a long timetable, which is consistent with the Basel agreement, but the hon. Gentleman is of course right to point out—indeed, the shadow Chancellor made this point—that the current situation in the eurozone is causing a stress on bank funding around the world. It was good to hear the shadow Chancellor acknowledge at the end of his remarks that the biggest single threat to British businesses, as I think he put it, is the current eurozone crisis, which is an analysis we share.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Still on the subject of brevity, I now turn to the person I would describe as the emeritus professor of that subject, Mr John Redwood.

[Mr John Redwood (Wokingham) (Con)]

Will the Chancellor take urgent action with RBS to create three new competitor banks from its assets and liabilities so that we can have real competition and more promotion of growth?

[Mr Osborne]

I have set out our view as the largest shareholder of RBS. We have to be careful of the shadow director rules and the like, but I was very clear in my statement that we expect and hope to see RBS shrink the size of its investment bank and focus on the UK and its UK customers. That is our proposal as an RBS shareholder. Of course, the question of how to dispose of our shares in RBS, which might arise in future, is one that we will address at the time.

[Malcolm Wicks (Croydon North) (Lab)]

Given the interesting speech recently made by the Prime Minister on the importance of Christian values, is there not a danger that the Chancellor and the Treasury as a whole are spending too long talking to the money changers and not enough time talking to more important elements of the British economy, such as manufacturers and small businesses? Does he feel that when Jesus overthrew the money tables he should have waited six years before acting?

[Mr Osborne]

I would not say that what we are undertaking is of biblical proportions, but we are acting now to deal with those problems. We are changing the system of regulation, which will be in place once the draft financial services Bill is passed next year; we are changing the competition remit, which will be in place by 2013; and we are committed to introducing all that legislation, including the secondary legislation, in this Parliament. We are undertaking those reforms, but in the years in the desert, which were the years under the Labour Government, none of those things was proposed at all.

[Stephen Williams (Bristol West) (LD)]

I congratulate my right hon. Friends the Chancellor and the Business Secretary on working together to provide a secure future for our banking sector and to put behind us the failures of the past. Uppermost in the public’s mind from the past will have been the £45 billion bail-out of the Royal Bank of Scotland, and, given that it is now under state ownership, could not the Chancellor consider its break-up to establish a challenger bank on the high street for lending specifically to small and medium-sized businesses in order to provide the finance for future growth and economic recovery?

[Mr Osborne]

I have already set out the Government’s view on the Royal Bank of Scotland, and the issue of what to do when we come to dispose of the shares will be one that we can all address at the time.

The document and the process have been a very good advertisement for the coalition Government. The Business Secretary and I have worked incredibly closely on the document, which is a joint one from us both, and people will not have read in the newspapers lots of stories about the “splits between us on the issue”—

[Ed Balls]

That was last week.

[Mr Osborne]

Getting a lecture on “splitism” from the shadow Chancellor, who has been the biggest source of division in the House over the 10 years that I have been in Parliament, adds to his lessons on how to regulate banks properly as something to treasure, but this document is a very good advertisement for the coalition Government and the work that we have done with the Business Secretary.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Chancellor for the statement, and for much of what was in it on Lloyds divestment, competition, account switching, retail ring-fencing and the final 2019 implementation date. I hope that that implementation will do nothing to weaken small and medium-sized enterprise lending, but what in particular did he mean by “RBS will make further significant reductions in the investment bank”? Can he put a cash figure on that? How much deleveraging does he see taking place? What does he envisage being sold off? Will it be in the UK or overseas? We need certainty about RBS’s future, so can we have some detail today, and will he confirm that he does not intend to undermine the independence of the board, notwithstanding the fact that the Government are the major shareholder?

[Mr Osborne]

The hon. Gentleman asks me not to undermine the independence of the board and, then, to provide all sorts of detail on exactly what the board should now do, so let me say this. I know that the Royal Bank of Scotland is a very important employer in Scotland and a very important part of the Scottish economy. We want to see it focused on its UK businesses, on UK corporate and individual customers, and its investment bank should support that service. The Royal Bank of Scotland management have also come to that conclusion, and in the coming months they will set out further details on how they are going to do that work, but it is a significant change of direction for the bank.

[Adam Afriyie (Windsor) (Con)]

Given the shadow Chancellor’s involvement in the biggest banking crisis in the history of our country, and given his overt criticism of the current Chancellor, will my right hon. Friend tell me whether he has received from him any constructive submissions at all during this period?

[Mr Osborne]

I do not think that I have received a single submission on banking reform from the shadow Chancellor since he took up his job.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Will the Chancellor of the Exchequer confirm that nothing he has announced today will for the next five years reduce in any way the risk to the British taxpayer in the event of a British bank losing out on sovereign debt in the European Union in a way that damages its retail operations?

[Mr Osborne]

There are things that we have done and are doing now to make our banking system safer. Banks are required to hold more capital—more cushion—to protect them against losses, whether from sovereign debt or anything else. We regularly take part in pan-European stress tests, and actually the British banks pass those tests when other European banks do not. I think that that is because the British banking system is well capitalised and liquid.

We are also introducing a new system of regulation, which, as I say, will be operational in 2013; once the legislation has passed through the House of Commons, the Bank of England will be in charge. Furthermore, we are introducing the Vickers requirements over the next three and half years, until the general election at the end of this Parliament—we are getting all that legislation through as well. We are doing a huge amount to make the British banking system safer now, but also safer in future.

[Mr William Cash (Stone) (Con)]

To protect the City of London, will the Chancellor follow the example of the Prime Minister when he used the veto the other day? When necessary, will the Chancellor here in Westminster override European legislation to protect the taxpayer, the City of London and the United Kingdom?

[Mr Osborne]

We need legislation that works effectively for British banks across Europe; British banks have subsidiaries in other European countries. Actually, a single market in financial services would be a very good thing—and it is a good thing for this country, although we need to see it deepen. We also need to make sure that countries with very large banking systems, such as our own, are able to take national decisions that protect our banking systems. I am confident that we can secure agreement to that.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is there not a possibility that if the banks are split up, there will be more top bankers than there are now? What we need in Britain is small business growth and large business growth. The chances are that the most reviled group of people in the land—the top bankers—are going to multiply.

[Mr Osborne]

I do not think that it automatically follows that if we ring-fence the banks, we double the number of bankers. It is our intention, yes, to have a successful financial services industry, which is very important in Derbyshire, Cheshire, where my constituency is, the west midlands and Scotland, as well as in the City of London.

However, we do not want our entire economy to be in hock to the City of London; that is what we are seeking to avoid. We do not want to put all our bets on the City of London. That is what happened over the last 13 years, and it went disastrously wrong. The Government are determined to build up other sectors of the economy, including manufacturing and small businesses. The very fact that later today we are debating the Government’s apprenticeship programme shows our commitment as a Government to building up those other industries.

[Mr Edward Leigh (Gainsborough) (Con)]

After these reforms, will our banks be more or less regulated than their international competitors?

[Mr Osborne]

In certain respects, they will be more regulated compared with some other regimes. Obviously, the ring-fencing requirement that we are introducing is not present in every other financial centre. However, it is an appropriate course of action for the UK, given the size of our banking system relative to our GDP—it is 500% of our GDP; the United States banking system is only 100% of its GDP. As I said, there is now quite a lot of international interest in what we are doing, so we may find that other financial centres follow our lead.

[Ann McKechin (Glasgow North) (Lab)]

The Chancellor rightly attacked casino banking. Does he not agree that now is the time to restrict UK state-owned banks in respect of their operations in tax havens, which have been a source of much of that casino banking?

[Mr Osborne]

We have required all the major banks in Britain to sign up to the tax code that the previous Government introduced, although they got only two or three banks to sign up to it. We not only have the code, but we are making the banks sign up to it.

[Michael Fallon (Sevenoaks) (Con)]

Does the Chancellor agree with me that if the three politicians identified as culpable in the Royal Bank of Scotland report had been serving in local government, they would probably have been surcharged? Does he think it likely that, in the fullness of time, other European countries will follow us along the road of a retail-wholesale split?

[Mr Osborne]

Two of those three politicians are now busy earning quite a lot of money in the financial sector to deal with the fact that they might face a surcharge. Perhaps, with the efforts of my colleagues, we can make sure that the third politician soon follows them.

[Ed Balls]

You wish.

[Mr Osborne]

Actually, we are quite happy for the right hon. Gentleman to stay where he is, so I retract my previous comment.

In response to my hon. Friend the Member for Sevenoaks (Michael Fallon), we are confident that we will be able to do this within the regime of European Union law.

[Mr William Bain (Glasgow North East) (Lab)]

Has the Chancellor assessed the impact on levels of net lending to business of corporate deposits, estimated at £270 billion for RBS, Barclays and Lloyds, potentially lying outside the scope of the retail ring fence? Who will decide which corporate deposits sit outside the ring fence—the new Prudential Regulation Authority or the banks themselves?

[Mr Osborne]

A key part of the Vickers report was that the location of the ring fence would be flexible. Certain things would have to be in the ring fence, such as small and medium-sized business overdrafts and deposits and the overdrafts and deposits of individuals, and certain things definitely could not be in the ring fence, such as investment banking activity. However, corporate deposits could either be in the ring fence or not in the ring fence; that would be a decision for individual institutions, although of course they sit under the regulatory regime. That is what John Vickers recommended, having looked at this very carefully, and that is the plan that we are now implementing.

[Lorely Burt (Solihull) (LD)]

I welcome the coalition Government’s commitment to implementing the recommendations of the Vickers report. What difference, practically, will it make to people in Solihull and elsewhere in the country, and by when will they start to feel that difference?

[Mr Osborne]

The intention is to make sure that the taxpayers of Solihull are better protected against the failure of banks in future in a way that they were not in recent years when banks such as RBS failed. That is the overall intention of the report, but it has a very important component that does not get nearly the same media attention as the ring-fencing element that we have all been talking about—namely, the promotion of competition. The report has a specific recommendation whereby, from 2013, customers in Solihull will be able to switch their bank account within seven days, at no cost, and all their direct debits and credits will follow them to their new bank account. That is a very practical benefit to the people of Solihull and, indeed, the entire country.

[Mr Denis MacShane (Rotherham) (Lab)]

Given that the Government are not spending and banks are not lending, is the Chancellor at all worried that he and Sir John Vickers are generals fighting the last war? Surely, rather than keeping a lot of money in vaults, we want it out there fructifying in the economy creating jobs and new businesses.

[Mr Osborne]

At times it feels like the current war as well. I do not think that the effects of the financial crisis have disappeared from our economy. Through these proposals, we are taking steps better to protect British taxpayers in the future. There is a decent implementation period for some of the recommendations, such as the loss absorbency recommendations, precisely to take account of what is going on in funding markets. It would be pretty extraordinary if this country, after all that it went through in recent years, with the biggest bank bail-out in the entire world happening here, did not learn the lessons of what went wrong and try to protect people in future.

[Andrea Leadsom (South Northamptonshire) (Con)]

The Vickers proposals definitely make banks more robust and more resolvable, but does my right hon. Friend think that they will definitely be more competitive? Specifically, the stickiness of personal current accounts and SME accounts is a real problem. Will he consider the proposal for full account portability rather than this halfway house which just makes it faster to transfer one’s bank account?

[Mr Osborne]

There is a specific reference to full account portability in the report, as my hon. Friend will see when she reads it, and that is there partly because of the point that she made to me about it in the Treasury Committee. We will consider full account portability if the switching service that we introduce is not effective and does not deliver the expected consumer benefits.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The House is not clear from an answer that the Chancellor gave to my right hon. Friend the Member for Morley and Outwood (Ed Balls) whether he supports the Vickers recommendation that in order to create an effective challenger bank, Lloyds needed to divest itself of a greater number of branches. Does he agree with that recommendation, and if so, when is he going to implement it?

[Mr Osborne]

We are confident that the sale proposed by Lloyds of 600 branches to the Co-op will create a sufficiently strong challenger bank because it is to an existing institution rather than a new institution. Obviously, that sale is subject to commercial negotiations and the deal is not yet done, but we think that it meets the conditions set out in the Vickers report. We have kept in close personal contact with John Vickers throughout this process.

[Mark Field (Cities of London and Westminster) (Con)]

The Chancellor has acknowledged that the Vickers recommendation would gold-plate the already onerous capital requirements on EU banks, as set out in the Basel III protocol. Does he recognise that if the figures were implemented in full, there would be the twin risk of diminishing the attractiveness of London as a global financial centre and further disincentivising corporate lending by UK banks, which is an essential part of the economic recovery and growth that we all support?

[Mr Osborne]

I do not think that it will discourage corporate lending, nor do I think that it will make the UK any less attractive as a location for the headquarters of global banks. We addressed that issue explicitly in our response. Because the principal proposals and additional national requirements are directed at UK retail banking, I do not think that it will change people’s view of the UK as an attractive place to locate their financial services, whether it be in the City of London or elsewhere.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

I welcome the Chancellor’s conversion on bank regulation. I remind him that there are more bankers and former bankers behind him than there are behind me. [Interruption.] I mean on all the Benches behind me. Why can he not bring forward the 2019 timetable? That is what my constituents want to know.

[Mr Osborne]

The 2019 timetable was recommended by John Vickers in the report. People should be clear that that is the backstop. That is the final day when everything has to be implemented. In particular, if the additional capital requirements were implemented today, it might have an impact on the economy that we would not want to see. The ring-fencing legislation will be in place by the end of the Parliament and banks will be expected to comply with it as soon as is practically possible. The competition requirements will be in place by 2013. When it comes to jibes about who is working in the financial services, I seem to remember that a number of former Labour Prime Ministers are now quite lucratively paid in the financial services.

[Steve Baker (Wycombe) (Con)]

Chapter 3 of the Government’s report, on loss absorbency, seems, perhaps reasonably, to take for granted the adequacy of accounting standards. I press the Chancellor in his forthcoming White Paper to consider seriously the pernicious effects of the international financial reporting standards, which were applied to banks by the previous Government.

[Mr Osborne]

There is a debate to be had about international accounting rules and their impact on the financial crisis, which I am happy to have with my hon. Friend in person. There are moves afoot to make the international bodies that set the standards more accountable by using the Financial Stability Board. He raises a good issue.

[Kevin Brennan (Cardiff West) (Lab)]

What assessment has the Chancellor made of the proposal in the ICB report to apply a blanket leverage ratio across all financial institutions, and in particular of the possible unintended consequences that that could have for building societies?

[Mr Osborne]

That is an issue that some building societies have raised with us. That is why we say in the report that we are attracted to a leverage ratio—indeed, it is now part of the international regulatory architecture—but that we will consult on exactly how to implement it so that it does not have a perverse impact on building societies, which have served customers well throughout this period.

[Richard Harrington (Watford) (Con)]

On behalf of my knees, Mr Speaker, I thank you. [Laughter.] I commend the Chancellor on his statement. Will he confirm that had these proposals been implemented before 2007, the RBS-ABN AMRO deal could not have taken place?

[Mr Osborne]

The RBS-ABN AMRO deal stands out as the moment of greatest folly in banking regulation, not just because—[Interruption.] The shadow Chancellor was the City Minister. He has incredible amnesia about his role, but thankfully we are here to remind him. It is extraordinary that the ABN AMRO deal was given the go-ahead after Northern Rock had failed. People do not appreciate the fact that it happened after that. We were highly critical of the Government’s regulatory system then, and we remain highly critical of the regulatory system that we inherited.

[Keith Vaz (Leicester East) (Lab)]

On 16 June 2010 the Chancellor told me that he would read the confidential parts of the Bingham report on the closure of the Bank of Credit and Commerce International and seek urgent advice from the Treasury about whether he should publish them. I do not know what the definition of “urgent” is in the Treasury, but 18 months seems like a very long time. I know that he has been busy, but has he read the report and will he now publish it?

[Mr Osborne]

The good news is that I have read the report. The bad news, from the right hon. Gentleman’s point of view, is that I do not propose to publish the appendices. Of course, my predecessors also took that decision. I have looked into the matter, and the view remains that publishing the appendices would not add substantially to people’s understanding of what went wrong, and that they would probably require extensive redacting, which would not only be expensive but still leave people with suspicions, even if those suspicions were unfounded. I have taken the same view that I believe the last three or four of my predecessors took.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I think the hon. Member for Watford (Richard Harrington) has set a trend of leaning forward expectantly, and the hon. Member for Erewash (Jessica Lee) is now following in his wake.

[Jessica Lee (Erewash) (Con)]

Does my right hon. Friend agree that one key conclusion of the report is about customers’ ability to move their accounts more cheaply and easily? That will be well received by people in Erewash and elsewhere. Banks are there to provide a service, and that is the type of measure that will significantly increase competition and aid this country’s recovery.

[Mr Osborne]

My hon. Friend is right, and she speaks up well for her constituents, who want greater choice on the high street. They want to be able to switch their bank accounts easily, and there are significant proposals in the report to help them do that within seven days and without having to chase up all the direct debits and the like, which will be done for them at no charge. That will be a practical benefit of the Vickers report and the Government’s implementation of it.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Chancellor give the House a categorical assurance that he has now fully recovered from his dangerous flirtation with deregulation, and that he will be able to avoid any further advances from the right hon. Member for Wokingham (Mr Redwood)?

[Mr Osborne]

If the hon. Gentleman examines what the Government and I have done over the past 18 months, he will see that we want proper regulation that works, enabling consumers to make choices and market forces to operate where appropriate while protecting the British taxpayer, with the Government stepping in where necessary. The report that we commissioned from John Vickers sets out a very important point about the regulation of bank structure that the previous Government did not examine. It represents a significant advance by this Government.

[Duncan Hames (Chippenham) (LD)]

The public are impatient for reform and proper regulation of our banks, so I applaud the Chancellor’s dexterity in separating the timing of the loss absorbency requirements from that of the requirements for increased competition and the introduction of a ring fence on high street banking. Having decided to introduce that ring fence, what is preventing him from doing so before 2015?

[Mr Osborne]

We have made a clear commitment—Sir John Vickers set the back-stop at 2019, but we have said that we want the legislation to go through by 2015. My hon. Friend has to appreciate, and I am sure he does, that it is about passing not just the primary legislation but the secondary legislation through Parliament. That is a very complex matter, because we do not want the banks to find a way around secondary legislation and we do not want to come up with rules that turn out to be full of holes. It is detailed, technical work, but we are absolutely determined to do it and have given ourselves a clear timetable for delivering it.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

How much money has the City of London donated to the Conservative party since the general election?

[Mr Osborne]

rose—

[Mr Speaker]

Order. In framing his response, the Chancellor of the Exchequer should be aware that if it is related in any way to banks, he is welcome to answer, but he is not obliged to do so. The question must relate to the specifics of the statement. It is up to the Chancellor.

[Mr Osborne]

indicated dissent.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s excellent statement, and I also understand why progress on ring-fencing has to be slow. Will he confirm that the guarantee for eligible retail deposits does not necessarily extend to the banks themselves?

[Mr Osborne]

The financial compensation scheme is very clear. We cover 100% of eligible deposits, up to £85,000 in a subsidiary. It is important that people are aware of that, and I think the public are more aware of it than they were three or four years ago. We want the explicit taxpayer guarantee of people’s deposits; what we do not want is the implicit taxpayer guarantee of the banks that took those deposits.

[Jim Shannon (Strangford) (DUP)]

I welcome the Chancellor’s statement. Will he confirm that the legislation will apply to mutual societies? If so, would it have prevented the crisis in the Presbyterian Mutual Society in Northern Ireland?

[Mr Osborne]

One of the things we are considering is whether there should be a de minimis exemption from the regulations for smaller banks and building societies. Vickers proposed that in the interim report, but not in the final report, so this is an area where we are looking at the interim report, rather than the final report. However, we will consult, and the views of Members from Northern Ireland and others will be welcome in that process.

[Stephen McPartland (Stevenage) (Con)]

Does the Chancellor agree that there is no painless way of reforming the banks and that the banks have to accept a little pain now, so that the Government can protect taxpayers from future bail-outs?

[Mr Osborne]

The banks themselves—inasmuch as we are talking about shareholders who own them—will benefit from a safer banking system. Among the casualties of the banking crash were shareholders of the Royal Bank of Scotland, Northern Rock and the like. They lost money too and, as my hon. Friend well knows, they were not all immensely rich City people; rather, many were actually on quite low incomes. The shares were their main source of savings, so the shareholders also lost out. Owners of banks, including small shareholders, will benefit from a safer banking system.

[Mr David Nuttall (Bury North) (Con)]

Given that the UK’s four largest banks hold seven out of 10 personal current accounts and eight out of 10 of the current accounts of small and medium-sized businesses, will my right hon. Friend reassure me that the proposed new legislation and regulation will neither result in banks leaving the UK or being deterred from expanding, nor deter new banks from opening in the UK, thereby reducing competition and restricting choice for customers?

[Mr Osborne]

The reforms will make the UK an attractive location for international financial services, which will know that our system is better regulated, and for retail banking, because customers will have greater assurances that the banking system is safe and that they will not have to bail out the banks if they go wrong.

[Matthew Hancock (West Suffolk) (Con)]

I very much welcome the report, which, along with all the other measures, I hope will help to change the culture of finance. With that end in mind, will the Chancellor set out what he hopes we can achieve in terms of having a direct impact on individuals’ personal pay and compensation in the financial sector?

[Mr Osborne]

We expect the bonus pool to be lower than last year and very much lower than four or five years ago, when it was probably four times what it will be now, so bonuses have come down. We have a very transparent regime, which did not exist when we took office, with the pay of the eight highest-paid non-board executive members now having to be disclosed. Above all, however, people should pay attention to what the Financial Policy Committee has just advised, which is that banks should retain earnings to build up capital at a time such as this, not pay them out in bonuses. The Governor of the Bank of England, the Financial Services Authority and I have all made it clear that banks would do well to pay attention to that advice over the next couple of months.

[Jason McCartney (Colne Valley) (Con)]

Does the Chancellor agree that the high street banks have a key role to play in regenerating our towns and rural communities, by continuing to have a presence on the high street?

[Mr Osborne]

Yes, I do, and, to be fair, the banks themselves acknowledge that they withdrew from the high street too much. We want to get back to more of that face-to-face banking that served our country well for many decades. As I have said, the banks acknowledge that, and they have come together to create the business growth fund, which will invest in new start-up businesses. They have also issued a new code of conduct to enable them to get back to the high street banking that we remember from the past.

[Mr David Hamilton (Midlothian) (Lab)]

On the subject of the personal responsibility of directors, I should like to draw the House’s attention to Fannie Mae in America, some of whose directors are being charged and, if found guilty, could face prison. Is there anything in the Chancellor’s proposals that could put directors in this country in the same boat, in that they could be sent to prison if they were found guilty of doing something wrong?

[Mr Osborne]

There is nothing specifically about that in the Vickers report, but the Financial Services Authority has done an investigation into what happened at the Royal Bank of Scotland, and has made specific recommendations on the law regarding bank directors. It turns out that the laws were inadequate to help the authorities to investigate specific individuals at RBS and HBOS, so we are going to look at the recommendation, which came to us only recently, and see whether we can implement it, to ensure that individuals as well as institutions can be held responsible for their actions.

[David Mowat (Warrington South) (Con)]

There is no agreed definition of which bank functions may be included in the ring fence, and which may not. There is therefore a risk of fudge as the proposals are rolled out over the next few years. Will the Chancellor agree to ensure that that is defined in primary and secondary legislation, and not simply left to the regulators to argue over with the banks?

[Mr Osborne]

There will be clear definitions in the legislation. To be fair, what John Vickers recommended, and what we are proposing, is relatively straightforward. There are certain things that will have to be in the ring fence, such as the deposits of individuals and the overdrafts of small businesses. There are also certain things that cannot be in it, such as classic investment banking activities. There will then be a middle ground, which will essentially involve corporate lending, and that can either be in the ring fence or not. John Vickers thought that it would be wrong to prescribe that, because different banks have different models, so he has left the location of the ring fence flexible. However, the height of the fence will be high, and we are going to introduce it into legislation.

[Nicky Morgan (Loughborough) (Con)]

I welcome the emphasis in the Chancellor’s statement on more choice and competition, which will benefit businesses in my constituency and elsewhere. They often tell me that this is not just about bank lending, and that it is also about poor customer service and unexpected charges being imposed. Will my right hon. Friend confirm that this is just the start of a process, and that there will be continuous monitoring of the way in which banks treat their customers from now on?

[Mr Osborne]

There will be, and part of the new regime will involve a specific authority looking at competition and customer service. In that way, we shall avoid having one institution—namely, the FSA—trying to do both functions of a regulator, which are to look at the point-of-sale service that someone gets to ensure that they are being sold a product correctly, as well as ensuring that the bank itself is being properly managed and is not about to collapse. Separating those functions will be an essential part of our reforms.

[Charlie Elphicke (Dover) (Con)]

May I urge the Chancellor to consider a whole in-country depositor preference system, such as that in the United States, rather than the insurance-based system recommended in the Vickers review? This would, over time, discourage reliance on the wholesale short-term funding markets. It would also reduce the risk to the taxpayer of banks that are too big to fail.

[Mr Osborne]

I am happy to consider my hon. Friend’s views, but we are equally clear that the depositor preference proposals in the Vickers report are the ones that we support in principle; their implementation in practice will be addressed in the White Paper.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that the ring-fencing outlined in the proposals will not only protect the taxpayer from casino banking but have the longer-term benefit of encouraging more competition by creating a fairer and more even playing field for small banks, which would be to the benefit of all?

[Mr Osborne]

We want to see more competition, which is why we proceeded with the sale of Northern Rock and why we are pleased to see Lloyds seeking to sell its branches to the Co-operative bank. It is also why we want to see other challenger banks out there. We are also considering a de minimis exemption for some of the smallest banks; we will report back on that when we publish the White Paper.

[Tony Baldry (Banbury) (Con)]

Small businesses in Banbury, Bicester and elsewhere will welcome the enhancement of competition in high-street banking and the fact that it will be easier for them to move accounts. Will my right hon. Friend explain, however, why it is going to take until September 2013 for these changes to be implemented? If the banks had the will, surely they could implement those changes much more speedily.

[Mr Osborne]

I believe this is quite a complex operation. We have looked at this, as has John Vickers—and he thought 2013 was the appropriate timetable. We are trying to create a seamless service through which people can indicate that they want to change their current account; that happens within seven days without any charges and all the direct debits and the like will follow people to the new bank. It is, as I say, quite complex to achieve and we want the service to be seamless for the customers, so I would rather spend a few months to get it right rather than try to rush its introduction.

[Glyn Davies (Montgomeryshire) (Con)]

Notwithstanding the benefit to individual taxpayers, the banking sector is unlikely to welcome the separation of its retail banking from its investment banking activities, so will my right hon. Friend assure us that he will stand his ground and ensure that our banks cannot look to the taxpayer to save them from the consequence of high-risk borrowing in future?

[Mr Osborne]

I can absolutely assure my hon. Friend that we will stand our ground. While I have been on my feet, I have received the news that John Vickers has welcomed our response. I absolutely commit to my hon. Friend, to John Vickers and to others that we will implement the proposals in the report to make sure that our banking system is safer, that taxpayers are better protected, that customers get a better service and that we do not repeat what went so badly wrong under the previous Government’s regulatory regime.

[Andrew Stephenson (Pendle) (Con)]

Given the dominance of the four largest banks in the UK, does my right hon. Friend agree that, in addition to new banks, credit unions such as the Pendle Community Credit Union or building societies such as the Marsden building society headquartered in Nelson in my constituency have a key role in improving competition on the high street?

[Mr Osborne]

I think credit unions and small building societies have a key role to play, whether it be in Pendle or other parts of the country. What we want is the greatest possible choice for customers. This report is an important step towards providing that competition and dealing with the large banks that have such a large proportion of the market. The competition part of the report is important and sits alongside the ring-fencing part—all designed to make our banking system safer and to serve customers better.

