Skills and Growth

Liam Byrne Excerpts

Wednesday 17th June 2015 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This has been an excellent debate. It has been made all the better for the outstanding maiden speeches we heard from the hon. Members for East Dunbartonshire (John Nicolson), for Glasgow Central (Alison Thewliss), for Derby North (Amanda Solloway) and for Northampton South (David Mackintosh) and my hon. Friend the Member for Bradford East (Imran Hussain). I was very glad to hear about the warnings and risks to our line of work from the hon. Member for Northampton South. The hon. Member for Derby North spoke with great courage about the progress we need to make to improve our mental health services. My hon. Friend the Member for Bradford East spoke with real passion and force about the transformative power of education. They all spoke with great wit, great eloquence and great passion, making a mark on both the debate and the House.

What we have sought to do in the debate is put the challenge of productivity centre stage. I am delighted that the Chancellor has now woken up to the productivity crisis that bedevils us, albeit arguably five years too late. The facts are very clear, extraordinary and alarming: there is now a 20% productivity gap between the United Kingdom and our G7 competitors. What does that mean? It means something pretty stark: what the rest of the G7 finish making on a Thursday night takes us to the end of Friday to get done. If this carries on, it will mean something pretty simple for the UK economy. We will become the cheap labour economy of Europe, while the rest of our competitors—we have heard many of those stories today—will continue to streak ahead. Quite simply, unless we grow smarter, we are going to grow poorer. There is no other way of raising living standards in the medium term unless we improve our productivity. It is good that the Chancellor has finally woken up to this issue. In three weeks’ time, he has the chance to set out a Budget that reflects on the contributions we have heard this afternoon and, crucially, does something about it.

The productivity crisis has come around every decade or two in this country since the second world war. In the 1970s we invented a phrase for it. We used to call it the British disease. Right now, the growth in productivity is worse—not better—than it was at the end of the 1970s. The British disease is back and it is worse than ever. The danger is that this is unfolding at a time when our challenges are getting stronger. We are now all pretty familiar with the strength of the education system in countries such as China and in cities such as Shanghai. I commend the Government for seeking to learn what lessons they can about how we improve our education system from some of those new competitors. I think it is next year, however, that China will spend more on science than the whole of Europe put together. Four out of the top 10 biggest global technology firms are now Asian. We are going to fall behind, and fall behind fast, unless we tackle skills and growth with greater vigour.

Across Westminster and beyond, I think there is an acceptance and a sense that reform of technical education is too fragmentary, not ambitious enough and too piecemeal. What we are seeing in some of the Government’s reforms are challenges to every single rung of the ladder. It is not clear whether the EBacc will apply to all students in all schools, such as UTCs. I hope the Minister can clarify that.

The hon. Member for Watford (Richard Harrington) was heroically, and quite understandably, unable to answer that question. We hope the Minister will do a better job.

The number of unqualified teachers in our classrooms is up 16% at the last count. Half of state schools do not send a single girl to do A-level physics. The CBI says our careers service is on life support. As the Minister will know, the number of apprenticeships for under-25s has not risen in the past year, but has actually fallen. The Secretary of State needs to talk far more about the apprenticeship opportunities she is championing in government for 16 to 19-year-olds. It is now widely accepted that it is not enough for the Government to talk about their ambition for the number of apprentices; they have to talk about raising the quality bar too.

A far-too-small number of apprentices go on to degree-level study. I know the Minister is working hard on this, but it is simply not good enough, as my hon. Friend the Member for Dudley North (Ian Austin) pointed out, that only 2% of apprentices go on to degree-level studies. At the moment, 70% of higher apprentices go to over-25s, and there has been a 40% fall in the number of people studying for HNCs and HNDs. As a result, the skills gap is getting wider and wider. The chief executive of Jaguar Land Rover, Mike Wright, says that there is a 40% gap every year in the number of qualifying engineers. My hon. Friend the Member for City of Durham (Dr Blackman-Woods) set out with tremendous eloquence what damage that is doing to the fabric of our economy.

Of all the challenges, however, perhaps the most serious is that the Government seem hellbent on destroying the spine of the technical education system—our further education colleges. This afternoon we have heard powerful testimony about the damage being wrought all over the country. My hon. Friend the Member for Birmingham, Perry Barr (Mr Mahmood) spoke with his customary eloquence about the impact of the 24% in-year cut to the adult skills budget. It is hard for cities such as Birmingham to move people up the skills ladder when every rung of that ladder seems to be being broken. He was absolutely right to set out the extraordinary work that colleges such as South and City College Birmingham and Birmingham Metropolitan College are doing, but they are doing it despite the Government, not because of them.

[Antoinette Sandbach (Eddisbury) (Con)]

The right hon. Gentleman’s words might have more credence were Labour not doing the same in Wales to further education colleges there. It is clear that cuts are being delivered and that qualifications, particularly in STEM subjects, are not being achieved in Wales.

