Oral Answers to Questions

Ian C. Lucas Excerpts

Thursday 10th April 2014 Commons Chamber

[Ian Lucas (Wrexham) (Lab)]

Is it not interesting that no Conservatives or Liberal Democrats are standing up to ask a question about small business? I saw a small business in Wrexham and spoke to Mr Phil Jackson of Fotofire, who told me that the Jobs Growth Wales scheme has enabled him to employ young people in a rapidly expanding media business. Will the Minister do something positive by looking at a scheme that is providing jobs for more than 9,000 young people in Wales, with 75% employment for those who go on the scheme in the first place?

[Matthew Hancock]

I am very glad to say that unemployment is falling throughout Wales as part of our long-term economic plan across the country. I am sure that in Wrexham, as elsewhere in the country, small businesses will be celebrating the fact that they are getting £2,000 off their jobs tax, which the Labour party has proposed to put up.

Secondary Education

Ian C. Lucas Excerpts

Thursday 21st June 2012 Commons Chamber

[Michael Gove]

That is good Yorkshire sense from my hon. Friend.

[Ian Lucas (Wrexham) (Lab)]

He’s Welsh!

[Michael Gove]

Yorkshire is a generous county that adopts children from whatever background and turns them into men.

It is not just Morrisons; in 2009, Sir Terry Leahy said that standards among the students that he was recruiting to Tesco were “woefully low”. We have to listen to employers. They demand a greater level of technical, mathematical and literacy skills from all their students and we need to improve our education to ensure that whatever route children follow, they receive a 21st century education—and that means additional rigour to compete with the world’s best.

Oral Answers to Questions

Ian C. Lucas Excerpts

Monday 17th October 2011 Commons Chamber

[Mr Gibb]

We are offering strong financial incentives to the best trainees, and are consulting on issuing bursaries of up to £20,000 to the best trainees in priority subjects. We are also expanding and doubling the successful Teach First programme and introducing trips for teachers to bring the skills of service leavers into schools. We will ensure that all trainees have a good understanding of maths and English, by requiring them to take tests prior to entering initial teacher training. We are reviewing the qualified teacher status standards under the excellent chairmanship of Sally Coates, the principal of Burlington Danes academy. I could go on, Mr Speaker, but I will stop there.

[Ian Lucas (Wrexham) (Lab)]

Does the Minister think that lessening teachers’ employment protection and worsening their terms and conditions will improve or diminish teachers’ morale?

[Mr Gibb]

That is not our policy. Teachers in academies are generally paid more. What we are doing is reviewing the performance management regulations to make it easier for head teachers to tackle underperformance in our schools and to bring the employment regulations in schools in line with employment practices in other professions and industries.

Intellectual Property (Hargreaves Report)

Ian C. Lucas Excerpts

Thursday 7th July 2011 Westminster Hall

[Mike Weatherley]

The right hon. Gentleman is exactly right. I think that the charge is equivalent to $10 a month, the payment of which allows unlimited downloads. Zero cents of that $10 goes back to the publishers.

As we come out of the recession, there is much talk of rebalancing the economy. Where will the growth come from? We cannot compete on labour costs and we do not want to. Our strength is in pharmaceuticals, high-end engineering, brands, bioscience and, of course, the creative industries. Our education publishers are No. l in the world. Our music industry is at No. 2. Our games industry used to be at No. 3—the position is under threat as other countries adapt and offer incentive packages that we are not matching. Surely we should be as proud of our creative industries and their podium positions as we hope to be of our athletes next summer.

To be fair to the present Government, the Hargreaves review is their first review of IP. I should also point out that there is a duty on those in the creative industries to adapt their business models far more quickly than they have done in the past. That includes reduced pricing models for the prime product and a changed emphasis on secondary income streams, such as live music and merchandising.

The Government’s response to the Hargreaves report is a tailor-made opportunity to celebrate our creative industries, and to confirm that we are open for IP business on a global scale. Will the Minister reassure banks in the UK that we are the best place in the world to invest in IP businesses? Will he confirm to creative businesses in this country that their assets will be protected by legislation? Will he encourage new talent with the message that people’s rights in respect of what they have created will not be reduced by exemptions and undermined by unnecessary regulation?

Let me turn to the Hargreaves report. It is better than I was expecting; I know that many other hon. Members have said the same. I have to admit that my heart sank when I met Professor Hargreaves and he hinted to me that he wanted to introduce US-style fair use here. His argument was that our IP laws were preventing internet companies from launching, yet I remember many search engines and social networks starting here. Some, such as Mumsnet and Friends Reunited, have been extraordinarily successful. They were not held back by our IP laws; they just did not have access to the same funding as Google and other silicon valley giants. Introducing fair use here would help only the likes of Google—established players with deep pockets that can fund the legal test cases that are such a feature of the US system. It was therefore with some relief that I read in the Hargreaves report that he rejected fair use for the UK. That is a sensible recommendation, and I urge the Minister to endorse it.

However, the report goes on to recommend a range of new exemptions. Let us be clear about what an exemption means for a creator. On the one hand, with our 300-year-old copyright tradition, we say that an author owns his work when he writes something. It is his property; he created it, and it is his. On the other hand, with an exemption, we say that he does not own his work any more in certain circumstances. Of course, there are situations in which the public interest must outweigh a property right, but we should be wary of taking away someone’s property, especially their own creation.

One example involves text and data mining. No case is made in the report for a text and data mining exemption. Such mining is simply described as making it easier to crawl the internet for material. Surely that is what Google and other search engines do on a commercial basis. Do we really need an exemption to make Google’s life easier? Should it not be obtaining licences if it wants to use other people’s material?

Parody, as we have heard, is another example. Parody is almost the hallmark of British comedy. It can hardly be argued that there is a shortage of parody in the UK. However, the Hargreaves report seems to think that there is a problem. The report concludes, with seemingly no evidence, that we should have a parody exemption, but should someone be allowed to take someone else’s work just because they are making fun of it? I do not see how parody justifies removing a creator’s basic rights in their work. Then there is research. Of course there is value in building on the work of others, but does that mean that the original researcher should get nothing for their work? I strongly urge the Minister to reject those recommendations in the report. This goes to the heart of copyright as a property right. Arguably, something that someone has created is even more precious than property. Our legislation gives creators ownership of their work. We should not take those rights away without good reason.

There are two areas where there is justification for an exemption, and that is broadly accepted by creators. The first is archiving. We have some unique collections of film and music in this country; indeed, I understand that film originated in my constituency of Hove. The British Library, for example, has the national sound archive, with millions of recordings going back to the birth of the gramophone, mostly donated over the years by record companies. Making digital copies is an obvious way of preserving those for future generations. When the Government consulted on an archive exemption three years ago, industry backed it. We should implement it now.

[Mr Christopher Chope in the Chair]

The second area is format shifting. That is copying CDs to MP3s, or DVDs to an iPhone or similar—something that millions of people do, despite its being illegal at the moment. Having just parted with cash for both a CD and their new MP3 player, consumers rightly expect to be able to copy music and films across without paying any extra, as they in effect paid for that in the purchase price.

The sticking point was whether musicians should get some recompense for that format shift. In the rest of Europe, that takes the form of a levy on copying devices. I do not like the idea of a levy. It is a blunt instrument that does not necessarily follow the market. Surely some form of licence could be allowed, provided that the material is solely for the private use of the purchaser. If it turns out to be impractical to stop internet file sharing, we could revisit the idea of a levy on equipment, as that would get some revenue to the rights holders and is attractive for its ease of use. In the meantime, I urge the Government to reject the idea of a levy on equipment and to allow personal-use format shifting, provided that an original licence has been purchased—in most cases, that would simply be someone paying for the CD for their own personal use.

On exceptions, the Hargreaves report gets some things right, but not others. The challenge for Government will be working out what to embrace and what to ditch.

[Ian Lucas (Wrexham) (Lab)]

I would like clarification. Is the hon. Gentleman saying that the licence would be bought at the same time as the CD, as part of the price?

[Mike Weatherley]

I thank the hon. Gentleman for his intervention. Yes, my belief is that once someone has bought a CD, they should be able to shift the music to another format to listen to it in their own home, for their own private use; that becomes an infringement only if the material is used for other purposes. The industry got that wrong years ago. It is making illegal users out of millions of people in this country. They tend to ignore the law on copyright protection because they see it as a ridiculous law, and once people see something as a ridiculous law, they throw away other laws. We should allow format shifting for personal, private use once someone has bought a full legal copy.

I was saying that the Hargreaves report got some things right, but not others, and that the challenge for Government would be working out what to embrace and what to ditch. The same is true of the idea of a digital copyright exchange and the recommendations on licensing. The report identifies licensing as underpinning creative businesses. Indeed, licensing is now central to almost every business model, whether we are talking about a direct licence from a rights holder for a specific repertoire, or a collective licence covering an entire catalogue. The report recommends that the collective licensing bodies adopt a code of practice to facilitate efficient markets. That is a good suggestion, but does it need legislation and, if so, how intrusive should it be? The British Copyright Council is already producing a template code, and all the collective licensing bodies in the UK have agreed to sign up to it. If the industry is adopting good practice voluntarily, we do not need more regulation.

Perhaps the most high-profile recommendation in the report is the one for a digital copyright exchange. In essence, that is a good idea. Indeed, many parts of the industry are already developing databases. Phonographic Performance Ltd, for example, has a database of 5 million recordings, and the database includes record company ownership and performer line-up. That is essential for its licences with the BBC and others, so that the broadcasters know what is in their licence and the right musicians can be paid. Book, newspaper and music publishers, along with photographers and others, are developing similar facilities. There may even be a role for Government in co-ordinating those efforts and encouraging greater co-operation between databases.

However, the Hargreaves report certainly goes a step too far. It recommends that the digital copyright exchange become a licensing platform, with flat-rate pricing available at the click of a mouse. Far from encouraging growth, that is anti-market. It is extraordinary that a review about growth should recommend a trading platform where prices are static and there is no room for negotiation. How on earth could any rights holder be expected to set a price in advance for a totally new service that at the time exists only in the mind of the creative entrepreneur? That is a recipe for stagnation.