[Mr Philip Hollobone (Kettering) (Con)]

My Kettering constituents would like to see more competition between the high-street banks. At the moment the big four banks have about 77% of all personal current accounts and 85% of all small business accounts. Would the Chancellor like to see those market shares fall; and, if so, by how much?

[Mr Osborne]

I would like to see them fall, which is why we are keen to get challenger banks out there. It is why we proceeded, as I have said, with the sale of Northern Rock, and why we want the Lloyds divestment to take place. As for what the exact market share of those banks should be, I do not believe, perhaps unlike my hon. Friend, in the command economy in which the Chancellor of the Exchequer determines every share of the market for every business. I will not prescribe exactly how much market share a bank should have; there has to be an element of the free market .

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I welcome these recommendations for regulation. It might come as a surprise or, indeed, a shock to Members to learn that I was refused my first mortgage application. That happened back in the days when mortgages to first-time buyers were capped at two thirds of the value of the property. Under the previous Government, however, first-time buyers could get 100% or 125% mortgages. Will the Chancellor confirm that those days of irresponsible lending are behind us?

[Mr Osborne]

We have not much mentioned today the report from the Financial Services Authority, which is about ensuring that people can afford the mortgages they seek. The changes are important, as they get the balance right between not pricing first-time buyers out of the market even more than they are now and ensuring at the same time that people are informed and can get a mortgage that they are able to afford.

Fisheries Council

Monday 19th December 2011 Commons Chamber

17:19

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I wish to inform the House of the outcome of the discussions on fisheries at last week’s Agriculture and Fisheries Council, at which I represented the United Kingdom for the fisheries elements of the agenda, while Richard Lochhead, Michelle O’Neill and Alun Davies represented Scotland, Northern Ireland and Wales respectively. I am aware that that many Members are very interested in the annual fisheries discussions, and I am grateful for the opportunity to inform the House of the outcome of this year’s negotiations.

The annual December round is always a difficult negotiation, but this year we went into it facing a greater challenge than we have confronted in recent years. Just under a month ago, the Commission published a regulation on the cod recovery plan that would have had dire consequences for significant elements of the UK fleet. We had not only to negotiate the annual total allowable catch and quota allocations, but successfully to negotiate a resolution of the threat of massive cuts in the time that our fishermen can spend at sea under the cod recovery plan. I am pleased to report that we managed to achieve both those outcomes.

We stated and won our case for our interpretation of article 13 of the cod recovery plan. That means that we can continue to offer incentives, in the form of additional days at sea, to fishermen who undertake additional conservation measures. Without that correction in interpretation, more than three quarters of the fleet would have had their fishing time cut drastically short, in some cases to just four days a fortnight. This important victory means fleets can go on fishing and catching their quota, while continuing the ground-breaking cod avoidance and discard reduction schemes that are being developed and implemented by fishermen all around our coast.

I know that the fact that—except in regard to the regulation that I mentioned a moment ago—we were unable to avoid reductions in days at sea has come as a blow to significant parts of the industry, and I share their disappointment. However, the Commission felt that significant legal obstacles, as well as resistance from a number of member states, prevented it from not cutting the number of days at sea. That said, the Commission has made it clear that the cod recovery plan is not meeting its objectives, and has agreed that the review that I secured last year must be accelerated as a matter of urgency. I hope that it will be possible to revise the rules without a full-blown co-decided revision of the text, but if that is needed, we will work hard with the Commission to create mitigating technical measures that will maximise the opportunities available to our fishermen.

Let me now turn to the TACs and quotas for next year, which constituted the main issue on the Council’s agenda. Since the Commission’s proposals were published in the autumn, we have consistently argued that we should follow the science, and should aim for the securing of sustainable fish stocks in our seas. That was particularly important in the context of tackling the so-called data-poor stocks. The Commission’s proposal that quotas should be reduced by up to 25% did not take into account all the information that the fishing industry and scientists had been collecting, or the implications of such cuts, both in economic terms for the fleet and for discards. Significant cuts in by-catch species, for instance, would have been likely to result in a substantial increase in discards. That is completely contrary to the policy of both the UK and the Commission, which is to eliminate discards.

We successfully negotiated amendments to the Commission’s original proposal for TACs and quotas—amendments that are worth an additional £36 million to the UK fleet. We secured the continuation of this year’s quota allocations for the majority of stocks, including North sea and west of Scotland megrim, whiting in western waters, and pollack and sole stocks along the west coast. I can give more details if Members require them, but a couple of noteworthy gains included a 200% TAC increase in west of Scotland haddock, a roll-over of Northern Ireland nephrops, and a 150% increase In south-western cod. The UK battled hard to reach an agreement that ensures the long-term sustainability of fish stocks while providing short-term catching opportunities for our fishing industry. The package we secured helps all sectors of the industry, large and small, and delivers benefits for all parts of the UK, north, south, east and west.

I would like to put on record my thanks for the co-operative manner in which colleagues from Scotland, Northern Ireland and Wales contributed to the discussions. In the event, all Administrations were able to agree to the final deal. I would also like to stress that the overall package of measures was negotiated with close and constructive co-operation with the European Commission and with other member states, most notably France, Germany, Spain, Denmark and Ireland. This shows that the UK is playing a firm and constructive role in Europe, getting the best deal for the UK and its fishermen. This was a good result for the UK fleet and, equally importantly, a good result for the long-term sustainability of the stocks that our fleet fish.

[Fiona O'Donnell (East Lothian) (Lab)]

I congratulate the hon. Gentleman on at least managing to stay in the room with his European colleagues until 4 am, unlike the Prime Minister. I also congratulate him on exposing the two faces of the Scottish National party on Europe: on the one hand it promises to get out of the common fisheries policy, while on the other hand it says it wants to be a leading player in the EU.

A sustainable and profitable fishing industry is vital to the UK’s economic interests and to coastal communities around the UK. Some 12,000 fishermen are employed on UK boats, with just over 5,000 working in Scotland. The fishing industry is particularly important in Scotland. I grew up in the highlands of Scotland, and on a recent visit to the Western Isles I had a chance to speak to the fishermen in those fragile island communities. Fishing provides employment not only to the men I met in Tiree, Barra and Lewis, but to women as well, in the processing of the catch. May I ask the Minister whether he has visited the Western Isles, and if he has not may I urge him to talk to those men and women, so he can see for himself the impact the decisions he makes has on these fragile communities? Without a good deal from this Minister, the very existence of those communities is at risk.

The case for reforming the CFP is compelling. At present, almost half the fish caught in the EU are discarded, which is both an economic and an environmental waste. In July, this House unanimously adopted a motion urging the Government to support radical changes to the CFP. The Commission published its draft reform proposals on 13 July. What guarantees can the Minister give that the Government’s position on discards and CFP reform will not lose out in future negotiations? What progress is he making in advancing the case for the regional management of fisheries waters, a move that would be welcomed by the UK fishing industry?

I pay tribute to the Scottish fishing fleet, which has already reduced discards and introduced CCTV as part of catch quota to better manage fish stocks. What investment in scientific evidence is the Minister proposing to make as we move to long-term management of fishing stocks?

The verdict on this Minister is in: the fishing industry and conservation groups have described his deal as a disaster. In November he met representatives of the fishing industry and stakeholders to agree the UK’s red lines for the negotiations, including rejecting any calls to cut the number of days that fleets can spend at sea. On 5 December he issued a press statement saying his discussions with Commissioner Damanaki on the amount of time fishermen can spend at sea were very positive, yet his deal will mean a cut of between 15% and 25% in the number of days white-fish vessels can put out to sea in 2012 as part of the cod recovery plan. Fewer days at sea could lead to the unintended consequence of more damage to fish stocks and higher levels of discards, as fleets rush to catch all they can in their allotted time. Will the Minister explain why he abandoned his red line last week? Will he confirm that some vessels will see their period at sea cut to about four days in every fortnight? Will he tell us how many vessels will be affected and what the position of the Scottish fisheries Minister was on this issue? How difficult was it for the Minister to build alliances to support his red line? What went wrong? Bertie Armstrong, chief executive of the Scottish Fishermen’s Federation, said:

“This is a bitter blow for our fishing fleet, which is now going to struggle to maintain economic viability under the impact of these…unwarranted cuts.”

What is the Minister’s message to fishing communities who feel betrayed by his broken promises?

I welcome the 200% increase in respect of west of Scotland haddock, the 150% increase in respect of south-west cod and the deal for fishing fleets in Northern Ireland. What assessment has he made of the ability of the fleet to use the extra quota, given that they will be at sea for fewer days? What impact does he believe the overall package will have on the number of fishing vessels that will be viable next year? What assessment has he made of the impact of the reduction in the number of days at sea on the financial viability of the Scottish fishing fleet and fleets elsewhere in the UK?

Next year, we have a once-in-a-lifetime opportunity to reform the CFP. What reassurances can the Minister give the House that the Prime Minister’s stance on Europe will not isolate us in discussions and ultimately harm the British fishing industry?

[Richard Benyon]

I thank the hon. Lady for her warm welcome—I am attempting irony, which never quite works from this position. She really needs to understand that at the beginning of last week we were looking down the barrel of a gun at cuts that could have resulted from a penalty regulation introduced by the Commission. Its interpretation of the cod recovery plan could have resulted in between half and two thirds of the Scottish fleet being put out of business, the Northern Irish nephrops fleet being tied up for 11 months of next year and a great many other vessels and fleets around the country being put out of business. We argued that both at meetings last week and at the end of the week at the Council and we got things reversed. We did so by close working with Ministers from other devolved Governments, and I thank them for their efforts.

If the hon. Lady looked into the details, she would see that although vessels will have a reduced number of days at sea next year, what we secured, through our interpretation of the cod recovery plan, was the ability for them to buy back days at sea by the imposition of other methods of conservation. So she simply has not understood the difference between the control order that the Commission has now withdrawn and the remains of the cod recovery plan.

The hon. Lady asked me to visit the Western Isles. I have done so in the past but not in this role, and I will certainly do so in the future. My right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) has reminded me that I am due to visit Shetland soon, and I see such visits as an important part of my job as UK Minister. She rightly says that there is an important social element to this, because the men who risk their lives to get this healthy and much-needed food on to our plates also support people in ports.

The Government remain absolutely committed to reform of the common fisheries policy. I sat up until 4 o’clock on Saturday morning arguing about net sizes, the gauge of nets, the Orkney trawl and eliminator trawls—such details simply should not be the subject of a management system where the people imposing regulations on the fishery are sometimes located 1,000 miles away from the fishermen who are supposed to use them. We must have reform that is more decentralised and that gets away from the micro-management that has failed. I believe that last week exposed a system that is obsessed with process and therefore ignores outcomes. The cod recovery plan is not working because the Commission sticks so rigidly to the process and the rules and regulations.

What we have achieved is a realisation from the Commission that it must start to look at the process, because the outcomes we all want to achieve are being lost. The hon. Lady is right that Scotland’s fleet has done many good things. It has led the way in real-time closures and selective measures, but it has not done so exclusively. Wonderful work has been done around the United Kingdom and we want to see it being brought forward. That is why we have secured the science budget, which the hon. Lady asked me about, to ensure that the information we can give the Commission is accurate. We faced 25% cuts in total allowable catch for data-poor stocks, but we managed to argue against that, not out of a blind desire to let our fishermen go fishing but because there was scientific evidence for it.

When the hon. Lady talked about last week, she talked as though Britain was somehow isolated in Europe. Nothing could be further from the truth. My right hon. Friend the Secretary of State is today at the Environment Council and she will have the same experience as I had, which is of a close working relationship. I built alliances with the French and the Germans, and, as I said, with the Spanish, the Irish, the Danish and those from many other countries. I can assure the hon. Lady that Britain is far from being isolated in these matters.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate the Minister on his stamina and on delivering an agreement that was in the best interests of Britain. What does he understand centralisation to mean under the fishery reforms? I hope he will join me in wishing Denmark well as it takes over the presidency. Does he share my concern at the lack of science? He referred to the data-poor species, but we are proceeding with these annual rounds with a complete ignorance of the science about the stocks and climate change, warmer waters and the movement of species. Will he also give us an undertaking today that our inshore fishing fleet will not be disadvantaged in the future reform of the common fisheries policy?

[Richard Benyon]

My hon. Friend will know that I have been particularly keen in this job to see a better deal for the inshore fleet. I believe that the pilots we are about to start will show a new way of managing the inshore fleet and I can assure her that the scientific evidence we require for that will be vital. As we roll out the Marine and Coastal Access Act 2009 and the marine conservation zones, we will see further investment in information about what is going on in our seas, on the seabed and so on, to ensure that we protect those areas as much as possible.

My hon. Friend asked about regionalisation and it is vital that we get this right. This is a once-in-a-decade opportunity, and, frankly, I do not believe that we will have another chance if we do not get it right this time. Decentralisation must mean an end to the top-down detailed decisions that I described earlier being taken so far from the fisheries. The problem we have in the United Kingdom is that our fisheries are complex. They are mixed fisheries with species swimming alongside each other, which means that if one species is targeted another is caught. Systems of management such as the cod recovery plan that operate from the sub-Arctic waters of the north down to the waters of Spain simply do not work because they are a one-size-fits-all solution and that simply does not work with fisheries.

[Mr William Bain (Glasgow North East) (Lab)]

Will the Minister guarantee that the result of the Council last week still places the European Union on target to achieve maximum sustainable yield by 2015? Does not the outcome of the Council make a powerful case for the introduction of long-term reforms to the CFP and of long-term catch quotas to deal with the problem of by-catch and discards? Is not that reform preferable to the abolition of the CFP, which is the policy of Scotland’s separatist party?

[Richard Benyon]

The hon. Gentleman makes an important point. We very much stick to our international agreed position of seeking to achieve maximum sustainable yield where possible by 2015 and good environmental status by 2020. He is right that long-term management plans are the way forward. I have just been rubbishing one long-term management plan, the cod recovery plan, which is a bad plan. What we want is good long-term management plans, and we certainly can achieve that. The problem with the common fisheries policy is not that it is common but that the policy is wrong. We will always need a degree of common working and all but a very few people in this country recognise that where there is an arbitrary line, such as the one that goes down the Irish sea or the median line through the channel, fish do cross those boundaries. We simply cannot work our management systems on just one side of that line; we must work on an ecosystems basis. That is why we need co-operation with other countries.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

May I suggest speedier answers and quick questions? Then, we will get everybody in.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on resisting the more extreme ideas that came from the summit over the weekend. Does he accept, though, that one of the dangers is that as a result of the cuts in the number of days at sea, fishermen may not be able to catch their full quota? Will he undertake to keep the position under review and, if that proves to be the case, go back to Brussels in a year and argue for changes?

[Richard Benyon]

One of the most ridiculous outcomes of the penalty that was due to be imposed on British fishermen was that they would not have had enough days at sea to catch the quota they were allocated. We managed to stop that. We will constantly keep that under review and we are working hard to make sure that the problems that the fishing industry faces through the reductions in days will not continue in future years.

[Angus Robertson (Moray) (SNP)]

I am grateful for advance sight of the statement and acknowledge the efforts of the Minister, Richard Lochhead, and other colleagues at the discussion, but does the Minister not acknowledge that this annual merry-go-round in Brussels is just not fit for purpose for the fishing industry or for the marine environment, so when will we see proper regional management come into force?

[Richard Benyon]

The hon. Gentleman is right. It is a circus. It is not a way to do business. We cannot make decisions in this way, working through the night and finding that the direction that we are seeking to take is thwarted by other countries working in a different way in an entirely different sea basin. It is not a good way of making any decision, so reform of the common fisheries policy, which we are discussing in the coming year with a view to a more regionalised system of management becoming possible in 2013, is a priority for this Government.

[Amber Rudd (Hastings and Rye) (Con)]

I know that the Minister is aware that 10 days ago the Environment, Food and Rural Affairs Committee met in Hastings and took evidence from fishermen. May I let him know that the local fishermen whom we spoke to are very concerned about transferable fishing concessions, and may I urge him in all his conversations to bear in mind their differences on the under-10-metre group?

[Richard Benyon]

I am very aware of the fishermen’s concerns, which I share. Transferable fishing concessions may have application with certain vessels in certain fisheries, but by no means all. That is why we need localised management. Member states should be able to take decisions to apply such measures in a way that suits some, but not necessarily all, of their fleet.

[Mr Iain Wright (Hartlepool) (Lab)]

A large proportion of Hartlepool’s fishing fleet comprises boats under 10 metres. The Minister did not mention that in his statement. Specifically, what did his late-night work help to achieve for that category of the fleet?

[Richard Benyon]

I am delighted that we are able to report that there were considerable increases in stocks that will benefit fishing out of the hon. Gentleman’s constituency, and that we were able to invoke the Hague preference, which is of particular importance to fishermen in the north-east. We secured increases in whiting, which is of particular interest to his constituents, and I very much hope that we will be able to continue the scientific work that we are doing with fleets based in the north-east on a land-all system so that we can learn what a discard-free fishery means, following it right through the food chain.

[Neil Parish (Tiverton and Honiton) (Con)]

I congratulate the Minister on standing up for British fisheries, and compliment him on the deal he got for cod in the western approaches. On the cod recovery plan, he should not have to defend our plan when we are stopping discards. Should we not get the Commission to endorse more of our plans, rather than having to defend them?

[Richard Benyon]

My hon. Friend is absolutely right. There has been some really good work in this country on reducing the number of discards, which was acknowledged by the Commission, so it was rather perverse that there was the possibility of measures being introduced that could have brought an end to precisely that good work. In his area, for example, Project 50% saw a more than 50% reduction in the number of discards in the beam trawler fleet. That would not have been possible under the proposed reduction in days that we were facing but luckily managed to reverse.

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the Minister on the hard work done in Brussels along with the other Ministers, including our own Northern Ireland Minister of Agriculture and Rural Development and Fisheries Minister. The Minister fought hard to ensure that prawn quotas were retained although the scientific evidence showed that they should have increased. The herring quota was also decreased although, according to the scientific evidence, it should have been increased. Will the Minister comment on the state of play at the sentinel fishery? We met some of the fishermen the week before he went away and we were told it was being investigated. I believe that the figures for that scheme will show the abundance of cod in the Irish sea.

[Richard Benyon]

I was particularly worried about the impact on the Northern Irish fleet. The initial proposal would have meant that many of them would have gone out of business. They could not survive if they were tied up for 11 months of the year and I am glad we managed to reverse that. I am glad that we also managed to reverse the proposed 19% cut in Irish sea nephrops, which was totally unjustified, and we were able to prove the science behind it. I was very interested by the proposal that the hon. Gentleman brought to me about a sentinel fishery in the Irish sea. We are looking into it and I will be in touch with him as soon as I have some information.

[Sheryll Murray (South East Cornwall) (Con)]

I thank my hon. Friend for both his stamina and determination in securing an increase in many stocks that my fishermen rely on, particularly cod in area 7B to K. Will he explore the possibility of top-slicing the additional quota that he secured, creating a reserve for the under-10-metre fleet, thus avoiding the disastrous situation we had under the last Government when, in 2008, the under-10-metre fleet in Looe was tied up because the quota was exhausted by the end of February?

[Richard Benyon]

I am delighted that fishermen have been telling me at great length, not just in the south-west, but certainly in the south-west, that they are seeing more cod now than they have seen for a great many years. That has been backed up by the science and we were able to secure an increase of 150%. That was a good result. Haddock is also up 25% and whiting up 15%. The package is worth £1.3 million in total to the fleet in the south-west. The managing director of one producer organisation told me in the small hours of Saturday morning that at the start of last week he was looking at a £250,000 cut to his members, which would have been devastating, but by the end of it we had secured a £250,000 increase. I will certainly look at my hon. Friend’s proposal for the under-10-metre fleet as well.

[John Cryer (Leyton and Wanstead) (Lab)]

At the beginning of the statement the Minister mentioned that the agreement was supported by France, Germany and Spain, among others. I bet they supported it; they saw him coming. If the number of days at sea is reduced, the number of boats going out and the number of people working in the industry will be reduced. The reality is that we will end up with a smaller industry, and that will not be reversed until the Minister obtains some sort of reversal during the review of the doctrine of common resource. That is the root of all the problems in the common fisheries policy, which is one of the most loony ideas ever to fly out of Brussels, and that is saying something. Until he does something about the doctrine of common resource, we will not reverse the situation.

[Richard Benyon]

I think we are coming from the same direction, but I am not sure we are reaching the same conclusion. The hon. Gentleman is just wrong to say that our relationship with other countries was somehow to their advantage and not to ours. There was a collective view across major fishing countries in Europe that the cod recovery plan was not working and the Commission had to understand why. We were absolutely on the same page with major fishing countries that fish in areas such as the North sea and around our coast. Not only did we achieve a good result last week, but in terms of reform of the common fisheries policy, we will continue to work on those relationships, whoever is in government in those countries, to make sure that we have the result that we need for our fishermen.

[Martin Vickers (Cleethorpes) (Con)]

I, too, praise the Minister for his steadfast and robust approach. One of my constituents shrugged his shoulders this morning and told me, “It could have been much worse”, which I can assure the Minister is high praise, coming from them. Many fishermen have virtually eliminated discards through new processes, but that is not reflected in the methodology used in the negotiations. What hope is there for future improvement in that respect?

[Richard Benyon]

I am grateful to my hon. Friend. It is really important that we build on good work, such as the fisheries science partnerships, which involve scientists going out on fishing vessels and fishermen meeting scientists to discuss how to approach this, as information on discards can then be dealt with in an informed way. That helps me in our negotiations with the Commission, so I commend the work being done by fishermen in his constituency on reducing discards and ask him to keep me informed.

[Tony Baldry (Banbury) (Con)]

I know from personal experience that the post of UK Fisheries Minster is a lonely one and I congratulate my hon. Friend on what he has managed to achieve. This ludicrous system whereby decisions are taken year on year on the basis of sleep deprivation simply has to stop. Will he give the House a written statement in the new year on how he sees the reform of the common fisheries policy moving forward? This year two maritime nations—Denmark and Cyprus—will hold the presidency of the Council of the European Union, so surely there is an opportunity to move to regional fisheries management during their year.

[Richard Benyon]

I am grateful to my hon. Friend for his help and advice as I have progressed in this job. It is useful to have Members of the House who know what it is like to go through this charade—I use the word carefully—of a process, which requires decisions to be made after two or three days of heavy negotiations that run right through the night. We must have meaningful reform and it must have regionalisation at its heart. We need to be able to define in the new year exactly what we expect when working with partners in the sea basins around the UK. I pledge to keep the House informed of our progress.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Given the considerable disquiet among British fishermen about the deal, particularly the breaching of the Minister’s own red lines, is the deal not further proof of the catastrophic loss of influence in Europe since the Government parties came to power?

[Richard Benyon]

No, the hon. Gentleman probably was not listening when I said that we have been working extremely closely with our European partners. I think that he would really benefit from seeing just how well we worked and how we joined forces to defeat a proposal that, had it been implemented, would have been utterly devastating for our fishing industry.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I congratulate my hon. Friend on getting a 150% increase in the amount of cod being fished off the south-west. What position did the Hungarians and Austrians take in the matter, given that they have absolutely no coastline? Will he also confirm that there will be no impact on recreational fishermen?

[Richard Benyon]

As my hon. Friend knows, I am a great supporter of recreational angling and want to see many more people fishing in our seas. One of the ways of achieving that is by having more fish in the sea, so that feeds into what we are doing. I can assure him that all my conversations—I think—were with nations that have a maritime interest and that we work well with them.

[Mr David Nuttall (Bury North) (Con)]

We keep hearing about all the benefits of our membership of the European Union. Does my hon. Friend think that UK fishermen agree that the common fisheries policy benefits the UK fishing industry?

[Richard Benyon]

I do not think that anyone loves the precise elements of the common fisheries policy, but fishermen tell me that they understand that proper management of our seas requires a common approach that recognises ecosystems, because fish do not recognise lines on maps. We need policies that reflect the ecology of fish, which sometimes means having to work with other countries.

[Mr Philip Hollobone (Kettering) (Con)]

The tragedy of all this is that Britain should never have given away her fisheries in the first place. Our European neighbours have overfished Britain’s territorial waters and we should be repatriating powers over our fisheries industry. Given that that is not Government policy, I congratulate my hon. Friend on doing his best in difficult circumstances, but will he tell the House whether Britain’s market share of fishing will go up or down as a result of this deal?

[Richard Benyon]

If I may correct my hon. Friend, it is precisely our position to see more regional management of our fisheries, which means that we will be responsible for more of the decisions that are taken at a local level. That seems much more sensible than the current system. I believe that we have created a considerable economic benefit for a number of fishermen around our coast and that we have certainly seen off some very damaging economic decisions that could have come out of it. I hope that, in moving forward to a properly reformed common fisheries policy, I will have his support in trying to get more localised management for our fisheries.

New MEMBER

Monday 19th December 2011 Commons Chamber

The following Member made and subscribed the Affirmation required by law:

Seema Malhotra, for Feltham and Heston.

Points of Order

Monday 19th December 2011 Commons Chamber

17:56

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

On a point of order, Mr Speaker. I have given you prior notice of this point of order, which relates to item 23 of the future business on today’s Order Paper—Public Bodies: Scrutiny of Draft Orders. This was due to be debated in the House last week, but the order, as drafted, was defective and so was pulled. It has enormous implications for the Environment, Food and Rural Affairs Committee in particular, but it also relates to all the orders for the dismantling once and for all of particular public bodies, the vast majority of which relate to the Committee.

If I may, I wish to ask for three things: that the order be debated in an orderly manner in the customary fashion; that, where an order for approval is drafted, it is not to be tabled before the end of the laying period and that additional time be granted to an individual Committee, such as the Environment, Food and Rural Affairs Committee, to allow a minimum of 60 to 90 working days to consider it; and that, if necessary, a debate on such an order is allowed on the Floor of the House. This order is monumental in its nature. These public bodies will cease to exist and the members of the Committee would like to have time to consider it fully.

[Mr Speaker]

I am grateful to the hon. Lady for advance notice of her point of order, and for the point of order itself. Sadly, none of the three requests that she has put to me is a matter for the Chair; all three are matters—her brow is furrowed, but I assure her that I am right on this issue—for discussion perhaps between the Liaison Committee, as the collective representative of Select Committees, on the one hand and Treasury Front Benchers on the other.

I should say to the hon. Lady and to the House, which I am sure will want the issue to be interpreted, that the point at issue is the procedure for Select Committees to deal with proposals made by Ministers under the recently passed Public Bodies Act 2011. I note—she referred to this in passing—that a proposed Standing Order to deal with those draft orders is indeed item 23 in today’s Future Business, section C, and no doubt those on the Treasury Bench, which does not include the Leader of the House or the Deputy Leader of the House at the moment but a number of Whips, who doubtless can convey the relevant information, will have heard her point. I have a feeling that if she does not get satisfaction, she is likely, if precedent is anything by which to judge, to return to the matter.

[Mr Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Speaker. At the end of October I submitted a written question to the Treasury for a named day reply. On the named day, 7 November, the reply from the Treasury Minister was, “I shall let the hon. Member have a reply as soon as possible.” It is 19 December, and I fully appreciate that I asked about a sensitive issue—fiscal integration in the eurozone—and I know how difficult things are in the coalition on the issue of Europe, but 19 December surely indicates that I should have had a reply by now. Will you, Mr Speaker, make urgent inquiries with the Treasury to ensure that I have a reply as quickly as possible?

[Mr Speaker]

I thank the hon. Gentleman for his point of order. This has been the subject of some considerable discontent on both sides of the House over a sustained period. Ministers have heard me say before that conforming to the spirit of what the House expects requires the provision of a timely and substantive response to the question posed. Simply to say just before the deadline or on the day of the deadline, “I will reply to my hon. Friend as soon as possible,” really is not good enough. The hon. Gentleman is a perspicacious Member if ever there was one, and he might wish to provide that example and possibly others to the Procedure Committee—and, perhaps, to write to the right hon. Member for East Yorkshire (Mr Knight), who chairs that august Committee and is looking into those matters—in the hope that he and his colleagues can get satisfaction.

