Skills: Importance for the UK Economy and Quality of Life

Thursday 9th May 2024 Lords Chamber

Motion to Take Note

12:03

Moved by

[Lord Aberdare]

To move that this House takes note of the importance of skills for the success of the United Kingdom economy and for the quality of life of individuals.

[Lord Aberdare (CB)]

My Lords, skills are central to the future of our young people and central to the future of our nation. Every one of the main challenges we face depends for its resolution on our having the right skills, now and in the future. Yet it seems to me that we, including in this House, do not focus enough on how to develop, maintain and enhance the skills needed to achieve net zero; to become a science and technology superpower; to realise the potential of AI; to meet our energy needs; to defend ourselves in an increasingly fractious world; to improve the quality of our health and care systems; to build enough new homes; to upgrade our transport infrastructure; to support our brilliant creative sector; and to pursue numerous other aims. All of these depend on skills.

My belief in the importance of skills is partly personal. I emerged from a very privileged education with an Oxford classics degree, an impressive academic record, virtually no practical skills and little idea of what sort of career to pursue. I believe that we can and should do better for our young people. I am also struck by the contrast between attitudes to education and skills today, and the burning desire to improve themselves that led some 200,000 Welsh people to learn to read the Bible in the circulating schools set up by Griffith Jones of Llanddowror, in my home county of Carmarthen, in the 18th century.

I am absolutely delighted to have obtained this debate to explore how we can better meet our skills needs, and greatly look forward to hearing the contributions of all noble Lords who are speaking, not least the maiden speeches of the noble Lords, Lord Elliott of Mickle Fell and Lord Marks of Hale, and of course the response of the Minister. I am grateful to the House of Lords Library for its briefing for the debate, for additional research that Thomas Weston has done for me, and to the many organisations which have deluged me with helpful and insightful briefings, to which I fear I shall do less than justice in the time available.

Virtually every sector of our economy currently faces worker shortages; so-called skills-shortage vacancies have risen from about 91,500 in 2011 to over 531,000 in 2022—up from 16% to 36% of all vacancies. A recent British Chambers of Commerce survey found that 73% of organisations are facing skills shortages. We have stubbornly high levels of young people who are not in education, employment or training: 12% of young people, some 850,000, are NEET. At the same time, employers complain that young people leaving education lack work-ready skills: 60% of employers struggle to find the right technical skills and 50% cannot find the transferable skills that they need. UK productivity seems to be stuck in a rut and falling behind that of other countries. Teacher recruitment and retention is not keeping up with demand. We face a serious skills challenge.

What sorts of skills do we need? I know other noble Lords will talk about specific skills, so I will just outline some of the categories needed. First, all of us need basic skills, including literacy, numeracy, digital literacy and no doubt oracy, which had not been invented when I was at school—your Lordships may have reason to regret that. Literacy and numeracy are, rightly, required elements of the school curriculum, although the Education for 11-16 Year Olds Committee, on which I served, argued that there should be more functional alternatives to the current requirement to achieve a level 4 GCSE pass, which has a highly damaging effect on the subsequent educational progress of the one-third of young people who fail to attain it.

Secondly, there are specific work or job-related skills, including technical and practical skills, for which training may be delivered by FE colleges, independent training providers or employers themselves. The much-needed green skills belong in this category.

Thirdly, there are the skills variously described as life skills, soft skills or transferable skills. The Skills Builder Partnership identifies eight essential skills: speaking; listening; problem-solving; creativity; aiming high; staying positive; teamwork; and leadership. It has developed a universal framework resource for teaching and assessing these, which is being used in a growing number of schools. These are increasingly important in the modern world, in both our work and personal lives. They are also the skills which employers are crying out for most of all: 57% of employers say they value transferable over technical skills. Employers find that the education system prepares students well for academic progression, rather than vocational pathways, on which there is insufficient focus. Yet 98% of teachers recognise essential skills as important for their learners’ employment opportunities and 86% agree that the national curriculum should include them.

The Local Government Association identifies no fewer than 49 national employment and skills-related schemes or services across England. They spend an estimated £20 billion in total and are managed by at least nine Whitehall departments and agencies. The Minister will have a lot to cover in her response.

I will briefly mention three initiatives within the remit of the DfE about which I feel strongly. Apprenticeships are a key part of skills policy. The apprenticeship levy is an important means of securing employer funding for skills training. There has been a disappointing decline in apprenticeship starts in recent years—from more than 509,000 in 2015-16 to about 337,000 in 2022-23. I will highlight two concerns about the current system. First, the number of apprenticeships for young people aged under 19 has declined even more steeply—from more than 131,000 to less than 78,000, as has the number of entry-level—level 2—apprenticeships, which are most suitable for many in this age group. The levy, in effect, incentivises employers to offer more expensive higher-level apprenticeships, often to upskill or reskill existing employees. This is also important, of course, but the balance seems wrong and needs to be adjusted to ensure a greater intake of younger apprentices, especially at level 2.

Secondly, there is a long-standing need to reduce the barriers of cost, complexity and bureaucracy which deter small employers from offering apprenticeships. Many employers are calling for greater flexibility as to how levy funds can be spent—for example to cover other forms of accredited training. The Government have made some improvements, but take-up by SMEs is still much too low.

A successful skills system depends on the availability of first-rate careers education and information for everyone from primary school age to adulthood. Much progress has been made in recent years, thanks largely to the efforts of the Careers & Enterprise Company and other careers organisations. Some 92% of schools are now part of local career hubs. More than 3,000 careers leaders have been trained, and the average number of the eight Gatsby benchmarks of good career guidance achieved by schools has risen from 2.1 to 5.5 in the last five years. Encouragingly, schools serving the most disadvantaged groups perform above the average. There is still much more to do in improving the quality of careers provision and business engagement, especially at local level and outside schools, tackling barriers to progression into jobs, and firmly establishing careers education as the bridge between young people and business.

The Skills and Post-16 Education Act 2022 led to the creation of local skills improvement plans across all 38 areas of England—most of them are led by chambers of commerce—which set out actionable priorities to tackle local skills needs. My noble friend Lady Lane-Fox, who is the president of the British Chambers of Commerce, will talk more about them. These should be a powerful tool for understanding and addressing skills needs and opportunities across England. Perhaps the Minister could tell us how implementation of the plans will be monitored and assessed. Should there not also be an NSIP—a national skills improvement plan—to ensure that, taken together with LSIPs, they are meeting identified national skills priorities and that programmes at national and local government levels are effectively co-ordinated?

Later speakers will doubtless mention other skills-related government initiatives, such as T-levels, the lifelong learning entitlement and the advanced British standard. We will also hear about some of the Labour Party’s proposals, including for a national skills taskforce. My impression is that existing initiatives add up to rather less than the sum of their parts, rather than a coherent and comprehensive package for tackling skills needs. They seem fragmented and lacking clarity about how different schemes are supposed to work together.

There are also many excellent organisations outside government helping to develop young people’s skills. The National Citizen Service, along with the Duke of Edinburgh’s Award, recently launched a report in Parliament on the enrichment activities they offer. The Scouts seek to empower young people with skills for life. WorldSkills UK, which is this morning announcing the young people selected to represent Team UK at this year’s Skills Olympics in Lyon, described one of its aims as “championing future skills” and helping the UK become a “world-class skills economy” so as to remain globally competitive. I say amen to that.

This Government do not seem keen on strategies, but no well-run organisation of any size would be without a human resources strategy. We, as a country, need a skills strategy to fulfil a similar role. What might such a strategy look like? First, skills should be recognised as a priority for any Government—national, devolved or local—and every area of policy needs to include provision for developing required skills. Secondly, the strategy should be evidence-based, built on sound data about current and anticipated skills needs, shortages and opportunities. There needs to be a process for monitoring and reporting on implementation and progress.

Thirdly, the strategy should be comprehensive and joined up across relevant government departments—I mentioned the nine that have programmes in this area—and across the nation, taking account both of local plans and of regional and national priorities, and seeking complementarity with the devolved nations, from which there may be valuable lessons to be learned.

Fourthly, and very importantly, the strategy should be matched by an education system fully aligned with its goals at all levels from primary to tertiary and beyond. This must recognise and seek to meet the need for skilled technicians and tradespeople, as well as university graduates, and give all of them a strong grounding in basic and essential skills. It is high time for the holy grail of parity of esteem between academic and technical/vocational education to be seized—although I am not sure whether that is the right thing to do with a grail. Of course, the implications of a skills strategy for education deserve a debate of their own.

Fifthly, a strategy should incorporate measures to increase teacher motivation and recognition by allowing them greater flexibility, to teach in a way that best suits their own abilities, experiences and interests. Highly skilled, highly motivated and highly regarded teachers must be a central plank of any skills strategy.

Sixthly, employers must be deeply engaged, both in defining and in delivering the strategy, including by ensuring that their own skills needs are recognised, and through offering work experience placements and apprenticeships.

Finally, the strategy should be vigorously promoted and publicised to individuals, employers, teachers, schools, parents and everyone concerned with skills. Such a strategy should aim to raise skills much higher up the public agenda and recapture some of the passion for education and skills that drove the success of Griffith Jones’s schools. Developing and delivering it would be neither easy nor quick and would depend on attracting the co-operation and commitment of all parties with a stake in raising skills—which is basically all of us. It might be supported by a high-profile campaign to build enthusiasm for pursuing the skills that young people and our economy need and to incentivise and celebrate investment in skills. The DfE’s existing Skills for Life campaign seems lacking in ambition and impact.

I am conscious that I have barely scratched the surface of the issues we are debating. I have every confidence that subsequent speakers will fill many of the gaps. I hope that this House, with the benefit of all the wisdom and expertise that it embodies, will continue to work doggedly with government, education institutions, employers and others in pursuit of policies to make the UK a world leader in skills.

When Napoleon supposedly described us as a nation of shopkeepers, I believe it was meant more as a recognition of our commercial talents than as an insult. Now is the time to apply our talents to a new challenge—to show ourselves to the world as a nation of skills builders. I beg to move.

12:18

[Lord Baker of Dorking (Con)]

My Lords, I congratulate my noble friend Lord Aberdare on initiating this debate. He and I meet from time to time at conferences on technical education around the country. I admire his determination; he never gives up, he just keeps bashing on.

Today, over 30 speakers in this House want to speak on technical education, including two maiden speakers. We have a rich knowledge of education in this House, but we do not hold the Government to account on education in any effective way. Since 2010, there has been no significant debate in this House on the curriculum, assessment systems, FE colleges, sixth-form colleges or even universities. We need a Select Committee on education and training and my noble friend Lord Aberdare should be its chairman.

The Government’s record on technical education in schools has been abysmal since 2010. The amount of technical education has fallen; the annual number of apprentices has dropped for the last few years because the Government believe—or Michael Gove and Gibb believed—that there should be no technical education below 16 in our schools. I am afraid they have succeeded. By imposing Progress 8 and EBacc on the school system, they have virtually ended design and technology. There has been a drop of 80% in our schools. In the cultural subjects of drama, dance, performing arts, music and art, there has been a drop of 50%. The broad curriculum that I tried to introduce in the 1980s has disappeared totally. This is not acceptable; there has got to be a change.

Many years ago, the Labour Party gave Lord Dearing and me enough to start two university technical colleges. Cameron increased that to 12 and then to 24, and I am glad to say we now have 44 university technical colleges. They are among some of the best schools in the country. We have over 20,000 students and 85% of the colleges get “good” or “outstanding” Ofsteds. What is really dramatic is that our colleges’ level of youth unemployment is between 1% and 3%. As my noble friend Lord Aberdare said, the level of NEETs in the country is 12%; in disadvantaged areas such as Stoke and Newcastle, it is as high as 20%. We have 2%. We are getting two new colleges in the next 18 months, in Southampton and Doncaster. They are expensive—they will cost £25 million. I would like 100. I am not going to get 100 because, in the next 10 years, hardly any new schools will be built, because of declining rolls. It will be an era of closing schools, which will be very difficult to handle for whoever forms the next Government—closing schools is very tricky and very expensive.

In the UTC movement, we have devised a way of bringing technical education into ordinary schools. We want to introduce a sleeve of 14 to 18 technical education into an ordinary 11 to 18 year-old school. That sleeve will have its own classrooms, teachers and equipment and will be separate from the academic route. We will of course continue to teach English, maths and science—as academic subjects, they will probably be shared with the academic route—but there will be a technical route in the school. It will have separate examinations and will be supported by the local university and local companies.

The department has known about this scheme for over a year. We have found 10 schools that want to do it and the Secretary of State and the Minister have been provided with their details. We are waiting for a decision. I believe this will be the only way for whoever wins the next election to get technical education into schools. It means you have to abandon and scrap Progress 8 and EBacc. In the last two years, there have been seven reports advocating exactly that, including two from Select Committees in this House, which said that EBacc and Progress 8 should be abolished and that the exam system of GCSEs should be reduced dramatically and reformed, or even ended.

There is a letter in the Times today from the headmaster of Bedales, which is a very successful school, describing how it is slowly moving away from GCSEs altogether. There is a private school in west London, Latymer, which is going to offer only two GCSE exams in three years’ time—just English and maths. The rest are going to be assessed; the subjects will go on.

As a result of not having the pressure of exams in the summer term, you will get two extra teaching terms. The spring term is now all revision and the summer term is all exams. You abolish all that and you will get extra time for very interesting new subjects such as anthropology, philosophy, archaeology, the history of south-east Asia, graphic design and even the history of pop music. You can get that by abolishing the GCSE system. I would like to see it, but it is not going to happen.

I am holding in my hand an application from the Bede Academy, a school in Newcastle and one of the best in the north-east—each year they get some students into Russell group universities. Those in the Bede Academy want a sleeve specialising in engineering, energy and health. It is a very good 12-page thing. They worked out entirely the quote for the next three years: what sort of teachers they want and the cost of it, including the buildings. They have the strong support of Northumbria University on health, and to introduce the health changes they need £200,000. They also need two digital computing units to teach artificial intelligence and virtual reality, which are not taught at all in Newcastle’s schools. They want six engineering rooms, metal-working and welding workshops, mechatronics workshops, CAD workshops, laser cutting and 3D printer sites. They want all of that and they have put the cost at £1.5 million to £1.8 million.

This, Minister, is an enormous bargain. If you wanted to set up a technical college in Newcastle, it would cost £12 million to £15 million. This is for only £1.5 million to £1.8 million. Before I sit down—and I am about to sit down—I will give this application to the Minister. I do not know whether she has received it or read it. I will give it to her and I hope that, before she sits down, if she is listening to me, she will be able to say when she is going to give approval to it.

[Noble Lords]

Oh!

12:26

[Lord Griffiths of Burry Port (Lab)]

My Lords, I give the noble Baroness the Minister the assurance that I will not repeat that party trick in a moment.

I stepped down from the Communications and Digital Select Committee just three months ago. It was an invigorating experience, spending three years looking at developments in the fields we were examining and interrogating various experts from the top of a number of industries and experiences. It seems that there is a paucity of contributors from that committee, so I bring to the attention of noble Lords an inkling of just two of the reports we brought out. Since the work has been done, I want to emphasise that we can refer to it at any time we like.

One report, on our creative future, was published just a year ago and there is a whole chapter on the skills that we need. Some 88% of employers in the creative occupations find it hard to recruit high-level skilled individuals, compared with 38% of employers across the economy. Someone we interrogated said that skills were currently the single biggest inhibitor of growth. Meanwhile, international competition for creative skills is growing, including creative, technical, cultural management and business skills, and this is likely to intensify. Those are just three or four allusions to a rich chapter that fleshes out the need for creative skills of all kinds in our creative industries, which make such an important contribution to the economy of our country. Since our country’s economy is well stated in the Motion from the noble Lord, Lord Aberdare—it is lovely to see him in his place and giving us the opportunity to discuss these things—we must draw attention to the fact that one sector of our economy is particularly hard hit by the absence of skills.

The other report to which I draw attention relates to fulfilling the second requirement of the Motion, which is for our personal development, and that is Digital Exclusion—or digital inclusion; which would we prefer? It is a fact that, for ordinary, everyday tasks, we lack the skills simply to do the things that are required of us. I left the house this morning, and my poor wife was coping with problems with our internet provider, needing to know language, to have patience and to entertain various options for which she was never trained, though she had a highly technical education and work pattern as a radiographer in the health industry. I myself have got yet again today what I regularly get, which is an imprecation from my bank to do internet banking. I utterly refuse, because I will not give the banks the opportunity to say that they have now mopped up all the remaining recidivists: people like me who will not modernise themselves or live in the modern world. I will say to my bankers that they should continue to send me my monthly paper statement, because that is an important thing for so many people.

We have heard that there has not been a properly developed strategy for skills since 2014, and it was spelled out just what needs to be in that strategy. One of the recurring things that we heard in all the committee meetings was that this need for skills branches out into so many aspects of ordinary, everyday living that we must have cross-departmental approaches to evolving this strategy. It is no good leaving it to the Department for Education, or science and technology or whatever it is. This impacts on the whole of our lives. It needs a dedicated body of people to look at this constantly in relation to the various departments of government. Formal cross-government evaluations seem to have stopped. They need to be reworked and rebegun.

The Government, of course, cannot be expected to solve everything, but they can achieve much by showing interest in driving change against clearly defined objectives. The committee said:

“We have no confidence that this is happening. Senior political leadership to drive joined-up concerted action is sorely needed”.