As if that was not enough, the report also proposes introducing penalties for rights holders who do not participate in the digital copyright exchange. Such wrongdoers would be denied access to their rights under the Digital Economy Act 2010, creating a two-tier system for copyright, and that must be resisted. Effectively, it is compulsory registration by the back door, and we should not allow it. One of the great strengths of copyright is its flexibility, and the fact that it is available to all creators, big and small. The principle of not requiring formal registration to enjoy copyright is enshrined in international treaties. We should uphold that principle, not undermine it.

We then come to the report’s suggestion that Government should appoint a digital champion to sort everything out. This is perhaps the most extraordinary of the report’s recommendations. The review rightly concludes that, if it is to work, the digital copyright exchange must be industry-led and must respond to the business needs of the creative sector. It then recommends that Government appoint a tsar to direct that industry initiative. “Industry-led” means led by the industry, not by a digital champion appointed by the Government. Will the Minister reject the idea of a digital champion, and allow the digital copyright exchange to be led by the industry from the start—or at least by a digital champion who is advisory rather than dictatorial?

In conclusion, I urge the Minister to be selective in his response to the Hargreaves report. Will he say yes to protecting our creative industries and the property owned by the creators? Will he say yes to archiving, private format shifting and some form of central rights database? Will he say no to the exemption of text and data mining for research and of parody, and will he be selective in exemptions linked to the national interest? Will he say no to fair use and to a centralised pricing model in the central rights database? Such confirmations and rejections would confirm this country’s commitment to ensuring that IP gives world-class support to business, and to the talent that drives it.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to be here this afternoon under your chairmanship, Mr Chope, and to have listened to such an interesting and intellectually challenging debate. I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing the debate. We all know about his musical talents from Runrig to the heady heights of MP4. He slips in a bit of politics from time to time. His insights have illuminated our discussion of the Hargreaves report. There were not too many surprises in his contribution. We have met on a number of occasions, and we have discussed these issues in different forums with many of the people who are here today. In particular, I remember an interesting tea that we had with Ian Hargreaves. Before I go into that, let me first say that I found Ian Hargreaves to be very accessible. To produce a report within such a short period of time was a demanding job. He has done that, and we are here debating the content of that report, which is positive.

That tea that I have referred to was pretty influential. It became clear to Ian Hargreaves then, if he had not known before, that there was a strong view among parliamentarians that the direction set out by the Prime Minister last November when the review was announced was not one with which many agreed. With the exception of my hon. Friend the Member for Falkirk (Eric Joyce)—I am glad that he contributed today—many parliamentarians here agree with the general view that fair use is certainly not what we need. We should ensure that our artists are suitably supported for their artistic and creative contributions. That is the view that comes across in most debates in Parliament, which is interesting because most of the e-mails that I receive on this subject say exactly the opposite. That is something that we should be very conscious of and that we should discuss in more detail with our parliamentary colleagues. Some of the people who need to be educated on this issue are fellow parliamentarians. When we were candidates before the last general election, we all had the happy task of responding to hundreds of e-mails on the Digital Economy Act 2010. There are heavy lobbies in this area, and I have received a number of them in connection with this debate.

The contributions today have been very helpful. I have already referred to the hon. Member for Perth and North Perthshire. We learned a lot from the excellent contributions of the right hon. Member for Bath (Mr Foster), who has such tremendous experience in the area, and of my hon. Friend the Member for Lewisham West and Penge (Jim Dowd). The hon. Member for Folkestone and Hythe (Damian Collins) made some interesting observations about search engines.

I want to raise one further matter, the vertical integration of search engine companies. Search engines do not always disclose their interests in the results of a search. They increasingly tend to acquire other companies that provide services and that are then linked to the search engine, so they are directly benefiting from their business. We need increased disclosure, so that the consumer is well aware of what is going on.

I enjoyed the contribution from the hon. Member for Suffolk Coastal (Dr Coffey) who quoted Abba. I was deeply disappointed that she did not give us the music to go with it. Perhaps she will do so on another occasion.

The hon. Member for Solihull (Lorely Burt) told us about small business, and she emphasised its importance in this field. I am disappointed that the group to which she referred feels it was not taken into account in the review, but of course it was the Government she supports who selected the people for the review, so perhaps she should take it up with them. She obviously took it up with the Minister, and I am sure that he will respond in due course.

It is always a delight to hear from the hon. Member for Northampton South (Mr Binley), who told us about visiting CD shops in Beijing; I am sure he did not buy one. We also heard from the hon. Member for Hove (Mike Weatherley) who has great experience in this field. He has shown the benefits of someone who comes not from a political background but from a business background. He has the experience to talk knowledgeably about this issue, and it is very refreshing to hear someone who is clearly at odds with his Prime Minister being able to speak out so frankly and openly on an issue such as this. Long may he do so; I myself have done so in the past. My hon. Friend the Member for Falkirk has a slightly different perspective, but it is important that it forms part of our debate.

I begin by discussing an important issue that we have not raised. When the Hargreaves report was commissioned last November, it was launched by the Prime Minister. The Secretary of State for Business, Innovation and Skills was charged with dealing with the issue, and the Minister with responsibility for culture, communications and creative industries in his Department is the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage (Mr Vaizey). The Minister for Further Education, Skills and Lifelong Learning clearly loves a debate. As a junior Minister, however, he does not have the same communication with the industry in connection with the internet, the media, culture and communications as the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage, who is now also a Minister in the Department for Culture, Media and Sport. That is a major problem. It is important that the industry has a close relationship with the Ministers who are actually dealing with this issue on a day-to-day basis. That is not happening at the moment, because in Parliament there is a great deal of confusion about who is responsible for this particular area. We know that telecommunications was shifted away from BIS as a result of the discussions that the Secretary of State for Business, Innovation and Skills had with some of his constituents. This is a serious issue as far as the industry is concerned.

[Pete Wishart]

The hon. Gentleman is making an important and powerful point. I think Siôn Simon will go down in history as possibly the last creative industries Minister. Having someone as a central point of contact that the industry could go to was very useful. We have not even got the Minister with responsibility for the matter here, because she is in the House of Lords. There needs to be a get-together on all this to have one Minister whom industry and we as MPs can go to, and I hope that the hon. Gentleman will continue to press the Government to create that one individual post.

[Ian Lucas]

I am grateful to the hon. Gentleman for making that point and for his support. We all want this area to move forward, because we want jobs and growth in this sector. We all know and appreciate that this is a hugely important sector for the UK. We have heard the 8% of GDP statistic and the fact that we are No. 2 in the world in exports in this field, and we want the sector to progress. Under this Government at the moment, I am afraid that we are not making the progress that we should. On 18 May, the Secretary of State said that there would be a response within weeks to the Hargreaves review, and I want to hear from the Minister when the response will actually come. We have still not made progress on the Digital Economy Act 2010. We are not clear about the Government’s position on enforcing rights. We still have a spectrum consultation going on, and we are awaiting announcements on broadband funding allocations. In the context of a very serious economic position, with growth flatlining generally over the past few months, we need to have one of the most important and positive sectors in the UK in a position of certainty and stability.

When a new Government are elected, a sector always gives them some time, because it is clearly in their own interests to have a good relationship with Government. I am afraid that the sector is running out of patience, and it needs to have support from Government to take matters forward as quickly as possible. It is important that the Minister understands that the industry wants action in this area, and it wants it as quickly as possible.

I want to thank all the organisations which sent me submissions in connection with the Hargreaves review. I have met many of them, and I have discussed in detail what is a very complex area for anyone who comes to it for the first time, as I did about nine months ago. There are many different groups within the sector who lobby well. When I was reading the papers in connection with this debate, I was struck by the common ground, despite the fact that the different groups are often presented as having a great deal of disagreement. The first common issue is that everyone wants growth. We are good at this sector, and we need to do better. We know that we can compete with anyone in music, drama and computer games, and we know that with the right background and the right framework, we can do better. We need to get more people involved in the creative industries, because we still draw from too limited a pool, but I think that we can make real progress. We all agree that investment and talent need to be rewarded, or there will be fewer people working in the sector, and the growth that we want will not happen.

In its submission to me, Google stated that it

“will continue to help content creators to generate new revenues and take control over their online products.”

I deliberately selected Google as supporting the rights holders in that way. When I read that, I was reminded of an interesting discussion that I had recently with the poet Wendy Cope at a meeting. She is well worth reading, although she is often read online without payment. Not surprisingly, she is frustrated by this, because, like everyone else, she has to pay for her Sunday dinner, too. We need to ensure that all original artists are paid. We all agree that artists need to be paid, and we all agree that their work needs to be disseminated more widely.

Obviously, no artist or creator wants fewer people to see their work. No artist will object to format shifting, provided they are paid for it in some way. I was pleased to hear the hon. Member for Hove make his position on format shifting clear. That is an area that needs to be sorted out. Frankly, I am not clear why it has not been done before. I was struck that it was not an issue for virtually every group that I have met. The fact that we have this format shifting that nobody seems to support is a barrier to growth. The example used by the Secretary of State for Business, Innovation and Skills when publishing the Hargreaves review was the case of Brennan, the format shifting company that first came to my attention in the New Statesman in the very convincing advert that it ran over a number of months, basically indicating that it is a company that is at a competitive disadvantage because of the position of format shifting at the present time. We all agree that the current position is not acceptable, and that we need progress, but no one can agree on a way forward, and in that respect copyright is a bit like House of Lords reform.

So, what can we do? There seems to be a consensus that the matter is best dealt with and led by the industry, but there is disagreement about what precisely should happen next, as has been reflected in the debate today. We have had, for example, a discussion about the digital copyright exchange, and part of the reason for the uncertainty, or disagreement, about that is that no one is exactly sure what is being proposed. If we are simply talking about a one-stop shop where someone goes initially and is then directed to existing registers somewhere else that can cope with the matters, that seems to be largely acceptable, but there is great resistance to any sort of compulsory system and to penalising artists if they do not take part in the digital copyright exchange.