[Mr Denis MacShane (Rotherham) (Lab)]

On a point of order, Mr Speaker. The Front Benchers’ opening statements on the Vickers report earlier this afternoon lasted more than 25 minutes. They were almost Second Reading opening speeches. Statements have become alarmingly long recently. They used to be only seven or eight minutes, and then questions allowed points to be developed. Can we get back to that general rule?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. I share his concern. Ordinarily, a ministerial statement is not expected to exceed and, indeed, is expected not to exceed 10 minutes. I was informed that the nature of that statement had required something slightly longer, and in those circumstances I allowed a little extension of time for the Opposition Front Benchers, but on the right hon. Gentleman’s substantive point I agree, and I hope that we can start 2012 rather better, with crisp statements and crisp responses from Opposition Front Benchers, and then get on to the people with whom I am mainly preoccupied, namely Back Benchers. I hope that that is helpful.

Bill Presented

Local Government Finance Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Eric Pickles, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Danny Alexander, Oliver Letwin, Andrew Stunell, Robert Neill and Mr David Jones, presented a Bill to make provision about non-domestic rating; to make provision about grants to local authorities; to make provision about council tax; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 265) with explanatory notes (Bill 265-EN).

Apprenticeships

Monday 19th December 2011 Commons Chamber

[Mr Speaker]

We come now to the motion relating to apprenticeships, and to move the motion I call the Minister for Further Education and Lifelong Learning—he may even have other elements within his arsenal—Mr John Hayes.

18:05

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

I beg to move,

That this House has considered the matter of apprenticeships.

Mr Speaker, the other element is skills—but my skills could never be as great as your own, I hasten to add.

The guitarist Chet Atkins once said:

“A long apprenticeship is the most logical way to success. The only alternative is overnight stardom, but I can’t give you a formula for that.”

Mr Speaker, you and I know, along with others, that long apprenticeships in public service can bear out the first part of that sentiment. On overnight stardom, I say only that the hon. Member for Streatham (Mr Umunna), the new shadow Business Secretary, will no doubt enlighten us on some future occasion.

Mr Speaker, you and I have no wish for this debate to become an exercise in party political tergiversation alone. There is no need for unnecessary contumely, and no need for more criticism of Opposition Members than that which is necessary to, by contrast, highlight the extent of our achievements.

There are many on the Opposition Benchers whose commitment to apprenticeship training is deep and sincere, and I recognise that the previous Government did indeed invest in apprenticeships—certainly towards the end. It is also fair to point out that there was a rise of almost 50,000 in the number of apprentices aged over 25, so, despite some things that we have read recently, the growth in older apprentices is a trend change that has been taking place over a number of years.

Indeed, the previous Government recognised, as you will know Madam Deputy Speaker, in the Leitch report on skills, which they commissioned, that such growth in the skilling of older workers was essential to keep pace with our competitors by upskilling and reskilling the existing work force.

Above all, I know that Members on both sides of the House recognise that apprenticeship training is a sure way to success. The all-party group on further education, skills and lifelong learning recently called for the creation of a “Royal Society of Apprentices” as a means of raising the profile of what many of us believe is our most effective form of vocational training, and I will, I am pleased to tell the House today, take that proposal forward.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister knows and is quite right that all Members are in favour of apprenticeships, but we are in favour of quality apprenticeships. When I was Chair of the Education and Skills Committee, I discovered that too many apprenticeships lasted only one year and very many did not lead to a secure job. There are now 1 million unemployed young people, and some of us believe that 6% of young people going into apprenticeships is not enough. We need new efforts to get more people apprenticeships now.

[Mr Hayes]

The hon. Gentleman has been a long-standing advocate of apprenticeships, and he rightly draws attention to previous Select Committee reports on the subject. He highlighted those reports in the Chamber on more than one occasion when I was present, and he is right in two particular respects: first, it is important that we focus apprenticeships on where they are of most value, and there is more evidence to suggest that they are of most value to young people between the ages of 16 and 24; and, secondly, it is important that we are relentless in our drive for quality. He is right, too, that as we increase the quantity of apprenticeships there will be a tension with quality, but I shall say a great deal more today about the steps that we have taken and the future steps that we propose to take to achieve just that ambition.

Having said that there is a broad measure of agreement, a point echoed by the hon. Gentleman, I should say, first, that the difference between us and the previous Government is that we have made apprenticeships the pivot around which the rest of the skills system turns. Secondly, we have made them fill a bigger space than ever before. Finally, we have put in place an unparalleled level of funding to support our single-minded aim to create more apprenticeships than modern Britain has ever seen. It is important to point out that that growth has not been only in traditional craft apprenticeships, but in the new crafts too—advanced engineering, IT, the creative industries and financial services.

Why, people might ask, do we put such an emphasis on apprenticeships? It is not just that apprenticeships work, although they do, or that an apprenticeship is probably the most widely recognised brand in the skills shop window, although it is; it is also about what apprenticeships symbolise—the passing on of skills from one generation to the next and the proof that that offers that learning by doing is just as demanding and praiseworthy as learning from a book. As William Morris said, all art and craft is

“the expression by man of his joy in labour”.

It is my ambition to dispel once and for all the myth that one can gain accomplishment only through academic prowess. The sense of worth that people gain through the work of their hands—through practical, technical and vocational skill—needs to be recognised, just as we recognise academic achievement.

It is that sense of apprenticeships as the embodiment of a continuum that guarantees their place at the heart of my vision for skills. I hope that, like me, hon. Members on both sides will welcome the provisional figures that show that, in the academic year that has just finished, nearly 443,000 people started an apprenticeship in England.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will my hon. Friend join me in congratulating HTP Training, an Isle of Wight apprenticeship provider, and its managing director Rachael Fidler? Most notable is its successful apprenticeship completion rate of 87%—significantly higher than the national average of 74%. Does my hon. Friend agree that none of that would have been possible without the Government’s help and support?

[Mr Hayes]

That is the kind of testing question and penetrating intervention that I expected during this debate. None the less, it was most welcome, and from a Member who never ceases to represent his constituents in the Isle of Wight with vigour, verve and absolute integrity. His support for apprenticeships has been critical in delivering the 100% increase in Isle of Wight apprenticeship numbers to which he has drawn the House’s attention.

[Mr Sheerman]

Some of us sometimes try to get the Minister to be cross with us because he is always so polite and always strokes the feathers of everyone who asks him a question. However, I have to put it to him again: we all know that apprenticeships are something of a fig leaf for the Government. One million young people are unemployed and the Government keep pointing to what I call the fig leaf of apprenticeships.

Will the Minister stop weaving the myth that they are all three or four-year apprenticeships leading to secure jobs? What is the average length of an apprenticeship today? That is the crucial thing. I think that the Minister is going to have to say that it is about a year. Is that the truth? That is what the public want to know. What quality and length are the apprenticeships of which he is so proud?

[Mr Hayes]

The hon. Gentleman is renowned for his insight, and I had thought until today that he was equally renowned for his patience. I said that I would deal with quality and I assure him that I will also deal with the length of apprenticeships. I think he is right. Although there is no direct, guaranteed link between the length of an apprenticeship and its quality, there is a relationship. It is not a direct correlation, but it is a correlation none the less.

Today I will set out my demands for a minimum length for apprenticeships. That is perfectly reasonable. As I said, it is not a guarantee of quality, but it will certainly offer considerable assurance to the hon. Gentleman and others who, like me, are determined that quality should match quantity. The hon. Gentleman has, over many years, supported my view that technical education is critical not merely because it serves an economic function—because of its utility—but because of what it does for social mobility and social cohesion. Drawing on his patience and insight once again, I ask the hon. Gentleman to wait a few moments. I shall be speaking about the issue at considerable and eloquent length.

The figures that I cited show that numbers were up by more than half in the 2009-10 academic year. I want to make the point firmly that that includes an increase of about 10% in the number of apprentices under 19. I remind hon. Members that that Government achievement has been completed not merely because of our concentrated effort and the funding that we have put in place, although that is critical, but thanks to the work of further education colleges and other training providers, businesses coming forward and creating apprenticeship places, and learners and their families seizing the opportunity with both hands. The real credit lies with the learners, the training organisations and the businesses that allowed that expansion in the apprenticeship programme to take place.

[Richard Harrington (Watford) (Con)]

SQI in Watford offers 10-week apprenticeship courses followed by 10-week placements. They lead to 85% of those taking part being in permanent employment. I do not think that the length of an apprenticeship is everything.

[Mr Hayes]

My hon. Friend has a lot to be pleased about in respect of apprenticeships; as he will know, in his constituency their number has grown by 98%. I did say that I did not think there was an exact correlation between quality and the length of a course, but I think there is a relationship. By setting down a marker about the minimum length of an apprenticeship, we will drive up quality. We will certainly reassure those who are genuinely committed to the apprenticeship programme, but have doubts about the tension between quality and quantity, that we are serious about standards. That matters.

I take my hon. Friend’s point. It may be possible, particularly for older learners with greater prior attainment, to top up skills—perhaps they are moving from a level 2 to a level 3 qualification, or they already have many of the skills necessary to gain their first level 2 qualification. None the less, I still think that length matters.

I should like to put the debate in context, Madam Deputy Speaker; you would expect me to do no less. The Government’s macro-economic policy is built on twin pillars—reducing the deficit and reshaping our economy to make it more sustainable. That second core aim is served by the apprenticeship programme, because it assists in recalibrating work force skills so that productivity rises and competitiveness grows. Britain’s future chance to prosper lies in a high-tech, high-skill economy and to prosper in that way we need a high-tech, high-skill work force.

The recent announcements of reform to the programme concentrated on three areas key to the programme’s continued expansion and success: how to get more employers involved in offering apprenticeships; how to ensure that apprenticeships continue to offer people, especially young people, a firm first step on the ladder that leads to fulfilling careers and further learning; and how we ensure that the money that we spend on apprenticeships has the greatest success.

In the end, apprenticeships are jobs and the programme is demand-led. That means that the growth depends on employers coming forward to make places available. In the current economic climate jobs are in short supply, notably for young people, so the record increase in apprenticeship numbers is remarkable. Hon. Members will join me in commending the 100,000 employers that are using apprenticeships to develop work force skills—helping their businesses, but also providing opportunities for people across this country to grow their skills and improve their prospects.

Our work to recruit more employers to our cause goes on. Only this morning, I was at No. 10 Downing street briefing major employers on what apprenticeships can do for them. They were as committed to spreading opportunity and to social justice as I am.

Our objective is to improve and strengthen the programme even further so that more individuals and employers can access the benefits of high-quality apprenticeships. Overall, employer ownership of vocational skills is the key to our approach. This ambition informs all our priorities in moving forward: first, by reducing bureaucracy to an absolute minimum, speeding up processes and boosting employer engagement; secondly, by safeguarding quality, raising standards, and enhancing the reputation of the apprenticeship brand; and thirdly, by focusing future growth where the returns and benefits are greatest, including growth sectors of the economy, small and medium-sized enterprises, young people and new employees.

SMEs tell us that they still face considerable hurdles in taking on apprentices, and we have taken a serious look at what we can do to help to remove the barriers that they face. This has rightly been raised on the Floor of the House by Members on both sides and in all parties. I can announce today that, first, we will bring reduce to one month the time it takes for an employer to advertise an apprenticeship vacancy, including identifying the provider and completing an agreement on a training package between the employer and the provider; and secondly, we will remove all health and safety requirements that go beyond what health and safety legislation requires. From 1 January, employers that meet the Health and Safety Executive’s requirements as set out in “Health and safety made simple” will be deemed to provide a satisfactory level of compliance. We will also work with the insurance industry to encourage an approach that is proportionate to risks, and with training providers to develop new service standards for supporting SMEs to be included in all contracts for apprenticeships delivered from March 2012.

In addition, we are committed, in a significant new pilot programme, to taking radical steps to give businesses direct access to up to £250 million of public funding for training and apprenticeships over two years. This pilot is a key part of the Government’s growth review. It will route funding directly to businesses, will be more efficient than current arrangements, and will give businesses real purchasing power in the schools marketplace to secure the support that they need.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Will the Minister give way?

[Mr Hayes]

I happily give way to the Chairman of the Business, Innovation and Skills Committee.

[Mr Bailey]

I thank the Minister for his customary courtesy in giving way. I welcome the announcement about provider and employer engagement, and speeding that up, but will he clarify whether there are any restrictions regarding a member of a board of a provider company being precluded from being a member of a board of a user company?

[Mr Hayes]

The answer is that I do not know; in these circumstances, it is always right to be straightforward. Because I know that the hon. Gentleman takes these matters seriously and is committed to getting this right, as I am, I will take his point away and look at it. He is arguing that there might be a conflict of interest in terms of provider and employer, and he is right to say that there should be a proper separation. However, as he will know, it is often the case in large companies that the training wing of the company provides the pedagogy associated with an apprenticeship while the apprentice is engaged in the work-based training in the same company, though in a different part of it. I would qualify his query with that caveat. None the less, I will take another look at the subject and will be more than happy to respond to him directly.

The pilot that I described will involve employers being asked to demonstrate how public funding will be used to leverage private investment and commitment to raising skill levels in their sectors or supply chains. As we grow the apprenticeship scheme, it is very important to take advantage of the value chains associated with our major corporates—their supply chains and their distribution chains, where they exist. Typically, Governments have spent insufficient time considering how that might work in the light of the well-established nature of those relationships and the dependence of large organisations on myriad smaller companies, the fragility of which, by their very nature, is possibly injurious to the interests of those corporates.

For example, major suppliers in the automotive industry tend to have very large numbers of organisations with which they deal commercially in their locality, some of which are vital to the effectiveness of such large organisations. It is vital, in their interests and in ours, that we do more to ensure that those relationships allow us to grow the apprenticeship system within SMEs. It may be of value for large companies to absorb some of the bureaucracy and some of the cost, and certainly to absorb some of the management associated with seeding apprenticeships in their value chain. Bidding for the employer-led pilot will formally be launched in the new year.

Above all else, my advocacy of practical learning and my faith in apprenticeships are driven not by economic imperative—not merely by utility—but by social purpose. I said earlier that for too long the myth that only through academic accomplishment can a sense of worth be achieved has been perpetuated by those who themselves have travelled a gilded path to academia. Now it is time once again to recognise what Ruskin and Morris knew—that all those with practical tastes and talents, with technical vocational aptitudes, deserve their chance of glittering prizes too. This is not just because of the relationship between craft and beauty and, in turn, between beauty and truth, but because for society to cohere we must promote the common good through a shared appreciation of what each of can achieve. All feel valued when each feels valued. Given that inequality is the inevitable consequence for a free economy in a free society, only through social mobility can a communal sense of fairness be achieved. A society that is unequal and rigid is bound to be unable to secure the ties of shared identity, as invisible and yet as strong as the heartstrings of love.

[Mr Sheerman]

The hon. Gentleman and I share a great admiration for the poet John Clare. I am still waiting for a quotation from John Clare, who lived very near his constituency.

May I bring the hon. Gentleman back to the false dichotomy that comes through insidiously in his honeyed words—namely, that there is one group of people going into academia and higher education and a more worthy group going into apprenticeships and more practical learning by doing? This September, 36% of people went into higher education and 6% went into apprenticeships; we want him to talk about the 58% who went in neither direction.

[Madam Deputy Speaker (Dawn Primarolo)]

This is the season of good will, so I am pleading for good will from hon. Members in making short interventions. I remind everybody in the Chamber that this is a very heavily subscribed debate with a time limit on speeches that may, at this rate, have to be shortened for each speaker. In the interests of good will, perhaps we could make sure that all hon. Members get to speak tonight.

[Mr Hayes]

Yes, Madam Deputy Speaker; I must not allow my legendary generosity to prevent Members from contributing to this debate.

To the hon. Member for Huddersfield (Mr Sheerman) I say:

“I loved thee, though I told thee not,

Right earlily and long,

Thou wert my joy in every spot,

My theme in every song.”

That is by the people’s poet, John Clare. I believe that the hon. Gentleman saved John Clare’s home with the involvement of a social enterprise. We share a passion for the people’s poet, as we share a passion for the welfare and interests of the people. It is just a pity that I am in the people’s party and he is not.

With so many people currently not in employment, education or training, we must do more to extend the ladder of opportunity—the point that the hon. Gentleman is making. It is absolutely vital that in getting apprenticeships to fill a bigger space, we not only allow them to redefine our sense of what we understand as higher learning—I shall speak about that, too—but use them as a vehicle to allow for re-engagement of those who are currently unable to contribute in the way that we both want them to by getting a job, keeping a job, and progressing in a job. Through our access to apprenticeships programme, which we piloted as a result of my determination to do exactly what the hon. Gentleman described, I believe that we can provide just such a vehicle to get those who were failed by the system the first time around and who do not have sufficient prior attainment on to a level 2 course.

The drive for greater quantity must be matched by a determination that quality will grow in tandem. First, we will strengthen the English and maths requirements for apprentices who have not yet achieved a level 2 qualification. Those subjects remain essential for long-term employability and progression, so from the 2012-13 academic year all apprenticeship providers will be required to provide opportunities to support apprentices in progressing towards the achievement of level 2, GCSE or functional skills qualifications. They will be measured on their success in so doing.

Secondly, we will launch a rapid employer-led review of apprenticeship standards to identify best practice, ensure that every apprenticeship delivers the professionally recognised qualifications that employers need, and ensure that the Government are maximising the impact of public investment.

[Andrew Griffiths (Burton) (Con)]

Does the Minister share my concern that the new requirement for maths and English to be part of the apprenticeship course might deter some of the NEETs—those who are not in education, employment or training—we are trying to get into apprenticeships from taking part in such schemes? Does he believe that we need additional support to help underachievers who do not have the required attainment in maths and English to achieve it so that they can get on to an apprenticeship scheme?

[Mr Hayes]

My hon. Friend will know that in his constituency of Burton, apprenticeship numbers have risen by 76%. He will know, too, that that rise is due to the excellent work of his local further education college, with which I have had regular dealings.

My hon. Friend is right to argue that it is important that we take account of those who do not have the prior attainment to get on to a level 2 qualification. That is precisely the point that I was making a few moments ago, when I spoke about pre-apprenticeship training. To be clear, I said that those achieving a level 2 qualification must meet the standards in maths and English. There is an absolutely proper argument that we need steps on the ladder before people get to level 2, to allow for the re-engagement of those who are currently not able to get a job.

Thirdly on quality, we will continue to raise quality through consumer empowerment and transparency by improving employer and learner access to objectives and comparable information on providers.

I can also announce today additional steps that I am taking to raise the bar of apprenticeship standards even higher and to root out poor quality where it exists. All apprenticeships should involve a rigorous period of learning and the practice of new skills. If the standards are sufficiently stretching and the expectations of competence high, I believe that a course should naturally extend over at least 12 months. That will be the expectation first for 16 to 18-year-old apprentices from August 2012, as new contracts to training providers are issued. I have asked the National Apprenticeship Service to assess the implications of extending that to apprentices of all ages, taking account of the fact that older apprentices typically have greater prior attainment, as has been said. That will also allow time for our raised expectations on English and maths standards to be achieved. I am mindful of the comments of my hon. Friend the Member for Burton (Andrew Griffiths) in that regard.

Alongside that, I have asked the National Apprenticeship Service to work with the Alliance of Sector Skills Councils to tighten guidance for those who are developing apprenticeship frameworks to ensure that expectations on national standards and rigour are met, and to take action where frameworks are insufficiently stretching. In the current economic times, we must be more vigilant than ever to ensure that funding delivers value and is properly spent. I am mindful of the remarks of the Chairman of the Business, Innovation and Skills Committee. We must crack down when there is evidence that public money is not being spent properly. Action is in hand to review cases where there is concern. Our resolve is to ensure that every penny of public money delivers high-quality apprenticeships and to continue to weed out failure and weakness wherever they are found. I know that the Select Committee is about to launch an inquiry into apprenticeships. I will make the evidence available in my submissions to that inquiry, giving a clear timetable of action and details of the steps we intend to take to root out poor provision.

The Skills Funding Agency will tighten the contracts with colleges and other training providers to allow the immediate withdrawal of funding from provision where quality standards are not met. I am mindful of the comments of the former Chairman of the Children, Schools and Families Committee, the hon. Member for Huddersfield.

Members are aware of the scale of the crisis in public spending that this Government inherited and of the sometimes painful measures that we have had to take to deal with that. The fact that even in these circumstances we have increased spending on apprenticeships is a clear demonstration of our belief in the economic and social value of this form of training, and in the talent and potential of our young people. On 17 November, we set out a clear commitment to focus growth where the returns are greatest, both in terms of age groups and sectors. For example, there is evidence that younger apprentices see the greatest benefits. We will expect the National Apprenticeship Service, employers and providers to focus their efforts on those groups. Accordingly, I am asking the National Apprenticeship Service to target more actively, through marketing and other operational levers, the learner groups, qualifications and sectors where apprenticeships deliver the greatest benefits.

In addition, to widen the effort to create more and better apprenticeship opportunities and to grow the programme among SMEs, from April 2012 we will offer up to 40,000 incentive payments of £1,500 for small employers who take on their first young apprentice. Sufficient funding was already available for next year to support at least 20,000 incentive payments in respect of apprenticeships for young people. An additional fund will be made available to support a further 20,000, meaning that in total there will be 40,000 incentive payments. The payments will be targeted to provide additional apprenticeship opportunities for young people who are ready for employment with small employers that have not been engaged with the programme previously.

I said at the beginning of my remarks that what distinguishes this Government from the previous one is that apprenticeships are at the heart—at the very core—of our approach to skills. We want to build a ladder of opportunity that stretches from re-engagement to the highest skilled levels, with apprenticeships filling a bigger space. We will redefine what we mean by higher learning. In future, our vision of higher learning will extend out from the university classroom or laboratory into the workplace. Because I want a vocational pathway as rigorous, accessible and progressive as the academic route, on 1 December we announced that £18.7 million from the higher apprenticeship fund will support the development of 19,000 new higher apprenticeships in key growth sectors, including construction, renewable energy, advanced engineering, insurance and financial services.

[Sajid Javid (Bromsgrove) (Con)]

I am glad that my hon. Friend is setting out plans to increase higher apprenticeships, because for many young people that is a better route to successful employment than a university degree. For the benefit of the House, will he outline how many higher apprenticeships were created by the previous Government?

[Mr Hayes]

I do not want to be excessively critical of the previous Government. I made that clear at the outset. I said that I would not be more partisan than was necessary to illustrate the extent of our achievement.

In answer to my hon. Friend, let me point out that in 2008-09 there were fewer than 200 higher apprenticeships. With the announcements that have already been made and the relaunch of the higher apprenticeship fund in January for its next phase, I estimate that in this Parliament we will create 25,000 higher apprenticeship places. From 200 places to 25,000 is an extraordinary and remarkable achievement, for which the Prime Minister, the Chancellor, employers, learners and providers can take an immense amount of credit, and for which I can take just a little credit too.

[Toby Perkins (Chesterfield) (Lab)]

I am very keen that the hon. Gentleman should get all the credit that he can. On that note, will he tell the House how many more young people between the ages of 16 and 24 are unemployed after the 18 months in which he has been in his role?

[Mr Hayes]

I wondered whether the hon. Gentleman might ask that question because I know of his genuine and deep-seated concern about these matters, so I had a look at the figures on NEETs over the period from 2000 to date. He will know that from 2004 the number of disengaged young people grew steadily, and that in the third quarter of 2009 it reached 925,000. He will understand that that is a structural problem that requires structural solutions, and that part of the solution is to recast how we train and educate young people and how we create opportunities of the type that I have described, so that we can not only re-engage them but allow them to progress.

The difference between our approach and that of the Labour Government—and, to be fair, previous Governments—is that for a time, apprenticeships may have been seen as a cul-de-sac rather than a highway. By creating the number of higher apprenticeships that I described, I am ensuring that there is a vocational pathway, so that far from being a cul-de-sac, apprenticeships are a route to higher learning that enables people to fulfil their potential. I am confident that our structural changes will help us to deal with a structural problem in a way that the last Government failed to do. I do not say that in an unnecessarily partisan way, but it is pretty surprising that even at a time when the economy was very strong, the number of young people not in education, employment or training remained persistently high and continued to grow.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Perhaps I can help by saying that in 1995-96, the number of young people starting an apprenticeship under the Conservative Government was a little over 20,000. The Tory Government did pump that up in their last few months and reached the amazing number of 65,000, but after 12 or 13 years of the last Labour Government, that number had increased to 280,000. I say that to be helpful to the hon. Member for Bromsgrove (Sajid Javid).

[Mr Hayes]

The hon. Gentleman is a former apprentice and is passionate about the subject, and on that basis I defer to his expertise and personal understanding of the subject. He will be as pleased as I am that apprenticeship numbers in his constituency have grown by 65%. I acknowledged at the outset that apprenticeship numbers grew under the last Government. Indeed, the former Prime Minister declared to the House in 2010 that there were 250,000 apprenticeships. Now there are nearly 440,000. That is the difference between Labour’s record and ours. I know that in the spirit of generosity that typifies all the hon. Gentleman does here, he will want to acknowledge that success when he speaks later.

The development of our new higher apprenticeships in key growth sectors, including construction, renewable energy, advanced engineering, insurance and financial services will allow about 250 employers, including Leyland Trucks, Unilever, TNT, Burberry and so on, to benefit from nationally accredited technical training delivered in the workplace. Higher apprenticeships have the potential to deliver higher-level skills tailored specifically to individual business requirements, and I am encouraged by the research produced at Greenwich university earlier this year showing that about 13% of apprentices progress into higher learning within four years of completing their apprenticeship. As I said a moment ago, we will deliver more than 25,000 higher apprenticeships in this Parliament.

There is much more that I could add to that catalogue of good news. I could wax even more lyrical about the scope and scale of our achievements, but I know that many Members want to speak and I am anxious not to impinge too much on their time. I know that when they speak, like those who have already intervened, they will want to reflect on how much has been achieved over recent months, not just in expanding the apprenticeship programme but in making it more responsive to the needs of employers and the aspirations of learners. Hon. Members will also be aware of how much remains to be done to ensure that we build on excellence, focus on quality, direct funding, link apprenticeships to growth and ensure that not only the macro-economic ambitions that I have set out but our social ambitions are achieved. That is the scale of what we want to achieve. We will be ever vigilant in raising standards and quality, cutting bureaucracy and prioritising areas in which returns and impact are greatest.

At a recent Business, Innovation and Skills questions, I asked all hon. Members who had not done so already to set an example by taking on an apprentice. Today, I ask for their engagement during national apprenticeship week, which starts on 7 February 2012.

To change our national prospects, we must change our view of what matters to each of us and all of us. Apprenticeships are an economic imperative, a social mission, a cultural crusade—such is the scope and scale of our ambitions. We want to reinvigorate practical, technical and vocational skills by reigniting the fire of learning. We want lives lit up by achievement, with a new generation of craftsmen shaping a bigger Britain and building a better future.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before I call the other Front-Bench speaker I inform Members, so that they can get ready, that as we are not making as much progress as we should, I am reducing the time limit for Back-Bench speakers to six minutes in order to get everybody in. I hope that is clear.

18:46

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

I know that in certain quarters—some of the more world-weary denizens of the 21st century—the Minister, for whom I have much respect and affection, is the subject of mild amusement because of how he manages to cover all times, all places and all poetry, and in particular because of how he invokes mediaeval guilds. I think that is extremely unfair, and I have a confession to make tonight: I, too, am a mediaevalist. In fact, a significant chunk of my education at Stockport grammar school was down to an apprentice made good, Sir Edmund Shaa, who was apprenticed as a goldsmith in 1450 and subsequently founded the school in 1487. His Latin motto was “Vincit qui patitur”, which very loosely translates as “You’ll get there if you stick at it”. Of course, that was what happened in that period for people such as Dick Whittington, who was of course apprenticed as a mercer. This is the time of year for pantomime, Madam Deputy Speaker, so I trust that you will forgive me for mentioning him. It also happened for Scrooge, who was not represented in Dickens’s novel as the Chancellor of the Exchequer but was an apprentice to Fezziwig, who was also a great model.

