Independent Schools: VAT Exemption

Lord Forsyth of Drumlean Excerpts

Thursday 5th September 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I have only four minutes so I will sum up my view of this policy in three words: wicked, stupid and cruel. I have spent the summer receiving emails from vast numbers of parents. The noble Lord, Lord Davies, told us he had not had time to read all of them. If he had done so, he would be heartbroken.

[Lord Davies of Brixton (Lab)]

My Lords—

[Lord Forsyth of Drumlean (Con)]

I am not going to give way—he would not give way to me.

These are lone parents, single parents perhaps struggling with two jobs in order to pay. They are people who put themselves in danger to defend our country in the armed services. They are parents struggling with children with severe learning difficulties. Who in this Chamber can defend the idea of sending a child who suffers with autism to a completely different environment halfway through term? Anyone who knows anything about autism will know that that would be a cruel and disgraceful thing to do. That is the consequence of this policy.

The messages are coming from health workers, teachers and small businesses, people who are struggling to pay those bills. The noble Lord, Lord Foulkes, is not in his place but he told me he was not going to listen to what I had to say because he has seen people turning up in their Range Rovers to schools. The people I am talking about do not have summer holidays and run old cars to scrimp and save to do their best for their child in their circumstances.

By the way, every single one of these parents is saving taxpayers money. For the noble Baroness to suggest that this was a tax break—it is not one unless you take the view that education should be taxed. What has happened to the Labour Party that set up the Workers’ Education Association and founded the Open University? The Labour Party was elected in 1997 on “Education, education, education” and has now become the party of “Taxation, taxation, taxation”.

I agree that state schools need more resources, but look at the impact that this is going to have on those schools half way through the school year. I guess Emily Thornberry did not get to be Foreign Secretary because she let the cat out of the bag. She said, “It’s fine: if we have larger classes, we have larger classes”. “Let them eat cake”—she did not add. One in four children in Edinburgh go to independent schools. How on earth will state schools be able to cope with people who are no longer able to pay the cost?

I confess that I have not always been a huge fan of the ECHR, but I hope that those people with the resources will put their hands in their pockets and help my noble friend Lord Lexden and others to take this Government to court over this issue, and that the Government will realise that their time is nigh. As for the idea that this will save money—the Government have come up with at least three figures, all reducing in number—they need to read the wonderful analysis by the noble Lord, Lord Hacking, on their own Benches, as to how it will end up costing more than it will save.

I have a suggestion to make to the Government. I know they have made a silly manifesto commitment, and I know they feel that they have to do something, but they should at least take some time and not do this half way through the school year. If that is what they are determined to do, they could perhaps meet their requirement to put VAT at 5% rather than 20%, as we do on heating charges, and phase it in over a reasonable period of time. I fear that this is an ideologically driven policy of the kind that the Prime Minister showed during the election, when he was asked, “If one of your family were desperately ill, would you ever use private healthcare?” and he said no. We do not want that kind of politics in this country.

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[The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)]

My Lords, I thank the noble Lord, Lord Lexden, for opening this debate, and I am grateful for the many contributions. I will do my best to respond to as many as I can in the time available, and I undertake to write to noble Lords on those that I am not able to get to.

I put on record that I share the view of the noble Lord, Lord Lexden, that there are many excellent schools in the private sector, as there are in the public sector. My mother taught at one of them in Malvern. I spent time during my teenage years washing up in the kitchen of another. I know that excellent education is provided in those schools, which is why the department will continue to have, I hope, an important and constructive relationship with the ISC and the ISA in thinking through the whole range of issues that relate to independent schools. But some people listening to this debate might have thought that the intention was to completely do away with the private sector. The noble Lord, Lord Naseby, described how independent education has been with us for centuries. It will be with us for centuries more. People will continue to have a choice of whether they want to educate their child in a state or a private school. I will return to that in a moment.

I was a teacher in one of the excellent state schools which educate more than nine in 10 of our children, and I now discover that I attended the same state school as the noble Lord, Lord Hampton. So I will be crystal clear about the focus and priority for this Government. We are determined in government—on these Benches and in the other place—to drive up standards in those schools for the overwhelming majority of the children in this country, so that they may receive the opportunities that, too often, have been the preserve of the rich and the lucky, as many noble Lords have demonstrated.

