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Andrew Pakes (Peterborough) (Lab) [R]
I beg to move,
That this House has considered the value of apprenticeships and National Apprenticeships Week.
It is a pleasure to serve under your chairmanship, Ms Jardine. It is my first debate of this nature. I thank the Backbench Business Committee and its Chair, the hon. Member for Harrow East (Bob Blackman), for granting me the time for this important topic. I declare an interest ahead of this debate: I am co-chair of the all-party parliamentary group on apprenticeships. I also declare that skills and apprenticeships are my political passion in this House.
We are about to celebrate National Apprenticeships Week, which runs next week. It is right that we celebrate the success of more than 750,000 apprenticeships that are powering skills and productivity in our local economies. I have had the privilege of meeting and visiting more than 100 businesses and their apprentices since I was elected. The breadth, talent and determination have been humbling, from butchers’ apprentices in Newborough and engineering students at Caterpillar in my constituency, to construction apprentices at Laing O’Rourke building a new Olympia, to, most recently, brilliant and creative learners at the Fashion Retail Academy. One of the most inspiring days I have spent as an MP was meeting learners and employers at the National Theatre to understand more about how we support apprenticeships in the creative arts.
Leigh Ingham (Stafford) (Lab)
I thank my hon. Friend for securing the debate. The creative industries have been identified as a growth-driving sector, and I know the Government recognise the impact of the arts on the wider economy. We must build more talent pipelines and widen the accessibility of careers in the arts for the longevity of the sector. In my role as co-chair of the APPG for theatre, I have looked at the critical skill shortages that the sector faces in technical, backstage roles, from lighting to sound clinicians and wigs, hair and makeup. That is why it is crucial for Skills England to review the seasonality of theatre work and explore the development of shorter-term apprenticeships to widen access to those entry-level roles.
Andrew Pakes
I agree 100% with my hon. Friend. As we have discussed previously, we both want to make sure that jobs in theatre, the arts and creative industries are open to young people in our constituencies and across the country.
We were the first country to pass a national apprenticeship Act when the Tudor Parliament enacted the Statute of Artificers in 1563. It is mind-boggling to think how much our society and economy have changed since then. What has not changed is the timeless requirement of educating the next generation, and ensuring that novices in the jobs market are set forth in the working world with all the pride and self-reliance of mastering a new occupation, profession or skill.
Over the past few years, there have been various reports into the status, scale and success of apprenticeships. It is clear that the system is not working as it should be. In my view, it is a national disgrace that the number of apprenticeships fell under the last Government.
Sarah Dyke (Glastonbury and Somerton) (LD)
I thank the hon. Gentleman for securing this important debate at the start of National Apprenticeships Week. Apprenticeships are particularly important in rural areas such as Glastonbury and Somerton, because they provide a valuable pathway for young people to gain practical skills and go on to secure employment in their local communities. That helps to combat rural depopulation and boost the local economy. There is a conflict, however, because although apprenticeships are good, the levy is not. Does the hon. Gentleman agree that the apprenticeship levy should be scrapped?
Christine Jardine (in the Chair)
Order. Before the hon. Member responds, I remind Members that a lot of people want to get in on this debate, and we need to keep questions much shorter in order to do that.
Andrew Pakes
I agree with the hon. Lady. That is why I welcome the announcement in September last year by my right hon. Friends the Prime Minister and Education Secretary of a new growth and skills levy to replace the existing apprenticeship levy, and include new foundation apprenticeships. That will give young people a route into careers where the nation has skills gaps.
It cannot be stated often or loudly enough that apprenticeships not only transform the lives of those who take them, but are vital to our economy and growth. Ministers’ single, unifying, animating purpose is to get the economy growing, and I wholeheartedly endorse that.
Michelle Scrogham (Barrow and Furness) (Lab)
Like me, my hon. Friend is a passionate advocate for apprenticeships, which play a huge role in Barrow and Furness and are vital for the workforce needed for the defence sector. BAE has an incredible 94% completion rate, whereas the national average is 51%. Does he agree that the Government’s much-needed reforms are vital for improving access to good, skilled jobs in growing industries such as the defence sector. What thought has been given to improving the national completion rate?
Andrew Pakes
I very much agree with my hon. Friend. Before I came to Parliament, I was a union official at Prospect, which represents many workers in the defence sector and in Barrow, so I know full well the great expertise of apprentices in the defence sector. We need more of those apprenticeships for our national security and for new jobs.
Growth will come because of a range of factors—we will secure inward investment and trade deals, shake up the planning system, boost infrastructure and back business—but a sure-fire way to stimulate growth is to invest in people’s skills, energy and talent. Just yesterday, I met level 3 to level 7 KPMG apprentices from all parts of the country who work together to bring new opportunities. It was brilliant to hear from Gaby from Peterborough, who told her own story and gave lessons for how to ensure that more young people in Peterborough get the same opportunities. That means nothing short of a revolution in our system of apprenticeships.
I am proud that the previous Labour Government revitalised apprenticeships—the largest expansion in our history—and I welcome the cross-party support for innovation since then, including all-age apprenticeships and all-qualification approaches to workplace learning, but I am not satisfied. We need to address head-on why 900,000 young people across our country are not in education, employment or training; why young people cannot access the opportunities they need; and why the opportunities are not there in the first place. That matters in Peterborough, where we have seen falling apprenticeship numbers and rising levels of youth unemployment.
Last Friday, I was pleased to co-host a NEETs summit with Peterborough college, Anglia Ruskin University Peterborough and local businesses and providers to look at how we can make apprenticeships work better in my constituency. We need to put rocket boosters under the number of firms that take on apprentices, not for altruistic reasons but because it makes smart business sense. We also need reform to ensure that apprenticeship standards work for businesses and learners. I ask the Minister to remove the artificial barriers to success of academic English and maths, and move quickly to business-ready, work-ready, functional skills where they matter.
We are coming up to National Apprenticeship Week, and I want to address one other issue before I finish: not apprenticeships policy, but the cultural barriers. In too many parts of the UK, there is a hang-up about apprenticeships, and so many parts of the system are obsessed with university. Of course, we should value our world-class universities and celebrate the hard work of our university students. As a former president of the National Union of Students, of course I recognise the vital role that British universities play in our national story. However, apprenticeships should be seen as an equally valid alternative route, a legitimate way to gain skills and experience, and a vital contributor to our economic prosperity, and yet in public policy sometimes they are not. Why is that? I fear that there is still a snobbery about apprenticeships in the UK that is not found in competitor countries such as Germany and Sweden, which are more competitive. There is too often a lazy and misguided assumption that apprenticeships are second best to degrees, and that apprentices are lesser in comparison with undergraduates.
We often use the phrase, “University is not for everyone,” as though university is the gold standard and apprenticeships are the also-ran for second-class kids. The English class system exerts itself and places people into boxes, limiting horizons, prejudicing futures and stifling ambitions. That must stop, not only for the good of the brilliant, energetic, ambitious young and not-so-young people who embark on apprenticeships, but for the economy and growth. We will not secure growth with one hand tied behind our back. Hardly any of the apprentices I have met say that their journey was made easier by careers support at school. That is why we need change in our careers service. We must make it easier for businesses to support learners and parents, and we need a step change in how we regard apprenticeships.
We are coming up to National Apprenticeship Week. Let us be loud and proud about apprenticeships. Let us challenge the stigma, call out the snobs, and put apprenticeships centre stage in our policy making, economic mission and national culture.
Christine Jardine (in the Chair)
I remind Members to bob if they wish to be called in a debate. To get in all the speakers we have, please try to limit yourselves to three minutes. I call Peter Bedford—he is not here. Jim Shannon, please.
Jim Shannon (Strangford) (DUP)
Thank you, Ms Jardine. I am always happy to be a substitute. I commend the hon. Member for Peterborough (Andrew Pakes) for securing the debate, and I spoke to him beforehand. There is a big crowd here because the subject is all-important to each and every one of us. I look forward to hearing the Minister’s contribution, which I know will be positive.