Apprenticeships were renewed by the trade union movement in this country in the 19th and 20th centuries. It was the skilled working class who took them up. My own father, who was apprenticed just before the second world war to Crossley Brothers, one of the best engineering companies in the north-west, was told by my grandfather that he had a job for life. However, as we well know, we have seen the decline of traditional industries over a long period. In the spirit of Christmas and non-partisanship, which the Minister mentioned, I will not ascribe that to any one particular Government, although Thatcherism comes to mind. We saw the meretricious pursuit of funny money and fluffy activity under the Thatcher Government—not that I would accuse the Minister of being either fluffy or funny. [Hon. Members: “Ooh!”] Funny peculiar, not funny ha-ha.

By the 1990s, as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said, apprenticeships were on their knees, and it was the Labour Government who renewed them, as the Minister was gracious enough to acknowledge. Incidentally, that renewal did not come out of a focus group, and sadly it was not detailed on the great pledge card. It certainly did not come via Twitter, because we did not have the technology in those days. It came from a deep belief and a response to what we were being told in our heartlands about industrial decline, the failings and horrors of the youth training schemes and the low-skill, low-quality training that had taken place under the Conservatives before 1997.

We said that there must be a better way. That was why we revived manufacturing and gave it a sense of structure as we approached the millennium, and why we set up the national apprenticeship scheme and introduced national apprenticeships week. At the end of the day, it was also why it was the Labour Government who supported our successful bid to stage WorldSkills this October in London—I also pay tribute to the Minister and Members from across the House—and what a wonderful showcase for vocational activities in this country that was.

I do not need to remind the House—because the Minister has already generously done it for me—that we commissioned the Leitch report, that seminal report on our skills needs which has informed policy in all parts of the House. What it says about the direction of travel remains just as relevant, even though the economic situation has changed utterly from the period in which it was produced. Leitch ascribed to apprenticeships an important role to play in improving adult skill levels, as the Minister rightly said. That will only become more important as our demographic profile changes. However, we have to resist the temptation to label all in-work training as apprenticeships, thereby stretching the brand to breaking point. We also have to judge training schemes critically in their own right, and in preparation for this situation.

However, at a time of huge rises in youth unemployment and the number of NEETs, it is clear that the immediate challenge is to grasp the nettle and boost the number of apprenticeships available to those aged 16 to 24. The Government’s own head of the apprenticeship service warned only this summer about the chronic lack of places for interested school and college leavers. It is therefore not just a question of supply, or even money—although the Minister has been somewhat over-familiar with the figures, and I intend to return to where some of the money has come from. It is also about demand—demand in the workplace and demand from employers—and, crucially, confidence. Without confidence, the Government can produce as many schemes as they like, but they will face an uphill battle in successfully attracting the numbers. It is this Government’s failure to produce economic arguments or an economic strategy that will generate confidence that has contributed to many of the problems with which the hon. Gentleman has had to grapple.

However, I would like, if I may, to pose a further question for the House—one that goes to the heart of the future for apprenticeships. What are apprenticeships for? Do we see them as a means to expand someone’s existing skills competences, providing a traditional role, or as a means to give rigour to new and developing types of employment, such as in green and low-carbon areas? If so, we need to highlight the importance of adopting a collaborative approach in those areas between employers and training providers in designing frameworks that best fit those new competences. I know from talking to a successful construction business in my area—a company called Amion, which has a good track record in supporting employees from Blackpool to gain higher and further education qualifications as apprentices, both part time and full time—that expansive frameworks might not always be the answer for young people taking an apprenticeship or skills route to qualifications while working in a company. As for older workers, especially in construction or electrical activities, it might make more sense to have shorter, one or two-day bolt-ons to existing qualifications, which again highlights the need for frameworks to be flexible and adapt rapidly to new developments. In a labour market where the average person will be expected to change jobs a number of times in their lives, can a portfolio of skills be offered that will allow the budding apprentice the ability to cope with this new-found flexibility, as he or she progresses?

There is a lively and ongoing debate about the nature of apprenticeships—an issue to which the Government have rapidly been forced to turn because of some of the disquiet in recent months. That was apparent from a meeting in this House organised recently by FE Week, when more than 80 apprenticeship providers came to the Commons to voice their views and concerns about quality and overstretch in apprenticeships, which is something that we have also articulated via our parliamentary questions. As Peter Cobrin, the national education director of the website notgoingtouni.co.uk, argued:

“Is 12 weeks working in a catering establishment and coming up with a certificate—is that an apprenticeship? Or three years working in a engineering company—is that an apprenticeship? We haven’t got a handle around what it is.”

Alastair Thomson from the National Institute of Adult Continuing Education talked about people who are already working for the employer and then being put on the programme. He said, “Sometimes that’s not a bad thing, but if the person who goes through an apprenticeship stays on the same job or does not get any pay rise—is that really a good use of public money? I’d suggest not.”

Those are issues that have been raised strongly, along with others, in connection with Elmfield Training, which made significant profits in delivering the apprenticeships framework. I have also written to David Way of the National Apprenticeship Service to voice my concern about those issues. I therefore welcome the Minister’s announcement today about curtailing apprenticeships that are shorter than a year. I also welcome all the other things he has said in that respect, but this House needs to remember that this comes on the back of a process of concerted pressure, 18 months into this Government’s period of office. I would say gently to the Minister that the devil is in the detail. I appreciate that he wanted to present a lot of the detail today, but when he was going through it so rapidly, talking about the sunny uplift, I was reminded of the old saying: “The faster they counted their honour, the faster we counted the spoons.” We will certainly be counting the spoons and holding the Government to account on these issues.

The Minister’s announcement will do nothing immediately to address the concerns about the quality and progression of apprenticeships for those in the crucial age range between 19 and 24, although the Minister said that he would look at that. After all, their futures are just as important to the economy and jobs as those in the younger range. We will therefore be pressing Ministers to ensure that apprenticeship standards and quality are maintained for all ages.

[Mr Hayes]

I do not want to intervene too frequently on the hon. Gentleman, because a lot of colleagues want to contribute, but he will know that the growth in apprenticeships for 19 to 24-year-olds over these two years—the first year of which his Government might take some credit for, because of the time lag in publishing the figures—has been around 60%. There has been considerable growth in apprenticeships for 19 to 24-year-olds. As for quality, he will also know that it was this Government who introduced both minimum contract values, to take out some of the smaller and less reliable providers, and apprenticeship standards, and that was in the beginning, not in response to any pressure from the Opposition.

[Mr Marsden]

Well, I—

[Nigel Adams (Selby and Ainsty) (Con)]

Agree?

[Mr Marsden]

No, I do not agree. I hear what the Minister has to say, and I accept that he and colleagues have made progress in that area. My point about 19 to 24-year-olds was not that the numbers had gone up, but that it is just as important to look at quality for that group as it is for 16 to 18-year-olds. Let me say rather gently—albeit excluding the Minister from culpability in this respect—that if the Government move in the same glacial fashion as they moved in other areas of quality and due diligence, such as with the regional growth fund, then we will have the opportunity to come back and quiz them further. However, knowing the Minister’s commitment in this area, his perspicacity, his ability to summon up armies of rhetoric—and, indeed, civil servants to do this job—I am sure that that will happen.

Let us create a landscape where we can continue to boost apprenticeship numbers. However, if we are going to do that, it is crucial to get the preparatory work right. That means a strong, solid system of careers advice for young people, to ensure not only that they are aware of the vocational opportunities available to them, but that they are given the skills to take them up. We support the principles behind the establishment of the all-age careers service, on which the Minister, while in opposition, and I, as a Back Bencher, agreed some time ago, as members of the all-party skills group. But the Ministers’ noble aspirations have been undermined by the chaos and confusion arising from the Department for Education’s arbitrary abolition of Connexions and the removal of a dedicated £200 million of support provision in schools. It is therefore not surprising that the president of the Institute of Career Guidance, Steve Higginbotham, went so far as to say:

“In reality, the National Careers Service is an illusion, and not a very imaginatively branded one either, and is a clear misrepresentation with regard to careers services for young people.”

A recent survey carried out by the Association of Colleges showed that only 7% of school pupils could name apprenticeships as a potential post-GCSE qualification. That illustrates the problem that still exists in some schools, in which the vocational route is not explained to pupils. Teachers and others need to have a much greater understanding of the role that apprenticeships can play in careers development and future job prospects. I fear, however, that the situation will not improve following the abolition of Connexions.

New initiatives such as the programme announced this week by the chief executive of the CBI to send mentors into schools to promote apprenticeships are to be welcomed. That announcement shows a welcome recognition that everyone needs to play their part, not just teachers. We must also ensure, however, that young people can afford to stay in education. Following the abolition of the education maintenance allowance, college enrolment data from the Association of Colleges show that numbers are down across the board. That has real implications, as many young people will miss out on the opportunity to gain the crucial pre-apprenticeship skills that they will need to take up a placement. If apprenticeships are to play an integral role, we must ensure that they are fit for purpose, and that they can match the expectations of the individuals who take up the placements with those of the employers who take those individuals on.

We need apprenticeship frameworks that allow progression for the individual; they must not just be there for their own sake. I know that the Minister shares that view, as it featured heavily in his “Skills for Sustainable Growth” document last year. Now, however, we need movement to match the aspiration. We need clear portability from apprenticeship frameworks, with qualifications that are pyramidal in shape, rather than horizontal. We need a process of continuous assessment and credit accumulation that builds up a broad competence, rather than just bite-sized chunks of training that do not add up to anything.

It is equally important, whatever the qualification route, that we do not force employers or apprentices into a false dichotomy between functional skills and skills for life. Enabling skills are important for gaining and keeping an apprenticeship, and subsequently a job, as well as a knowledge of specific skills. Both aspects need to be taken into account as we balance our skills needs in the years ahead.

We need clear, accessible pathways from higher-level apprenticeships into higher education. I want to point out that the choices relating to vocational and academic education should not be viewed as an either/or proposition. Perhaps the Minister should ask his colleague, the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), to get UCAS to consider recognising apprenticeship qualifications as part of its tariff-points system. For too long, complacency about the status quo and some minor snobbery in a minority of universities have hampered not only access but the interchange between the academic and vocational worlds. I welcome what the Government have said about the higher apprenticeship fund and the way in which it will be taken forward, but the key question is how those qualifications will be recognised and integrated into higher education progression.

How will this culture shift of which the Minister is so proud be delivered? The national apprenticeships service, which we set up when we were in government, is clearly set to lead from the front, but will it have the resources to deliver the expansion that the Government are talking about? Recent parliamentary questions have shown that the organisation has lost just under 100 staff in the course of the past year, at the very time that it is being asked to lead the delivery of more and more apprenticeships and to oversee the additional initiatives that the Government are pushing out, including those announced today. My own inquiries have shown that regional directors are now finding themselves further stretched by having to cover multiple areas of the country as well as delivering all the new initiatives that the Government are launching.

The Skills Funding Agency is responsible for all post-19 provision, but, crucially, the Department for Education still controls 16-to-18 provision and is arguably not showing the same commitment to apprenticeships and vocational education as Ministers in the Department for Business, Innovation and Skills have done. The problem with all this, and with the Minister’s dual role in the two Departments, is that it is sometimes hard to see who is leading whom.

We might also ask about the situation on the ground. Following the abolition of the regional development agencies, the Government have completely failed to link local and regional growth into their skills policies. That obviously includes apprenticeships. They have swept away the informal architecture that used to bring together the key players who were crucial to delivering apprenticeships locally, including further education, higher education and small and medium-sized enterprises.

I welcome what the Minister said today about the supply chain, but he merely echoed what we have been saying for more than a year. Why did a year have to be wasted before he came to the House to say these things? Why did we have to wait a year for the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark) to talk about the Government setting up a set of apprenticeship hubs in a number of city areas? The reason is that both Ministers were fettered by other Ministers, by the Chicago-based economists and by the people who think that they can deliver everything on the ground without any Government intervention, whom the Minister has on other occasions derided. Yes, it is good that the Government are looking at apprenticeship hubs, but who on the ground is going to deliver, arbitrate and energise demand? What about those outside the city regions? Are the second-tier towns, the seaside towns and the suburban and rural areas not entitled to an apprenticeship hub locally? We need those structures on the ground so that business demand can be recognised locally rather than being micro-managed from Whitehall, as happens now.

The situation is not helped by the cluttered environment that has developed in post-16 provision, with the creation of university technical colleges and the potential for free colleges and 16-to-19 academies alongside existing FE colleges. We can all see the results when apprenticeship schemes are run well; we have only to look at the demand for schemes run by BAE Systems, Jaguar Land Rover and Network Rail. I have also seen for myself the excellent work being done by British Gas to encourage more female apprentices, and the work done by the nuclear skills academy. All those schemes demonstrate the value of investing in training and skills for the long term—a point emphasised eloquently by my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, in his recent Bloomberg speech.

This brings us back to the age-old question: what is a good job? How do we match the fluid skills demands of the labour market with the life chances and skill sets of individuals? To boost apprenticeships, we will have to meet the challenge of winning over employers who are still sceptical about the some of the values that apprenticeships could bring. A recent British Chambers of Commerce skills survey showed that many employers were still not ready to engage with the programme. Only 20% of businesses surveyed across the board took on apprentices in 2010-11, with the figure set to drop to 15% in the coming year. The Federation of Small Businesses has rightly highlighted issues of complexity and red tape, which act as a deterrent to its members. So I welcome what the Minister has said today, although we shall have to wait to see the small print and to see how rapidly the proposals are put into practice.

I raised the problems of SME engagement in a debate in June, when I said that the Government needed urgently to consider tailoring apprenticeships better towards their needs. That means not just having financial incentives, which Ministers and others sometimes seem to think are enough, but structuring them to the daily cycle and the needs of SMEs’ work. We need to improve the levels of engagement between large companies and middle-ranked companies—identified only last week as key by the CBI director, Mr Cridland. They can play a vital role in boosting apprenticeships via supply chains.

Undeniable pride and dignity surround apprenticeships. That is why so many hon. Members have been able to recruit support for individual initiatives in their area. It has been the same in my area, and this summer I met apprenticeship award winners at Blackpool and the Fylde college in my constituency. My local paper, the Blackpool Gazette ran a successful campaign to create 100 apprenticeships in 100 days. In these sorts of processes, however, making connections and having middle men can be key. I learned that by talking to my FE college and to apprentices and the SMEs with whom they had bonded.

The Government have re-announced today—this is about the third time—the £250 million scheme to allow employers to bid directly for the training budget, but they need to be careful that the human resources element is not lost in hastily thought-out schemes that do not have safeguards and risk deadweight while funding for learning providers and colleges, which are already voicing their concerns, is top-sliced.

This October WorldSkills hit London, and team UK won 12 medals. I was delighted when by lobbying the Government I was able to play a small part as chair of the all-party skills group in tandem with others in the group in helping to bring that event to the UK. Young people with apprenticeships shone out, including Rachel Cooke from Blackpool and the Fylde, a BAE employer in my area. I agree with what the Minister said about the value of that. Labour Members have agreed with it for many years. Although I did not regret the changes made in the 1990s to the Labour party’s constitution in respect of clause IV, I did regret the removal of the words, to achieve

“for the workers by hand or by brain the full fruits of their industry”

because that embodied and continues to embody an important part of our tradition and our aspiration. I believe it is crucial that apprenticeships should have and deserve to have this respect—not least because some of the organisations that promote them, such as City and Guilds, which has been with us since 1878, have become a byword for attaining qualifications, rather like Hoover has become a byword for vacuum cleaners. Apprenticeships now span both traditional types of occupation such as stone masonry and thatching offered by the National Trust and the new schemes in the green industry and everything that goes with them. Harsh words have been said about some elements of the service sector in connection with some of the shorter-term apprenticeships, but we have to recognise that the sector will be key in delivering future economic prosperity.

We need to build a bridge of values between the old and new apprenticeships. We need a 21st century offer that combines an appreciation of the traditional strength of apprenticeships with what they can offer for young people, for retraining and for returning to work, particularly for the women of today. All the structural changes and genuine enthusiasm for apprenticeships will be for nothing if we appear to have promised too much from apprenticeships as a one-stop shop for all training and skills and as the silver bullet to solve all this Government’s skills and employment problems. They will be for nothing if we allow the brand to be contaminated by questionable providers or overstretched by branding all forms of training as apprenticeships. They will be for nothing, too, if we do not provide frameworks that offer the flexibility and progression opportunities for a 21st century economy—ones that are able to adjust to changing domestic and international demands.

The Minister did not find time this evening to talk about one issue that looms on the horizon—further education loans, which anyone aged 24 and above, but not the traditional 25-plus division, will be able to take up. Apprenticeships will be a large part of that number; perhaps as many as 100,000 people will be obliged to take up these loans after Government support is wound down. The time scale for the Government to make detailed decisions after consultation is very short, and this is already causing major problems with colleges across the sector, while business groups have raised the concern that the additional bureaucracy in administering these loans could disengage them from the process. A big bang approach to student loans in further education, including for thousands of apprenticeships, is one thing in a time of plenty, but in a time of scarcity, it is quite different.

When we were in office, we revitalised and re-energised the apprenticeship programme. We put in place procedures to ensure that Government contracts such as Building Schools for the Future would take on apprenticeships, and we saw completion rates rise dramatically to their current rate of over 70%. While the Government have sensibly built on much of that inheritance, there are new challenges that they have not yet understood or that have been hampered by silos, divisions in government and a reluctance to understand how Government can shape and enable markets, which includes skills and apprenticeships. Despite all the press statements and all the re-announcements and the conferences, the adult training budget has been significantly cut. The previous Government had put more than £700 million into funding Train to Gain, but that money has not been allocated to apprenticeships. In effect, the Government have not increased the overall budget for training apprenticeships.

Any Government—whether it be this Government or the next Labour Government—will need to build on a strong legacy from the past by working tirelessly to help expand access to the apprenticeship programme, by engaging with SMEs and helping them to overcome the barriers they face and by making apprenticeships offer a clear route of progression, as I have described. We also need to use the enormous power of Government, which includes creating thousands of new apprenticeship opportunities by incentivising companies to bid for Government contracts over a million-pound threshold to offer apprenticeship schemes.

[Jane Ellison (Battersea) (Con)]

On that very point, I hope the shadow Minister will join me in congratulating the Mayor of London, who has indeed incentivised major contractors bidding for public projects by insisting that apprenticeships are part of the mix in their bid?

[Mr Marsden]

Given that I have talked about Scrooge and “A Christmas Carol”, let me say that Dickens would have described the Mayor of London as a phenomenon—possibly an infant one, I do not know. What I would say about the Mayor is that his trajectory in following this Government’s policies in a series of areas is rather interesting, but, secondly, I would say that we are delighted to welcome him to our big tent, as this is precisely what we have argued for a long time.

The Government have discarded the guidance we put in place to encourage this development, so what we want to know is whether the Minister will listen to the broad range of groups supporting this change. Will he go back to those churlish officials who keep putting problems in his way, and will he support the private Member’s Bill proposed by my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) when it returns to the House next month? These are crucial issues. While he is at it, will the Minister discourage rather more churlish people such as the Minister for Housing and Local Government for describing apprenticeship requirements linked to public contracts as “ridiculous” and “counter-productive”?

The Government have had to face problems connected with further education loans, queries about ESOL—English for speakers of other languages—funding, active benefit restrictions and so forth. All that tells me is that we need to revisit the elephant in the room, which is how we develop a funding system that weighs properly and incentivises the contributions from the state, employers and individuals. That is a matter that Labour Members take very seriously, so we shall be looking at it in great detail in our policy review.

As we move forward, the world of work will no doubt continue to be epitomised by the rapid change we have seen in the last 10 to 15 years; moves towards hi-tech industries and demand for high-quality niche products will still be valid. Apprenticeships will have to adapt to the challenge of providing skills for jobs that do not yet exist. Apprenticeships will have to respond to the growing wish for people to buy experiences as well as products—hence my comments about the service sector—and that will have implications for the manufacturing-service balance. Our apprenticeship structure must be robust enough to support that evolution. Apprenticeships will also have a key role in the

“partnership between productive business and active government”

to which the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), referred recently.

Opposition Members, many of whose parents, grandparents and other antecedents were apprentices, fully intend to play their part in that process. We will continue to support the Government while they build on our achievements in a sensible fashion, but we will also continue to question them about the devil in the detail—always along the lines of “progression, progression, progression”. We shall be glad to have made a contribution to their learning curve.

19:20

[Stephen McPartland (Stevenage) (Con)]

It is a pleasure to follow the Minister and the shadow Minister, and I am grateful to you, Madam Deputy Speaker, for calling me so early in the debate.

It is great news that the number of apprentices in Stevenage has risen by 73% over the last year, from 380 to 650. Those numbers are important, because they relate not just to training schemes but to apprenticeships that will lead to real jobs. I know that the Minister, like me, attended the WorldSkills event, in which 13 of our young people won medals. That showed that they were hungry for learning and achievement. We need to reduce the gap between skills and education to make it easier for employers to take on such young people. I supported the clause in the Bill that became the Education Act 2011 that increased the requirement to level 2—the equivalent of a GCSE A to C grade in maths and English—because it enables our young people to acquire the numeracy and literacy that will help them to gain real jobs at the end of their apprenticeships.

There has been some discussion about the quality of apprenticeships. My constituency contains a couple of manufacturing firms: MBDA, which builds complex weapons systems, and Astrium, which builds 25% of the world’s telecommunications satellites. Their boards are run by people who were apprentices 20 or 25 years ago, and they offer massive apprenticeship opportunities. MBDA recently won an award for being one of the best apprenticeship organisations in the country. The companies take on students aged 16 or 18, give them real jobs, and support their development and acquisition of skills. They even pay for their degrees so that they can make progress. I wonder whether the Minister would be prepared to meet representatives of one of those companies to discuss level 5 apprenticeships.

[Mr Hayes]

I should be delighted to do so.

[Stephen McPartland]

I thank the Minister.

My constituency also contains a couple of accountancy firms that are taking on 18-year-olds and training them to become accountants. They are not providing old-fashioned apprenticeships—jobs to keep young people going for six to 12 months—but are investing in their careers. Stevenage is in Hertfordshire, and is close to London. It takes 25 minutes to travel to King’s Cross on a fast train in the mornings, although it takes much longer in the evenings. The companies want young people because they become committed to them and stay for 20 or 25 years. They become partners in the accountancy firms, and become board members of the large multinational companies.

The Minister came to Stevenage and kindly opened the first welding skills college. It is the result of a fusion between North Hertfordshire college and Weldability Sif, whose inspirational founder is Adrian Hawkins. We are trying to develop a network of such colleges throughout the United Kingdom, which is short of 30,000 welders. The average age of a welder is over 55, and welders in the midlands are now being paid more than £100,000 a year. Welding gives people fantastic career opportunities. [Interruption.] Some of my hon. Friends are suggesting, from sedentary positions, that many of us should have gone into welding when we were younger.

[Mr Iain McKenzie (Inverclyde) (Lab)]

There used to be an abundance of welders on the Clyde, in the area I represent, but there is no longer an abundance of them on the Clyde or, indeed, anywhere else in the country. Is that not because a Conservative Government ripped the heart out of the shipbuilding industry on the Clyde, and caused the loss of many welding apprenticeships?

[Stephen McPartland]

That is an interesting point. As is clear from my accent, I do not have much knowledge of the Clyde, but I believe that more than 1 million manufacturing jobs were lost under the last Government.

The quality of apprenticeships depends on the quality of the colleges that provide the training. North Hertfordshire college has an inspirational leader, Fintan Donohue, who has been working very hard. I am grateful to the Department for Education for providing it with a studio school last week, one of 12 in the United Kingdom, which will focus on science and technology. That brings me back to MBDA and Astrium, whose apprentices specialise in those subjects. The headquarters of the Institution of Engineering Technology are in Stevenage, and it is very involved in the provision of engineering qualifications. We need more young apprentices gaining skills that will make firms want to employ them in real jobs.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend think that there is a role for local government? Shepway district council in my constituency runs a brokerage service enabling businesses with an interest in apprentices to contact the appropriate training providers.

[Stephen McPartland]

I think that there is a role for everyone to take on as many apprentices as possible. Some young people are interested in academic careers, while others prefer to pursue a more hands-on route. My view is simple. I believe that all that young people really want is a job. They want a route map: they want to be told “If you take this path, you will find a job at the end of it.” The Minister has done a huge amount of work in that regard, both in opposition and in his present post. He has kindly given me one “yes” already, but I wonder whether he would be consider fully funding, for two years, the cost of apprenticeship training for people between 19 and 24. At present only 50% of the cost is funded, and full funding could greatly help NEETs—people who are not in education, employment or training.

Let me end with a quotation from the deputy principal of North Hertfordshire college, Signe Sutherland.

“The changes to the single adult budget have been excellent and we have managed to grow apprenticeships by 300% I the last 12 months. This equates to… an increase of apprenticeships in numbers 500 to 2,000 so with perseverance there are jobs are there”.

That is important news. The college is based in Stevenage, but it does a huge amount of work throughout Hertfordshire. I think it is integral to the apprenticeship offer that we focus on the simple fact that what is important is giving young people the skills that they need to obtain jobs.

19:28

[Paul Blomfield (Sheffield Central) (Lab)]

I welcome the Minister’s commitment to a spirit of bipartisanship in the debate, but I hope he will forgive me if I depart from it for a moment. Like my hon. Friend the Member for Inverclyde (Mr McKenzie), I represent a city that was deeply scarred by the last Conservative Government’s assault on manufacturing industry in the 1980s. Thirty years on, we in Sheffield live with the legacy of the policies of that time.

[Andrew Griffiths]

Does the hon. Gentleman agree that it is shocking that manufacturing declined faster under the last Government than it did under the Government of Mrs Thatcher?

[Paul Blomfield]

I invite the hon. Gentleman to come to Sheffield to see the real consequences of Mrs Thatcher’s policy on steel and engineering in our city. Some 30 years on, we in Sheffield still live with the legacy of those policies: a lost generation who never made it into regular work and the social consequences of intergenerational unemployment. In the steel and engineering industries, apprenticeships were the route to highly skilled and well-regarded jobs that provided both a learning experience gained from respected role models in the workplace and experience of the discipline of working and of working as part of a team.

To revert to the spirit of bipartisanship, I am pleased that the Minister recognised the role the last Government played in restoring apprenticeships. As my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) pointed out, apprenticeship starts more than quadrupled between 1996-97 and 2009-10. I am deeply worried, however, that with youth unemployment now at more than 1 million, as in the 1980s, we again face the risk of there being a lost generation.

The Minister is an honourable man who is deeply committed to skills and apprenticeships, and he must therefore share our frustration that behind the Government’s rhetoric is a sorry picture in respect of apprenticeships. There is concern about the age profile of apprenticeships nationally, and that is certainly felt in my constituency. In 2010-11, just 150 people under the age of 19 started an apprenticeship, as against 200 people aged between 19 and 24 and 250 people aged 25 and over. Compared with the previous year, there has been a 27% decline in the number of apprenticeship starts for those under 19, as against an increase of 17% for those aged between 19 and 24 and a 313% increase for those over 25. In June, even the head of the Government’s apprenticeship service, Simon Waugh, had to admit that

“there is still a chronic lack of apprenticeship places for interested school and college leavers”.

Many people were shocked to discover that the growth in new apprenticeships under this Government has come in the 25-plus category. Astonishingly, the number of apprenticeships taken up by those aged over 60 increased tenfold between 2009-10 and 2010-11. What is the reason for that trend? There is concern that since the abolition of many of the training courses delivered under Train to Gain, there has been a rebranding of in-house training as apprenticeships. The Minister must address that issue.