I could go on, but the reports are there. I place the underlying questions of my intervention in the hands of the Minister in the hope that she can give us some concrete evidence of progress in these areas. It will also reinforce my confidence that the work of our Select Committees gets heard and is implemented, and that their ideas are taken forward.

12:33

[Baroness Garden of Frognal (LD)]

My Lords, I thank the noble Lord, Lord Aberdare, for introducing this debate so comprehensively on a subject where he and I regularly end up at the same meetings and with the same enthusiasms for the world of skills. I sympathise with the noble Lord, Lord Griffiths: my home wifi has been down since Wednesday, and they tell me that they will bring somebody on Monday to sort it out. It is so infuriating; but that is enough of that. I warmly welcome the two maiden speakers, who have chosen a very good subject on which to cut their teeth in this House.

I, too, was on the recent Education for 11-16 Year Olds Committee, where members strongly recommended that the Government’s obsession with knowledge needed to be tempered with the acquisition of skills. Few students would need algebra and geometry later in life, but they would all need financial literacy and computer skills. Few would need Shakespeare and the finer points of grammar—that is not to say that Shakespeare is not vitally important, of course—but all would need to be able to read, write and speak. We noted that oracy, as the noble Lord, Lord Aberdare, has said, featured very little in state schools, whereas independent schools were keen on public speaking and expressing oneself.

It is of concern that many heritage craft skills are endangered. They require patience and attention to detail, both of which are often missing in young people who are used to the instant responses of computers. Yet pottery, silversmithing and weaving give immense satisfaction, as indeed do stonemasonry, decorating, fashion, catering and floristry—a whole range. These are skills which require dedication; they contribute to the happiness and well-being of others, but they are seldom taught in schools. We hear from the University of the Arts that the creative industries generated a £108 billion in economic value in 2021 and grew more than one and a half times faster than the wider economy between 2010 and 2019, employing more than 2.3 million people—one in 14 jobs.

Colleges, which do the lion’s share of teaching skills, are too often sidelined by a Government who are obsessed with academia and with learning facts, not skills. Like the noble Lord, Lord Aberdare, I graduated from Oxford with a passion for medieval French, which has never been of any use to me whatsoever later in life. Colleges and their hard-working tutors deserve a much better deal, given the key part that they play in generating the skills which we all need. Universities should never be seen as the only respectable route for young people to take. Even ivory towers need plumbers and bricklayers, and academics need hairdressers and caterers.

I have already referred to the creative industries as major players but, as the noble Lord, Lord Baker, bemoaned, music, art, dance and drama have disappeared from many state schools, as they have to conform to the demands of the baccalaureate, which squeezes such skills out of the timetable. Can the Minister tell us what consideration the Government have given to tempering their obsession with knowledge and making a place for practical skills in the school curriculum? What consideration is given to the happiness of students as they master skills and produce things other than exam results?

I worked for 20 years for City & Guilds. Founded in 1878 by the City of London and 16 of the livery companies to promote training in trade and skills, the organisation continues to award millions of certificates every year in work-based subjects, all, of course, designed by employers. I say to the Government that T-levels are not unique in this respect. Every work-based qualification since time began has been designed by employers.

The City of London still puts great resource into encouraging financial, professional, sustainability and digital sectors and, like the livery companies, promoting apprenticeships. I declare an interest as a past master of the world traders livery company, which is a modern company. I am very proud that this year’s Lord Mayor is one of our past masters. Livery companies are major contributors to education and charity. I am delighted to see that we have another past Lord Mayor here—in the noble Lord, Lord Mountevans—taking part today, because the City and the livery companies are major players in these areas. Like many others, they would love to see the apprenticeship levy reformed, so can the Minister say what steps are being taken to make the levy more conducive to take-up and more relevant to actual apprenticeships?

I mentioned colleges being essential to improving skills, yet their funding is always less generous than that of schools. The Open University and the WEA also provide invaluable support to those wishing to acquire skills later in life, for jobs but also for life and for contributions to the community. However, they always have to do battle for any government funding.

May I add my voice to the support for BTECs? The Government are obsessed by their new-found T-levels; they are untried, untested and currently with only some 26,000 students enrolled, as compared to 280,000 students studying at least one applied general qualification. BTECs provide a more effective, tried-and-tested route to higher education or skilled employment than A-levels or T-levels. It would be an act of vandalism to stop funding them and would exacerbate the shortage of qualified, skilled people in the workplace. Will the Minister do all she can to stop the Government from ruining life chances for the next generation and weigh in behind BTEC, City & Guilds and traditional apprenticeships to ensure that we can find qualified people from among our own workforce, both doing rewarding jobs and gaining satisfaction from their skills?

I will end with some stats from Open University, which reported that

“58% … of organisation leaders … report a mismatch between young people’s skill levels and employer expectations in the past three years. A decline in soft skills (54%) such as communication, teamwork, time management and technical skills … suggests there is a need for more investment in preparing this generation, that account for 20% of the current workforce, for the workplace”.

So, can the Government please rethink their response to our committee report and give us some hope for the future and the quality of life of young people?

12:39

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet and congratulate my noble friend Lord Aberdare, both on securing this debate and on the way in which he introduced it. He managed to cover such a wide range of issues, which I am sure will be highlighted in various respects over the course of the debate. I very much look forward to the maiden speeches that we are to hear.

I want to concentrate my contribution on the importance of green skills for the successful economy of the future, and for the delivery of the Government’s stated commitments towards net zero and a nature-based and nature-positive economy. Those commitments will mean a shift to jobs in low-carbon industries, and in providing nature-based solutions as part of a fair transition to net zero and nature restoration. That change can bring associated health and other co-benefits to all parts of the UK, particularly to the most vulnerable and some of the most disadvantaged.

As my noble friend Lord Aberdare so obviously and clearly explained, we need a national skills strategy. As part of that, we need a specific green skills strategy, which sets out a comprehensive plan for how the Government intend to deliver the green jobs and skills of the future. It is important to emphasise that green jobs are not just going to be those in the energy sector. In the same way that delivering the net-zero transition will need a concerted effort from all sectors—from government, education, government departments and local authorities—so the green jobs of the future will require the same comprehensive approach, with a huge range of jobs and skills needed in all sectors, from the health service and social care to education, transport and the built environment, including learning how to repair things once again, rather than throwing them away.

I would like to specifically ask the Minister about the Government’s promised net zero and nature workforce action plan. In 2023, the CCC noted that it was overdue. It has now been promised for 2024. To echo a remark made yesterday in the House, can the Minister tell us whether we will see it soon, shortly or in due course? Also, how will it fit into any broader national skills and productivity planning, such as the work of the Unit for Future Skills? It is vital that we have a proper, joined-up plan to deliver the skills we need for the future in a fair way, and to seize the opportunities it can bring across all regions of the UK.

As well as the new roles that will be created by the net-zero transition—the CCC estimates this to be up to 700,000 jobs by 2030—a recent report from Bain & Company estimates that around 4 million workers will need reskilling by 2030 to prepare for the new green economy. The Association of Colleges briefing, which noble Lords received, highlights the need for reform of the UK’s tertiary education system to help address future skills gaps, which could be a major constraint in delivering on the plans and commitments that the Government have made. Practically, if we are to deliver the Government’s target of 600,000 heat pump installations by 2028, how are we going to train enough heat-pump engineers when we have 3,000 at the moment and it is estimated that we need 27,000 to deliver on the Government’s promise?

It is also extremely important that we do not leave behind those who work in high-emitting sectors at the moment, whose transferable skills could be redirected very easily to the low-carbon industries of the future. If we do not reskill them, we will lose them to other countries which are developing their own green energy projects.

During debate on the Offshore Petroleum Licensing Bill, we discussed an amendment which proposed the publication of a green skills retraining plan for the 30,000 or so oil and gas workers still working in our declining North Sea basin. This included a skills passport which would provide financial and practical support so that those workers who wish to do so can easily—and without additional cost to them—reskill and retrain. In that debate, the Minister confirmed that the Government are “keen to take … forward” such a plan and are supporting the delivery of work being led by Offshore Energies UK, which includes a skills passport. When she replies, can the Minister let us know when this work will be delivered? It is now two years since the industry-led integrated people and skills strategy recommended it. Will there be financial support for workers looking to move into green jobs?

12:45

[Lord Marks of Hale (Con) (Maiden Speech)]

My Lords, it is a privilege to follow the noble Baroness, Lady Hayman. I share many of her views on net zero and how we equip young people with the skills to deliver a green strategy.

With much pride, and some emotion, tempered with a healthy dose of butterflies, I rise to speak for the first time in this Chamber. Debating excellence is a hallmark of this House and we have already heard some outstanding speeches today. Therefore, on the advice of noble friends, I have spent time listening and learning before venturing to make my maiden speech.

Given the kindness and the size of the welcome I have been given since my introduction, I would like my first words to be those of gratitude and appreciation to everyone, but especially to my supporters: my noble friend Lady Williams of Trafford and my close party colleague and political mentor, my noble friend Lord Leigh of Hurley. I also extend my thanks to my Whip, my noble friend Lady Sanderson of Welton; to my mentor, my noble friend Lord McLoughlin; and for the advice proffered to me by Black Rod and the Clerk of the Parliaments. I also thank the doorkeepers, who have never lost patience with me as I have asked—for at least the 20th time—the way to the Peers’ cloakroom. One corridor looks very much like another when you are a newbie.

I have many reasons to be passionate about skills and the need for skill equality across the country but before that, just a little about myself. My seat bears the title of Hale, a beautiful village in lovely countryside just to the south of Manchester, where I was brought up and still live with my devoted wife, and where we raised our four children. I am also an avid runner; since entering the House, I have chanced upon a new training programme. Sprinting from the Chamber to the platform at Euston, via the tube, has completely transformed my fitness, especially when trying to crack a sub-20 minutes. I invite any Mancunians in the House to join me.

As noble Lords will have gathered, I am a man of faith, so entering the Chamber for the first time from the Moses Room was very special to me. I was raised in a traditional Jewish household, where my parents—both businesspeople—left a deep impression on me of the pillars defining Judaism: belief in God, kindness to others, charity, justice and prayer. I have, over time, increased my observance and religiosity to become what is known as shomer Shabbat: someone who guards and observes the Sabbath, which is the most wonderful 25-hour weekly digital detox. I highly recommend it to everyone. As a hard-working entrepreneur, I like to say that I am available 24/6.

On Tuesday, we remembered the Holocaust, with our annual Yom HaShoah events around the country. It is with great sadness and despair that within living memory of the Holocaust, anti-Semitism has returned around the world. Like many Jews in this country, I am horrified and frightened by what I see, what I hear, and what I feel, whether on the streets, through social and other media, or of course in our universities.

I am therefore very grateful for the outpouring of support from noble Lords of all religions and backgrounds, who have been united in their condemnation of this. If we fight together and fight hard enough, we can and will stamp out this virus. I am also particularly thankful to our Prime Minister for his unwavering support of the Jewish community and for everything that he and the Government are doing to ensure that anti-Semitism has no place in society, including today meeting university leaders to ensure a zero-tolerance approach to anti-Semitic abuse on all campuses.

Although I went to a grammar school, my academic interests waned somewhat towards the end, shutting off the option of a university education for me. That was actually no big deal, as I was itching to embrace the world of commerce. I have been blessed with a successful career building a number of substantial companies, mostly in disruptive technologies—even taking one of them to the London Stock Exchange—and have always learned along the way from inspiring colleagues and clients. My business of the last 10 years has been at the forefront of corporate innovation, bringing talented start-ups to the attention of multinational companies and creating an environment for collaboration between David and Goliath. However, it was the skills I learned at school that prepared the way for my career. I therefore congratulate the noble Lord, Lord Aberdare, on bringing this important debate to the House.

In my business, I am privileged to see thousands of technology and manufacturing solutions from around the world and to witness real innovation. While I believe that you cannot teach the drive, ambition, risk-taking and work ethic that makes an entrepreneur, you can teach them the skills they need to build and run our unicorns of the future. As the report outlines, essential skills include teamwork and communication, which all companies need in order to thrive. Likewise, the many people who believe that skills are particularly important in overcoming adversity and difficulties in life should not be overlooked. Many do not have the privilege of an easy or affluent childhood, but that should never be a barrier to success in future life.

Indeed, we all have a moral duty to ensure that we take the resilience that is often endowed as a result of a challenging childhood and combine it with everything a person needs to succeed, including apprenticeships, which I know can be a lifeline and bridge to a much happier world. Ensuring that young people are properly trained and equipped with the skills that suit their capability and temperament will facilitate favourable outcomes, whether entering the factory floor, rising up the corporate managerial ladder or building their own businesses. That must be the number one goal for UK plc.

The report also addresses levelling up, which I am completely in agreement with. Of course, it does not refer only to the north. The imbalance in skills across the country means that many areas are left behind, which leads to proportionately lower investment in innovation and R&D. However, some of the most successful companies, old and new, have thrived in some of the poorer parts of the country. I know that because I built my first company in Nelson in east Lancashire, one of the most deprived areas in the UK. However, we became an employment magnet and rewarded the workforce with training and career progression, and I am proud that many of our employees rose through the ranks at my company or transferred their skills to find new, exciting jobs elsewhere. We should gravitate to the leaders of these companies, embrace them and learn from them, so that we can copy the formula that works, thereby encouraging more businesses to open and relocate to these areas, which, in turn, addresses the economic imbalance and provides a marketplace for skilled workers. That, in turn, creates wealth, attracts more investment, improves the quality of life and raises the standards of living and education. As John F Kennedy said:

“A rising tide lifts all … boats”.


My only disappointment on joining this House is that I have not been able to spend time with the towering late Rabbi Lord Sacks, a true spiritual leader and a sage of our time. He was—and still is—my inspiration on all matters Judaic and, indeed, in life. He was taken away from us far too early. I will devote my final words to something he said:

“Where what you want to do meets what needs to be done”


is your mission in life. I hope that my contribution to public life, through my attendance in this House and participation in future debates, enables me to do exactly that and, in turn, to make a valuable contribution to this wonderful country.

12:55

[Lord Willetts (Con)]

My Lords, I congratulate my noble friend Lord Marks of Hale on a wonderful maiden speech. He is assured of a very warm welcome to our House. He gave an important and topical reminder of the dangers of anti-Semitism. For many of us, Lord Sacks is an excellent example of how the wisdom of the Jewish tradition can be of value to us all. The athleticism of the noble Lord, Lord Marks of Hale, is also clearly very impressive. We look forward to seeing his running shoes alongside the mobility scooters downstairs. I am sure that he will be an important contributor to our debates in this House.

I also congratulate the noble Lord, Lord Aberdare, on opening and setting the scene for this important debate on skills. I draw the House’s attention to my interests.

I will focus on two issues. The first is the future of BTECs, which are important vocational qualifications, introduced as a skills reform in the 1980s—I am looking across to the former Secretary of State—and which play an important role in providing vocational qualifications today. The Government appear to believe that they can defund BTECs and everyone will instead move on to T-levels, but the figures do not bear that out. In 2021, 5,300 students started T-levels, and one-third dropped out, compared with one-fifth dropping out from other vocational qualifications and one in 10 dropping out from A-levels. The Sixth Form Colleges Association estimates that, in comparison with the low numbers doing T-levels, defunding BTECs could result in 155,000 students not having a level 3 qualification that they otherwise would have secured through the BTEC route. I very much agree with the warnings from the noble Baroness, Lady Garden, on that issue.

BTECs matter. They are a route into degree apprenticeships, to which Ministers rightly attach a lot of importance. They are a route into higher education, with perhaps 60,000 people getting places in higher education as a result of BTECs in important vocational courses, such as nursing.

We have discussed BTECs in this House before, and I informed the Minister that I would raise with her the assurance that she gave us in a debate in this House on 7 April 2022:

“I know that noble Lords are all interested to see the provisional list of qualifications that overlap with waves 1 and 2 T-levels. I want to be absolutely clear to your Lordships today that through this process we expect to remove public funding approval for just a small proportion of the total level 3 offer, including BTECs. This will be significantly less than half”.—[Official Report, 7/4/22; col. 2202.]


That quotation from Hansard was the assurance she gave us approximately two years ago. I would be very grateful if she could update us on how the defunding of BTECs is progressing. It is possible that, in her statement to us two years ago, when she referred to “this process” she was not referring to the full defunding of BTECs but simply to overlap. I would very much like to hear the Government’s estimate of the total number of BTEC and other advanced qualification enrolments, after they have completed the full defunding process. A useful baseline is the 248,000 BTEC/AGQ enrolments in 2022-23. What is the Minister’s latest estimate of how many BTEC courses will be defunded? How many people will be enrolling on BTECs at the end of the full process of defunding BTECs, compared with that baseline of 248,000? As I said, I gave the department advance notice of this question and very much hope that, in the light of our previous debates, we will get those estimates today.

I also ask the Minister—given the slow take-up of T-levels, and given that we now know the Government do not see T-levels as part of a long-term framework—whether they are in turn going to be replaced by this new advanced qualification. Is there not an even stronger case for pausing the defunding of BTECs to reduce the risk that tens of thousands of young people might find themselves without any suitable qualification that they can study and end up not in education, employment or training? It would be a tragedy if the defunding of BTECs have that result. Given the latest information on the uptake of T-levels, I very much hope the Minister will be able to make some concessions on that.