Along with everyone here, I am a massive supporter of apprenticeships and the value they bring to the world of careers for young people. As I told the hon. Gentleman beforehand, I tabled an early-day motion about Northern Ireland apprenticeships two weeks ago. I see the good and the potential for apprentices across Northern Ireland. I am giving a Northern Ireland perspective to this debate to complement, echo and support the hon. Gentleman and everyone who speaks.
There are 13,000 apprentices across Northern Ireland, and it is great to be able to say that there are some incredible opportunities for young people in my constituency. Companies such as Thales and many car companies are brilliant at encouraging young people down the apprenticeship path. My right hon. Friend the Member for Belfast East (Gavin Robinson) and I met representatives of Thales just before Christmas. I was impressed by the work the company is doing with apprenticeships. Apprentices get a good wage, which starts small and gives them encouragement to stay at it. As an example of what can be done, their student fees are paid by the company. Job suitability is about nothing more than having the desire and the work ethic to learn.
It is important to look at the range of stakeholders: local councils, employers, further education colleges, universities and others. The South Eastern Regional College in my constituency is brilliant at supporting young people through their educational journey. It is holding its spring awards ceremony in the terrace pavilion on Monday 3 March. I look forward to that, and to sharing its success.
In Northern Ireland, especially in my constituency and the Ards peninsula, we have a tradition of work in the construction sector. It is important that those in the sector have plenty of opportunities to advance— for some of them, to having their own businesses. The Department for the Economy in Northern Ireland has set aside some £600,000 to increase apprenticeship participation among women, people with disabilities and individuals from disadvantaged areas. That will encourage collaboration between education, business and community sectors to develop innovative solutions for enhancing inclusivity in apprenticeships.
The theme for this year’s Northern Ireland Apprenticeship Week is “Getting it Right for You”, and that is we want to do for apprentices. Job creation is so important for sectors such as STEM, mechanics, aerospace and defence across the UK. There are endless opportunities, and we must do more to make our young people aware of them. Boys and girls, men and women can all take advantage of them. I am encouraged by the women in Northern Ireland who are looking for jobs in engineering. I look forward to the Minister’s contribution and to doing all we can to support apprenticeship opportunities across the devolved nations.
Alex McIntyre (Gloucester) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this important debate.
Apprenticeships matter. They matter because they break down the barriers to opportunity, giving residents in cities like Gloucester the skills that they need to succeed in life. This Government are committed to creating a fairer, more inclusive system that equips individuals with not only the skills that they need today, but the skills that we will all need in future.
We are introducing a youth guarantee, transforming further education colleges and fostering collaboration between businesses, training providers and Government to build a highly skilled workforce ready to support Labour’s industrial strategy. I hope that in Gloucestershire we will take advantage of the devolution of adult skills funding, empowering local leaders to take charge of skills development in our area. Importantly, we will reform the apprenticeship levy, which has proven ineffective. In its place, the Government will introduce a flexible growth and skills levy, creating a fairer system that works for employers and learners in Gloucester.
John Slinger (Rugby) (Lab)
When I spoke to an apprenticeships organisation in Rugby called Intec Business Colleges, it pointed out a deficiency of the previous apprenticeship levy: the threshold meant that it was mostly applicable to and attractive to larger companies. Sadly, that has meant that the small and medium-sized enterprise market has been significantly disadvantaged. Does my hon. Friend agree that as this Government reform the levy to be more effective, we must do everything we can to encourage SMEs to gain from apprentices, so young people can have more opportunities?
Alex McIntyre
I agree entirely. SMEs are the backbone of our business community. I recently met the Federation of Small Businesses in the south-west to discuss the opportunities in small and medium-sized businesses in Gloucester and across the region. As my hon. Friend says, apprenticeships are so important to those businesses, as is ensuring that the new levy is flexible so everyone can take part and every person in our country can benefit from the opportunities.
I recently met the principal of Gloucestershire College to discuss the opportunities and the vital role of FE colleges in helping young people to develop the skills that they need for the future, but challenges remain. Our higher and further education system is under significant strain. Many young people leave school without the skills or preparation that they need for the future. I will therefore be grateful if the Minister sets out the steps that the Government are taking to support FE colleges and work placements.
Apprenticeships are not just a pathway to employment. They are a key driver of opportunity for future generations. They provide people with the chance to gain valuable skills, earn while they learn and build fulfilling careers. By supporting people to gain skills in sectors such as technology, science, engineering, health and education, we are building a skilled workforce that will benefit individuals, businesses and the economy. The steps that this Government are taking will leave a lasting legacy of opportunity, ensuring a prosperous future and a workforce ready for the challenges ahead. This will lay the foundations for a stronger Britain, one in which the future is bright and Gloucester thrives.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine. I welcome the opportunity to speak in this debate; I commend the hon. Member for Peterborough (Andrew Pakes) for securing it, particularly ahead of National Apprenticeship Week next week. We in this place appreciate that apprenticeships play a crucial role in developing skills, supporting businesses and providing opportunities for young people to embark on meaningful careers.
I am proud of the progress that was made and am keen to see how it can continue. Between 2010 and 2024, the Conservative Government delivered 5.8 million apprenticeships, creating routes into 70% of occupations. In the last academic year alone, apprenticeship starts increased to 278,590, with 66% of those supported by the apprenticeship levy. Those figures highlight my party’s commitment to ensuring that young people and adults alike have access to high-quality training that meets the demands of our economy. Since 2020, we have also seen the successful roll-out of T-levels, another innovative qualification that combines study with workplace experience.
Across my constituency, I have seen absolutely fantastic examples of apprenticeships making a real difference. Just last week, I met an apprentice called Stan at Surespan, a local access solutions business. It is a manufacturing business in Aldridge, but with global markets, and it is investing heavily in apprenticeships and technical training. In-Comm Training is another outstanding apprenticeship provider. Events such as the Brownhills jobcentre apprenticeship fair further demonstrate the enthusiasm and the need from both businesses and learners in supporting apprenticeships.
It is important that we ensure that apprenticeships remain of high quality and accessible and that they are offered as a career choice alongside university. Although local businesses across my constituency are actively creating apprenticeships, I ask the Minister to confirm that the focus will remain not just on quantity, but on the quality of apprenticeships.
I would also like to raise concerns about funding and accessibility for SMEs. That is really important, particularly with businesses feeling the impact of the increase in employer national insurance contributions—the jobs tax. We cannot just keep squeezing and squeezing small businesses. Without addressing that, we will not see increases in investment in employment and apprenticeship opportunities.
I could speak a lot longer on this topic—as hon. Members may have guessed, I am rather passionate about it—but I am conscious that the clock is ticking. Apprenticeships are a crucial pillar of our education and skills system. They provide young people with the opportunity to learn while they earn, to support businesses in finding the skilled workforce they need and to contribute to our nation’s economy. Let us work together to make sure that there are more apprenticeships in future.
Frank McNally (Coatbridge and Bellshill) (Lab)
It is a privilege to serve under your chairship, Ms Jardine. I congratulate my hon. Friend the Member for Peterborough (Andrew Pakes) on securing this important debate. I welcome the opportunity to recognise the importance of National Apprenticeship Week in the UK—although you and I will be celebrating Scottish Apprenticeship Week next month.
Prior to my election, I spent many years as the chair of education in North Lanarkshire, Scotland’s second largest education authority. In an area in which one in four children are living in poverty, the route through education and entering positive pathways is critical. For many, that involves apprenticeships, which break down the barriers to opportunity. A successful apprenticeship journey works most effectively with the efforts of schools, further education, Government and employers.