I think the Minister will agree with me about the number of apprenticeships in small businesses. Only 8% of small businesses had taken on an apprentice in the past year according to a Federation of Small Businesses skills report in June. In October, the British Chambers of Commerce found that 53.7% of its members who were surveyed thought an apprenticeship was not relevant to their business or sector. The FSB backs that up in its report, saying that 46% of businesses did not think an apprentice was suitable for their business. That proportion increases to 60% for sole proprietors and 47% for micro-businesses. That perception must be challenged, because apprenticeships can play a valuable role in all sectors both in the workplace and in terms of gaining valuable skills.

I have been working on that issue with the British Chambers of Commerce, and that work has been reflected in early-day motion 2469, which has support on both sides of the House. It states that

“greater priority needs to be given to increasing the number of apprentices across the UK to provide essential career opportunities for young people”.

About 20% of small businesses cited each of the following three factors as major reasons for not taking on an apprentice: training time and general time constraints, costs, and the young people involved having no previous experience. The Government must consider how they might give better support to small businesses by disseminating information better to break down these perceptions and by providing the practical assistance that SMEs need.

[Damian Collins]

I do not wish to plug my district council in Shepway again, but it has developed a service to local businesses who may want to share an apprentice rather than take one on full time, and that service addresses how the council might help with some of the transport costs as well. Good local creative thinking may help to solve some of the problems the hon. Gentleman is setting out.

[Paul Blomfield]

I welcome such initiatives, while also recognising that many local authorities—such as mine in Sheffield, which is facing a 30% cut in funding over a four-year period—will have difficulty finding the money to launch such new initiatives. Assistance of that sort does need to be provided, however, and the Government might try to identify funds to support local authorities in taking initiatives such as that in Shepway.

We can also do more in our constituencies to work with small businesses, and I applaud the efforts of the hon. Member for Harlow (Robert Halfon) and other Members on both sides of the House in setting up the Parliamentary Academy. As employers, we are not dissimilar to SMEs. Our offices operate as micro-businesses, and we are busy, money is tight and we might never have taken on an apprentice before. I was pleased to take on an apprentice even before the Minister invited us to do so. A young woman called Rebecca is working in my office as an apprentice secretary, in partnership with Sheffield college. At the end of the year she will gain a level 2 BTEC in business and administration, by spending one day a week in the college and four days a week in my office, with regular visits from the work-based learning assessor. She will come out of the scheme with skills and experience enabling her to get a job, and she will have assisted the work of my office over this year. There is a lesson in that for all small businesses. I encourage other MPs to take a lead on this issue by employing apprentices.

I hope the Minister will also recognise that there is much more that we can do collectively and that his Government can do to advance the cause of apprenticeships. I hope he will respond in his closing remarks to the comments of the shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), about the powerful role the Government can play in public procurement. It is unfortunate that this Government have backed away from some of the initiatives Labour took when we were in power, and I hope the Minister will recognise the opportunities that exist to use the role of government locally and nationally as consumer in order to bind companies to take on more apprentices.

19:36

[Lorely Burt (Solihull) (LD)]

Apprenticeships are one of the key tools we as a Government have at our disposal both to tackle youth unemployment and to skill our young people to serve the needs of industry both today and in the future, when there will be increasing demand and the country will need to be able to achieve the growth we all desire. I do not intend to ruin the positive ambience we are fostering with the Opposition this evening, but I must say that the last Government concentrated on higher education, sometimes at the expense of apprenticeships. That is not to say that higher education is not important; it is hugely important, but it is not all-important. The last Government did increase the number of apprenticeships, but it was by an average of 13,000 a year over eight years, whereas this coalition Government have raised it by 160,000 over one year alone.

I do not want to talk about the past, however. The past is past and today we face a new series of challenges. I therefore want to talk about what those challenges are, what the coalition Government are doing already, and what else we might do to develop this success story even more.

We do have a good story to tell. Provisional data for the full 2010-11 academic year show that apprentice starts increased by over 50%, to 442,700, with increases at all levels and stages, contrary to the assertions of the hon. Member for Sheffield Central (Paul Blomfield). There has also been a strong increase in completions, to 181,700. That is mirrored in my constituency of Solihull, where the increase is 53%.

We want the figures to rise even further and faster, but to achieve that we must identify the obstacles preventing employers from recruiting more apprentices. Red tape is a culprit, and I would give special prominence to health and safety red tape. Clearly, we cannot put young people at risk, but from this January employers and trainers will no longer have to comply with the additional health and safety requirements imposed by the Skills Funding Agency. Employers will have to comply only with the Health and Safety Executive’s requirements as set out in “Health and safety made simple”—if that is not a contradiction in terms.

Small businesses are obviously a key area that we need to target, as several hon. Members have said. The Federation of Small Businesses reports that only 8% of businesses surveyed had taken on apprentices last year but 28% said that they would do so if there were a wage subsidy. The FSB very much welcomes the incentive payment recently announced and says that

“initiatives like this will help the smallest of firms to take on young people.”

[Mr Robin Walker (Worcester) (Con)]

Would the hon. Lady recommend the initiative taken by Worcester city council? A small subsidy can, in some cases, make a big difference, so it is providing £500 to small businesses that take on their first apprentice.

[Lorely Burt]

I would definitely commend the hon. Gentleman’s local city council.

I also suggest that the payment of £1,500 should be available to as wide a range of businesses as possible. I would welcome greater clarity on how the money will be targeted and what the eligibility criteria will be. I would be grateful if the Minister elaborated on that in his remarks, particularly given that the FSB wishes to take advantage of this as quickly as possible. For small businesses that may not have the time and wherewithal to organise courses for their apprentices, the FSB would like the use of apprenticeship training agencies and group training associations to be expanded. The ATAs would employ the apprentice and lift the administrative burden for the small business, while GTAs enable employers to come together to offer the right training to meet their needs.

Other barriers that the Government should be addressing are outlined by the United Kingdom Electronics Alliance. It talks about schools and universities

“releasing students onto the jobs market without key life skills such as communication, practical problem solving, work ethic and an understanding of manufacturing and the role it plays in the economy.”

We are back to the “oily rag syndrome” of ignorance, where many young people have little idea of what manufacturing really is; a key area that we need to address is how to give kids an understanding of what exciting futures are out there, and these futures involve ingenuity, creativity, imaginative design, great job satisfaction and good money. We have to link schools up with companies while kids are at a formative stage, to open their eyes to the possibilities of what is out there and crying out for their skills and aptitudes. When these young people have a realistic idea of what the world of work is like, they will focus on the skills that the UKEA talks about.

The coalition Government are also doing some good things for higher apprenticeships. The higher apprenticeship fund will support the development of up to 25,000 new higher apprenticeships at levels 4 and 5, which compares with a figure of just 200 in 2008-09. The shadow Minister talks about achieving by hand or by brain, but surely the pinnacle of achievement in manufacturing comes about by hand and by brain.

The UKEA also suggested that a tax credit would “de-risk” the decision for companies willing to set up apprenticeship schemes and that we could introduce the idea of leaving money on the table if a company does not invest—this is a push-pull strategy. I would be interested to hear the Minister’s views about using tax credits in that way. I could say more, Madam Deputy Speaker, but other colleagues wish to speak. Of course we need to do more, but we have made a pretty reasonable start.

19:43

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

In opening the debate, the Minister said that he has put apprenticeships at the heart of this Government’s policy, and I welcome that. Nobody would in any way decry the commitment to and passion for this issue. However, when someone makes such a bold assertion, they have to produce statistics to demonstrate that the Government are succeeding, and that is at the heart of the Government’s problem on this issue. The statistics may demonstrate a big increase in the number of apprenticeships, but if we drill down and look at what is behind the statistics, we find that it does not necessarily indicate a commensurate increase in skills or value for money. Comments have already been made about the huge increase in the number of post-24 apprenticeships and some of the poor-quality provision for 16 to 18-year-olds. I commend the Minister for his comments about trying to improve the quality of provision, but they are a tacit admission by the Government that their policies so far are not actually delivering what they are intended to deliver.

Talk about apprenticeships is good rhetoric, as it chimes with the Government’s assertion that we need to rebalance the economy, and it provides a justification for pointing out an alternative educational route for those denied access to higher education—that denial is what the Government’s higher education policies are likely to produce. Clearly what is available is not actually going to deliver the agenda that individuals need and the economy needs.

I must pose a rhetorical question: what actually comprises an apprenticeship? We can debate the definition, but this contains certain key elements. It must be a work-based course to improve skills and employability, and it should be undertaken over a sufficient period to be meaningful. At the end of the course, the apprentice should qualify for a position superior to the one that he or she had when they started the apprenticeship, either in the same company or another. The level of employment post-apprenticeship should be a measurement of the success of the apprenticeship. Most importantly, the individual who has undertaken the apprenticeship must believe that they have enhanced their skills as a result. Unfortunately, the evidence so far is that a great number who have taken the current apprenticeships do not feel that way and have not had opportunities open to them as a result.

I have evidence to suggest that young people recruited for 12-week apprenticeships have ended up doing only five weeks, with a significant element of that time taken up with stuffing envelopes. The Government have paid for that as an apprenticeship course, which poses serious questions about the value for money that we are getting, the experience that we are offering to young people and the damage to the apprenticeship brand that could arise from it.

[John Glen (Salisbury) (Con)]

I have been listening carefully to the hon. Gentleman’s remarks. He seemed to suggest that the previous Government’s university access policy was delivering something superior and he seems to be denigrating the status of apprenticeships. Is not half the problem that people talk down apprenticeships, which denigrates their status—that status is very important in encouraging people to take up apprenticeships in place of going to university—and delivers an outcome that is no better?

[Mr Bailey]

I am glad the hon. Gentleman made that intervention, because it allows me to point out that under the previous Labour Government there was a huge increase in the number of people going to university, including a fourfold increase in the number going from my constituency, and there was also a fourfold increase in the number taking apprenticeships. By and large, we find that those apprenticeships were far superior to the those being classified as “apprenticeships” under this Government. As has been said on a number of occasions, the huge number of apprenticeships for over-24s is just a rebranding of the Train to Gain programme. They would not have been included in the previous Government’s statistics on apprenticeships, so to compare one with the other is not to compare like with like. I believe that in the retail sector more than 70% of those who get an apprenticeship level 2 qualification are in existing employment, so does that really meet the test of improved professional qualifications and employability? I doubt it.

[Mr Hayes]

The hon. Gentleman is the Chairman of the Select Committee and I know that he would not want to present a parody of what is happening. We are determined to deliver quality, but I cannot imagine that he is saying that apprenticeships should not be a vehicle for retraining and upskilling and improving the prospects for existing workers. If he was saying that, it would be an extraordinary claim.

[Mr Bailey]

I was not going to make that claim. In fact, the Minister raises an important point. I would not in any way decry the upskilling of existing workers, and Train to Gain was very successful in doing that, but whether we want to call it “apprenticeships” is debateable. Perhaps we do, perhaps we do not, but statistics cannot be traded with the previous Government’s apprenticeship statistics when such people were not included in them. That is my essential point. I am not decrying in any way the benefits of in-work training, but there is a genuine issue with measuring the enhanced employability of people who have undergone that training and the amount of money invested in it.

Let me consider the Government’s approach to the education maintenance allowance. One reason for scrapping it was the alleged deadweight cost of the fact that many young people would have taken courses irrespective of whether that allowance had been paid. The same sort of detailed scrutiny must take place of some of the post-24 training to ensure that we are not spending a vast sum of money—there is a lot of money involved—on providing people with training that they would have had anyway. A secondary issue is the fact that if we can retain the level of skills enhancement we have already and refocus some of the money that would be spent on it on other areas, we might well be able to enhance other apprenticeship provision in other areas, which is equally important.

I could go on for a very long time about this—[Interruption.] But not today. My Committee will carry out a detailed inquiry, but I conclude by saying that we should get away from the rhetoric of apprenticeships and talk about general skills. There are a range of skill packages for different groups of different ages and different skill levels and we must ensure that they are supported rather than talk all the time about apprenticeships—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

19:52

[Nigel Adams (Selby and Ainsty) (Con)]

It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey), and I shall try to keep the rhetoric to a minimum if I can. It is also a pleasure to speak in the debate.

Apprenticeships are the most ancient form of vocational training. In this country, they predate degrees and their formal existence dates from the middle ages. In places such as China, apprenticeships have been around for 1,000 years. Hon. Members will all be aware that Confucius explained why apprenticeships worked by saying, “I hear and I forget, I see and I remember, I do and I understand”.

Last Friday evening, I had the good fortune to be invited to Selby abbey to present the annual Selby college awards. As the Minister will know, Selby college is an outstanding further education college in my constituency and I was thrilled to present awards to several apprentices who had excelled in their fields and who are now looking forward to embarking on their careers. The college plans rapidly to expand its apprenticeship scheme numbers in the forthcoming year, with ambitious plans to increase the programme by 300% by working closely with local and regional employers to help to train people with the skills they will need to join the working world. As well as making that commendable progress, the college is in touch with university partners to expand the range of degree programmes that students can take there.

Today, thousands of young people are benefiting from the excellent start to their working life that an apprenticeship can offer, but apprenticeships are open not only to the young. Hon. and right hon. Members might have seen reports in the media about current apprentices in their 60s and 70s, and a recent forecast published by the Government shows a large increase in the number of adult apprenticeships over the course of this Parliament. That offers hope for all of us who might be thrown out of this place in the future.

With Christmas spirit and a sense of fair play, I acknowledge that there is agreement on both sides of the House that apprenticeship training must be central to any Government’s approach to skills. I will go further and acknowledge that one of the achievements of the previous Administration was to bring about a significant expansion of the number of apprentices in training. I am delighted, however, that the coalition Government have taken apprenticeships to a new level, as cemented in the coalition agreement, which stated that the Government

“will seek ways to support the creation of apprenticeships, internships, work pairings, and college and workplace training places as part of our wider programme to get Britain working.”

This Conservative-led Government have more than fulfilled that promise and continue to do so with an extra 53,000 apprenticeship starts recorded during 2010-11.

We have seen a 54% increase in apprenticeship starts in 2010-11 compared with the figures for 2009-10, under the previous Government. Those figures could not be clearer. This has been a record year for apprenticeships, with the greatest proportional growth at level 3, the equivalent of A-level. The task now must surely be for the Government to continue to increase the number and range of apprenticeships on offer while, most importantly, improving their quality. I support the Government’s announcements on improving the quality of apprenticeships, particularly now that English and maths up to the standard of a good GCSE—level 2—will be available for all apprentices.

Madam Deputy Speaker, there is a great song—I am sorry, Mr Deputy Speaker. I had not realised that you had taken Madam Deputy Speaker’s place. There is a great song by an artist I have had the good fortune to have seen live, called Seasick Steve, which goes, “I started out with nothing and still have most of it left”. If we are to avoid that rather gloomy outcome, we must continue to improve the quality of apprenticeships.

In my constituency, Doosan Power Systems, a company that works in the energy sector, has had a successful apprenticeship programme in place for more than 40 years and employs 92 apprentices across the years between 16 and 18, with hopes of bringing in a further 62 next year. In Selby and Ainsty, we have seen an increase in apprenticeship numbers of 67% over the past year, from 510 to 850, and I hope that that figure continues to increase, with companies such as Doosan taking on more and more apprentices with the help and support of the Government.

[James Wharton (Stockton South) (Con)]

May I take this opportunity to observe that in the north-east we have seen a rise from 535 to 860 engineering apprenticeships in the past year? Is it not the case that the sort of apprenticeships my hon. Friend is talking about and which the Minister is doing so much to deliver will provide the jobs and growth for the future that we so desperately need in our region?

[Nigel Adams]

My hon. Friend is absolutely correct. It is important that we have quality apprenticeships to ensure that they lead to proper jobs. I commend my hon. Friend; I am sure his input has gone a long way towards insuring that increase in apprenticeship numbers over the past year.

Further support can be offered through an increase in the funding support for apprentice work placements to cover non-productive employer costs such as travel, accommodation and supervision. I have spoken to employers in my constituency and found that another area where it is widely felt that greater Government support is necessary—I put this to the Minister—is in the current 50% reduction in funding for apprentices over the age of 18, an issue raised earlier by my hon. Friend the Member for Stevenage (Stephen McPartland). Many firms and establishments do not allow workers under the age of 18 to enter their sites owing to the perceived high-risk nature of the work, which in turn limits the age of apprentices that companies will take on. If the age were raised to 19 before the drop in funding, it would encourage more employers to take on younger apprentices without the risk of not being able to utilise their skills fully on site.

An advanced economy needs people with advanced skills in order to grow, and we need to use all our talents. I am assured that this Government are committed to driving up the skill levels of the work force. Apprenticeships already make a tremendous contribution to society, but this Government intend and need to go further. The Government should ensure that apprenticeships are improved and expanded so that more individuals and businesses can benefit from the opportunities that they offer.

20:00

[Nic Dakin (Scunthorpe) (Lab)]

As we have heard, there is substantial consensus across the House that apprenticeships are a good thing. Both the previous Government and the present Government have supported and invested in the growth in apprenticeship numbers. Both the current Skills Minister and the shadow Skills Minister have excellent track records championing apprenticeships inside and outside Government. Many MPs are, like myself, employing apprentices, a practical, positive way of showing commitment to the apprenticeship route into employment.

Across the country there are excellent examples of first-class delivery of apprenticeship programmes. Two examples from my own constituency demonstrate how flexible the apprenticeship model is for apprentices and for businesses. North Lindsey college provides a wide range of excellent apprenticeship opportunities in partnership with a range of local companies. Humberside Engineering Training Association—HETA—whose general manager, Eric Collis, gave compelling evidence to the Education Committee, provides a range of high-quality apprenticeships in partnership with companies such as Tata Steel. It is a tribute to the quality of Tata Steel apprenticeships that they are heavily oversubscribed year on year. It is a tribute to Tata’s commitment to the development of its future work force that it is committed to maintaining its apprenticeship numbers even while it navigates the choppy waters that the steel industry currently faces worldwide.

So the apprenticeship brand is a strong one. Labour breathed fresh life into apprenticeships after they had been somewhat neglected. The number of apprenticeships rose from 65,000 in 1996-97 to 279,000 in 2009-10. The dedicated National Apprenticeship Service was set up to promote and expand apprenticeships. To their credit, the Government have built on this. However, most people think of apprenticeships as long courses focused on practical skills for young people.

Apprenticeships are now being supplied for a much wider range of skills and ages than previously, and vary in length. This is not necessarily a bad thing, but care needs to be taken with the branding, and vigilance should be maintained to ensure that apprenticeships are always used appropriately. We have heard some exchanges about that in the debate today. Vigilance needs to be maintained so that apprenticeships remain rigorous and of quality.

Most of the growth in apprenticeship numbers since the election has been in the 25-plus age group, and much of this has been achieved by the re-badging of Train to Gain numbers, so we need to be careful. With the rise in youth unemployment to record levels, it is important that renewed effort is put into building the number of apprenticeships for those under 25.

[Mr Hayes]

The hon. Gentleman is right to say that most of the growth has been in that area and he is right to attribute that to the changing shape of apprenticeships. We are using them as the principal vehicle to upskill and reskill the existing work force, as well as the traditional route into employment through the acquisition of practical competences, but I know that he will want to acknowledge that the two-year change in young apprenticeships for people aged under 19 is around 28% or 29%, and that the biggest proportionate growth is at level 3, rather belying the argument that this is all about low level skills for older people.

[Nic Dakin]

I thank the Minister for his intervention. He is right to say that where there is success it needs to be celebrated. That must be built on. He is also right to recognise the diversity of the apprenticeship model, but everybody in the House is right to emphasise the importance of rigour and quality as we move forward. There is agreement across the House on these issues, but when qualifications change, it is a tricky time and must be managed carefully. I am sure that with his track record, the Minister will be doing his level best to ensure that that is the case.

We do not wish to see another lost generation. That is the risk because of the economic challenges that the country faces. One way of addressing the issue would be to boost under-25 apprenticeships by smart public procurement. We have heard that discussed this afternoon. But there are other ways of addressing the challenge. In his opening speech the Minister drew attention to certain barriers to the supply of apprenticeships, which he hopes to release to allow a greater supply.

The Federation of Master Builders notes that there has been a sharp decline in construction apprenticeships as a result of the economic challenges confronting the construction industry. It states in its report:

“Apprenticeships are so successful because they are employer led and the qualifications on offer are designed to equip the learner with the skills required by the industry. Employers are at the very heart of apprenticeships and so, in order to really make a difference, politicians must continue to make the businesses’ case for hiring an apprentice. This includes the continuation, or even expansion, of the apprenticeship incentive payment.”

As the shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), said, a discussion is needed about how to balance the costs and the incentives between the student, the employer and the state as we move forward.

Finally, I shall touch on information, advice and guidance, which is tricky at present. I know the Minister is concerned about that. Research by the Edge Foundation showed that most people know a lot more about academic qualifications than they do about apprenticeships. The emphasis in the school curriculum on the English baccalaureate risks distorting choices and aspirations. Young people must be given better information about apprenticeships in order to make informed decisions. This should include opportunities to meet current apprentices and visit colleges, training providers and employers, starting before they make subject choices at 14.

Better information is needed about the paths that apprentices can take once they have finished their apprenticeships. It is not well known that apprentices can progress to higher education, or that many are promoted to supervisory and management positions soon after completing their training. Edge’s 2009 survey of teachers revealed that more than half—56%—of the secondary school teachers surveyed rated their knowledge of apprenticeships as poor. We need to take action on information, advice and guidance. We need to be rigorous about quality as we move forward, and we need to look at the package of incentives available to stimulate the further progression of apprenticeships.

20:07

[Chris Kelly (Dudley South) (Con)]

I should start by declaring an interest as a non-executive director of my family’s business, which has a long-established apprenticeship scheme.

Apprenticeships are a shining success in the first year and a half of the coalition Government. The figures paint a hugely pleasing picture, with the number of new apprenticeship starts in my constituency of Dudley South sharply up, as in most other parts of the country. In 2009-10 the number of new apprenticeship starts in Dudley South was 550, and in 2010-11 that number has grown to 910. That is a two thirds increase compared to 2009-10 and, more importantly, 360 more young people have been given access to the life-changing opportunities that an apprenticeship and skills for life provide.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime, so I would like to use this opportunity to thank all the employers in my constituency who have taken on apprentices, and especially those who have taken on apprentices for the first time recently. As the son of an apprentice, I make a commitment that any business in Dudley South employing apprentices that makes contact with me wanting a visit from their local Member of Parliament will get one, as I think it is absolutely right to celebrate the best in business.

I would like to make a special mention of the National Apprenticeship Service website, apprenticeships.org.uk. It has been re-developed and is now easier to use for both employers and apprenticeship candidates, so I congratulate the Minister on his Department’s effective use of communications technology. It is good to see the roll of honour there, giving deserved recognition to those businesses that are playing their part in training and developing our future work force.

Things are certainly heading in the right direction. In the academic year 2010-11, 442,700 people started apprenticeships—as the Minister has mentioned, a 58% increase on the number who started in the previous year. Much of this increase is due to more people aged 25 and over starting apprenticeships. The majority of people starting apprenticeships chose frameworks in the service sectors, such as business administration and retail, and a majority of apprenticeship starters were, for the first time ever, female. So apprenticeships are not just for school leavers, and are not just for the traditional industries, such as metal bashing, for which the black country is famous, but also for the service sector. This is particularly relevant to the Dudley borough, where Stourbridge college’s hospitality and retail academy is sponsored by Westfield, owners and operators of the Merry Hill shopping centre in Brierley Hill in my constituency.

The early figures are encouraging, but my right hon. and hon. Friends on the Front Bench are not complacent, and that is why the Government have introduced incentives to support up to 40,000 young apprentices in 2012-13. The Government will offer an incentive payment of up to £1,500 to small businesses, the final payment of which, quite rightly, will not be made until the apprenticeship has been completed and the apprentice has progressed to sustainable employment.

I recognise that money is tight at the moment, but will the Minister see what more he might be able to do on this incentive payment? For every £250 increment in the payment, there will be a huge increase in the number of employers willing to take on an additional or new apprentice. Further, will the Minister ask his Department to undertake some research, if it has not already done so, on the effects on take-up of increasing that payment offer to £1,750 or £2,000?

The British Chambers of Commerce published a recent report on apprenticeships that found that time, cost and inexperience were barriers to taking on apprentices. It also found that a fifth of firms with fewer than 10 employees, and also a fifth of those with between 10 and 50 employees, recruited an apprentice from 2010-11. That rose to over a third of companies with 100 to 249 employees, and to over a half of all companies with more than 250 employees.

The £1,500 maximum payment will clearly be important in incentivising small and micro businesses to take on apprentices, but the BCC is right also to identify time and inexperience as barriers. That is why I am pleased that the Government have responded by reducing red tape, ensuring that employers are able to advertise a vacancy within one month of deciding to take on an apprentice and have them ready to start work within three months, and removing all excess health and safety requirements for apprenticeships. In the new year, the Government will be enabling businesses to design, develop and purchase the apprenticeship and other training programmes that they need through a £250 million pilot fund.

In 2009, 30% of large employers with over 500 staff offered apprenticeships while only 5% of small businesses with two to four employees did so. This is precisely where we need to see the next increase in take-up coming from. Small and medium-sized enterprises account for almost half of the private sector in the UK, yet just 2% of small businesses employed apprentices in 2009. I generally do not like bandying statistics around, but that truly is a damning one. So this Government’s incentive payment to employers, along with the £250 million pilot fund and proposals to slash red tape, will clearly help to address this past failure. Like Dr Adam Marshall, director of policy at the BCC, I commend the Government for

“offering real help to firms and apprentices alike”.

One of those small business that I have talked to is in my constituency of Dudley South and it recently hosted me for a visit. The business, Generic Punching Systems in Netherton, has been helped by this Government to take on two apprentices. It is a family business with the managing director’s son and daughter working alongside their father in production and accounting roles. The other two employees are new apprentices. I commend GPS for investing in the future by taking on and training up new apprentices. My only concern however is that the managing director told me that he had not found it possible to employ apprentices through the local college system, and that is something that we need to be mindful of. Instead he uses his personal network within the area to identify willing and able candidates to be interviewed for apprenticeships. I commend the Government for their work thus far.

20:13

[Steve Rotheram (Liverpool, Walton) (Lab)]

I welcome tonight’s debate on this very important instrument in tackling unemployment in Britain today, which promotes a highly trained, suitably qualified, sustainable work force. I think that I am one of the few parliamentarians who has been an apprentice. I was a brickie and I learned my trade through an indenture route. Many years later, I became a vocational training instructor. In addition, I have worked for the Learning and Skills Council and its predecessor organisation, and was responsible for delivering construction training in the Merseyside sub-region. Therefore, I have some limited understanding of the issue.

In modern times, many traditional occupational areas are still three-year, and in some cases four-year, apprenticeships, and are still seen as being a detailed introduction to a trade: a valuable period of on and off the job training to industry recognised standards. Apprenticeships should not be 16-week test drives, as some are today. This will result only in damage to the brand.

I must confess that I feel that some right hon. and hon. Members’ interpretation of apprenticeships is slightly different from mine. For me, some employers are still confused about the precise definition of an apprenticeship. I welcome the Minister’s comments tonight about ensuring that quality does not suffer through quantity.

Thanks to the cuts in career services such as Connexions, many youngsters starting out today will be reliant on parents, grandparents and teachers for career support and guidance, and will need to decide whether to say on at school, whether they can afford the tripling of tuition fees and go to university, or whether to try to get an apprenticeship. Very few people, apart perhaps from some Conservative Members, would advise a young person to pack in school at 16 to take part in a six-month apprenticeship. So let us incorporate the question of definition into today’s debate. All training programmes cannot simply be rebadged as apprenticeships or they will lose all credibility. They should at least include the NVQ qualification at levels 2 or 3, the technical certificate and the key skills element.

