Technical and Further Education Bill

Robert Halfon Excerpts

Ping Pong: House of Commons
Wednesday 19th April 2017 Commons Chamber

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I beg to move, That this House disagrees with Lords amendment 1.

[Mr Speaker]

With this it will be convenient to discuss the following:

Lords amendment 6, Government motion to disagree, and Government amendment (a) in lieu.

Lords amendments 2 to 5 and 7 to 18.

[Robert Halfon]

This Bill was introduced to transform the prestige and culture of technical education, providing young people with the skills that they, and our country, need. It provides necessary protection for students should colleges get into financial difficulty, and ensures that the most disadvantaged are able to climb the ladder of opportunity. It left this House after thoughtful scrutiny and, after similar diligence in the other place, I am delighted that it returns for consideration here today.

I ask hon. Members to support the Government on all amendments made to the Bill in the other place except amendments 1 and 6, where we have tabled an amendment in lieu. Amendment 1 impinges on the financial privilege of this House. I urge the House to disagree to that amendment and will ask the Reasons Committee to ascribe financial privilege as the reason.

The amendment, costing more than £200 million per year by financial year 2020-21, would mean that the parents of apprentices aged under 20 would continue to be eligible for child benefit for those young people as if they were in approved education and training. It is an issue in which I have a great interest. Apprenticeships provide a ladder of opportunity, and we should seek to remove obstacles to social mobility wherever we can.

A young person’s first full-time job is a big change for them and for their family, and it marks a move into financial independence that should be celebrated. I know that the adjustment can be challenging for the young person learning how to manage a starting wage and new outgoings and for parents who may experience a fall in income from the benefits they previously received for that dependent child. One of the core principles of an apprenticeship is that it is a job, and it is treated accordingly in the benefit system. It is a job that offers high-quality training and that widens opportunities. Moreover, more than 90% of apprentices continue into another job on completion. Most apprentices are paid above the minimum wage. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70.

[Kelvin Hopkins (Luton North) (Lab)]

Although what the Minister is saying is correct, in that those apprentices will be paid, taking child benefit away from low-income families will be a disincentive for them to take up apprenticeships. Those families will be pressed to stay in education so that they can continue to get child benefit. Is that not the case?

[Robert Halfon]

The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards.

The apprenticeship programme already supports low-income groups. The funding system gives targeted support to the participation of care leavers, and this year we are making £60 million available to training providers to support take-up by individuals from disadvantaged areas. We are committed to ensuring that high-quality apprenticeships are as accessible as possible to people from all backgrounds. We will take forward the Maynard recommendations for people with learning difficulties and our participation target for black and minority ethnic groups.

With regard to the amendment’s suggestion of a bursary for care leavers, I understand that some young people have greater challenges to overcome. That is why we are providing £1,000 to employers and training providers when they take on care leavers who are under 25. We will also pay 100% of the cost of training for small employers who employ care leavers. There is scope for apprenticeships to benefit social mobility even more. We are working across Government to use the apprenticeship programme to extend opportunities.

I am grateful to Lord Storey for tabling Lords amendment 6, which introduces a new clause into the Bill to require Ofsted to take into account the quality of the careers offer when conducting standard inspections of further education colleges. I welcome the work that Ofsted has already done to sharpen its approach. Matters relating to careers provision feature in all the graded judgments made by Ofsted when inspecting FE and skills providers. Destination data—published in 16 to 18 performance tables for the first time this year—are also becoming an established part of college accountability. Those are important steps.

I pay tribute to the good work that is already being done throughout the FE sector to prepare students for the workplace. Ofsted’s annual report for 2015-16 cites the excellent work of Derby College, which has set up employer academies so that learners benefit throughout their course from a range of activities, including workplace visits, talks from specialist speakers, masterclasses and enterprise activities. However, Ofsted noted in the same report that the quality of information, advice and guidance in FE providers can vary and does not always meet the full range of students’ needs. That is why I want us to take this opportunity to go further.

Lords amendment 6 signals our determination to ensure that every FE student has access to good-quality, dedicated careers advice, which I know this House supports. That is vital if we are to tackle the skills gap and ensure that we make opportunities accessible to everyone. We have proposed some drafting changes to the amendment to ensure that it achieves its intended effect. The amendment makes it clear that in its inspection report Ofsted must comment on the quality of a college’s careers provision. I urge hon. Members to accept the amendment. FE colleges are engines of social mobility, and this is our chance to ensure that students from all backgrounds can access the support they need to get on the ladder of opportunity and to benefit from the best skills education and training.

I will now turn to the amendments that the Government are asking the House to accept without any further amendment. The Government support Lords amendment 2, which requires schools to give education and training providers the opportunity to talk directly to pupils about the approved technical education qualifications and apprenticeships they offer. I would like to place on the record my significant gratitude to Lord Baker of Dorking for tabling the amendment, and for his unstinting support for the Government’s technical education reforms. As I have explained, high-quality careers advice is the first rung on the ladder of opportunity and will play a key part in realising our ambition for high-quality skills education and training. The amendment will strengthen the Bill by ensuring that young people hear much more consistently about the merits of technical education routes and recognise them as worthy career paths. I urge the House to agree to it. I hope that never again when I go around the country will I meet an apprentice who was refused access to the school they were taught in to talk about apprenticeships.

[Ian Mearns (Gateshead) (Lab)]

I actually welcome that proposal. We have heard lots of evidence that schools are not allowing FE colleges and apprenticeship providers to access their students and to tell them what the options are post-16. That, of course, is because of the “bums on seats” funding regime for post-16 studies in schools. How are we going to get around the deep-seated culture in schools that prevents careers advisers and others from providing that independent, impartial advice to young people in schools?

[Robert Halfon]

The hon. Gentleman speaks a lot of sense on this issue. Every time I meet an apprentice, wherever I am in the country, I ask them, “Did your school encourage you to do an apprenticeship?” Nine times out of 10, they say that their school taught them nothing about apprenticeships and skills. We have already changed careers advice so that schools have to offer advice that includes apprenticeships and skills. I believe that Lords amendment 2 will make a huge difference, because technical bodies, apprenticeship bodies and university technical colleges will be able to go into schools, and schools will publish policy guidance on this.

I agree that a huge part of this is about cultural change. That is why my right hon. Friend the Secretary of State always talks about parity of esteem. Until we ensure that we have parity of esteem between skills and technical education and going to university—that is also a wonderful thing to do—we will not achieve the cultural change that the hon. Gentleman talks about.

[Ian Mearns]

There is a problem with that, because training providers themselves have a vested interest—just as much as the schools do—in securing those students for their courses or apprenticeships. Is it not true that we need a much more robust process for the provision of impartial advice and guidance that does not include anyone’s vested interests?

[Robert Halfon]

We are looking at careers guidance in the long term, and at how we can make it more independent and skills-focused. I think that the work of the Careers & Enterprise Company in getting more people to do work experience, along with the money we are investing in these things, will help, but there are no easy answers. There are some great private providers, FE colleges and university technical colleges that I would love to see going into schools. However, I think that this is an important step forward to change the culture and ensure that pupils have the access to learn about apprenticeships and the technical education and skills that they need.

Lords amendment 3 introduces a new clause specifically providing for regulations to be made about the delivery of documents about an insolvent FE body to the registrar, and how those documents are kept and accessed by the public. Essentially, the new clause allows for the proper management of the paperwork of an insolvency procedure for an FE body.

I am pleased that the Government were able to accept amendment 4 in the other place, which deleted the words “if possible” from clause 25(2). The original drafting of subsection (2) was intended to offer reassurance to creditors and the education administrator that the education administration would not continue indefinitely while we waited for the education administrator to achieve the impossible. Instead, it caused concern, both in this House and in the other place, that student protection was in some way lessened. That was not our intention. Having sought the confirmation of lawyers that there was no change to our policy objectives, we were content to delete the words in order to address those concerns.

Lords amendment 5 replaced the original clause in the Bill with a new version in order to fully apply, rather than replicate, the Company Directors Disqualification Act 1986 to further education bodies in England and Wales. The new version of clause 40—formerly clause 37 —still allows the court to disqualify any governors whom it finds liable of wrongdoing from being governors, and now also from being company directors in any part of the UK. It fully prevents disqualified individuals from being able to repeat the mistakes they have made in a different way, potentially at the expense of another FE institution. We have amended the clause to close a potential loophole in the Bill and more fully protect learners at FE institutions from the potential actions of any governor who acts recklessly.

--- Later in debate ---

[Gordon Marsden]

No, I am sorry, but I am not going to give way again. The hon. Gentleman has had two shouts and he is out. [Interruption.] I am going to continue, so he can stop chuntering.

This will inevitably have a negative effect on the family income in circumstances where the household budget is not covered by the earnings in an apprentice’s salary, given that the apprentice minimum wage is barely over £3 an hour. The National Society of Apprentices made that point in its submission to the Committee, saying:

“It seems inconsistent that apprentices are continually excluded from definitions of ‘approved’ learners, when apprenticeships are increasingly assuming their place in the government’s holistic view of education and skills”.

If apprenticeships are to be seen as a top-tier option, then the benefits should be top tier too. University students receive assistance from a range of sources, from accessing finance to discounted rates on council tax. Apprentices currently do not receive many of those benefits. Their lordships believe, and we agree, that the system must be changed so that both groups are treated equally.

[Robert Halfon]

I thank the hon. Gentleman for the way in which he is approaching these amendments. He mentioned that some apprentices were paid more than the apprentice minimum wage. Is he aware that 82% of apprentices are paid at or above the appropriate level of the national minimum wage or national living wage?

[Gordon Marsden]

Those figures come from the Minister’s Department, and I am not going to dispute them on this occasion. We are trying to set, in legislation, provisions that will be valid for five, 10 or 15 years. It seems far more appropriate to have a principle under which everybody has equal access. We can trade figures all day about whether this is acceptable or whether it is 10%, 15%, 20% or 25% of apprentices who are not in this position. I do not believe that we should go down this route, and Members of the House of Lords agreed when they passed this amendment.

Shakira Martin, the NUS vice-president for FE, says:

“If apprenticeships are going to be the silver bullet to create a high-skilled economy for the future, the government has to go further than rhetoric and genuinely support apprentices financially to succeed.”

In support of this amendment, the Learning and Work Institute has said:

“There are currently participation penalties for low income and disadvantaged young people who take an apprenticeship compared to an academic pathway. This amendment would help towards treating apprentices and students in further and higher education equally in the support and benefits system.”

The Government’s decision to exclude apprenticeships from the category of approved education or training will serve as a deterrent to young people, particularly those from disadvantaged backgrounds. Together with that, and without any change to the category that apprentices are placed in by the DWP—FE has to accept that, as things stand at the moment—the Government are providing a severe financial disincentive for young people to enter into an apprenticeship as opposed to other routes of education. The National Society of Apprentices agrees.

In the other place, the Minister’s colleague, Baroness Buscombe, said that there would be discussions about this issue with colleagues in the Department for Work and Pensions, but that did not happen. The Minister has told me on previous occasions that this needed to be addressed and discussed with other Departments, but that has not happened. This is a Government who are long on rhetoric but short on delivery, and it is young people and their families who are suffering. The Government are now blocking a modest proposal from the House of the Lords to begin to remedy their inability to do joined-up government.

[Robert Halfon]

The hon. Gentleman will know that, as I have mentioned before, we are carrying out a social mobility review of a whole range of issues, from benefits to incentives to providers and employers, to get more apprentices from disadvantaged backgrounds. It is entirely wrong to say that we are not doing so, as a significant amount of work is going into these areas.

[Gordon Marsden]

I am grateful to the Minister. The broader perspective of social mobility is a perfectly reasonable way of going forward. However, to be honest, particularly at a time such as today when we are moving to a general election, I think that most people would be interested in some movement—some jam now rather than a promise of jam possibly in future from the social mobility study. I will come on to talk about other areas where, I am afraid, the Government have moved at, to put it at its kindest, a reasonably glacial pace. That is one of the reasons I am not terribly impressed by the Minister’s argument, although, as I say, I understand and appreciate his commitment to trying to do something.

I want to speak in support of the second part of the amendment, which talks about opening benefits to care leavers by opening up access to a bursary that has traditionally been available only to university students. Young people in local authority care who move into higher education can apply for a one-off bursary of £2,000 from their local authority, and the amendment would enable care leavers who take up apprenticeships to access the same financial support.

I remind the Minister of what the Children’s Society has said. Every year, around 11,000 young people aged 16 or over leave the care of their local authority and begin the difficult transition out of care and into adulthood—to be fair to him, he recognised that in his opening remarks—and my hon. Friend the Member for South Shields tabled an amendment to the Children and Social Work Bill to provide such a local offer to care leavers. The Government have a golden opportunity to follow up on that by focusing on support that could be provided by the DWP. I am at a loss to understand why the Government are ignoring this possibility. They could make provision from the apprenticeship levy for local authorities to administer a £2,000 grant to all care leavers.

When care leavers move into independent living they often begin to manage their own budget fully for the first time, and that move may take place earlier for them than for others in their peer group. Remember that a care leaver in year one of an apprenticeship may be, and often is, earning as little as £3.40 an hour before being able to transition to a higher wage in the second year. Evidence from their services and research has revealed how challenging care leavers may find it to manage that budget, because of a lack of financial support and education. As a result, young carers frequently fall into debt and financial difficulty. The Minister really needs to put himself in their shoes. The Minister for Vulnerable Children and Families, the hon. Member for Crewe and Nantwich (Edward Timpson), could tell us all, from his own family’s perspective, how vulnerable young people who come from disturbed and difficult family backgrounds can be.

The question remains: why are the Government not prepared to retain this amendment? Fine words are all very well, but you may know, Madam Deputy Speaker, that according to the old Tudor proverb, “Fine words butter no parsnips”. Just what are the bureaucratic arguments for doing nothing to support hard-working young people and their families—and, even more so, those who do not have families to support them—to fulfil their hopes of better times via an apprenticeship? We talk about parity of esteem between HE students and apprentices, but some of these young people, because of their circumstances, struggle to have a strong sense of self-esteem.