During my time in office, I was pleased that we were able to operate the largest foundation apprenticeship programme in Scotland. Just last year, there were more than 2,000 modern apprenticeship starts in North Lanarkshire. However, in Coatbridge and Bellshill and across Scotland, despite the efforts of employers and learners, challenges remain. It beggars belief that despite the record settlement that the UK Government have given to Scotland, the Scottish Government’s draft Budget includes a real-terms cut in apprenticeship funding. Colleges Scotland has warned that the Scottish Government’s Budget for the next financial year will deliver a real-terms cut of 1.4% for the college sector, following a shocking 17% real-terms cut in recent years and the termination of more than 1,700 posts since 2020.
I have said on a number of occasions since the election that in Scotland and across the UK we need a skills revolution. That is the only way that we will transform our physical and digital infrastructure and deliver the well-paid jobs of the future. It is therefore not acceptable that the number of apprenticeship starts for 16 to 24-year-olds in Scotland has fallen by 5,800—a drop of 28%—in the past 10 years, according to analysis by the Chartered Institute of Personnel and Development. Just last month, the chief executive of Scottish Engineering highlighted the fact that one in five high-quality potential engineering apprenticeships have been lost this year because of a lack of funding.
It is right that the Labour Government are committed to fixing the mess left by the Tories with new apprenticeship reforms. It is critical that we get a Government in Scotland who have a similar laser focus.
Shockat Adam (Leicester South) (Ind)
It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes); I have a business in Peterborough, and I concur with everything he said.
Let me begin by highlighting the remarkable return on investment that apprenticeships provide. I know from my time in Parliament that everything leads to the Treasury. Studies have shown that every £1 invested in level 2 and level 3 apprenticeship training will see a return of between £26 and £28. That is a big win not just for employers, but for apprentices.
For many individuals who do not thrive in traditional academic environments, apprenticeships are a lifeline. I lost so many friends, colleagues and peers who were brighter by far than I was, but who just did not fit into the conventional education system. If they had had an apprenticeship model they would have been really successful, but unfortunately they are now without work after so many decades. That is especially the case in unconventional areas like ours.
There are several challenges that employers and apprentices face. Among the most important is system complexity. For the employers I have spoken to, it is so complicated to employ apprentices. The system was meant to make things easier, but it has made things more complicated.
We need to concentrate on making the levy system a lot simpler for employers. We may need to revisit the tax treatment of self-funded training. Employer-funded training benefits from broad tax exemptions, while self-funded training does not enjoy the same advantages. To encourage greater training uptake among the self-employed and smaller businesses, we should align the tax relief for self-funded training and employer-funded training, levelling the playing field and incentivising skills development. We must also improve administrative support and reduce the regulatory complex. The decline in apprenticeship numbers and the overall reduction in training participation are not just statistics; they are signals that our current system is too complex and that both employers and apprentices are facing real, tangible challenges.
Before I conclude, I have a few questions for the Minister. How will the Government simplify the apprenticeship levy to ensure a uniform and effective subsidy rate for all employers, regardless of size? What measures will be introduced to ensure that public funding for adult education is increased and spent effectively to achieve outcomes? How do the Government plan to address the administrative burdens that discourage employers? Will the tax treatment of self-funded training be reviewed to create a level playing field for everybody?
Baggy Shanker (Derby South) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing such an important debate as we approach National Apprenticeship Week. National Apprenticeship Week will bring us together to shine a spotlight on fantastic businesses and apprentices across our country, and rightly so.
Across the country, apprentices are building skills for life. They are also helping us to plug massive skill shortages across critical national infrastructure sectors as they train. One sector where we lack suitably qualified and experienced people and where apprenticeships are building skills for the future is the nuclear sector. Last week, I had the real pleasure of meeting and speaking to apprentices from Rolls-Royce, on which I refer the House to my entry in the Register of Members’ Financial Interests. These highly skilled, hard-working apprentices are based at Rolls-Royce’s Raynesway site in Derby. They are designing propulsion plants that will power the next generation of AUKUS submarines and safeguard our national security for years to come. They should be proud of their work.
As much as I love speaking to the apprentices working in businesses across my constituency, I do not need to take their word for how valuable their experiences are. I myself know how valuable an apprenticeship can be and what a fulfilling career trajectory it can lead to, although I must say that when I first walked through the doors at Courtaulds to start my apprenticeship back in 1989, I would not have imagined ending up in this place. Having decided that A-levels did not feel right for me, I began a four-year broad craft apprenticeship. It allowed me to build my practical skills and attend college one day a week, before going on to specialise as an instrument and control mechanic.
I want every child in Derby and across the country to be educated about the amazing career opportunities that apprenticeships can offer. Our teenagers and young people must be able to make an informed choice about their next step, whether that is university or entering the workplace as an apprentice. The curriculum has an important role to play, and it is vital that we give every child a practical, hands-on learning experience. It is also important that students understand how such experiences might link to a range of vocational opportunities once they leave school.
I am pleased that the Labour Government have brought forward the curriculum and assessment review, which will ensure that children leave school ready to enter the workplace. As a former apprentice, I will always advocate for the huge value of apprenticeships. Apprenticeships are not second best. They are a fulfilling and exciting opportunity that our education system must support and reflect.
Tony Vaughan (Folkestone and Hythe) (Lab)
It is a privilege to serve under your chairship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this vital debate.
I start by mentioning an injustice. It is not right, economically or morally, that so many young people who want to enjoy a vocational education have not benefited from the same opportunities as university students. In my constituency of Folkestone and Hythe there is incredible potential for a thriving apprenticeship system. My constituency has strengths in the creative industries, as well as in green energy and nuclear—we are home to Little Cheyne Court wind farm and Dungeness nuclear power stations. But the potential for apprenticeships is untapped. Despite the significant number of regeneration projects in Folkestone and Hythe, the number of apprenticeship starts in construction, planning and the built environment fell by 49% in 2022-23 compared with the year before. Currently, there are 500 16 to 24-year-olds who are searching for work in Folkestone and Hythe but cannot find it. Apprenticeships have a critical role to play in supporting people to succeed in the workforce.
I want to celebrate East Kent college in Folkestone, which in 2023 was judged by Ofsted to be outstanding and offers an incredible array of qualifications, such as BTECs, T-levels and adult education, as well as a junior college. I also commend the work of large businesses locally such as EDF, as well as smaller local businesses such as Jenner and Park Farm Construction, which provide brilliant apprenticeships. But frustratingly, spending on training by businesses is at its lowest level since 2011. I want to speak directly to employers in Folkestone and Hythe: when you invest in apprenticeships, you invest in our young people; when you invest in our young people, you invest in our future and our community; and if you support the local community, it will give back to your businesses and support your success.
I believe that it is critical that part of Skills England’s mandate will be to collaborate with the Migration Advisory Committee to ensure that we prioritise training of our young people before reaching to recruit from abroad. The Government’s reforms will benefit many young people in Folkestone and Hythe who feel disenfranchised and believe that the 21st-century economy does not necessarily serve them. In many cases after deindustrialisation, where we gave them a pound shop in the place of a workshop, they may well be right.
I have some questions for the Minister on future policy development. I would welcome the publication of a timeline as to when we can expect the phased development of Skills England. How do the Government plan to align our industrial strategy, Invest 2035, with their apprenticeship strategy, and how can they use apprenticeships to reduce youth unemployment and long-term economic inactivity?
Much was made of Tony Blair’s desire to see 50% of young people start university, but there are a lot of people, whether they have gone to university or not, who are ill-prepared for the 21st-century economy. We have had “education, education, education”; we now need apprenticeships, apprenticeships, apprenticeships.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for introducing this topic. I draw attention to my entry in the Register of Members’ Financial Interests.
I have had personal experience of the value of apprenticeships during my career and within my own family. My father, who became a fellow of the Royal Institution of Chartered Surveyors, completed an apprenticeship in the surveying department of a local authority rating department in the early 1960s. He came from a working-class family in Glasgow. That opportunity was the making of him, and he went on to have a successful and enjoyable career. By the time I started the same career, the route to qualifying as a chartered surveyor began at university.