There are many on the Government Benches who will no doubt advocate their love for and devotion to apprenticeships, but who have no intention of taking on an apprentice themselves, or of encouraging their own children to complete one. In fact, many Members claim that apprenticeships are the be all and end all if you listen to some of them, but despite my minor misgivings at times about the last Labour Government’s emphasis on academic routes over vocational training, the last Tory Government nearly destroyed apprenticeships completely. We were down to about 20,000-odd in the year before their last year in power.

Any increase in apprenticeship numbers, as identified by the Minister earlier, is welcome—

[Derek Twigg (Halton) (Lab)]

Does my hon. Friend agree that the recently announced construction projects that the Government support are an ideal opportunity for the Government to stipulate that they should include a number of apprenticeships? In our part of the world, the council is working hard to ensure that there are apprenticeships on the Mersey gateway. Should not the Government stipulate that any construction project they support should have apprenticeships?

[Steve Rotheram]

I agree with my hon. Friend. We tried to push the Government on that. The old rule of thumb used to be that for every £1 million-worth of procurement an apprentice was taken on. The Minister should seriously look again at that, because it is a way of stimulating demand for apprenticeships.

The point made earlier about 10-week programmes makes a mockery of the brand and looks like statistical gerrymandering to all those responsible for delivering quality apprenticeships. They are not what people out there believe to be apprenticeships; they are training programmes. They are very welcome in the vocational field, but they are not apprenticeships. While the Government take credit for all that they have done and for the current level of apprenticeships, many Members seem to forget that some current apprentices in traditional occupations started their apprenticeships under the Labour Government. For example, my beloved son is an apprentice electrician, which is a four-year programme. Perhaps I am being cynical, but the Government seem to be systematically rebranding work experience programmes as apprenticeships, and I genuinely hope that that is not the case.

The reason for my scepticism probably has something to do with a recent incident in my constituency of Liverpool, Walton. I keep questioning why the Government, who claim to be so dedicated to reducing unemployment and increasing apprenticeship numbers, allowed the National Construction Academy in Aintree to close its doors on their watch. Not only will the decision deny up to 80 young people each year the chance of accessing training via the centre, but Walton is unfortunately home to the sixth highest level of unemployment in the country.

The Minister will know that I have the greatest admiration for his undeniable appreciation of vocational routes into employment, but surely he must understand the relationship between public sector spending and private sector growth. Despite the coalition’s at times relentless desire to drive a wedge between the public and private sectors, the two are heavily interlinked and mutually co-reliant, as can be seen in the construction sector, for instance. As I have said on a number of occasions since becoming a Member of Parliament, the symbiotic relationship between the public and private sectors means that cutting one makes the other bleed. Needless to say, the construction sector is haemorrhaging badly at the moment and needs an urgent transfusion. The construction industry has a long history of taking on apprentices, but such programmes have now been savaged, with capital investment slashed—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

20:21

[Henry Smith (Crawley) (Con)]

It is a privilege to follow the hon. Member for Liverpool, Walton (Steve Rotheram), a former apprentice, and I am grateful for being called to take part in the debate. As my hon. Friend the Minister said in his introductory remarks, apprenticeship places are central to the economic and social good not only of this country and our local communities, but of individuals.

Youth unemployment is of course a significant concern for every right hon. and hon. Member. Looking back at the history of youth unemployment, it is shocking to see that between May 1997 and May 2010 youth unemployment increased by around 42%, and of course that is still very much a challenge as we face the current debt and international economic crisis, but it is even more important that we focus on properly skilling people, particularly the young, through apprenticeship places, and that is rightly a central commitment of the coalition Government.

Much has been said this evening about national policy on apprenticeships, and I would like to talk about how translating that national policy at a local level is making a real difference in my constituency. I am delighted to report that in the past year the number of apprenticeship places in Crawley has risen by 70%, which is 20% above the national average. That is playing an important role, along with other measures introduced by the Government, such as the Work programme, to ensure that young people in particular can find routes into sustainable employment.

I pay tribute to Central Sussex college, particularly its principal, Dr Russell Strutt, for the work it is doing. It is engaging hundreds of local young people and more than 1,600 local businesses with apprenticeship places across the board, whether in construction, health and social care, business administration, warehousing, hair and beauty or other areas of our diverse economy. Unfortunately, unlike what the hon. Member for West Bromwich West (Mr Bailey) described earlier, the proportion of people from Crawley going on to higher education in 2009-10 was just 17%, which is woefully low. I therefore very much welcome what Central Sussex college is doing in working with the University of Brighton to link local young people to the first-class, global employers in my constituency, such as Thales UK, Varian Medical Systems and Boeing UK, but we need to concentrate on more than just a higher education offer.

[Neil Carmichael (Stroud) (Con)]

I should like to celebrate the work of Dr Beri Hare in promoting engineering and manufacturing at Stroud college, because it is a great tribute to the college’s interest in young people and to the effective way in which it has delivered on ensuring first-class training.

[Henry Smith]

Clearly, further education colleges and those who work so tirelessly in them are making a significant difference, whether in Stroud or in other parts of the country.

The further education sector is not the only one playing a significant role, and I pay tribute to some of my local employers, who are also playing an important role in increasing the number of apprenticeships. One, Virgin Atlantic, which is headquartered in my constituency, is offering 38 apprenticeships in the highly skilled industry of aircraft engineering, and, based on the record of apprenticeship places it offers, almost two thirds of its apprentices stay with the company for a long time, helping to grow that sector of the economy and bringing loyalty to such first-class companies.

Another company in my constituency, TradeSkills4U, the largest electrical apprenticeship organisation anywhere in the country, offers 4,000 places not just in Crawley, obviously, but in the wider country. It offers them not just to young people, either, but to many people who are at the midpoint of their careers and looking to retrain—particularly people leaving the armed services and looking to retrain, especially in solar power technology. I was delighted to help open its new premises on the Manor Royal industrial estate in my constituency earlier this year with Falklands veteran Simon Weston.

Eezehaul, a courier and package company in my constituency, offers apprentice places as well, but both employers cite the importance of literacy and numeracy as a bar to people taking up apprenticeships and as a burden on many companies, because they often have to provide the teaching that schools and parents should have provided a few years earlier. That is why I was delighted to hear my hon. Friend the Minister mention focused support for literacy and numeracy so that apprenticeships can grow further. That can help to grow our commercial sector, thus growing our economy and creating a greater number of jobs.

20:28

[Mr Iain McKenzie (Inverclyde) (Lab)]

In the current economic climate for young people, this debate is very welcome. I speak with experience of apprenticeships, having spent the first four years of my working life as an apprentice and having had the good fortune to go on to discover a second career as a modern apprentice. That is why I have been engaging regularly with companies in Inverclyde, trying to encourage them to start thinking about increasing the number of apprenticeships or about starting an apprenticeship scheme.

Inverclyde is not as bad as some constituencies with youth unemployment, but that does not reflect what is happening in Scotland overall, nor in the UK as a whole. Youth unemployment has never been higher, and the statistics are frightening. Youth unemployment has risen to 1.027 million, the highest since records began in 1992, beating the previous record set only a month ago.

The young continue to bear the brunt of the lack of jobs in the UK, and many are thinking about emigration as a way out. Too many young lives are being wasted on the dole queue; long-term unemployed young people are the most vulnerable, with many trapped in a vicious cycle of joblessness, anxiety and depression. We desperately need to get our young people into training and apprenticeships. They need every chance to improve their skills to get them into good jobs.

The other week, I visited a project in my constituency in which young people are applying themselves to the renovation of community facilities and to learning new skills in the traditional trades of electrician, plumber and joiner. Those young people are determined to succeed; they are not sitting back on benefits. They ask only for the opportunity to learn the skills that they hope will get them employed as apprentices.

The Government need to do more to help our young people. They have dropped Labour’s guarantee of an apprenticeship place to young people who want one and they have failed to expand apprenticeship places for school and college leavers. The Government should be doing everything that they can to support opportunities, helping young people to improve their skills and get good jobs. Instead, they are leaving Britain’s youth on the dole queue, instead of taking constructive measures today. We need a highly skilled, highly educated work force to meet the challenges of tomorrow and compete with the advanced nations of the world. We need value added skills to compete with the economies of Brazil, India, China and other emerging nations in the world.

Apprenticeships are a valuable way of giving young people skills and training in jobs. They offer an on-the-job learning opportunity; they enable young people not only to learn about their chosen trade or profession, but to learn it on the spot and talk to colleagues who are already skilled and experienced in their particular area.

Apprenticeships can offer so much, and there is no reason why they should not be expanded to cover a wide variety of jobs and professions. We need to get Britain’s companies on board. The Government are cutting apprenticeships back when they are needed more than ever. It is so short sighted; the Government need to make more apprenticeship places available. Labour has a plan for our young people, even if Government Members do not. Any company wanting to provide goods or services to the public should be required to have an apprenticeship scheme before they can win a contract. My council in Inverclyde already does that, and to great benefit.

Labour’s jobs-for-contracts scheme would increase the number of apprenticeships by thousands and give immediate help to many of the 1 million unemployed under-25s. This simple idea—creating apprenticeship places through public procurement—would provide immediate help to alleviate youth unemployment. The Government spend £220 billion a year on goods and services from the private sector; from construction to business support services, the Government are the top single contractor in the UK. That means that they have a unique tool at their disposal to get young people into work. The Government should reverse their decision to abandon apprenticeships in Government procurement and instead do everything that they can to create new apprenticeships.

When Labour was in government, it rescued apprenticeships, increasing their status and nearly quadrupling the number of places from 75,000 in 1997 to 280,000 in the last year we were in government. Labour plans to repeat the bank bonus tax and use the funds to provide jobs and apprenticeships for young people, as well as for a temporary reversal of the VAT rise, would help kick-start our economy and provide the growth and jobs that we so urgently need.

Public money should always be used to maximise social and economic benefit. In 2009, the Labour Government drew up the Office of Government Commerce guidance, “Promoting skills through public procurement”. This Government have scrapped that, denying high-level apprenticeships in key industries for young people. Labour’s plans on apprenticeships would work for young people and get them into work. Getting our young people into apprenticeships is the best way to put Inverclyde, Scotland and the UK on the right course for the future.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To accommodate more Members, the time limit on speeches is being reduced to five minutes.

20:34

[Stuart Andrew (Pudsey) (Con)]

It is a pleasure to take part in this very important debate.

Being unemployed is a terrifying experience that I went through a number of years ago. For me, that new year’s eve was not about looking forward to welcoming in the next year and everything that was hoped for, but about receiving my P45 and thinking what the prospect of unemployment would hold for me. During the time I was unemployed, I began to realise what work was really about. It is about more than earning money. Of course, that is a vital part of going to work, but it is also about self-worth, the reason for getting up in the morning to go and achieve things, and social interaction with the colleagues with whom one works. When I was unemployed, I found myself without any of those things. Money was scarce, and I had to make the choices between whether to put money aside for gas or for electricity—did I want to be warm or did I want to watch television? Those stark choices were very difficult. There was not much to do, either. I like to be busy and active and to have a purpose, and I dearly missed that daily contact with colleagues.

Of course, in this Chamber we all want to make party political points. I sometimes find it hard to listen to Labour Members talk about the youth unemployment statistics. One would think that this was a new phenomenon that had existed only during the past year. The fact is that it has been a growing problem for a good number of years, and we need to do everything we can to deal with it. It is simply not acceptable to see so many people out of work. It is not good for them, it is not good for the economy, and it is certainly not good for our society. The evidence is that this problem is not unique to the United Kingdom; we need only look at other countries such as Spain to see how difficult it is.

So how do we deal with the problem? There are many ways. For years, our education system has concentrated too much on those who go into academia. What about the rest? I never went to university—it might show, of course—but I was fortunate enough to find a job early on. I always had a sense that I had failed somehow because I had not gone to university. My brothers were in exactly the same position. They found themselves with young families and low incomes, and going out to retrain had a huge personal and financial cost for them, but they did it and I am very proud of them for that. Apprenticeships are a way of tackling youth unemployment. We often hear the older generation talk with real pride about the apprenticeships of the past helping people to learn new skills and develop a trade. One of the hurdles that we will have to cross is the immense snobbery that remains about people who decide to go into apprenticeships. We should be proud of those who make that choice.

The Government should be congratulated on getting off to a fantastic start. I have noticed that every Member has referred to the figures in their constituency, so I will carry on the tradition. I am proud that in Pudsey 460 people took part in apprenticeships in 2009-10, and that figure has gone up to 770 in 2010-11—a growth of 67%. That is hugely impressive, but it has not happened by accident. Despite dire public finances and tough public spending decisions, the Government have increased investment in this area, and that must be welcomed as a crucial policy that demonstrates a real desire to tackle the problem. Some of the schemes may be basic, but many people out there do not have the basic skills they need for a job, and it is important that we give them the opportunity to acquire them.

One of the companies in my constituency, Airedale International, is very successful, but its customers’ increasing demand for state-of-the-art products means that it needs highly skilled employees, and the managing director said to me during a recent visit that they are simply not available. The company has had to invest £250,000 in a new training and apprenticeship skills centre so that it can get the people that it needs to do the job.

I urge the Government to continue with this excellent policy to help young people and to continue to talk to industry to ensure that we have the skills that it needs so that ultimately we can create a competitive, skilled economy and hope for those whose futures might otherwise be bleak.

20:39

[Jim Shannon (Strangford) (DUP)]

It is a privilege to stand here and speak about this issue.

Apprenticeships are very important in my constituency and across the whole of Northern Ireland. I want to look at two aspects—the position today in Northern Ireland and the help that we need from Government. When I think of Northern Ireland, I am always happy to highlight the good that we have, particularly in the education system. I believe that it has one of the finest education systems in the United Kingdom. The figures show that it produces superior GCSE and A-level grades and higher literacy and numeracy figures than the OECD average. We have enterprising people who want to work and businesses that want to expand, but they are restricted. There is no doubt that there are good prospects; the issue is turning them into reality for the people of the United Kingdom and of Northern Ireland. That reality is getting harder to achieve by the day when we are on the edge of a recession, looking into an uncertain future.

I accept that the Minister is totally committed to his strategy. However, when we are staring at the problem of 1 million-plus unemployed young people, where is the strategy to address that? What interaction has the Minister had with the devolved Administrations, particularly that in Northern Ireland? Is there a joint strategy that we can use to our mutual advantage?

Every day in my constituency, I see young people and indeed older people who need help with benefits issues. They tell me that they are desperate to get a job. I always feel inadequate because I am not able to point them towards a job opportunity, which should be just around the corner. I wish I could do that, but it is most definitely impossible.

My office took on an apprentice two years ago so that he could learn how the office worked alongside the other seven staff. It was a practical and physical way of learning. We worked with the college in our area to give that young boy the opportunity to develop his skills, experience and commitment. Work is also a reason to get up in the morning. It gets people into a pattern of discipline, which is good to have.

Tradesmen are one of the casualties in this area. Members have mentioned the construction industry. In the construction industry, like in many businesses, when it comes to job losses, the mantra is, “Last in, first out.” Unfortunately, that usually means that apprentices are the first out of the door, perhaps in the middle of a two or three-year apprenticeship. We have to address that issue.

Only 10% of companies in the UK employ apprentices, compared with about 25% in Germany and Austria. One developer who did very well during the building boom has now got to the stage where he does not take a bonus when a house is sold, but keeps it for his men and for the next house that the business builds. That means that he cannot take on apprentices. I believe that it is time for the Government to consider this issue.

Last week in this Chamber, we had a debate about unemployment. In an intervention, I suggested that businesses should be given an incentive to employ people aged between 16 and 24. The CBI has suggested that there should be a £1,500 grant and that the person’s national insurance contributions should be paid. That is a constructive suggestion that could enable people to employ apprentices when they could not otherwise do so. A small incentive from the Government could be just what is needed to make that happen.

I want to speak highly of the companies in my constituency of Strangford that already employ apprentices, such as Bombardier Shorts and John Huddleston Engineering. Those companies employ apprentices every year and they would employ more if the opportunity was there. Perhaps we need to consider that. There are not sufficient skills available to our indigenous companies to attract investment. We need apprenticeships in skilled labour, office admin, marketing, computer skills and many other areas. There are many issues that we need to address. I believe that Northern Ireland can be part of a UK strategy to give opportunities to young people.

I applaud the Government for tabling the motion, but it is not enough. We need a strategy and then its implementation to give hope and opportunity to young people.

20:43

[Caroline Dinenage (Gosport) (Con)]

I am grateful for the opportunity to contribute to this incredibly important debate. I have learned an enormous amount from just sitting and listening to the contributions. It is a huge tribute to the Government’s commitment to apprenticeships that in just 12 months we have witnessed an incredible increase of more than 50% in the number of apprenticeships across the country. As the Minister said, however, it is not just about the increase in numbers but about the quality and standard of apprenticeships. The greatest growth has been achieved in level 3 apprenticeships, which means that more young people than ever are gaining the equivalent of A-levels in their chosen field. That is very important in my constituency, which has a proud maritime and naval heritage and a great tradition of engineering skills.

It is always heartbreaking to see young people who, when the academic door is closed on them at quite an early age, are uninspired by the work choices available to them. At best they have unskilled work, and at worst a life not in education, employment or training. I would like to think that the apprenticeships that are on offer could raise their aspirations.

Such apprenticeships are right on our doorstep, because key employers such as EDF and Network Rail are helping to reinvigorate the national skills base through a major apprenticeship training centre run by Babcock at HMS Sultan in my constituency. At any one time, up to 400 young adults are carrying out apprenticeships there for vital engineering and technology jobs. The dedication and passion of the apprentices are immense, as they know that they are gaining high-level skills for significant and tangible job opportunities. Such apprenticeship programmes open up opportunities for all.

Remarkably, last year women made up the majority of apprenticeship starters for the first time. The story of one female apprentice, Alannah at HMS Sultan, is one example that illustrates what has happened. After just a few months at the centre she was described as an exceptional apprentice with a highly promising career ahead of her. With her apprenticeship at Southern Water offering experience in a broad range of engineering roles, it is clear why she finds her training so rewarding.

We must not pretend that the Government have achieved all they can for potential apprentices, including female apprentices. Alannah admits that she still experiences some prejudice in the male-dominated world of engineering, and more vitally recalls that she received no support or advice whatever at school about pursuing that route. The reality that her case illustrates is that many schools are simply not doing enough to promote apprenticeships. We must ensure that they are recognised and endorsed as a viable and exciting opportunity for young people. What better way of doing that than to get young apprentices into schools to talk about their experiences? Alannah says that she has been going to speak to kids in schools, and I ask the Minister whether more apprentices could be encouraged into schools. They are the best advert for what they are achieving.

The training offered at HMS Sultan totally belies the traditional and limited image that many young people and their teachers have of apprenticeships. Contrary to what Opposition Members have said today, apprentices there serve between 12 and 24 months of their three years’ training on site at HMS Collingwood, where they gain skills, tangible job opportunities and the joy of living away from home without the burden of university debts.

To build further on the successes of the past year, we must ensure that our schools and young people do not hold the damaging misconception that apprenticeships are second best. The breadth and diversity of the opportunities at HMS Sultan could put some university courses to shame, with the apprentices taking on fully functioning professional roles early on in their training.

There is also evidence throughout my constituency of how apprenticeships can build the resources of a community. At the new maritime skills centre, there are plans for an extensive apprenticeship programme, with talks currently ongoing with a company about the provision of apprentices for offshore wind farms. The potential for the students to gain high-level employment, and for employers to guarantee that their workers have the skills that they need, is immense. That is a real boost to the local economy.

Last year, Gosport saw more than 1,600 people start apprenticeships. I sincerely hope that that figure will grow and grow in the coming months and years, to the benefit of students, employers and the community. I also hope to encounter more girls like Alannah who are doing science, technology, engineering and maths-based apprenticeships throughout my constituency and getting the most from their fantastic opportunities.

20:48

[Andrew Griffiths (Burton) (Con)]

I begin by directing colleagues to my entry in the Register of Members’ Financial Interests, and by congratulating Members of all parties on the quality of this evening’s debate. I read in a national newspaper over the weekend that MPs had all given themselves an extra holiday, and that we were skiving off and the Chamber was going to be deserted this evening. For that reason, I had written an hour-and-a-half speech, but I have been able to trim it somewhat. I intend not to take my full time, so that I can allow other colleagues to contribute to this important debate. I would particularly like to pay tribute to my hon. Friend the Member for Pudsey (Stuart Andrew), who made a thoughtful, articulate and caring speech about youth unemployment. As a northern, working-class lad who did not go to university, I am proud to be part of that club.

Mr Deputy Speaker, as a regular visitor to Burton, and to east Staffordshire, you will know that it is a thriving constituency. I am proud to say that I win the prize so far this evening, because I have had the biggest percentage increase in apprenticeships in my constituency, at a whopping 76%. The number of apprenticeships in my constituency has increased from 540 to 960. That represents young people being given the skills and the training they need to get back into work, and I am proud of what this coalition Government are achieving.

I was touched that the Minister, who is sadly no longer in his place—[Interruption.] I am told he is having his dinner. An army marches on its stomach—and the Minister can march a long way. He kindly mentioned Burton and South Derbyshire college, which is a fantastic provider of apprenticeships, training and education to young people in my constituency. We are desperate for the Minister to visit us so that he can see the good work that we are doing. The principal, Dawn Ward, is desperate to embrace the Minister and all that he wants to achieve in educating our young people. I hope that his office is taking note of that and will respond to our letters urging him to visit Burton and South Derbyshire college.

We all recognise that apprenticeships are a fantastic brand and that people understand what they do. They do what it says on the tin: they give young people experience of the workplace, and education and training to help them to develop their careers. I am concerned and nervous about some of the examples that we have heard from both sides of the Chamber this evening of short courses that do not really seem to stick to the ethos or the hard work done to develop the apprenticeships brand. I would urge the Minister to look into that. However, I am heartened by his assertion that apprenticeships should last 12 months.

I want to make a plea. Demand is outstripping supply. We all know of young people in our constituencies who want to get back into work or into an apprenticeship, but who cannot do so because not enough apprenticeships are available. I would urge the Minister and the Front-Bench team to consider extending the helpful £1,500 that is currently available to small and medium-sized businesses to larger businesses. It is true that larger businesses are more geared up to take apprentices, but if we want to get young people back into work, surely we should give them that opportunity in some of our biggest and finest companies across the globe.

Finally, I would like to make a plea on behalf of manufacturing, as a boy who grew up working for the family engineering business. Engineering and manufacturing are very important for our economy, with 12% of economic output and 54% of UK exports in manufacturing. We are often told that we cannot manufacture things because our production and work force costs are too high. However, Germany’s labour costs are 63% higher than the UK’s. We have the skills and the work force; we just have to train our young people to get involved in engineering and manufacturing, and sell our great British products across the globe.

20:53

[Neil Parish (Tiverton and Honiton) (Con)]

I am glad to follow my hon. Friend the Member for Burton (Andrew Griffiths), who rightly pointed out that although we are all supposed to be on holiday, attendance among hon. Members has been very good this evening because we realise how important this issue is. I thank the Minister very much for his earlier statement about apprenticeships and the fact that we are nearly doubling them. I shall give some figures from my constituency, although I cannot quite beat the percentage increase that my hon. Friend has seen in Burton. We had 580 apprenticeships last year, which is going up this year to 780—nearly 800—so we are going in completely the right direction.

I want to make a plea to the Minister. It is good that larger businesses are taking on apprentices, but some 50% of the private sector economy comprises small companies and micro-businesses, and they take on only about 2% of the apprentices throughout the country. It is important that we get that figure up. We must ensure that apprenticeship schemes are worth while, but we must also ensure that they are not so burdensome or beset by red tape and bureaucracy that small companies will not use them. Small companies and micro-businesses are personal concerns that someone has built up, and if a young person can work every day with the person running the company, that will be important not only for building the business but for building up a relationship that could lead to the business taking on an extra employee. It would therefore help tremendously if more small businesses could be persuaded to take on apprentices.

[Justin Tomlinson (North Swindon) (Con)]

One of the biggest challenges that micro-businesses face is that of accessing information on providing an apprenticeship. In previous debates, I have called on the Minister to provide such information in the annual business rates mail-out, setting out just how easy it is to offer those opportunities, which are good for the business and good for the apprentice.

[Neil Parish]

My hon. Friend makes a good point. Individuals in small and micro-businesses usually work very hard and do not have much time to look through such information, and they certainly do not have anyone else to deal with that side of the administration. I am sure that the Minister will take that point on board, to ensure that such businesses have greater access to apprenticeship schemes.

In my constituency of Tiverton and Honiton, both those towns contain many little manufacturing and engineering businesses that are taking on apprentices, as do Axminster, Seaton and Cullompton. I was an unofficial apprentice; I was milking cows at 13. My father—God rest his soul—did not believe in paying anybody, and certainly not his own son. Seriously, though, agriculture nowadays has changed. Anyone who drives tractors will know that they light up like a Christmas tree. They are full of computers, and probably cost between £50,000 and £60,000. People need really good skills to be able to drive them. Similarly, the machinery used in engineering businesses is all computerised. Apprentices need greater skills now than ever before, and this is linked to education and to colleges. Petroc college in Tiverton, for example, is creating more and more links to apprenticeships. That needs to be done; colleges need to link into businesses in that way. Constituencies such as mine have a lot of agriculture and a lot of tourism. They also contain many eating establishments and other businesses that can build in apprenticeships to provide real skills and meaningful jobs.

I want to echo the comment from other Members. Bringing young people and older people—especially those who are not used to working—into apprenticeships and retraining can give them valuable experience of work. That is where small companies and micro-businesses can be useful, because one-to-one interaction between the employer and the apprentice will give the apprentice the confidence to carry on and build a career. It is a matter of giving people confidence and the ability to work.

My final point is on the youth schemes designed to help young people. There are 40,000 places on those schemes, and I hope that we will be able to find a bit more money, even in these difficult times, to fund a few more places. I think we all agree that we want to see all our young people in jobs. It is rather rich of the Labour party to knock what we are doing when we have doubled the number of apprenticeship schemes, and are now adding the youth schemes to help young people. We saw a rise in youth unemployment during Labour’s time in office. The Labour Government created a huge boom in the economy, only to create a huge bust afterwards. Youth unemployment rose during that time, and we are going to have to fight hard to get those people back into work and to get the apprenticeship schemes running so that we can give young people a great future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Ten Members wish to speak and there are 40 minutes remaining. My maths suggests it is four minutes each. I would be grateful if Members would stick to that limit, which we will put on the clock.

20:59

[Iain Stewart (Milton Keynes South) (Con)]

It would be remiss of me not to add the votes of the Milton Keynes South jury to the league table of improvements in apprenticeship numbers, as we are up 70% over last year—not quite as good as for my hon. Friend the Member for Burton (Andrew Griffiths), but it compares favourably to a 58% national increase and a 44% regional increase. Clearly, good progress has been made in Milton Keynes.

I shall focus my remarks on a discussion I had at a dinner I recently had the great privilege to attend for the principals of further education colleges in the Thames valley. One issue that came out of the discussion was the hesitancy among employers at times to take on apprentices because of concerns about the cost and the bureaucracy involved. The measures outlined by the Minister—particularly the £1,500 incentive payment and the simplification of a lot of the bureaucracy—goes a long way to address those concerns, but more needs to be done.

Another interesting point that came out of the discussion was that Members of Parliament can play a huge role in encouraging employers to take part in these schemes. Individually and collectively, we all have a duty there. The evidence presented at the dinner showed that where MPs took a proactive lead in encouraging employers to take on apprentices, the results were very encouraging.

We have made good progress, but as I said, more needs to be done. I want to follow up the point ably made by my hon. Friend the Member for Pudsey (Stuart Andrew)—that we need to achieve a cultural shift in thinking about apprenticeships. There is still a snobbery about not going to university, so that taking an apprenticeship somehow appears as a lesser option. The problem often starts at school. Not every school is guilty, but too many careers advice services in schools focus on the academic route and not on the vocational route with apprenticeships or other training options. I believe that for the long-term health of the UK economy we need to move away from that and to value apprenticeships and the learning that goes with them.

