Apprenticeships and Skills (Public Procurement Contracts) Bill

Iain Wright Excerpts

Friday 1st November 2013 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

I thank my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) for his passionate and compelling argument. I fully support the Bill and believe that we should give it a fair wind and take it to Committee. I hope that the Minister agrees.

It is vital that the British economy succeeds, thrives and grows. That success should be based not on making a fast buck, cutting corners, thinking of the short term or cutting employment rights and training opportunities in a race to the bottom, but on well-paid, secure and skilled jobs. That is how Britain can pay its way in the world in the 21st century—with an emphasis on a high-skilled, well trained work force. To help achieve that objective, we need a skills system that meets the needs of our country, our society, the economy, employers and young people. My hon. Friend’s Bill would provide that and be central to having a good, resilient, productive and efficient work force for the future.

My hon. Friend rightly said that in many ways, the previous Government helped to revalue apprenticeships. There were something like 65,000 apprenticeships when the Government came into office in 1997, and when we left office in 2010—I was the Minister responsible for apprenticeships at that time—there were 240,000. The current Government have carried on that good work to some extent, and I want one characteristic of apprenticeships to be that they transcend party politics and Parliaments and work in the long-term interests of what this country needs. It is clear that we need good, strong apprenticeships.

As my hon. Friend said, even in these financially straitened times, it makes common sense, economic sense and social sense, when both central and local government spend money—often billions of pounds—for skills and training opportunities to be provided when contracts are granted. He mentioned the 50:50 scheme in his constituency, which particularly interested me, and other hon. Members have mentioned similar schemes. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) said that 926 apprenticeships had been put in place through Liverpool city council, and we heard about other initiatives. In an excellent speech, my hon. Friend the Member for West Ham (Lyn Brown) talked about what is going on in London. Of course, in programmes such as Crossrail, Building Schools for the Future and so on, Labour established the idea of procurement as a lever to bring in additional training opportunities.

There remains a huge issue to consider. Although the number of apprenticeships has gone up, I am particularly concerned about the statistics on under-19-year-olds. In 2011-12, there were 129,900 apprenticeship starts by those aged under 19, but that represented a 1.4% decrease year on year. There were 95,400 intermediate-level apprenticeship starts, which was a 2% decrease. We fail our young people if we do not get them a good first step on the career ladder, and we all know about the crisis of youth unemployment that this country still has. In the quarter June to August 2013, 958,000 young people aged 16 to 24 were unemployed, making an unemployment rate of 20%—up by 0.1% on the previous quarter and 0.5% on the same period last year. The unemployment rate for 18 to 24-year-olds is 19.1%, but what really concerns me—it is linked with the decline in apprenticeship starts for under-19s—is that the unemployment rate for 16 to 17-year-olds is 36.3%. That should be a national scandal.

We are failing our young people and not giving them the employment and training opportunities they need. We will suffer the consequences of that for decades to come. If we do not get our 16 to 19-year-olds on to a career ladder and thinking about skills and training, and if they cannot get employment, the chances are that they will suffer low-paid, low-skilled jobs for the rest of their careers.

Not only will the careers of those people and the prospects for their families suffer for decades, but the long-term economic potential of the country and how we compete in the modern, fiercely competitive world, will be compromised. We need to address that. I suggest that ensuring we can link training opportunities and apprenticeship places with public procurement is an exceptional way to go.

[Barbara Keeley]

I want to tie in my hon. Friend’s point with the wage benefits of completing an advanced apprenticeship, which I have mentioned. Does he agree that, in areas such as Salford, where we have such a lot of long-term unemployment and unemployed young people, wage benefits are the important factor? If we can get people in to apprenticeships, particularly advanced apprenticeships, we can ensure that they can earn 22% more than similar young people.

[Mr Wright]

I am glad my hon. Friend has contributed to the debate. I know how much she is passionately committed to giving young people a chance, particularly with apprenticeships. I have fond memories of going to Salford as Minister with responsibility for apprenticeships. We had launched the apprenticeships grant for employers. I met a tree surgeons firm in her constituency—I do not know whether she remembers. It could not afford to take on a young person, but we provided a £2,500 grant. I thought it was to help to pay the wages of that young apprentice, but it provided the equipment to allow them to scale up the tree and do the work required. That small firm wanted to help to bring on young people and to ensure that it gave young people a chance, making a difference—as I recall, it took on a 17-year-old. The Bill can do exactly the same.