Today, firms such as global real-estate advisers Avison Young, where I worked, offer a range of apprenticeships: for town planners, surveyors and project managers; and across support functions, such as marketing, IT and human resources. I have come to understand the value of apprenticeships as a way to improve productivity. Apprentices who join the workforce from the age of 16 onwards in Scotland are able to earn and contribute while learning on the job and combining with study at college or university on day release.
Apprenticeships improve staff retention and loyalty. From an employer’s point of view, they introduce fresh talent and promote diversity in the workplace. From an employee’s point of view, apprenticeships present opportunities for some who otherwise may not have had the chance to combine on-the-job training with a degree-level qualification. Today, apprenticeships are available in a much wider range of career paths than ever before. I strongly encourage employers and young people in my constituency of Paisley and Renfrewshire North to consider the apprenticeship route to work. If they do, they will find that West College Scotland does an outstanding job of supporting learners and employers across my constituency to develop the skills that they need. I doubt that we can overstate the importance of apprenticeships, and I am pleased to be able to support National Apprenticeship Week.
Ms Julie Minns (Carlisle) (Lab)
I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this important debate. Bendalls Engineering in my constituency of Carlisle can trace its route back to 1894. Founded as a family-run business, Bendalls can lay claim to having manufactured the body parts of Donald Campbell’s Bluebird cars and boats in the 1920s, and in the 1950s the company became one of the first suppliers of bespoke equipment to Britain’s first nuclear facility. I was therefore delighted to learn that the latest chapter in Bendalls’s history of innovation is to be an on-site skills academy managed by Lakes college.
My constituency brims with companies like Bendalls—from international firms such as Pirelli, and locally headquartered companies like Grain broadband, to other family-founded business, including the haulier Wm Armstrong, industrial supplier Thomas Graham and agricultural machinery provider Rickerby. All are committed to building a pipeline of talent through their apprenticeship programmes, which is complemented by the excellent array of apprenticeship programmes offered by Carlisle college.
In geographically remote places such as my constituency, with low inward migration and an ageing population, these apprenticeship schemes are the lifeblood of our local economy. What a shame then that, under the previous Government and in slight contrast to the rosy picture painted by the right hon. Member for Aldridge-Brownhills (Wendy Morton), fewer and fewer people embarked on apprenticeships. Indeed, between the introduction of the apprenticeship levy in 2017 and 2023, apprenticeships fell by 31%, while the number of skilled job vacancies more than doubled.
Wendy Morton
I set out my case during my speech, but since the hon. Lady is so passionate about apprenticeships, perhaps she can explain how the Government’s interest in employer national insurance will help with the creation of more apprenticeships. They cannot simply keep pushing and pushing business, and squeezing their profit margins, and expect them to be able to invest in employment opportunities and training.
Ms Minns
I thank the right hon. Member for that intervention. We are having a debate on apprenticeships, and the fact that I put forward is that, under the last Government, they fell by 31%. I think it would be welcome if Opposition Members started to own their record in government. This Government, by contrast, are committed to making apprenticeships work for employers, apprentices and our country, closing regional growth gaps, targeting the skilled jobs that the country is crying out for and giving businesses like Bendalls more flexibility on the courses that are funded.
Joe Morris (Hexham) (Lab)
It is a pleasure, as always, to serve under your chairship, Ms Jardine. I am very proud to be speaking today about the value of apprenticeships and National Apprenticeships Week. I represent the largest constituency in England, so it will be unsurprising to my hon. Friend the Member for Peterborough (Andrew Pakes) and everyone else that I want to speak about apprenticeships in Northumberland and the north-east, as well as Callerton and Throckley, where young people typically have extreme difficulty in accessing apprenticeships.
I visited my old school on Friday and had the pleasure of speaking to the deputy head; we spoke about the issues that many of the students at Queen Elizabeth’s High School still have in getting access to skilled employment after they leave school and vocational education. Simply put, for many people in the north-east who want to remain there, there are not enough jobs, particularly in Northumberland. One of the major failures of the previous Government is that young people had to leave Hexham to find their futures elsewhere. I do not wish to score political points on that issue; people’s need to leave is a political reality. One of the things that I will judge myself by is whether people can make their homes and their lives in Northumberland.
Apprenticeship programmes are essential to increasing social mobility, pride in communities and, frankly, to combating some of the depopulation in my part of the world. As I have said before in this Chamber and in the main Chamber, I represent the place where I grew up but unfortunately I am much more likely to bump into the parents and grandparents of my former schoolmates in the street than I am to bump into my former schoolmates themselves. That is a tragedy and a shame.
We need to ensure that local businesses are able to benefit from flexibility. I spent a couple of years working in the steel sector, where I saw highly sought-after apprenticeships that were much more competitive than Oxford and Cambridge. However, we have an apprenticeship regime that is designed for multinational companies; it is not designed for industries that are far smaller, or for businesses such as Brocksbushes Farm Shop, which I visited a couple of weeks ago. I had an incredibly productive conversation there about the challenges it faces. It wants to offer more young people employment and more upskilling. It is held back not just by inflexibility in the current regime—and I urge the Government to look at that, and at how they can work with rural and small businesses to make the apprenticeship scheme work better for them—but by poor transport links. One of things that would make a major difference to the farm shop is simply having a bus stop slightly nearer to its premises. That would massively increase the ability of young people to get out there and to get the skills they need, while earning an income.
As I come to the end of my speech, I urge the Minister to seriously consider how we can improve apprenticeships—not just in major urban centres and in areas with good transport links, but in areas with poor transport links. That is because transport infrastructure is a key part of how we improve the issue.
Several hon. Members rose—
Christine Jardine (in the Chair)
Order. Given the number of speakers, we will now have to move to two minutes per speech, unfortunately.
Terry Jermy (South West Norfolk) (Lab)
It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate my hon. Friend the Member for Peterborough (Andrew Pakes) on securing this debate. It is heartening to see so many Members here talking about this important subject, although they seem rather weighted on one side of the room.
I was keen to contribute to the debate because in rural areas such as my South West Norfolk constituency, apprenticeships are crucial. They offer a way into many industries in rural communities, including land management, farming, planning services, engineering, energy and nature conservation. So often, I talk to businesses in my constituency that struggle to recruit. They cannot find the people with the right skills, and as a result, their businesses often suffer. Apprenticeships are an important tool for addressing that challenge.
One business in my constituency that has been successfully leading the way on apprenticeships is Warren Services in Thetford, under the direction of Richard Bridgman and his son Will. Warren Services is an engineering firm with a proud track record of more than 30 years. To its credit, Warren is committed to building the workforce of the future, and it routinely goes to schools, academies and colleges to inspire young people to pursue a career in engineering and manufacturing. It regularly hosts recruitment days; there is one coming up next week, on 13 February. I do not normally advocate for second jobs, but if anyone wants a level 2 apprenticeship, they are available next week.
I am delighted that this Labour Government are doing more to support firms such as Warren and making apprenticeships a key part of their employment offer. In particular, I welcome the focus on green skills and the green skills gap in this country. Building a workforce with the skills needed to transition to a greener society is crucial to tackling the climate and nature crisis.
Jodie Gosling (Nuneaton) (Lab)
It is a pleasure to serve with you in the Chair, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes), who secured this debate.
Too many of our children are out of school and education, and they are leaving school ill-equipped for the world of work. Apprenticeships are a vital tool to help people attain hands-on skills while earning, without the financial repercussions of university or college life. They provide the specific, tailored skills that our local economies need to grow. For many of our young people—especially those who did not fit into the school system—apprenticeships are also a second chance.
I recently had the pleasure of meeting a group of students in Asda’s supported internship programme. It was particularly noteworthy because those children had significant learning difficulties. The internship has given them a supported way into the workplace to gain the skills that they need to thrive, and they have worked incredibly hard to develop their skills significantly. I was struck by how well integrated they were in their workplace and with their colleagues, and by the pride their tutors took in their increased confidence. That is especially important, because disabled people are twice as unlikely to find employment.
