Apprenticeships

Lord Macdonald of Tradeston Excerpts

Thursday 26th June 2014 Grand Committee

[Lord Macdonald of Tradeston (Lab)]

My Lords, I am grateful to the noble Lord, Lord Cormack, for his fascinating contribution and for this opportunity to discuss the important role of craft apprenticeships in putting young people on what can be a productive and satisfying career path. It certainly was that for many of my generation, who served craft apprenticeships in the 1950s and 1960s as engineers, electricians, carpenters, bricklayers, plasterers, et cetera—all the traditional manual trades. It was a working-class rite of passage that helped turn raw apprentices into time-served tradesmen, and of course we were almost exclusively men in those days. Then came the 1970s and decades of decline in manual labour with the contraction of the old industries. However, new options opened up for school leavers with the expansion of our universities and the rapid growth of the service sector. Compared to the new jobs on offer, craft apprenticeships for 16 to 21 year-olds were often five years long and poorly paid. Sadly, the money problem persists. Today, an estimated 30% of apprentices are not paid the minimum wage to which they are entitled. In the Queen’s Speech the Government promised to ensure that all employers respect the national minimum wage levels, and it is particularly important that apprenticeships are made more rewarding.

The decline in the appeal of apprenticeships was evident in the figures that confronted the incoming Labour Government in 1997. After 18 years of Conservative government, the number of apprenticeship starts had fallen to just 65,000 a year. Noble Lords may recall that the Blair Government’s election slogan had been “Education, education, education”, with priority to be given to improving schools and increasing the number of young people going on to university. I offer no apologies for that, as around half of all our young people are now in higher education. However, the Labour Government, of whom I was part, also worked to boost vocational training, and by 2010 they had raised the number of new apprenticeships from that 65,000 to 280,000 a year. In addition, we also raised the school leaving age, which is now 17. That helps to explain why the percentage of young people in England not in education, employment or training—the so-called NEETs—is now at its lowest level for 20 years, down to 7.6% last year. Some 81% of 16 to 18 year-olds are now in education or work-based learning, and that figure should rise again next year, when the school leaving age rises to 18.

Labour now sees untapped potential for training in craft skills and our further education sector. The shadow Education Secretary, Tristram Hunt, cites Chichester College in West Sussex as a model that might be adopted nationally. Chichester College is turning out 100 skilled woodworkers a year. Ten of its students have now set up their own furniture-making businesses, while others have helped local craft businesses expand internationally. Given higher status accreditation as institutes of technical education, FE colleges, building on local tradition or identifying new market opportunities, could also be encouraged to produce craft clusters, such as those in Chichester, offering new skills to those of all ages who prefer to work with their hands.

Both Labour and coalition Governments have made welcome progress in vocational training in recent years, and I echo the eloquent appeal made by the noble Lord, Lord Cormack. The number of apprenticeship starts has risen to around half a million a year. There is now a cross-party consensus that employers must take a more active role, and then we can do even more.

However, in this debate about craft apprenticeships, we should note that the top sector for annual apprenticeship starts is now business administration and law. Next comes health, public services and the care sector, and then retail and commercial enterprise. I make it clear that I make no complaint about these rankings. New jobs in these sectors can be very worth while, and they certainly produce a much better gender balance than craft apprenticeships have ever achieved.

In this sectoral table, engineering and manufacturing together now rank fourth, with 66,000 new apprenticeships a year but, to bridge the existing skills gap across that industry, the Institution of Mechanical Engineers wants to see that number double. Perhaps the most alarming gap in the supply of craft skills is in the construction industry, which is responsible for 6% of our GDP and currently employs 2.65 million people, with the majority of those in south-east England coming from outside the UK to work.

The Construction Industry Training Board estimates that over the next five years 180,000 new construction jobs will be created and that 400,000 building workers will reach retirement age. To fill this alarming gap, the CITB reckons that, in total, 120,000 additional apprenticeships will be required by 2019, about 25,000 new starts a year. That is in contrast to the number of completed apprenticeships in UK construction last year—just 7,000. Back in 2010, a key government policy was to reduce our reliance on skilled migrants. Nowhere is that more evident than in construction. In the recent debate on the Queen’s Speech, I asked whether this issue is getting the urgent attention from government that it so obviously needs. I got no reply, but I hope that the Minister replying this evening can help with an answer.

At a national level, I recommend to noble Lords that the Government look again at another Labour Party proposal, which is to link public procurement to the provision of apprenticeships on larger contracts. Sadly, about half of the UK’s largest companies do not offer apprenticeships. The leverage of public procurement could surely change that. Large companies in regulated sectors could also be required to commit to apprenticeship training as appropriate as part of their contractual obligations.

To conclude, I have no doubt that any ambitious but practical policy which offers more young people a greater chance of a craft apprenticeship will have enthusiastic public support. I now look forward, in particular, to the contribution of the noble Lord, Lord Ramsbotham, who will surely create a new Lords record when he speaks in his fifth successive debate in a single afternoon.