Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]

Debate between Ashley Fox and Bridget Phillipson

2nd reading
Tuesday 25th February 2025 Commons Chamber

[The Secretary of State for Education (Bridget Phillipson)]

I beg to move, That the Bill be now read a Second time.

We are a country of incredible talent and enterprise; a country of industry and invention. Our universities lead the world. Our colleges deliver excellence to hundreds of thousands up and down the country. British companies founded on great ideas export their products across the globe. Our strengths range from research to manufacturing and from professional services to creative industries, yet there remains a wide and growing gap between where we are now and what I know our great country is capable of, because, despite our many strengths, there are skills missing from our workforce.

There are skills missed by people who want to get on in life, get better training to land that great job and earn a decent living; skills missed by our employers, with businesses, hospitals, labs and factories held back; skills missed by so many of our communities, with towns and cities left behind as industry has moved on; and skills missed by our country. Those skills are vital to the security and growth that this Labour Government are so determined to deliver.

Our latest data shows us that half a million vacancies sit empty simply because employers struggle to find the right staff with the right skills: the most since we started collecting the data in 2011. That is half a million jobs not filled, half a million careers not boosted and half a million opportunities not taken—a tragic waste that this country simply cannot afford. But I am sorry to say that this is not surprising. We have fallen behind our neighbours on higher technical qualifications—the ones that sit just below degree level, but which can lead to well-paid, fulfilling careers for software developers, civil engineering technicians or construction site supervisors.

Over 90% of employers value basic digital skills in their job candidates, but more than 7 million adults lack them. Our skills gaps deal our people and our country a double blow. They hold back the economic growth we need to invest in our public services and drive national prosperity, and they hold back the ambitions of working people who deserve the chance not just to get by but to get on. They deny them the opportunity, the power and the freedom to choose the life they want to live.

[Sir Ashley Fox (Bridgwater) (Con)]

Would the Secretary of State agree that one of the difficulties is that employers cannot spend the money from the apprenticeship levy easily, and that too much of that money is retained by the Treasury? Will she undertake to speak to the Chancellor to see whether she could make it easier for employers to spend that money on training?

[Bridget Phillipson]

I can assure the hon. Gentleman that the Chancellor is as committed as I am to ensuring that we have the right skills within the economy, because without them we will not be able to deliver the economic growth that is the No. 1 mission of this Labour Government. But we are committed to reforming the failing apprenticeship levy, reforming the system and converting it into a growth and skills levy with more flexibility for employers. As a first step, this will include shorter-duration and foundation apprenticeships in targeted sectors, making sure that we are working more effectively with employers in order for our economy to grow.