Finding a job early, and grounding it in skills and development, transforms the lives of young people in Nuneaton and throughout the United Kingdom. Our rich and diverse bedrock of small businesses and microbusinesses in Nuneaton find it more and more challenging to access apprenticeships. That is one of the reasons why the number of apprenticeships in Nuneaton halved between 2018 and 2023. We have been working alongside umbrella bodies to remove some of the barriers that trade and small businesses face in entering into apprenticeships, and we would very much welcome more investment to remove those barriers.
Andy MacNae (Rossendale and Darwen) (Lab)
I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this important debate. In the interest of time, I will focus on one issue: the awareness of apprenticeship opportunities, particularly among school leavers.
When I go around my Rossendale and Darwen constituency, I am inspired by the range of opportunities that our great businesses offer, but at the same time, a lack of skills and the inability to recruit the people they need remain key barriers to growth. I go into schools and talk to young people, and their awareness of the opportunities available to them remains remarkably low. That is reflected in the take-up of apprenticeships: only 25% are taken up by school leavers—around 80,000 students in 2023, compared with over 300,000 who applied for universities—and take-up was dominated by two sectors, which leaves many areas completely under-represented. It is also reflected in surveys: although 70% of parents would recommend an apprenticeship to their child, only one in 10 would be confident in supporting them through the application process, compared with four in 10 for university applications, and 82% of teachers said that they felt confident talking about university opportunities, compared with just 27% for apprenticeships.
That is a fundamental issue. Indeed, the National Foundation for Educational Research found that the principal barrier to young people accessing apprenticeships was
“a lack of in-depth understanding of apprenticeships amongst young people, their parents/carers, and teachers, including the opportunities for career progression. This is preventing young people from even getting to the point of application.”
I have some questions for the Minister. To what degree are we assessing the impact of the enhanced Baker clause? What more can we do to enhance awareness among schools, businesses and others? To what degree should we consider destination measures—what students’ education leads to, rather than the qualifications they get—in Ofsted judgments?
Pam Cox (Colchester) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this debate as we approach National Apprenticeship Week.
We are fortunate in my Colchester constituency to have a diverse range of apprenticeship opportunities—from healthcare roles at Colchester hospital and in other parts of the NHS, to retail law and engineering—many of which are offered via the Colchester Institute university centre. Data from the Department for Education shows that there were 370 apprenticeship starts in Colchester in 2023-24, with over 1,400 people participating. Those numbers are good, but they are not great; we really need to raise them in Colchester and across Essex.
Unfortunately, there has been a fall in the take-up of intermediate-level qualifications—a reduction of nearly 50%, as I understand it—in the past five years. That must be addressed, because apprenticeships often give people a vital entry into the workforce. I encourage the Minister to consider how we can support intermediate and high-level apprenticeships in the near future, and to give employers and universities maximum flexibility in tailoring a new apprenticeship offer for new times.
Mr Toby Perkins (Chesterfield) (Lab)
I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this debate.
It is great to see that the debate is so well attended, and it is clear that we could have had three times as long and still filled the time. Reflecting on some of the things we have heard, I believe that the previous Government had a commitment to apprenticeships, but they did not have any kind of systemic approach. There is a huge raft of different initiatives, but we do not have a proper skills system in this country. We have several different qualifications that do not coherently work together, which is why we see a very low completion rate. Many people complete their course but do not need the qualification to get the job. The previous Government focused on T-levels, through which apprenticeships cannot be done. We really need the Government and Skills England—as it is being created—to put that whole raft of different initiatives into a constructive system.
There have been a lot of contributions about promoting the value of apprenticeships to young people; what we actually find is that when those major companies bring forward their apprenticeship schemes, there is no lack of people applying for them—there are 200 people for every job. We need to make apprenticeships more attractive to businesses, particularly SMEs. We have a system entirely designed around the BAEs and the Rolls-Royces of this world, but we need to reflect the reality of the economy, which, in many of our towns, is mainly those small businesses that are completely excluded from the system.
When the Minister gets to her feet, I hope she can say a lot more about when the Government will bring the growth and skills levy forward, what the role of Skills England will be, and how we will end up with a more systemic approach to capitalise on the huge interest in this subject to ensure we make real progress.
Adam Thompson (Erewash) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing this debate ahead of National Apprenticeship Week.
I am a great advocate of the apprenticeship system. This time last year I was employed at the University of Nottingham, teaching degree-level apprenticeships in electromechanical engineering. Degree-level apprenticeship courses strongly complement a traditional format of degree-level education and powerfully support the Government’s skills agenda.
I want to focus specifically on degree-level apprenticeships and their unique offering. The course I helped deliver at Nottingham was a new paradigm in degree delivery. When people picture a degree in mechanical engineering, they could be forgiven for thinking of an aged lecturer—often male and white—delivering a sermon on gear ratios or some such nonsense to a half-empty, oak-panelled lecture hall, with his students often more taken by the declining state of repair of his ochre elbow patches than the content of his lectures. However, that image could not be further from the course that my colleagues and I were delivering last year. In a degree-level apprenticeship, content is commonly provided asynchronously via recordings and digital exercises, in a manner significantly more engaging than otherwise might be possible in a traditionally delivered degree.
When I was in my previous employment, I often joked that my role was closer to a professional Youtuber than that of a traditional lecturer, with my days spent recording and editing 15 to 20-minute videos in a bite- sized, easily digestible format. I want more degree-level apprenticeships to be offered to allow more people to access the knowledge and experience those courses offer. I want to see people thrive with a new skills offering, and to reverse the decline in apprenticeships that happened under the previous Government.
This Friday, I will visit JTL Training in Sandiacre in my constituency, a training facility which supports career development and business growth and offers apprenticeships and traineeships in building services engineering. I am looking forward to meeting the apprentices on Friday, to talk to them about exactly how we can support their growth, and the growth of our nation.
Nesil Caliskan (Barking) (Lab)
It is a pleasure to serve under your chairmanship, Ms Jardine.
The families and young people in Barking and Dagenham are not short of aspiration or willingness to work hard, but the lack of opportunities means that a staggering 46% of 19-year-olds there lack qualifications, the second worst statistic in London. The statistics do not much improve as young adults get older, as 22% of the residents in the area that I represent have no qualifications at all. Of course, behind every such statistic is a person, a life and wasted potential.
Unemployment caused by a skills gap also holds us back as a country. In Barking and Dagenham, economic inactivity is 25% higher than the London average, so this topic really matters to my constituents. The truth is that many of the people who I represent want to work, but the skills programmes and apprenticeship opportunities are simply not there. Indeed, the national apprenticeship levy is a system that is broken, which I know all too well because I led a local authority before coming to this place.
That is why I welcome the Government’s announcement to establish Skills England. I would also welcome the Minister giving more details on the timeline for that body, because the skills and apprenticeship challenge is a national one. Compared with those of other OECD countries, the UK workforce are under-qualified, primarily because this country has a much lower uptake of technical training in comparison with other levels of study, for reasons that my hon. Friend the Member for Peterborough (Andrew Pakes) outlined.
Consequently, a national commitment to a comprehensive apprenticeship scheme is important. It should include small and medium-sized enterprises, such as those in my constituency, because I frequently meet apprentices who tell me that the additional support they receive from smaller employers or microbusinesses is outstanding.
It is important to link a skills agenda to an industrial strategy, which has been lacking for the past 14 years. Without a comprehensive industrial strategy and a skills agenda that sit side by side, we will set ourselves up for failure, so I welcome the Government’s commitment on both those plans.
Alistair Strathern (Hitchin) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine.
I welcome the work of my hon. Friend the Member for Peterborough (Andrew Pakes). He has not just secured this debate, but shown leadership on this issue long before he became an MP.