The timetable for the Hargreaves review was so tight that the review was never really going to come up with a detailed and convincing response, but we need the matter to be taken forward and an agreement to be reached—within the industry, I think. There are lots of experts in this field, and it is better that they sort out a way forward themselves. I was very encouraged by the setting up of the Creative Industries Council, which is a good model. We have the Automotive Council UK in the very competitive automotive industry, and the different industry parties sit around the table and devise with the Government a strategy to take forward the UK automotive industry. The Creative Industries Council should perform a similar role in areas such as the Hargreaves report, and one of its first tasks should be to find a way forward through discussion within the industry and compromise. Sometimes, to make progress it is also necessary for the Government to knock a few heads together, but in all the discussions that I have had there has been a desire to establish stability and progress in the sector, and the industry in the UK would benefit as a result of that.

It cannot be beyond the wit of the creative industries to put this together; we know about their capabilities and the fact that they have devised structures and new models of working. The Government must, however, play their part too, and I am afraid that at the moment they are letting the side down. We have delay, confusion and a lack of clarity in the relationship between the Government and the industry, and the Government need to step up to the plate, act as quickly as possible—I hope that we will hear some dates for their responses to the review—improve their relationship with the sector and take matters forward from there.

[Mr Foster]

On a point of order, Mr Chope. Given that we are discussing media matters, would it be appropriate for me to inform the House that I have just received the news that the first major casualty of the appalling behaviour at the News of the World is that the newspaper will close after this Sunday?

--- Later in debate ---

[Mr Hayes]

My hon. Friend is right about the matter that he raises, and I will certainly do as he asks. He has some professional expertise in this field. Other hon. Members may not know that, but I have been pleased to visit Northampton with him many times, including this week. He brings some expert understanding to the subject. As I said, I share his background in the information systems world. He is right about search engines. I will draw his comments to the attention of both my noble Friend Baroness Wilcox who has responsibility in this area and, indeed, the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage. If he had been asked to respond to the debate, contrary to what the hon. Member for Wrexham said, he would have been a peg below me; hon. Members are getting a Minister of State dealing with the matter, rather than an Under-Secretary. I think that that is a bonus. My hon. Friend the Member for Northampton South makes a fair point and, as I say, I will pass on his comments.

[Ian Lucas]

rose—

[Mr Hayes]

I give way to the hon. Gentleman. I did not mean to be unkind to him.

[Ian Lucas]

No, not at all, and I did not mean to be unkind to the Minister. I want to make that absolutely clear. This is not in any sense a personal criticism of him. As he knows, in November, the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey) was a Minister within BIS and he would have been responding to this debate if that situation had continued. He stopped being a BIS Minister because of the Secretary of State’s discussions with his constituents and he is now a Minister in the Department for Culture, Media and Sport. That has a real impact on this area. I am making a serious point about a problem that the Department needs to address.

Oral Answers to Questions

Ian C. Lucas Excerpts

Thursday 9th June 2011 Commons Chamber

[Vince Cable]

The hon. Gentleman has already described his scheme to me, and it sounds an exciting project. I have identified several potential candidates in my constituency, and it sits alongside many other very good initiatives that are taking place, including for example the engineering prize, which is being launched with the support of leading UK companies.

[Ian Lucas (Wrexham) (Lab)]

I join the Secretary of State in welcoming the tremendous news this week of the excellent investment from BMW Mini and Nissan. That of course builds on the initiatives of the Automotive Council, which has been so successful and was set up by the previous Labour Government. Also set up by the previous Labour Government was Manufacturing Insight, an organisation dedicated to bringing young people into engineering and manufacturing, which this Government have scrapped unfortunately. Why did the Secretary of State make that decision?

[Vince Cable]

I am not sure I should take lectures on manufacturing industry from a representative of the party that presided over the biggest decline in manufacturing of any major country, but none the less the hon. Gentleman is right that there are some good legacies. One of them is the Automotive Council, which works extremely well and contributes very positively to the supply chain. I welcome that.

Further and Higher Education (Access) Bill

Ian C. Lucas Excerpts

Friday 4th March 2011 Commons Chamber

[Mr Chope]

Looking at the Bill, I do not see how that can be the case. I define merit in clause 2 as

“academic ability, potential and aptitude as assessed by the institution of further or higher education”,

thereby emphasising not just academic ability as reflected in exam results but potential and aptitude, to be assessed exclusively by the institution in receipt of an application. That emphasises the importance of giving institutions the freedom to make the judgment themselves.

[Ian Lucas (Wrexham) (Lab)]

Will the hon. Gentleman explain what would happen if, once the Bill had been passed, an institution did not admit students on the basis of merit?

--- Later in debate ---

[Mr Chope]

Absolutely—I am not pouring cold water on that initiative. The Government have demonstrated over the past several months that they share many of our concerns about the failure of the education system to deliver.

The statistics show a desperately serious situation. In the last 15 years, the proportion of A-level students at comprehensive schools who achieve three A grades or more has increased from 4.2% to 8.2%, while the proportion at independent schools has increased from 15.1% to 32.3%. That is a commentary on the previous Administration’s lack of achievement. Anything that can be done to put that right would be a good thing.

[Ian Lucas]

I am listening carefully to the hon. Gentleman, but the statistics that he has presented are grossly misleading, because they take no account whatever of the restrictions on admission to many fee-paying schools, which do not apply to schools in the comprehensive sector. He should at least recognise that when he presents such figures.

[Mr Chope]

They are not my figures—they are from the Department for Education, but they speak for themselves. However, if the hon. Gentleman wants more figures to confirm what a miserable failure the previous Government were in that respect, I should tell him that 29.9% of all students who got three A or A* grades at A-level in 2009-10 were at comprehensive schools, which was 8.2% of the total taking A-levels at comprehensives, but that those comprehensives accounted for 46.7% of all A-level students. That shows that the comprehensive schools just did not deliver on the potential of the students whom they taught.

--- Later in debate ---

[Mr Chope]

Absolutely, but the £150 million is going towards scholarship funds. At the moment, the Russell group, which represents only about 20 universities, is already investing more than £75 million a year. Pro rata, it is already investing more than the Government are promising to invest in the future, yet the Government are saying that if a university wants to raise its fees to anything beyond £6,000, the Government will, through the Office for Fair Access, interfere in its ability to do so and exercise their own judgment on the level of the fees because they are concerned about improving access. I am saying that these universities should be trusted. Many of them are international centres of excellence and should be trusted to make their own judgments. There is no reason to criticise anything that the Russell group universities have achieved, or indeed what some other universities have achieved.

I suspect that at the heart of all this is a feeling on the part of some elements of the coalition Government—I will not spell out, following the Barnsley by-election, which elements I have in mind. [Interruption.] As the hon. Member for Wrexham (Ian Lucas) says, it is the part of the coalition not represented in the House today.

[Ian Lucas (Wrexham) (Lab)]

They came sixth.

[Mr Chope]

The hon. Gentleman obviously wants to put it on the record that they came sixth in the Barnsley by-election.

--- Later in debate ---

[Mr Chope]

Exactly, but my right hon. Friend fails to appreciate the transparency of the measure. If an institution of higher or further education is going to give places on a particular course on criteria other than merit, it should make that clear when people are considering applying to that university. For example, if it offers a sports science course, and welcomes in particular people who are proficient at playing soccer, it should say so in the application so that people who cannot kick a ball at all will not apply, or understand that if they do so it is unlikely that they will be accepted. Clause 3 tries to make sure that where universities give places on criteria other than academic merit those criteria are spelt out openly and transparently. I am surprised that my right hon. Friend is concerned about that. Perhaps he will accept that his interpretation of the clause is incorrect.

[Ian Lucas]

I am grateful to the hon. Gentleman for giving way—he has been generous in accepting interventions. Does he believe that the current system of university admissions is transparent?

--- Later in debate ---

[Jacob Rees-Mogg]

I think the Bill should have said that in the first place. I am even more suspicious of the new Labour approach of a Bill that says one thing initially and then does something completely different.

[Ian Lucas]

The Liberal Democrat approach.

[Jacob Rees-Mogg]

I stand corrected, but I am not quite sure that I can go along with that monstrous slur on our coalition partners.

We must have Bills that do what they say, not ones that set off in one direction, hare off in another in Committee, and then say something that was never intended or given a Second Reading by the House.

Let us consider the question of merit. My right hon. Friend for a Yorkshire constituency—I forget precisely which—talked about how clauses 1 and 3 operate.

--- Later in debate ---

[Jacob Rees-Mogg]

I absolutely accept what the Minister says in his helpful intervention. I know how tall I am, or was, in terms of physics. Just as many people shrink as they get older, I feel that as I get older I begin to shrink in my ability to do physics, and cannot remember much of it. Universities need to take in people who can go further, and do better than the ability yet measured. To consider the Minister’s comparison and talk about how high people grow, we do not necessarily know how high a 16-year-old will be at 18. One has to make a judgment on it, and that judgment becomes subjective—it has to be, by its very nature.

Is it not always dangerous to put legislative constraints on subjective judgments? How does one then take them through the courts? How do they become justiciable? It is simply replacing one person’s judgment with another’s, and we cannot tell who was right until after the fact. I therefore have my doubts about the early definition of merit. Potential is even more subjective. We may think that the person whose height we are considering will grow to be a giant; we may be wrong. We cannot guess the qualities that we are talking about from an interview or a series of examinations.

We can, however, get a broad feeling or understanding, and a tutor can understand whether a person is someone whom they can teach. That is obviously important, because some dons at Oxford—I tend to stick to Oxford because I know it, but I am not speaking to the exclusion of all other universities—want to be able to get on with the people whom they are to teach. If a person comes for an interview and the tutor dislikes them at first sight, they may find that teaching them for three years would be neither to the pupil’s nor the tutor’s benefit, because it will be a constant battle of wills, with hostility and difficulty, without the tutor being able to express their knowledge to the pupil, or the pupil being able to learn from the tutor. The question of potential is even more deeply subjective than that of ability, and aptitude is, in a sense, the same.