A company in my constituency, Two Trees Photonics, is a start-up company with only a handful of employees. Its chief technical officer—whose name, Dr Christmas, is very seasonal—started off as an apprentice and gained all his academic qualifications through the apprenticeship route. He is now developing this cutting-edge technology, which is potentially transformational. There are examples like that, and it is the duty of companies, as the hon. Member for Solihull (Lorely Burt) said, to get into schools and open the eyes of young people to choosing that route. I encourage the new National Careers Service and note the statutory duty on schools to provide impartial and independent advice, which should go a long way to help us to develop this strategy.

In the few remaining seconds, I want to refer to University Centre Milton Keynes, which is pioneering innovative ways of delivering new products to meet skills needs in the nascent parts of the economy such as low-carbon and telemedicine. In my last nine seconds, I would like to add to the Minister’s lists of visits, already including to Stevenage and Burton; he should come to Milton Keynes to learn what UCMK and others can do.

21:03

[David Morris (Morecambe and Lunesdale) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in such an important debate.

Apprenticeships have been the bedrock of training in British Industry for generations, and anyone who cares about British Industry must, by extension, care about apprenticeships. I am very proud to say that I left school aged 15 and joined Thatcher’s youth training scheme. The YTS apprenticeship programme was the start of my career, and I believe that I would not be standing here today without it. That is testament to the flexibility in skills and career structure that the hon. Member for Blackpool South (Mr Marsden) seems to seek. However, apprenticeships also benefit companies. According to the British Chambers of Commerce, 82% of companies offering apprenticeships say that they build long-term skills and capacity, as well as offering young people on-the-job training with small salaries to help them get by.

I take the view that the best ideas benefit everyone involved. Apprenticeships create stronger and more profitable companies, offer young people employment, and even regenerate communities by increasing skills and employability, and I am glad to observe that Members in all parts of the House agree on the fundamental premise that they are a good thing. Obviously there are disagreements on the detail, but that is to be expected. I was pleased to hear the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) say that he wanted to see 220 apprenticeship starts a year by 2013. I agree with him wholeheartedly, which is why I was also delighted to see that the Government have delivered more than twice that number this year. That represents real progress, and we should all applaud it. It is the result of a major new package of funding that will enable the budget for apprenticeships to rise by £250 million a year by 2014-2015.

We should bear in mind, however, that Government money and cross-party agreement are not what it takes to deliver apprenticeships, although it helps. The people who are meeting these ambitious targets are the companies and apprentices themselves: it is they who are making it happen. We must applaud their efforts loudly, and then ask ourselves how we can ensure that more companies and young people join in. As a former small business man myself, I fear that not enough small businesses are being encouraged to participate in schemes. Many fear that red tape, health and safety rules and inflexibility will leave them out of pocket. We must ensure that apprentices are seen as a real economic benefit to their companies.

I do not believe that small businesses can afford to risk losing money on apprenticeships in difficult climates such as this, and I think that the Government are right to offer £1,500 payments to companies that take on apprentices. In that way, we are offering security to the companies, and as the number of places expands, we will offer more of them to young people. I know from my time in small business that gestures like that help to reduce risk and enable companies to act.

We should be very proud of the achievements of our young people. We have a record number of apprenticeships, they are gender-balanced for the first time, and the number of apprentices over 25 is increasing. This is an issue on which the whole House agrees, which I think is borne out by the results that we have seen. Our young people are our future, and the business community has done us proud. As a former apprentice who is now a Member of Parliament, I commend what the Government are doing.

21:07

[Jane Ellison (Battersea) (Con)]

It is that time of the evening when we are almost reduced to “name, rank and serial number”. I shall say “Battersea 109%”, and get it out of the way.

I want to make two points in the short time available to me. I have already referred to the picture in London, in an intervention, but I want to say more about that, and also to say something about the gender breakdown in apprenticeships.

I strongly support the Government’s agenda for rebalancing the economy throughout the United Kingdom, but London is going great guns on apprenticeships, which are an incredibly important part of the UK’s economy. The number of apprenticeships in London increased by 99% between 2009-10 and 2010-11, which reflects the Mayor’s enthusiastic championing of them, and he has set the ambitious target of 100,000 apprenticeship starts by the end of 2012.

Members on both sides of the debate have talked about the way in which public procurement projects can be used. There is no doubt that the Mayor has used big public projects such as Crossrail and Thameslink to drive forward the apprenticeship agenda in London. I know that the Skills Minister has had conversations with the Mayor’s officials on the subject, and I shall be interested to hear his and other Ministers’ responses. I know that they are considering the matter. Given the large number of exciting public projects that were given the green light in the Chancellor’s autumn statement, this seems an appropriate time for them to comment.

I welcome what has been said about the gender rebalancing of the overall number of apprenticeships, but if we dig down into the 12 key sectors which represent about 60% of apprenticeship starts in 2009-10, we see that, as well as the problem of snobbery that some of my hon. Friends have mentioned, there is a problem of gender stereotyping.

[Mr Marsden]

Will the hon. Lady give way?

[Jane Ellison]

I will not, but only for the sake of others who wish to speak. I do not wish to be discourteous.

To take a couple of extreme examples, in children’s care, learning and development, the breakdown is 4% men and 96% women, while in plumbing it is 98% men and 2% women. I chose plumbing as an example because in London plumbers can make a fortune at present, and I want women to have the opportunity to be in the high-wage jobs. I chose children’s care, learning and development because we in this House regularly debate the need for more male role models in children’s early years. That sort of gender imbalance in that important area of employment is clearly not right, just as it is also not right that we have a similar gender imbalance in primary school teaching.

While celebrating the overall gender balance across apprenticeship starts, we must use every opportunity—through the new National Careers Service, through visits to schools and firms, and through talking to young people—to encourage young people to look at the widest possible range of professions. It was very heartening to hear my hon. Friend the Member for Gosport (Caroline Dinenage) talk about the young apprentice she described. There are not enough similar examples. As we approach 2012, we must challenge the obvious stereotypes that still exist, and the apprenticeship programme provides us with a chance to challenge and tackle them.

21:11

[Graham Evans (Weaver Vale) (Con)]

I am very pleased to have a chance to speak in this debate, which is very timely given the recent focus on youth unemployment. Like my hon. Friends the Members for Pudsey (Stuart Andrew) and for Burton (Andrew Griffiths), I left school with few qualifications. I did not go to university, and I spent a wee while as an unemployed person. That is why I believe that apprenticeships are so important. They are a vital weapon in combating youth unemployment. We have all seen that the youth unemployment figures have risen to over 1 million for the first time. Opposition Members have, in their own charming way, tried to make out that the coalition Government somehow invented youth unemployment and that this problem appeared from nowhere on 11 May 2010. As ever, they display impressive amnesia about their own 13 years in office.

The truth is that youth unemployment sky-rocketed by 40% under Labour. That massive increase took place entirely after 2004. That fact must be greatly puzzling to many Opposition Members. For the largest part of that period, the UK enjoyed strong economic growth, so a lack of jobs cannot explain it; the “evil Tories” were not in office, so they cannot be blamed; and we all know that it could not possibly be the Labour party’s fault. So what could possibly have gone wrong?

The root causes of the unprecedented increase in youth unemployment are many and complex, and if we are to address the problem, we must consider them all carefully and take smart, targeted measures. It will not do just to repeat the vague mantra that “we need to invest in young people”. Many Opposition Members are fond of doing that, but although it might make them feel better, it does not achieve anything.

It is no coincidence that the dramatic increase in youth unemployment began in the same year that the European Union was enlarged to include eastern Europe. This was the biggest ever expansion in the history of the EU and, despite numerous warnings at the time, the Labour Government decided against having transitional immigration controls. The consequences have been significant. After all, how can a 16-year-old with a blank CV and no training compete in the jobs market alongside 30-something migrants with lengthy work experience? Why would employers take on the risk, costs and effort to train school leavers who have no way of demonstrating they are reliable, ahead of older migrants who are already trained and have a CV demonstrating a strong work ethic? That question illustrates why apprenticeships are absolutely essential in tackling youth employment.

I congratulate my hon. Friend the Minister for Further Education, Skills and Lifelong Learning on the passion and expertise he has brought to the job. The record number of people starting and completing apprenticeships is testament to his hard work. It makes me proud to support this Government, and I applaud the work they are doing on apprenticeships. I am delighted that the Government are going further, by making it even easier for businesses to take on apprentices by slashing red tape, creating cash incentives for small firms to take on apprentices for the first time, and giving businesses direct access to huge levels of public investment. Those are all very welcome measures.

Apprenticeships are not just important to the apprentices who benefit directly from them. They benefit everyone. They help ensure that our workforce is equipped with the necessary skills to enable us to compete in this era of globalisation. They are an essential ingredient in the Government’s efforts to rebalance the economy away from the City of London and towards manufacturing in places like Northwich and Runcorn. I am particularly delighted that in the past year there has been a 71% increase in new apprenticeships in my constituency.

All this progress is very encouraging, but there remains so much more to do. The challenge is to ensure that apprenticeships directly benefit those young people who are hardest to reach: those living in severely deprived areas, who may have grown up in a family where nobody has had work for several generations and whose opportunities have been far too limited for far too long. I know that the Government take that challenge seriously and are treating it as a priority. We need to drive up standards in all our schools, radically reform the welfare system, control immigration, cut red tape and rebalance our economy.

21:15

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Thank you for inviting me to speak in this debate, Mr Deputy Speaker, and I shall begin by setting out the context to my remarks. I, like many on this side of the fence, did not go to university, and I have always felt slightly ashamed that I did not have the academic qualifications to do that. When I left school, I undertook 18 months of training to become a Conservative party agent and it taught me a set of very good practical skills that enabled me to develop a business and got me involved in community consultation and giving advice.

The one thing I am very concerned about is “aspiration”, which nobody has mentioned in the debate. How do we get these kids to want to do a job when they come out of school? We need to do much more in that area. My constituency, and Plymouth’s economy as a whole, has a low-skills and low-wage base. It most certainly does not have that sense of aspiration and many children need to be encouraged to try to find it. As all hon. Members will know, Plymouth is one of the homes of the Royal Navy, although it is declining; we have fewer people with those kinds of skills. I have to blame the Navy slightly for that, because in the days when the dockyard was under public ownership a big skills base was not actually encouraged; the Navy wanted all the bright boys and girls to go to work in the dockyards. So anybody who went to any of the grammar schools was encouraged to go there, and an entire culture accompanies that. The one good thing that has emerged is that Plymouth university is now one of the centres for marine science engineering, which has most certainly made us a global leader in developing that area.

I spoke to a number of employers and individuals in Plymouth over the weekend, including some who were trying to get back into work service personnel who had left the forces. They found it very difficult to get those personnel to use their qualifications in other areas. When we debate apprenticeships we must think about how we transfer skills.

Another point that many people have made to me is that some people who want to become apprentices cannot read and write to a suitable level, which is an enormous indictment. I am delighted that Babcock, which tells me it has 20,000 training apprenticeships each year, has decided to support and sponsor the university technical college. That is exactly the route that we need to take; we need to take children from the age of 14 to 18 to make sure that they have basic skills, so that when they eventually go into the workplace they know what they are going to do.

In the final seconds available to me, I wish to quote from Franklin D. Roosevelt:

“We cannot always build the future for our youth, but we can build our youth for the future.”

That is the job that we should be about.

21:18

[Martin Vickers (Cleethorpes) (Con)]

I must compliment the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), on opening the debate with his usual eloquence. We in Lincolnshire know well his commitment to skills and apprenticeships. Hon. Members will be relieved to learn that the limited time available means that I am going to skip the statistics, but I must clock up the fact that in my constituency there has been a 47% increase year on year up to March. That is not in the premier league, but we would have readily accepted it had it been on offer when the coalition Government came to power.

The shadow Minister, the hon. Member for Blackpool South (Mr Marsden), drew attention in his opening remarks to the abolition of the regional development agencies, the changes to the college structure and so on, as well as the fact that that might cause some disruption. In my Cleethorpes constituency, the transition has been remarkably smooth. The colleges and other organisations, such as social enterprises and the CATCH, or Centre for the Assessment of Technical Competence Humber, facility at Stallingborough, which is the chemical industry training establishment, have come together and are working remarkably well together.

It was interesting to hear my hon. Friend the Member for Tiverton and Honiton (Neil Parish) draw attention to the need to have appropriate skills to drive a tractor, which light up like the deck of Concorde these days. A business man in my constituency came to see me a few weeks ago and I must confess that I was rather cynical when he told me that he had been looking for a forklift driver but that there was none available as “they”, meaning all the various agencies, do not produce them any more. When I took my first job as an office junior in a printing works in Grimsby some 40 years ago, when one stepped out into the yard one put one’s life at risk with all the forklifts shooting one way and another, and that meeting made me ask whether private industry was contributing. If people want a forklift driver, is it all that difficult to go out and employ someone and to do the training themselves? I take note of what my hon. Friend said, however, and I recognise that life and qualifications are much more complex now. Perhaps we have created too complex a regime in that regard.

It has been fashionable for Government Members to say that they did not go to university. I went to university at the age of 48 to study politics, and look what happened to me.

I want to draw attention to the fact that the Government have recognised the problems of my area, creating two enterprise zones that have enormously encouraged local industry and enterprise. May I suggest, however, that more could be done to fund apprenticeships within enterprise zones, with perhaps some ring-fenced moneys to create a work force with the skills to last. Like my hon. Friends the Members for Pudsey (Stuart Andrew) and for Weaver Vale (Graham Evans), I experienced redundancy. It is not pleasant and we must do everything we can to encourage and support our young people with the training and apprenticeships they need. I congratulate the Government on what they have achieved in the past 18 months.

21:22

[Richard Graham (Gloucester) (Con)]

What a pleasure it is to join this vital debate on one of my favourite subjects—apprenticeships. I start by paying tribute to the coalition Government and the Minister for rightly identifying apprenticeships as a crucial part of improving the nation’s skill base, helping business grow and providing the young with genuine future opportunities.

My constituency, Gloucester, is famous for making things, so I was an early convert to the concept and practice of apprenticeships. That is why I first spoke in this House to support the additional apprenticeships funded in the emergency Budget of May last year and urged the Minister even then to do more. That is why I recruited my own apprentice at the beginning of this year and am collating data on all Members to ensure that we hold the Minister to the generous promise he gave in a Westminster Hall debate to provide a reception for the first 100 apprentices employed by MPs. Let us hold him to that promise.

Today, the Minister highlighted his intention to fund higher apprenticeships in several sectors and I hope that inspires the insurance company, Ecclesiastical, which is headquartered in Gloucester, and banks such as the Co-op, which I hope will shortly take over the former Cheltenham & Gloucester branches, to join other sectors in taking on apprentices. The Minister also highlighted moves to incentivise SMEs to take on apprentices and I hope that they will respond. I believe that there is a challenge here, not in the funding, the will or the incentives—those are in place—but in business confidence and the time of very small businesses to absorb the details of new schemes.

My first recommendation to the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), concerns the National Apprenticeship Service, which has done a fantastic job. I pay tribute to Gina Johnson of the NAS, who did a great job in Gloucestershire—I am sure her successor will do the same. The NAS has only one representative per county. I believe it needs to adopt some modern marketing techniques, such as having superb DVDs available on its website that can be shown by the Federation of Small Businesses and local chambers of trade and commerce to inspire the smallest employers to take on apprentices. I urge the Minister to consider that.

Secondly, all Members of the House could champion apprenticeship fairs in their constituency. I know the one that I helped to organise last year in Gloucestershire, which the Minister kindly came to, was incredibly positive and is part of the reason new start-up apprenticeships in our city doubled between 2009 and 2011 from 510 to 1,020. The fair contributed to the extraordinary increase across the county, where there are now more than 4,000 apprenticeships.

Thirdly, we are fortunate in Gloucester to have the extremely proactive Gloucestershire media and the local newspaper, The Citizen, which launched the 100 apprenticeships in 100 days campaign that has been widely copied around the United Kingdom. In 2012 it is launching the Gloucestershire apprenticeship awards. This happy event is taking place on my birthday and I hope very much to launch the MP for Gloucester’s female apprentice of the year award at that happy occasion. I urge other Members to consider doing likewise.

Fourthly, every local enterprise partnership should have a spokesperson for apprentices, as we do in Gloucester, in order to encourage employers to push the apprenticeship agenda forward and benefit from this growth opportunity. It can also encourage local content of public sector contracts, such as the one for the Gloucester academy, which is very important. Lastly, I urge all schools to bring their pupils to local apprenticeship fairs, recognising that the sky is the limit for apprenticeships and that this is a great way forward for many young people.

21:26

[Mr Robert Buckland (South Swindon) (Con)]

It is a pleasure to take part in a debate that has been wide ranging, informative and extremely useful. There has been much discussion about what an apprenticeship means. There is a consensus that it is a paid job of work that involves training both on and off the job, and that there must be an outcome that is a success in terms of employment, enhanced skills and re-entry to the work force.

Just before speaking, I was reminiscing in my mind about the experiences that my grandfather had as a manager of a labour exchange in south Wales in the middle of the last century, where it was his mission to try to match the skills that he found in the work force to jobs available out in the marketplace. The position has not really changed. Often there is still, sadly, too great a mismatch between the skills that are available and the jobs that are out there.

I have the pleasure and the honour of representing a town that is one of the driving forces of our national economy, Swindon, which is renowned for making things and for generating new investment, new ideas and new industry. In my constituency, South Swindon, I am proud to say that we have seen a 48% increase in the uptake of apprenticeships in the past year. That is very encouraging, but it is important to focus on the position of 16 to 24-year-olds, and especially 16 to 18-year-olds, who have particular difficulty, it seems, in accessing the workplace.

I am glad to say that locally, with the help of agencies in the private sector, we have been able to launch Plan 500. I had great pleasure in playing my part in helping to launch it last year with my hon. Friend the Member for North Swindon (Justin Tomlinson). It is supported by Swindon Strategic Economic Partnership and firms such as Nationwide and it has brought local businesses and the community together to create 500 opportunities for local young people, 16 to 18-year-olds in particular, involving apprenticeships, work experience and placements on mentoring schemes. I am glad to say that the figure now has exceeded 500 and the scheme continues.

I mention other types of work experience because I believe that access to apprenticeships is so important. Many young people do not have the skills to access and to benefit greatly from apprenticeships, which is why the Government’s access to apprenticeships programme is very important. It will work well if it is truly co-ordinated with the DWP’s Work programme, which is already delivering for people in my constituency, giving them the wherewithal they need to seek and already to obtain jobs.

The Government’s increase of £410 million by 2012 in spending on apprenticeships is testament to the passion that my hon. Friend the Minister shows for this subject. He is one of the last great romantics. He paints a broad canvas of an optimistic horizon, and he is right to do so.

Today in Swindon we had welcome news that Honda is to increase employment by 500 following on the production of the new Civic. I hope that that welcome Christmas present will yield further fruit in the form of apprenticeships and real employment for young people in my constituency.

I look to further progress being made in the years ahead to ensure that as many people as possible benefit from the opportunities that apprenticeships offer.

21:30

[Sheryll Murray (South East Cornwall) (Con)]

I am proud to be part of a Government who have seen the biggest boost ever in the number of apprenticeships. We have seen a rise of new apprenticeship starts of only 10% in my constituency, but that is partly because traditionally people from South East Cornwall have travelled across the Tamar to the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) for training. That has gone on historically and it continues and grows.

I want to tell the House about one young lady from my constituency whom we have helped. Charlotte Rose is doing an apprenticeship learning school administration through first-hand experience at St Martin’s Church of England school in Liskeard. This apprenticeship was made possible only through the cash incentives that the Government announced in November, offering employers £1,500 if they had 50 employees or fewer. Charlotte told me that she had planned to go to university, but she saw this as an opportunity, and I applaud Charlotte and the school for making that possible.

On Friday, I visited the Grayhound project in my constituency, and I was delighted to see that at last, through the apprenticeship scheme, shipwrights and marine electricians are getting training. It is easy for a shipwright to find work as a carpenter on a building site, but a trained carpenter cannot work in a shipyard and become a shipwright. The same applies to marine electricians. These skills have been traditional throughout South East Cornwall and they have been lost. I am delighted to be part of a Government who are providing the training, facilities and employers for those lost trades to continue. That is why I applaud what the Government are doing today.

21:33

[Priti Patel (Witham) (Con)]

I commend the Government on demonstrating their commitment to supporting opportunity and job creation by prioritising the development of apprenticeship places. The fact that a record number of apprenticeship starts took place in 2010-11 is something to celebrate. For the record, in Witham we have had a 70% increase in the number of apprenticeship places over the past 12 months. I also praise Essex county council for its role in spearheading that. It has invested resources into apprenticeship places and is working with businesses to get young people into employment and training. That shows a clear dividing line between the failed policies of the last Labour Government and the positive steps taken by Ministers since May 2010.

Let us not forget Labour’s lack of ambition on apprenticeships as they sought to herd people through university in a very much one-size-fits-all approach to post-16 and post-18 education. We heard lectures earlier from the Opposition Benches, which are now deserted, but Opposition Members are in no position to give lectures on boosting economic growth or tackling unemployment because, as we heard in the debate, youth unemployment rose by over 40% under their watch. That is why the 400,000-plus new apprenticeship starts last year stand as a real tribute to the exceptional efforts of the Minister for Further Education, Skills and Lifelong Learning, who has worked tirelessly to deliver rapid increases in the number of apprenticeship places being offered to young people and the unemployed across the country. They are new opportunities to develop skills, enhance their experience and progress into long-term employment.

I should declare an interest, as I was recently delighted to welcome the Minister to my constituency on a visit to see the outstanding work being undertaken by an organisation called Lota Training to secure apprenticeship places for young people. It specialises in apprenticeships places and works hard with many local businesses of all shapes and sizes. It is innovative and creative in looking at new ways of working with business and creating more opportunities. During his visit he heard about the good work Lota is doing and about the partnerships it is forging not only with local businesses, but with firms in the City of London and large international companies to provide opportunities across the country, which is to be commended.

In the minute remaining, I would like to refer to small businesses, because about 83% of local jobs in my constituency are in the private sector and in small and medium-sized businesses. That figure is about 15% higher than the national average. As you will know, Mr Speaker, Essex is a highly ambitious and entrepreneurial county that is full of small business people. There is no doubt that they are keen to create new jobs, but they have found it difficult to take on more apprentices over the past few years, which is why I welcome the positive measures that the Minister outlined today. I certainly look forward to seeing more of my local businesses thrive, prosper, grow and, importantly, provide many more opportunities to young people through apprenticeship schemes.

21:36

[Ms Karen Buck (Westminster North) (Lab)]

We have enjoyed a thoughtful debate this evening with contributions from both sides of the House that have stressed Members’ real concern, and interest in, apprenticeships and the need to raise the skills base among young people and the general population. In particular, I congratulate Members on both sides who have taken on apprentices, with your support, Mr Speaker, and hope that that will encourage others who have vacancies to divert them to that purpose. [Interruption.] I apologise to the House—I have a terrible cold and my throat keeps catching.

We heard some thoughtful contributions from Opposition Members. The hon. Member for Strangford (Jim Shannon) asked where the strategy was for linking youth unemployment to apprenticeships. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) spoke from personal experience about apprenticeships and warned about the impact of the cuts in the construction industry and the extent to which they might choke off opportunities for young people in that important sector. My hon. Friends the Members for Inverclyde (Mr McKenzie), for Sheffield Central (Paul Blomfield) and for Scunthorpe (Nic Dakin) all made pleas for making better use of public procurement powers, which is a message I would also like the Minister to take away. My hon. Friend the Member for West Bromwich West (Mr Bailey), who chairs the Business, Innovation and Skills Committee, and others mentioned their fears about the extent to which adult in-work training programmes are branded as apprenticeships—I will touch upon this in my contribution—in the context of the abolition of Train to Gain. Although in-work programmes offer important skills training to older people, they are not exactly what many of us consider to be apprenticeships.

When the Minister made his contribution at the start of the debate, he used poetry and spoke from the heart, and I genuinely believe that he has a passion for apprenticeships and for providing an alternative to the traditional academic and higher education route, particularly for young people. That message was reinforced by the overwhelming majority of contributions we heard this evening. That was at the heart of the report on 14 to 18-year-olds’ education by Professor Wolf, who stressed the importance of expanding the number of high-quality apprenticeships that offer genuine career progression to young people. We are all as one in saying that apprenticeships are of equal value and provide an alternative and equally important route for young people through post-16 education.

The Labour Government made substantial progress on that issue, as well as on increasing—quite rightly, and for which I make no apology—the number of young people who went into higher education. In the globalised economy in which we operate, it is absolutely essential that we do not tip the balance the other way and underplay the importance for many of our young people of a university education.

We quadrupled the number of apprenticeships to 279,000, and those who make much of the additional apprenticeships that the coalition Government have introduced have not stressed the context of the abolition of the future jobs fund, which was intended to provide 200,000 jobs for young people; the rise in youth unemployment, which is now at its highest level since comparable records began in 1992; or the rise, by 140,000, in the number of young people not in education, employment or training. The Minister spoke of the number of NEETs being 925,000 in 2009, but that figure now exceeds 1.1 million.

The additional apprenticeships that are being provided—and they are being provided; that is not in doubt—must therefore be seen in the context of the rise in demand and need, particularly among young people, and the abolition of the future jobs fund. Alongside that, young people have also borne the brunt of many other Government cuts, which have had an impact on their ability to access and make better use of skills and training. Those cuts range from the abolition of the education maintenance allowance to the scrapping of Connexions, access to face-to-face careers advice and youth work and mentoring services, which were also an important signpost for such skills and training.

Overall, as many Opposition Members have said, while the economy is flatlining employers and, especially, small employers are unlikely to respond with apprenticeships, employment or work training on the scale that we would like. A recent Federation of Small Businesses survey showed that only 8% of the small businesses surveyed had taken on an apprentice in the previous year, and that is a particular concern, because we know from labour force survey statistics that in the past more than half of apprenticeships were based in businesses with fewer than 50 employees.

We welcome the Government’s incentive scheme, which I hope will be effective, because it certainly needs to be in the economic context in which we operate, but I add my voice to those asking the Government to review as soon as possible the incentive payment’s concentration only on those businesses with fewer than 50 employees, as we also want to put a great deal of stress on the role of medium-sized organisations—those with between 50 and 149 employees—in creating employment.

The £1 billion youth jobs fund that the coalition is delivering via the Work programme is also a cause for concern, because it is unlikely to have any impact on the delivery of apprenticeships to young people, so I hope that it too will be reviewed. Money and effort are being concentrated on a Work programme, but we need to ensure that it delivers apprenticeships, too.

Almost all Opposition Members who spoke stressed that the growth in apprenticeships, of which Government Members have made so much, has not delivered for young people in the way it has for their older counterparts. That masks a genuinely worrying position for young people. In 2009, the final year of the Labour Government, 42% of apprenticeship starts went to those aged under 19; in 2010-11, that figure had fallen to 29%. In 2009, 41% of all starts went to 19 to 24-year-olds, and that figure had fallen to 31% last year. That is genuinely concerning. Given the crisis of youth unemployment, we need to make absolutely sure that the opportunities out there are going to young people who need them.

In the context of the abolition of Connexions and the reduction in funding and access to a face-to-face careers service, it is also important that the young people most in need of accessing apprenticeships have the knowledge and support to be able to do so. In the past few months, I have had extensive first-hand experience of working with young NEET children who need access to apprenticeships and training. They have so little ability to be guided to the opportunities that exist, and that is worrying. The issue of confidence among young people without good qualifications is critical; it is no good simply relying on access to the internet and telephone advice lines. Even for those who are able to use those, making that first contact requires a mentor—a guide and someone to advise them. Without that, I fear that those who most need support will be those least able to access it.