There has been an assumption from some contributors that only some parents have aspirations for their children. As the mother of two children, of course I understand the absolute passion of parents to do the best for their children—to find the place that suits their children the best. That is not confined to people who choose to educate their children in private schools and are able to. As my noble friends Lord Davies and Lord Griffiths made clear, it is an aspiration shared by many parents around the country and one that this Government are determined to meet. Private education is not an option—

[Lord Forsyth of Drumlean (Con)]

Will the Minister give way?

[Baroness Smith of Malvern (Lab)]

No—the noble Lord has had the opportunity to have his say, and I want to respond to as many of the points that have been made as possible.

Private education is not an option for most of those people and, unlike the last Government, we will not build public policy around the expectation that public services will fail our children. Most parents need local state-funded schools to support them in meeting these aspirations. It is therefore right for the Government to focus on improving those schools—a public good that will benefit all of us.

Several noble Lords, including the noble Lord, Lord Forsyth, have identified the significance of education and the contribution that investment in that education makes. My noble friend Lady Ramsey identified the gap between that investment provided to our state schools and that provided to private schools: there was a 40% gap in 2010 and there is a 90% gap now. The noble Lord, Lord Bilimoria, said that we should spend more on state schools. The noble Lord, Lord Winston, talked about the deprivation and impact on aspiration of those who do not get the education that they deserve, and argued for more investment. That is precisely what this Government want to do—but we arrived into government to discover a £22 billion black hole and, unlike the previous Government, we are determined to make that investment in our schools but make it on a sustainable basis whereby we can outline where that money is coming from. That is why ending the tax breaks on VAT and business rates for private schools is a tough but necessary decision. It will generate additional funding to help to improve public services, including the Government’s commitments relating to education and young people.

VAT will apply to tuition and boarding fees charged by private schools for terms starting on or after 1 January 2025. I assure noble Lords that the impact of those changes has been assessed and that the Office for Budget Responsibility will certify the Government’s costings for those measures at the Budget.

Several noble Lords have asked what the impact will be of introducing the change on 1 January. We are impatient in this Government to ensure that we can start funding the improvements that so many noble Lords have argued for—that is one reason. It is also worth while, when thinking about the impact of the changes, to recognise that, for many pupils, the change should not mean that parents will automatically face 20% higher fees—nor do we expect pupils to move immediately. Most of the analysis suggests that that will not happen to the extent that pupils move at all—and I shall return to that point.

The Government expect private schools to take steps to minimise fee increases, including through reclaiming the VAT that they incur in supplying education and boarding—so the estimate is that the real VAT impact will be 15%. We think that that will happen, because we have seen what has happened in recent times. There have been above-inflation increases in private school fees for very many years. There has been a 55% increase since 2003 and a 20% increase since 2010, and there has not been a large exodus of pupils from those schools, which of course suggests an inelastic demand for private school places. It is reasonable for the Government to model and think about future impact based on previous experience.

We have provided considerable information around the proposal—both in the technical note and the draft VAT legislation. The technical consultation remains open until 15 September, and I encourage those who are interested to contribute to that as well.

The noble Baroness, Lady Monckton, raised a specific issue about the support to implement the VAT regime. The Government recognise that this will be the first time for many schools that they will need to register for VAT, and HMRC will publish bespoke guidance. It will also contact private schools directly with information about support sessions that will help them to go through this process.

The noble Lord, Lord Lucas, and the noble Baroness, Lady Barran, raised issues about what potential there is to raise revenue here. This will of course be part of the OBR assessment that will be published alongside the Finance Bill at the time of the Budget, which will enable us to consider the broad impact of this—not just the taxation impact but the broader cost impact as well. The IFS estimates that it will raise an extra £1.3 billion to £1.5 billion per year in the medium to long term. As I say, these points will be certified by the Office for Budget Responsibility. The Treasury is doing an economic analysis of the impact of this policy change and the interaction with other behaviours that might come about because of the introduction of VAT.