The second issue I want to briefly touch on is degree apprenticeships. I very much welcome degree apprenticeships—they are an important part of the options available. It is just worth, again, putting the figures in context. There are now about 40,000 enrolments in degree apprenticeships, but half those are by people aged over 25. They seem to be particularly taken up by mature learners. We have about 20,000 young people starting degree apprenticeships, about 10% of the total number starting in higher education.

The noble Lord, Lord Aberdare, rightly raised the question of the apprenticeship levy and the pressures on it. Degree apprenticeships are funded out of the apprenticeship levy. They are particularly expensive programs. If they are a significant claim on the apprenticeship levy, their growth is surely part of the answer to the question put by the noble Lord, Lord Aberdare: why are we seeing such a decline in the number of young people doing apprenticeships and apprenticeships at levels two and three? The answer is that this fixed pot of money is being increasingly deployed for degree apprenticeships.

I wish to see more expansion—as the noble Lord said—of apprenticeships for younger people and at lower levels. I urge the Government to consider funding degree apprenticeships out of fees and loans, just like the rest of higher education, to liberate funding for more apprenticeships. That would also have the side effect that, instead of trying to drive people on to degree apprenticeships by scares about the fees and costs of higher education, we would have a shared interest in explaining to young people that they do not pay for their higher education courses upfront and they should have the option of a growing number of degree apprenticeships alongside other higher education qualifications.

13:02

[Baroness Wolf of Dulwich (CB)]

I, too, thank the noble Lord, Lord Aberdare, most sincerely for securing this debate and for his wonderful speech. I add my congratulations to the noble Lord, Lord Marks, on his inspiring maiden speech, and I look forward to hearing the maiden speech from the noble Lord, Lord Elliott. I declare an interest as a professor at King’s College London who teaches students and, one hopes, develops their skills. I have been actively engaged for many years in skills policy, including as a government adviser.

At one level, I am delighted at the great interest in this debate on all sides of the House. But, alas, as the old saying goes, “Fine words butter no parsnips”. If we do not get precise commitments on non-university skills spending and on individual access to skills training in forthcoming party manifestos, in my opinion we will continue to deliver inadequate and inefficient skills policies that fail repeatedly and systematically to solve our main skills problems. This is not because politicians and advisers, let alone Peers, are insincere—it is because not just underfunding but repeated short-term upheavals and repeated unpredictable cuts and changes in skills provision are currently hard-wired into our system.

Skills spending always ends up in the Treasury’s and indeed the DfE’s sights when deficits are looming or a bright new initiative is being marketed—so round we go again. Why skills? In common with other developed societies, absolutely rightly we guarantee all children a free education from the age of five to 18 or 19. We offer free early education to three and four year-olds. We quite rightly have legislative obligations to children with special needs and disabilities and, in England and Wales, we offer support to everyone over 18 who is accepted on to a course in a registered higher education institution.

These are clear entitlements and are clearly understood by the population—and, because they are transparent and stable, people can and do plan ahead to use them. Institutions are also able to plan and deliver. But when it comes to mid-level skills—the sorts of skills we are mostly talking about today and the ones for which our economy is currently desperate—clarity is replaced by confusion and repeated, inefficient, expensive and often destructive change. I shall give noble Lords one example. If you stay at school until you are 18 and you are moderately successful, you will be offered a free education up to and including a level 3 award. Level 3 is the skilled trades level, as well as the usual university entry level; it is the one where our skills shortages in this country are the most glaring.

If you leave school without a level 3, our society turns its back on you. As a citizen, you have a right to a free education while you are 18, but not when you were 20, 25 or 30. This is a travesty—it is a travesty in terms of equal treatment of citizens and a travesty in terms of any coherent skills policy. In the Augar review, on which I was privileged to serve and contribute, we strongly recommended that every citizen should have a right to a free level 3. So have many others, including the Economic Affairs Committee of this House. The current Government, back in 2020, did not make a formal commitment to an entitlement, but they acted fast in launching a new funded program which in practice made this available, on terms that made it feasible and attractive for colleges to plan and launch new courses, which is always a high-risk decision. Why did they do so? It was not because there was a sudden blast of light one day, but because earlier there was written into the manifesto a new £3 billion skills fund to be spent over the Parliament, which Treasury could not just wave away. I am 100% sure that without that manifesto commitment nothing would have happened.

Crucially, access to this programme was simple. If you did not have a level 3 qualification, it was open to you—just as now, if you are offered a place at a university, you have a right to Student Loans Company support. Normally in our skills system, working out what you can access at this middle level, and whether you have to pay and what you have to pay, is a moving minefield. Not surprisingly, most people walk away. It is not that people do not want to train or upskill, but the system is completely non-transparent. In other words, it is designed to cut off our skills pipeline at the ankles. Of course, one programme did not transform things, but it was a major step in the right direction. I say “was”, because now the DfE is announcing new restrictions that will make most of these programmes completely unviable. Why? Well, some poor official has written the usual guff about better targeting, but it is actually because the DfE needs to find some money and it is looking for things to cut. As always, the simplest place to look is skills programmes.

This Government have, in my view, done some very good things for skills—and not only when they were listening to me—but I want to emphasise that these things happened because there was a ring-fenced pot and a very clear commitment in a manifesto. No Minister and no Front-Bench spokesman is going to make a commitment of that sort to me today, so I am not even going to ask the Minister to do so. However, if we enter the next election with only high-level uncosted aspirations and with no clear commitments to access to those mid-level skills for people who do not already have a level 3, five years from now we will be making the same speeches—and, if anything, things will be worse.

13:09

[Lord Patten (Con)]

My Lords, there is a lot of evidence that, once a certain standard of living is reached—economic security in particular—good relationships, happy families, and friends and community quite often follow, although not always necessarily, and both of these depend on skills and on the effort made by all of us on improving the quality of life, as the noble Lord said in his opening speech. There are quite a lot of both of these attributes, good skills and good quality of life, in the United Kingdom.

I do not go quite as far as Cecil Rhodes in his bombastic dictum in another age that to be born an Englishman is to have won first prize in the lottery of life. There may be one or two on the wilder shores of my party who have that view of life, but I will not tempt myself to name them today. However, it is a fact that lots of people want to come to the United Kingdom, which I am glad about—I do not speak of the dangerous lives of people seeking to come to our shores illegally. There are queues of people who wish to come here for the attributes that the United Kingdom has, and we should not just forget that and say that everything is a terrible problem.

I will give some examples. The City of London remains a destination ranked way above a Paris or a Frankfurt by generations of polls of those wishing to come to work in the financial services area, where I work. Our best universities remain a target, too, for undergraduate and postgraduate students who want to get proper legal entry into our best universities. We have some great universities, with always three and sometimes four in the top 10 and in the top 100—I forget the figure; doubtless my noble friend Lord Willetts will know what it is, but an awful lot of our universities are ranked in the top 100. We also always welcome a lot of outside direct investment. The UK remains the second biggest destination in Europe for foreign direct investment, and this is led by tough-minded investors from the US and India. These people must have spotted at least a few useful skills that we still have around.

Yet the paradox remains that, despite this, decent skill levels do not automatically lead to increased productivity, which is a mystery that I think the noble Lord, Lord Aberdare, referred to when he spoke of productivity. It is particularly poor in the United Kingdom. It is a genuine mystery, and a lot of very clever people are trying to provide the answer as to why it is there, but we have not yet got it. According to the Office for National Statistics in its report last week, the biggest drops in productivity are in the public sector, and they are in education and in health, which are critically important to all of us.

A lot of effort is being put in via policies of different sorts to improve this, notably by levelling up. However, a generation takes a long time, and we are often told that the levelling-up policy will take a generation. A generation is 20 or 30 years and change takes time. So I applaud the realism of the Secretary of State for Levelling Up, as reported by the Financial Times of 30 April, who said that it remains “work in progress”, describing the process as like “building a cathedral”—and they often take longer than one or two generations. So it is extremely important that we deal with the unsolved mystery of why our productivity is so low.

We must also recognise that skills have lots of attributes that are hard to teach formally, but, if they are not acquired or imbued in some way, all the doctorates or degree apprenticeships in the world will not benefit and bring the skills of life with them. I pay tribute to the noble Lord, Lord Blunkett, who said in a speech during a debate which he initiated back on 7 March that we had to be realistic about the problems that the university sector is facing. He is right, I think, that we are facing a bit of a sub-prime issue—I will not overwork it by calling it a sub-prime crisis—in a number of our universities, where we have seen, alas, a lot of sacking of staff and abolition of courses. This is always brought in with a lot of management speak, even by great universities such as Goldsmiths, which has announced that it has a “transformation programme”. Once you see a transformation programme coming and vice-chancellors running for the hills, you know there is trouble. We are facing, there and in a number of our underperforming universities in this country, a bit of a looming sub-prime problem, which the noble Lord, Lord Blunkett, was absolutely open in saying that we have.

13:15

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the noble Lord, Lord Aberdare, for securing this debate and particularly thank him for his formulation of the Motion, which acknowledges that skills are not just for “the economy” but for life, and indeed are the foundation of quality of life. That reflects the Green approach to education and skills training—that it indeed has to be for life, not just for exams or for vocational training.

I associate myself with the remarks of the noble Lord, Lord Baker of Dorking. We have an education system that wastes term after term preparing for exams, which is not education or learning but is a very narrow skill that most people will never repeat once they leave the education system.

I want to particularly focus in one area of my remarks on the great tragedy of the collapse of lifelong learning provision. The number of publicly funded qualifications started by adults has declined by 70% since the early 2000s, dropping from nearly 5.5 million qualifications to 1.5 million qualifications by 2020—those are Institute for Fiscal Studies figures. Essentially, what is left is an extremely narrow range of courses focused particularly on education for jobs that might exist at this particular moment.

The total spend on adult education and apprenticeships combined will be 25% lower in 2024-25 than in 2010-11, and markers have already been made on the plan for adults over the age of 24 studying level 3 and 4 qualifications being forced to take on debt. We are loading our young people down with debt that they will never be able to repay, and now we are seeking to do the same thing right through our age ranges. We have seen the damage it has done to our young people. What damage will it do to people seeking to get ahead, to have that weight of debt on their shoulders?

What is happening here? I will quote one figure: in the last decade, there have been 4 million “lost learners”. That means people who have not been able to advance their productivity—to focus on something this House often looks at—but also have not been able to improve their health through education and skills training, which is very much underrated.

One of the ways in which we utterly fail to value skills is by failing to value the people who teach the skills. In a UCU survey that came out last year, among further education college staff 77% said that the quantity of work had “increased significantly” in the past three years. More than four in 10 say their workload was “unmanageable”. Those who provide education and skills training need to be valued as essential workers and paid and treated accordingly—and that is not what is happening now. If the noble Lord, Lord Patten, wants to look at why productivity might be low, exhaustion, overwork and lack of being valued and treated well may well be factors in that figure.

I want to pick up points made by the noble Baroness, Lady Hayman, on green skills, and particularly, as she said, that they are too often thought of as relating just to the energy and technology sectors. I will focus briefly on land-based skills in particular. We have seen a cascade of closures of agricultural colleges around the nation, among them recently the 125 year-old Newton Rigg College in Penrith, which is much mourned and much valued. It was deemed no longer financially viable. That is the product of government policy decisions and government funding decisions—a system that has failed to acknowledge that we need food security in this country and that that requires skills.

We have seen some movement from the Government in acknowledging that food security is not just, as I think the Prime Minister three PMs back said, a matter for the supermarkets. There is now some acknowledgement that it is a matter for the Government. Surely land-based skills, the ability to grow food and—I stress this—the ability to engage in environmental horticulture and care for our natural spaces are skills in one of the greatest areas of shortage for our country.

I ask the Minister a question. I know that we are about to start a GCSE in natural history. Can she update me, now or later, on how that is progressing, what student numbers are looking like and how many of those courses are likely to be introduced?

I have two brief final points. Even when a Green Government have introduced a wonderful education system and lifelong learning system, there will never be enough skills. We need to think about where the skills are going. We have an oversized financial sector, which employs 9 million people and swallows up many of our physics and maths graduates and many other people with key levels of skills. We need to think about where those people could be better used for the state of our society—for the future resilience and well-being of all of us.

I also briefly note that we need to acknowledge skills that have been acquired through experience. We need to stop talking about “unskilled jobs”. Many of the jobs that people do on the minimum wage are really difficult, and they have to learn to do them, and we need to acknowledge them in the levels of pay and respect.

I will finish by reflecting on a young woman I met in the north-east recently. In her mid-20s, she had spent a decade caring for her father, who had a horrible degenerative disease. She is a NEET—not in education, employment or training. She has learned so much and has so many skills, but she does not have a lot of confidence, because society has not valued what she has done. We need to value skills that people, particularly women, have acquired through care, and acknowledge them when they seek to enter the labour market.

13:22

[Baroness Coussins (CB)]

My Lords, some people think that learning a foreign language is just an academic pursuit for the top set, but languages are an important skill for everyone. They enhance the economy and individual lives. I declare my interests as set out in the register.

The UK is often caricatured as no good at languages, partly in the belief that “Everyone speaks English, so why bother?” But this is a myth: only 6% of the world’s population are native English speakers, and 75% speak no English at all. In the 21st century, speaking only English is as much of a disadvantage as speaking no English. Another myth is that we need not bother because there is always Google Translate. But when it comes to nuance, cultural sensitivity and understanding, humans and interpersonal skills will always be needed. Ask any soldier who has been deployed to Afghanistan how vital their interpreters have been and how easy it might have been for a single wrong word on Google to have made the difference between life and death.

I return to the UK and the value of language skills to our economy. Research estimates that lack of language skills here costs an estimated 3.5% of GDP. SMEs making use of languages are 30% more successful in exporting than those that do not. In 2022, Cambridge University research calculated that, if we invested more in teaching French, Spanish, Mandarin and Arabic in schools, we could increase our exports by up to £19 billion a year. The British Chambers of Commerce sector survey showed that 38% of businesses expect to need language skills.

Yet employers are frequently forced to recruit from overseas because they say our school leavers and graduates fall short of the language skills that they need. A CBI skills survey said that modern language skills were the ones that employers were the least satisfied with. Only 9% of English 15-year-olds are competent in their first foreign language beyond a very basic level, compared with an average of 42% across 14 European countries. But tighter immigration rules have had an adverse impact on recruitment from overseas, making it even more important to invest more, and more strategically, in language teaching and learning here in the UK. In 2023, only 33% of the target for MFL trainee teachers was met.

This is a challenge not just for graduate or international jobs. One survey showed that the highest level of language skills shortages is among basic clerical and admin staff. You do not always need to be fluent: basic conversation in one or two other languages will often land you the job. Without language skills, the shutters come down on possible career paths not just into business but into diplomacy, international relations, defence and security. Qualified linguists are also needed in key sectors, such as public service translators and interpreters in the NHS, the police and the courts.

As well as opening doors to jobs and careers, learning languages also means learning about other cultures and countries. Trips and exchanges abroad can be inspirational and life-changing. The British Academy has shown how languages bring recognised transferable skills, such as problem-solving, creativity and an international mindset. Believe it or not, there are also proven benefits to cognitive function, the delaying of dementia and helping recovery from stroke. Research has shown that primary school age children who learn another language perform significantly better across the whole curriculum, including in maths.

The fact that the lowest take-up of language GCSEs corresponds exactly with the UK regions where we have the highest recorded skills shortages and unemployment, and the most pupils from low-income families and on free school meals, should in itself be an enormous red flag to politicians and policymakers concerned with levelling up. More attention and more investment in language teaching and learning would be a great help in that regard.

I conclude by flagging up the headlines for six key areas needing urgent attention if we are to improve language proficiency in the UK. I hope that the Minister will be able to comment on each of them, however briefly.

First, double down on boosting take-up of language GCSEs and A-levels, for example by introducing the advanced language premium as an incentive to schools, modelled on the advanced maths premium, which has been successful.

Secondly, sort out the financial and bureaucratic obstacles to trips and exchanges—the Minister knows from our recent debate what I mean by that.

Thirdly, encourage more local authorities to replicate the Hackney transition system, so that key stage 2 language learning is built on, rather than undermined, when children go to secondary school.

Fourthly, look at the FE sector: a landmark report from the British Academy said that FE colleges were a language learning cold spot.

Fifthly, deal with the haemorrhaging of languages from universities. Over 60 of them have cut some or all their modern language degrees since 2000. We must return to a system which protects languages as a strategically vulnerable subject.

Sixthly and finally, do not forget our 2 million bilingual children and make sure they have the chance to gain academic qualifications in their home or heritage languages, many of which are of strategic importance to the UK, whether in business, security or diplomacy.

13:28

[Lord Lilley (Con)]

My Lords, I congratulate the noble Lord, Lord Aberdare, on securing this debate and opening it so brilliantly, and the noble Lord, Lord Marks of Hale, for a gently brilliant but forceful speech. If I am not down in the Chamber and up in my room and I see his name on the annunciator in future, I certainly will turn the sound on and listen to what he has to say.

The skills problem in this country is of long standing. There are Blue Books written in the 19th century which decry the shortage of skills here relative to Germany. As people such as Correlli Barnett and others have pointed out, the roots lie in a sort of class prejudice that attributes prestige to a subject in inverse proportion to its practical and commercial value: the prestige is higher the more academic it is and lower the more practical and commercial it is.