Members have spoken about pre-apprenticeship training, which I would also like to emphasise. About 10% of young people not in education, employment or training have been in that situation for a year or more. They are a core group about whom we should be most concerned. Such an experience, at that stage in life, can be absolutely devastating to a young person. As the Minister is aware, many of those young people have not got GCSE C grades in English and maths, in particular. The problem is that because there is such competition for the apprenticeships that now exist, particularly among young people who have been through a university education, young people without a GCSE find it very hard—in some cases, impossible—to get on the first rung of the apprenticeship ladder.

Although additional skills training within the apprenticeship programme is welcome, we need to make sure that we are not locking out some of the young people with particular needs. That issue has been raised with me by the apprenticeship training agencies, which are very concerned about the issue. It is particularly worrying because a young person who has perhaps done all right at GCSE, but not got a C grade in maths or English, will be required to retake before they even get on to the apprenticeship programme. That can be difficult and challenging.

I have been impressed with the work of my local regional apprenticeship training agency with young NEETs. Some of its outcomes are very impressive: 90% of its apprenticeship starts involve young people who are not in employment, education or training. All its apprenticeships starts are new placements, not conversions, and 99% of them are in the 16-to-24 year-old age group. However, there is a worry that the Government are not making such good use of the resources and skills that such agencies provide. It would be helpful if the Minister confirmed that client hosts of apprenticeship training agencies will be included as beneficiaries of the £1,500 apprentice incentive schemes. Will the Minister meet representatives from the new Confederation of Apprenticeship Training Agencies to discuss that?

In conclusion, we welcome an expansion of apprenticeships. Any good news, money or resources in the field are welcome and need to be supported. However, given the issue of access to the additional places, there is still a real risk that young people are being left on the shelf. We look to the Government not only to congratulate themselves on a higher number of apprenticeships overall but to address more effectively how to respond to the national emergency engulfing so many of our young people.

21:48

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

This has been a good-humoured and well attended debate at a time when the press would have us believe that we are all on beaches taking holidays. There has been a good degree of unanimity, and I thank hon. Members on both sides for some incisive and shockingly well informed contributions. The debate has also been competitive: people were competing not only over who had the greatest increase in apprenticeship numbers, but over how few qualifications they got at school, how early they left school and how they never got anywhere near university or any form of higher education. Some had also experienced redundancy; that is good practice for when election time comes.

This debate is a great tribute to the enormous amount of constituency experience that all hon. Members have spoken about regarding the projects in their own constituencies. That is what we are doing in the time we are not in this place, if only the media would pay some attention. It is really refreshing to see the whole House agree on the importance of the apprenticeship programme in offering a valued and valuable route for young people who want to work while getting training that can support their careers.

It is always difficult, Mr Speaker, as you know better than many, to follow my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, whose opening speech was steeped in, or positively intoxicated by, his perspicacity, his articulation, his sagacity and his commitment. He will no doubt be very pleased that during his short departure for the dinner hour, in which he is no apprentice, I agreed to a great number of visits to various constituencies, including that of the shadow Minister, the hon. Member for Westminster North (Ms Buck), who will be more than delighted to take up the offer.

Let me make it clear that this Government are absolutely determined to make the apprenticeship programme as effective as possible for as many young people as possible. We want to expand the programme and drive up quality across the board. I take this opportunity to repeat my hon. Friend’s appeal in inviting hon. Members to take on their own apprentices and get involved in national apprenticeship week from 7 February.

Many employers and apprentices are telling us that young people are not receiving enough information in schools about vocational pathways in general, including apprenticeships, or that the information they do receive is not of a good enough quality. From September 2012, the Education Act 2011 will place a new duty on schools to secure access to independent, impartial careers guidance for pupils in school years 9 to 11. Subject to consultation, this will be extended down to year 8 and to young people aged 16 to 18 in schools and further education settings. Under the duty, careers guidance must be impartial, it must be provided in the best interests of the student, and it must offer information on all 16-to-18 education or training options. The new duty makes it a specific requirement to provide information on the benefits of apprenticeship options. I encourage anyone with a specific concern to contact my hon. Friend the Minister, along with any applications for visits, and bring it to his attention.

Given the quality of the contributions that we have heard, I will go through those rather than stick to the script. That always alarms officials, but let us give it a go. My hon. Friend the Member for Stevenage (Stephen McPartland), who had a 73% increase in apprenticeships in his constituency, talked about young people hungry to learn and achieve. His comments on the welding skills college demonstrated how well our colleges are responding to the new freedoms that we have given them and rising to the challenge in this respect.

The hon. Member for Sheffield Central (Paul Blomfield) spoke about the low numbers of small businesses that have so far taken up apprenticeships. That was raised many times by hon. Members, and it is very important. In response to his point about public procurement, my hon. Friend the Minister has taken up that issue with gusto. He is introducing a kite mark for Government suppliers who have embraced the apprenticeship programme and is providing more information for Departments in their procurement programmes. In addition, ministerial champions are promoting apprenticeship in the context of public procurement campaigns. All those points were well made and, characteristically, my hon. Friend had already anticipated them.

The hon. Member for Solihull (Lorely Burt), who had a 53% increase in her apprenticeships locally, asked for details of the £1,500 bonus. Those will be forthcoming early in the new year; perhaps she, too, would like to book a meeting with my hon. Friend the Minister.

The hon. Member for West Bromwich West (Mr Bailey), who is Chairman of the Select Committee and who had a 64% increase in apprenticeships in his constituency, made the very good point that quality is the all-important factor. This must be about providing enhanced employability to those who have undertaken apprenticeships, but we must also get value for money. As for the legacy of Train to Gain, a 60% deadweight cost was attached to that programme, so we now have one that is much better value for money.

My hon. Friend the Member for Selby and Ainsty (Nigel Adams) has had a 67% increase in apprenticeships; the figures in his constituency speak for themselves. He spoke of the importance of getting good increases at level 3 and of good literacy and numeracy skills; that is why English and maths must be up to a good GCSE standard.

The hon. Member for Scunthorpe (Nic Dakin), who has had a 55% increase in apprenticeships in his constituency, mentioned the parliamentary apprenticeship scheme and the importance of impartial, independent careers advice.

My hon. Friend the Member for Dudley South (Chris Kelly), who has had a 67% increase in apprenticeships, offered himself as the Kelly visiting services for any company in his constituency that has taken on apprentices. He spoke with great experience as his own family business has long taken on apprenticeships, before it even became fashionable.

The hon. Member for Liverpool, Walton (Steve Rotheram) grudgingly acknowledged the 65% increase in apprenticeships in his constituency. He, too, spoke from experience as somebody who has been an apprentice and who became an instructor. He again raised the important issue of procurement.

My hon. Friend the Member for Crawley (Henry Smith) has had a 70% increase in apprenticeships. It was as though he was name-checking his Christmas card list of businesses, which he did with enormous aplomb and without notes. He mentioned Virgin Atlantic, which runs very worthwhile high-tech apprenticeship schemes in aircraft engineering in his constituency. The hon. Member for Inverclyde (Mr McKenzie), another former apprentice, mentioned the determination of young people to succeed.

My hon. Friend the Member for Pudsey (Stuart Andrew), who has had a 67% increase in apprenticeships in his constituency, boasted that he had been unemployed. He spoke about the self-worth, values and socialising skills that such schemes give people. He reminded us that youth unemployment is not a new phenomenon, but that it started going up drastically from 2004.

In response to the hon. Member for Strangford (Jim Shannon), my hon. Friend the Minister for Further Education, Skills and Lifelong Learning assures me that he has been in constant talks with the devolved Administrations over these schemes. As the hon. Gentleman said in relation to educational achievements in Northern Ireland, there are things that we can learn from each other. We need to share and disseminate best practice.

My hon. Friend the Member for Gosport (Caroline Dinenage) made a very good point about the Babcock training centre. She also spoke about getting apprentices into schools to ensure that pupils know what apprenticeships are about. There is almost an apartheid system whereby one either goes to university or does not go to university. However, there are many worthwhile and often lucrative options in between. We need to ensure that our young people have those options before them as early as possible.

My hon. Friend the Member for Burton (Andrew Griffiths) boasted that with a 68% increase in apprenticeships, he was the winner in the raffle of training opportunities. He was wrong, because my hon. Friend the Member for Battersea (Jane Ellison) has had an increase of 109% in her constituency. My hon. Friend the Member for Burton also boasted that he had not been to university, but perhaps a little more maths experience would not go amiss. He, too, invited my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to visit, because apparently the principal of Burton and South Derbyshire college is eager to embrace him. I hope that he has long arms and I warn him that my hon. Friend is not partial to continental kissing.

My hon. Friend the Member for Tiverton and Honiton (Neil Parish) has had a 38% increase in apprenticeships in his part of the world. He spoke about SMEs and the low rate of take-up. That is something that we must get on to. He also talked about how high tech agriculture has become—this debate is not just limited to the traditional manufacturing industries.

My hon. Friend the Member for Milton Keynes South (Iain Stewart), who has had a 71% increase in apprenticeships, mentioned what a strong role MPs have to play. I echo that. We can all do a good job of getting our local businesses to engage with this programme.

My hon. Friend the Member for Morecambe and Lunesdale (David Morris)—I am determined to get through all the hon. Members who spoke—has had an 81% increase in apprenticeships in his constituency. He made the important point that the inflexibility of health and safety constraints can be a deterrent to people getting more involved in the apprenticeships programme.

As I said, my hon. Friend the Member for Battersea has had an increase of 109% and is the winner this evening. I confirm that my hon. Friend the Minister has been liaising with the deputy mayor on the programmes that she mentioned. The Mayor of London, Boris Johnson, who I hope will also be the next Mayor of London, has thrown himself into the apprenticeships programme.

My hon. Friend the Member for Weaver Vale (Graham Evans) also boasted about leaving school early and not going to university. He reminded us that youth unemployment did not start under this Government.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile), who has had a 41% increase in apprenticeships, rightly spoke about aspiration and how we need to take basic skills into the workplace.

My hon. Friend the Member for Cleethorpes (Martin Vickers), who has had a 41% increase in apprenticeships, went to university at the age of 48 and studied politics. He did not tell us whether he passed, but he ended up here anyway. He made a practical point about enterprise zones and the funding of apprenticeships.

My hon. Friend the Member for Gloucester (Richard Graham)—plus 35%—is a trailblazer of the parliamentary apprenticeship scheme, and he mentioned practical measures such as apprenticeship fairs and DVDs to promote apprenticeships.

My hon. Friend the Member for South Swindon (Mr Buckland), who has had a 48% increase in apprenticeships, talked about the mismatch between skills and jobs, and again gave examples of great stuff that is going on. My hon. Friends the Members for South East Cornwall (Sheryll Murray)—plus 10%— and for Witham (Priti Patel), with plus 68%, also gave good, practical examples. This has been an excellent debate, so well done—

20:48

Motion lapsed (Standing Order No. 9(3)).

NHS Services in Blackpool South

Monday 19th December 2011 Commons Chamber

22:00

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

I have the pleasure and honour of presenting to the House a petition of more than 1,000 people from Blackpool South.

The petition states:

The Petition of residents of Blackpool South,

Declares that the Petitioners are concerned that the Government’s Health and Social Care Bill, with its proposed changes to the NHS, will adversely affect NHS services for residents across Blackpool South.

The Petitioners therefore request that the House of Commons urges the Government to amend the Health and Social Care Bill so as to secure existing levels of funding and service provision for NHS patients in Blackpool South.

And the Petitioners remain, etc.

[P000994]

Mental Health Unit (Burton)

Monday 19th December 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Michael Fabricant.)

22:01

[Andrew Griffiths (Burton) (Con)]

I thank you, Mr Speaker, for allowing this important debate today. Although this issue may not be big news nationally, it is incredibly important for the people of Burton and east Staffordshire. If we want to make Parliament more relevant and debate the issues that matter to people, debates such as this one, which is about a key local facility, will do a great deal to enhance the House’s reputation for being in touch with real people and their concerns.

I speak about the Margaret Stanhope centre, a very important mental health facility that is much loved and valued in Burton, east Staffordshire and south Derbyshire. South Staffordshire primary care trust is consulting on the closure of the centre, which would mean the loss of 18 acute beds and eight elderly care beds in the facility.

I have been a Member of Parliament for some 18 or 19 months now, but I have not seen an issue that has united people in the way that the campaign to keep open the Margaret Stanhope centre has. At this point, I should like to pay tribute to two gentlemen who are in the audience today, Dr Matt Long and Mr Gerald Chatfield. They have been at the forefront of the SOS—“Save our Stanhope”—campaign, and they have worked diligently and tirelessly to bring the threat of the closure of the Margaret Stanhope to the attention of people in Burton.

I should also mention the invaluable contribution of the Burton Mail, a well respected local newspaper that covers both east Staffordshire and south Derbyshire. It has led the campaign and represented the views of local people extremely well having brought the matter to their attention. I pay particular tribute to the reporter Adrian Jenkins, who has doggedly sought out the facts, and Mr Kevin Booth, who, in his time as editor of the Burton Mail, has turned it into a campaigning newspaper that is properly representative of local people.

The PCT has failed to take account of the grave impact that closing the Margaret Stanhope centre will have on mental health provision across Staffordshire and south Derbyshire. Losing those 18 acute beds and eight elderly beds will leave us with 20 acute beds and 11 elderly beds at the George Bryan centre in Tamworth, and a further 50 acute beds and 26 elderly beds at the St George’s hospital in Stafford, giving a total of 70 acute beds and 37 elderly beds for the whole area covered by the South Staffordshire PCT. I have done some research into this issue, and I have come across an important report that the Audit Commission produced in March last year. That report looked at the provision of mental health in-patient beds at 46 mental health trusts across the country, giving a snapshot of a large number of mental health providers up and down the country. That evidence showed that the median number of beds per 100,000 people was 27.5, yet in south Staffordshire, which has a population of 606,100, we currently have 88 acute beds.

I was rebuked by the Minister earlier for not having very good maths—[Interruption]—the Minister in the previous debate—but I have done the maths and I have had it checked. It shows that the figure for south Staffordshire equates to 14.5 per 100,000. Why should my constituents—people covered by the South Staffordshire PCT in east Staffordshire and across Stafford—be satisfied with the provision of less than half the median number of beds provided to other constituents and residents across the country? My residents think that that is simply not acceptable and they are saying no to that provision.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this matter to the Chamber. Has any consideration been given in his investigations to the impact on the families of those who would be in those beds, but who suddenly do not have them and will now be at home? What will happen with care in the community for them?

[Andrew Griffiths]

The hon. Gentleman makes a valid point, which I hope to come to later in my speech. He has served his community well over many years and he properly understands the needs of families, particularly the most vulnerable in our society.

Removing those beds from the Margaret Stanhope centre will bring the median down to 11.5 per 100,000 people, compared with the median of 27.5 across the country. That is putting lives at risk, and we are not prepared to put up with it in east Staffordshire.

The Audit Commission report also talked about occupancy rates, saying that the median occupancy rate across those 46 trusts was 90%. I requested the occupancy rates from South Staffordshire PCT—I think it took five weeks to winkle, or drag them, out of the PCT. I was provided with the figures for April 2010 to August 2011. I examined them and found that, with the beds at the Margaret Stanhope centre still in place, the occupancy rate across the PCT was 87%.

[Dr Julian Lewis (New Forest East) (Con)]

This debate gives me such a sense of déjà vu, because a few weeks ago I initiated a debate about how Southern Health NHS Foundation Trust, which has a bed occupancy rate of over 90%, wants to close 35% of its acute beds. Like my hon. Friend, it took me a long time to get the statistics from the trust. When I asked for them to broken down in a different way, the breakdown showed twice as many beds being vacant as the first lot of calculations did. In other words, the trust has not got a clue what its own statistics add up to, yet it is intent on closing beds. Accurate statistics must be central to any consideration, and I think that my hon. Friend and I ought to go and see the Minister about this, if he would be willing to see us.

[Andrew Griffiths]

My hon. Friend makes an incredibly important point. He has been vociferous in campaigning on behalf of his local residents—as I am attempting to do—and I share his concerns. None of us is a backwoodsman, and none of us wants to ignore the facts, but the facts that are being presented to us by the PCTs are not the facts. When we dig down and look at the assertions that the PCTs are making, they simply do not add up. I shall give the House further evidence of that later.

For the six months during which we were able to examine the occupancy rate, we found that it was already more than 90%. In June 2010, it exceeded 100%, yet the PCT is telling us that it can safely remove those 18 beds from Margaret Stanhope with no impact on mental health provision in my community. I simply do not accept that.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing the debate and getting the Minister here to listen to it. I also want to praise the campaigning work of Dr Long, Mr Chatfield and the Burton Mail. My constituency of South Derbyshire is a neighbour of east Staffordshire, and we do not have a hospital. My constituents have to travel either to Derby or to Burton, and my southern villages are covered by the South Staffordshire PCT, which is why my hon. Friend and I have come together on this important issue. It is outrageous that one of the excuses that the PCT is putting forward is that people want care in the community. What people want is respite care, and that is why it is so important that the unit should stay open.

[Andrew Griffiths]

My hon. Friend has been brilliant and steadfast in standing alongside me in my attempt to keep open this valuable facility, and I pay tribute to her for that.

Time is moving on, and I want to get to the facts. We extrapolated what the occupancy rates would have been if the Margaret Stanhope centre had been removed. We found that there would have been an average of 113%, and that in June 2010, it would have been 130%, which is a third more than the 100% that I just mentioned. The PCT tries to argue that in-patients can be cared for in their own homes, but I can prove that that is simply not tenable. In an interview in the Burton Mail, the consultant psychiatrist to the PCT, Abid Khan, who is also the clinical director of adult mental health services at the South Staffordshire and Shropshire NHS Foundation Trust said that he had reduced in-patient stays “by a third”. That is a direct quote. He also cited an independent report undertaken by Staffordshire university.

As my hon. Friend the Member for South Derbyshire (Heather Wheeler) will know, that same report was cited at a passionate public meeting held at the Pirelli stadium in Burton. The report stated that the crisis resolution team could reduce in-patient stays by a third. I asked to see that report. It was also requested by Dr Matt Long, and, after a great deal of fighting, Dr Long managed to get hold of it. We discovered that, far from being independent, it had been produced by Professor Eleanor Bradley, who works not only for Staffordshire university but for the NHS trust. The PCT was claiming that the report was independent, yet it had been produced by someone who was on its payroll. Abid Khan talks about the one third reduction in patient stay, yet when we examine the figures we find that stays over 91 days have been reduced from 39 to 23 days—a reduction, even according to my maths, of about a third—but those between two days and 90 days, which are the vast majority, went down from 524 to 518, a reduction of only six. One-day admittance went up from 48 to 50.

The PCT claims in aid an independent report that is not independent, which states that in-patient stays were reduced by a third, when it is clear that they were not. The PCT expects people to accept the closure of this much-loved facility on the basis of dodgy figures. I put it to the Minister that a PCT cannot be allowed to conduct a consultation in this way, because the consequences are too dangerous to contemplate.

My hon. Friend the Member for Strangford (Jim Shannon) has spoken about the impact on families. We all know that families are hugely important in helping people back into mental health well-being and can act as a huge tonic and support. For those who have to go to St. George’s in Stafford, it is a 27-mile trip one way. [Interruption.] My hon. Friend the Member for South Derbyshire says from a sedentary position that there is no bus from South Derbyshire. That is true. It is 47 minutes by car from Burton. It is an hour on the train, costing £13.50 for a return ticket; then there is a seven-minute bus ride, costing a further £3.50, and a seven-minute walk. A family member wanting to visit a son or daughter, a husband or a wife would face a two and a half hour round trip. It would cost £117 a week or £470 a month. These are some of the most vulnerable people in society, but the PCT thinks it can overcrowd the beds, force people to travel those distances and still provide mental health care that is adequate. I say no—and, more importantly, the people of Burton and South Derbyshire say no.

As a result of the work of Dr Long and of the Burton Mail, 7,500 people have signed a petition to keep the Margaret Stanhope centre open. I have cross-party support for my efforts. East Staffordshire borough council passed a resolution in which every single member united in support for the Margaret Stanhope centre, with Labour councillor standing next to Conservative councillor and the mayor of East Staffordshire, Patricia Ackroyd, manning the battle lines in cold, wet and miserable weather to get people to sign the petition.

I want to make one last point that relates to other services. We all know that people experiencing mental breakdown can often be a danger to themselves or to others. We recognise that the police are at the forefront of dealing with people—it might be a small number—who experience the most acute breakdowns. People often break down in the middle of the night and at the most inconvenient times; they can be a danger to themselves and a danger to their families. Currently, if the police are called to someone at 2 am or 3 am on a Friday or Saturday night, they will try to calm the person as best they can and take them to the Margaret Stanhope centre because they know that the person will get the proper care and support that they need.

I believe that if the Margaret Stanhope centre closes, the police will be faced with two options. Two police officers—they have to travel in pairs—will have to travel all the way to Stafford or Tamworth to drop off a vulnerable person and then come all the way back, which will probably take them out of action for two or three hours. Even worse, however, a vulnerable person might be put in a police cell overnight until the crisis team can come to them. We cannot allow vulnerable people in acute mental breakdown to spend a night in the cell. That is simply not acceptable.

I am hugely grateful, Mr Speaker, for the opportunity to bring this debate to Parliament. I know—I had a text earlier from someone saying, “Andrew, will you straighten your tie?”—that people are watching this debate on television in Burton. I know that there is interest in the issue, because I know that the people of Burton and South Derbyshire care passionately about it. The Margaret Stanhope centre has saved lives. It has rebuilt lives. People throughout my constituency owe a debt of gratitude to the magnificent people who work in this institution, and I owe it to them—and the House owes it to them—to ensure proper consideration.

I will leave the House with the words of one of my constituents, who came up to me on one of those mornings when we were collecting signatures in the high street in Burton in the pouring rain. She said that she had had cause to go to the Margaret Stanhope centre, and that when it happened she was married and had two children. She did not know where she was when she arrived at the centre. She did not know whether she would live through the day, and she did not know whether she wanted to live through the day. But she now knows that the care and compassion of the people in the centre, and the love and support of her family who were able to visit her every day, allowed her to rebuild her life, to go back to society and to work, and to go back to being someone of whom her family could be proud.

It is people such as that whom we are here to support today. I hope that the Minister will accept that, and will help us in our campaign to keep the Margaret Stanhope centre open.

22:21

[The Minister of State, Department of Health (Paul Burstow)]

I congratulate my hon. Friend the Member for Burton (Andrew Griffiths) on securing the debate and on making his points so clearly on behalf of his constituents. I also congratulate him on demonstrating why Adjournment debates are so important: they give Members in all parts of the House an opportunity to bring issues to the attention of the public, and also to serve their constituents by bringing issues to the House in a way that requires Ministers to be accountable.

I am aware, from what my hon. Friend has said this evening also from my preparation for the debate, of the strength of feeling in my hon. Friend’s constituency. I noted his description of the contribution made by his local newspaper, the Burton Mail, in leading the campaign at local level. The 7,500 signatures to the petition that have been collected so far are an impressive indication of the extent of public support and concern.

Let me say a little about the national policy context, some of which I have said on other occasions. In February this year we published our mental health strategy, “No health without mental health”, which I commend to Members in all parts of the House and, indeed, to my hon. Friend’s constituents. Let me now make two specific points. First, we expect the treatment and care of patients to be provided in the environment that is most appropriate and therapeutic for the patient. Acute beds should of course be available for those who need them, and those in charge of services should always consult on the needs and wishes of patients when making decisions about community or hospital-based treatment. Indeed, 10,300 new patients with an early diagnosis of psychosis were engaged with early intervention in psychosis services this year, the largest number ever recorded.

A number of Adjournment debates in recent weeks have raised the issue of data on bed occupancy and the definitions on which they are based. I will not undertake to arrange a meeting, but I will undertake to ensure that work is done in the Department, which I will examine, to establish how well the data are collected and how clear they are.

[Dr Julian Lewis]

I am very satisfied with the Minister’s offer, but may I suggest that the Audit Commission—the only organisation that seems to produce reliable figures—has a chance to look at what we have discovered in our trusts? As I have said, the figures that are given to us are not reliable where I am, and, as I have heard tonight, they are not reliable where my hon. Friend the Member for Burton (Andrew Griffiths) is either.

[Paul Burstow]

I will certainly try to ensure that the data sets that we have are robust, although the future of the Audit Commission is perhaps a moot point in tonight’s debate.

Let me now deal with the local situation outlined by my hon. Friend the Member for Burton and, in particular, the proposals relating to the Margaret Stanhope centre. It is important to stress that the proposals are currently the subject of public consultation, notwithstanding some of the concerns about the process that have been outlined.

[Andrew Griffiths]

I thank the Minister for speaking so well about our concerns, but we have little faith in the PCT and the way in which it has conducted itself in this consultation. A rumour is gathering pace in my constituency and locally that the PCT is now going to extend the consultation period past next month’s closing date, for perhaps another three or six months. I and many of my constituents believe that would be a cynical attempt to buy time in order for the furore to die down so that the PCT can plough on regardless of public opinion. Does the Minister agree that as all the facts are now on the record, the PCT must make a decision on the facts as presented and the time scale as already laid out?

[Paul Burstow]

I will certainly give some further consideration to that. I am not sure that I am in a position to give my hon. Friend the undertaking he wants tonight, but if new issues arise it is in the public interest to make sure they are properly understood. My hon. Friend has rehearsed a number of the key issues this evening, and although he is right that consideration is being given to extending the consultation period, that is not for quite as long, as he suggested. I believe the PCT has decided to extend it by three to four weeks. It must do that, as the public and my hon. Friend must have confidence in the process. I am sure that he will understand that in responding tonight what I cannot, will not and must not do is come down on one side or the other on the options being canvassed in the consultation or express a preference as to its outcome. As he will know, there are clear requirements in law in respect of significant service changes that ultimately allow for reference to the Secretary of State, and I must avoid fettering the discretion the Secretary of State might in due course have to exercise.

Staffordshire Local Involvement Network—the LINk—is overseeing this consultation, and it has facilitated sessions after the presentations at public meetings. It has not involved anyone from either the PCT or South Staffordshire and Shropshire Healthcare NHS Foundation Trust. The LINk will also oversee the analysis of the consultation, to ensure its results are presented objectively. There is an independent element, therefore. I hope that goes some way towards reassuring my hon. Friends who have spoken tonight.

Travel has been mentioned in passing, and it is an important issue. When PCTs and service providers consult on service reconfigurations of this sort they must properly consider travel times, distances and journeys. I am pleased to note that, certainly in terms of the environmental impact assessment, those matters have been brought into play, although I await to see from the outcome of the consultation whether they have been sufficiently brought into play.

The local NHS would say that the consultation is about the future direction of in-patient services in the area and further strengthening community services. We must remember that this consultation is not only relevant to mental health in-patient services in Burton, but that it covers Tamworth and Stafford as well.

Although the concerns raised tonight have rightly focused on the Margaret Stanhope Centre, the important wider issue of improving community mental health services must be kept in mind. That is why I come back to the concern about the impact of reducing the number of beds available in the area. There is a dispute between the NHS locally and my hon. Friend about whether that will retard local services’ ability to meet legitimate needs, or whether more investment in community services will meet those needs.

This has been an important debate because it has allowed my hon. Friend to set out clearly and cogently his concerns. The consultation is not yet concluded and there will now be some additional weeks in which further views can be gathered. Clearly, the campaign being run by the Burton Mail, with the support of many of my hon. Friend’s constituents, will be a factor that the PCT will need to take into account when making its decisions. I am sure that the health overview and scrutiny committee will also want to be satisfied when it draws its conclusions about whether the results of the consultation are safe and sound, and whether it supports a model that does posit the notion that there are many mental health circumstances where the mental health needs are better and more appropriately met in the community, although there is also a need to ensure that there is always a robust in-patient response where that is necessary.

With that, may I take the opportunity to wish you and others in this Chamber the compliments of the season, Mr Speaker? I thank my hon. Friend for raising these matters and I will come back to him on any details that I have not addressed this evening.

[Mr Speaker]

I thank the Minister for his good wishes, and they are warmly reciprocated.

Question put and agreed to.

22:30

House adjourned.