Skills and Post-16 Education Bill [HL]

Debate between Lord Adonis and Baroness Whitaker

Committee stage
Monday 19th July 2021 Lords Chamber

[Baroness Whitaker (Lab)]

My Lords, I support Amendments 76 and 80, for the obvious reason so clearly set out by the noble and learned Lord, Lord Clarke of Nottingham, and others that unless full funding is available, many students who could benefit from and would in turn benefit society by attending these courses will simply not be able to do so through poverty. This applies to a significant proportion of those from the Gypsy, Traveller and Roma communities, and no doubt to other minority-ethnic students, as well as to the rest of the NEETs referred to by the noble and learned Lord. I hope that the Government will respect the powerful arguments in favour of these amendments.

[Lord Adonis (Lab)]

My Lords, this is a hugely important debate for the future of not only our education system but our society, because unless we have a properly trained workforce in the future and young people have real prospects and qualifications, we are in for a terrible time. As the noble and learned Lord, Lord Clarke, said, there cannot be levelling up unless we have qualifications, skills and opportunities that level up. It is good that he and my noble friend Lord Watson have tabled these amendments, which give us an opportunity to explore this broad issue and to hear from the Government what their intentions are.

Amendment 76 in the name of the noble and learned Lord, Lord Clarke, and my noble friend Lord Watson’s Amendment 80 are superficially similar. But I notice that as soon as you start probing them, as the noble Baroness, Lady Greengross, said, there are significant differences. I wonder whether my noble friend might elucidate, because his amendment is much more circumscribed then that of the noble and learned Lord, and I wonder why. I find the noble and learned Lord’s amendment very appealing: it has a broad statement of policy objectives, which looks to be absolutely correct for the future of our workforce and society. The bold statement in the noble and learned Lord’s amendment is:

“Any person of any age has the right to free education on an approved course up to Level 3 supplied by an approved provider of further or technical education”,


whereas my noble friend’s amendment says:

“All persons aged 19 or older and under the state pension age have the right to study a fully-funded approved course”.


The noble Baroness, Lady Greengross, asked whether that eliminated all people who are over the retirement age. By the way, we need to eradicate from society the concept that once you get to the age of 60, 62 or 65, you are now unemployable and should not be eligible for proper training and the full opportunities that we extend to other people. If the House of Lords—average age 72—does not stand up for those beyond the statutory retirement age, who in this country is going to do so? The noble Baroness’s point is very well made and I look forward to my noble friend Lord Watson, speaking on behalf of my party, making it clear that we are fully in favour of people post retirement being eligible for these benefits as well.

My noble friend’s amendment also does not specify whether this is to be a right, which must go with funding, or simply an entitlement. The amendment of the noble and learned Lord, Lord Clarke, says:

“Any person of any age has the right to free education”,


whereas my noble friend’s amendment says:

“All persons aged 19 or older and under the state pension age have the right to study”.


The big question is: who is going to pay for that? I know that we are having a policy review at the moment. The noble and learned Lord is a former Chancellor, so he is well aware of the forms of words that need to be used when you can give no commitment that involves any spending at all. I fully appreciate that may be why my noble friend’s amendment does not extend, so far as I can see, any rights that go with funding. but it would be as well to make that clear.

In the policy review which my party is conducting, it is essential that we put the rights of those who are on a path to technical and vocational education on a par with those who go on to university. We keep mouthing these platitudes about equality of opportunity but we never deliver it. When we look at the priorities facing the country, there is none more important than seeing that those on a technical education track, who at the moment too often do not get those opportunities, have them extended to them. These two amendments give us an opportunity to explore the terrain in this area.

However, the noble and learned Lord’s amendment also raises the very important issue of the apprenticeship levy. In all the instances of major acts of public policy which have delivered the exact opposite of their stated intention within the last generation, I cannot think of a more significant example than the apprenticeship levy. George Osborne, the late lamented Chancellor of the Exchequer who introduced it in his Budget speech of July 2015, said about apprenticeships that the then Government were

“committed to 3 million more”,

and that,

“while many firms do a brilliant job training their workforces, too many … leave the training to others so we are going to take a radical and, frankly, long overdue approach … an apprenticeship levy on all large firms”—[Official Report, Commons, 8/7/15; col. 328.]

to ensure 3 million more apprenticeships. Very few policies which came out of the Government during the past 11 years, which have been a bit of a wasteland for public policy at large, have I applauded more warmly than the apprenticeship levy. It looked to be, and I think George Osborne intended it to be, a bold step forward to raise significant additional funds that would have been available for training. The CBI was not wild with excitement when that policy was announced because it thought that was to be the case.