Why have the Government not moved on this? Once again, why have the consultations with the DWP not taken place? Was the Minister nobbled by No. 10 trusties or by those in his own Department, in the same way as Department for Education Ministers seem to have led us down the garden path of reforms to GCSE resits only to slam the door shut? I say as gently as I can to the Minister that if the Government do not retain the amendment, people will know that the Government’s rhetoric has been somewhat hollow, and apprentices and their families will suffer.

I join the Minister in supporting amendment 2, which was carried in the Lords, and I also want to talk about amendment 6. The lack of parity of esteem for apprentices starts at an early age, and, as my hon. Friend the Member for Gateshead (Ian Mearns) illustrated in his useful and constructive exchange with the Minister, the rhetoric on careers advice still does not match the painful reality that faces many young people.

The reality is that careers advice has been devastated over the last Parliament and since 2010, certainly at a local level, and young people who want to take a vocational and apprenticeship route are in danger of being short-changed again in their careers advice. Despite the work of the Careers & Enterprise Company, which is still in its infancy, support in schools remains poor. Careers England—the trade body for careers advice and guidance—and the Career Development Institute have confirmed to me recently that in their view, nothing has greatly changed. They estimate that only a third of schools can adequately deliver careers advice. Taken alongside the shortage of careers advisers and the fact that the remaining advisers earn far less than they used to, it adds up to a very difficult position.

That is one of the reasons why last November the co-chairs of the Sub-Committee on Education, Skills and the Economy, the hon. Member for Stroud (Neil Carmichael) and my hon. Friend the Member for Hartlepool (Mr Wright), said that the Government had been complacent over careers advice. They said:

“The Government’s lack of action to address failings in careers provision is unacceptable and its response to our report smacks of complacency.”

I know that the Minister challenges that strongly, and I know that he has put on record that the Government are working towards a thorough careers strategy in that respect. But we have to deal with the situation as it is today, not with what it might be under a careers strategy developed by whatever Government are around at the end of the year.

In the survey conducted by the Industry Apprentice Council last year, just 42% of respondents found out about apprenticeships from school or college, and using one’s own initiative remained by far the most common way for a young person to discover apprenticeships. The council also said that there needed to be a change in careers information, advice and guidance because the proportion of respondents who said that theirs had been very poor remained high across the three surveys.

That is why the House of Lords has produced these two quite detailed and comprehensive amendments; those overall issues are not being addressed. Strong careers guidance is critical to promoting apprenticeships in schools. If we are to make a success of the institute, it is crucial that young people are alerted early enough in their school life to the importance and attraction of technical routes. That is one of the things that amendment 2 from the other House, which we supported, makes very clear.

If the Minister does not think that the Lords amendment on careers advice is necessary, perhaps he would like to explain just how and when the Government are going to get a grip on the existing fractured landscape of careers advice revealed by his own Department. Last month—it was not bedtime reading, so I will not be surprised if hon. Members have not read it—the Department for Education published a research report, “An economic evaluation of the National Careers Service”. The report was produced by London Economics, which was originally commissioned by the former Department for Business, Innovation and Skills to evaluate the impact of the National Careers Service.

The National Careers Service has changed considerably during the five years since it was introduced by the Minister’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes). I had the benefit of discussions with him at the time, and he was very clear when it started that the National Careers Service would principally be for the over-24s. That process has changed. I am not necessarily criticising that, but the process has certainly migrated in an unplanned fashion. The National Careers Service website says that anyone aged 13 and over can have access to the data, and that adults aged 19 and over can have access to one-to-one support. The problem is that only 15% to 22% of the customers—again, I am taking statistics from a report that the Government have commissioned—were referred by Jobcentre Plus, while the remainder were self-referring. Does that not speak volumes about the lack of joined-up government between the Department for Education and the Department for Work and Pensions?

--- Later in debate ---

[John Pugh (Southport) (LD)]

I want to speak very briefly on the Government motion to disagree with Lords amendment 6 and Government amendment (a) in lieu, as much as anything else to probe what amendment (a) will achieve. As a preface to that, let me give an impression of what the noble Lord Storey sought to achieve with Lords amendment 6. We have all acknowledged during the course of the debate so far that careers advice is incredibly variable and has been for some considerable time. Lord Storey tried to set in place a mechanism for monitoring careers advice so that we know precisely how good or how bad, and how valuable or useless, it actually is.

In Committee stage in the Lords, Lord Nash described careers advice as always having been “pretty poor”. There was, of course, an Ofsted report in 2013 that established that three quarters of schools were not providing effective advice or, as the hon. Member for Gateshead (Ian Mearns) pointed out, impartial advice. It said that the guidance given to schools was not sufficiently explicit, employers were not engaging in many cases and the National Careers Service was not effectively promoted. A key conclusion of the Ofsted report was that schools’ advice should be assessed when taking into account general school leadership, or sector leadership in the case of further education—Lords amendment 6 also applies to the FE sector.

I think that the Minister accepts all that, and I know that he has produced a variation on Lords amendment 6. I would like him to satisfy me and the House that it complies with what the Lords intended in their amendment.

[Robert Halfon]

I thank the hon. Member for Southport (John Pugh) and the shadow Minister for their speeches. I understand that the hon. Member for Southport is stepping down. He is an experienced Member of the House, and I send him every good wish for the future.

To answer the hon. Gentleman we are essentially accepting de facto Lords amendment 6, which was suggested by Lord Storey. We have just made it tighter for legal reasons and, in fact, stronger. Ofsted will now be required to comment on college careers offers in its reports. However, we accept the principle of Lords amendment 6.

I set out earlier the Government’s position that the majority of the Lords amendments serve to strengthen the measures in the Bill and ensure their success in practice. I urge hon. Members to accept all the amendments made in the Lords, with the exception of Lords amendment 1. As I explained earlier, that amendment is subject to financial privilege and I ask Members to reject it on that basis, while noting the work I have set out, which demonstrates our commitment to finding the most effective ways to address barriers and support the disadvantaged into apprenticeships.

The shadow Minister said, in essence, that we should put our money where our mouth is. It is worth remembering that we have 900,000 apprentices at the moment, which is the highest on record, and that 25% of apprentices come from the poorest fifth of areas. The Careers & Enterprise Company has more than 1,300 enterprise advisers going into schools, and they are set to target something like 250,000 students in 75% of the career coldspots in the country. The National Careers Service is there to give careers advice and CV advice, and to provide personal contact either face to face, over the telephone or on the internet. The bodies have different roles.

I ask Members to accept our amendment in lieu of Lords amendment 6, on which many noble Lords spoke. I spoke earlier of the positive activity at Derby College. It is by no means the only college taking active steps to provide high-quality careers advice to students. I have seen incredible work in my own college in Harlow and in Gateshead in the north-east of England. We want to ensure that all young people can access such support, and I ask Members to support that ambition by accepting the amendment in lieu.

[Ian Mearns]

I know that the Minister is determined and full of good intentions, but good intentions do not provide sound careers advice and guidance to young people who are in the system now. We need to see more urgency from the Government in backing up his decent intentions, to make sure that young people get the impartial advice and guidance they so deeply need as soon as possible.

[Robert Halfon]

Let me give the hon. Gentleman our intention. Given the financial climate, £90 million is no small sum of money to spend on careers, predominantly with the Careers & Enterprise Company, which has enterprise advisers going into schools. There is £20 million for mentoring services in schools. As I mentioned, enterprise advisers are going up and down the country to coldspots. The National Careers Service alone is getting more than £75 million this year to advise on careers. That is real financial backing for two very important services.

[Ian Mearns]

I am listening to the Minister. I was a member of the National Careers Service national association board prior to the invention of Connexions. I seem to remember that the national budget for careers at that time was something like £130 million. That was more than 15 years ago. In the current climate, the figures the Minister is talking about are inadequate.

[Robert Halfon]

Given the financial climate, the £90 million to be spent predominantly with the Careers & Enterprise Company and the £77 million that is going to the National Careers Service this year alone are sizeable sums of money. As I have said, we are developing a careers strategy. Obviously the election is occurring, but I hope very much that we will see careers with much more of a skills focus, and do much more work in schools on mentoring and on work experience.

I have said that the Bill is a Ronseal Bill. It is very much part of our reforms to create an apprenticeships and skills nation and to give millions of young people the ladder of opportunity to get the jobs, security and prosperity that they need. It is a Bill to ensure that technical education is held in the regard it deserves. In the unlikely event of a college insolvency, students will be protected. The measures in the Bill make vital changes to support young people to build the essential skills that our nation needs, and they provide the right support to enable young people to climb that ladder. Many Members on both sides of the House and in the other place have spoken in support of that ambition, and I take this opportunity to thank them for their ongoing commitment to the Bill and for supporting all our young people to reach their potential.

Question put, That this House disagrees with Lords amendment 1.

Technical and Further Education Bill: English Votes for English Laws

Robert Halfon Excerpts

Wednesday 19th April 2017 Written Statements

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I am pleased to announce the publication of analysis of English votes for English laws in relation to amendments to the Technical and Further Education Bill during its passage through the House of Lords.

The English votes for English laws process applies to public Bills in the House of Commons. To support the process, the Government have agreed that they will provide information to assist the Speaker in considering whether to certify that Bill or any of its provisions for the purposes of English votes for English laws. Bill provisions that relate exclusively to England or to England and Wales, and which have a subject matter within the legislative competence of one or more of the devolved legislatures, can be certified.

The memorandum provides an assessment of tabled amendments to the Technical and Further Education Bill, for the purposes of English votes for English laws, ahead of Commons consideration of Lords amendments (CCLA).

This analysis reflects the position should all the amendments from the House of Lords be accepted.

The memorandum can be found on the Bill documents page of the Parliament website at:

http://services.parliament.uk/bills/2016-17/technicalandfurthereducation/documents.html

I have also deposited a copy in the Libraries of both Houses.

[HCWS598]

Draft Public Sector Apprenticeship Targets Regulations 2017

Robert Halfon Excerpts

Monday 27th March 2017 General Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I beg to move,

That the Committee has considered the draft Public Sector Apprenticeship Targets Regulations 2017.

It is an honour to serve under your chairmanship, Mr Nuttall—especially having sat next to you on the Back Benches for five years in the last Parliament. The regulations are the first use of the power under sections A9 and A10 of the Apprenticeships, Skills, Children and Learning Act 2009 to set apprenticeship targets for prescribed public bodies.

The Government are committed to delivering world-class public services and ensuring that people from all backgrounds have the opportunity to reach their full potential. Through investing in education and skills, we will tackle our productivity gap, deliver greater prosperity and promote fairness. We will create a ladder of opportunity that delivers jobs, security and prosperity and enables people from all walks of life to reach their full potential through apprenticeships.

To meet those objectives, it is vital that the public sector embraces apprenticeships, and the introduction of the target will support them to do that, building their workforce capability and delivering more for the public in the process. The regulations will strengthen the public sector’s commitment to apprenticeships, raising the prestige of that route into work by putting apprentices at the heart of every workplace.

The regulations set the target that the number of apprentices who begin to work for in-scope public bodies from 1 April 2017 to 31 March 2021 will be equal to 2.3% of the public body’s headcount in England. By engaging with public bodies, Government Departments will support their own wider public sectors to meet the 2.3% target.

Our reforms will make apprenticeships more rigorous, better structured, independently assessed and more clearly aligned with the needs of employers. By investing more than £60 million in supporting apprentices from deprived areas, we are enhancing social mobility by ensuring that everyone—regardless of age, background or circumstances—can gain the skills employers need.

Alongside the reforms to technical education, it is right that the public sector plays its part. We have committed to 3 million apprenticeship starts by 2020. Historically, the public sector has delivered far fewer apprentices than the private sector. That is why it is necessary to establish the target, to ensure that all parts of the economy are able to benefit from the skills revolution. It is only sensible that we take action to meet our public sector skills needs, and the target will do so by increasing the capacity and capability of public sector employers. It will support them in taking advantage of the reformed apprenticeship system so that they can, in turn, deliver more for the taxpayer.

During the passage of the Enterprise Act 2016, which inserted this provision into the Apprenticeships, Skills, Children and Learning Act, the House debated and voted upon provisions enabling the Government to set apprenticeship targets for prescribed public bodies. At the time, there was cross-party support for what was rightly regarded as an opportunity to both improve public services and provide more opportunities for people of all backgrounds. It is exactly that two-part benefit, which the target can and will ignite, that led the Government to act. We do not increase the responsibilities of the public sector lightly. We remain diligently aware of the challenges faced. Rather, the regulations are an opportunity for public bodies and the nation as a whole.

We consulted on the target in January 2016 and received 180 responses from bodies across the whole public sector, including numerous public sector organisations that recognised the value of apprentices in their own and wider workforces. The majority of those felt it vital that the public sector engaged with our reforms and itself benefited from the growing apprenticeship movement.

We also listened to concerns that were raised. Some respondents were critical of the target being assessed on an annual basis. As such, while we will continue to monitor public bodies’ progress in annual returns, the target is calculated for grouped bodies as an average over the target period. For all other public bodies, the target is calculated only in respect of years in which the public body has 250 or more employees. That will allow the best of both options, with organisations being able to plan their training and recruitment of apprentices to meet their workforce needs, and the Government being able to monitor, intervene and support public bodies where suitable.

Headcount is used for the purpose of calculating the target, as we believe that using full-time equivalents would result in a lower number of starts. We want the public sector to deliver its fair share of apprenticeships. However, following consultation, we will now allow local authorities to separate out the headcount of bodies for which they employ staff but do not direct the workforce planning—including schools and emergency services—in their information returns.

We chose the target of 2.3% of a public body’s headcount, because that reflects the public sector’s fair share of our commitment to achieve 3 million apprenticeship starts by 2020. Different sectors will have different ways to have regard to that target, with my Department supporting others across Government to best engage their wider public sector bodies.

