Queen’s Speech

Lord Macdonald of Tradeston Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Macdonald of Tradeston (Lab)]

My Lords, it is my privilege to congratulate the noble Lord, Lord Bamford, on such an attractive and authoritative maiden speech. His mastery of business is evident in the outstanding global success of his family business, JCB, which I think is now the world’s third largest construction equipment manufacturer. His expert report, commissioned by the Prime Minister in 2012, argued persuasively for improvements in the Government’s engagement with business. One recommendation was for a better system of training and education for young people in technical fields, which I shall advocate today, although not so eloquently as the noble Lord. Like him, I was an engineering apprentice, so I particularly look forward to him championing the cause of manufacturing in future debates in your Lordships’ House.

The Queen’s Speech stated that the Government would increase the total number of apprenticeship places to 2 million by the end of this Parliament. Provisional figures show that under the coalition there has already been a total of 1.7 million apprenticeship starts in the past four years. However, with the annual number of starts now running at half a million a year, getting from 1.7 million to the target of 2 million in the next year should not be too challenging.

That said, I welcome the cross-party consensus we now have on the need to improve vocational training and revive apprenticeships. From the 1970s, under successive Governments, traditional craft apprenticeships collapsed. When New Labour took office in 1997, the number of apprenticeship starts had fallen to only 65,000 a year. Although priority was given to boosting student numbers, the Labour Government also worked to improve vocational training including apprenticeships. By the time Labour left office in 2010, new starts had risen from 65,000 to 280,000 a year. However, the unsatisfied demand for vocational training was highlighted in a recent debate in your Lordships’ House. My noble friend Lord Layard said that in 2012-13 some 800,000 young people between 16 and 18 registered as applicants for apprenticeships and only one in seven was successful. Surely priority should be given to putting school-leavers into jobs, especially into apprenticeships.

The concern is that the coalition has for the past four years markedly increased apprenticeships but for the over-25s, in part perhaps to boost annual totals. The Local Government Association worries that more than 80% of the recent increases in apprenticeships has been in sectors generally associated with low skills while starts in key engineering sectors remain low. Indeed, the Institution of Mechanical Engineers said in response to the gracious Speech that hitting the 2 million target was not enough when the UK needs to double its intake of engineering apprentices to keep pace with demand.

There is real concern, too, about skills in the construction sector. Recently, a group of cross-party parliamentarians published some alarming figures in their report, No More Lost Generations: Creating Construction Jobs for Young People. The report said that this £100 billion industry would create 180,000 extra jobs and need to hire 400,000 building workers to replace those retiring over the next four years. By contrast, the number of completed apprenticeships in construction last year was 7,000. That was half the number of the year before. Can the Minister tell us if construction training will get the urgent attention it clearly needs in the last year of the coalition Government?

There is also concern about the estimated 30% of apprentices who are not paid the minimum wage to which they are entitled. The welcome news is the legislation promised in the gracious Speech to impose higher penalties on employers who fail to pay staff the minimum wage.

Since 90% of employers do not train any apprentices, popularising apprenticeships with employers is surely our biggest challenge. The Labour Party has an independent skills task force whose reports reinforce the view that employer groups must take more control over how public funding for apprenticeships is deployed and how skills standards are set. Another key taskforce recommendation is to increase further the number of higher apprenticeships with progression to degree-level status—a policy that also deserves to be embraced in cross-party consensus.

The fact that almost 50% of young people are now in higher education generally is to the credit of successive UK Governments. A challenge for schools, though, is, through better career advice and curricular reform, to make the study of science, technology, engineering and mathematics—the STEM subjects—more attractive to more pupils. However, it should also be emphasised that the UK benefits greatly from the more popular subjects in the arts and humanities, which attract the talent driving the growth of our world-class creative industries. These are expanding at an encouraging rate and offer exciting career prospects. Despite that, the number of apprenticeships in arts and culture jobs seems strangely stunted. If I read the figures correctly, only 1,000 of that total of 500,000 apprenticeship starts per year are in the arts and culture subset of the creative industries. Does the Minister agree that employers in the creative sectors should, as a priority, create more apprenticeships, so that those from less privileged backgrounds can better compete with well connected graduates and those able to work on unpaid internships while also opening up entry to a range of craft roles?

Finally, it is surely regrettable that half the UK’s large companies do not offer apprenticeships. We can no doubt change that if we sustain the cross-party consensus and support for vocational training. We should also look again at the proposal that the Government use the leverage of their billions of pounds spent in public procurement of goods and services to boost apprenticeship opportunities by requiring companies bidding for larger contracts to offer apprenticeships. Regulators could also be asked to assess what scope there is to add apprenticeship training to the contractual obligations of their large companies. Does the Minister agree that that approach deserves further consideration as parties prepare their manifestos for next year’s general election?