I saw that in my own life. My grandfather, who was a skilled lathe operator during the First World War producing torpedoes, educated himself in mechanical engineering and rose up the firm a bit. Eventually—obviously, he was inspired by the prediction of what my noble friend Lord Baker would recommend—he ended up teaching mechanical engineering in a college of further education. So it always seemed a wonderful thing to me, and when I went to university and acquired a degree in natural sciences, I asked my director of studies if I could move to mechanical engineering. He said, “No—you’re quite clever enough to continue doing pure science”. He was wrong in two respects: I was never going to be another Einstein, and we need clever people, whether at university or in colleges and schools, to acquire the skills to make the things we use. If I go over a bridge, I want to know that the engineer who designed and created that bridge was good, and that the people who welded it were skilled in what they were doing.

Sadly, there are only two ways to increase the supply of skills in this country. One is to increase the skill levels of the domestic population, and the other is to import skills from abroad. My thesis is that unless and until we break the national addiction to importing skills from abroad, we will never seriously tackle the lack of domestic skilled people. Almost the only person who has done anything useful and practical is my noble friend Lord Baker; most of the other initiatives have been ineffectual or half-hearted.

Since Tony Blair opened our borders to the importing of skills from abroad—this is not a party-political point, because he was, sadly, followed by the coalition Government and Boris Johnson—spending on training of people at work has declined, and, predictably, the time people at work spend on training has declined. One of the things that brought home to me how deeply entrenched this belief is in the need to import skills from abroad—and, indeed, the virtue of doing so—was when I was on the Select Committee in the other House and we went up to Sunderland after the referendum. We were greeted by people from the local district council, the county council, the local CBI, the Institute of Directors and the chamber of commerce, and they said their principal fear was that they would no longer be able to import skilled workers from abroad.

The only major employer that was not present was Nissan. I remembered visiting Nissan when I was Trade and Industry Secretary shortly after it set up, and I asked a rather stupid question. They were too polite to point out who was stupid, but I asked them whether they had had any problems recruiting trained automotive workers in Durham when they set up. Of course, there were none within hundreds of miles of there, so it was a stupid question. But they said no, they had trained them, and they were very keen to be trained. Now, the Nissan factory is the most productive factory in the whole Nissan network across the world. So I put it to the local CBI, IoD and chamber of commerce that if Nissan had been able or inclined to follow its belief that the way to get skills was to import them from Europe, there would be 7,000 people in Sunderland flipping hamburgers or unemployed, instead of being the most productive workers in the Nissan network.

We have to break this addiction—but, unfortunately, we have convinced ourselves that, at least for specific skills shortages, we must import the workers from abroad. Yet, since we took that view, in almost all the areas where we initially had a shortage, the shortage has got worse. That should not come as any surprise, because the International Labour Organization, way back in 2004, warned:

“What may begin as a simple temporary ‘spot shortage’ of trained native workers, can be made considerably more permanent by attempting a quick fix from migrant labor. Any program which imports migrants into a sector whose employers are complaining of insufficient trained natives, can be expected to exacerbate (rather than alleviate) its native shortage. Rather than raising incentives to entice new workers to seek training to fill the empty slots, visas are likely to be used to avoid the needed market response”.


But we did not take any notice of that.

My conclusion, therefore, is that if in future we say there is a specific shortage and for a while, we will have to import people from abroad, that must be permitted only if there is an agreement between the employers, educators and the Government that they will train more people in that sector, so that we do not have such a reliance, within a specific period. Employers will have to recognise and acknowledge that during that period—probably indefinitely—they will have to pay more for those people.

I mention pay because it is rather important. The very idea of a shortage of labour in a free market is an oxymoron. Again, this was pointed out by a colleague of the author I have just quoted, who said:

“Long term labor shortages do not happen naturally in market economies. That is not to say that they don’t exist. They are created when employers or government agencies tamper with the natural functioning of the wage mechanism”.


Allowing indefinite reliance on importing labour from abroad has enabled us to put off tackling the shortages, which the noble Lord, Lord Aberdare, has, thankfully, brought to our attention, and which, hopefully, with the advice of my noble friend Lord Baker, we will in future remedy.

13:36

[Lord Birt (CB)]

My Lords, the noble Lord, Lord Aberdare, has plainly scored a real bull’s-eye in initiating this debate. I also cannot help but applaud the noble Lord, Lord Baker, for his everlasting ebullience and fighting spirit. Long may that continue. Finally, I welcome the hopeful and positive messages in the maiden speech from the noble Lord, Lord Marks of Hale.

In total, there are just under 1 million vacancies in the UK economy. As the ONS recently identified, most UK businesses now face a significant shortage of workers. In most sectors of our economy, shortage of skills is a critical factor, as it is, for instance, in construction, manufacturing, health, education and business services—just some among many.

There are shortfalls in every category of worker with skilled trades in the lead. I give just two examples: in 2022, there were 43,000 vacancies in skilled metal, electrical and electronic trades; and 83,000 vacancies in social care. In all, the ONS estimates that the UK economy is short of over half a million workers with the appropriate level of skill. This is surely one, if not the only, reason why the country is experiencing low growth and relatively low productivity—a point made by the noble Lord, Lord Patten, a moment ago.

One root cause of the skills shortage is the post-pandemic exodus from the workforce of around 400,000 adults aged 50 to 64, but there is other causation too. We lack an appropriate balance between vocational and academic education. Allow me to offer some evidence of that imbalance and the reasons for it.

Fewer than 3% of 16 year-olds are becoming apprentices. In 2021, 250,000 students entered university, while fewer than a quarter of that figure took on apprenticeships. Remarkably, the number enrolling in FE colleges is only a 30th of the number attending university. The OECD records that our secondary schools perform above average by global standards, which we all welcome, but that the bottom quartile in those schools has a very low sense of personal well-being.

Poorer children are performing far less well than their richer classmates. For instance, the richest 33% gain an A or A* at A-level, compared with only 5% of the poorest decile of students. The problem appears to be worsening; post Covid, persistent absence has affected almost one-third of all UK schools. The ONS has identified that one in seven 16 to 24 year-olds is not in education, work or training. According to the Prince’s Trust, the main cause for that shocking statistic identified by those dropping out is their mental health.

Over 3 million people in the wider population now draw PIPs—personal independence payments. Nearly 8 million people of working age in the UK now say that they have a significant disability or health condition. Can we not do more to help these individuals to find work which suits them and in which they will be happy and productive? Can we do more, especially in our schools, to expose young people to the satisfactions and pleasures of work and to arm them with the soft skills necessary to navigate the workplace?

The economy is highly dynamic, constantly reinventing itself and demanding new skills and abilities. Society too is dynamic, constantly evolving, and embracing social and cultural shifts. It is not clear, however, that our education, skills, health and welfare systems are acting in step and that they are sufficiently dynamic and innovative to keep abreast of and respond to these ever-changing needs of both individuals and the economy. These issues are deep, stubborn and challenging and, as a nation, we need to step back and consider in the round how best to address them.

13:41

[Baroness Lane-Fox of Soho (CB)]

My Lords, I too thank the noble Lord, Lord Aberdare, for this extremely important debate. I am beginning to think that the only place that there is no skills shortage is in this Chamber, although the real skill might well be fitting all that we have to say into the brief time that we have been allotted.

I was thinking through the things that I am lucky enough to have done over the last 20 years and wondering on which I should focus today. Should it be the work that we did when I was setting up Doteveryone, helping people in this building and the other place with the skills to understand digital technology more? Should it be the challenges that I saw as the chair of WeTransfer, a mid-scale tech company, as we tried to recruit people who can help us to design the future? Should it be the skills that we see and that my noble friend Lady Hayman talked about, as a director of Peers for the Planet, in transitioning to the green economy? But, as some noble Lords know, I am a relatively eternal optimist so will focus on two things that are actually working, on which I would like Members on all the Front Benches to respond in saying how important they are in their own strategic plans for skills.

The first is the local skills improvement plans that have already been mentioned, particularly by my noble friend Lord Aberdare. As president of the British Chambers of Commerce, I am thrilled that we run 32 of the 38 LSIPs that have been created around the country. These are collaborative plans that are very local and encourage businesses, local education providers of all colours and any other interested parties to sit down and map out what they need for their area to succeed. We have so far engaged over 65,000 businesses in these plans, and I will just talk to your Lordships about two specific examples.

The first is in Coventry and Warwickshire, where the chambers have been working with over 3,500 different employers. Over 74% of the employers that the chambers are working with say they have never sat down with any of the higher education providers in their area in the last five years. This unlock has been fundamental in helping both businesses and the providers plan for what both sides need over the next two or three years.

It is staggeringly interestingly to me, particularly as former chair of the committee on Covid and its long-term implications, that there seems to have been an extreme drop-off, post-Covid, in how much collaboration happens across different bits of the economy and the sectors serving the skills parts of the economy that we are talking about today. However, these local skills improvement plans are a tangible way to encourage this collaboration. When the providers have mapped out their needs, they will then come up with a plan, on both the business side and the education side—higher, tertiary or any level—for what is needed to plug those gaps. It could be advanced manufacturing or very simple skills in hospitality. There is a whole range of things.

The second example that has come out of these local skills improvement plans is the partnership that the British Chambers of Commerce has with Aviva, where we have committed to train 150 town planners. This is just a small start but gets to the core of so much of what we are talking about. Both the Government and the opposition parties have launched major reforms into planning. It is interesting that they are doing this with very little understanding of how we are going to execute that, as we have no town planners. This very small start should be an indication of how we can encourage businesses to match with a national network—Aviva with the chambers, in this case—to have the fundamental skills we need to create this change.

Please support the LSIPs. The funding runs out in 2025 but they need to be there until 2028 and beyond. We need a long-term focus on something that is actually working and that employers tell us is working.

I cannot stand here without mentioning the Open University, of which I am chancellor. The noble Baroness, Lady Garden of Frognal, has already mentioned its importance and I know noble Lords have had briefings from the university in research for today’s debate. We have this incredible national asset sitting in front of us, yet we have had battles for the last decade to get the requisite funding for this organisation. It is the organisation that is helping people to continue to retrain and get the skills they need. Some 63% of our learners are in work. They are not part-time learners; they are double-time learners. Please, let us support this fantastic organisation.

13:46

[Lord Elliott of Mickle Fell (Con) (Maiden Speech)]

My Lords, I stand here today deeply honoured to be a Member of your Lordships’ House and proud to be sitting alongside my first boss, my noble friend Lord Kirkhope, who gave me my first tour of this place in 1996, when he was the Member for Leeds North East in the other place. Looking around this historic Chamber, I recall him proudly telling me how it was built using limestone from Yorkshire. I like to imagine that the seam of rock each building block is carved from runs all the way to Mickle Fell, the highest point in the historic county of Yorkshire, close to where my grandparents, the Elliotts, lived.

I thank noble Lords on all sides of the House, as well as Black Rod and her staff, the doorkeepers, police officers, advisers, and all the other wonderful staff, for their warm welcome and guidance. I also congratulate my noble friend Lord Marks on his excellent maiden speech. I note that he was born on the other side of the Pennines to me, so I will resist making any further reference to Yorkshire. I am grateful for the advice that I received from noble friends in preparation for today, in particular my mentor and noble friend Lord Kamall, and my noble friends Lord Borwick and Lord Kirkhope, who introduced me to the House earlier this year.

When I mentioned to another noble friend that I was planning to make my maiden speech on 9 May, they said, in rather more colourful language than this, “Really? That’s Europe Day. Are you going to talk about Brexit?”. That’s a subject I do not intend to revisit, at least today. I am instead delighted to have the opportunity to speak about something more foundational, which is far closer to my heart—the subject of business as a force for good in delivering skills and training opportunities. I thank the noble Lord, Lord Aberdare, for raising this important subject today.

Our nation’s prosperity is firmly anchored in the vigour of our business community, a truth echoed by the very fabric of this Chamber. The Woolsack before us, symbolising the historical wealth from the wool trade, serves as a constant reminder of the essential role of business in creating the prosperity our nation enjoys. In terms of our future prosperity, 64% of apprenticeships in England are provided by businesses—almost double the number offered by colleges, schools and public bodies combined. I use this opportunity to pay tribute to my right honourable friend Robert Halfon, who has championed apprenticeships throughout his parliamentary career in the other place and leaves behind him the tremendous legacy of the lifelong learning Act.

We should also remember that civic-minded business leaders familiar to this place are behind some of the most successful schools in the UK, not least the JCB Academy, the Ashcroft Technology Academy, the Harris Federation and the Dixons Academies Trust. We should never forget that businesses, from the smallest corner shop to the largest supermarket chain, are responsible for generating the tax revenue that funds our education system. Take Sainsbury’s, for example, which typically pays in excess of £2 billion annually to the Exchequer—enough to fund 50,000 teachers, 100 new secondary schools or nearly half of the entire adult education budget.

To repeat, the business community is essential to the skills debate, whether through the provision of training, the establishment of schools or the payment of taxes that fund our public services. On top of this, businesses are also a powerful engine for social justice. Earlier this year, the noble Baroness, Lady Lane-Fox, eloquently spoke about the vital role of business in tackling poverty, especially through the provision of high-quality jobs. This is a cause that I also champion as president of the Jobs Foundation, as declared in the register of interests. I am grateful to be supported in this work by my noble friend Lord Harrington and the noble Lord, Lord Mendelsohn, who both serve on our advisory council.

As part of this role, I travel across the country, meeting local business leaders and entrepreneurs. The stories I hear are a powerful reminder of the direct impact that businesses have on people’s lives. I recently visited a local London bakery called the Dusty Knuckle. As well as serving delicious baked goods, it works with young offenders, helping them grow their skills and confidence through a combination of on-the-job training and mentorship in a successful, warm-hearted business. In the words of one of its trainees, “I feel so much happier. I feel like a real person in the real world; like I actually exist”.

Another successful entrepreneur shared with me his father’s story. Many decades ago, his father fell in with the wrong crowd and ended up in prison. After his release, he successfully completed a training course to drive fuel tankers across the country. The entrepreneur still vividly recalls the moment his father opened a telegram from Shell, telling him it knew about his period in custody but was still willing to give him a permanent job. It was, he told me, the one and only time he ever saw his father cry. These are just two examples of businesses being a force for good, and an illustration of why a successful society requires successful businesses.

I will conclude with the words of Winston Churchill, who delivered many of his wartime speeches in this very Chamber: “Some people regard private enterprise as a predatory tiger to be shot. Others see it as a cow they can milk. Not enough people see it as a healthy horse pulling a sturdy wagon”. I look forward to working with noble Lords across the House to ensure that more people have access to these opportunities in life, and that we support businesses to do even more good in the local communities they serve.

13:53

[Lord Harrington of Watford (Con)]

My Lords, it gives me the greatest pleasure to follow my noble friend Lord Elliott’s maiden speech, to which I will return a bit later. First, I thank the noble Lord, Lord Aberdare, for allowing us to have this debate. Of all the many speeches, I will refer particularly to that of my noble friend Lord Baker, who I have been a willing acolyte and devotee of for many years. I congratulate him on the work he has done for the UTCs. We have heard an excellent maiden speech from my noble friend Lord Marks of Hale—which is the wrong side of the Pennines to me, as well as to my noble friend Lord Elliott. I look forward to many contributions from him in the future.

I must briefly return to my noble friend Lord Elliott, because our lives have a lot in common. I am following him today, but he followed me to Leeds Grammar School, which we both attended—unfortunately for me, with a 20-year gap. He chose to be Lord Elliott of Mickle Fell, which, as he explained, is where his grandparents come from. It has a link with Leeds Grammar School. My noble friend referred to it as one of the highest peaks in Yorkshire. For me, it was a place of terror and one where I had absolutely no skills whatever; it was the location of our school outward bound centre, which I am sure my noble friend thrived at. For me, I promise your Lordships, it was not the highlight of a school career.

Our paths crossed again in later life in London. He has shown skills in so many things that he has done, with his work as a policymaker with very successful groups, such as the TaxPayers’ Alliance and others, for which he deserves absolute credit. I wish in 2016 he had used his skills in, from my perspective, a rather better direction than Vote Leave. He did say he was not going to mention Brexit, and I will not, but I have remained, and remain to this day, a major fan of the noble Lord, Lord Elliott. The work he has done has always been to do with business and jobs, as typified now by the Jobs Foundation that he mentioned.

I speak in this skills debate as a person who prided myself, in my business life, on training apprentices and giving people opportunities in life. Luckily enough, in my political life, my first job was as an apprentice adviser to David Cameron in 2011. That was probably because he could not fit me in to promote me to be a Minister at the time, but I took it as being very important. With Nick Boles and others, I worked on the apprenticeship levy. The apprenticeship levy, to me, was an excellent idea because it felt that, if businesses were paying to train apprentices, they would in fact hire apprentices. It sounds very simple, but very good in theory. It was only some years later, when I reappeared as Business Minister, following other jobs, that I found most meetings I attended had people criticising the apprenticeship levy. It did have its faults—and it does have its faults to this day. But its achievements have been very significant in increasing the number of apprenticeships.

I am delighted to see Robert Halfon here in the Chamber today. He has contributed so much to skills. One of his early jobs in that was probably taking over from me as chairman of the grand-sounding Apprenticeship Delivery Board. Actually, it was all of our responsibility to bring apprenticeships to the forefront of companies that had not considered them otherwise.

