Youth Unemployment

Lord Bhattacharyya Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord Bhattacharyya]

My Lords, I thank my noble friend Lord Adonis for securing this debate. As a former apprentice school governor, I declare my interest as chairman of Warwick Manufacturing Group and of being involved in industry all my adult life. This subject is very close to my heart.

My noble friend has set out the scale of the crisis. To take just one example, last year saw a 15% increase in long-term youth unemployment. It would be easy and largely justified to blame the Government for that increase, yet youth unemployment is not only a matter of fiscal policy and Work Programme funding. Young people in Britain are particularly exposed because of the structure of the British economy. We know this because youth unemployment was rising well before the financial tsunami.

Britain’s youth unemployment rate increased by a quarter in the three years to 2007, while the economy grew, so for long-term solutions we should perhaps look to countries that have low youth unemployment in good times and bad. Where do they focus? They focus on preparing young people for work. That is where we fail. We abolished our vocational technical colleges with the best of intentions. As technical colleges became universities, many lost their focus on employability for all. Vocational sub-degree courses went and work placements vanished. That was the wrong path to take.

We should look instead at fast-growing Brazil, where the number of students at technical colleges has quadrupled in 10 years, with one in four students doing a degree. Today, the Brazilian Government are building 150 more technical colleges. In Germany, the dual system of vocational education means companies pay to train the young, so they can hire the best workers after they get their Berufsabschluss. For Britain, the best example is perhaps Japan where youth unemployment has stayed incredibly low, even in the “lost decade”. Japanese technical colleges—the senmon gakko—educate a fifth of all school leavers in vocational courses. Tuition at senmon gakko costs more than in most universities, yet many students take a vocational course alongside their degree, such is their value in getting a job.

At secondary level, technical kosen schools which take students to higher education on a vocational path are massively oversubscribed. Both kosen and senmon gakko graduates have outstanding employment rates. In contrast, we in Britain fail too many young people not on track to “traditional” higher education. Employers report low basic skills and young people are too often left with qualifications of little value. I know that the company Jaguar Land Rover with which I am very closely involved cannot get youngsters to go there.

We have discussed this for 30 years and more, yet far too little has changed. As in Japan, we need better technical education at both secondary and post-16 levels. Of course, schools must first give all pupils the essential foundations of technical education, literacy, numeracy and science. We should also encourage innovation in technical education in university technical colleges, which my noble friend Lord Adonis talked about. I am delighted that we will have a university technical college in Warwick, but Britain needs more like it; we should have hundreds of them.

Next, we must transform vocational education after 16. There is huge demand for skills that are worth something in the jobs market. Young people apply for quality apprenticeships in huge numbers, but we have far too many useless skills providers. An easy way to make money is to set up as a training company, latch on to a funding body and provide some low-level vocational “qualification”. Sadly, we saw examples of this during the jubilee. To stop this, the Wolf report proposal of letting funding follow students rather than courses will reduce incentives to offer confetti qualifications.

Finally, we must introduce the values of the Japanese senmon gakko into all our higher and further education colleges. We need more flexibility, more modularity and more integration between courses and the jobs market. Some may protest at the factory floor arriving in the groves of academe. However, a law degree from Cambridge is also part of a well rounded vocational education. For apprentices as well as lawyers, vocational education must be a path to the top, not a dead end.

Young people are ambitious. We must be with them and create a route from apprentice to doctorate. I am a graduate. I did my apprenticeship and then a doctorate, which was paid for by the company that I worked for. Sadly, we see too many examples of where the Government have failed in this area. There have been many courses. I blame industry, too. It whinges left, right and centre that we do not have enough skills, but it should pay for them. In my case, industry paid. In all other countries, it pays. Of course, the Government must help.