My hon. Friend the Member for Denton and Reddish was right to highlight the importance of driving up quality. However, he also mentioned the need to expand opportunity. Often, we do not tell young people of the difference apprenticeships can make. People will be paid more over the lifetime of their career if they become apprentices. I am therefore baffled by the debate on clause 2, which is on the advertisement of work force vacancies. When there are opportunities, we should communicate them as much as possible. That is a no-brainer. Where better to do so than in the jobcentre? Clause 2 is essential. I want the Bill to pass on Second Reading, but, in Committee, we need to widen and expand it to ensure that schools, colleges, teachers and others are aware of apprenticeship opportunities.

[Andrew Gwynne]

My hon. Friend is right that we could go further. I struggle to see what the problem is if Stockport, Tameside, Newham, Hull or Salford councils promote public procurement and apprentices through public procurement in their areas. Why should they not advertise those opportunities to young people in those areas?

[Mr Wright]

My hon. Friend is right. We have an enormous opportunity in my patch in the north-east. In Hartlepool, we have the makings of a great renewable energy and offshore wind supply chain. I know that the area my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) represents is in the same position.

We have had public procurement tenders, including for the Teesside offshore wind farm, in which no local firm got the work, meaning no local apprenticeship opportunities. What a scandalous waste of potential. I fail to understand why we should not use the opportunities from the public purse to give young people those chances and why those opportunities should not be advertised locally so that people in Hartlepool, Hull, Stockport and elsewhere can know about them. My hon. Friend the Member for West Ham made an eloquent and passionate contribution about the impact of the Olympics, a major project that should have benefited east London. It did benefit east London, but not as much as it could have. Those benefits should have been maximised.

I was very interested in the hon. Member for Shipley (Philip Davies). I always knew he wanted to take us back to the ’50s, but I did not realise he meant the 1550s and the Elizabethan age. He made an important point. He said that the Bill would undermine best value for the taxpayer because the additional apprenticeship opportunities would make procurement contracts more expensive. I disagree. One of our problems—with the Government, with the country—is this short-term, silo-driven approach. If we spend or save £1 in one area, no consideration is given to the impact elsewhere on the public purse. For example, no one considers the long-term consequences of cuts to local government for access to A and E or social care. We need to take a longer-term view. If, using the public procurement route, we can help to train our work force of the future, we will create many more opportunities and our economic potential will be greatly increased.

[Andrew Gwynne]

In terms of total spend, does not public procurement often make one of the largest contributions, if not the largest contribution, to the local economy, and is it not baffling, therefore, that Statler and Waldorf on the Tory Benches seem to think it falls outside the remit of the public domain to expect more training and skills opportunities?

[Mr Wright]

I found it astonishing too. I was particularly concerned by the 55-minute speech of the hon. Member for Bury North (Mr Nuttall). I am sure that those 555 18 to 24-year-olds in his constituency will be surprised to hear that he did not want apprenticeship opportunities advertised in his local jobcentre.

[Mr Nuttall]

With the greatest of respect, I never said that I did not want job opportunities advertised in the Bury jobcentre—incidentally, my office is just around the corner from it. I just think it should be left to employers to decide where they advertise their jobs.

[Mr Wright]

But does the hon. Gentleman not agree that, in order for the opportunities to be cast as wide as possible, young people should be made aware of them. There could be teachers, schools and colleges who are not aware of what is on offer. As I just said, I am keen to see these opportunities advertised in jobcentres, but I am also keen to table amendments in Committee to ensure that schools, colleges and others in the community are made aware of them.

[Lyn Brown]

I find it remarkable that some Government Members do not seem to understand that the taxpayer’s pound should be made to go further. Normally, we hear quite a different argument from them. Why can they not see that taxpayers’ money should be enabling young people to get the skills they need to find work?

[Mr Wright]

Absolutely. In these straitened financial times, why are we not squeezing the taxpayer’s pound still further, for the long term, to ensure that young people have a good career decades into the future? I cannot understand it either. I share my hon. Friend’s disbelief.

[Philip Davies]

I wonder why Labour Front Benchers have so little faith in employers that they feel that they cannot be trusted to advertise in a jobcentre, and must be mandated to do so by the Labour party. The hon. Gentleman talks of value for money, and says that we should look at the bigger picture rather than seeing things simply in terms of pounds, shillings and pence. Can he explain what was the great benefit to the country of his Government’s leaving it with an annual deficit of £150 billion?

[Mr Wright]

Oh dear me. I think that the Bill describes exactly what we need to do in order to secure the country’s economic success. When those in government—centrally or locally—spend money, they should look to the long term, and ensure that they can provide the skills and training opportunities that are needed for the future by giving young people a chance. I believe that that is central to what we need to be doing.

I fully support what my hon. Friend the Member for Denton and Reddish is trying to do, and I hope that the Minister does as well.