The regulations prescribe the public bodies in scope of the 2.3% target, how public bodies can calculate progress towards meeting the target, and the information that they must publish and send to the Secretary of State. Regulation 2 identifies how to define the headcount that public bodies will use as the basis of their calculation of the target. Regulation 3 prescribes the public bodies in scope of the regulations. Regulation 4 identifies reporting periods relevant to both the calculation of the target and when information must be published and sent. Regulation 5 specifies the target period, and regulations 6 to 8 specify how the target is to be calculated for the different public bodies. Finally, regulation 9 specifies the information that must be returned and/or published.

The groups of public bodies described in the regulations and public bodies with 250 or more staff in England, as of 31 March in any of years 2017, 2018, 2019 or 2020, will be required to publish and/or provide information relating to their progress towards meeting the target for each year they are in scope. There are two parts to that requirement. The first is a data publication. That will identify a public body’s progress towards the target through data. Sharing that information publicly, and directly with the Department, will make bodies transparent and accountable, and make clear which bodies are leading in their investment in apprenticeships. Secondly, public bodies will have to send an apprenticeship activity return to the Department, detailing the actions that they have taken to have regard to the target, why they may not have met the target, and their intended future actions to do so.

We recognise that there will be specific challenges across sectors, including the NHS, schools and local government. I am particularly glad that standards for police constables and registered nurses have been approved, and standards for midwifery and teachers are in development. In addition, my Department will be supporting others across Whitehall to deliver apprenticeships and engage their own public sector bodies in scope of the target. Departments will lead their wider in-scope public sector bodies to understand where and how apprentices can be employed in their workforces and how they can meet the 2.3% target. For example, in my own Department, we have recently published a guide to the new apprenticeship system for different types of schools.

Departments will also work with public bodies to develop new, employer-designed apprenticeship standards and increase the number of quality apprenticeships, thereby delivering more for the public and increasing access to the ladder of opportunity, especially for those from the most deprived areas, who are under-represented in apprenticeship positions. The regulations are an important part of our wider plans for the delivery of world-class public services and a skills system with apprentices at the heart of the workplace.

--- Later in debate ---

[Robert Halfon]

I thank the hon. Member for Blackpool South and the right hon. Member for Don Valley for their contributions. I also thank the hon. Gentleman for the kind comments he has made about my not being able to attend the FE Week conference because of the security issue that took place in Parliament. I will answer some of their points individually and some together.

On quality, the right hon. Lady made an important point about polytechnics. Perhaps the wrong decision was made. I hope that with the boost to FE through the Sainsbury reforms, national colleges and institutes of technology, and the extra £500 million announced, we will go back to state-of-the-art technical education. That is the purpose of many of the things I am trying to do in my work. We have changed the legislation to ensure that an apprenticeship does what it says on the tin—it is about not just work experience for a few months. As defined in the legislation, it must be a minimum of a year, with 20% off-the- job training. We have moved from a framework, where there was a spaghetti junction of qualifications, to rigorous employer-led standards that meet our skills deficit. That is why we have created the Institute for Apprenticeships and, from next year, subject to approval by the Lords, the Institute for Apprenticeships and Technical Education.

Both the hon. Gentleman and the right hon. Lady asked about those bodies that are outside the scope, for which there are various reasons. The House of Commons, for example, is not subject to the control or direction of Ministers. As a smoker, I know that we would legally be allowed to smoke in here, but the Speaker has made a decision that there will be no smoking. As the hon. Gentleman will know, when I entered Parliament I was the first MP to employ a full-time parliamentary apprentice in the House. Many MPs now do that, and the House of Commons has a very good apprentice scheme. Over the years, I have met those apprentices, who work in all the different areas of the House of Commons. The BBC works with the scheme very closely. As to the Post Office, the reason is partly that 97% of the 11,500 post offices are run by independent postmasters on an agency basis, rather than by people who are Post Office employees, so there are reasons why some FE colleges and universities are out of scope and why a number of organisations were not included.

[Caroline Flint]

Can the Minister give one good reason why a university is out of scope while schools will be affected?

[Robert Halfon]

FE colleges are corporations or companies, for the most part; universities are regarded as independent bodies and were not seen as in the public sector or managed in the same way. However, there may be universities subject to the levy, depending on their wage bill, so they will be required to have apprenticeships or the levy will be used to fund apprenticeships elsewhere.

An impact assessment was done for the whole Enterprise Act 2016. Neither an impact assessment nor an equalities impact assessment was prepared for the regulation, because the measure affects only publicly funded bodies, with no costs to business. The Better Regulation Executive confirmed that no impact assessment is required in relation to the regulations but, as I have said, one was done for the whole Act.

The hon. Member for Blackpool South asked whether a number of areas in public services would be able to have apprenticeships, and perhaps I can give some examples, beginning with the national health service. The public sector target is 27,500 new apprentice starts for 2017-18. That is estimated to deliver 100,000 apprentices in the course of the Parliament. The information from Health Education England is that almost 20,000 apprentices were employed in the NHS in 2015 and 2016. I have met many healthcare apprentices when visiting colleges and apprenticeship training providers. We are developing pathway apprentice standards—level 2 healthcare support worker leading to level 6 nursing apprenticeship.

I recognise that schools are a difficult issue. First, it is important for councils to share their levy pot fairly. We have issued guidance to schools. The Department for Communities and Local Government is keen that the levy pot should be shared fairly. The whole purpose of the levy is to change behaviour and create an apprenticeship and skills nation. Why cannot a teaching assistant in a school do a teaching assistant apprenticeship, a cook in a school do a hospitality and catering apprenticeship, or someone who is doing business administration do a business administration apprenticeship?

[Gordon Marsden]

The right hon. Gentleman is responding with particular examples to what I said about problems and pressures for schools. None of those is a bad example, but the issue is whether the apprenticeships will lead to any progression or improvement in career status. I am concerned, as others may be too, about whether, particularly in strained financial circumstances, schools will rebadge people doing existing relatively low-level jobs—I put it mildly—to achieve the target.

[Robert Halfon]

There is an important point here. I have acknowledged in the past that there will always be some gaming of the system and I accept that once the levy comes in we will not know how much, for a while. However, if someone is doing a teaching assistant job why should they not be offered an apprenticeship and a skill? They certainly will not be able to progress without a skill. With a skill and an apprenticeship they will have a much better chance of progressing. If someone is a school cook, why not give them the chance to do a hospitality and catering apprenticeship?

[Caroline Flint]

I do not see the evidence that some of those routes for progression are not already working. I have in mind people in my constituency who have become teaching assistants—in fact it was something that the last Labour Government helped to create. I know a number of people who have used that route to be supported and get training, and they have ended up taking the teaching route afterwards. Likewise, in many of the schools that I visit, and I am sure that the right hon. Gentleman visits many schools too, members of the ancillary staff—whether that is in the kitchens, or on the maintenance side of the school—often have to get their NVQs and other qualifications that are suited to what they are doing, and it is concerning that we just end up with a rebadging for no good reason.

[Robert Halfon]

First, that may be the case for some people, which is all well and good, but I want everyone to have a chance of having an apprenticeship. However, even if the right hon. Lady is correct that everyone has a certain qualification or a certain level of training, why not give them a chance to do an additional piece of training? If they have a level 3 qualification, why not give them an apprenticeship in level 4, and so on and so forth?

As I say, the purpose of these regulations is to change behaviours. As long as standards continue to be developed—new standards are being developed and they are of higher quality—I think we will give everyone that chance. We want employers to know that when we say we want to create an apprenticeship nation, that is what we mean.

The hon. Member for Blackpool South talked about the issue of the headcount versus the full-time equivalent; that was also raised by the right hon. Member for Don Valley. We think that headcount is the fairest measure to assess workforce numbers for the purpose of delivering high-quality apprenticeships. If someone does more than one apprenticeship with the same employer, they can count towards the target more than once. Headcount data are readily available across the whole public sector, and if the headcount target were to be replaced on a full-time equivalent basis, the 2.3% target would result in a lower number of starts, meaning that the public sector would not deliver its fair share of apprenticeships unless the target was raised. Having said that, we have listened to those who are concerned about how the target might impact on them, given the high proportion of part-time workers, and we suggest that these bodies should use FTE in parallel with headcount, to report and explain any underachievement of the target as necessary.

This is not about one size fits all; we have listened to people and responded. The hon. Member for Blackpool South talked about cuts. No one has denied that there have been pressures—significant pressures—on the economy but most of the organisations that we are talking about pay the levy, so for most of them it will come out of the levy pot. It is not relevant to say that cuts will affect this process, because if an organisation wants an apprenticeship, it will come out of its levy pot. That is an important point.

The hon. Gentleman also talked about the supply chain. He will know that after the first year of the levy, provisionally 10% will be allowed in terms of the supply chain. He talked about gaming; if anything, we could affect gaming if we do not get things right. After the first year, we will see how things pan out, then we will make a decision, but the 10% figure will not apply until after the first year of operation of the levy.

The hon. Gentleman also asked whether or not this process was an efficient use of public money. If we look at apprentices’ returns, we see that if someone is doing a level 2 apprenticeship their wage increase is 11%, between £48,000 and £74,000; the figure is between £77,000 and £117,000 for level 3 apprenticeships. Ninety per cent of apprenticeships get jobs. Apprenticeships are very good for the economy. There is another figure that I forget, but all apprenticeships deliver a huge return in terms of cost-benefit to the economy.

The hon. Gentleman mentioned social justice and social mobility. He will know, because I mentioned it in the debate in Westminster Hall about financial support for apprentices, that we are undertaking a review of social mobility and apprenticeships. Some £60 million was guaranteed for this year, and the review is under way. As for the Maynard reforms, I hope to make an announcement soon—that is a real “soon” and not a civil servant’s “soon”—that I do not think he will be too unhappy with.

The hon. Gentleman talked about veterans, and I will reflect on his remarks. I have not seen his whole speech, I only read the article in FE Week. I thought that was important, and I will look at what we are doing. I know, as the Defence Secretary proudly tells me, that the Ministry of Defence is a huge employer of apprentices, but I think that is an important thought.

The hon. Lady—

[Caroline Flint]

Right hon.

[Robert Halfon]

Sorry, the right hon. Lady—I beg your pardon—talked about getting women into STEM.

[Caroline Flint]

That is an important area, and there are lots of jobs across the public sector that need the skills that a STEM-based education provides. However, I am sure the Minister knows as well as I do that, across the public sector as well, there is a massive amount of gender job segregation, which, in some ways, reinforces the pattern of low pay for women in certain sectors. It would be very good in the long term if we can do anything at all to encourage more diversity across those areas.

[Robert Halfon]

The right hon. Lady makes an important point. Some 53% of apprentices are women, and the survey suggests that female apprentices actually earn more than men. However, there is a huge problem around women in STEM subjects.

One of the issues I face when looking at careers guidance in schools is that they show a picture of a woman being a nurse and man doing engineering. That is from primary school onwards, and it is a significant problem. We are doing a huge amount of work on careers strategy and we are looking at that. Everywhere I go, I try to promote female STEM apprenticeships and females doing STEM in schools, but there are cultural issues and all kinds of problems that make this quite a difficult problem to surmount.

[Caroline Flint]

I thank the Minister for what he says, but perhaps he could go away and reflect. In evidence to the Public Accounts Committee, officials told us that there are targets for addressing this particular problem for black and ethnic minority people but not women, which he clearly understands from what he has just said.

[Robert Halfon]

It is important that we take the right action to make sure that we increase those numbers; I think that we are doing that. The hon. Member for Blackpool South asked about monitoring. The Skills Funding Agency, through the National Apprenticeship Service and the Digital Apprenticeship Service, is monitoring that and works with the bigger employers. Department for Education officials will analyse the returns on a yearly basis. He will know that my boss, the Secretary of State, chairs the “Earn and Learn” taskforce.

There is no particular stick that public sector bodies get if they do not meet targets, but we are doing everything possible. We want to work with public sector bodies—they will obviously publish their information; it will be up to the independent bodies how to collate it—to try to see this as a new thing that we are doing. We will see how it pans out each year as we assess, but at this point in time, we are trying to work with public sector bodies, rather than saying that there will be a penalty if they do not deliver on their particular targets.

You will be pleased to know that I am coming to the end of my speech, Mr Nuttall, but I shall close by saying that this is a very important part of our reforms; it is not just a stand-alone product. It is part of our designs to change behaviours to create that ladder of opportunity for millions of our young people.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Public Sector Apprenticeship Targets Regulations 2017.

Draft Immigration Skills Charge Regulations 2017

Robert Halfon Excerpts

Wednesday 22nd March 2017 General Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I beg to move,

That the Committee has considered the draft Immigration Skills Charge Regulations 2017.

It is an honour to serve under your chairmanship, Mr Streeter. The Immigration Act 2014, as amended by the Immigration Act 2016, provides the Secretary of State with the power to require certain employers who recruit skilled workers from outside the European economic area to pay an immigration skills charge. The regulations provide for the amount of the charge and the obligation to pay it.

The Government are committed to a strong skills system that can drive increases in productivity and improvements in social mobility, and help to make a success of Brexit. The immigration skills charge plays its part in that commitment by incentivising employers to invest in training and upskilling the resident workforce. It was first announced in May 2015. We then commissioned the independent Migration Advisory Committee to advise on applying a skills charge to businesses recruiting workers from outside the European economic area. The MAC considered the charge as part of its review of the tier 2 skilled worker route and reported in January 2016. In its report, the MAC supported the introduction of the charge.

We announced the rate, scope, exemptions and introduction date of the charge in March 2016. We took into account the MAC’s recommendations—for example, on the rate—but we also responded to concerns raised in Parliament during the passage of the Immigration Bill and by employers by announcing a number of exemptions and a lower rate for charities and smaller employers.

The draft regulations implement the decisions taken last year. We believe that has given employers enough time to prepare for the introduction of the charge, subject to parliamentary consideration. Through the charge, we want to incentivise employers to think differently about their recruitment and skills decisions and the balance between their investment in UK skills and overseas recruitment.