[Liam Byrne]

The hon. Lady cannot evade the fact that a 24% cut is being delivered to adult education budgets across our country. Right now, colleges and college leaders all over Britain are saying to right. hon. and hon. Members that many colleges are about to fall over. If the Minister is serious, as I hope he is, he has a judgment day coming at him in three weeks. If the Chancellor stands at the Dispatch Box and does not deliver a sensible, sustainable settlement for further education, I fear that the Minister’s ambitions for the future of the technical education system will come to naught.

My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) set out the horrifying scale of cuts to the City of Liverpool College. I cannot believe that such a college is having to lose 1,300 places at a time when the prospects for regeneration in Liverpool are pretty good. My hon. Friend the Member for Dudley North talked about the catastrophe unfolding at Dudley College, which is doing anything and everything to help people in Dudley get up the skills ladder, get qualified and get better jobs, and again it is doing that despite the Government, not because of them.

My hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) has not been in the House long, but she made a powerful speech about the damage being wrought to Tameside College and the denial of opportunities she is already seeing in her constituency. The right answer would have been to protect the 16-to-19 education budget, which would have delivered a £400 million uplift to further education over this Parliament.

The Government will have to make a decision in three weeks’ time. Are they serious about backing the Secretary of State for Education in her ambitions? Are they serious about backing the Minister for Skills in his? It will be decision time, and Ministers will be judged on whether the Chancellor delivers.

[George Kerevan (East Lothian) (SNP)]

Does the right hon. Gentleman agree that one of the prime examples of the lack of numeracy in the United Kingdom workforce that is undermining our productivity is the inability of Conservative Members to make any association between the massive cuts that they are introducing and the reduction in the skills base and skills training in this country?

[Liam Byrne]

The hon. Gentleman is absolutely right. The same case was made earlier, with some force, by my hon. Friend the Member for Cambridge (Daniel Zeichner).

There has been an improvement in the youth unemployment figures, but they are still too high. [Interruption.] The Secretary of State should listen, because it is in towns such as her constituency of Loughborough that employers are “sponsoring in”. This country imported 300,000 people over the course of the last Parliament because firms were able to prove that there was a skills shortage here, and I am afraid that that gap, and that pull, will only increase unless the Secretary of State weaves her magic with her right hon. Friend the Chancellor in three weeks’ time. Where initiatives such as the northern powerhouse are creating the opportunities for which we pray, those initiatives will come to mean nothing to families unless we give local people the skills that will enable them to do those new jobs.

Last week, in Westminster Hall, the Minister reflected thoughtfully—as he often does—on his ambition to agree strategic principles for the long term to underpin reform of the technical education system. Our motion this afternoon, which has been welcomed by the Institution of Mechanical Engineers, gives him a chance to seize that opportunity with both hands, and I hope that he will take up the offer to agree on principles that could reform the system for a generation to come. There are points of consensus, a couple of which were identified by the hon. Member for Watford in what was a very thoughtful speech.

Over the last year, my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) and I have set a number of principles, which I offer the Minister this afternoon. First, there must be a broad and balanced curriculum in our schools. That will be harder to deliver at a time when school budgets are being cut by 10%, and at a time when there is ambiguity and confusion over whether every pupil in every school is required to take the English baccalaureate. Secondly, we need to rebuild the careers service in this country. Modern economies need strong careers services in schools. There is an obvious place to look for the money: £50 million could be taken from the widening participation fund.

Thirdly, there must be huge support from the Government for the city apprenticeship agencies that are being established by Labour councils such as those in Leeds and my home city of Birmingham. They are important, because they help small and medium-sized enterprises by finding young people who want to take up apprenticeships. SMEs are creating most of the jobs in our economy today.

Fourthly, there must be more specialisation and quality in further education, which will require a sensible funding settlement. That is the only way in which we can set good examples such as Prospects College of Advanced Technology, or PROCAT, which was mentioned earlier. Fifthly, we must allow more apprentices to study skills to degree level. We cannot simply pass a law to deliver parity of esteem between apprenticeships and degrees. We must create a system that will allow more than 14,000 apprentices a year to proceed to higher-level skills.

When we live in a country where those who are retiring are more literate than those who are coming into the labour market, we face a very serious challenge, and, this afternoon, no one described that challenge better than my hon. Friend the Member for Dudley North. The challenge of technical education has long frustrated us in this country. It was back in 1944 that Lord Percy said, in a report that he delivered to the Government, that

“the position of Great Britain is being endangered by a failure to secure the fullest possible application of science to industry… and…this failure is partly due to deficiencies in education.”

We do not want that conclusion to be delivered again in 50 years’ time.

I hope that the Minister will take it on himself today to deliver a level of consensus, agreement and support for the motion. I hope that generations to come will look back on days like today and say, “That was the moment when partisan differences were put aside, and the parties decided to come together to rise to the challenge of the future.” I commend the motion to the House.