[Ian Lucas]

The hon. Gentleman is making an interesting speech, and I speak as an Oxford graduate, so my experience is, in that respect, somewhat similar to his. He has touched on an interesting issue as far as the attitude of the tutor, and his resistance to someone different, is concerned. Does that not support a transparent admissions policy, in which the student, and the institution presenting the student to the university, are aware, before the student applies, of the criteria that will be used?

[Jacob Rees-Mogg]

I thank the hon. Gentleman for his helpful intervention. That is absolutely right. Transparency is, in a sense, everything. As long as people know where they stand, they will be able to see what they ought to do. It is a tremendously beneficial reform for the Russell group to have said which subjects it views as being proper subjects, because now pupils from across the country can say, “If I do history, classics and double maths, I have a really good chance of getting in, if I do well; but if I do knitting and photography, I won’t have a very good chance of getting into the top-rate universities. My chances and opportunities will be limited.” It is absolutely right to let people know at an early stage the way that they ought to be going. Understanding the interview process when one applies to a university is also extremely helpful. If one is going from a public school to Oxford, one will be very well trained in what to expect in the interview, and that should be made as widely available as possible to people from other schools and backgrounds. I agree with the hon. Gentleman on his point on transparency.

We have, I think, established that in terms of merit, the Bill has a lot of waffle in it. What it says is fundamentally subjective, cannot work in practice, and, if taken to the courts, would be impossible to adjudicate on. It is hard to see where the Bill is going, in that respect. The exemptions are glorious, because they are so splendidly old-fashioned. By and large, I rather like things being old-fashioned, and I do not normally use it as a term of disapprobation, but in this case it means that one could reintroduce the closed scholarships. At New college, Oxford, which has a close connection with Winchester, places could be reserved for Wykehamists. People may think that that is all fine and dandy, but as an Etonian, I would feel that I was being prejudiced against, and that it was wrong to give places to Wykehamists rather than Etonians—or, more seriously, to deny them to people from all over the country. Allowing the reintroduction of a system of closed scholarships cannot be what my hon. Friend the Member for Christchurch is really trying to do. That cannot be an advance for universities, and it does not make this a sensible Bill to pass.

--- Later in debate ---

[Jacob Rees-Mogg]

I thank the Minister for that intervention, although I must say it was rather depressingly negative and uncharacteristic of him. What we really want to be thinking about is lifting people’s spirits. In the middle ages, people saw the joy and virtue of learning.

[Ian Lucas]

Most people did not. Many people did not achieve, not because they were stupid but because there were not enough scholarships. I went to Oxford, but I did not have a scholarship and if I had not received a grant and had my fees paid I could not have gone to Oxford and I would not have achieved. That is progress, and although I am a great admirer of the past, I think the hon. Gentleman needs to see that sometimes progress can be made.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

First, I commend the hon. Member for Christchurch (Mr Chope) for initiating this interesting and wide-ranging debate by introducing his Bill. I agreed with him at the beginning of his speech when he said that the Government’s higher education policy was mired in confusion and that the Government were at sixes and sevens. I also agreed with him at the end of his speech when he talked about the difficulties that the Government are having because of the decision by an increasing number of universities to charge £9,000 a year for fees under the rules passed before Christmas. That is causing the Government increasing financial difficulties, because their approach to higher education was predicated on the basis that the fees would be rather less than that. Perhaps that explains why, as we have heard, the higher education White Paper, which should be a framework for discussion, has been deferred again. The opportunity for us to discuss the matter has therefore been delayed. More importantly, those students who are in what I still call the lower sixth who are planning to go to university in 2012 will be looking at a menu with no price list, and no description of the dishes on offer, which is a great abdication of responsibility by the Government.

[Mr Hayes]

The hon. Gentleman is being a little unfair. The previous Government, of whom he was a member, commissioned the Browne review, agreed its terms of reference and fixed the timetable. The hon. Gentleman could hardly have expected this Government to come to office when the Browne review was still considering its recommendations and immediately introduce a White Paper, still less legislation.

[Ian Lucas]

The Government told us initially that the White Paper would be published in March this year, but made the decision not to abide by their timetable—the timetable was theirs, not that of Her Majesty’s Opposition.

The Bill states that admissions to universities should be on the basis of merit, but frankly, that is a truism with which no hon. Member would disagree. The difficulty is that there is so little agreement on what constitutes merit in a student. That lack of agreement exists not only among hon. Members, but among universities, which use very different admissions criteria.

The hon. Member for Shipley (Philip Davies) interestingly focused on A-level grades, which are an important reflection of the academic ability of those who are seeking to go to university. In very many cases, universities look at those to determine whether someone will be a successful applicant for a course, but they are not the only criterion that universities currently use. The advantage of the A-level is that it is transparent. The student is aware when he applies and is given an offer of what he needs to achieve to gain admission to a university course. However, the grades that are now expected of applicants are extremely high. For example, I am personally aware that the leading universities in the country offer mathematics applicants two A* grades and an A grade, or two A grades and a B grade or three A grades.

That is a transparent process, but some universities have a standard offer—an offer made to all applicants, no matter what school or further education college they come from or their background. The standard offers are also high. One university makes an offer of two A* grades and an A grade for the subject in which it has a very high reputation.

The sixth term examination paper exam, which is additional to A-levels, is increasingly being relied on by universities when they consider whether to admit candidates. I do not know whether hon. Members are aware of that, but the Minister should take note of it. STEP exams require a particular type of teaching, and commendably, some universities have recognised that and are providing support for students who come from institutions that do not provide such teaching, to give a fair chance to individuals who have the academic ability to achieve the results they need. Many schools, particularly those from the fee-paying sector, provide preparation for STEP exams that is not provided in many state schools, and that prejudice is, I am afraid, working against the chances of talented individuals—including today’s Cardinal Wolseys—achieving admission to universities on the basis of their A-level and STEP-level results.

The system as it stands disadvantages applicants from schools and institutions that do not have good provision for the teaching of STEP exams. STEP exams are a very recent innovation—I happen to know something of them because I have children at the age when these applications are made. I would like to hear whether any consideration has been given to introducing STEP exams into offers made to individuals, and whether the Minister has looked at the provision in place in institutions and schools for teaching in that area. It is an area of great concern to me.

[Philip Davies]

What puzzles me is that the hon. Gentleman seems to feel that after 13 years of a Labour Government pumping so much money into the state education system, people in the state system still cannot compete equally with people who go to private schools, and therefore an adjustment is needed. If what the previous Government did to the state education system was so marvellous and raised standards so high, why cannot we just have fair and free competition between the state and private sectors?

[Ian Lucas]

I am sorry that the hon. Gentleman is bringing party politics into the debate, because I am trying to approach it in a measured way. I am talking about offers made by universities to talented students, including in his constituency, who happen not to have the provision in their own institution, whether in the private sector or public sector, to support their applications to university. I think that the Government should be looking at support for that.

This is relevant now, as opposed to when the Labour Government were in power, because back then the requirement for STEP exams when university offers were made had not been implemented. This year, there is a particular issue relating to university applications: an enormous number are being made to universities owing to the prospect of fee levels next year. There has been a huge rush of applications, but fewer offers are being made by universities. Furthermore, higher offers are being made this year than I think will be given next year, because so many more people are applying.

I also want to touch on issues of transparency and merit. I raised this point in interventions earlier. Transparency is a great quality, particularly when one is looking at the very complex process of applying to universities. There are lots of different universities and lots of different courses, and it is a big job for any individual student, or parent advising a student, to deal with the complexities of the university admissions system. It is particularly difficult when the admissions system is not transparent. The hon. Member for Christchurch (Mr Chope) at times suggested that the current system was transparent. In my view, it is not transparent when not based on admission by academic performance, and it is not based on academic performance when it is based not on A-level or STEP results, or any other exam results, but on an interview. The disadvantage of an interview process is that, if a student achieves the required grades, passes the exam and is called for an interview, but is then rejected, they do not find out why they have been rejected.

[Mr Hayes]

I am listening carefully to the hon. Gentleman. What is emerging is a certain unity of view between him and my hon. Friend the Member for Christchurch (Mr Chope). He seems to be saying that he wants to curtail universities’ freedom to take into account other circumstances that might prevail in precisely the same way as my hon. Friend. The freedom of universities, which we cherish, is under assault.

[Ian Lucas]

How profoundly ironic that the Minister, who has proposed the restrictions to which the hon. Member for Christchurch vociferously objects, should suggest that I agree with the hon. Gentleman. I agree that admission to university should be made on the basis of merit, but I disagree with the assumption that the system is currently based on merit. In fact, the system discriminates against students from non-fee-paying schools.

The hon. Member for North East Somerset (Jacob Rees-Mogg) made an interesting aside in his very interesting speech. He raised the subject of individuals at, for example, Oxford university, who conduct the interviews that I have just discussed, and who meet applicants who challenge them. They may feel uncomfortable with discussions at interview, and they may not like the prospect of teaching them, not because of their academic potential or achievement but because of their own preconceptions. The disadvantage of the interview process is that it allows that to happen.

It is therefore important that we have a transparent admissions process. It is very important indeed that we have independent universities and that we use all the potential that we have in our schools, whether fee paying or in the state sector. What is the best thing for Britain is that everyone with potential should realise their potential through school and bring it to fruition at university. The tragedy is that, for too long, too many people with the ability and the potential have not been taken through university because of the ivory towers and walls that exist.

[Mr Hayes]

I should like to elicit from the hon. Gentleman his precise position. On the one hand, he says that he believes that universities should be “independent” and that people should be able to fulfil their potential but, on the other, he seemed to suggest—and we need this on the record—that he was against universities interviewing candidates. Would he make it illegal? Is he suggesting that it would be entirely forbidden were he ever to hold the position held by my right hon. Friend the Minister for Universities and Science?

[Ian Lucas]

The Minister, having given his personal views on grammar schools at the Dispatch Box, even though he speaks as a Minister, could not possibly tempt me to make binding commitments from the Front Bench in a way that I might have done had I been on the Back Benches.