As Minister for Apprenticeships and Skills, I am committed to ensuring that people from all backgrounds can get a step up on the ladder of opportunity. We need to do more to support people into quality jobs and help them to gain the world-class skills that meet employers’ needs. The evidence is that the lack of investment in skills is damaging our productivity and economy. We are quite honest about the skills problem facing our nation. Employer investment in training has been declining for 20 years. UK workers undertake 20% less continuing vocational training, on average, than those in the EU. According to the latest available international comparison, the UK spends 55% less than Germany and just over 70% less than France per employee on vocational training. We are forecast to fall from 24th to 28th out of 33 OECD countries for intermediate skills by 2020.

Skilled migration has brought huge economic benefit to the UK. It has boosted our ability to compete in many global markets and helped to make us world leaders. There are many examples of good practice, but it seems that some employers would prefer to recruit skilled workers from overseas than invest in training UK workers. Use of the tier 2 visa route grew by 37% between 2010 and 2016. Our aim is to see UK workers with the right skills to fill those tier 2 roles. Through the immigration skills charge, we want to encourage employers to think differently about recruitment to those roles, which are mainly at graduate level and above, with a salary of more than £30,000.

As the Secondary Legislation Scrutiny Committee acknowledged, most respondents to the MAC’s consultation were not in favour of a charge, but it is not surprising that those who will have to pay the charge do not welcome it. The MAC supported it. Made up of independent experts, the MAC made this decision as part of a comprehensive review of tier 2, having analysed different levels of charge and taking into account views from more than 250 written submissions and meetings with more than 200 public and private sector employers.

The MAC considered that a flat charge of £1,000 per worker per year would be large enough to have an impact on employer behaviour and would be the right level to incentivise employers to reduce their reliance on migrant workers. Where Government took a different line from the MAC, it was to protect the UK’s position as a centre of excellence for education and research and to support smaller employers. Regulation 3 therefore introduces a reduced rate of £364 per individual per year for small and charitable sponsors.

Regulation 4 provides for the exemptions. As the MAC recommended, sponsors of tier 2 intra-company transfer graduate trainees are exempt from paying the charge. The Government have also exempted specified PhD-level occupations, including higher education lecturers and researchers. In addition, those who switch from a tier 4 student visa to a tier 2 general visa to take up a graduate-level position in the UK are exempt. That was welcomed by the British Medical Association, because it will benefit doctors completing their foundation training. The exemptions are designed to protect employers’ ability to recruit the brightest and the best. For out-of-country applications for entry clearance, the regulation provides that the charge does not apply for leave of less than six months.

Regulation 5 provides that the sponsor must pay the charge up front. This is for a minimum of 12 months and then in six-monthly increments, rounded up. It will be calculated according to the length of employment that the sponsor enters on the certificate of sponsorship. Employers will pay the charge as part of the existing sponsorship process administered by the Home Office.

Regulation 6 provides that part or all of the charge may be refunded or waived.

Regulation 7 means that the charge will not be retrospective. Employers of individuals who are already in the UK on a tier 2 visa or who have been assigned a tier 2 certificate of sponsorship at the time the regulations come into force will not have to pay the charge. That will also be the case when such individuals apply to extend their stay or change job or employer.

Let me turn to how the funding raised will be used. Based on Home Office analysis of the use of the tier 2 route, it is estimated that the charge will raise £100 million in the first year. The Home Office will collect the charge and transfer it to the Consolidated Fund, less an amount to cover the costs of collecting the charge. The population percentages underlying the Barnett formula will be used by the Treasury to determine the split of funding between the Department for Education and each of the devolved Administrations. The income raised from the charge will be used to address skills gaps in the workforce. It will make a contribution to the Department’s skills budget, ensuring that we can continue to make a significant investment in developing the skills that the country needs.

The charge will raise income, but it is also designed to change employer behaviour, and that applies across all sectors. I recognise the concerns about the impact of the charge on health and education in particular, but the MAC was clear in its recommendations that the public sector should not be exempt from the charge. As an employer like any other, it should be incentivised to consider the UK labour market first. That is in line with Government policy. It is not sustainable to rely on recruiting overseas staff. We are committed to building home-grown skills, recruiting from the domestic labour market and investing in training. There are 52,000 students training to be nurses, and the first apprentice nurses could be in training from September 2017. Once the system is established, up to 1,000 apprentice nurses could join the NHS each year. There are 30,000 students training to be doctors. The Department for Education is investing more than £1.3 billion up to 2020 to attract new teachers into the profession.

We recognise that immigration has a role to play in the supply of workers where there are genuine skills shortages, but that should not come at the expense of investment in skills in our country. As Minister for Apprenticeships and Skills, I am committed to ensuring that people from all backgrounds can get a step up on the ladder of opportunity. This charge is designed to incentivise employers to invest in training and upskill the resident workforce. It will also raise funding to support ongoing investment by the Government in skills programmes. I hope that the Committee will support the regulations.

[The Chair]

Before I call Mr Marsden, I remind the Committee that this is not a general debate on immigration policy. The debate must be focused on the regulations before us.

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Streeter. It is also only appropriate to congratulate the Minister on his birthday.

We support the broad principle of the regulations. We support everything that the Minister has said about the need to change behaviour and to skill up, and we support the analysis in the policy background in paragraphs 7.1 and 7.3 of the explanatory memorandum. The Minister is absolutely right to say that the skills gap has been a continuing problem, although it is not a new problem. Governments of all persuasions have not succeeded in addressing it for a period of 25 years, so it was not unreasonable that the Government should have embarked on this process in, presumably, 2014-15.

The Minister has gone through the details and done everything he is supposed to do. However, we want to ask some fairly probing questions this morning about the detail. The Minister knows that I often say the devil is in the detail, and there is a lot of detail in the explanatory memorandum on which the Committee will need some substantive answers. Of course, it is not just a question of detail, but a question of chronology.

Perhaps the Minister will tell us when the regulations were first mooted between the Home Office and the then Department. We know from the policy background in the document that the charge was announced by the then Prime Minister, David Cameron, in May 2015. As the Minister has said, the MAC endorsed it in January 2016 and the charge is due to be introduced on 6 April 2017. In that period of time we have had Brexit, which alters the context of the regulations substantially.

The charge relates, of course, to the issue of migrant workers from non-EU countries and allows for the recruitment of skilled workers, to be specific, from outside the European economic area. The reality is that the implications of Brexit mean that the context in which the Government introduced the charges and the Migration Advisory Committee put forward its recommendations has utterly changed. That is not an argument for rejecting the regulations, but it is an argument for saying that we have to look substantially more closely at the impact that Brexit will have on our ability to have skilled workers who, by the time the charge has come fully into effect, may include skilled workers from the EU, of which we will no longer be a part. That is the context in which my comments will be made.

I will begin by picking up one or two points from the Minister’s speech. He used gentler language than I would when he talked about the Migration Advisory Committee, because I would say that it ignored the views of the majority of consultees. I take slight issue with the Minister. Perhaps neither of us is in a completely good position to make a thorough judgment because we were not there at the time and we were not looking at the context of the Migration Advisory Committee’s work, but I suspect that the concern of many of the stakeholders and employers was not simply about cost, although cost is obviously important. They might have had other concerns. Given the detail of what the regulations will require from employers or would-be sponsors, they might have had concerns about the sheer volume of quite complex regulatory procedures that they will have to comply with in this process.

If the Minister does not mind my saying so, there was some confusion in our Whips Office when we saw the explanatory memorandum today, because initially I was not going to be granted the privilege of addressing you, Mr Streeter, from 8.55 in the morning; that opportunity was due to go to my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), the shadow Home Secretary. I am sorry that you do not have the shadow Home Secretary, Mr Streeter; you have got me.

[Robert Halfon]

A much better option.

[Gordon Marsden]

I could not possibly comment.

That is just an illustration of how closely woven these regulations are with the perfectly reasonable policy objectives of the Home Office. However, I have to say, and I think this point is germane, that looking at the detail of the regulations, we can see that they will be a significant burden—administratively, apart from anything else. The Minister mentioned small employers and the regulations will be a particular burden on them, but I will talk about that a little more in a few moments.

The Minister said that enough time had been given for people to prepare for the introduction of the regulations. There is a great gift in Government for making an argument out of necessity and there is a little element of that here. It has taken two years to bring the regulations together. We can look at that either way: either we can say that they are the product of mature, concerned deliberation, or we can say that all the upheavals in the Conservative party and the Conservative Government over the last 12 months, including getting a new leader, a new Prime Minister, and having to deal with Brexit, may have had something to do with it.

Nevertheless, we are debating the regulations here today. We often forget this, but it is not unwise from time to time to prick the Government and officials on this point: we are debating here today something that will be implemented in 10 days’ time. That is one of the issues, especially with a particularly complex set of instruments such as these regulations. It would have been beneficial—I will say no more than that—for this House and indeed the other place, which debated the regulations yesterday, to have seen them two or three months earlier. Anyway, we are where we are.

I have some specific questions for the Minister about the explanatory memorandum. Paragraph 7.5 says that there is a large degree of uncertainty around the potential income raised by the charge. It then makes the point that a number of assumptions have been made in taking all the different factors into account.

The Minister will be relieved to know that I am not going to ask him for the statistical basis or analysis on which his officials prepared those estimates and assumptions. Having been a Parliamentary Private Secretary, I am well aware of the ways in which they will have done that: there will have been a pessimistic view and an optimistic view. Members can judge for themselves whether the £100 million represents the pessimistic view or the optimistic view.

I want to draw attention to the number of assumptions that have been made, which are dealt with subsequently in the regulations. That makes the argument for being very careful about unintended consequences arising as a result of the legislation, the principle of which, I repeat, we support. That is what paragraph 7.5 says.

Again, I draw Members’ attention to the detail—I will not go through it—in paragraphs 7.8 and 7.9, which spell out the complexities of these regulations for employers. There is the sponsor licence, the certificate, the sponsorship providing evidence, and so on. Behind those bland sentences is a raft of bureaucracy that many companies, particularly those having to fill gaps fairly rapidly, will struggle to deal with.

I notice in the explanatory memorandum that it will not be the Minister’s Department administering this process, but the Home Office. The Home Office, perfectly reasonably, will get a fee that is, from memory, 1% of the £100 million—if that is incorrect, the Minister can tell me. I know the ways of interdepartmental dealings in these matters. What guarantees can the Minister give us that his colleagues in the Home Office will not come calling for more money for their administrative processes if they prove to be far more laborious and time-consuming than these bland regulations suggest? If that were the case, the £100 million—the figure given as the potential benefit for the skills process—would rapidly begin to shrivel.

My second question for the Minister in that respect is how his Department plans to use the money that eventually comes to him after the top-slicing from the Home Office, whatever it may be, in the skills sector to do precisely the sort of thing he said, perfectly reasonably, that he wanted to do.

I want to emphasise again the issues around the consultation process. The memorandum says:

“The Government considered the Committee’s recommendations before announcing the rate and scope of the charge”.

That is civil service speak for largely ignoring it. The Minister was more candid; I have given my views on what the problems were. That is done and dusted, but what concerns me more is paragraph 8.4, which says:

“A full public consultation has not taken place.”

The Minister observed that, but it would be helpful if he outlined the reasons why a full public consultation has not taken place.

Specifically, in terms of both the public and private sectors’ response, it would be helpful to know what consultations took place with large, or indeed small, business organisations. What consultations were there with the Confederation of British Industry, the Institute of Directors or the sector skills councils for the groups that will be most affected, according to the table on page 6? In the context of what the Minister said about the issues for small business, was there consultation with the Federation of Small Businesses? The table at paragraph 10.4 on page 6 shows the five sectors that will account for the majority of sponsored skilled visa applications, according to the Home Office’s own immigration statistics from February 2017. It is striking that by far and away the largest of the top five categories listed is information and communication, with 23,358 sponsored skilled visa applications in the period that the Home Office assessed.

Everybody knows that we are going hell for leather—and perfectly reasonably so—to enter the digital age. The Digital Economy Bill has just concluded its passage through the House of Lords. Has any consideration been given to the potentially harmful impact on that process if things do not go quite as smoothly as the regulations suggest? Specifically, what consultations has the Minister’s Department had with colleagues in the Cabinet Office and what is now the Department for Business, Energy and Industrial Strategy—both of which would be adversely affected in the digital areas if the regulations did not produce what they said on the tin—and what was the response? If we simply go through the detail of what the Government have put forward in their explanatory memorandum, we see that various issues and problems are already looming.

The Minister and his colleagues have been very helpful, and I pay tribute to him for holding an information session last week. I was not able to attend, but my assistant was, and he provided very helpful information. However, I have a couple of questions about what was said. My understanding from the meeting and from the memorandum is that there are no plans to extend the charge for the European economic area, but I want to put my question again: what will happen if in the future EU citizens become necessarily eligible for tier 2 visas?

I have already mentioned the issue of how the Minister and his Department intend to spend the money, so I will not dwell on that again. The charge is about incentivising existing employers. In theory, if it is successful, at some point the skills charge will not be necessary. Has the Minister’s Department done any modelling or made any assessment of the nudge impact, which I think is perhaps the right way of describing what the Minister said the purpose of this was?

I have touched on the issue of statistics, which are extraordinarily important for Government to be able to make judgments not only about how to introduce a policy but about how to administer it. Sad to say, but the Government’s closure of the UK Commission for Employment and Skills last year, which routinely did analysis and collection of statistics, means that we no longer have a single body with a national overview of the skills gaps that the Minister referred to. I therefore want to ask—this is absolutely crucial for him to convince and persuade not only the Committee, but the majority of employers who will participate in the process—how his Department and his officials will identify the skills gaps and decide how much of the £100 million they will prioritise for which areas.

I have already mentioned Brexit and I will return to it in the context of the regulations at the end, but I also want to raise the implications they will have for the NHS and the healthcare sector. Again, the chart in paragraph 10.4 identifies human health and social work activities. I hope the Minister’s Home Office colleagues have made him aware of a letter sent by the British Medical Association and the Royal College of Nursing to the Home Secretary on Friday 10 March regarding the impact of the charge on the health and social care workforce. In that letter they asked the Home Secretary to exempt the NHS and the wider health and social care system from the charge.