Many good things have come from that. We have seen ups and downs with apprenticeships, but the overall trajectory seems very good. We have seen the implementation of a lot of different standards, and apprenticeships in fields that had never dreamed of before. Degree apprentices, banking, estate agencies, accountancy—you name it, a lot of people have been given an opportunity in life that they would not have had otherwise.

I would like to say, though, on the crucial manufacturing sector, which is absolutely at the centre of the skills debate and of most plans to bring about growth in the UK economy, I am very concerned. Starts have gone down from 120,000 to 45,000 per year, according to Stephen Phipson of Make UK, an organisation which has done so much in the training of apprenticeships. We have tried to look into why that has happened, because most people would think that apprenticeships in engineering, manufacturing and things like that are natural types of apprenticeship. There are a number of reasons. It appears that private training companies are dropping out of apprenticeships training. Their costs have gone up dramatically and the figure placed for these apprenticeships—which I think was £26,000 per year—has not increased over the time. Of course, the cost of providing those apprenticeships has gone up, so many have dropped out. We need to recognise this, and to get these firms back into providing apprenticeships.

Secondly, there are other providers, such as colleges of further education; they appear to be dropping out of training these kinds of apprenticeships as well. We have tried to find out why. There are a few technical matters: for example, they are not allowed to use the apprenticeship levy for capital expenditure. Of course, if you are training engineers, the tools and the equipment are extremely expensive. It seems to me rational that they should be allowed to use the kind of money from the levy to facilitate that, because it is as much part of the apprenticeship as the labour.

So we need to look into this carefully. I hope that this Government and future Governments will listen to Make UK and to people who really want to see apprenticeships succeed, because they know how important the skills agenda is to the economy.

13:59

[Lord Hampton (CB)]

My Lords, as ever, I declare my interest as a state secondary school teacher in Hackney. I join the chorus of thanks to my noble friend Lord Aberdare for this opportunity to debate the issue, and I congratulate him, as ever, on his hard work, his opening speech, and the fact that he has acquired the skill of speaking Welsh, which he kept very quiet. He is an inspiration to us all.

I congratulate the noble Lords, Lord Marks of Hale, and Lord Elliott of Mickle Fell, on their excellent maiden speeches. They were able, thought-provoking and delivered with a high level of skill.

I also thank all the organisations that sent me briefings for this debate, and admit that I read none of them. Because I do not think we needed to. Everybody agrees that skills are vital for the success of the UK economy and for the quality of life of individuals.

I am honoured to be among so many people with so much experience, particularly those responsible for the Education for 11-16 Year Olds Committee report. I described in an email how, having read only the first page of the summary, I had punched the air three times. Thinking about it further, the report does not go far enough. Perhaps that is why the Government rejected pretty much all of it.

In our schools, we are confusing knowledge with skill, as the noble Baroness, Lady Garden of Frognal, pointed out. They are not the same. The knowledge-rich curriculum is teaching students the art of learning large amounts of facts rather than skills. Some are obviously transferable; many are not. We are all aware that students lack the skills for life today. We decry that fact that they lack the basic skills for work or adulthood, yet we persist in doing nothing about it. We consider much of the vital work as extracurricular, or cram it, once a term, into PSHE day.

Our curriculum and methodology have changed very little since Victorian times; filling our heads with facts so that students go off to work in banks or the colonial service, or march unquestioningly across no man’s land. Why do we insist on memorising so much when we have the internet to hand? How many people can truthfully say that they do long multiplication these days? They have a calculator on their phone. Genuinely, who sits down in a sports hall and writes by hand for three hours?

I am fully aware that many noble Lords will be forming the words “hippy-dippy” in their minds, and deciding, “We tried that in the 70s and look what happened”. No, we did not.

We need to concentrate on what matters. Mental arithmetic needs to be hammered in, and grammar, punctuation, and good oracy skills, need to be the bedrock of any education. But rather than long division—which you can do on your phone—would it not be better to have an intuitive knowledge of how to design, populate and interpret a spreadsheet? Would it not be better to teach students about their bodies, so that they can look after themselves and save the NHS billions? Rather than study the plays of Shakespeare, would it not be better to write, produce, act in and record a film? I have said in this place before that I believe that every student should leave school having started at least one business. Dare I say that this might be fun to learn, and fun to teach.

These things would give students real-world skills that can be honed in tertiary education, or used instantly in the workplace. Add touch-typing and a high level of Microsoft Office skills and you now have a cohort who can hit the ground running when they leave education. The joyous thing is that this would actually save the nation money in filling the skills gap and helping with student attendance, teacher retention and student attainment.

To quote from one of my favourite films, “Four Weddings and a Funeral”, on the subject of university,

“I didn’t go myself. I couldn’t see the point. You see, when you work in the money markets, what use are the novels of Wordsworth gonna be, eh?”


I have not even started on my own subject, design technology, which the noble Lord, Lord Baker, very kindly talked about, or craft skills. As far as I know, AI has not learned to change the fuse in a plug yet or, as the noble Baroness, Lady Hayman, said, repaired something. It cannot do sports, or loads of the other skills we need. The winds of change are coming. We have a once in a lifetime chance to start a revolution. Will the Minister join me in storming the barricades?

14:05

[Lord Lingfield (Con)]

My Lords, while also thanking the noble Lord, Lord Aberdare, I remind your Lordships of my registered interest as chairman of the Chartered Institution for Further Education. The institution, the only royal chartered body exclusively for further education, was founded in 2015. Its chief aim is to improve skills education in the UK by creating what could be called, in shorthand form, a Russell Group of further education colleges and providers—the best that we have in the country. It has certainly succeeded in doing so. Aspiring members have to satisfy a council of their peers of the high quality of their governance, leadership and management, teaching and learning, and their financial strengths, including reserves, as well as student satisfaction and, above all, the employment destinations of their students. Typical of our members is Burton and South Derbyshire College, which was very recently adjudged “outstanding” by Ofsted in all areas. I pay tribute to its principal, Mrs Dawn Ward, for her wholly distinguished leadership.

The chartered institution has developed a number of projects aimed at spreading good practice in the vocational sector: for instance, its skills update licentiate programme requires participating college lecturers, such as in automobile engineering, to revisit their industries regularly over a full year to gain the most contemporary know-how that, for instance, Mercedes, Toyota or Jaguar have available, which then may be passed on to students so that their skills are wholly up to date. This year, we also launched an initiative with the Association of Apprentices to enable those successfully completing to be recognised with a post-nominal designation.

I want to touch on T-levels for a minute or two. These present a prime opportunity to elevate professional and technical education, but there are some real concerns that need addressing. T-levels have rightly been mapped against technical jobs that are in high demand; they require a common vocational core in the first year and then an occupational specialism in the second. For instance, engineering T-level has three routes: design and development for engineering, which has four specialist pathways in the second year; maintenance, installation and repair for engineering, which leads to five; and engineering, manufacturing and processing, which has four. Adding them up, there are 13 highly specialised engineering career pathways among which a school leaver, in principle, may choose. In fact, even assuming that the student has the knowledge at 16 with which to make that choice, the chances of finding, even among the best colleges, one that can provide more than a couple out of the 13 is very remote. It is clear that the provision is far too complicated and ought to be rationalised.

In spite of this Government’s impressive record on improving numeracy and literacy teaching, far too many young people in school are still unable to achieve adequate GCSE results in English and maths. To progress to T-levels, they have to retake them at FE colleges, which distort the main vocational mission of those colleges. Alas, even with significant support, resitting learners do very badly; only 14% pass in maths and 22% in English, so T-levels will be wholly unavailable to them. Also unavailable to them next year, when funding ceases for level 3 vocational trade programmes, will be any kind of advanced qualification in, say, carpentry, joinery or bricklaying. These young people will be marginalised, and their chances of employment much diminished. As the noble Baroness, Lady Garden, said, we need to revisit the decision to end funding for vocational level 3 programmes, while T-levels are being developed and their glitches removed.

All T-level students are required to spend 45 days of their courses at industry placements. There is evidence from colleges that employers are suffering from fatigue with T-level work experience—as well as with apprenticeships, as the noble Lord, Lord Harrington, told us. Placements are becoming very difficult to find, particularly in rural and deprived areas. We badly need to look again at funding schemes to support and incentivise employers to engage in placements, especially in SMEs.

Finally, I remind your Lordships that March’s joint report on restoration and renewal says that

“businesses in all four nations of the UK will also benefit from the work … that restoring the Palace will generate. Jobs and opportunities will be created”,

while skills and trades will be revitalised. Many of these will be heritage crafts, of course. I am delighted that representatives of the programme board have approved in principle a Palace of Westminster apprenticeship scheme that I have been proposing since restoration and renewal was first debated in this House. It will, of course, be a huge opportunity to showcase apprenticeships and to emphasise the importance of skills for the UK’s economy. We must take advantage of it.

14:12

[Baroness Valentine (CB)]

My Lords, I am grateful to my noble friend Lord Aberdare for introducing this topic. We have the economic challenge of building relevant skills for the future and the social challenge of one in 10 youngsters being unemployed. I shall focus on the need to join these two thoughts up by finding ways of upskilling these people for worthwhile jobs—both for their own quality of life and for the sake of the economy.

The most recent government skills survey found that skills shortage vacancies have grown from 6% to 10% in the last five years. Prominent examples include a shortage of 200,000 employees with green skills, three-quarters of businesses with digital skills vacancies, and more than half of our manufacturers struggling to find skilled workers. On the other hand, only 11% of UK workers have advanced digital skills. Last year, the number of young unemployed increased by 10%.

Through my work as a director of Business in the Community, I see at first hand the challenges that young people face in forgotten places across the UK. Let us take, for example, Claremont ward in Blackpool, where there are 480 unemployed individuals in just 12 streets. There is a concentration of families in slum housing where there is a subculture of many youngsters not leaving their bedrooms post-Covid.

Last week, I visited Eastwood primary school in Keighley to understand the challenge in enabling children just to learn to read—a fundamental skill, if they are to go on to get a good job. The school provides a haven of calm for children in an area where parents dare not let them out on the streets. It provides food for families, clothes and a safe place for parents to learn cooking skills. It also ferries children to the dentist because there is not one locally. There are four year-olds with rotten teeth and abscesses which keep them off school. Sadly, these challenges and interventions are common to schools in Claremont, North Earlham, Foleshill and other places where we work.

Looking outside the school system, Pillgwenlly, in Newport, is an ethnically diverse community—more than 32 languages are spoken at the local primary school. On the streets, county lines are commonplace and there is a red light district opposite the police station. Community organisations such as the Newport Yemeni Community Association and Kidcare4U run catch-up clubs for more than 120 children on Saturday mornings. However, funding is due to end in August.

Let me turn to some practical steps that might help. These fall into three categories: first, finding realistic routes to help the young unemployed into work; secondly, helping those in secondary school to understand work and future job opportunities better; and thirdly, supporting heroic teachers in challenging primary schools, so that children can leave feeling confident in themselves and able to read.

Extensive work carried out by the Rank Foundation in Claremont suggests that we need an intermediate labour market to provide opportunities to get the youngsters currently sitting in their bedrooms into work. This involves working eight to 12 hours a week in real work situations, paid at a living wage, which provide dignity and purpose. It would help further if the Department for Work and Pensions considered talking to these people online, rather than insisting they come into the office.

The apprenticeship levy has not been fully spent. I encourage the Government to double down on apprenticeships, making them as flexible as possible but also advising companies that they can pass the levy on to their supply chain, a fact of which many companies are unaware.

In Sheffield, we have recently launched a campaign with local businesses to provide routine and frequent employer encounters for all the schoolchildren in the area. This is based on robust analysis by the Careers & Enterprise Company which suggests these contacts can reduce future likelihood of unemployment by 20%. The advantage of this approach is that businesses can talk directly about current skills needs such as digital or manufacturing.

Finally, national government needs to recognise the challenges and support schools on the front line. I have just one small ask: to provide genuinely accessible NHS dental services to these children. Who knows, one of them might be inspired to become a future dentist.

14:16

[Baroness Sater (Con)]

I congratulate the noble Lord, Lord Aberdare, on securing this excellent debate. I declare my interest as an officer of the APPG on financial education for young people.

To equip young people with the best opportunity to succeed in future training and jobs after leaving school is to give them essential life skills. These must include financial literacy, among other work-related skills, and their teaching and fostering in schools must start early to ensure young people are ready to enter and thrive in the workplace. Some 79% of teachers surveyed by Teach First in 2022 believe their pupils are less ready today for the world of work compared to previous years. Recent research from Young Enterprise in its Inspiring Futures programme, which delivers applied learning programmes nationwide to pupils in areas of disadvantage, found that the young people they seek to engage consistently assess themselves as significantly below average in crucial personal attributes such as resilience, confidence, managing money and work-readiness.

As many pupils leave school and go straight into the self-employed workplace as sole traders or entrepreneurs and do not have the money, time or employer commitment to increase their skills, they must be able to rely on the skills they learn at school. Furthermore, school leavers that do go on to undertake further skills training would benefit from the underpinning of a sound financial education. Pupils who complete the Inspiring Futures programme have been shown to progress significantly and exceed their previously average skills assessment. This improvement shows how applied learning can enable young people to acquire critical skills for workplace readiness, including financial literacy, which also enable upward social mobility and positive emotional well-being.

However, the skills landscape is constantly changing. In 2023, the World Economic Forum estimated that six in 10 workers will need re-skilling by 2027, showing the importance of fostering and securing confidence and adaptability in young people now, at both primary and secondary curriculum levels. I would be grateful if the Minister indicated any progress made on this pivotal curricular point, which I may have mentioned previously in your Lordships’ House. It is that confidence and adaptability, combined with financial education and numeracy, that makes young people financially literate.

Financial education alone is not enough; the confidence to apply it and make informed decisions in the real world is vital to a young person realising their full economic potential. Moreover, it is not just the individual who wins. The Centre for Economics and Business Research found in 2021 that 11% of UK workers had experienced a fall in productivity over the preceding three years due to their personal financial situation. It is perhaps no surprise, therefore, that research by GoHenry complements this finding: it predicts that an extra £6.98 billion would be added to the UK economy annually by prioritising financial education in schools.

This prediction is further strengthened by the Essential Skills Tracker 23, from the Skills Builder Partnership—together with the CIPD, the Edge Foundation and KPMG—which reveals that the cost to the UK economy of low essential skills in 2022 alone was £22 billion. Again, good education alone will not cut it. The same tracker found that 18% of workers with above-average literacy and numeracy levels have a very low essential skills score, meaning that they cannot properly implement and take advantage of that education. The 13% of the population who experience real social mobility—enjoying a strong income, job satisfaction and life satisfaction—combine their education with these all-important skills and confidence.

I was delighted to be part of the panel judging the recent Devon county final of the Young Enterprise Company Programme, which empowers young people to set up and run a student company under the guidance of a volunteer. Students make all the decisions about their business, including managing the company finances, and gain or embed the essential workplace skills I have mentioned. Putting all the fantastic studies I have cited aside, I saw for myself the terrific impact the Young Enterprise Company Programme can have on the young participants’ abilities to learn, adapt, and earn and manage money, and the boost it gives to their confidence and leadership abilities.

I hope that today, I have managed to highlight just how critical financial literacy and these enabling skills are to our young people right now; that they deserve early prioritisation in both primary and secondary school curricula—including through schemes like the Young Enterprise Company Programme, which I hope the Minister will endorse—and that they have the power to create a society with a confident young workforce supporting a more successful UK economy, not only by managing their own finances, future employment and quality of life successfully, but also our collective financial security.

14:23

[Baroness Fairhead (CB)]

My Lords, I congratulate my noble friend Lord Aberdare on securing this important debate and on his truly excellent opening speech. I also congratulate the noble Lords, Lord Elliott of Mickle Fell and Lord Marks of Hale, on their optimistic maiden speeches. I draw your Lordships’ attention to my interests as set out in the register.

Today we have had a very wide-ranging debate on this huge and hugely important topic. I will focus on just one issue—artificial intelligence—and aim to provide some specific suggestions for skills-building in this area. AI is a revolution. As Jamie Dimon, the former chairman of Citigroup, said:

“Think the printing press, the steam engine, electricity, computing and the internet.”


I know that, as my noble friend Lord Hampton said, AI cannot change a plug, but deploying AI responsibly and securely does have the potential to enhance productivity, improve lives and boost our economy quite significantly. To take just one healthcare example, doctors’ lives can be enhanced massively by AI by combining the spoken word of a consultation with relevant images such as x-rays, adding any of the required prescriptions discussed and possibly scheduling new appointments. The doctor just needs to check the note before authorising, saving huge amounts of time and improving their own lives and those of their patients.

Yet students are not equipped with these skills at school. There are still very few computer scientists entering our market, and businesses are not fully grabbing hold of this capability. A BCC report last September found that less than 50% of SMEs plan to use AI. We need to both increase the skills across the population and reduce the fear of deploying.

Government has a clear role here to educate, promote and, of course, to fund. In schools, more programmes need to be developed to make digital and AI skills adoptable by school leaver age, rather than assuming this happens later. The Department for Education has correctly built AI skills into BTECs and is working with hyperscalers to create bootcamps which link to jobs boards. Whether BTECs continue or the advanced British standard assumes part of that role and picks up the skills of AI, that will not be for 10 years, which is a long time for the current students to wait. More needs to be done now with 14 to 18 year-olds to make them ready for the world of work.