There was a great expansion of the university system under the Labour Government, and there was great investment in it. The continued independence of the university system was cherished under the previous Government, and that sat alongside the fact that there was increased state investment in the system. I am afraid that as fond as I am becoming of the hon. Member for North East Somerset, we part company on the important role that the state plays in our university system. I think that it is a good thing that more people go to university. It is a good thing that people who have the potential to go to university should realise that potential. I do not believe that if the state stood aside entirely and did not provide support, either through a grant system or another form of system, that would be a good thing for the United Kingdom, because fewer people with the potential to go to university would do so. That is why the grant system was originally introduced, and that is why I went to university. I went to Oxford university—and my father left school at 14, as did my mother. If I had been limited, as Cardinal Wolsey was, to securing a scholarship, I am afraid that my intellectual capability would not have enabled me to go to Magdalen college, and indeed to found my own college. That may be something for the future.

The issue that sits between those who support the Bill and myself is merit. No one disagrees on what constitutes merit. Our difficulties lie in how we define the procedure by which that is identified in applicants. The hon. Member for Shipley talked solely about A-levels. Some universities are currently choosing systems that are not transparent, and which do not disclose the criteria that apply. When one couples that with the fact that the price list on the menu is very unclear for students who want to go to university, particularly for the year after next, it is virtually impossible for students to make sensible, informed choices about their future.

When I speak to business people in my role as shadow industry Minister, they often tell me that they want more engineering graduates. They also want apprentices, and I defer to no one in my admiration for apprenticeships and foundation degrees, but they do want graduates of the highest quality, in science, maths and engineering. We need a system that ensures that everyone who has the potential to secure a future—to expand and extend their skills as far as possible—achieves that potential. That clearly requires a role for the universities, who have their own skills in identifying those candidates, but it also requires a role for Government, because the Government invest in the university sector, and it is important that public money is used in a positive way and for the benefit of the country as a whole.

It is at that stage that I disagree with the hon. Members for North East Somerset and for Christchurch, because I believe that means we have a responsibility in the House to hold the Government to account on the use of public money. I want as many young people and students as possible from my constituency to go to the best universities. I happen not to have a private school in my constituency, so if a young person living in my constituency wants to attend some of the best universities in the country, the facts and figures show that they are less likely to be admitted to those universities than if they went to a fee-paying school. I regret that. The current system is not fair. We need to devise a system that takes into account and re-establishes the position of the universities as independent institutions, but also recognises the legitimate role of Government in ensuring fair access to them.

[Rehman Chishti]

In terms of the responsibility to ensure that those from different backgrounds can go to university, the role of OFFA and the criteria that it applies to ensure that those universities—the top end, the Russell group—can get people from less privileged backgrounds have to be right. The hon. Gentleman said that some people from schools in tough catchment areas may not have the right experience for the interview process at Oxford, but in the OFFA criteria,

“the scale and nature of outreach activity to be undertaken (singly or in partnership) with local schools and colleges—such as mentoring,”

will be taken into account, as will targeting schools in tough catchments. Therefore, what the Government have put forward in the wider package for higher education, along with the role of OFFA, which will certainly help to ensure that people from less privileged backgrounds get that assistance to go to some of the high-performing universities, have to be right.

[Ian Lucas]

I am very confused about the Government’s rules that will allow a university to charge £9,000 rather than £6,000. The criteria for universities are extremely unclear.

[Rehman Chishti]

The hon. Gentleman refers to the figure of £9,000, but he needs to consider the overall package. He must accept that it is right and proper that there are no up-front fees, which would have deterred a lot of people from less privileged backgrounds—I put myself in that category. It must also be right to increase the threshold from £15,000 to £21,000.

[Ian Lucas]

There have not been any up-front fees since the Higher Education Act 2004 was passed under the previous Labour Government, so that is a complete red herring. The existing system is being continued, but the difference is that this Government are tripling the debt that students will take on, with which I profoundly disagree. I voted against the 2004 Act—I was a Labour Back Bencher at the time, and I continued to be a Back Bencher as a result—because I disagreed with the concept of fees.

[Rehman Chishti]

The hon. Gentleman talks about finance, but he must accept that we are in a difficult financial situation. The Government have inherited one of the worst financial situations in the G20 and one of the worst structural deficits in the G7. He responded to my point about up-front fees. The fact is that the Government could have considered introducing up-front fees, but they ruled them out categorically. The overall package is good for part-time students and helps mature students. He must accept that there is a real problem with discrimination against children with disabilities and learning difficulties who wish to go into higher education, and the package will improve their situation, too.

[Ian Lucas]

The Government are tripling student debt in the years ahead, but that is profoundly wrong. Their policy will deter individuals from poorer backgrounds from going to university, so I shall continue to disagree with it.

I am with the hon. Member for Christchurch on the question of merit, but I am against him on exemptions, so I will not be able to support his Bill. The existing situation is unsatisfactory because insufficient students are admitted to university on the grounds of merit. Many people are frustrated because some universities are sending them the message that if they do not go to the right schools, it is not worth their applying, so as a consequence they do not apply. That is why there has not been the progress that should have been made. Young people should be able to achieve their potential, but they need support. We need a fair system that supports individuals who want to go to university and, above all, ensures that every individual achieves their full potential.

--- Later in debate ---

[Mr Hayes]

Now my hon. Friend encourages me to go down a classical road, which might be of interest to the House but certainly would not necessarily be relevant to the Bill, and I will not be encouraged to do that.

A consideration of potential has always been at the heart of the relationship between the teacher and the taught in the business of deciding where a person might go, having been admitted to an institution. I will not say that I was shocked—it is hard to be shocked in the House—but I was surprised by what the shadow Minister said. He might want to correct this—I do not want to damage his career unreasonably, although it will be in opposition of course—but he at least appeared to suggest that the Opposition’s policy was hostile to the very business of universities interviewing students. That would require unprecedented prescription over independent universities. It would be a curious Government and a curious Minister who told universities that they were forbidden to use what they had used successfully, perhaps for generations, as a means of choosing who was best suited to their institutions.

[Ian Lucas]

That is exactly why I did not say it.

[Mr Hayes]

I am pleased to hear that helpful correction.

[Ian Lucas]

I would be grateful to the Minister if he did not misrepresent what I said to the House.

[Mr Hayes]

I am grateful to the hon. Gentleman for that correction. I will not say that it was a U-turn—that would be too strong—but he seemed to clarify his remarks in a way that is helpful to us all in considering these matters in a balanced and measured manner.

The principle that I have described in respect of merit linked to a consideration of potential is time honoured. The other things that OFFA suggests that universities should take into account are no more frightening than those that I have already identified:

“progress towards benchmarks…published by HESA and others more immediate targets and measures agreed”

in respect of those less well represented groups. Targets agreed and measures suggested and agreed do not form the frightening perspective that my hon. Friend the Member for Christchurch described in his opening remarks, although, of course, I celebrate the fact that he has given us the chance to explore these matters because I want to put on the record what I have told him previously: I agree with him about merit.

Department for Business, Innovation and Skills (Performance)

Ian C. Lucas Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Lorely Burt]

I am sorry, but I have given way twice already and that is it.

All those measures are yet to come into effect, so how can we claim that the improving business situation is due to us? We have created a climate of confidence in this country. We have put in some pretty harsh measures to tackle the deficit. Not a single Liberal Democrat colleague has taken a moment of pleasure in that, but we joined the coalition and signed up to the agreement because we felt that it was necessary to restore confidence, and it did. Following the June Budget, we saw our triple A credit rating restored. The credit rating agencies backed our deficit plan, and so did the International Monetary Fund, the OECD, the CBI, the European Commission, the World Bank, the Governor of the Bank of England and one Mr Tony Blair. Other countries, before and after the Budget, have faced financial meltdown, and if we had not done that, we would be paying the crippling interest rates that people in Ireland are now paying.

[Ian Lucas (Wrexham) (Lab)]

Fiction.

[Lorely Burt]

We are hearing a lot of denial from those on the Opposition Front Bench. Had we not taken that action, we would be facing greater wage cuts than we are already suffering and more job losses. Not everything that John Cridland, the director-general of the CBI, has said about the coalition Government has been complimentary, but this week he said that

“the coalition government has a lot of credit in the bank with the British business community for the way it’s tackled the deficit. That was task number one and it needs driving through and it mustn’t allow itself to be knocked off course”.

The Secretary of State has referred to the £4 billion cut in the Department’s budget. Labour has opposed this, but it has failed to say even once where it would have cut to achieve their stated £44 billion worth of cuts. BIS was an unprotected Department under its plans. It criticises us for our plan for business, but it does not have a plan. It should criticise after it has produced an alternative, because what it did for the past 13 years certainly did not work. Under Labour, Britain fell from seventh to 13th in the World Economic Forum’s global competitiveness league. Tax competitiveness also fell: in 1997, the UK had the 11th lowest corporate tax rate in the world; but in 2009 it was the 23rd lowest. The British Chambers of Commerce has claimed that Labour created £83 billion of red tape that was simply choking off businesses’ ability to grow.

I know that things are choppy, and we have heard about the lack of growth in the past month, but I would like to finish on a positive note, because it is not just about manufacturing. The Reed job index, which is run by the country’s largest recruitment website, has shown that employers seem to be in job creation mode. I am not pretending that we are out of the woods yet, but things are certainly improving under this Government.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

The shortness of time available means that I will not have the opportunity to refer to all Members in my summing up of this debate. It has become better humoured as it has progressed and although that is perhaps unusual, I hope that it will continue. I particularly thank my hon. Friend the Member for West Bromwich West (Mr Bailey), the Chair of the Select Committee, for his contribution, which made mention of Sir Richard Lambert’s statement that the Government have “failed to articulate” their vision for growth. That was the case before his speech, but I regret that they have failed to articulate their vision for growth again today. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) made a particularly valuable contribution, pointing out that £2.8 billion has come out of capital allowances for manufacturing industry and £2.7 billion has gone into the rest of the economy, including a tax cut for bankers. Bankers were mentioned regularly in the debate.