The British Medical Association and the Royal College of Nursing quoted two particular statistics that the Minister may or may not wish to challenge. They said that £3.5 million would be taken out of the NHS budget if the charge was applied to doctors who were granted tier 2 general visas from August 2014 to August 2015. They also made the point that if the charge had been applied to registered nurses, the health and social care system would have lost £655,000 in 2014-15, rising to £2.1 million in 2015-16. Of course, those are “What ifs?” and hypotheticals, but they nevertheless give some indication of why the BMA and the Royal College of Nursing are so concerned.

I do not want to quote at length from the detailed letter that the BMA and the Royal College of Nursing sent to the Home Secretary, but there are a couple of key points. The Minister talked about wanting to get moving on this, get skills coming in and get people trained, all of which I agree with. However, the chair of the BMA and the general secretary of the Royal College of Nursing rightly reminded the Home Secretary and her officials of the gestation time of this process. They said:

“While the health secretary has outlined proposals to expand the supply of UK trained doctors to reduce the NHS’s reliance on doctors from overseas, the length of time taken to train a senior doctor will mean that the NHS will continue to be reliant upon doctors from the EU and overseas in the short to medium term to fill vacant posts.”

They also said:

“Checks and balances are already in place to ensure posts are first offered to UK and EU nationals through the resident labour market test. It is unfair therefore, to penalise health and social care employers for recruiting a doctor or a nurse on a tier 2 visa”.

I do not intend to go into the broader debate around health service training and skills, because that would be outwith the purposes of the regulations, but those comments certainly ought to send a message to the Minister and to Home Office officials and the Home Secretary, who will have to bear the responsibility. Although the Minister and his Department will benefit from this—I mean this in the nicest possible way—they are the bag carrier for the Home Office in this matter.

It is important to look at the practicals. It is not irrelevant to give a brief example from my own constituency. My local hospital, Blackpool Victoria hospital, in common with many other hospitals, is finding it extraordinarily difficult to recruit at the moment. It has just had to hire 80 medical staff from the Philippines. Some people might say, “Well, they should have been doing more to retrain, reskill and bring people on board,” but the reality of attracting staff to coastal or suburban places that have more challenges than university-led or city centre hospitals is significant. Given the town the Minister represents, I venture to say that he will know of those issues, in terms of the competition between small-town areas and city centres. Those are really important issues that will need to be taken into consideration in implementing these regulations.

My hon. Friend Lord Watson of Invergowrie, speaking for our party in the other place yesterday on these regulations, identified potential problems coming from science, technology, engineering and maths teachers not being exempt. Will the Minister look carefully at that and respond? I do not believe that his hon. Friend, the Minister responsible in the other place, gave a response, although I stand to be corrected.

In that debate my hon. Friend also suggested a sunset clause, whether formal or informal, for the regulations. I urge the Minister to look seriously at that. This is a bold initiative, but it is nevertheless full of a series of untested variables that could be even more prone than usual to the law of unintended consequences. The Government themselves have admitted, in paragraph 7.5, the complexity of the regulations. I am sure that officials will sometimes say, “A sunset clause is unnecessary.” They might say that in the context of the fact that we are told in paragraph 12.1 of the explanatory memorandum, which refers to monitoring and review:

“The Department for Education will keep the operation of the charge under review, with support from, amongst others, the Home Office. This will include reviewing the policy after 12 months’ operations.”

It is not clear to me whether that means reviewing the policy as a whole or in the context of the charges and tariffs that have been produced for it. I would be grateful for clarification on that matter from the Minister.

One of the reasons why we thought long and hard about whether we would not oppose these regulations is that we believe the regulations have to be monitored extremely carefully, for all the reasons I have described. If the Minister is not minded, or not able, to apply a sunset clause to them, we need at the very least to have an annual review brought to Parliament that says where there have been problems or where there is potential for tweaking the policy.

I repeat what I said at the beginning. We are in broad support of the process, which is a process and a set of suggestions that we considered as a party in opposition and discussed before the 2015 election, so it would not be right for us to oppose the regulations on this occasion. However, our abstention comes with a big caveat to the Minister to take note of all the things that I have said and that my noble Friend said in the other place yesterday. I give notice today that we, and my colleagues in the shadow Home Office team, will very vigilantly pursue the process and the implementation of the regulations. There is also a role for the Chairs of the Select Committee on Education and the Select Committee on Business, Energy and Industrial Strategy, so I will be sending a copy of my remarks and those of my noble Friend in the other place to them too.

--- Later in debate ---

[Robert Halfon]

I thank all the shadow spokespeople and my hon. Friend the Member for Sleaford and North Hykeham—who I am delighted to see in her place, having won the by-election—for their thoughtful and considered questions. I will try to answer as many as possible.

I would like to make a wider point, following what the hon. Member for Aberdeen North said about our putting up the drawbridge. There is nothing of the sort. This is very much part of our genuine policy on skills reform, including the apprenticeship levy, the Sainsbury reforms and the £500 million announced in the Budget to support further education. All that is about building a skills and apprenticeships nation, because we have a huge skills deficit in our country.

The leader of the Labour party often criticises Conservatives for cutting corporation tax, which we have done in order to increase jobs and ensure that companies can invest in capital. We believe we have to share the burden of paying for skills with big business and big organisations and the hard-pressed taxpayer. That is the Conservative approach.

I am a huge believer in overseas development and overseas aid. I also believe in soft power. I have fantastic Filipino nurses in Harlow. However, every time we take someone from a poorer country and do not develop our own people’s skills, we are making that country poorer, not richer, because that doctor from India or the Philippines is lost to that country and is doing service here. We are not only not skilling our own population but causing damage to poorer countries that desperately need those skills. I believe in soft power, but this is about reforms to skills.

I am happy to apologise about the timing. As the hon. Member for Blackpool South kindly acknowledged, the measure was first announced in 2015 and was debated in Parliament in 2016. We wanted to bring it in earlier. It is genuinely the case that Brexit, the new Government and trying to get it right have meant a delay, for which we apologise. It has not been as ideal as it might have. As the hon. Gentleman acknowledged, there have been many external factors.

To be clear in terms of Brexit, this charge will be paid by UK employers who recruit skilled workers from outside the European Economic Area through the tier 2 general visa. There are no plans to apply a charge to employers when they recruit EU nationals. Primary legislation would need amending to extend the charge to workers from Europe and we have no plans to do that.

[Gordon Marsden]

I am grateful to the Minister for his apology. I want to make it clear that I entirely exempt him from what were not criticisms but observations of the process. I appreciate that he had to use the words “no plans”, but will the Government categorically confirm that, if we withdraw from the EU without any trade agreement, the position will not affect the employment of EU nationals and that they will not be treated in the same way as those affected by this instrument?

[Robert Halfon]

First, the immigration skills charge is purely to do with those outside the European Economic Area and there are no plans to apply the charge to EU nationals. We would have to amend primary legislation. When we leave the EU, we will be able to take steps to control EU immigration, but the precise way that is to happen has not been determined. The immigration charge is purely to do with people from outside the European Economic Area and there are no plans to apply that to the EU. The Home Office Minister is in another debate today at the same time; otherwise, I am sure he would have been able to confirm that.

The hon. Gentleman referred to our sending a conflicting message about being open for business, a point that was also made by the other shadow spokeswomen. We remain open to attracting the brightest and best from overseas. As I set out in my opening remarks, the exemptions to the immigration skills charge show the commitment, supporting global knowledge and the exchange of skills. However, we must have the right skills domestically and we are way behind.

The vote to leave the EU demonstrated the importance of making the economy work for people of all backgrounds, in all areas of the country. The fact is that British individuals in our country are losing out because of the decisions of employers instead to recruit people, often from poorer countries. That is why we introduced the immigration skills charge.

The consultation was done by the Migration Advisory Committee. It undertook a thorough review and consulted widely. It issued a public call for evidence, receiving 251 written submissions and meeting representatives from 200-plus public and private sector employers. I will happily send a list of every single one to members of the Committee, if they would like—I do not have it on me today. Our job is to listen to the views of the Migration Advisory Committee and we followed its recommendations. There was a consultation, but it was done by that specific, respected body and the people on it.

In terms of the fee, the Department for Education is paying IT development costs of about £600,000 in 2016-17. That is not coming from the income raised from the charge. The small ongoing administration costs are approximately 1%. As I said in my opening remarks, the money is going into the Consolidated Fund, but it will be spent on skills. We are discussing with various people how that money should be spent. I would hope that it will sustain, for example, the institute of technology colleges and/or the lifelong learning and so on that we announced, but it will be spent on skills.

The hon. Member for Blackpool South asked about the stats and the closure of the UKCES. The reason I go on about the “Nightmare on Skills Street”, as I describe it, is because the Department and many other bodies collect a huge range of statistics about skills and apprenticeships and social disadvantage. The reason why we have the skills and apprenticeships priorities that we do—widespread, quality provision, social mobility and addressing our skills needs, particularly of women in STEM—is all the data and the analysis going on in the Department, with the Skills Funding Agency and many other organisations.

Let me turn to the public sector and the health service, which were raised by my hon. Friend the Member for Sleaford and North Hykeham and the Opposition spokesman. We need to put this into context. The number of doctors, nurses and teachers recruited through a tier 2 visa route—the thing we are talking about today—is low. The MAC’s report found that 3,600 certificates of sponsorship were used for doctors and 2,600 for nurses for the year ending August 2015. In terms of teachers, the same report showed that 164 certificates of sponsorship were used for science teachers and 10 for teachers of Mandarin in 2015. Let me put that in context. The use of tier 2 visas is relatively low in terms of the whole number.

[Kirsty Blackman]

If the numbers are relatively low, why do the Government not exempt the NHS and the teaching professions?

[Robert Halfon]

For two reasons. First, we are trying to change behaviours and develop—[Interruption.] If I am given a chance, I will set out all the things we are doing to invest in skills in the NHS. The second reason is to raise funds to invest in skills. We want to change behaviours and we want to raise funds. We want to share the burden of paying for the cost of skills across the United Kingdom and not put all of the burden on the hard-pressed taxpayer but share it fairly.

[Anne McLaughlin]

Would it not be quite useful not just to invest in training new doctors and nurses, but to treat existing NHS staff a little better so that they want to stay in the NHS? For example, there might a nursing shortage because the Government stopped nursing bursaries. In Scotland, nursing bursaries still exist, plus there is an additional fund for those facing extra hardship. The result is that, while applications to train as a nurse in England and Wales have dropped, they have gone up by 50% in Scotland.

[The Chair]

Order. Interventions should be brief.

[Robert Halfon]

I have some important news for the hon. Lady. We are investing a huge amount, and we will have a new nursing degree apprenticeship. That is not a bursary; apprentices will earn while they learn, get the skills on the apprenticeship and get the qualifications they need. Health Education England is forecasting that more than 11,000 additional doctors will be available by 2020 and more than 40,000 additional nurses will be available by 2020. We are investing in frontline staff and we are ensuring that even with this charge the NHS and elsewhere have the skills that they need. I do not know whether your Government are going to introduce a nursing degree apprenticeship, but if they were, I strongly recommend that.

[The Chair]

Order. Just to let the Minister know, my Government are not going to introduce any such change.

[Robert Halfon]

I beg your pardon, Mr Streeter. I meant to say “her Government”.

The number of teachers using the tier 2 route is relatively low; the overall volume of teachers recruited through the tier 2 route has fallen markedly from almost 1,500 in 2009 to under 900 in 2015. Through our STEM programme, the Department for Education will recruit up to 2,500 additional maths and physics teachers and provide subject knowledge and training in maths and physics to 15,000 non-specialist serving teachers. The DFE is investing £1.3 billion up to 2020 in new teachers, and schools could also benefit from the small and charitable sponsors reduced rate of £364, as well as from the exemption if individuals switch from the tier 4 student route to the tier 2 general route.

Putting teachers on the shortage occupation list is not a green light for overseas recruitment. The MAC report notes that, as I have said, the number of teachers being recruited through tier 2 is relatively low.

The hon. Member for Blackpool South asked about a review of the policy, and we have committed to conduct one after a year. Its scope is yet to be agreed, but I am happy to discuss that with him and take his advice on how it should be conducted. The hon. Member for Glasgow North East asked about the impact of spending on skills, and we will continue to monitor, review and evaluate the skills programme. She also asked about the payment, and I referred earlier to the sum of £1,000 and £364 for small organisations. The amount payable is calculated according to the length of employment that the sponsor enters on the certificate of sponsorship, and that is for a minimum of 12 months, followed by six-monthly increments rounded up. The important thing to note—I hope this pleases my hon. Friend the Member for Sleaford and North Hykenham—is that this charge is not retrospective, so none of the nurses who are no doubt doing a brilliant job in the hospital mentioned by the hon. Member for Blackpool South will be affected.

I think that I have answered most of the questions, and I thank everyone for contributing to an interesting debate. We have introduced the regulations as part of our general reforms to create a ladder of opportunity for millions of people in our country to get the skills they need. We will have a productive UK economy. The Treasury has had many discussions with the devolved Governments and we have kept our colleagues in the devolved Administrations informed at every stage. The Treasury has had continuing discussions about how the funding will be distributed; the hon. Member for Glasgow North East will know that it will be based on the Barnett formula.

I am glad that at least there has been broad agreement with my senior shadow about the principle, if not questions about the detail. With the immigration skills charge we will raise important funds for skills and change behaviours right across our country.

Question put,

Draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2017

Robert Halfon Excerpts

Tuesday 21st March 2017 General Committees

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I beg to move,

That the Committee has considered the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2017.

It is an honour to serve under your chairmanship, Sir Alan. The order enables the Engineering Construction Industry Training Board, the ECITB, to raise and collect a levy on employers in the engineering construction industry. We must equip people for the future, and there are acute shortages of technical skills: engineering and technology alone face an annual shortfall of 69,000 level 3 and 4 technicians. Established by the Industrial Training Act 1982, the core activity of the ECITB is to invest money it receives by way of the levy in skills training for the engineering construction workforce. The ECITB develops the skills of the existing workforce and new entrants to the industry by providing training grants and putting in place strategic initiatives that will benefit the industry in the long term and secure a sustainable pipeline of skills.