As the noble Lord, Lord Baker, mentioned, it is very difficult to change the curriculum in those years, given its high-stakes, examined nature. However, I urge the DfE to work with headteachers, the British Computer Society, the tech industry, the LSIPs and other interested employers to find a pragmatic solution in the short term. Potentially, a sleeve of UTCs could be added; perhaps there are other solutions.

In further education, real progress has been made since 2018, following the AI industrial strategy. Over 11,000 students have been enrolled in AI and data science conversion courses, and over 25 AI centres for doctoral training—which will train over 1,800 PhD students by 2033—have been created. Much of this was driven by Professor Dame Wendy Hall, with whom I had the privilege of working as a Minister, and whom I consider a national treasure. This momentum needs to be continued. Can the Minister confirm that these programmes will be?

On business education, last week DSIT launched two activities: the AI skills for business competency framework and a flexible AI upskilling fund pilot. These are welcome additions and go some way to removing the skills obstacles and the obstacles of fear surrounding the use of AI. However, they are nascent; the pilot is currently small. If proven out, I hope that it can be expanded rapidly.

That is not enough, and more must be done to promote AI effectively and to inform and connect, which is something that the Government could do. They could promote success stories, highlight major programmes—possibly within government—where the adoption of digital and AI have massively improved productivity, highlight companies like Uber which offer additional AI building skills to all of its 3 million drivers, not for the benefit of Uber but for the benefit of their people, or promote our own tech industries, AI unicorns like Quantexa, which help provide the data and help companies store it, to ensure that IP continues to reside in the UK.

Playbooks for SMEs need to be created to help them take those steps. These must be supported by a database of excellent case studies. As I discovered as Minister, SMEs like to see companies that look like themselves and have done it like themselves, and that is the way to encourage them.

Finally, more needs to be done to harness the offerings of AI companies which are willing to work with Governments as part of social responsibility. I sit on the board of Oracle, which works with the Kingdom of Saudi Arabia and has a programme for training 50,000 people to build AI skills, primarily focusing on women, and works with government and businesses. A lot of our businesses and other hyperscalers would be prepared to work with the Government on that.

This all needs to be part of an overall framework and strategy, as my noble friend Lord Aberdare said at the beginning. I sincerely hope that we look to future skills, and AI is part of them.

14:29

[Lord Lucas (Con)]

My Lords, I thank the noble Lord, Lord Aberdare, for the chance to have this debate.

I work very closely with the Better Hiring Institute, an organisation I recommend to noble Lords. A trend that we are increasingly seeing is for skills-based hiring. That is where, rather than listing qualifications or CV items, a company gets down to the core of what skills it needs for a particular job and then goes looking for a match. As the noble Baroness, Lady Fairhead, said, skills change rapidly. Companies look for the skills that they need now. For example, if a new AI product comes out, they want their people to have command of it—if somebody is offering a course in it, that is what they want. This is therefore driving a real interest in micro-credentials: short courses that will bring someone up to speed in the area that an employer needs.

Together, these trends offer great opportunities to government, if government will take an interest and involve itself. First, if the Government will work with the recruitment industry, which is certainly prepared to work with them, there is the opportunity to gather data to get a grip on what skills are required and where, as well as on how the trends are developing. Secondly, on the other side, there is the opportunity to help the process of moving into micro-credentials by helping develop an underlying system for identifying which of these have quality—again, that is partly about processing data, but it is an area where you want a very reliable source, so we get back to the issue of individual learning accounts and all the scams that went with them. We need to integrate that sort of structure of learning with proper pastoral care and careers guidance and work that into the structure of apprenticeships and other larger qualifications. I hope that the Open University will take a close interest in that.

This comes back to what other noble Lords have said about the need for employers to take a very close interest in driving training. The noble Lord, Lord Marks of Hale, and the noble Baroness, Lady Lane-Fox of Soho, made that point in the context of LSIPs. To pick up on what my noble friend Lord Lilley said, we must allow no escape via immigration. We have to train our own people. We want to pay our own people more and to have a workforce with ever-rising skills, capability and pay. We must not allow that to be undermined by people going abroad to buy the skills in cheaply. We must focus people on training here. As my noble friend Lord Lingfield said, the links between good education organisations and industry, so that education is in tune with what industry needs, is a very important thing to see develop.

Turning to schools, noble Lords know that I am the proprietor of the Good Schools Guide. In the next few years, I suspect that we will have a real look at what we want a school leaver to know. I am sure that my noble friend Lord Baker will be at the forefront of that discussion. The Government have shown, through their interest in the ABS, the idea that they want school leavers to have a broader understanding of things than we are providing now. The direction is clearly there.

Micro-credentials will again have a strong role here. It used to be the case that the Open University provided courses that people could do as a supplement to A-levels, but that was driven out by universities being unconstructive in valuing them. Given that universities will now take qualifications from all over the world and from all kinds of backgrounds, they are being very unhelpful in so narrowly insisting on the qualifications they get out of the UK school system. I hope that they will become partners in broadening education—and, indeed, in broadening the education that they provide themselves. My degree in physics consisted of nuclear physics; it did not go beyond that, not even to understand how the weather works. My daughter’s education in the arts does not involve anything to do with economics or business. Why not? We are not educating people for the world that they will have to face outside, so we need to look at that.

That comes back to what many noble Lords have been saying about BTECs. T-levels are too massive and too specialised. If we are broadening people’s education, that is not the road to go down. We will learn something from them, but BTECs occupy a much more important place for many of our young people. We absolutely must guard that.

I will pick up on something that the noble Lord, Lord Hampton, said; Shakespeare, yes, but let us learn it the way it was written—which is to be performed and to be understood. My wife taught Shakespeare in prisons, and it went down a storm because they understood the stories and liked the bloodshed. To learn it as prose criticism is deadly. We want to get back to a shared culture; no country survives without a shared culture. Something like performing Shakespeare is a really important part of that.

14:35

[The Earl of Clancarty (CB)]

My Lords, I too congratulate the noble Lords, Lord Elliott of Mickle Fell and Lord Marks of Hale, on their maiden speeches, and of course my noble friend Lord Aberdare on his very comprehensive introduction.

At the outset, I say that I agree entirely with what the noble Lord, Lord Baker of Dorking, said about EBacc and Progress 8. They both need to go. They are holding the arts back in our schools and beyond. A future Government should make that pledge before they come to power.

The mover of this Motion, my noble friend Lord Aberdare, had to point out to me that “education” is not mentioned in it, even if it seems nevertheless logical that the noble Baroness, Lady Barran, will answer for Education. Such is the modern-day conventional assumption that what we call skills and education go together hand in hand, but that does not have to be true, depending of course on how one defines both words. “Skill”, like “innovation”, has become a watchword, even a buzzword, to the extent that it is perhaps too easy to stop seeing what the word means and instead pay lip service to something we have not thought carefully enough about, and perhaps to promote certain narrower meanings above other meanings. For instance, my research tells me—I bow of course to the expert linguists and historians among us—that “skill” comes from the Old Norse “skilja”, which seems to have had quite a number of past meanings, including, believe it or not, to break up, to separate, to discern, to distinguish, to understand, to find out and to decide. Even further back in time, this word was used to denote knowledge or even divine wisdom, which begs questions about the separation of knowledge and practice that we have heard about today in this debate. There are meanings here that are wider than a skill being simply the supposedly or conventionally right way of doing something, or learning something that becomes automatic because it is practised. The original etymology seems to contain other things like analysis, breaking things up and perhaps putting them back together again—deconstruction in other words—critical thought, and even perhaps contemplation, which our more modern, narrower understanding of “skill” does not seem so much to contain.

This older understanding is important because, over a number of decades, education itself has changed significantly within the UK. The particular modern usage fits our current, very specifically framed, educational system. Of course, as we have already heard, there are many different kinds of skills, including life skills, craft skills, and green skills. But the idea of skills that are necessary for specific jobs, including the job of study itself, nevertheless holds a kind of primacy within this world of skills. Education itself, particularly higher education, has become monetised and therefore transactional in a way that was not true 30 years ago, but is now very true since the introduction of tuition fees in 1998 and the accompanying expectations that an increasing number of students now have. Among those expectations I point out three: first, that students can get a piece of paper telling them that they have an extremely good degree that validates their course of study; secondly, they can get a well-paid job at the end of their course, which is part of the expected transaction; and thirdly, they have learned the skills that will equip them for that job. That is true even of those who follow the academic route, because of the change in culture of higher education.

Therefore, when the Government talk the rhetoric of “low-value” courses and send out the message that the arts and humanities are less important by cutting the top-up grants to those university courses, they are also saying that the skills learned for those courses or during that time of study are less important because the skills, like that important piece of paper which gives you your grade or the examination that determines that grade, must be something that according to the modern understanding of a skill is quantifiable because it has an objective, predetermined use.

I will make just one further point. The irony is that the real world thinks differently. Companies consistently want well-rounded people, not necessarily those with very specific, narrowly defined skill sets, important though those might be. I also know from my own experience closer to home that not all colleges, such as drama colleges, are interested in the skills that enable you to get a good degree. They look for things beyond specific skill sets such as passion, enthusiasm and originality of thought, which perhaps in the “skilja” definition might also be thought of as skills.

14:41

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in this fascinating and informative debate. I congratulate my friend the noble Lord, Lord Aberdare, on securing it, and both maiden speakers on their excellent and insightful contributions. I look forward to hearing more from both of them in due course. I also declare my interests in technology as an adviser to Boston and to BPP University.

I will talk about three things this afternoon: talent, technology, and Kenneth Baker. We have such an opportunity to be skilled for success in the fourth industrial revolution. I will take the noble Lord, Lord Baker of Dorking, first. I am so privileged to be able to call him my friend. He has done more than anybody in this country to drive forward opportunities for those who all too often have been dismissed or underrated by the state and society through pushing technical education. He deserves the respect and thanks of this House and every single individual across this country for everything that he has done and continues to do so vociferously and effectively.

Skills for success in the fourth industrial revolution—what will it take? First, we must understand that inclusion and innovation are the golden threads. In reality, inclusion enables innovation. We need to consider AI, blockchain, the internet of things and all the elements of these new technologies as tools in our human hands. They are extraordinarily powerful but are still tools. We would not in any sense give an individual a powerful tool without first giving them the skills to make a success of using it. If we are to get optimal outcomes, not least from artificial intelligence and all the other new technologies, it needs to be human-led—human in the loop, human over the loop.

What do we need to think about in terms of society, our democracy and our economy? First, socially: imagine what we could achieve with this skills approach if we had truly personalised skills training and education in real time, considering not just the skills that we need to succeed in AI but AI’s impact on skills. Secondly, the issues goes to our very democracy. Skills need to abound. In a year when over 40% of the world will go to the polls, how can we ensure that all our electors have the skills to make sense of what is out there, not least the proliferation of deepfakes? Media literacy, digital literacy and, yes, financial literacy are all required if people are to be able to play their full part as citizens in our democracy. Moving beyond that, there needs to be much more consideration of risk literacy and resilience literacy. In addition, can we put an end to calling so much of this “soft skills”? These are not soft skills but essential skills, and without them the world is incredibly hard.

I move to the economy—why not have a stat in our debate? PwC says that, by 2030, AI will increase GDP by £15.7 trillion a year but, without the skills, how can we ensure that we are all enabled to take advantage of those economic and social opportunities?

What do we need to change? I offer at least three things. First is the curriculum—yes, in schools first but, beyond that, in higher education and across all training programmes. We need nothing short of a full transformation of the curriculum. Would my noble friend the Minister agree? I know that, when she comes to wind up, she will offer examples of elements throughout the curriculum. It is clear that these are pockets, certainly positive ones, but she must agree that we are far from the complete garment.

Is the Minister aware of the accreditation in ethical AI that is being led by the current Lord Mayor, who is doing such an excellent job and understands this area so clearly? Does she agree that we need accreditation for all our data scientists, developers and deployers of AI? You would not have an accountant, lawyer or any other professional unaccredited and unqualified. Would that not be a positive boon and an opportunity for the UK, not least in ethical AI?

Does the Minister agree that we need to ensure that, whatever the training and the skills programme, it must be both inclusive by design and accessible by all? Can she assure the House that this is the case for all skills and training programmes? If not, why not, and when can we say that this will be the case? We need to move beyond STEM and even STEAM: every voice in every decision should be skilled to articulate and contribute and to have the skills that it takes to make a success individually, connectedly and collectively.

When it comes to STEAM, I believe that there is only one place where we should consider this: if AI was to the human intellect what steam was to human strength, then you get the picture. Steam literally changed time. It is now our time to completely transform the skills ecosystem in the United Kingdom if we are going to enable, empower and unleash all that human talent and enable human-led, human-in-the-loop and human-over-the-loop AI and all the other technologies. If we get it right, it will not just increase all our skills but fundamentally change for the better the relationship between citizen and state.

There has been talk of the lack of a skills strategy. We need to go further. We need a vision for skills. No one even gets off the sofa for a strategy, but a vision for skills, to enable, empower and unleash all that human talent, is our mission for today and should be our mission for all days. #OurAIfutures.

14:48

[Lord Mair (CB)]

My Lords, I am grateful to my noble friend, Lord Aberdare, for introducing this important debate. I also congratulate the noble Lords, Lord Marks of Hale and Lord Elliott of Mickle Fell, for their excellent maiden speeches.

I will make two points, declaring my interests as an academic and a practising engineer, as set out in the register. The first is on the acute shortage of skilled engineers and technicians, who are so important for the success of the economy, and the second is on climate change and the pressing need for green skills to be embedded in our education system.

A recent report led by the Institution of Engineering and Technology estimated that there is a shortfall of around 200,000 workers in the STEM sector. It called on the Government to help tackle the UK’s engineering skills shortage by embedding engineering into the current school curriculum. This is consistent with the findings of the recent inquiry of this House’s Education for 11-16 Year Olds Committee, which the noble Lord, Lord Aberdare, and the noble Baroness, Lady Garden of Frognal, mentioned. Like them, I was privileged to have been a member of that committee.

A key finding of our report published in December is that there has been a significant decline in recent years in the number of pupils taking up technical subjects during key stage 4—14 to 16 year-olds. This is coupled with a wider decline in the opportunities available throughout the education of 11 to 16 year-olds to develop practical skills. Our committee heard from many witnesses that the current GCSE curriculum is too full and overly focused on academic pathways. Our report recommended a more balanced national curriculum to enable all pupils to study at least one technical or vocational subject should they wish. We recommended that the EBacc performance measure should be abandoned, as was so forcefully advocated in this debate by the noble Lord, Lord Baker of Dorking. Creative, technical and vocational skills must not be sacrificed in favour of an overly full curriculum of academic subjects, as so well articulated by the noble Lord, Lord Hampton.

The UK must do much more to encourage children to develop STEM skills, including practical skills, and to make full use of them. This is not just about universities and higher education. Although we have outstanding engineering courses in our universities right across the country, more than half our young people are not suited to universities. The importance of further education colleges has been overlooked for far too long and the opportunities for attractive degree apprenticeships are growing. Both these routes were spoken about by the noble Lord, Lord Harrington of Watford. They could have a major impact in reviving the fortunes of vocational and technical education, critical for the engineering industries. It is highly significant that in Germany 20% of 25 year-olds have a higher technical qualification, whereas in the UK the present figure is only 4%. That is because in Germany there is a much wider range of opportunities in technical education for young people.

My second point relates to climate change and green skills, about which the noble Baronesses, Lady Hayman and Lady Bennett of Manor Castle, have spoken. There is an urgent need to fast-track vital green engineering skills into our economy by 2030 at the latest. Led by the Royal Academy of Engineering, Engineers 2030 is an education and policy programme rethinking engineering and technology skills for our future world. It challenges how the engineering workforce needs to be different and how we should teach and professionally develop young people. We need to do things differently. The reality is that right now we lack sufficient numbers of engineers and technicians to deliver even the commitments already enshrined in legislation. The demand for substantial growth in green jobs comes at a time when engineering skills have largely stagnated over the past 10 years. In higher education, the proportion of students studying engineering has remained at around 5% for the past 15 years in this country; this compares with 22% in Germany.

A large proportion of young children have a strong preference to contribute to solving environmental problems and achieving net zero. It must therefore be a top priority that we equip them with the green skills and technical tools to do this, particularly promoting greater engagement of girls and young women. Gender diversity in engineering remains largely static. According to EngineeringUK, women made up just 17% of the engineering workforce in 2021. The real barrier to girls entering the engineering profession is perception. Many girls miss out because they perceive that engineering is only about machinery or hard hats and construction—apparently subjects only for boys—and they do not want to be thought of as the odd one out. This mistaken perception is also widely held by parents and by many teachers. In reality, engineering is very much wider than machinery or hard hats and construction. Engineering is simply applied science, which employs—I can reassure the noble Lord, Lord Lilley—very clever people. It covers a huge range of subjects, many of them involving green skills that will build the net zero world of tomorrow, ranging from biotech to environmental solutions and from innovative new materials to novel energy systems such as hydrogen, all of which are potentially hugely attractive to both boys and girls.

In summary, both our economy and our path to net zero depend critically on engineering. There is a substantial untapped resource of future engineers and technicians—especially girls—in our schools. We need to address this urgently and plug the skills gap. I look forward to the Minister’s response.

