Apprenticeships: SMEs

Alex Sobel Excerpts

Thursday 13th February 2020 Westminster Hall

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Slough (Mr Dhesi) for securing this debate. I must say it is also a pleasure to see the Minister still there in her place opposite me, to continue our discussions from Tuesday.

I will start by commenting on my hon. Friend’s speech. He started with an interesting point about the differences between Germany and England in the status of apprentices and how they are viewed. I saw that when the Education Committee went to Germany, and I was struck by how fantastic the system is there. Of course, there are structural differences that mean we cannot replicate it here in this country, but I think we can all agree that we need to keep selling the idea of apprenticeships, talking them up and explaining what a good thing they are for our country.

My hon. Friend made a very good point about the falling apprenticeship numbers in small businesses. Out of all the figures that he mentioned, the one that struck me was the figure of 34% in small businesses. Small businesses have been hit even harder than medium-sized businesses by the apprenticeship levy. He spoke passionately about apprenticeships in Slough; in fact, I was at the event with him where he talked to some of his fantastic apprentices from Slough, and I was really impressed by their passion and dedication to their training.

My hon. Friend was right to highlight the falling numbers of level 2 and level 3 apprenticeships. Very few people know at 16, or even at 18, what they want to do when they move on in life, so we need to start where people are at. If people are not ready to start at level 3 —if they have not been able to achieve as successfully as we would all like them to in school—they need that level 2 start to enable them to make progress and to fulfil their ambition and achieve social mobility. I am sure that we all agree with that.

My hon. Friend is also right to point out that a question was raised in the debate on Tuesday about the levy for businesses—I am in favour of that levy—and whether the Government expected all businesses to use it. There seem to be conflicting evidence and statements about that, and I would be interested to hear the Minister’s thoughts. Are businesses expected to use all of the levy themselves, or was the intention behind the design that a certain amount of the levy would be kept and used by SMEs? There seems to be a lack of clarity over whether it is a tax that larger businesses contribute to, which can be distributed to small businesses, or whether it is just a system to allow individual businesses to get the money back for themselves.

I am particularly pleased that my hon. Friend raised the question of maths and English and the extra support that is needed. This might not be the right debate in which to talk about that, but I hope that the Department will take it seriously, because we have created a system where the insistence on having people resit their qualification in their first year, even when they are on a two-year course, is causing many people to fail. We have to explore ways to enable everybody to succeed. I would like the Department to go away and think about why it insists that people on a two-year level 2 course should resit at the end of their first year. Why not give them that extra year to practise and develop their skills before they have to sit their exam? Can we not be a little bit more open-minded and creative in coming up with solutions to enable everyone to achieve the maths and English qualifications that we all agree they need?

I really enjoyed the speech of my hon. Friend the Member for Birmingham, Perry Barr (Mr Mahmood)—he has gone, but I will let him know. It was nice to hear him talk about how his father’s interest in engineering got him involved, and how he was not sure what he wanted to do. It was a heart-warming speech. I look forward to visiting his constituency and seeing the examples he gave. He is quite right: we need to invest in engineering and manufacturing skills, and support the making of British goods here in Britain. It has been a source of frustration to me for a long time that we continue to import more and more when we could grow our own, and develop and make things in this country, giving people high-skilled jobs and helping to grow our economy. I hope the Minister will comment on how the apprenticeship levy can do that.

I do not usually comment on the remarks of Scottish National party spokespeople, but I really liked the interesting point that the hon. Member for Kilmarnock and Loudoun (Alan Brown) made about the retention of apprentices, which I had not considered before. If we fund apprenticeships, as a Government or through the levy, should we not expect businesses that have had access to those public funds to retain the apprentices? That is an interesting idea to explore, and I look forward to the Minister’s comments on that.

I think we all agree about the importance of apprenticeships, not only for the productivity of our country but for individuals and social mobility. We all agree that SMEs are really valuable to our economy. In fact, during the debate on Tuesday, one Member pointed out that in Northern Ireland, where their constituency is, there are few large, levy-paying businesses, so it is nearly all SMEs. I have not yet had the chance to crunch the data on this, so it will be interesting to see whether the Department has analysed the areas of the country where there are fewer levy-playing businesses, and looked at whether we have therefore created coldspots and areas in which people lack opportunities to access apprenticeships.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

One industry prevalent in small business is hair and beauty. Routes into hair and beauty and other apprenticeships include the level 3 qualification, which the Government just cut thousands of, and T-levels. T-Levels will be the major route into higher-level apprenticeships, but they are not yet ready, and in the hair and beauty industry they will not be ready for years. The pathway to these apprenticeships needs to be solid, small businesses need to know what is happening and the funding needs to come through. Otherwise, we will see an even further drop in apprenticeships, on top of the challenges of the apprenticeship levy.