The technical education reforms are crucial to ensure that we enable people from every background to climb the ladder of opportunity. The first rung of the ladder is enhancing the prestige of the technical and professional education system. The ladder of opportunity’s social justice rung will give all those from disadvantaged backgrounds the opportunity to progress to skilled employment. All of that will combine to ensure greater job security and prosperity. The ECITB is well positioned to support and embed the technical education reforms in the engineering construction industry. We must ensure that the skills exist in the engineering construction workforce to deliver critical new infrastructure projects such as Hinkley Point C in Somerset, which I visited during national apprenticeship week.

Engineering construction is characterised by significant levels of project working, where demand can be unpredictable. Workers in the sector are often highly skilled and in high demand, both domestically and internationally. The ECITB works to retain those vital skills within the UK economy. The reforms to technical education will address the nation’s skills needs and ensure that people, whatever their background, have the skills they need to secure high-quality, fulfilling jobs that are fit for the future. The ECITB’s support of further education qualifications increases employment chances and wages and improves social capital.

The ECITB is led by industry and has a central role in training the workforce in the engineering construction industry. It provides a range of services, including setting occupational standards, developing vocational qualifications and offering direct grants to employers that carry out training.

[John Redwood (Wokingham) (Con)]

I hope that the Minister will explain whether there is an overlap with the apprenticeship levy and how this long-standing industry initiative relates to the Government measures. I am all in favour of more training, but I want to know how it fits together with the public sector.

[Robert Halfon]

I am delighted to explain that. The apprenticeship levy is very different from the ECITB levy, which is used for a range of things—for example, it supports national colleges such as the National College for Nuclear, and it has special scholarship schemes and graduate trainee schemes. The other important thing to note is that 65%-plus of the ECITB’s members, who are levy payers, voted to have this levy. It is up to them to choose the levy. I will come on to that in more detail.

The ECITB also has a role in encouraging greater diversity and equality of opportunity across the engineering construction industry. Only 7% of the current engineering construction workforce are women, so I strongly congratulate the ECITB on its extensive careers programmes in schools, promoting female engineering role models. Also, 10.8% of apprentices in construction have a learning difficulty or disability. That is an excellent place to build from, and I know that the ECITB is investing in programmes to provide further support. The Department for Education is also investing £20 million in business mentors, to help disadvantaged and vulnerable young people to get the right information about skills and training and a fulfilling role that is right for them.

Industry support is fundamental to the success of the ECITB. The vast majority of employers in the engineering construction industry continue to support a statutory framework for the ECITB levy, and the order will enable those statutory levy arrangements to continue. The Industrial Training Act allows an industrial training board to submit a proposal to the Secretary of State for the raising and collection of a levy on employers to ensure the effective provision of skills in the industries it serves. The order will give effect to a proposal submitted to us for a levy to be raised by the ECITB for the levy periods ending 31 December 2017, 31 December 2018 and 31 December 2019.

People may ask, as my right hon. Friend the Member for Wokingham did, for more detail on how the order interacts with the apprenticeship levy. Given the introduction of the apprenticeship levy, the ECITB has reviewed its levy arrangements and made the decision to reduce its rates. The levy rate attributed to site employees will be reduced to 1.2% of total emoluments—by emoluments, I mean all salaries, fees and wages and anything else that constitutes earnings of an employee—plus net expenditure on subcontract labour; that is down from 1.5% of total emoluments in the 2015 order. The rate in respect of off-site employees, often referred to as head office employees, will be reduced to 0.14% of total emoluments plus net expenditure on subcontract labour, down from 0.18% of total emoluments in the 2015 order.

The proposal involves the imposition of a levy in excess of 1% of payroll on some classes of employer. In accordance with the provisions set out in the Industrial Training Act, we are satisfied that the level of the levy is necessary to encourage training in the industry. In line with the requirements of the Industrial Training Act and the detail of the ECITB’s proposal, the ECITB has taken reasonable steps to ascertain the views of the majority of employers that together are likely to pay the majority of the levy. The Secretary of State is satisfied that that condition has been met through an industry consultation. The ECITB’s proposal for the levy obtained the support of the majority of employers in their respective industries. The three major employer federations in the industry—the Engineering Construction Industry Association, the Offshore Contractors Association and the British Chemical Engineering Contractors Association—supported the levy. All 84 levy-paying members of the employer associations were deemed to be supportive. Of the 149 employers not represented by those federations, 41 did not respond and only 10 declined to provide their support. On that basis, 78% of levy-paying employers were supportive of the ECITB’s proposal, and such employers are likely to pay 87% of the value of the levy.

The Industrial Training Act also requires that the ECITB includes within its proposal how it will exempt small employers from the levy. The order therefore provides that small firms are exempt from the levy if their total emoluments are below a threshold that the industry considers to be appropriate. If the total gross emoluments and total gross payments are less than £275,000, no training levy will be payable in respect of site-based workers. If the total gross emoluments and total gross payments are less than £1 million, no training levy will be payable in respect of off-site-based workers. Employers that are exempt from paying the levy can and do still benefit from grants and other support from the board. Of all the establishments considered to be leviable by the ECITB, it is expected that around 32% will be exempt from paying the levy.

The order is expected to raise £78 million for the ECITB in levy income over three years and will enable the ECITB to continue to carry out its vital training responsibilities alongside the apprenticeship levy. I commend the order to the Committee.

--- Later in debate ---

[Robert Halfon]

I welcome the thoughtful response from both Opposition spokesmen. The hon. Member for Blackpool South stressed that training is not just about apprenticeships and mentioned the Institute for Apprenticeships. He is absolutely right, and I hope that—it is subject to the will of the Lords—the institute will become the Institute for Apprenticeships and Technical Education. The reforms to apprenticeships go alongside the Sainsbury reforms, the extra money announced in the Budget and much more beside. I was careful to say that the levy is not a stand-alone agenda, but part of our efforts to have widespread quality provision, helping those who are socially disadvantaged and making sure that we meet our skills needs.

The hon. Gentleman asked about the CITB. The ECITB has 330 members, whereas the CITB has thousands. The ECITB wanted to get its levy arrangements made, but I believe the CITB intends to wait until after the review is announced; then the usual procedures regarding its members will be gone through. I am reminded that the CITB will consider industry views on future levy arrangements in its field in October.

I welcome the strong support given the ECITB by the Scottish Government. I know they collaborate closely in the work the ECITB does in Scotland. The hon. Member for Glasgow South West will know that the instrument applies in England, Wales and Scotland—its remit covers the three nations. Some 40% of ECITB levy employers are based in Scotland, working primarily in the offshore gas and oil sector. Skills policy is devolved to the Scottish Government, so the ECITB needs to be responsive to both English and Scottish Government skills policy. Both the Scottish Government and the Welsh Assembly have confirmed their support for the order.

[John Redwood]

The ECITB levy will raise less after 2018 than it does now. Is the amount of the reduction to take into account the apprenticeship element, which is now supplanted?

--- Later in debate ---

[Robert Halfon]

As I said, the ECITB recommended the levy it wanted to charge, and its members voted on that. Of course some of proposed levy reflects the apprenticeship levy. The ECITB is raising some funds itself—about £3 million—and it has £10 million in reserves, but it has decided to reduce its own levy rates and that has been voted on by the members.

The hon. Member for Glasgow South West asked about equalities. We are reviewing both industry training boards. We will see how the levy rolls out over the coming year, but when we announce the review, hopefully in late spring or summer, we will be able to set out how we envisage the roles of the two organisations. As this is a tax arrangement, it is not subjected to the impact assessments given to other instruments.

The Committee will note that the ECITB exists because of the support it receives from the industry it serves. There is a firm belief that without the levy, there would be a serious deterioration in the quality and quantity of training in the engineering construction industry. It continues to be the collective view of employers in that industry that the ECITB remains an integral part of meeting the skills challenges in the industry. Employers have demonstrated the continued role the EICTB has to play alongside the apprenticeship levy and its vital role in supporting the Government’s delivery of reforms in the skills sector.

Finally, the hon. Member for Blackpool South gave some historical context to the levy. I have been looking at some of the documents and I believe the history books will show that mainly it is Tory Governments who introduce levies. I commend the order to the Committee.

Question put and agreed to.

Oral Answers to Questions

Robert Halfon Excerpts

Monday 20th March 2017 Commons Chamber

[Liz McInnes (Heywood and Middleton) (Lab)]

7. What discussions she has had with the Chancellor of the Exchequer on the timetable for the introduction of maintenance loans for students undertaking (a) technical qualifications and (b) distance learning.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

It is essential that we support learners while they study if we are to grow the number of skilled workers that the economy needs. The Government will introduce maintenance loans for learners studying higher-level technical qualifications at level 4 at national colleges and the new institutes of technology from the 2019-20 academic year. Maintenance loans will be available for the first time for both full-time and part-time higher education distance learners in the same year, subject to satisfactory controls being in place.

[Mr Cunningham]

Does the Minister agree with the Open University that the decision to delay maintenance loans for distance learners will adversely affect disabled students, for whom distance learning is the best option, and those from poorer backgrounds, who need maintenance loans to support them while they study?

[Robert Halfon]

I thank the hon. Gentleman for his question. I am very supportive of distance learners and the incredible work of the Open University. We want to offer these maintenance loans, but we want to get this right; we have a duty to ensure that we are providing the right value for money for the public and that the right controls are in place.

[Liz McInnes]

The Chancellor, in his Budget statement, declared a commitment to lifelong learning, yet maintenance loans have been capped as being for those of less than 60 years of age. Given this Government’s apparent determination to raise the retirement age and their appalling treatment of the WASPI—Women Against State Pension Inequality Campaign—women, does the Minister agree with me, and probably with Dame Vera Lynn, that life most definitely does not end at 60?

[Robert Halfon]

It is this Government who have introduced advanced learner loans; we are going to have maintenance loans for students going to institutes of technology or national colleges, and for future distance learners; and we have just announced an extra £500 million to support further education. This Government are actually backing skills and giving people the funding they need.

[James Gray (North Wiltshire) (Con)]

Britain’s record in engineering and technical training at the moment is deplorable, with our being 16th among OECD countries, so I very much welcome the Minister’s announcement earlier about maintenance grants. Does he agree that the private sector has a role to play? In particular, will he welcome Sir James Dyson’s recent announcement that he intends to open a new technical and engineering college at Hullavington in my constituency, with it being at least partly paid for by giving the students salaries?

[Robert Halfon]

I could not have put it better myself; my hon. Friend is exactly right, and I congratulate Dyson. What is happening with that company and elsewhere in the country, with the investment the Government are putting into skills—the £500 million extra announced last week, and the £40 million for pilots in lifelong learning and studying—show that we are investing. We are putting our money where our mouth is and building a skills and apprenticeship nation.

[Gordon Marsden (Blackpool South) (Lab)]

The Budget timetable, which saves the Treasury £400 million—we did not hear that from the Minister—is now a double whammy for learners. It delays until 2019 and jeopardises Lord Sainsbury’s technical skills agenda, and it hits disabled and disadvantaged and distance learners, as the Open University warned the Department for Education it would. With a 30% drop in part-time learning since 2011, why is the Department planning to cut support for distance learners even further, as the Office for Budget Responsibility revealed in section A.22 of its Budget document?

[Robert Halfon]

I am amazed by the hon. Gentleman’s question. I thought he would rise to celebrate the £500 million extra we are spending on further education, the £2.5 billion we will be spending on apprenticeships by 2020, or the £40 million on pilots for lifelong learning. By 2020, there will be more funding for adult education than at any time in England’s history. We have a record of which we can be proud; it is time the hon. Gentleman supported us.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

3. What steps her Department is taking to encourage the development of resilience in children through curricular and extracurricular activities to promote mental wellbeing.

--- Later in debate ---

[Amanda Milling (Cannock Chase) (Con)]

5. What steps her Department is taking to encourage small businesses to participate in apprenticeship programmes.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

We have a wealth of advice and guidance for employers and small businesses through the “Employing an apprentice” and “Recruit an apprentice” pages of gov.uk. There is information for employers on all aspects of apprenticeship recruitment. This requires training organisations to post vacancies to be viewed by and applied for by candidates using the find an apprenticeship service.

[Amanda Milling]

Although they are keen to take on apprentices, I have small businesses in Cannock Chase that are finding it difficult to identify candidates. What are the Government doing to make it easier for small businesses to connect with local colleges and potential apprentices?

[Robert Halfon]

I thank my hon. Friend for her question and for her championship of apprenticeships in her constituency. We are doing a lot: we are spending millions to incentivise small businesses and providers to take on apprentices; we have a huge communication programme —43,000 small businesses have recently been contacted by the Skills Funding Agency’s “Get In. Go Far” programme—and we have a network of 500 apprenticeship ambassadors. We are doing all we can. It is worth noting that roughly 200,000 small businesses have apprentices.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The new register of apprenticeship training providers published last week excludes a significant number of successful training providers, including four in Birmingham, two in Coventry and one in Solihull. Is the Minister not aware that if he goes ahead with that decision, he will essentially be destroying technical education for 16-year-olds in the west midlands?

[Robert Halfon]

It is worth noting that 75.7% of those that applied to get on the register have been successful. One hundred and seventy further education colleges got on to the register, as did 178 providers of apprenticeship training in Birmingham. No existing apprentices in the colleges will be affected.

[Mr Philip Hollobone (Kettering) (Con)]

What message can I give small businesses in Kettering about the incentives given to apprenticeship training providers to link up with small businesses rather than larger ones?

[Robert Halfon]

The good news is that the taxpayer is spending millions of pounds to incentivise small businesses and providers to have apprenticeships. In addition, we have the huge communications programme that I highlighted earlier.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Employers have “high expectations”, the college has “good standards”, and young people are “ambassadors” for apprenticeships. That is the verdict of Ofsted on Birmingham Metropolitan College, yet it is one of four colleges in Birmingham— 13 in the west midlands—that have been denied access to the apprenticeship levy and will have to cease providing apprenticeships. Does the Minister begin to understand the outrage over this inexplicable decision? Will he meet Birmingham’s MPs, so that we can make further representations to him?