While there will be more detailed information about the revenue raised by this measure, this seems like a reasonable estimate of the revenue that will be raised. Unlike some other noble Lords, I do not see that amount of money as being inconsiderable. Of course there is more that I would certainly hope that we as a Government will be able to find to invest in education, as previous Labour Governments have, but this is an important contribution to some very important changes that we wish to make.

The noble Baroness, Lady Finlay, asked about the devolution consequences of VAT receipts. I assure her that additional funding provided for schools in England will be matched in the devolved Administrations in line with the Barnett formula.

I move to the issue of special educational needs. Understandably, this has been raised by many noble Lords this afternoon, in particular the noble Lord, Lord Shinkwin, in his contribution about the enormous significance of the independent special school that he identified, and the noble Baroness, Lady Monckton. Once again, I say that there is excellence in the private sector in independent special schools. Such excellence is the reason why, when there is a particular need for a pupil educated in the state sector to benefit from that excellence and its provisions for their education, health and care plan, that place is paid for by the local authority. The local authority will have the ability to reclaim the VAT placed on that fee, so there will be no impact on the parents of those children with the most acute special educational needs. I can also confirm, in answer to questions from the noble Baroness, Lady Barran, that further education institutions will not be affected by these provisions, and non-maintained special schools are exempt as well.

I can understand the concern of parents—given what I said previously about everybody’s aspiration—particularly where their children have special educational needs that have not been met or assessed through an education, health and care plan, in wanting to think about the best place for their children to go, but we cannot organise policy on the basis of the broken state of public provision for children with specific learning needs. This is a government failure long in the making. I share the passion of the noble Lord, Lord Addington, about the way in which the current system is working. In fact, the former Secretary of State for Education, after 13 years of her party’s approach to special educational needs, rightly described this issue as “lose, lose, lose”. One reason for needing the additional investment that this provision will provide is to help begin turning round the special educational needs system, which I wholly agree currently fails too many of our students.

In response to those who have asked for further discussions about the position of independent special schools, we are happy to continue having those conversations. However, I reiterate that, for those children with acute needs who are being educated in independent special schools with an EHCP, there will be no impact on them from this VAT change. We will actively listen to the questions and concerns being raised and will meet with our colleagues.

Several noble Lords, including my noble friend Lord Hacking and the noble Baroness, Lady Barran, raised the impact of these changes on state schools. The Government believe that the number of pupils who may switch schools as a result of these changes represent a very small proportion of overall pupil numbers in the state sector. As I have already outlined, those parents paying to send their children to private schools have already experienced considerably above-inflation increases and have not chosen to move their children, but we will of course monitor local demand to ensure that appropriate measures are taken to increase capacity where required.

I take the noble Baroness’s point about the differential impact, potentially, on different parts of the country, and DfE officials will monitor that very carefully, but children move between the private and state sectors every year and local authorities and schools have processes in place to support their transition. In terms of places, of course we are going through a period of demographic change. Even if the pupil displacement is above the estimate of the independent Institute for Fiscal Studies, which suggested that up to 40,000 might move over a period of time, that is still likely to represent less than 1% of the more than 9 million total UK state school pupils. The latest figures published showed that 83% of primary schools and 77% of secondary schools have one or more unfilled places.

I turn to the issues raised by the noble Baronesses, Lady Fraser and Lady Bull, about the enormously important contribution of Music and Dance Scheme schools. We can all see, in the talent of the noble Baroness, Lady Bull, the significance of those schools. We are continuing to engage with the schools currently within the Music and Dance Scheme project. As has already been outlined by noble Lords—and I wholly agree that, for the good of all of us, we need low-income families to be able to send their children to those schools when they have that talent—the children of parents who cannot afford the fees are funded by the Music and Dance Scheme. We will consider, in the light of the VAT charges, how and whether we can change that scheme to compensate for the VAT issue. We are willing to carry on talking, as we have done, to representatives from the Music and Dance Scheme schools about the impact of this change of policy. The same goes, as the noble Earl, Lord Clancarty, raised, for the dance and drama awards, where we will also continue having discussions that we have already started with the schools in that category.