The hon. Member for The Cotswolds (Geoffrey Clifton-Brown) made an interesting contribution, in which he referred to investment and the issue of visas. That continues to be a problem, notwithstanding the efforts that the Secretary of State has made. The important issue of foreign direct investment was also raised. The hon. Member for Angus (Mr Weir) made the valuable point about individuals and partnerships that do not pay corporation tax and therefore do not benefit from tax cuts of that nature. We need to examine ways in which those individuals and partnerships can benefit from support. Investment in business is very important indeed, a fact stressed by the hon. Member for South Staffordshire (Gavin Williamson) in a valuable contribution. I particularly enjoyed the contribution from my hon. Friend the Member for Wirral South (Alison McGovern), who introduced Bill Shankly into the debate. I have to say that the late, great Bill Shankly’s views on economic growth were much more coherent than the Secretary of State’s.

Last week’s growth figures were truly shocking. When Labour left office, growth was increasing and unemployment was falling. The net result of this Tory-led Government’s policies has been to create conditions where the economy has contracted and unemployment is rising. In 2008, the Labour Government faced the most severe world economic crisis since 1929. Their response was to introduce a number of policies to support industry and jobs, and they acted fast. They gave business more time to pay taxes. They introduced an enterprise finance guarantee scheme to assist lending to business, and a car scrappage scheme to support our automotive industry at its most difficult time. They also used Train to Gain to help businesses to invest in training. Not one of those initiatives was opposed at the time by any of the parties now on the Government Benches; on the contrary, the criticism that I received at the Dispatch Box was that our Government were not spending enough money fast enough. So all the tears that we see at the moment do not reflect the position of the parties now on the Government Benches when they were in opposition.

As well as providing effective help fast in the short term, Labour’s active industrial strategy helped to create the right conditions for industry to grow—that growth was the legacy of the Labour Government to this Tory-led Government. We married research with industry to create the right conditions for investment. We got investment from Nissan and Toyota in low-carbon vehicles, and from Clipper in offshore wind. We obtained investment and support for institutions such as the National Composites Centre in aerospace, with companies such as Airbus, AgustaWestland and GKN plc being involved. That response was led by a Business Department that was at the heart of government when it needed to be. Growth took place and the deficit, about which we have heard so much from those on the Government Benches, came in £20 billion less because of the action taken by business and by Government to reduce the crisis that faced this country in 2008.

Let us contrast that with the lack of urgency and complacency of this Government. In their hallowed coalition agreement, they said that they needed “to take urgent action”, but they have not done so. Nine months on, we have no major loan guarantee scheme and no effective proposals to ensure a flow of credit for SMEs. That point has been made across the House and it is about time Government Front Benchers started to listen. The only step that they have taken on finance is to extend the Labour enterprise finance guarantee scheme. We have had no growth White Paper, and the Maoist and chaotic establishment of local enterprise partnerships means that those who should be working to bring jobs to British industry are looking for jobs themselves. The university sector that is so crucial to our long-term future is, after a decade of increased investment, wrestling with the consequences of an 80% cut in its budget.

At a Federation of Small Businesses dinner last night, I was asked, “What has happened to the one-in, one-out rule?” What are the Government doing about it? We have had the soundbite, but when is the policy going to be implemented? That is what businesses are asking me. The Secretary of State was at the dinner last night, so I hope he heard that, too. I was talking to people from the chemical industry yesterday and they told me about the negative impact on business of the Government’s new visa regulations. Similarly, research from the Federation of Master Builders tells us that the VAT increase will cost 7,500 jobs in the construction sector alone. That is the sort of contribution that the Government are making to industry at this time. As the Secretary of State has said today, increased taxes cost more jobs than cuts in expenditure. That is absolutely right, so why did he increase VAT?

To cap it all, responsibility for one of the most successful and important industrial sectors in the United Kingdom—telecommunications—has been transferred out of BIS because of the Secretary of State’s incompetence. This very morning, I was asked by telecoms representatives if the sector will be transferred back to BIS when the Secretary of State leaves. Perhaps he can answer that. There is no clearer symbol of the diminution of the Department than that transfer of responsibility for a major sector of the industrial economy. It is a disgrace and it will have a detrimental effect on British business and British industry as a whole.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the hon. Gentleman give way?

[Ian Lucas]

No, I will not give way.

The Department for Business, Innovation and Skills is at the margins at the very time when it needs to be at the centre of Government policy—and it loses battles. It has lost a battle with the Department for Communities and Local Government about planning, it has lost a battle with the Home Office over visas and it has lost a battle with the Treasury on banks. It is a Department diminished in influence and it is failing and letting down business. For the sake of British industry it needs to change and it needs to change fast.

Oral Answers to Questions

Ian C. Lucas Excerpts

Thursday 13th January 2011 Commons Chamber

[Mr Hayes]

Having anticipated that question, I have already had a meeting with my hon. Friend on just that subject, and I am pleased to be able to say that we will look very closely at the work being done at Harlow college, which is an exemplar in so many ways. We will look at how that can be spread across the whole country, providing more opportunity and apprenticeships, and building a Britain that works.

[Ian Lucas (Wrexham) (Lab)]

A strong manufacturing sector needs a powerful digital economy at its core. Does the Minister agree that it would be good for jobs in the digital economy sector for it to be outside the control of the Business Secretary?

[Mr Hayes]

One of the things about coalition is that it brings together people from different starting points. [Interruption.] I have to say that this coalition has convinced me that the Business Secretary’s commitment to jobs, apprenticeships, manufacturing and British business is unrivalled in his post, and is certainly considerably greater than that of his predecessors.

Oral Answers to Questions

Ian C. Lucas Excerpts

Thursday 18th November 2010 Commons Chamber

[Ian Lucas]

But companies such as Nissan, Toyota and Sharp Electronics in my constituency are investing in the UK and bringing teams to train British workers in new green technologies. The prevention of inter-company transfers is stopping them investing in British business, so why is the Business Secretary supporting the Tory immigration cap that he opposed at the general election?

[Vince Cable]

The hon. Gentleman did not listen to my previous answer. The Prime Minister was quite explicit on this, and I will repeat what he said:

“things such as inter-company transfers should not be included”

in our proposal for the immigration cap. I have spoken to Nissan and other companies, and the Government are well aware of the needs of business. We are open to business and we welcome foreign investors. The proposal on the immigration cap will be pursued, but not in ways that damage those companies.

National Apprenticeship Scheme

Ian C. Lucas Excerpts

Wednesday 21st July 2010 Westminster Hall

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton—possibly for the first time—and to have heard the speeches of hon. Members who have contributed to the debate. I am pleased to hear apprentices and apprenticeships being valued so highly by hon. Members from all parties. Such comments are something of a damascene conversion on the part of the Conservative party because, as the hon. Member for Gloucester (Richard Graham) said, reviving apprenticeships was a Labour idea.

It was a Labour idea because in 1997, after 18 years of Conservative Governments, the British apprenticeship was dead on its feet. The enthusiasm that we have heard from the Conservatives this morning was certainly not felt by the Conservative Governments between 1979 and 1997, who effectively sounded the death knell of apprenticeship schemes in the UK. Hon. Members should be aware of the tremendous record of the Labour Government in reviving the apprenticeship scheme within the UK. I am very proud indeed of the steps that were taken by the previous Government in re-establishing the importance and status of apprenticeships.

[Chris Skidmore]

Will the hon. Gentleman give way?

[Ian Lucas]

I want to make some progress at this stage, but I will give way in due course. I agree that we need to elevate the respect that people have for apprenticeships in industry and across the training field. However, the performance of further education colleges and other providers has improved dramatically over the past decade. The satisfaction rates of employers and learners have risen. Since 2001, about 3 million adults have improved their basic skills and achieved a national qualification and, since 1997, more than 2 million people have commenced apprenticeships, compared with the position under the previous Conservative Government. Even more importantly, completion rates for apprenticeships have more than doubled.

The focus of this morning’s debate is apprenticeships, but it is also important to mention the union learning fund, which is now worth £21.5 million a year. As a result of the fund, more than 23,000 union learning reps across the country are encouraging people to learn within their workplaces and develop their skills. That is what we all want to happen to improve the performance of UK industry. Those representatives helped nearly 250,000 workers into learning last year.

It would be remiss of me not to mention the highly successful transformation fund that supports adult learning. The fund has generated a marked increase in participation and there has been a huge investment of more than £2 billion into the Building Colleges for the Future programme, which has transformed the places in which people learn. In my constituency, through investment via the Welsh Assembly Government, Yale college has rebuilt its Bersham road site to enable it to help train apprentices equipped for 21st-century manufacturing. I hope that the Minister can reaffirm that all the schemes announced in the Building Colleges for the Future programme earlier this year will be going ahead. As manufacturing changes, it is important that colleges’ facilities improve to equip modern apprentices for modern engineering, modern industry and modern work.

The impact of the capital investment in our further education colleges under the Labour Government is part of our proud legacy on skills. Not a single penny was spent on further education capital for colleges in the final year of the Conservatives’ last term in office. Although the £50 million that the Minister has announced is very welcome, it is a one-off raid on revenue, not a long-term commitment.

Our White Paper, “Skills for Growth”, was published last November. It set out clearly the skills challenges for the next decade and gave a clear set of proposals to meet those challenges, including an ambition to ensure that three quarters of people participate in higher education or complete an advanced apprenticeship by the age of 30. The proposals include the expansion of the apprenticeship system to build a new technical class, by doubling apprenticeship places for young adults; apprenticeship scholarships; and focusing the skills budget on the areas from which future jobs will come.

[Chris Skidmore]

Does the hon. Gentleman not agree that there is a huge gulf between the image and the reality of what happened under the previous Government? For example, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister, promised 500,000 apprenticeships, but the number of apprenticeships fell by 13,200 in 2006-07. Furthermore, between 2007-08 and 2008-09 there was a decrease of 7.5% in the number of 16 to 18-year-olds taking on apprenticeships. The reality of the figures does not match up with what was in the White Paper.