Apprenticeships matter to me, and not just because I have seen at first hand the impact they can have on young people’s lives. I also recognise that they are crucial for delivering on this Government’s agenda. We will not have the construction skills needed to get Britain building again, from key infrastructure to affordable housing, without action on apprenticeships; our workforce will not have the skills they need to seize the benefits of the green transition, from retrofitting to green manufacturing, without action on apprenticeships; and, crucially for me, we will not live up to our aspiration to be less agnostic about the type of growth, the type of jobs and who benefits from them for the first time in a long time in this country without action on apprenticeships.
I am lucky to have some fantastic businesses and training providers in my constituency, and to have had not one, but two Secretaries of State visit them with me. First, the Minister for Science, Research and Innovation came to visit Cadent, to see the incredible pride that its apprenticeships took in the skills they were learning at their training centre in Hitchin. Secondly, the Secretary of State for Education came to see the fantastic charity Amazing Apprenticeships, founded by Hitchin resident Anna Morrison CBE, which agitates for better action and ambition around apprenticeships, and supports more young people to access them, not just locally but across the country.
When I speak to those apprentices, it is clear that they have huge pride in their work and in the opportunities available to them. What is also clear is the greater optimism they now have for their own futures as a result of their apprenticeships. That is an optimism that I want more people in my constituency to have.
From speaking to employers and to Anna Morrison, it is clear that there is more we can do, from making sure that we improve functional skills, to ensure that employers have confidence in them and more young people can access them, to making sure that as we expand the huge opportunity that foundation apprenticeships can provide, we also support more employers and particularly more SMEs to offer them, so that they can truly be a stepping-stone for more young people into apprenticeships. We must also ensure that we build on the greater awareness that young people now have of apprenticeships and turn that into a greater number of apprenticeship starts. Heartbreakingly, that number declined under the last Government. Young people deserve a lot better and I look forward to working with the Minister to make sure they get it.
Leigh Ingham (Stafford) (Lab)
I welcome today’s debate and its focus on apprenticeships, which is so important.
As my hon. Friend the Member for Peterborough (Andrew Pakes) suggested earlier, apprenticeships and the narratives around them have changed a lot in recent years. When I was younger, apprenticeships were seen as something that working-class kids did. They were not considered academic or necessarily broad. They were in traditional trades, such as hairdressing, plumbing, building or being an electrician. Actually, my dad did one, completing the training to be a bricklayer.
However, the situation is quite different now. People can do an apprenticeship in anything, from computer science to law to being a chef or a pilot. They are not just for people fresh out of college or high school. Many apprentices in my constituency of Stafford, Eccleshall and the villages are older than 25 and the majority of the apprenticeships undertaken are advanced qualifications.
Our policies must reflect those shifts, which is why I welcome Skills England’s work in driving forward national skills development and transforming opportunities for young people and those switching careers.
Apprenticeships do not just provide education, but are a powerful tool for economic growth, as many hon. Members have said, particularly in towns. I regularly meet representatives of Newcastle and Stafford Colleges Group, the outstanding college in my constituency, which collaborates with more than 700 employers from small businesses to multinational corporations. Its success in securing apprenticeships highlights the vital role that apprenticeships play in bridging skills gaps and strengthening our workforce.
I am also glad that Skills England is committed to working across industry with employees and other key organisations to refine its assessments of the UK’s skills needs. We must be laser focused on skills shortages, particularly in SMEs, while ensuring that apprenticeships work for businesses and the people taking them. I believe Skills England’s review will hold the answers we need. I look forward to the Minister telling us where the Government are with that and the timeline for that process.
Antonia Bance (Tipton and Wednesbury) (Lab)
I thank my hon. Friend the Member for Peterborough (Andrew Pakes) for securing the debate. I am a proud manufacturing MP from the Black Country. I represent Tipton, Wednesbury and Coseley, where manufacturing still makes up 25% of the jobs available, but we have two and a half times the national average of people with no qualifications.
I want to make three points. First, I want our skills strategy to prioritise manufacturing, engineering and construction in line with the industrial strategy. We do not want to see welding, bricklaying and retrofitting on the Migration Advisory Committee’s shortage occupation list, because we want to grow our own. We want to build 1.5 million new homes with new construction workers brought in through construction apprenticeships. That is why I am so worried about the fact that there were only 24,000 construction apprenticeship starts last year.
Secondly, I want us to prioritise level 3 and 4 apprenticeships, because that is where the wages premium really is. Just 17% of people in my constituency have level 4 skills, but 40% of the jobs on offer need those skills.
Finally, the mandatory grade 4 English and maths at GCSE continues to be a barrier to young people accessing apprenticeships in my constituency. The perpetual resits are so dispiriting. I bow to no one in my belief that working-class kids need qualifications, but there has to be a better way. I hope the Minister has some answers for me.
Christine Jardine (in the Chair)
Order. We are out of time. I call the Liberal Democrat spokesperson, Max Wilkinson.
Max Wilkinson (Cheltenham) (LD)
It is a pleasure to serve under your chairship, Ms Jardine. I congratulate the hon. Member for Peterborough (Andrew Pakes) on securing the debate.
Apprenticeships are a vital part of our education system, and the Liberal Democrats think there should be more of them. They break down barriers to opportunity and offer young people a chance to learn while earning through vocational placements. However, after years of Conservative failure, the system is badly struggling and is failing to attract the number of young people it should.
Mr Perkins
I am grateful to the hon. Gentleman for saying that the Liberal Democrats believe that there should be more apprenticeships. One of his colleagues said that the apprenticeship levy should be abolished. Can he clarify whether that is Liberal Democrat policy? If so, how does he intend to fund the extra apprenticeships that he wants?
Max Wilkinson
I will move on to that, and the hon. Gentleman will find that there is a pleasing consensus between my party and his.
There are positive stories around, and I will highlight an example of good practice from Cheltenham. The hon. Member for Gloucester (Alex McIntyre) mentioned Gloscol, which has one of the most influential, if not the most influential, cyber-clusters outside London. The 5,000 members in CyNam work closely with academia and the education sector to build the skills that drive growth. Gloucestershire college is helping to equip the cyber-security professionals of tomorrow with the skills they need via a range of digital and cyber apprenticeships, in both Cheltenham and Gloucester. Apprentices at Gloscol benefit from being at the heart of Cheltenham’s cyber-security community, close to GCHQ and the Golden Valley development, alongside experienced professionals based in co-working spaces on site. The cyber degree apprenticeship is endorsed by the National Cyber Security Centre and is offered in partnership with the University of the West of England. It gives young people a route into a huge growth sector, helps our economy to thrive locally and nationally, and makes our nation safer too. The college is also offering courses at its new £5.2 million sustainable construction centre. The hon. Member for South West Norfolk (Terry Jermy) mentioned green skills earlier. We are equipping young people with the skills needed to deliver the built environment we need for the future.
Those are just two examples from Gloucestershire college, which is ably led by its visionary principal, Matthew Burgess. It is a local success story of which I and the hon. Member for Gloucester are rightly proud, and it shows that offering apprenticeships should be a much bigger priority for this country.
Gideon Amos (Taunton and Wellington) (LD)
Another key development site, similar to the projects my hon. Friend has mentioned, is Tata’s Agratas gigafactory near Taunton. It is important that colleges can set up apprenticeships and skills training in advance of the factory being built. Does my hon. Friend support a request to the Minister to facilitate that?
Max Wilkinson
Of course. An alignment of skills with the jobs need for the future is key in the apprenticeship sector. Flawed policy in the past means that there has been a clear drop-off in new apprentices in recent years. Just over 736,000 apprentices participated in an apprenticeship in the last academic year, which is a slight decrease of 2.1% on the previous reporting period. Apprenticeship starts overall have fallen by 170,000 since 2015-16, when the Conservatives started governing alone. The deal on offer is clearly not as attractive as it once was.
We need to recognise that apprentices have the same rights as other employees, but experience a large pay disparity compared with other workers. The national minimum wage will be £11.44 for those aged 21 and over, but for a first-year apprentice, the rate is much lower. Young people are not immune from the cost of living crisis and the disparity between those two wages might be a disincentive. Have Ministers considered whether it is and whether it might be putting young people off from taking up apprenticeships?