Noble Lords, including the noble Lord, Lord Kempsell, the noble Baroness, Lady Garden, and the noble Earl, Lord Devon, raised the issue of military families. I reiterate that the Government recognise the enormous sacrifices our military families make; of course, that is why the Ministry of Defence and the Foreign and Commonwealth Office provide the continuity of education allowance to eligible officials and service personnel. It is also worth pointing out that very many military personnel send their children to state schools and want to benefit from the improvements that will happen in those state schools. However, the Government will monitor closely the impact of these policy changes on affected military and diplomatic families. The upcoming spending review is the right time to consider any changes to this scheme, but we will continue to look very carefully at that.

Several noble Lords talked about the contribution of private schools, and the defence was that because they contribute through partnerships with state schools or by providing bursaries, we should not interfere with that. I welcome the contributions private schools make to cross-sector partnerships, as outlined by the noble Lord, Lord Maude, my noble friend Lord Winston and the noble and learned Lord, Lord Etherton; I hope that will continue. Certainly, for schools with charitable status, as charities, and in line with legislation passed by the last Labour Government, they must continue to demonstrate public benefit. I hope they will continue to do that through the provision of a small number of means-tested bursaries and through partnership with local state schools. I think they will continue to demonstrate their broad public benefit through those wider contributions.

On the legal position, raised by the noble Lord, Lord Alton—channelling the noble Lord, Lord Pannick —and my noble friend Lord Hacking, I am not going to speculate on the outcome of the ongoing technical consultation. However, legal considerations have been incorporated into the process, as is standard for all legislative changes, and we are confident that the measures are compatible with the Human Rights Act 1998.

I know I have not managed to cover all of the wide range of issues that have been raised, and I undertake to write to noble Lords, but I assure the House that private schools will remain part of our education system. The choice to send your child there will remain. However, most children are educated in the state sector and that is where we must target our support and resources most. We will work closely with schools and local authorities to make the implementation of the new tax rules as smooth as possible. I thank noble Lords for their contributions this afternoon.

--- Later in debate ---

[Baroness Smith of Malvern (Lab)]

I think I covered that point in talking about the arguments for introducing this in January, while also making it clear that it is the Government’s view that introducing the VAT liability does not necessarily imply that a sudden increase in bills will arise; nor does it imply that the whole of that increase in VAT will be passed on in fees. In fact, if we look at the behaviour in the private school sector, we see that, despite very large increases in fees—well above inflation—parents have tended, where they have made that choice, to keep their children in the private sector anyway, and I am sure that the vast majority of parents will continue to do that. The analysis, including that carried out by the Institute for Fiscal Studies, suggests that, even if there is going to be a movement of pupils away from the private sector, that will tend to be not immediately in January but over a much longer period, and I imagine that will be the approach that most parents take.

[Lord Forsyth of Drumlean (Con)]

Before the noble Baroness sits down—since she is now giving way—she made a very passionate point about how all parents have aspirations for their children, wherever they are educated. She has not explained why she wants to tax that aspiration.

[Baroness Smith of Malvern (Lab)]

I explained that, to improve state education—where 93% of our pupils are educated—and meet the aspirations of the parents who send their children to those schools, we need to find the funding. Unlike the previous Government, we are not willing to make uncosted commitments or run this country’s fiscal position into the ground. We are not willing to risk our pensions and our reputation as a fiscally prudent country in the way that the last Government were. Therefore, to make and deliver the range of commitments we have set out, we will be clear about where that money is coming from. This is part of the honesty and transparency around fiscal prudence that the last Government so patently failed to deliver.

School Funding: Special Educational Needs

Lord Forsyth of Drumlean Excerpts

Thursday 23rd May 2024 Lords Chamber

[Baroness Barran (Con)]

Having a highly skilled teacher to work with, combined with the assistive technology to which the noble Lord referred, is the critical part. That is one of the reasons that Huawei has worked with the sector: to reform the training not just for SENCOs but for those on their initial teacher training and early career frameworks to support children in mainstream education.

[Lord Forsyth of Drumlean (Con)]

My Lords, I congratulate my noble friend the Minister on the wonderful job that she has done at the Dispatch Box. I also congratulate her on her patience in listening to questions from Members of the Opposition demanding more resources, when, as a party, it is not prepared to commit itself to a single cent of extra expenditure.