[Ian Lucas]

What is absolutely clear is that, under the Labour Government, there were far more apprentices than in 1997 and the apprenticeship scheme has a value now that it did not have at that time. Later in my speech, I will talk about some individual examples of young people and not-so-young people who have benefited from the progress made under the Labour Government.

I should say to Conservative Members that I am simply not going to allow the previous Government’s record to be trashed in the way that the Conservative party is determined to trash it. The reality is that if it were not for the Labour Government, there would not be any apprentices at all in UK industry; the support that existed in 1997 was parlous in the extreme.

[Chris Skidmore]

Does the hon. Gentleman seriously believe that if it were not for the Labour Government, there would not be a single apprenticeship in this country? Is he willing to make that statement or would he like to retract it? The fact is that the number of young people not in education, employment or training has increased significantly—the figure is even higher than 1997 levels—to 837,000 in 2010, which is up from 618,000 in 2005. It is delusional to suggest that there would not be a single apprenticeship in this country and that apprenticeships would not exist if it were not for the Labour Government. In fact, youth unemployment skyrocketed under the Labour Government. He cannot deny that.

[Ian Lucas]

What I can say is that the Labour Government’s approach to apprenticeships from 1997 was a marked contrast to that of the preceding Government, and that it placed far more emphasis on the apprenticeships scheme. I will come on to talk about some specific examples from my area of which I am personally aware and mention the individuals I have met who have benefited hugely from the apprenticeships scheme.

[Richard Graham]

Will the hon. Gentleman give way?

[Ian Lucas]

I will just make a little progress and then I will certainly give way to the hon. Gentleman, whom I should have congratulated on securing the debate; I do so now.

The White Paper’s proposals included a joint investment scheme with sector skills councils, more national skills academies, skills accounts, user-friendly public ratings for colleges and providers, and better skills provision for those on out-of-work benefits. The promotion of apprenticeships as a priority in public procurement is important and we also wish to reduce the number of publicly funded skills agencies by more than 30. It is important that we make apprenticeship schemes as easy as possible for employers to access, and we need to focus resources on key economic strategic areas, so that we can make real progress.

The Labour Government have a strong record of achievement and the Labour party has a clear strategy for the future. I have heard the Minister speak many times of his passion for apprenticeships and I profoundly admire his rhetoric, so I hope that the Government will carry that through with real action. I hope that he will be clear this morning on whether he intends to follow the strategy set out in the White Paper or whether he intends to jettison it.

[Richard Graham]

The hon. Gentleman suggested earlier that the Conservatives had had a damascene conversion on apprenticeships. I suggest gently that if he looks at the Members on this side of the Chamber, he will see that none of us was on any road in 1997, let alone the road to Damascus, as we are all new Members. It is rather telling that few Members from his party, old or new, have attended. Although we could argue about the role of the previous Government and their achievements on apprenticeships, does he not recognise that several positive suggestions for taking forward apprenticeships have been made today and that he might agree with them?

[Ian Lucas]

I do not wish to be churlish in any way and at the outset I welcomed the fact that the debate was taking place. I also welcome the genuine and sincere contributions that have been made. However, my political views were forged in the 1980s and 1990s and my perceptions were based on the Conservatives’ attitude to manufacturing as I saw it in the north-east of England. I know that progress has been made in the apprenticeships scheme and I want to put that on the record, because we have heard a contrary view during the debate.

We have also heard from the Minister, who has been trying to soften the savage in-year cuts that the Chancellor has imposed on his budget by recycling £200 million from the skills budget into 50,000 apprenticeship places, costing £150 million—£3,000 per place. What kind of apprenticeship places will the Minister be able to get for a unit cost of £3,000? How has he costed those places, and what will be the breakdown by sector? He sometimes tries to give the impression that he is the first Minister ever to announce investment for extending apprenticeships, but the fact is that the previous Government rescued apprenticeships from the oblivion they faced under the Conservatives, who allowed the number of apprenticeships to fall to 65,000, with a completion rate of only one third.

Yesterday, I had the privilege of attending a reception for the Society of Motor Manufacturers and Traders in the House of Commons and of meeting young apprentices. Some were from General Motors at Ellesmere Port, some were from Toyota at Burnaston and some were from Ford at Dagenham. They were of varied ages and backgrounds, but they all shared a passionate belief in what they were doing and the part that they would play in the future of automotive manufacturing in the UK. It was an inspiring reception. I was disappointed not to see a Minister there, who could not only have met the apprentices, but listened to an interesting speech by Ron Dennis, from McLaren, on the future of UK manufacturing. Earlier this year, I attended the Airbus annual awards scheme, where the largest apprenticeships scheme in the UK was celebrated.

[Justin Tomlinson (North Swindon) (Con)]

I, too, attended yesterday’s reception and met some of the apprentices from Honda UK, whose head office is based in my constituency. For me, the telling point was that 85% of those who take part in that scheme end up in employment with Honda, and the majority of the remaining 15% find jobs elsewhere, potentially being paid more money. That contrasts with the number of graduates who are unable to find work, as all the newspapers have been reporting. That shows the value of giving people real applied skills with real job opportunities at the end.

[Ian Lucas]

The hon. Gentleman makes a valid point. To bring a little local experience to that observation, I should say that a successful scheme is operating at the Airbus factory in Broughton, close to my constituency. It is very attractive to young people in their teens who are still at school, whether they are capable of going to university or not. I know young people who are perfectly capable of going to university, but who have chosen to go through an apprenticeship programme because they regard it as the best way of developing their future careers. The scheme has been taken forward by combining study at further education colleges with development of that study through a foundation degree at a local university, and there is the added bonus of earning, which for many young people is preferable to incurring debt.

One point on which we can all agree is that apprenticeships need to be valued and their status recognised. The hon. Member for Harlow (Robert Halfon) made the interesting suggestion that there should be a royal society for apprenticeships, which is a good idea. The level of expertise and skill required by many apprentices to carry out their jobs is entirely equivalent to that acquired through a degree. Larger companies, such as the car manufacturers I met yesterday—I have visited Honda in Swindon, which was an interesting experience—are doing a great deal to support apprenticeships.

The real challenge lies with smaller businesses, and that is the most difficult area on which we should concentrate. We need to carry forward the good work that has been so successful with many of the large investment companies that I have mentioned, develop it and learn the lessons so that we can extend the apprenticeships scheme to smaller businesses.

[Mr Robin Walker (Worcester) (Con)]

Does the hon. Gentleman agree that part of the problem with the apprenticeships scheme under the previous Government—I accept that there were many achievements—was that too often they were in a rush to increase the numbers and so approached large companies, particularly in retail and catering, that could easily transform traineeships into apprenticeships to get the numbers up? We must do much more to reach smaller companies, particularly those in manufacturing, such as Aeromet, an aerospace company based in my constituency, whose representatives I met yesterday. They told me that they had not been approached by central or local government at any time about apprenticeships and that they would like to learn more.

[Ian Lucas]

We certainly need to work hard with smaller companies to develop apprenticeship schemes, but there are good examples. I will mention another company in my constituency, Lloyd Morris Electrical. It is a small construction company that deals with electrics. It places great store by its apprentices and the training of its young people. There is a great appetite for apprenticeships among young people. Some of them could go to university but simply do not want to do so because they see their lives developing along an alternative route.

An important point was made earlier when we mentioned teachers and their attitude to apprenticeships. We need to give teachers a much more accurate and up-to-date representation of modern apprenticeships, and I mean that not in a particular sense, but in a broad sense. High-skill, high-technology and high-value jobs are involved, and teachers should encourage their students to follow them.

The Minister has made a commitment on apprenticeships, and I welcome his language, which contrasts, I am afraid, with what was said and done by the Conservative Government before 1997. He needs to be transparent about the details of what will happen in future and not pretend that his commitment is something that it is not. He hopes to announce the creation of 50,000 extra apprenticeships, giving the impression that they are new jobs for young people. First, it is one thing to promise apprenticeship places and another to deliver them—the devil is in persuading businesses, small ones in particular, to take on apprentices. I have often had that discussion with businesses in my area.

[Priti Patel (Witham) (Con)]

Small and medium-sized businesses are at the heart of my constituency, creating something like 80% of local jobs in Witham. The hon. Gentleman spoke about small businesses. Having been in government, what practical measures would he recommend to enable small businesses to take on more apprentices? The small businesses that I speak to in my constituency are struggling and are fed up with the paperwork and bureaucracy associated with taking on apprentices.

[Ian Lucas]

I ran a small business myself and was Minister with responsibility for regulatory reform, so I do not like paperwork or bureaucracy—no one does, and every Government talks about reducing the burden.

We need to reduce regulations and burdens as much as possible. Saying that is easy, but doing it is difficult, because we have to be accountable for the use of public money. It is important that we should have a scheme tailored to what small businesses need, and that requires commitment by business. Businesses cannot expect such tailoring to happen by accident; they have to commit to working with providers and putting together an appropriate scheme that will be of benefit. That is what we need.

My first point was that it is easy to say that 50,000 apprenticeship places should be delivered, but that we need to get them delivered. Secondly, even if 50,000 places were supported, the Minister needs to guarantee that they will be quality places, helping those who need them most.

We need the Minister to be clear today and to answer questions about his plans. How many of the 50,000 apprentices does he expect to be new recruits and how many will be existing employees? How many will be under 25? That is an important issue. Those questions need to be addressed. Will he please respond to the question about level 3 and level 2 qualifications? Does he value level 2 apprenticeships? We need to look at the detail of what will happen. It is easy, when talking about apprentices, to talk the talk; what we need from the Minister is an assurance that he will walk the walk.

[The Minister of State, Department for Business, Innovation and Skills (Mr John Hayes)]

Thank you very much, Mr Caton, and it is a pleasure to serve under your chairmanship. It is a pleasure, too, to participate in the debate secured by my hon. Friend the Member for Gloucester (Richard Graham), who cares about such matters deeply. I welcome the shadow Minister, the hon. Member for Wrexham (Ian Lucas), who is not in his normal territory but standing in for the shadow apprenticeships Minister, who cannot be here. I know how keen the hon. Member for Cardiff West (Kevin Brennan) says he is to debate apprenticeships and I hope that he will find the time to do so with me in due course.