The Liberal Democrats would scrap the apprentice rate and instead pay apprentices more fairly. We must also reform the apprenticeship levy, which many Members have mentioned today. Employers tell us that it simply does not work and the House of Commons Library briefing shows that there are large underspends every single year. The amount of money being put aside to train young people is simply not being spent. The Association of Employment and Learning Providers says that the money is being raised for skills but not spent on skills, at a time when Governments—this one and the last—say they are keen to encourage businesses to invest in skills.
The Lib Dems would replace the broken apprenticeship levy with a broader and more flexible skills and training levy. We are pleased to hear that the Government want to abolish the apprenticeship levy and replace it with a new growth and skills levy under Skills England. That is a positive step. However, it is clear that there is still work to be done in establishing the new levy and Skills England to oversee it. I would appreciate an update from the Minister on where things are with that policy.
There is also a concern that careers advice systems are not being properly set up to advise people of the many opportunities in apprenticeships. If we are going to fill the skills gaps that we have discussed, alignment of careers advice with those gaps will be key.
We Liberal Democrats believe that apprenticeships have a much bigger role to play. We welcome the Government’s plan for changing the system. If we get the reform right, we will help young people and employers, too. Central to that will be finally getting rid of the failed apprenticeship levy, properly valuing apprenticeships and learning from best practice like that in my constituency and that of my neighbour in Gloucester.
Christine Jardine (in the Chair)
I call the Opposition spokesperson, Rebecca Paul.
Rebecca Paul (Reigate) (Con)
It is a pleasure to serve under your chairmanship, Mr. Jardine, and to respond today for the first time for His Majesty’s Opposition. I congratulate the hon. Member for Peterborough (Andrew Pakes) on securing this debate on the value of apprenticeships and National Apprenticeships Week.
We have heard some tremendously insightful points this morning and, like others, I thank all Members for their contributions. I think it is apparent that everyone who has spoken today recognises the inherent merit of apprenticeships and it was we in the Conservative party who acted to deliver a world-class apprenticeship system that has created opportunities for countless young people, which would otherwise have remained out of reach, allowing them to earn while they learn.
Since 2010, there have been more than 5.8 million apprenticeship starts, with 736,500 people participating in an apprenticeship in England in the 2023-24 academic year alone. The numbers are impressive, but what truly makes the system we put in place one of the most laudable in the world is the sheer diversity of occupations that have been opened up to our young people. In England today, the apprenticeship system reaches into nearly 700 different occupations—everything from finance to agriculture to construction to nuclear physics. That means that today it is more viable than ever before for young people to chart their own paths and take those vital first steps into the careers that they have been dreaming of.
Of course, a robust apprenticeship scheme offering access to qualifications ranging from level 2 through to master’s degrees at level 7 cannot be delivered on the cheap. That is why successive Conservative Governments always sought to fund apprenticeships properly. In our final year in office, we delivered £2.7 billion for apprenticeships. As Members will appreciate, even the most excellent apprenticeship schemes are of little use without the anticipated uptake. That is why, when in government, we set out to cut red tape for businesses offering apprenticeships. We fully funded young people up to the age of 21 undertaking apprenticeships in small businesses, increased the amount of money apprenticeship levy payers could give to SMEs to hire an apprentice and put all apprenticeships on UCAS so that young people can compare apprenticeships in the same way they would a university degree.
Rebecca Paul
I am sorry; I will need to make progress so that the Minister has sufficient time.
Crucially, it was a Conservative Government that brought the Skills and Post-16 Education Act 2022 into law, ensuring that all pupils now meet providers of technical education so that they understand the wide range of career routes and training available to them, such as apprenticeships, T-levels or traineeships—not just the traditional academic options.
I know that Members will have their own accounts of how this fantastic system is working to nurture and support young people in their constituencies, and we have heard many of them today. I could not miss the opportunity presented by the debate to highlight one of my own. I was recently fortunate enough to visit the UK headquarters of Toyota, located in Burgh Heath, in the Reigate constituency. The visit included the chance to meet and hear from some of the outstanding apprentices working at the company. I was struck by the truly impressive enthusiasm, intelligence and dedication of these young workers. Though still in the early stages of their careers, the apprentices were already making hugely valuable contributions across departments from engineering to finance to marketing. In return, they received experience and training that I have no doubt will leave them in excellent standing for the duration of their working lives. That is an example of apprenticeships done right—an exemplar of what Conservative Governments have been working to enable and support for the last 14 years.
It is of real concern that today the very framework that made these apprenticeships, and so many others like them, possible now appears to be in some jeopardy. That jeopardy arises from a Government commitment to replace the apprenticeship levy with a growth and skills levy that will allow firms to spend up to 50% of their levy contributions on non-apprenticeship related training. If we make the plausible assumption that businesses will take maximum advantage of that flexibility, the number of apprenticeships on offer could slump from about 350,000 to just 140,000, a 60% decrease.
Of particular concern is that the worst of the impact would be felt by our youngest workers at the very first stages of their careers. If we again assume the full 50% decrease in spending, the number of apprenticeships available to those under the age of 19 would crash to below 40,000. That would be a drop from 106,000 in 2017. I concede that the Government’s intended approach might make some degree of sense if a significant portion of the apprenticeship levy remained unspent and would otherwise be serving no useful purpose. However, this is simply not the case. A full 98% of the apprenticeship budget has been used up over the last two years. That funding has gone to support high-quality, career-boosting apprenticeships of the sort we have been discussing this morning. It is concerning that this commitment risks seeing apprenticeship funding diffuse out into lower value courses, or even seminars and programmes that employers would have offered anyway. That is clearly not in the best interests of our young people, and risks creating a cohort with markedly worse life chances than that which came before.
It may well be the case that the Government intend to have their cake and eat it. It would be possible to both allow firms the flexibility to spend 50% of their levy contributions elsewhere and to maintain the current number of apprenticeships, but that could only be achieved with additional Government spending. To maintain the number of apprenticeship starts at the current level—assuming the 50% flexibility on levy spending—the Government would be forced to invest an additional £1.5 billion of new funding.
I ask the Minister to provide clarity on the Government’s intentions. Will firms be given 50% discretion to divert funding away from apprenticeships, as was previously announced? If so, will the Government step in with fresh investment to maintain numbers or will they allow our dynamic apprenticeship system to wither? If Ministers intend to intercede, where will the £1.5 billion they need be found? I pose those important questions not to score political points, but because we derive enormous value in this country from the transformative effect of apprenticeships and want to see as many young people benefit from them as possible.
With one eye on the clock to ensure the Minister has sufficient time to respond, I will say a brief word on defence. As of November 2023, the Ministry of Defence was the largest single deliverer of apprenticeships in the UK, with over 22,000 personnel engaged on a nationally recognised apprenticeship programme at any one time. In addition, over 95% of our non-commissioned military recruits are offered an apprenticeship after their trade training. That includes schemes with focuses on digital, nuclear, analytics and much more. Apprenticeships are a thread that runs through our armed forces, the Ministry of Defence and those private sector organisations that support both. It is of great importance that in their rush to redefine the way apprenticeships are delivered in this country the Government do not deprive our armed forces of the much-needed talent and capacity that is now nurtured and developed through apprenticeship schemes.
I have left the Minister much to address, so will now end where I began, by congratulating the hon. Member for Peterborough on providing us with this valuable opportunity to express our support for, and commitment to, apprenticeships. I wish everyone participating from 10 February a successful National Apprenticeship Week.
The Parliamentary Under-Secretary of State for Education (Janet Daby)
It is a privilege to speak with you as Chair, Ms Jardine. I congratulate my hon. Friend the Member for Peterborough (Andrew Pakes) on securing a debate on this subject and on his thoughtful speech. Whether in debates like today, or in his role as co-chair of the APPG on apprenticeships, he is an excellent ambassador for apprenticeships. I appreciate his enthusiasm and drive, and I was extremely impressed to hear that he has visited over 100 businesses since being a Member of Parliament.