[Baroness Barran (Con)]

My noble friend is very kind—

Russell Group Universities: Foreign Student Admissions

Lord Forsyth of Drumlean Excerpts

Thursday 1st February 2024 Lords Chamber

[Baroness Barran (Con)]

The Government share the noble Baroness’s commitment to making sure that disadvantaged students can access higher education. As the noble Baroness and the House know, our perspective is that there are opportunities at different levels of jobs, such as levels 4, 5 and 6—namely, undergraduate level. We have also put an enormous emphasis on degree apprenticeships so that loans should not be a barrier to access and, as the House knows, we will be introducing the lifelong loan entitlement, which will also unlock potential from those who do not currently access higher education.

[Lord Forsyth of Drumlean (Con)]

My Lords, like the noble Lord, Lord Campbell-Savours, I benefited from a free education and a grant at St Andrews University. Today I would not have a hope of getting into St Andrews University because, while they are free of tuition fees, there is insufficient funding. The result is that children from disadvantaged backgrounds cannot get a place at Scottish universities. The universities have responded to the lack of income from fees by bringing in lots of international students. This is a disgrace, and if the situation in England is bad, north of the border—under the SNP—it is extremely worse.

[Baroness Barran (Con)]

I have to agree with my noble friend. The figures are very different in Scotland. I mentioned that 85% of undergraduates in England are UK students. In Scotland, that figure is only 66% and has declined from 73% over the last five years.

Children’s Care Homes: Private Equity

Lord Forsyth of Drumlean Excerpts

Tuesday 30th January 2024 Lords Chamber

[Baroness Barran (Con)]

There are just under 8,000 children in children’s homes, about 57,000 children in foster care and just under 7,000 children in either secure placements or independent supported accommodation.

[Lord Forsyth of Drumlean (Con)]

My Lords, this attack on the private sector is extraordinary, is it not? Local authorities are desperate for capital and the resources to provide for children, yet the private sector, which is providing that capital, is under attack. Surely the alternative is that there will not be the resources needed for children.

[Baroness Barran (Con)]

My noble friend pointed to a more fundamental question, namely: why have local authorities and charities, which used to provide these services, stepped back in a world where the private sector can make a decent return on them?

Teacher Shortages

Lord Forsyth of Drumlean Excerpts

Wednesday 6th September 2023 Lords Chamber

[Baroness Barran (Con)]

I am aware that the Secretary of State has apologised for her remarks. Working closely with her and my right honourable friend the Minister for School Standards, I can absolutely assure the House that we barely have a conversation where we do not express our gratitude to teachers and school leaders. We take workload very seriously and are continuing to work with the unions on that following the pay agreement.

[Lord Forsyth of Drumlean (Con)]

My Lords, on the subject of intemperate behaviour, does my noble friend share my disgust that the Labour Party put out a message that the Prime Minister did not care about the safety of our children in schools? On issues such as the ones she has dealt with so well, we do not need people making party political points.

[Baroness Barran (Con)]

I think the serious point here is that there is a serious situation in the handful of schools where we have had to intervene on the concrete. Of course, it could not be more inaccurate and unhelpful to criticise the Prime Minister personally in this regard.

Teacher Training: Dyslexia and Autism

Lord Forsyth of Drumlean Excerpts

Thursday 22nd June 2023 Lords Chamber

[Baroness Barran (Con)]

I know that the noble Baroness is a former teacher, so she brings professional insight to this. We had very serious expert panels, including educational experts, on special educational needs and disabilities, both for the core content framework and the reform of initial teacher training. All of them were clear that trainees need to be able to teach everyone, and one of the great skills of a teacher is being adaptive. There also needs to be a pathway to experts in a school, and that is where the SENCO comes in.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare an interest as I have a family member who is affected by autism and dyslexia. Does my noble friend agree that one of the problems is that before people can get support in the schools, they need a diagnosis, and getting a diagnosis is extremely difficult and takes a very long time? What are we going to do about that?

[Baroness Barran (Con)]

I agree with my noble friend that early, accurate and effective identification is critical, but schools and colleges are permitted to put in place support for children where they have identified a need, without needing to wait for a formal diagnosis.