[Robert Halfon]

I am happy to meet MPs from Birmingham and any other area. The crucial aim behind the decision is to improve quality. Getting on the register is a competitive procurement process—everyone had to fulfil the same criteria. It is important to note that, from tomorrow, those that did not get on the register can reapply, so they may yet succeed.

[John Glen (Salisbury) (Con)]

6. What steps she is taking to support and expand selective secondary education.

--- Later in debate ---

[David Rutley (Macclesfield) (Con)]

13. What steps the Government are taking to improve the quality of further education.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

We are building an apprenticeship and skills nation, and crafting a ladder of opportunity to create widespread provision to meet our skills needs and to help those with social disadvantage. We are spending £80 million on national colleges and £170 million on institute of technology colleges, with extra money for further education.

[David Rutley]

I welcome the progress that Ministers are making in helping to raise the profile of and standards in technical education. What steps are being taken to help to improve the job prospects of the young people who will benefit from the £500 million investment announced in the Budget?

[Robert Halfon]

From 2019, students will have a choice of two routes: an academic route, or a state-of-the-art technical route with 15 different routes within it. We are investing in that, as I have said, and we are investing an extra £500 million on top of the existing funds. We are building the skills and apprenticeship nation that our country needs, and we are creating the skills that people and employers need.

[Mr Alan Mak (Havant) (Con)]

18. High-quality further education, linked to STEM—science, technology, engineering and maths—skills and the needs of employers will help Britain to lead the fourth industrial revolution. Will the Minister join me in welcoming T-levels, which will help our young people to secure the jobs of the future as the workplace evolves?

[Robert Halfon]

My hon. Friend is exactly right, and I congratulate him on the work that he does in this area. T-levels, our technical education reforms, our apprenticeship reforms and our strong backing of further education are exactly what we need to do to create the skills to make sure that people have the jobs and the skills that they need for their futures.

[Sir David Amess (Southend West) (Con)]

14. What recent representations she has received on the number of available apprenticeship places.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

Apprenticeships are jobs, and availability is determined by employers offering such opportunities. Our ambition is to reach 3 million apprenticeship starts by 2020, and to support the growth of apprenticeships across different sectors and regions.

[Sir David Amess]

Will my right hon. Friend join me in congratulating the Central Training Group’s Central Hairdressing Academy in Southend on its support of apprenticeships and its excellent results, and will he reflect on the view that trainers feel that a lot of pressure is put on children to stay on in the sixth form who might benefit from taking an apprenticeship?

[Robert Halfon]

My hon. Friend is exactly right. I congratulate the hairdressing academy on its support of apprenticeships. We now have 900,000 apprentices—the record highest number ever—and we have 784,000 starts. We are building the apprenticeship nation, and giving those young people a ladder of opportunity.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

--- Later in debate ---

[Diana Johnson (Kingston upon Hull North) (Lab)]

T2. Is the Minister concerned that when the apprenticeship levy is introduced it will disproportionately benefit London and the south-east, rather than areas in the north, in particular Hull, as the money it raises will not be redistributed? Will the Minister look at making sure the money goes to areas most in need?

[The Minister for Apprenticeships and Skills (Robert Halfon)]

By 2020, we will be spending £2.5 billion on apprenticeships, much of that raised through the levy. It will be spent wherever our apprentices are needed.

[Andrew Stephenson (Pendle) (Con)]

T8. Earlier this month, six Pendle schools announced plans to work together to launch their own academy trust. What can my right hon. Friend do to ensure that the Pennine Trust helps to raise educational attainment and aspiration across Pendle?

Education

Robert Halfon Excerpts

Monday 20th March 2017 Ministerial Corrections

The following is an extract from the response to the hon. Member for Luton North (Kelvin Hopkins) during the Westminster Hall debate on financial support for apprenticeships by the Minister for Apprenticeships and Skills on 8 March 2017.

[Robert Halfon]

The hon. Member for Luton North said we were not resourcing apprenticeships, but I take issue with him on that. By 2020 apprenticeship spending will have increased to £2.5 billion, almost double what it was in 2015.

[Official Report, 8 March 2017, Vol. 622, c. 312WH.]

Letter of correction from Robert Halfon:

An error has been identified in the response I gave to the hon. Member for Luton North (Kelvin Hopkins) during the debate.

The correct response should have been:

[Robert Halfon]

The hon. Member for Luton North said we were not resourcing apprenticeships, but I take issue with him on that. By 2020 apprenticeship spending will have increased to £2.5 billion, almost double what it was in 2010.

Apprentices: Financial Support

Robert Halfon Excerpts

Wednesday 8th March 2017 Westminster Hall

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing this debate. I met him briefly in passing in the corridors of the House last week, and I said I was pleased that he had put in for and got this debate in National Apprenticeship Week. He has an unrivalled knowledge of apprenticeships, skills and further education, and he made a significant contribution to the Technical and Further Education Bill as it went through the House.

I will come on to the issues that the hon. Gentleman raised, but he will know that in his constituency, apprenticeship starts increased by 19% over the course of the previous Parliament, which I am sure he welcomed. Overall, apprenticeships have increased to 900,000, which I think is the highest number on record. He raised a number of issues that I would like to touch on, including resource, equality, the skills deficit, wages, the cost of living—the shadow Minister also touched on that—social mobility and social justice.

Before I start on all those things, the shadow Minister mentioned some of the things he has been doing in National Apprenticeship Week, which is a wonderful week to celebrate apprenticeships. It is very important as one of the rungs on the ladder of opportunity is increasing the prestige of apprenticeships and skills. It goes back to what the hon. Member for Motherwell and Wishaw (Marion Fellows) was saying: unless we increase the prestige of skills, we will have the situations she described.

I met incredible apprentices and young people learning skills at Bridgwater and Taunton College. One was learning to be a luthier to fix violins. EDF apprentices are helping to build Hinkley C. I met older apprentices, including a 47-year-old apprentice who was working for EDF. I met lab technicians doing apprenticeships. I asked to meet the Premier Inn apprentices in the hotel where I was staying in the first two days of my travels around the south and south-west. They were young 23-year-olds doing level 3 or level 4. One was very young and had already become an operations manager. I pay tribute to all those organisations, including the excellent college, the Premier Inn, Sunseeker—I went to visit its apprentices in Poole—EDF Energy and Hinkley Point, and I pay tribute to all the other apprentices I have met so far during National Apprenticeship Week. They show the best of apprenticeships.

The shadow Minister is right that we need to make the distinction between apprenticeships and apprentices. I often get told off for using the word “apprentices” rather than “apprenticeships”. He is looking at the individual, and that is very important. I am glad to see that almost everyone in the Chamber is wearing the new apprentices badge, which we have launched as part of the ladder of opportunity. We believe that apprenticeships offer young people that ladder of opportunity to increase the prestige, to meet our skills needs and to help those with social disadvantage to ensure that we get the jobs, security and prosperity that we need.

[Official Report, 20 March 2017, Vol. 623, c. 9-10MC.]The hon. Member for Luton North said we were not resourcing apprenticeships, but I take issue with him on that. By 2020 apprenticeship spending will have increased to £2.5 billion, almost double what it was in 2010. We have introduced a levy not only to change behaviours but to make sure we have funding for big businesses and small businesses to have apprentices.

[Kelvin Hopkins]

I thank the Minister for giving way. It is a pleasure to listen to him speaking. I said in my speech that the Government have made some moves but not enough. The outcome will be successful if we achieve the number of apprenticeships, trained apprentices and skills that we require for our economy. If that works, what has happened will be enough, but I suspect it is not yet really enough.

[Robert Halfon]

The hon. Gentleman is absolutely right. One of the rungs on the ladder of opportunity is widespread quality provision, which I will come on to. Although we have a huge amount of work to do—and the work is never done—statistics show that roughly 90% of apprentices get a good job afterwards, often in the place where they did their apprenticeship, or go on to additional education, which they may not otherwise have thought of. That is a pretty good sign of the way things are going, but I do not deny there is a lot of work to do.

Within the funding framework, millions of pounds go to employers—I could list them all here—and providers. Special help ensures we do everything possible to incentivise SMEs to take on 16 to 18-year-olds, and they pay no training costs if they have fewer than 50 employees. Huge amounts of money are spent on trying to encourage businesses, employers and other organisations to take on apprentices with learning difficulties and disabilities. Amazingly, in the construction industry, 10% of apprentices have disabilities. I was astonished when I first saw that statistic, which is a credit to the construction industry and shows that the things we are trying to do in terms of incentives for the trainer, provider and employer are having an effect. Given the funding pressures that the country faces, the money that is going into apprenticeships is a significant amount and it is something I strongly support.

The hon. Member for Motherwell and Wishaw said the Select Committee went to Gateshead College, which is an incredible and outstanding place. I went there a few weeks ago as part of the industrial strategy launch. The college embeds careers advice in every single part of the course. It does huge amounts of work for LDD apprentices and huge amounts of work to encourage people into apprenticeships. It is an outstanding college that does a lot of work on mental health. I am glad the Select Committee visited, and our job is to find out how to replicate what the college does across the country.

[Dr Poulter]

My right hon. Friend is right to outline the great successes of the expansion of apprenticeships across the country. I am sure he recognises the challenge of helping people from poorer and less privileged backgrounds into apprenticeships. Can he outline what steps the Government are taking to improve that situation?

[Robert Halfon]

I promise to answer my hon. Friend’s question, but I hope he does not mind if I answer it later because I want to deal with the points made by the hon. Member for Luton North, who initiated the debate. My hon. Friend raises an important issue. One of my key motivations in my job is to make sure that people from disadvantaged backgrounds can have the same equality of opportunity as everybody else, but I will come on to that in a minute.

[Marion Fellows]

On the question of careers, I met careers advisers and the students who talked to them. I think the Minister should address pre-college and what happens in schools to encourage children and schools to look at alternative academic progression.

[Robert Halfon]

The hon. Lady spoke thoughtfully in a previous debate on apprenticeships in this Chamber. She is completely right. I ask every single apprentice I meet—I have met a few thousand since being in post—“Did you get any apprenticeship or skills advice in your school?” and nine times out of 10 they did not. If they say yes it is usually because they have been to a university technical college or a place that specialises in technical work. That is depressing. I have mentioned before the story that Gateshead College told me about its own degree apprentice students and how the college was not allowed to talk to them about apprenticeships in their schools. It was the same with Heathrow airport and other apprentices I have met. That is shocking. We are reviewing our careers strategy and hope to publish a serious careers strategy in the coming months. We want it to be more focused on schools, and we are looking at the best way to incentivise schools to teach students about apprenticeships and skills, as not enough are doing that.

Women apprentices have been mentioned: 53% of apprentices are female. A survey showed that female apprentices earn more than men, so I do not accept the wage disparity point. However, very few do STEM subjects. If I go to a college that teaches healthcare, the room will be filled with mostly females and there might be one or two men, which of course is fantastic. If the subject is engineering or electrical, it is all men, and that has got to change.

There are enlightened employers. Among the Jaguar apprentices at Warwickshire College, 20% are women. There are lots of other examples of good employers and we need to encourage them, but a lot of that comes from careers advice in schools. I was told by one student yesterday that when they were given careers advice they were shown pictures. All the pictures of engineering jobs showed men and the nursing picture had a woman. That is why we face a problem. It is a cultural problem in our country, and schools need to do a huge amount more to promote apprenticeships. We are doing an enormous amount of work on that. We strongly welcome the Baker amendment, which the hon. Member for Blackpool South (Gordon Marsden) highlighted, because that will make it law that schools have to accept careers advice from further education and apprenticeship providers.

The hon. Gentleman said we were not doing enough on quality. Again, I take issue with that, although we have had a problem in the past. There were too many qualifications and an apprenticeship could mean anything. I remember speaking to people at a hotel. I said, “Have you got apprentices?” and they said, “Yes, we have got apprentices. In fact, we have a few in the kitchen who are here for a few weeks.” They were perfectly lovely people who genuinely believed they had apprentices. We have changed the situation and changed the legislation on apprenticeships. An apprenticeship has to be for a minimum of a year. Apprentices I met yesterday were doing two, three and four-year apprenticeships. They have to spend 20% of their time in training.

We have moved from frameworks to standards—we have had many discussions about that—because of the spaghetti junction of frameworks and qualifications. We have moved to standards that are primarily employer-led. From the beginning of April, subject to progress on the Bill in the Lords, the new Institute for Apprenticeships and Technical Education will design the new standards and training for apprentices so that employers will be given what they need, which has not necessarily happened in the past. Degree apprenticeships are not only about prestige, but quality. The Premier Inn apprentice I met yesterday is 23 years old. Having done levels 2 and 3 with the company, they were going on to do a level 4 and level 5 degree apprenticeship. That will transform the quality and prestige because it shows that apprenticeships are really serious and go up to different levels. They will offer students—again, as the hon. Gentleman rightly pointed out—an amazing chance to get a degree and earn while they learn. They will have no student debt and will be virtually guaranteed a job at the end of it. That is the future. That is what we need to encourage our young people to do.

When I visited Tyneside, I spoke to Accenture, which has degree apprentices, some of whom do not even have their GCSEs yet, doing coding. I said to Accenture, “How do you choose the people?” and it said, “It is attitude, attitude, attitude.” It offers people from disadvantaged backgrounds a chance to get a serious degree apprenticeship.

The hon. Member for Luton North rightly talked about the skills deficit. I have acknowledged countless times that we are way behind other OECD countries. Our skills deficit is a long-standing problem, and we highlighted it in the industrial strategy we announced a few weeks ago. That is why we put money into STEM apprenticeships and increased the frameworks by between 40% and 80%. We pledged £170 million to create the new institute of technology colleges and £80 million to set up national colleges focusing on nuclear, digital and the creative industries to try to change the skills base. We created an employer-led qualification to ensure that apprentice standards provide the skills that employers need. Through the Sainsbury reforms, which will be rolled out from 2019, every student aged 16 will be able either to continue with a traditional academic education, or to go down a state-of-the-art, prestigious technical and professional educational route. We are doing everything we can to address the skills deficit that the hon. Gentleman rightly highlights.