The debate is timely. My hon. Friend the Member for Gloucester spoke at some length about why he, like me and the Government, is so committed to the apprenticeship programme. In his maiden speech on 9 June, he treated the House to a striking description of his constituency past and present, as well as announcing his intention to convene an all-party group on urban regeneration. Many of the issues that he and other hon. Members raised this morning spring logically from such commitment, because they are closely connected with the economic future of all our constituencies.

Like many other places up and down the country, Gloucester remains a city whose prospects depend in large measure on the skill of its people and the success of its businesses, in particular the small and medium-sized enterprises. I shall speak a little about the challenge made by the hon. Member for Wrexham in a minute. Before I do so, however, I will answer one other point made by him. I shall also try to respond to all the points made, although they are numerous. If I cannot do so, I will happily engage with hon. Members one to one and take up the matters not covered today.

The shadow Minister mentioned the White Paper and a strategy for skills. The Government are absolutely determined to build on the best of what the previous Government did. No Government are all bad or all good; they each have good policies, people and ideas. We will take the best of those ideas and build them into our strategy. I look forward to putting that strategy together over the coming months, on a highly consultative basis, but of course it will be coloured by the comprehensive spending review. The hon. Gentleman knows that Ministers are in discussion with the Treasury about spending constraints. The Government are determined that we should spend only what we earn as a nation, but he can be assured, as can this Chamber, that in that context I will make a vigorous case not only for skills in general but for apprenticeships in particular. Our strategy will have apprenticeships at its heart, so I am not by any means ignoring the important principles laid out in the previous Government’s strategy; we will absorb the best of them into a plan for the future.

My hon. Friend the Member for Gloucester and others who have spoken understand, as I do, that apprenticeships must play a vital part in securing our economic future. In the latest year for which figures are available, more than 500 people started an apprenticeship in the city of Gloucester, in sectors as diverse as health and social care, retail and hospitality, catering, hairdressing, construction and engineering. I expect the National Apprenticeship Service and its local partners to increase still further the number and range of apprenticeships in my hon. Friend’s city.

The belief that apprenticeships can play a major role in building the future of Gloucester and our nation as a whole is not founded on transient political fashion or a preoccupation with the zeitgeist, but on the evidence of centuries. To paraphrase Chesterton, education is simply the soul of a nation as it passes from one generation to another, and apprenticeships are indeed time honoured, as hon. Members have described this morning.

I take the point made by my hon. Friends the Members for Gloucester and for Harlow (Robert Halfon) and others that the aesthetic of apprenticeships is critical. I have already made that point to my departmental officials. I am determined to ensure that the role of practical learning is elevated, in terms of its “prestige”—the word used by my hon. Friend the Member for Harlow—and we will look closely at the issue of local apprenticeship days.

We already have annual apprenticeship awards. I was at the ceremony last week and spoke with some eloquence—

[Ian Lucas]

Even though the hon. Gentleman says so himself.

[Mr Hayes]

Even though I say so myself. I was greeted with warmth and appreciation, because of the commitment that the coalition, of which I am a humble member, has made to skills and to apprenticeships in particular.

The important thing to emphasise when considering that aesthetic is that apprenticeships involve not only the crafts we think of when considering the craftsmen who built the great cathedral church of St Peter and the Holy and Undivided Trinity, but those in the modern economy. Growth industries mentioned by various hon. Members include the green economy, the IT industry and high-tech engineering. The whole range of advanced apprenticeships in advanced subjects in the modern economy will do so much to fuel our nation’s recovery and future prosperity.

I have already had meetings with sector skills councils about such high-tech, high-growth areas, and with individual employers, missioning them to develop new apprenticeship frameworks and to make the best of existing ones. In that way, we will make apprenticeships, as described by the hon. Member for Upper Bann (David Simpson), relevant to businesses and current economic need, and exciting and seductive from the perspective of learners. That those sectors matter is absolutely right, as the hon. Member for Wrexham said. We will focus on those high-growth sectors because that is what we must do to feed national economic growth. We see our skills strategy as very much tied to our growth strategy. My Department, the Department for Business, Innovation and Skills, is after all the Department for growth.

Let me pick up some of the other points made by hon. Members this morning. There has been a welcome for the Government’s conviction of the value of apprenticeships and the view that they should be an indispensable component of any effective and responsible further education system. There has also been an appreciation of the fact that we have put our money where our mouth is, and I am grateful for what the hon. Member for Wrexham said in that regard. One of the first things we did in government was transfer £150 million from Train to Gain to the apprenticeship budget. We did that because we know what competencies apprenticeships deliver, how long they take, how much they cost, and that they are valued by employers and supported by learners. Nevertheless, there are important questions to ask about them.

Our plan involves transferring resources from Train to Gain to the apprenticeship programme. That is a challenge for providers, which they have discussed with me and are willing to take up with relish. None the less, it is a challenge. It is important that the apprenticeships that evolve from that are meaningful and are the right product for employers, and it is absolutely right that employers buy into them.

My hon. Friend the Member for Kingswood (Chris Skidmore) said that such things cannot be managed from the top down but have to be built from the bottom up. We need to look at some of the supply-side reforms mentioned by various hon. Members, including my hon. Friend the Member for Stourbridge (Margot James), and how small businesses in particular are disincentivised from taking on apprentices.

We must ensure that the framework matches current economic need. The economy is dynamic. Perhaps, Mr Caton, I might be allowed, at a tangent, to give a short lecture in economics, as I believe that it will be relevant to the debate. As economies advance, they not only require greater skills but also become more dynamic. Skills needs become more dynamic, too, so it is critical that the skills system is as responsive and flexible as possible.

The best way to deal with that kind of economic change is to ensure that money and competence are devolved to the sharp end—to businesses and those who serve them in terms of training. That is why we are so determined to free up provision and to give further education colleges and independent training providers more flexibility and freedom to respond to employer need. Apprenticeships are at the heart of that, and I have had discussions with the FE sector, which welcomes the changes that I have recently introduced to free up colleges, and with independent training providers, who relish the opportunity in a more freed-up market to be more responsive to an increasingly dynamic economy. But let me move on from that short tributary on the subject of macro-economics that we have travelled up together back to the questions that have been put properly by hon. Members in the course of the few minutes that we have had to discuss apprenticeships.

It is important that we are absolutely certain about where apprenticeships are to be delivered and how. The hon. Member for Wrexham knows very well that we are talking about an average when we talk about £50,000. Some apprenticeship frameworks cost much more than others. An apprenticeship in hair and beauty, for example, will cost the Government less than an apprenticeship in aeronautical engineering, so we are discussing an average. In the end, such things must be demand-led. I cannot dictate exactly how many apprenticeships there will be in a particular sector at a particular time. The dynamism that I described earlier will dictate exact requirements for skills in particular parts of the country.

My hon. Friend the Member for Gloucester said that the programme is too target-driven. I have done some research on the basis of earlier discussions that he and I have had on the subject. I know that he is extremely concerned that there should be flexibility for the National Apprenticeship Service to respond to changing local demand. I assure him that we will not be rigid about setting unalterable targets, and in a meeting that I had earlier today, just after my extremely luxurious breakfast in the Tea Room upstairs, I asked officials to look at those issues.

The truth of the matter is that the success of our plan will depend on our motivating—indeed, galvanising—businesses, and I will look at how we can help small and medium-sized enterprises. There is an argument for giving them particular support, both on supply-side reform and through a series of incentives. We spoke in opposition about an apprenticeship bonus to support SMEs in that way, but hon. Members will understand that we live in difficult economic times. We have inherited circumstances that no incoming Government would have wanted, and we have to see how we can deliver more for less. Nevertheless, I remain committed to the idea that, in particular sectors and for particular kinds of business, we need to have carefully tailored policies that help to make our ambitions for apprenticeships a reality. We must walk the walk and not just talk the talk, although I am immensely grateful for the complimentary comments of the hon. Member for Wrexham about my rhetoric.

I do not want to be too hard on the previous Government and, particularly as the hon. Gentleman is performing outside his natural brief—he is a full back performing as a striker today—I do not want to be too hard on him, either. Nevertheless, it has to be said that the culture of aspiration that apprenticeships should embody—the culture that they feed aspiration and satisfy economic need, which unites people across this House—was previously, unfortunately, swallowed up by a series of meaningless targets and inflated figures. The previous Government forgot Einstein’s dictum:

“Everything that can be counted does not necessarily count”,

And we had the curious business of confusion between level 2 and 3 qualifications. The hon. Gentleman asked me particularly about that.

Let me be clear: it is vital that we identify levels in a meaningful way. I am looking at building a progressive ladder of training, beginning with re-engagement for those who are outside the work force altogether—that might involve small, bite-size, modular chunks of learning as described by various hon. Members—running through to level 2. Of course, much level 2 training is useful and purposeful, but we would move to full apprenticeships at level 3. The idea that we are exploring is for foundation apprenticeships at level 2, full apprenticeships at level 3, and advanced apprenticeships at levels 4 and 5. We are working on and consulting on that kind of clarity, which I feel the previous Government did not deliver.

In addition, we need to look at the costs of what we deliver through the apprenticeship programme and the effects of how it is delivered. In these times in particular, we need to look closely at whether more money can be delivered directly to employers, as my hon. Friend the Member for Stourbridge suggested, whether we can be less bureaucratic about how we manage the apprenticeship programme, and whether that too can be made more cost-effective.

Yes, we are committed to the idea of apprenticeships as a route into further learning, whether that further learning is at levels 4 and 5 in a college or in an institution of higher education. My right hon. Friend the Minister for Universities and Science and I have worked together, hand in glove, for many years on these matters and share a view that the division between FE and HE should be more permeable, that the university sector can play an important part in assisting us with the elevation of practical learning, and that we do not need to see this as an either/or, as it is sometimes seen. He is the personification of how one can be both a practical achiever and an academic.