International Higher Education Students

Lord Forsyth of Drumlean Excerpts

Tuesday 21st March 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords—

[Lord Morgan (Lab)]

My Lords, is it not—

[Lord Forsyth of Drumlean (Con)]

My Lords, would my noble friend care to reflect on the fact that in Scotland, which has St Andrews as the oldest university, the failure of the Scottish Government to have tuition fees for Scottish students has meant that there are no places for Scottish students, and the universities are having to raise the money by having more international students, at the expense of youngsters in Scotland?

[Baroness Barran (Con)]

I cannot really comment on the experience of youngsters in Scotland. I can say that, from our perspective in England, we believe that the presence of international students is a great source of soft power for the nation—both those in our universities here and the more than 500,000 students who study in British universities overseas.

Education: Philosophy

Lord Forsyth of Drumlean Excerpts

Tuesday 1st November 2022 Lords Chamber

[Baroness Barran (Con)]

I am absolutely delighted to add my support. The evidence on the value of oracy beyond simply public speaking is all important and very clear, and the department is working on it.

[Lord Forsyth of Drumlean (Con)]

Following the point made by the noble Baroness, Lady O’Neill, should we not have more philosophers in this House, if for no other reason than we would be better at explaining why we exist?

[Baroness Barran (Con)]

Having once had the pleasure of having tea with the noble Baroness, Lady O’Neill, I know that she is in another league in her ability to explain these complex things, but having a multidisciplinary House is probably a strong basis.

Capita: Turing Scheme Contract

Lord Forsyth of Drumlean Excerpts

Thursday 27th January 2022 Lords Chamber

[Baroness Barran (Con)]

The noble Baroness is absolutely right to pick me up on not having acknowledged the British Council’s role in the set-up of the scheme. We are very grateful to it, as we are for the way that it and the new provider are working together to ensure a seamless transition. The international network is less relevant to this contract because it is about grant administration. It is up to the institutions participating in the scheme to make those international links.

[Lord Forsyth of Drumlean (Con)]

My Lords, is my noble friend not astonished that many of the people now carping about how the scheme is run, even though it has delivered two-and-a-half times more people, were not so long ago telling us that if Erasmus disappeared there would be no opportunities at all? Does she not get a bit tired of those people still fighting old battles?

[Baroness Barran (Con)]

I cannot comment on my noble friend’s final point but it is important that we look at the data and the evidence of what happens. As my noble friend has pointed out, the evidence is extremely encouraging.

Skills and Post-16 Education Bill [HL]

Lord Forsyth of Drumlean Excerpts

Report stage
Thursday 21st October 2021 Lords Chamber

[Lord Aberdare (CB)]

My Lords, I fully support what the noble Lord, Lord Layard, described as the first half of Amendment 50, but I am rather less comfortable about the approach taken in the second half, requiring any employer receiving apprenticeship funding to spend at least two-thirds of it on people under 25 beginning apprenticeships at levels 2 and 3. That is an aim I entirely support, but I am not convinced that putting the onus wholly on employers to deliver it is the right way of going about it.

One of the concerns employers have regularly expressed about the current apprenticeship system is its lack of flexibility. This amendment would not only reduce the flexibility available to employers but impose extra requirements on them to manage their apprenticeship programmes and an extra level of bureaucracy resulting from the process of enforcing the requirements.

Employers already find it difficult to spend their levy funds, which is why so many apprenticeships go to reskilling and upskilling existing employees. The energy and utilities sector, which has a very good record of employing apprentices, has managed to spend on average only 54% of the levy funding available to it, so it is not as if there is not more money available. All that they do not spend just goes back to the Treasury.

I believe a better approach might be to introduce that extra flexibility into the apprenticeship levy system itself, to make it easier and more attractive for employers to offer more apprenticeships at these levels to younger people. This could be done through, for example, enabling part of an employer’s levy funds to be used for pre-apprenticeship training initiatives in schools to identify and prepare young people who might then be suitable candidates for apprenticeships. I am sure there are other ways of motivating employers to offer more apprenticeships of this type, rather than introducing additional rules that could lead to their providing fewer.

I support two and a half thirds of this amendment, but I am slightly uncertain about the mechanism that the noble Lords are implying to address the third one.