What then happened is what always happens when there is no one in government who really gets a grip on these things: the policy was essentially abandoned and became an orphan. As we know, Mr Osborne left the scene a year later—one of the many casualties of the Brexit disaster, which has managed to consume all its children during the last five years. The Chancellor of the Exchequer who had been behind the policy vanished and there was never an Education Secretary who was behind it. The noble Lord said that vocational education is the lesser priority of the education department, but among recent Education Secretaries I am hard put to see that it is a priority at all. As I said during the first day in Committee, there has been one Minister of Further Education each year since 2010 and the only one who showed any interest in apprenticeships, Robert Halfon, was promptly sacked because he was becoming too enthusiastic, and was shunted off to become chairman of the Select Committee in the House of Commons. There was nobody taking a grip on this policy and, as a result, two fatal flaws developed in its evolution.

The first, which the noble Lord highlighted, was that firms themselves were allowed to define what constituted training—as he said, it was anything up to and including MBAs. This is why there has been a massive decline in entry-level and level 2 and 3 apprenticeships, while all the emphasis has been on high-level apprenticeships. It is only large firms that pay the levy and that is how they best use the money which they have hoarded for apprenticeships.

The figures speak for themselves. The number of apprenticeships actually being provided is far from George Osborne’s 3 million extra. In the last four years it has declined from 213,000 to 161,900. This is a decline of nearly 50,000 apprenticeships from a policy that was supposed to increase the number by hundreds of thousands: it has moved in exactly the opposite direction to the one intended.

These figures are all taken from a House of Commons research paper from 30 March this year. For the under-19s, the fall has been catastrophic: the fall over that four-year period is more than one-third. The number of under-19s going into apprenticeships has declined between 2018 and 2021 from 66,000 to 39,000. That is a colossal tale of human deprivation and misery, because this means there are 17, 18- and 19-year olds who are basically going on to no proper training whatever.

That leads to the second flaw of the apprenticeship levy. It was a design flaw that I put to George Osborne at the time; he said he was prepared to look at it but, again, things moved on. The apprenticeship levy is not, in fact, a levy. Again, I look to the noble and learned Lord, Lord Clarke, as a former Chancellor. When the Government introduce a levy, normally—in almost every other case that I can think of—the levy is Her Majesty's Government by Act of Parliament requiring other bodies to pay a contribution to the Government or a public body for the delivery of a service, or to go into the Exchequer.

This is not a levy of that kind; it is a requirement on large firms to undertake training up to a certain level, which is the amount of the levy as a percentage of their turnover. Only if they do not provide training up to that level is the money then supposed to be volunteered under a scheme, which is very haphazard, and go to the Treasury or a designated public authority.

That was a fatal flaw in the design of the levy. It is like stamp duty being given to estate agencies, which have to pay the money to the Treasury only after they have paid all their expenses, paid into every imaginary marketing scheme that they can think of and paid vast salaries to all the agents. It was a fatal flaw and was done as a concession to business because the deal was that, if the money was first made available to the employers, this would be less of a burden on the employers. As a result, it was a huge incentive to the employers only to train their own workforce—which, by definition, was the existing workforce—so there were not many of those at entry level. This included training up to level 4, MBAs and bespoke training courses at vast expense.

There was no incentive to increase the number of apprenticeships and no mechanism for taking any of the money away from them and distributing it more fairly, nor, as the noble Lord, Lord Aberdare, so rightly said, a provision for small and medium-sized enterprises to get the money either because they do not pay the levy. It applies only to large employers, and SMEs only get any of the proceeds by the process of redistribution if money is returned to the Treasury over and above what companies spend, which is virtually nothing. SMEs are the major employers in this country and should be providing an army of new apprenticeships.

The apprenticeship levy is a complete catastrophe of a policy. It has significantly reduced the supply of apprenticeships, even though it was meant to increase them. It has particularly done so in respect of small and medium-sized enterprises and young people. Therefore, the third part of the amendment of the noble Lord and learned, Lord Clarke, which states that any employer

“receiving apprenticeship funding shall spend at least two thirds of that funding on people who begin apprenticeships at Levels 2 and 3 before the age of 25”

is vital. I would take it further and take the funds out of the hands of the employer and see that they are distributed on a fair, national, basis including to SMEs.

I look forward to the Minister’s response, particularly on what steps the Government are proposing. It is a very basic question: what steps are the Government going to take to ensure that the number of apprenticeships in this country goes up rather than down? Each year at the moment the numbers are going down and we need them to go up.

What I would most like to see is the Minister accept the amendment put by the noble and learned Lord, Lord Clarke. It is an excellent amendment and comes with the great pedigree of a former Chancellor; he was not a notable high spender as Chancellor but was quite discriminating in the object of his affection when he was in charge of the national money bags. If he thinks that this should be a big imperative national priority, then we should think so too. I very much hope that something like his amendment becomes the law of the land.