14:55

[The Earl of Effingham (Con)]

My Lords, I thank the noble Lord, Lord Aberdare, for raising this important debate and I congratulate both my noble friends Lord Marks of Hale and Lord Elliott of Mickle Fell on their maiden speeches; I look forward to hearing more of their valuable contributions.

Reading the newspaper headlines this week illustrates the seriousness of the situation in which we currently find ourselves, with regard to the quality of life for many in the country and the real need for skills for the success of the UK economy. We are told that there are a record 2.8 million people off work with long-term illness; that thousands of youngsters appear to have given up on school since the pandemic, with the highest number of so-called “ghost children” being recorded; and, to top it off, that almost a quarter of children aged 10 and 11 in British primary schools are clinically obese and that, for pupils in the poorest areas, the figure rises above 30%. However, with the right life skills for both young and old, this can be turned around.

We need only to look at further headlines to see think tanks calling for a wholesale curriculum and assessment review of the education system to add new topics such as financial education and mental health. The advanced British standard may indeed be an improvement on the current framework, but it is years away. The existing status quo is centred on teaching for exams that students will sit, but that is not necessarily what will help them in real life.

A few weeks ago, I had the privilege to visit a school academy in one of the most deprived boroughs of London. The academy is the envy of its peers in both the public and private sector, boasting an Oxbridge acceptance rate of 15% and a Russell group acceptance rate of 64%. I asked the principal how she achieved these results. Her response was that “Everyone, both teachers and pupils alike, wants to be here”. The same message came across in a business session recently, when discussing culture and values. The adage “If you love what you do, it is not a job” could not be more true. If we can create an environment where people feel good about multiple aspects of their life and in control of their situation, that will give them the confidence and ability to find a job that they love, grow the economy and attain a high quality of life.

The skills that make a difference can be narrowed down to four key pillars: food education, physical education, financial education and social education. Food education is paramount because you are what you eat; your gut is your second brain and what you put into it matters. Physical education follows, as it boosts energy, confidence and sleep quality, as well as reducing anxiety and stress. Financial education will then enable you to live the life that you want within your means. The right basic knowledge and small regular savings can create a potentially life-changing sum over the long term. Lastly, I will concentrate on social education, which is becoming increasingly vital as smartphones take over our lives.

During my visit to the same academy, the principal flagged that one of the few issues that they did experience was poor social interaction, and I noticed that some of the pupils, when they talked to me, did not look me in the eye and had trouble engaging directly. I think about my own career and consider myself extremely fortunate to have worked in the same room, paradoxically, with individuals who left school at 16 with no qualifications, all the way to rocket scientists with PhDs in astrophysics. The glue that bound us together was confidence and self-belief in what we were doing, which was derived purely from real, in-person, human interaction.

However, in the current day, by the age of 11 some 91% of children in the UK own a smartphone. The restaurant chain Prezzo has found that its customers between the ages of 12 and 27 suffer from “menu anxiety” and are too socially nervous to engage in a conversation with a waiter, preferring to order by QR code. The most truly shocking statistic is from a recent survey which found that a quarter of 18 to 34 year-olds have never answered their phone. This surely must be addressed as a top priority.

It will not surprise the Minster to hear me ask the Government how they will increase awareness on food education, physical education and financial education—but I would like to ask something else. Please can she update the House on the expected timeframe for a compulsory ban on smartphones in schools, to address the clear and present danger of in-person social interaction, which is arguably the most important life skill, becoming a thing of the past?

15:00

[Lord Mountevans (CB)]

My Lords, I add my congratulations to my noble friend Lord Aberdare on securing this very important debate. He has undoubtedly touched a particular vein here in the House, with tremendous engagement from all participants. I also congratulate the noble Lords, Lord Marks of Hale and Lord Elliott of Mickle Fell, on their excellent maiden speeches.

The much-vaunted UK knowledge economy masks an inherent imbalance with, and under-celebration of, our skills economy. “Education, education, education” has enabled our universities to blossom—perhaps at the expense of our colleges. For several decades, we have hollowed out and failed to invest adequately in our skills infrastructure. This has been further compounded by the aspiration for a degree, with all the supposed hierarchical status it promises.

It is regrettable that it has taken significant skills gaps and chronic skills shortages to deliver the wake-up call to UK plc of the pivotal importance of skills. We must go well beyond the virtue signalling of apprenticeships. Government policy has placed great importance on front-skilling the school pupils while neglecting their older siblings’ and parents’ needs for upskilling and reskilling. We are failing to value and appropriately fund the technical skills, the digital skills, the future skills, the green skills—as mentioned by the noble Baroness, Lady Hayman—and even skills foresighting. At the centre of everything, we need bold leadership and sustained political attention, kept honest by a strong voice from industry and a joint commitment to long-term investment.

I will speak on apprenticeships, on the colleges on which we rely for so much of skills training and, finally, if time permits, on the experience in my own maritime industry. Apprenticeships are a vital part of investing in individuals to deliver better skills outcomes for the wider economy. My understanding is that over 250,000 apprenticeships are commenced per year. This is not enough and, as we have heard, it does not adequately address the vital SME need. Figures from the OBR indicate that receipts by government for the apprenticeship levy will reach close to £4 billion in 2024-25, while the apprenticeship budget stands at £2.7 billion. Is the balance going to a good end in training or education?

We know there has been a significant increase in the number of young NEETs. Something must be done for this group. Yet apprenticeships remain the only part of the education sector where 16 to 18 year-olds are not fully funded by the state. Can this be addressed in any way? There needs to be a joined-up approach to apprenticeship across government, with direct ministerial oversight.

Now I turn to colleges, on which we depend so heavily for training away from work. For the colleges, this is a particularly challenging time. We rely on them to tackle the chronic and acute skills shortages, particularly among struggling SMEs and those sectors blighted by Brexit and the pandemic. If I may paraphrase the words of a friend, Dr Paul Little, principal of the renowned Glasgow College, I fear we are sleepwalking into a vocationally light future with an underpowered skills system and an underinvested skills infrastructure.

On the maritime experience, we are in fact very fortunate with the training options in maritime. We have heard a lot of quite depressing statistics one way and another today, and areas of great concern, but I think this is a success story, and credit goes to the Government for that. A number of universities are offering excellent degree courses and some professional organisations are offering specific professional qualifications in significant shore-based specialisations such as law, insurance and ship-broking.

There is time to concentrate only on seafarer training. We are indeed fortunate that seafarer training has operated essentially on a global basis through the supranational regulator, the International Maritime Organization, which is based across and up the river, and the UK’s national Maritime and Coastguard Agency. Our UK maritime sector is blessed in having a close tripartite relationship between the ship owners, the educators and workforce representatives, convened for almost a century by the UK Merchant Navy Training Board. This is borne out of inherent concern for seafarers’ safety, both coastal and deep sea, placing a higher value on competency and proficiency than on merely gaining a qualification.

I should add that the SMarT funding arrangement has been a great success for the training of seafarers, with 50% of the cost paid by government. This scheme supports seafarers’ training while ensuring a flow of very well-qualified seafarers—when they come ashore—into the maritime professional services, where Britain is the global industry leader. We are also fortunate in having a Maritime Skills Commission and blessed to have four seafarer education and training colleges, located in Glasgow, Warsash in Southampton, South Tyneside and Lowestoft. The skills and training acquired in these colleges are still recognised as the gold standard for maritime skills worldwide, and long may this last.

The noble Baroness, Lady Garden, noted the strong contribution of the City of London Corporation, City & Guilds and the livery companies to education and training. It is interesting that the noble Baroness, Lady Fairhead, is a fellow liveryman of the Goldsmiths’ Company, which makes an outstanding contribution to education and training. When I was elected to the City of London Corporation, I served on a number of school boards. I quickly realised that one area of great importance is aspiration. The City’s colleges and schools have succeeded in imbuing and developing aspiration in staff and students. I do not believe that any of us has mentioned aspiration, but it is vital for teachers and their students alike. I could wish to associate myself with very many speakers, but I do so with what the noble Baroness, Lady Coussins, said about the value of foreign language teaching.

15:06

[Lord Addington (LD)]

My Lords, certain themes come across in trying to sum up what has been said in this debate. A clear one is the fact that we do not seem to have a handle on training for skills—a skill you can actually do in later life—or we have a dozen badly attached handles on it. We have an education system that is plugged into passing X number of little dots.

It is also an education system which says that getting your A-levels and going to university is what you should be aiming for, regardless of things such as how much money you will earn and what you actually want to do. You are taught by a group of people who have done this, which I am afraid is one of our problems: we have this conveyor going through. When it comes to skills and training et cetera, we know that you did things such as what used to be NVQ level 4 or HND level 5 when you messed up your A-levels. That was true when I was at a college doing my A-levels. Regardless of whatever you wanted to achieve in life, that is what you were supposed to do. It has become incredibly apparent that we have not thrown that off.

I do not know what hold the noble Lord, Lord Baker, has over the Whips’ Office, but allowing him to have the first dig at any debate means that an Education Minister really has to have a word with their friends. There has to be something here, but the noble Lord is essentially right. We have not taken skills seriously enough. They are secondary options. It probably goes back to grammar schools and secondary moderns, and beyond that, but that is what we have.

I have a couple of special interests that I should declare. I am dyslexic and president of the British Dyslexia Association. I also work for a disability assistance company, Microlink. One thing I have discovered, and indeed raised at many points, is that if you tell one group: “You’ve got to pass English, you’ve got to pass Maths”—which means remembering formulae, when all dyslexics have bad short-term memory; I think I have met one person who denied that in about 40 years—you have actually created a problem. Other groups have problems with it as well. Other people just do not learn because they do not think it applies to them, but you have still got to get English and Maths.

The noble Lord, Lord Hampton, spoke about how your phone has a calculator in it. The calculator has been around an awfully long time; it just happens to be in a convenient place now. There is something else on his phone he did not mention: the voice operation button. Every single computer that you buy today allows you to talk and turns that into text, then will read stuff back to you; it is built in. Twenty years ago, you had to plug the stuff into it, but now it is there. We have an automatic way in to allow you to access information. We are still not fully taking that on board.

Ten years ago, I had a long battle to allow people to take apprenticeship qualifications without passing a written English test—true, it was a tapped English test, but it still had to be a written English test. The examples of that were ridiculous in the end; it was basically that they had not thought of it. A lot of the briefing for this debate spoke about good standards in basic skills; if you are going to expand the base of people who will take these qualifications, you must allow other ways in. Many people struggle with English; it is a difficult language. If you want the academic reason why, the English got conquered by the French and created this non-phonetic structure that we pride ourselves on taking other words into—learn that without a phonetic route.

Going through, you must have a degree of flexibility. The Minister is probably the most informed person on this subject that I have seen sitting in that place in this House. I hope she will be able to give me some assurance that we will make sure that that barrier is not there in the future.

The second thing I should say here goes back to the point that we know what the education pathway is. We also know that the most important people for influencing what you will try to do are your parents; teachers come second. We know that if they had been a banker, for instance, you are likely to become a banker—or an actor or politician; in all those cases, you will think of doing that. If they are unemployed, that is what you think happens to you.

We have one big challenge: careers pathway advice in the future. We have spoken about this, and I believe the Government have been talking about it and doing things. It is a big challenge; do not underestimate it. The full benefits of any change now will probably not be seen for many years, possibly decades, but we have to start at some point. If we are to expand this to take in all the new technologies and developments, we must start now. Can the Minister give us some guidance about how this expanded knowledge of what is available is out there?

I will give a little example of where we need to do it. I am part of our DCMS team and we get presentations by the creative industries—film, et cetera. Do noble Lords know what happens to the back-room boys of the film industry? They are usually graduates, often in English, who decide that they want to go into the creative arts. Then they have to retrain, work on the job and spend time running around. They do not take HND or NVQ qualifications at level 4 or 5 in the subjects they need; they may be difficult to find. Indeed, there are local pathways for skills at this level, which is roughly the training, if I have it right—I have a nod there from the noble Baroness, Lady Lane-Fox, who is retaking her place, so I will take that as a win. But that is a local pathway, not a national one, and this is a national industry. Surely, we should be expanding our national careers structure to take in level 4 and 5, and say where you can go, because there is a huge unmet need. That need is historic; the first time I heard of a lack of technician-level training in this House was well over 30 years ago.

We have got to start to address—the noble Lord, Lord Lilley, was the first to say it—the idea that we are not taking these things seriously. Unless you do that, you will continue down this path of ignoring where the demand is where you can generate a better than living wage, and go on to do other things.

I could have expanded on these points—a lot of the other information was about social skills—but there are just a few seconds left to me. Everybody says, “tell the teacher to do it”. Teachers have an awful lot to do. Are we encouraging children in our schools—for instance, in sports clubs and arts organisations—to get a taste in school, then go out to where they will meet adults they will have to talk to and interact with? You can acquire many social skills there in a non-professionalised way, with people they may look up to, not people they are forced to say “Sir” or “Miss” to in a classroom. That would be a better way forward.

We can try to make school a smorgasbord of trying things—trying a few essentials to go on and do other things to acquire more skills, inside and outside the structure. Unless we get out of the idea that we are just getting rubber-stamped to a certain level on subjects, then told, “Off you go, life is perfect”, we will continue to fail. It is quite clear that most of us do not learn that way, or we do not learn successfully. Unless we can embrace that at a more fundamental level than we do now, we will merely continue to make the mistakes of today.

15:16

[Baroness Wilcox of Newport (Lab)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Addington. He always speaks with such engagement on this topic.

I thank the noble Lord, Lord Aberdare, for bringing this important subject to our Chamber today. I know that he has a strong interest in the subject, as do many Peers who have engaged in this debate that demonstrates the cross-party support for the importance of skills in our society. I was particularly pleased that the noble Lord alluded to the learning undertaken by our Welsh forefathers. Modern Wales has much to be commended on in its innovative work. At Skills Competition Wales, over 280 talented young people from across the country were recognised for their outstanding vocational skills at an awards ceremony at Trinity Saint David University in March this year.

I congratulate both our maiden speech contributors. I am sure that we will welcome their future contribution to the House.

In Breaking down the Barriers to Opportunity, Keir Starmer set out clearly Labour’s fifth mission in government: to break down the barriers to opportunity for every child, at every stage, and shatter the class ceiling. We will track our progress on this mission through three stages of education: boosting child development, with half a million more children hitting the early learning goals by 2030; achieving a sustained rise in young people’s school outcomes; and building young people’s life skills with an expansion of high-quality education, employment and training routes, so that more people than ever are on pathways with good prospects by 2030.

The Office for National Statistics, based in Newport, estimates that there were 851,000 young people not in employment, education or training between October and December 2023. That number has risen by 20,000 compared to the same period in 2022, and accounts for 12% of all 16 to 24 year-olds.

Education is at the heart of Labour’s mission to expand opportunity. From our earliest years through to learning or retraining as adults, gaining knowledge, skills and qualifications, and exploring our interests and abilities, enables us to build the lives that we want, and the society that we share. Today, the best education that our country has to offer is not available to every young person. The opportunity to learn and train as an adult is limited and available to too few. At this point, I want to acknowledge the work of the Open University; it is a marvellous organisation, initiated of course by Harold Wilson.

Our mission to spread opportunity means enabling everyone to access the opportunities that excellent education brings. Despite much talk, the Government have not developed the apprenticeships and skills pathways that will allow adults to reskill and upskill throughout their life. The result is that we have too few people who have the skills we need for growth. So what will Labour do to redress this huge deficit? Retraining and upskilling will need to be locally based and tailored to the needs of each community: plumbers to fit new heat pumps; engineers to lead the application of AI; and solar power fitters to harness renewables. We will set up new technical excellence colleges in all parts of the country, so that people have the specialist skills that local businesses need, and transform the apprenticeship levy to give employers the flexibility they need to train their workforce in new and relevant skills.

During National Apprenticeship Week in early February, Labour took the opportunity to announce further changes and policy initiatives. We set out our plans to boost skills training and drive economic growth, as data revealed that a decade of decline in apprenticeships and training is holding Britain back. Apprenticeship starts have declined, and the Government have failed to equip individuals and the economy with the skills to meet national challenges, including the transition to net zero and rising demand for digital skills. To reverse this downward trend, we will train over 1,000 new careers advisors to provide professional advice and guidance at schools and colleges, alongside high-quality work experience for young people.

Labour will give businesses the flexibility that they are asking for to train their workforce and deliver growth. We will start by turning the apprenticeships levy into a growth and skills levy. The Government’s current levy has seen millions of pounds that should be used for skills training going unspent, even as businesses report growing skills shortages. Giving businesses flexibility will ensure that this money can be better spent on a greater range of training courses, including basic English, basic maths and digital skills, so that businesses can fill gaps and people can gain new skills.

As part of a wider package of reform, we will establish Skills England, a new national body, driving forward a national ambition to meet the skills needs of the next decade. This will be driven by pushing power and decisions on skills spending out from Westminster to local communities, so those communities can better match up skills training with their local business needs and grow local and regional economies. My noble friend Lord Griffiths made many apposite points regarding the need for skills in, for example, the creative sector. Young people and adults are ambitious for their families’ futures; they want to learn new skills and get new jobs, or progress at work, but they are being let down. We will reverse this trend. We will give businesses the flexibility that they need to train people up, from digital technologies to the green skills needed to tackle climate change.

