Apprenticeships (Small Businesses)

James Morris Excerpts

Thursday 9th June 2011 Westminster Hall

[Richard Graham]

My hon. Friend is absolutely right in what he says, although at some point in the debate we should touch on the removal from employers offering apprenticeships of the freedom to have the training element provided in the workplace. The new rules require 30% of the time to be spent away from the workplace, which for some employers is not necessarily practical. My hon. Friend and others may wish to comment on that as the debate continues.

The National Apprenticeship Service has provided the key facts. There are now more than 85,000 employers nationally offering apprenticeships in more than 130,000 locations, with almost 200 frameworks. That is highly encouraging. The statistics about employers who take on apprentices finding that it is a worthwhile thing to do are even more encouraging, with 80% agreeing that apprentices make their workplace more productive, which of course is ultimately the test in terms of the business growth element of the equation. Some 83% of employers who employ apprentices rely on those apprenticeship programmes to provide the skilled workers whom they need for the future.

The question for this debate is whether the take-up of apprenticeships by small businesses is quite so encouraging. I do not have the range of national statistics to argue the case as strongly as I would like to today, but I am sure that the Minister will share with us some of the Department’s research. I know that the Federation of Small Businesses has estimated that take-up by small businesses is only 8%. Anecdotally, in my own constituency and my own county, it is true that it is much harder to persuade a small business with fewer than 12 employees to take on an apprentice than it is to persuade, say, a company with 100 employees.

[James Morris (Halesowen and Rowley Regis) (Con)]

My hon. Friend is making a very important point. One of the things that I have been trying to do in Halesowen in my constituency is to work with the further education college to develop specific engagement programmes for small business to overcome the barrier that my hon. Friend has correctly identified. I still see a very important role for FE colleges in reaching out to the small business community in local areas.

[Richard Graham]

Yes. My hon. Friend is absolutely right to say that FE colleges have a critical role to play, as do some of the smaller, specialist training providers. A question for us all to consider—I am sure that my hon. Friend has done this in his own constituency—is the extent to which courses offered by further education colleges can be effectively tailored to the requirements of small businesses. Quite often, some of the courses—this is where the questions of the framework structure and the sector skills bodies come in—are fairly specific and technical, and small businesses often require an apprentice to take elements of a business administration course, elements of a marketing course and elements of other courses. So there is a question about whether there is an adequate structure of training to cater for small businesses, but I absolutely agree with my hon. Friend that further education colleges have a crucial role to play.

Moving away from apprenticeships in general and their take-up nationally, and coming on to the small businesses sector specifically, I believe that there are just less than 5 million small businesses in the UK, of which more than 3.5 million have sole proprietors. An astonishing statistic is that 97% of UK companies employ fewer than 20 people, and 95% of them employ fewer than five people. That shows us that one of the key drivers in all our constituency economies is the extent to which small companies that employ fewer than five people feel able to take on an additional person.

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[Mr Marcus Jones (Nuneaton) (Con)]

Thank you, Mr Davies, for allowing me to make what I hope will be a short but important contribution.

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this extremely important debate. He has made a positive, well-thought-out and comprehensive contribution, which goes to show just how much he cares—as, it seems, do a number of Government Members—about this extremely important subject.

I also want to take this opportunity—I do not often do this in my contributions to debates—to congratulate the Government, and particularly the Minister, on grasping the nettle and backing apprenticeships in this country. It will be an absolute honour to welcome him next week to the excellent North Warwickshire and Hinckley college in Nuneaton, where I am sure he will promote apprenticeships with the same vigour and enthusiasm with which he promotes them in the House. I am proud of that.

I am proud to support apprenticeships, because it is apparent that they are extremely important. Some 80% of people who employ apprentices say that the workplace is a more productive place as a consequence, and 81% of consumers favour using a company that employs apprentices. People of all ages understand the concept of an apprenticeship and, importantly, it is an excellent vehicle for getting young people into a proper career.

Bearing in mind the importance of tackling the huge problem of youth unemployment in our country at the moment, I will focus my comments on younger people. It is a real pity that that problem was not properly recognised by the previous Government, who presided over a huge increase in youth unemployment and a huge increase in the influx of foreign labour, which filled the skills void that we had when the economy was in better shape, leaving thousands of our young people on the scrap heap. I commend the shadow Minister for his attendance here today, but it is a damning indictment of the lack of seriousness and enthusiasm on the part of Opposition Members that none of them, apart from him, is here today.

While extolling the virtues of apprenticeships we must also acknowledge that not all is totally well in the proverbial rose garden. A large rump of employers in our country consider apprenticeships inappropriate for their organisations. I have been looking into that and, according to the Chartered Institute of Personnel and Development, 68% of companies say that that is the case. In some instances, those companies may be correct, and there are a number of situations in which it is wholly inappropriate for businesses to employ apprentices. However, I suspect that in many others instances that is not the case, and that there are many situations in which apprentices could be taken on. Employers and business people view most things on the basis of risk, and they take a view looking at the particular risks of taking on younger people and at the barriers to employing apprentices and to developing their talent.

I want to highlight two issues in relation to risk. First, employers see a risk in taking on a young person who is untried and untested in the workplace. As Members of this House, we need to acknowledge that although many young people take to the working environment like a duck to water, many do not, as my hon. Friend the Member for Gloucester has mentioned.

[James Morris]

My hon. Friend is making a series of powerful points. On young people not being ready to take up apprenticeships in small businesses, it is important that we consider the potential role of the voluntary sector. For example, the YMCA and other organisations enable young people to develop skills before they take up apprenticeships, which is an important part of the mix.

[Mr Jones]

As usual, my hon. Friend has made a pertinent comment, which brings me on to my next point. Useful work experience can be obtained in voluntary organisations. Similarly, I am a firm believer in part-time work, in which I was active in my younger days, particularly when I was at school and college. Part-time work is invaluable to young people in developing soft skills—my hon. Friend the Member for Gloucester mentioned that earlier—and in relation to integrating into and learning about the workplace environment, which, to be perfectly frank, is completely different from a school or college environment. Young people going into a workplace are not dealing with teachers or their peers; all of a sudden, they are working with people who have been involved in the industry for many years and are not accustomed to somebody fresh and green from a school environment.

We must acknowledge that opportunities for part-time work for our young people, although important, are extremely limited. Although I acknowledge that we must do all that we can to keep our young people safe and ensure that they are not exploited in any way, we must consider the regulations that many employers face when employing youngsters part-time, which go far beyond health and safety. I received a useful briefing on employing children from the House of Commons Library, and I was astounded by the number of regulations that it contained. I would be surprised if many employers knew those regulations. If they did, it would frighten them to death to take on any young person part-time.

For example, the document states that young people may not deliver milk or work in a butcher shop. When I was that age, many of my peers did such work. I delivered milk with the Co-op milkman—I am not sure whether the milkman should have allowed me to deliver milk with him, but I went out and delivered it all the same. Many of my peers at school used to work for one of the local butchers part-time, and they gained invaluable experience. If we are to enable our youngsters to gain such invaluable experience now, we must ensure that we look carefully at the regulations to ensure that we put barriers in the way only when absolutely necessary. We must also consider removing a great deal of the bureaucracy, including what appears to be a draconian reporting culture, that employers must undertake. Does the Minister think that it is a healthy position effectively to bar youngsters from taking on many part-time jobs? Does he not agree that we should free up regulations in a sensible way?