[Lord Forsyth of Drumlean (Con)]

My Lords, I have not participated in any of the proceedings on this Bill, partly because I chair the Economic Affairs Committee and we are looking at central bank digital currencies at the moment. But I bumped into the noble Lord, Lord Layard, who pointed out to me that this amendment is entirely in line with the recommendations made by the committee in its report, Treating Students Fairly, which was published in June three years ago. I shall not repeat the arguments so eloquently put by my noble and learned friend Lord Clarke of Nottingham, with every word of which I agree, but it was set out clearly in that report, more than three years ago, that the apprenticeship levy was not working. Indeed, we found that larger employers who were running very effective apprenticeship schemes had simply abandoned it, treating the levy as a tax, and done their own thing.

My noble and learned friend spoke about the way in which all the financial incentives are to keep people in schools and send them on to universities, where they do courses which do not enable many of them to use the skills and achieve the kind of living standards which they aspire to. In short, we probably need more plumbers, electricians, specialists and engineers than we do people who are experts in media studies. I am not saying that media studies is not a serious subject—well, actually, I do think that it is not a serious subject, but that is probably going to get me a lot of abusive emails. I am disappointed that, as this matter was discussed in Committee and as there has been so much about it in the all-party unanimous report, the Government are still dragging their feet on the matter.

When we discuss future topics in our committee, one thing that is regularly suggested is that we look at productivity. We always reject it, on the grounds that it is such a broad subject and so difficult, but this matter is absolutely central to productivity and, even more importantly, offers a future to so many of our young people. So I hope that my noble friend will consider this amendment. I take the point about providing flexibility.

One thing that struck me—and I know that the Government have taken some action on this—was that one of the officials who gave evidence to us proudly announced that the apprenticeship scheme had been used to send her to business school. Of course, that is the antithesis of what the scheme should be. I am not up to date on what has happened since, but there were some 400 different types of rules for different organisations, and the whole thing had become utterly bureaucratic.

The noble Lord, Lord Layard, referred to the Robbins committee. Those of your Lordships who have not read the report should just read the introduction; it is written in the most beautiful prose. It sets out the objectives, from all those years ago, and this amendment is central to achieving them.

When we were looking at treating students fairly, one thing we got in evidence was a diagram showing all the initiatives that had been taken by various Governments for training, and all the changes in names and so on. It is an unbelievably complicated process—not just YTS; there are literally tens and tens of different initiatives. What we need, in the words of Her Majesty the Queen, is perhaps less talk and more doing in this area. This amendment is a very important step forward if the Government decide to accept it.

[Lord Cormack (Con)]

My Lords, I had not come to speak in this debate but to listen. However, some things said by my noble friend Lord Forsyth provoke me to make a short intervention. I do so because I am the chairman—I was the founder—of the William Morris Craft Fellowship. Every year, we award craft fellowships to craftsmen working, for the most part, on historic buildings, including stonemasons, plumbers and bricklayers; people who have gone through a proper apprenticeship in the past and who we select because we think they have the potential to oversee a great project. Your Lordships all know the sort of thing to which I refer: a great parish church or cathedral, or a country house in the possession of the National Trust or privately owned. These places are at risk because of the very few people who are coming forward and getting a proper apprenticeship in this modern age.

My noble friend referred to the young woman and the business qualification that she claimed to be an apprenticeship. I have met people who have claimed to have apprenticeships in flower arranging. But I am talking about young men and women—and there is an increasing, though not overall great, number of women— who have spent four, five, six and sometimes seven years learning and mastering a craft. The noble Baroness, Lady Sherlock, on the Front Bench opposite, is a great devotee of Durham Cathedral, as I am of Lincoln and indeed all our great cathedrals. Their survival depends upon having men and women who are accomplished and able enough to master these crafts, which go back centuries. And they are in danger.

I am also a vice-president of the Heritage Crafts Association, which represents crafts men and women who very often work individually, at home, producing something, in the William Morris idiom, that is both useful and beautiful. We have produced only recently a red list of endangered crafts. I give you but one example: we are down to the last sporran maker. It might sound slightly amusing, but—

[Lord Forsyth of Drumlean (Con)]

It is very serious.