An important aspect of the skills agenda is digital skills, again noted by my noble friend Lord Griffiths. We lack a properly developed strategy. We need a digitally literate population. If we fail, we will be left with a lack of opportunity, particularly in employment. We rely on the internet, as many noble Lords have said, for applying for jobs, accessing education and training, banking—except for my noble friend Lord Griffiths—paying bills and accessing other services. People find employment online and many social media sites are available where professionals can network. Last year’s consumer digital index, which is run by Lloyds Bank and commissioned by the DfE, reported that there are about 13 million people in the UK with very low digital capability, which means they

“are likely to struggle interacting with online services”.

Furthermore, we need to provide adults with the opportunity to improve their literacy skills. The National Literacy Trust estimates that more than 16.4% of the adult population are functionally illiterate. How can people improve their digital skills if they do not already have good literacy skills?  

Adult skills spending has been cut under this Government. Last December, the Institute for Fiscal Studies pointed out that 

“total adult skills spending in 2024–25 will still be 23% below 2009–10 levels. Spending on classroom-based adult education has fallen especially sharply”. 

This is driven by falling learner numbers and real-terms cuts in funding rates. In 2024-25, it will be more than 40% below 2009-10 levels. This is very damaging to our economy, and the situation needs to be reversed.   

Digital skills are crucial for the future of our economy, businesses and workforce. That is why a core pillar of Labour’s industrial strategy is to harness data for the public good and to transform digital skills. Young people need to understand developing technologies to be able to use them. Our curriculum review will embed digital literacy and skills throughout children’s learning.   

Can the Minister say how the Government are working with businesses to understand the digital skills needs of the future? How can all skills needs be best met now, and what can the Government do to future-proof our skills needs as a country? I add my support to the noble Lord, Lord Willetts, who questioned the defunding of BTEC courses. I look forward to the Minister’s response on these extremely important matters.

Despite the rhetoric, the Government have overseen a decade of decline in skills and training opportunities which is holding Britain back. From digital to green skills, childcare to social care, a Labour Government will harness the talents and abilities of the British people so we can strengthen our economy and break down barriers to opportunity. We will provide more training opportunities so people can gain new skills, access better jobs and grow our economy. That is the difference we will make.

15:26

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, I am grateful to all noble Lords across the Chamber for their contributions. I thank the noble Lord, Lord Aberdare, for securing this very important and well-supported debate. It was an honour to be present to hear the maiden speeches of my noble friends Lord Marks of Hale and Lord Elliott of Mickle Fell. Listening to a maiden speech reminds us all just what a privilege it is to serve in your Lordships’ House.

If I may, I will step back and remind noble Lords what the Government are looking to achieve with our overall programme of skills reform. The noble Lord, Lord Aberdare, started by talking about the need for a strategy. I hope he recognises many, if not all, of the seven points in his speech in the Government’s approach.

The Skills for Jobs White Paper, published in January 2021, is the blueprint for our reforms. It sets out the case for change and the vital need to drive up skills in our country. We know that a third of productivity growth can be attributed to increases in skills levels. I join other noble Lords in thanking my noble friend Lord Baker for his work over many years to bring a focus to the skills agenda. But we still face significant gaps in skills at higher technical levels, with level 4/5 being the highest qualification for 10% of adults, compared to 20% in Germany and 34% in Canada. 

My noble friend Lord Patten was absolutely right to highlight the importance of improving productivity in the public sector as well, and my noble friend Lord Holmes was right to stress the importance of inclusivity and innovation in developing skills programmes.

The gaps in our skills are creating significant challenges in the labour market. As we heard from a number of noble Lords, employers report that they cannot find people with the skills they need, particularly the technical skills that drive innovation and enable adoption of new technologies. I acknowledge the points raised by the noble Baroness, Lady Coussins, regarding foreign languages, but I may need to address some of them in writing.

As it stands, a quarter of job vacancies in the UK are due to skills shortages. Some estimates show that, by 2030, we will face a global skills shortage of 85 million. There are major challenges for the future, as we know from research published by the department’s Unit for Future Skills, which estimates that between 10% and 30% of jobs could be automated through AI. The significance of AI was brought out powerfully by my noble friend Lady Fairhead. That is why we have introduced a series of reforms, with the aim of developing a world-leading skills system that is employer-focused and fit for the future. This is backed by an investment of £3.8 billion over the course of this Parliament to strengthen higher and further education. The noble Baroness, Lady Wolf, spoke about the need for stability in the skills system. Probably the strongest thing we hear from employers is that they want stability so they can plan and invest.

The noble Baroness, Lady Wilcox, asked about opportunities for lifelong learning. I remind her of the important lifelong learning entitlement, which will transform opportunities to upskill, reskill and develop skills throughout one’s lifetime.

I will divide my remaining remarks into three broad categories, focusing on an employer-led skills system, our support for priority growth sectors, and the reform of qualifications. I hope that addresses the spirit of the remarks made by the noble Lord, Lord Birt, about looking at this issue in the round and not in a fragmented way.

As the noble Lord, Lord Aberdare, said more eloquently than I can, employers need to be at the heart of our skills system. The Government have worked hard to bring education and business together so that skills and training provision directly support economic growth and productivity. The Government are proud of their new high-quality apprenticeship programme. Nearly 700 apprenticeship standards are now available, covering around 70% of occupations in this country. The noble Lord, Lord Aberdare, asked about the drop in the number of apprenticeships. I think he knows what I am going to say: we focused very much on quality, so we took out apprenticeships that did not deliver for apprentices. I say to the noble Baroness, Lady Wilcox, that I am not sure what changing the name of the apprenticeship levy achieves, but I think that Labour’s proposals are estimated to halve the number of apprenticeships, which would have a very serious impact on our economy.

I thank my noble friend Lord Harrington for acknowledging the value of the apprenticeship levy. I will address some of his concerns, and those of the noble Baroness, Lady Garden, about reform of the levy. We already pay 100% of the apprenticeship training costs for 16 to 21 year-olds in respect of SMEs. We have also doubled the levy transfer limit from 25% to 50% so that levy payers can maximise the benefit of their levy funds.

The noble Baroness, Lady Wolf, gave us her expert insight into the importance of level 3 apprenticeships. As she is aware, they are the most popular apprenticeships, accounting for 43.3% of starts in the current academic year. We now have 229 apprenticeships standards at level 3 and an active apprenticeships campaign promoting both level 2 and level 3 apprenticeships.

My noble friend Lord Harrington noted the importance of manufacturing apprenticeships. The Government are investing £50 million in a two-year pilot to support providers to deliver more high-value apprenticeships, particularly in areas such as engineering, advanced manufacturing, green technologies and life sciences.

My noble friend Lord Lucas talked about the importance of micro-credentials. He will be aware that we have introduced skills bootcamps, which provide flexible training for adults aged 19 and over, which are directly linked to roles in priority sectors. These, again, were courses that were designed and delivered in partnership with employers to respond to their needs. There are now more than 1,000 skills bootcamps available across England.

Turning to the local skills improvement plans, I thank the noble Baroness, Lady Lane-Fox, for her leadership in this area. I was glad to hear how important and innovative that direct link is—if I followed her remarks correctly—between business, higher education and further education, just getting people in the room together to work out what an area needs.

The noble Lord, Lord Aberdare, asked about oversight of the LSIPs. The employer representative bodies are now leading on implementation and review of the plans, and each of those bodies will publish a public annual progress report in June 2024 and June 2025, setting out their progress.

We also think the introduction of institutes of technology is extremely important. They are collaborations between colleges, universities and business, designed to deliver the best technical education and help businesses to get the workforce they need. We will have 21 of these new institutes in place from September.

The noble Lord, Lord Mair, said that—I hope I wrote this down correctly—20% of adults in Germany have higher technical qualifications, and that this is an important gap in our skills landscape. That is why we have introduced HTQs to meet exactly that need at levels 4 and 5. They have a quality mark that is awarded only to those qualifications that deliver the skills employers need. That also speaks to the point about recognition of qualifications that the noble Earl, Lord Clancarty, referred to. To date, 172 qualifications have been approved as HTQs across seven routes. The Government have also sought to prioritise five sectors that are critical to driving our growth in the 21st century: green industries, digital technologies, life sciences, creative industries, and advanced manufacturing.

The noble Baronesses, Lady Hayman and Lady Bennett of Manor Castle, and the noble Lord, Lord Mair, all talked about the importance of green industries. The net-zero growth plan sets out how the Department for Education is empowering people to get skills for green jobs, but this challenge is a very significant one, whether it be in relation to workers in offshore wind or, as the noble Baroness, Lady Hayman, used as an example, in relation to heat pumps. We are funding a range of apprenticeship standards in green occupations, including level 4 electrical power networks engineering and new low-carbon heating technician apprenticeships. We also have T-levels to support this area in construction engineering and land management.

The noble Baroness, Lady Hayman, asked about the nature action plan. On timing, the technical answer is “soon” but not “in due course”—that is the good news. We have made a public commitment that it will be published in the first half of this year, and that public commitment still stands. I think that is “soon”.

Digital technologies are a foundation for our economy, but 18% of the UK labour force do not have the essential digital skills that they need for work. The noble Lord, Lord Griffiths of Burry Port, asked about cross-departmental working. As an example, we are working closely with DSIT to convene the Digital and Computing Skills Education Taskforce, aiming to increase the number of individuals taking digital and computing qualifications and attracting people into digital jobs. We have invested over £100 million in the National Centre for Computing Education, to improve teaching of and participation in computer science GCSE and A-level.

I recognise very much, in my noble friend Lady Fairhead’s comments about AI, the pace of change and the difficulty in government to stay ahead of the curve. I hope the House agrees that my right honourable friend the Prime Minister has given great leadership in the area of ethical AI and safety in AI. My colleagues in the department are also making great progress, and I look forward to being able to update the House on some of those activities in due course.

The third area of focus is on life sciences. The UK life sciences industry is one of the largest in the world, with the potential to create up to 133,000 new roles in 2030. Through the Office for Life Sciences, my department is working with employers and industry bodies to identify and address skills challenges.

The noble Lord, Lord Griffiths of Burry Port, talked about the importance of the creative industries. This is one of the fastest growing sectors of the UK economy, and we have clearly set out the Government’s ambition—shared with industry—to support a million new jobs through education and skills objectives, in our creative industries sector vision. We have developed 57 creative and design occupational standards and we have more flexible training models to support apprenticeships in the creative industries, where short-term contracts or other non-standard employment models are the norm.

Finally, our fifth area of strategic focus is on advanced manufacturing. Manufacturing provides 2.6 million jobs in the economy—7% of total employment—but there are currently 70,000 vacancies. Our plan sets out our ambition to establish an advanced manufacturing skills forum with the National Manufacturing Skills Taskforce. Again, this is supported by skills bootcamps and T-levels, to create a pipeline of skilled workers.

I turn to our qualification reform, which was a subject of interest for my noble friends Lord Willetts and Lord Lingfield and the noble Baroness, Lady Garden. As the House knows from our debates on this subject during the passage of the skills Bill, we aim to fund only qualifications that are of the highest quality and lead to good progression outcomes. T-levels are delivering fantastic results for those 16 to 19 year-olds across the country. I encourage my noble friend Lord Lingfield to perhaps meet some of those students with me, because they are delighted by their courses. Over 30,000 young people have now enrolled on a T-level since their launch four years ago, with roughly 16,000 enrolling in the last year.

My noble friend Lord Willetts asked some very specific questions about the precise number of qualifications that will have funding removed and the number of students taking them. I will cover some of those points now, but I will also write to him and put a copy of my letter in the Library, because this is a slightly complex area. We have not yet finished all our decision-making on the funding of qualifications, but we have published the number of courses and enrolments, rather than students, where either funding is being removed or we are considering it, and I will put the links to that information in my letter.

As the House knows, we are removing public funding from qualifications in phases. The first phase was for 5,500 qualifications, which had either no or very low enrolments. The second phase is for the removal of funding from qualifications that overlap with T-levels. The final phase relates to our approval process through which alternative academic qualifications must go to be funded from September 2025.

On the second phase—the removal of funding from qualifications that overlap with T-levels—waves 1 and 2 covered about 130 qualifications and about 39,000 enrolments. Within that, there were 10 qualifications that had more than 1,000 enrolments. Wave 3 covered 85 qualifications with 17,000 enrolments, and there were five qualifications with more than 1,000 enrolments. Wave 4 is expected to cover around 70 qualifications and 32,000 enrolments, of which nine qualifications had more than 1,000 enrolments. I raise the point about the relatively small number of qualifications with large numbers of enrolments because my noble friend Lord Lingfield talked about T-levels being too complicated, but the existing system is extremely complicated. We want to bring simplicity and clarity to the quality of the qualifications that young people are undertaking.

The final reason why I would like to write to my noble friend, rather than try to explain this in any more detail at the Dispatch Box, is that T-levels are very large courses covering a variety of occupational specialisms and lasting two years. The qualifications being defunded are of different sizes; some can be very small, and one person could take several enrolments. The enrolment data for older-style qualifications cannot be directly compared with T-levels, which are much larger. I assure my noble friend and the House that students will continue to have a range of options available to them at level 3, in addition to A-levels and T-levels, including new technical occupational qualifications and alternative academic qualifications, helping to ensure that all students have a range of options. Each one of those will have employer standards and occupational standards at its heart.

[Lord Willetts (Con)]

I am very grateful to the Minister for the full answer she has already given. Can she give her assurance that the measure of enrolments, which I understand is not the same as the number of students, going back to the baseline that I referred to, will be in her letter to me?

[Baroness Barran (Con)]

It will.

I turn to the wider points raised about the curriculum by my noble friends Lady Sater and Lord Effingham, the noble Lord, Lord Hampton, and the noble Earl, Lord Clancarty. To critics of the curriculum, I say as a starting point that we work very closely with the Education Endowment Foundation, which gives a robust, highly respected and independent evidence base about all the reforms that we have undertaken, so there is nothing ideological in what we are doing in our schools. It is based on the best available evidence, including randomised control trials and other similarly robust approaches.

I absolutely agree with the noble Earl, Lord Clancarty, that it is a bit artificial to separate knowledge and skills; it is the combination of the two that is powerful. I agree with my noble friend Lady Sater about the importance of confidence and agility, but we believe those are based in a knowledge-rich curriculum that fosters competence and mastery in a subject. I may have to include my response about storming the barricades with the noble Lord, Lord Hampton, in my letter. All I can say at this point is that it sounds an interesting option.

In relation to my noble friend Lord Effingham’s question regarding prohibition of phones, if additional evidence emerges that they are a problem—we know that most schools already prohibit phones in some way—we will seek to make our guidance statutory. The noble Baroness, Lady Valentine, emphasised the importance of careers. I remind the House that in the financial year 2024-25 we are investing more than £90 million in high-quality careers provision for all.

I am running out of time. My last point is to acknowledge the point made by my noble friend Lord Lilley that the Government cannot make a success of these skills reforms on their own. Employers must also do more to support the development of workforce skills. We have seen employer investment in training fall by 7.8% in real terms between 2017 and 2022. As my noble friend said, we must move away from reliance on migration to fill skills gaps and towards investment in the skills of our domestic workforce.

[Lord Baker of Dorking (Con)]

At the beginning of her speech, the Minister said—I have not heard a Minister say it before—that the forecast of the skills gap in 2030 is hundreds of millions, if not billions. It is absolutely extraordinary, and our education system as presently constituted cannot possibly meet it. I gave her forewarning of this in my speech: will she consider the proposal that has been put to her to insert into ordinary schools in the UK a technical sleeve, known as a UTC sleeve? We have 10 schools that want to do it and applications have been made to her, but there has been no reaction at all from the Department for Education. When will she be in a position to give approval to this? Will it be before the next election?

[Baroness Barran (Con)]

The skills gap numbers that I cited were in relation to global skills gaps. The point I was making was that this is not a uniquely UK problem in relation to skills; it is a global problem. As the noble Lord knows, his correspondence with the department is the responsibility of another Minister. I understand that it is under consideration.

15:53

[Lord Aberdare (CB)]

My Lords, I have found this a thoroughly absorbing, enlightening and encouraging debate. I am extremely grateful to all noble Lords who have spoken, from so many different perspectives. I particularly look forward to hearing more in the future from the noble Lords, Lord Marks of Hale and Lord Elliott of Mickle Fell, following their splendid maiden speeches. I am also grateful to the Minister. I very much echo the tribute by the noble Lord, Lord Addington, to her knowledge and commitment to this area, and thank her for her characteristically comprehensive response to such a broad debate. I am certainly not going to try to summarise in any sense, but I very much look forward to reading it in Hansard. It has very much confirmed to me the importance of skills as an issue, the breadth of areas it covers and the scale of the challenges we need to address. It is much too broad for a single debate, so I hope we will have other opportunities to discuss it.

My noble friend Lord Clancarty spotted the fact that I had omitted “education” from the Motion. That was because I wanted to focus in particular on the skills aspect. Other noble Lords, including the noble Lord, Lord Addington, commented that skills are not taken seriously enough. It seems that for too long education has been a powerful horse pulling a rather ramshackle skills carriage, when what we need is for them to work in harness with other horses: employers, other departments, parents—all the groups we have talked about—and they should be pulling a first-class, golden carriage accommodating both education and skills. So I was very glad to hear the noble Lord, Lord Holmes, talk about a vision for skills, which perhaps is the design for that golden carriage that we need. This is an issue that I will certainly wish to push further, but I reiterate my thanks to all noble Lords for a really inspiring morning.

Motion agreed.