Apprenticeship Levy

Jim Shannon Excerpts

Tuesday 11th February 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Gloucester (Richard Graham) for setting the scene. It is a pleasure to follow the right hon. Member for Harlow (Robert Halfon) and to participate in this debate.

I have always been a great believer in education in its many equally important forms. Some people excel in academic subjects, such as science, mathematics, literary subjects, medicine and languages. We need people who excel in all those things, but we equally need people who excel with their hands and understand how a car works, how to make electrics safe, how to build and how to create. Society cannot function without all sorts. That is what the debate is about, as apprenticeships cover many different aspects of life, and that is why I was thankful that the Government recognised the need to push apprenticeships.

One of my constituents, a mother, came to see me about a different issue and told me an interesting story. She said that she tried to save half her daughter’s child benefit each month in an individual savings account. Her reason for doing so was simple. She and her husband both worked, so their children would never be entitled to grant aid, but their wages were not high enough to allow them to put aside much money. Her endgame has stuck with me for the five years since she came to see me: “I need to save as much of my daughter’s child benefit as I can to help her with university or to buy her the tools of whatever trade she goes into. Whatever job she gets, she will have help to be the best at it.” That mother understood the importance not just of academia, but of ensuring that her child would have help to get into a trade if academia was not her calling. Today everyone, male or female, has or should have equal opportunity for an apprenticeship. If mothers are making sacrifices so that they can invest in their sons’ and daughters’ futures in trades, should we likewise invest more? I look to the Minister to address that.

On 6 April 2017 the apprenticeship levy came into effect, with all UK employers with a pay bill of more than £3 million per year paying the levy. The levy is set at 0.5% of the value of the employer’s pay bill, minus an apprenticeship levy allowance of £15,000 per financial year. The levy is paid into an apprenticeship service account, and funds in the account have to be spent on apprenticeship training and assessment. The Library briefing states that since the changes in 2017

“there has been a large fall in the number of apprenticeship starts, leading to criticism of the levy and other reforms that have been put in place.”

The hon. Member for Gloucester referred to that. In 2016-17, before the changes, there were 900,000 new starts. That system worked. Perhaps the Minister will outline why we cannot revert to a system that seemed to work.

I have read statements that indicate that the quality of training is better under the new system, and I understand the logic behind that. In Northern Ireland, where big companies are scarce, it is imperative that apprenticeships are available in SMEs as well. The hon. Member for Gloucester referred to apprenticeships and SMEs in his introduction. He understands the issue clearly, and I hope we will come to a better understanding.

Apprenticeships are vital for the construction sector in my constituency. I met someone there a few weeks ago and was impressed by what they were doing. The apprenticeship levy that they pay enables them to make a long-term commitment to those they bring on board. Bombardier, part of which was recently bought by Spirit, is committed to apprenticeships. It had some events here at the House of Commons, and its commitment to giving boys and girls opportunities in engineering was great. I was encouraged to meet some of the apprentices.

We now have a Northern Ireland Assembly that is up and running. It is good to see it working, and we look forward to what it can deliver. Whether the responsibility for this matter lies with the Department for the Economy or with the Department of Education, my hon. Friend the Member for South Antrim (Paul Girvan) and I will be in touch with the Minister responsible to push for apprenticeships in Northern Ireland.

In Northern Ireland, 16 to 24-year-olds made up some 89% of participants starting in the academic year 2018-19, and level 3 apprenticeships accounted for some 47% of all participants starting in that academic year. Electrotechnical, engineering and food manufacturing were the most popular frameworks. Males accounted for 71% of all participants, and the proportion of male participants was highest in the level 2 and 3 apprenticeship group at 91%. More than three fifths—62%—of those who left level 2 apprenticeships in 2018-19, up to April 2019, achieved a level 2 framework. More than three fifths—61%—of those who left level 3 apprenticeships achieved a level 3 framework.

I understand that others wish to speak, so I will finish up now. I am convinced that apprenticeships work, but we must make them accessible and attractive to providers. Complicated frameworks and buy-ins are not the way to do it. Sufficient time has passed to make such a judgment, and we must review the funding mechanism. Although this is a devolved matter—the Minister does not have responsibility for Northern Ireland—the ball must start rolling on the review in this place for the sake of those who are labelled as underachieving males, but who in reality need to be given a chance to find their niche and their chance to excel. I hope the Minister will take the opportunity to talk it over with the Minister in the Department for the Economy or the Department of Education in Northern Ireland. It is important that we have uniform rules and regulations in a system that takes in all the devolved Governments in Scotland, Wales and Northern Ireland.