[Kelvin Hopkins]

I agree absolutely with what the Minister says about the importance of raising skills in STEM subjects in particular, but is it not the case that the failures are lower down in the school system, rather than at the further education or apprenticeship level? Is he saying to his colleagues in education that we have to do as much as possible to ensure that when youngsters reach the age of 16, their mathematics skills in particular are sufficiently good to make them useful apprentices and eventually good employees?

[Robert Halfon]

The hon. Gentleman is right, and he has highlighted that issue previously. My right hon. Friend the Minister for School Standards is resolute on high standards. They are his passion. I work with him and I know he is doing everything possible to ensure that students have the right qualifications in maths and English by the time they leave school. We are looking at things such as improving functional skills post-16. As I say, we are putting our money where our mouth is. We are investing in the new institute of technology and the national colleges. The Sainsbury reforms are being rolled out, and we are investing in STEM apprenticeships. We are trying to undo a 20 or 30-year skills deficit caused by Governments of all persuasions and employers not investing in training and producing the skills that our country needs.

It is important to highlight a few points about wages. The apprentice wage is £3.40 and will go up to £3.50 in April, but 82% of apprentices are paid more than the national minimum wage or the national living wage, according to data from 2016: apprentices earn £6.31 per hour on average. Wherever I go, I ask every apprentice I meet how much they get paid—I do not just look at the surveys—and most of them tell me that they get way above the apprentice minimum wage.

I want to make a wider point about the wage issue. It is important to note that apprentices are earning while they are learning. I want to do everything I can to help disadvantaged apprentices—I am going to come on to that point in a minute—but if those apprentices were in higher education or studying at further education colleges, they would not be earning while they are learning. Apprentices are earning while they are learning, and 82% of them get more than the national minimum wage or the national living wage. When we consider the benefits and that kind of thing, we need to reflect carefully on the fact that apprentices are earning money. Many of my constituents who are not apprentices—no doubt this is also true of other hon. Members’ constituents—earn the national minimum wage, but apprentices get training and education in the knowledge that 90% of them will get jobs at the end. That does not mean that there is not a problem. Some apprentices come from very low-income backgrounds—I think 25% of them come from the poorest fifth of areas in the country. It is important to put that fact on the record. I will come on to child benefit in a minute.

[Kelvin Hopkins]

The Minister is making a fair point about apprentices earning a wage, but families—particularly those on modest incomes—are acutely aware of the tipping point where the benefits that those people might get if they were in education outweigh the wage they might get if they were in an apprenticeship. When incomes are tight, such marginal differences make a difference to the choices families make.

[Robert Halfon]

I am acutely aware—I see the pressures on my constituents—of the pressures that families face, and I do not want to create disincentives for families who are working but struggling. Often, one member of the family works in the day, one works at night and the son or daughter does an apprenticeship, yet the family are struggling to keep their heads above water. I accept that. We announced that we will be doing a serious, committed review—this relates to the question that my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) asked—of how to get more apprentices from disadvantaged backgrounds. We have a £60 million fund to incentivise providers to take apprentices from the most deprived backgrounds, and FE colleges can use some of their bursary money to help apprentices with travel and overcome some of the other obstacles that have been raised.

[Dr Poulter]

I hope my hon. Friend the Minister recognises that that is inadequate for many students living in very rural areas. Some colleges cover vast geographical areas and some students have to do 100-mile round trips daily to attend college. They also have to pay for transport or car and petrol money to get to the workplace where they are doing their apprenticeship, which is a real disincentive in some rural areas. Will my hon. Friend the Minister look at the challenges that rural apprentices face?

[Robert Halfon]

I accept the premise of my hon. Friend’s question. I have been to rural areas to meet apprentices, and the younger ones in particular say that the cost of transport is a problem. We are looking at that as part of the social mobility review for apprentices. Again, if those apprentices were just going to an FE college they would not be earning any money, and if they were at university they would have to have a loan. At least they are earning, and the vast majority of them are earning more than the apprentice minimum wage. We have to strike a fair balance between the needs of the people my hon. Friend describes, which are very real, and fairness to taxpayers on low incomes, in terms of the overall costs and benefits. It is open to colleges to give apprentices bursary funding to help them with bus travel, and many do so.

[Gordon Marsden]

On the review—this is the first I have heard of it, but I welcome it—I urge the Minister, in connection with the points I made earlier, to look not only within the Department but at some of the broader issues, such as the 16-hour rule and the relationship with the Department for Work and Pensions.

[Robert Halfon]

We announced the review in November last year, with that final announcement on the levy. I am working closely with my hon. Friend the Minister for Employment at the DWP. I cannot say that we will come up with a magic solution, or that there is a magic funding pot, but there are other issues, such as those to do with benefits and so on—for example, if a single parent were working in a coffee shop but wanted to do a teaching assistant apprenticeship and the wage was literally the minimum of £3.40. We are looking at all those, although I hope that when universal credit comes through fully it will deal with some of the problems. As I say, we are committed to that. We also have a £60 million fund.

In addition, the National Union of Students has its Apprentice extra card. I helped to launch it and worked with the scheme in the previous Parliament when I was a Back Bencher. My predecessor, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), attended the launch. Apprentices, as young people under 25, are also entitled to some rail discounts and so on.

The hon. Member for Blackpool South talked about traineeships, to which I am very committed. We have spent more than £50 million on them. There were more than 24,000 traineeship starts between August 2015 and July 2016. Fifty per cent. of trainees progress into apprenticeships and 94% of employers consider traineeships an effective way of increasing young people’s chances. Traineeships are part of the £5.4 billion 16-to-19 budget funded by the Skills Funding Agency. It is also important to note that almost 20% of those who do traineeships have learning difficulties or disabilities. I think that is a wonderful figure. We would like to increase it further, but it is pretty high already.

We also still have the target to increase black and minority ethnic take-up of apprenticeships by 20%, and we have said that publicly. We are doing everything possible to increase apprenticeships in the public sector, with a new 2.3% target. I have been asked about apprentices with disabilities and we are working hard to implement the recommendations of the Maynard taskforce, led by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). We agreed with everything it suggested and our aim is to have full implementation by April 2018.

I thank the hon. Member for Blackpool South for mentioning council tax. I will discuss those matters with my counterparts in the Department for Communities and Local Government, especially if, as he says, apprentices are not getting rebates to which they are entitled. I will look into what we can do about that.

Before I conclude, I apologise, Ms Ryan. I should have said at the beginning of my speech that it is a pleasure to serve under your chairmanship.

Yes, we have a lot of work to do. The hon. Member for Luton North has highlighted how we need to continue to work on quality, to ensure that those 3 million apprentices have quality apprenticeships. He is right to highlight that we need to do everything possible to help the socially disadvantaged. I am not saying that we have all the answers, but the statistics show—the numbers show, not just me—that we are helping. The individual stories show that we are helping in human as well as numbers terms. Whenever I go around the country, I speak to as many people as possible. Almost every Thursday I go around colleges and meet apprentices. This week, had it not been for this important debate, I would probably have been in a college early this morning, before the Budget. We are investing in the skills and the quality, and we are creating and doing everything possible to create a ladder of opportunity to ensure that apprentices from all backgrounds may climb it to the jobs, security and prosperity they need.

School Funding: Cheshire West and Chester

Robert Halfon Excerpts

Wednesday 22nd February 2017 Westminster Hall

[The Minister for Apprenticeships and Skills (Robert Halfon)]

It is an honour to serve under your chairmanship, Mr Bailey. I congratulate the hon. Members for City of Chester (Christian Matheson) and for Ellesmere Port and Neston (Justin Madders) on the thoughtful and considerate way in which they have approached this debate. I am grateful also for the contribution of my hon. Friend the Member for Eddisbury (Antoinette Sandbach).

Today I am standing in for my right hon. Friend the Minister for School Standards, who has unavoidable duties elsewhere, but I am pleased to be here, because this opportunity has allowed me to look in more detail at the topic of fair funding. Now more than ever, no matter where they live and whatever their background, ability or need, children should have access to an excellent education, and I think there is agreement that the current funding system prevents that. We currently have a postcode lottery, which is random and haphazard and means that money is often not getting to the places that most need it and to the poorest students.

Few people will disagree that the system is unfair. One example that particularly struck me from the first consultation was that the same school, with the same kind of pupils, would get 50% more funding in Hackney than it would in Barnsley. We have to change the historical unfairness by introducing the national funding formula; that is why it was a key manifesto commitment. It will mean that the same child, with the same needs, will attract the same funding regardless of where they happen to live.

We launched the consultation in March. We asked for views to underpin the formula. More than 6,000 people responded, and there was widespread support for the proposals. In December, we launched the second stage. That document sets out the detail of the formula and shows how it would impact on every school in the country, but I stress that this is a consultation. We have allowed more than three months for the consultation. This debate is incredibly important, and I will feed back to the Schools Minister what Members have said today. Indeed, the consultation will stay open until 22 March.

The purpose of the proposals is to focus money towards the pupils who face the greatest barriers to success. The formula is designed to boost support for those who are deprived and live in areas of deprivation, but who may not be eligible for free school meals and the pupil premium. Those pupils are from the families who are just about managing—no doubt many constituents of Members here today, and many of mine. Overall, under the proposals, more than half of all schools will benefit from increased funding through the formula. They will see overdue increases in funding of up to 3% per pupil in 2018-19 and up to a further 2.5% per pupil in 2019-20. No school will face reductions of more than 1.5% per year or 3% overall per pupil as a result of the formula.

[Antoinette Sandbach]

The issue is that the unfairness in the system, involving the f40 group of worst-funded councils, is locked in by that 3% cap. In fact, councils that transfer money from their general schools budget into higher needs are actually penalised under the current formula. I hope that the Government will listen to representations made in that regard.

[Robert Halfon]

Of course we will listen and, as I said, I will feed back all the comments made today to my right hon. Friend the Minister for School Standards.

A substantial part of the reason for the change in the formula is to ensure that money goes to the most deprived students. We want to ensure that every child can achieve their full potential and succeed, and that means directing funding to those who need the extra support. We know that disadvantage has a significant impact on pupils’ attainment. That is seen throughout the school system and is compounded in areas of higher deprivation.

This is not about north versus south, to comment on what the hon. Member for City of Chester said. We can look at the biggest gains in the north: Derby is gaining by 8.6% and Barnsley by 6.9%. Deprived areas of the north-west, where there is much higher deprivation, and my colleagues’ constituencies, are getting significant increases. Halton local authority has very high rates of deprivation and is seeing a 2.2% increase in funding for its schools, as do St Helens, which is having a 1.6% increase, and Salford, which will have a 2.6% increase. Areas where there are high levels of deprivation are seeing increases in their funding. That is why we publish data for every school in the country—so that they can see how the formula affects them.

[Justin Madders]

Both my constituency and that of my hon. Friend the Member for City of Chester (Christian Matheson) have areas of real deprivation as severe as in some of the areas the Minister has just mentioned. Does he accept that a local authority is a broad area that has different levels of wealth and poverty?

[Robert Halfon]

Of course every area will have areas of deprivation, but overall the hon. Gentleman’s area has less deprivation than others, and because we do not have an unlimited pot of money we are trying to make sure that the money goes to those in the most need. As I said, there is a consultation; we are hearing from parents, colleagues across the House, governors and schoolteachers so that we can get this historic change right.

The changes make it all the more important that we get funding right. We want to put schools on an even footing. As the hon. Member for City of Chester mentioned, all schools need to make the best use of their resources, ensuring that every pound has the maximum impact on standards. He was right to highlight that more than 93% of schools in his area and that of the hon. Member for Ellesmere Port and Neston are good or outstanding—148 of them, which is 37 more than in 2010. That suggests that although funding is incredibly important, it is about not just funding but the quality of teachers. I pay tribute to the teachers and schools in their constituencies who have made it possible to have such a good record in education.

We will continue to produce a comprehensive package of support. We have recently published a school buying strategy and will try to improve that model over the coming months. I know that the hon. Members here today have played an important role in the f40 group, which has campaigned for years for fairer funding. I recognise that because of that campaign, Members may have expected an increase in funding for schools under the national formula. I am sure that the hon. Member for City of Chester will understand that the national funding formula has been designed to ensure that funding is allocated according to need on the basis of up-to-date measures. However, we have deliberately set a long consultation period so that we might hear the widest range of views.

I thank hon. Members representing the Cheshire West and Chester constituencies for their dedication to this important topic and for raising it in the way that they have. We have continued to fund the pupil premium, which goes to the poorest pupils, and their constituents get a sizeable amount it. The schools budget does take pupil numbers into account and will rise as pupil numbers rise throughout the Parliament.

The introduction of the national funding formula will be a historic reform. It is the biggest change to school funding in more than a decade. Of course it is difficult, as the hon. Member for City of Chester was fair enough to acknowledge, but for the first time we will have a clear, simple and transparent system that matches funding to children’s needs and the schools that they attend. It will enable all schools equally to create opportunities for their pupils and provide a first-class education. I know that my right hon. Friend the Minister for School Standards is looking forward to engaging with Cheshire MPs later today. I hope that what I have said will reassure hon. Members that the Government are committed to reforming school funding and making it fair for all schools in the country.

Question put and agreed to.

Education

Robert Halfon Excerpts

Wednesday 22nd February 2017 Ministerial Corrections

The following is an extract from the response to the right hon. Member for Tottenham (Mr Lammy) during the Adjournment debate on night schools and adult education by the Minister for Apprenticeships and Skills on 13 January 2017.

[Robert Halfon]

Including the levy and taken together, the adult education budget, apprenticeship funding and advanced learner loans will provide more funding to support adult further education participation than at any time in our island’s history.

[Official Report, 13 January 2017, Vol. 619, c. 658.]

Letter of correction from Robert Halfon:

An error has been identified in the response I gave to the right hon. Member for Tottenham (Mr Lammy) during the debate.

The correct response should have been:

[Robert Halfon]

Including the levy and taken together, the adult education budget, apprenticeship funding and advanced learner loans will provide more funding to support adult further education participation by 2020 than at any time in England’s history.