As we have heard, I have a good many questions to respond to and I will endeavour to do my best. It is refreshing to hear from the many Members on the Government Benches about their grassroots experiences; there are those who have held jobs, been apprentices and are well connected to their communities, and we appreciate them all.
I want to set the record straight when it comes to what the Government have inherited. As well as inheriting the £22 billion black hole, we also inherited the fact that one in eight 16 to 24-year-olds are not in education, employment or training. Indeed, UK employers have said to us that a third of vacancies are due to skills shortages under the previous Government. Technical training at level 4 and 5 in the UK is at only 4% of adults, compared to Germany at 20% and Canada at 34%. What we have inherited is absolutely staggering. This is a Government for change—we are investing in our people and their future careers, and I will continue to speak about these issues.
I acknowledge everybody who has spoken: my hon. Friends the Members for Stafford (Leigh Ingham), for Barrow and Furness (Michelle Scrogham), for Gloucester (Alex McIntyre), for Rugby (John Slinger) for Coatbridge and Bellshill (Frank McNally), for Leicester South (Shockat Adam), for Derby South (Baggy Shanker), for Paisley and Renfrewshire North (Alison Taylor), for Carlisle (Ms Minns), for Hexham (Joe Morris), for South West Norfolk (Terry Jermy), for Nuneaton (Jodie Gosling), for Rossendale and Darwen (Andy MacNae), for Colchester (Pam Cox), for Erewash (Adam Thompson), for Barking (Nesil Caliskan), for Hitchin (Alistair Strathern), and for Tipton and Wednesbury (Antonia Bance), as well as my hon. and learned Friend the Member for Folkestone and Hythe (Tony Vaughan), the right hon. Member for Aldridge-Brownhills (Wendy Morton), and the hon. Members for Strangford (Jim Shannon), for Glastonbury and Somerton (Sarah Dyke), for Cheltenham (Max Wilkinson) and for Reigate (Rebecca Paul). I thank them all for their contributions.
National Apprenticeship Week promises to be the best yet, with more than 1,000 events across the country showcasing all that apprenticeships have to offer, as well as the wonderful apprentices taking to social media, including Instagram, to share their stories to inspire the apprentices of tomorrow. I thank all the apprentices, employers and providers who have worked so hard to provide these opportunities and to make apprenticeships such a success.
We know that right now the system is not working for far too many young people who have the most to gain from apprenticeships, but who have too often been locked out of accessing these opportunities. Apprenticeship starts by young people under 25 fell by almost 40% between 2015-16 and 2023-24. We are committed to changing this and to rebalancing the system to support more young people. That is why we are introducing new foundation apprenticeships in targeted, growing sectors. These will give more young people a foot in the door at the start of their working lives, while supporting the pipeline of new talent that employers will need to drive economic growth. We are working closely with employers and providers to design these new offers and ensure that they have the opportunity to develop their infrastructure before training and assessment starts.
We also want to make sure that apprentice wages support the attraction of talented individuals into apprenticeships. We are increasing the apprenticeship minimum wage by 18% this April, from £6.40 to £7.55, which will boost the hourly rate for thousands of young apprentices across a range of sectors and those in their first year of an apprenticeship.
We will continue to support care leavers to undertake apprenticeships. Apprentices under the age of 25 who have been in local authority care can claim a bursary of £3,000 when they start an apprenticeship. We will continue to pay £1,000 to both employers and training providers to support them to take on apprentices aged under 19, or 19 to 24 if they have an education, health and care plan or have been in care. Employers are exempt from paying towards employees’ national insurance for all apprentices aged up to 25 when the employee’s wage is below £50,270 a year.
As we work to support more apprenticeship opportunities for young people, it is vital we make sure they are aware of these opportunities. We are promoting career starter apprenticeships, suitable for those leaving full-time education, and targeting young people through the Skills for Life campaign. We have committed to improving careers advice and guaranteeing two weeks of work experience for every young person, as well as to establishing a national jobs and careers service to support people into work and help them to get on at work.
We are also taking action to support employers who want to build the skilled workforce they need for long-term success but who have told us they have not been able to find the right training options. In recent years, UK employers have said that over a third of their vacancies were down to skill shortages. That is why, as a key step of our levy-funded growth and skills offer, we will be introducing shorter duration apprenticeships. These will allow employers to benefit from high-quality apprenticeship training for valuable, in-demand roles that need less than 12 months’ training to be fully occupationally competent, offering more flexibility where that is right for the employer and the learner. We will continue to listen to employers as we deliver the greater flexibility they have called for, and to work with them as we build a vigorous and responsive skills system that will support employers to fill skills gaps that are holding back our economy.
After the Conservatives left us with a collapsing apprenticeship system as well as skills shortages, Labour is listening to employers and redrawing the system through Skills England, a new growth and skills levy, and new foundation apprenticeships. Apprenticeship starts by young people under 25 fell by almost 40% between 2015-16 and 2023-24. The Government are focusing on establishing a coherent skills system, with more flexible training options that support employers to fill skills gaps by driving growth and spreading opportunity. We are introducing foundation apprenticeships to get young people into work-based training and employment, as well as delivering shorter duration apprenticeships to provide flexibility for employers and learners.
SMEs are incredibly important to the economy and to apprenticeships. They are more likely to employ younger apprentices and apprentices from disadvantaged areas. We pay 100% of the training costs for young apprentices aged 16 to 21 and for apprentices aged 22 to 24 who have an education, health and care plan or have been in local authority care where they have undertaken apprenticeships with SMEs. As I have mentioned, we also pay £1,000 to employers and providers for apprentices aged 16 to 18 and those aged 19 to 24 who have an EHCP. We will ensure that we consider the needs of the smaller employer as we develop our levy-funded growth and skills offer.
The Government’s first mission is to kickstart economic growth. Across the country, skills gaps are holding back business growth, so we will support employers to invest in skills training. That brings me on to Skills England. We know that right now the skills system in England is complex. There is no shared national ambition on skills development. There is a need to bring together in one place a range of functions, currently scattered across different organisations, to better support the delivery of the skills that the economy needs and to further our industrial strategy, and growth and opportunity missions.
We are setting up Skills England to address these problems by bringing coherence and efficiency to the system, for the benefit of learners, businesses and local areas. Skills England will ensure that we know where our skills gaps are, and the training needed to fill them now and in the future. Skills England will combine the best available statistical data, with insights generated by employers and other key stakeholders. It will also ensure that there is a comprehensive suite of apprenticeships, training and technical qualifications that are aligned with skills gaps and the needs of employers.
The first Skills England report highlighted employer demand for levels 4 and 5—high technical qualifications; those qualifications have been independently approved as providing the skills that employers need. Skills England will work closely with employers, providers, trade unions, Government Departments, combined authorities, regional bodies and other agencies, all of which will help deliver our mission to drive economic growth and to open up a world of opportunity for young people and adults. The Government have an ambitious plan to rebuild Britain. We will deliver 1.5 million homes in England in this Parliament. Around 5,000 more construction apprenticeship places will be made available per year by 2027-28, thanks to an £140 million industry investment to get Britain building again.
We welcome Peterborough’s commitment to breaking down barriers to opportunity by being part of one of eight youth trailblazers that will launch in April 2025. Peterborough and Cambridgeshire have just announced the formation of their youth forum to shape the youth guarantee, to ensure that the voices and perspectives of young people are included in decision making. That pilot will address the needs and challenges faced by the young people in that area. It was wonderful to hear from many MPs about the work in their constituencies. I thank everybody for championing the work that the Government are doing in this area.
Jim Shannon
On a point of order, Ms Jardine. The hon. Member for Peterborough (Andrew Pakes) has not wound up the debate.
Christine Jardine (in the Chair)
We are out of time. The hon. Member indicated at the start that he did not mind.
Question put and agreed to.
Resolved,
That this House has considered the value of apprenticeships and National Apprenticeships Week.