Skills: Importance for the UK Economy and Quality of Life

Baroness Wilcox of Newport Excerpts

Thursday 9th May 2024 Lords Chamber

[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.