[Lord Cormack (Con)]

It is serious, as my noble friend Lord Forsyth knows better than most. Not only is it serious but it is outrageous that, to provide sporrans for a Scottish regiment, the Ministry of Defence has recently gone to Pakistan, whereas in Scotland they can still be made.

I will not go on; I hope I have made my point. Apprenticeships are desperately important, and they are not second best. A young man or woman cannot work with his or her hands unless they have a brain that functions—although, rather interestingly, many people with dyslexia are particularly good crafts men and women. We need them, and we must have proper apprenticeships that enable them to become accomplished.

I am very taken by the amendment moved by my old noble and learned friend Lord Clarke. We began in politics together, way back in 1964, fighting in adjacent constituencies. I think he has performed a service to the House by moving his amendment, so ably seconded by the noble Lord, Lord Layard. I very much hope that my noble friend who winds up will accept the thrust and logic of what has been said and give us a comforting reply.

--- Later in debate ---

[Baroness Barran (Con)]

My Lords, I thank my noble and learned friend Lord Clarke and the noble Lord, Lord Watson, for their amendments, and all noble Lords who spoke in the debate. I concur with all noble Lords’ ambitions around lifelong learning. This is an important issue with which the Government agree; however, we do not believe it is necessary to specify such a requirement in the Bill.

In April, we launched the free courses for jobs offer as part of the lifetime skills guarantee. This gives all adults in England the opportunity to take their first level 3 qualification for free, regardless of their age. We have ensured that our funding arrangements will allow relevant providers to access further funding if there is higher-than-expected learner demand. Over 400 level 3 qualifications are available, which have been specifically identified for their strong wage outcomes and ability to address key skills needs. Adults in all regions of England have been enrolling since April.

The free courses for jobs offer builds on the pre-existing legal entitlement for 19 to 23 year-olds to access their first full level 2 and/or level 3 qualification—a point raised by the noble Baronesses, Lady Wilcox of Newport and Lady Garden of Frognal—which the free courses for jobs offer complements. Through the adult education budget, full funding is also available, through legal entitlements, for adults aged 19 and over to access English and maths to improve their literacy and numeracy, and for adults with no or low skills to access fully funded digital skills qualifications, as we discussed in an earlier group of amendments.

The adult education budget also supports colleges and training organisations to work with adults at lower levels who want to re-engage with learning and/or their local labour market. This includes around 2,000 regulated qualifications and their components, and non-regulated learning, from entry level to level 2.

In areas where adult education is not devolved, the adult education budget can fully fund eligible learners studying up to level 2 where they are unemployed or earning below around £17,300 per year. In areas where the adult education budget has been devolved to mayoral combined authorities or the Greater London Authority, they are responsible for determining the provision to support outside of the legal entitlements.

The noble Baroness, Lady Wilcox, asked why the Government will not put the offer of free courses for jobs on a statutory footing. As she will be aware, this policy has been in delivery since April and is already benefiting adults aged 19 and above without a prior level 3 qualification in all regions of England. We do not believe that it is necessary to legislate in order to deliver this important investment in the nation’s skills.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to my noble friend. It is fantastic that she has listed all these initiatives, but it does not really explain why she is not prepared to put this in the Bill. She says that she does not believe that it is necessary. Why?

[Baroness Barran (Con)]

I am sorry; I thought that I was clear in my remarks. We are already delivering the policy and therefore do not believe that it is necessary to have it in the Bill.

[Lord Forsyth of Drumlean (Con)]

But—

[Baroness Barran (Con)]

If my noble friend will allow me to finish, I will come on to talk about some of the wider issues—particularly in relation to funding, on which I know he is a great expert—further on in my comments.

[Lord Forsyth of Drumlean (Con)]

I do not wish to press too hard on this, but Governments are here today, gone tomorrow, and Ministers change. By putting this amendment in the Bill, it is clear to everyone what the future is; otherwise, we are relying on administrative decisions, which can change.

[Baroness Barran (Con)]

My noble friend is quite within his rights to press me and the Government as hard as he sees fit, but I have set out the Government’s position as best as I can at this stage.

Turning to the other aspects of the amendment in the name of the noble Lord, Lord Watson, I agree that the list of qualifications—