Budget Resolutions

Lord Evans of Rainow Excerpts

1st reading: House of Commons
Tuesday 14th March 2017 Commons Chamber

[Justine Greening]

I pay tribute to the work that my hon. Friend’s local college is doing. She is absolutely right. In order to see a change in the workplace and in careers, we have to start in early education to build the pipeline to make sure that girls, and subsequently women, are going into these careers, which have traditionally often been more male dominated.

This is not just making a difference to the people who are doing apprenticeships; apprenticeships are making a difference to our country. Employers tell us that apprenticeships increase quality and increase productivity, so investing in an apprenticeship pays out for them and their business, and it is paying out for our wider economy. This is only the beginning of our apprenticeship reforms. Next month, we are introducing the apprenticeship levy, which will ensure that by 2020 over £2.5 billion is available to support apprenticeships. Contributing to the levy will mean that employers are, for the very first time, truly fully invested in apprenticeships. This keeps us on track to meet our manifesto commitment of delivering 3 million apprenticeships by 2020.

Apprenticeships will play a key role in delivering the skills that our modern economy needs to level up, but we need to do more to meet the broader challenges that our economy faces. The most successful countries do not just rely on apprenticeships—work-based routes—to get skilled professionals. They also depend on more college-based routes—on technical courses with workplace experience and training as a crucial element. So we will up our game, looking at reforming our technical education system to make it a central plank of how to sustain a growing economy. For decades, our country has neglected technical education, despite the fact that a substantial proportion—over half—of our young people who choose not to go to university take this path. We have never achieved a sustainable strategy because it has never been truly led by employers. We need a strategy that asks businesses what a world-class technical curriculum should look like—that invests in the tools, the teaching and the skills expertise that help young people to navigate the complex web of choices on careers to find the skills and the career that is right for them.

Over many years, we have allowed the technical curriculum to emphasise quantity rather than quality. There are currently around 13,000 separate technical qualifications. In plumbing alone, a young person has the choice of 33 different courses. How on earth are they supposed to know which course is the highest quality, which one is valued by businesses, and which option is the right fit for them? This cannot be right. In recent years, we have made some important steps forward in tightening the requirements for qualifications included in school and college performance tables, but we need to go much further to ensure that technical education is high quality and meets employers’ needs. In place of complexity, this Government are following the advice of Lord Sainsbury and replacing the current system with a streamlined set of just 15 technical skills routes. Each route will be a pathway to skilled employment—from construction to digital, whether bricks and mortar or lines of code—and our standards for each route will be designed and agreed by our best businesses to make sure there is a direct flow through to the skills that our economy needs.

We know that we need investment as well as reform. At the moment, a young person working towards a technical qualification receives a programme of about 600 hours a year, but in countries with the best technical education—Germany, Denmark, the Netherlands, Norway —students train for far more hours per year. If we really are serious about becoming world-class on skills, we need to rival the commitment and investment of the world’s leading countries.

That is why my right hon. Friend the Chancellor announced last Wednesday over half a billion pounds a year of new funding for technical education. It will be used to increase the number of teaching hours for students. As the Sainsbury panel recommended, it will also fund institutions to organise a substantial, high-quality work placement for every technical education student, helping them to apply their skills in the workplace and to prepare for a successful move into employment. In total, this will mean that a student’s programme hours will increase by more than 50%, from 600 hours per year to more than 900. It is no surprise that the CBI has called this Budget a “breakthrough Budget for skills”.

The funding for extra hours will be rolled out alongside the new technical routes, beginning with the first programmes in autumn 2019. Each of the routes will lead to a new certificate, the T-level, which will be a gold standard for technical and professional excellence. The name will remind Members of another prominent qualification, and that is very deliberate. I want there to be no ambiguity whatsoever: this is the most ambitious reform of post-16 education since the introduction of A-levels 70 years ago. The investment announced by my right hon. Friend the Chancellor shows that the Government are committed to making it a success.

[Graham Evans (Weaver Vale) (Con)]

I am very privileged to have my constituency office based at Sci-Tech Daresbury, which is all about technology, innovation and skills. Will the T-level be significantly stronger than existing technical qualifications?

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[Graham Evans (Weaver Vale) (Con)]

It is a pleasure to speak in this important debate and to follow the hon. Member for Clwyd South (Susan Elan Jones). Hers is a fine constituency in north Wales, an area I know particularly well because it abuts my own county of Cheshire. She will know how closely Cheshire MPs work with her and her colleagues in north Wales to benefit the wider economic zone. MPs in Cheshire and north Wales should work together for the betterment of all our constituents. I would like to think that the Budget goes some way towards enabling us to raise tax to invest in infrastructure that benefits our cross-border constituents.

Against a backdrop of global uncertainty, and as we start our negotiations to exit the European Union, the Budget takes forward our plan to prepare Britain for a brighter future. Nine years ago, the UK was one of the economies worst prepared to face the financial crisis; today, it is one of the best prepared. The OBR forecasts that the UK economy will grow by 2% in 2017. That figure has been revised up from the 1.4% forecast in November. The economy will be growing faster than every major economy in Europe, except Germany’s.

Any family could sit around the kitchen table and tell us that we cannot keep on spending more than we bring in; the same holds true for the Government. There is no magic money tree. Britain has debt of nearly £1.7 trillion —almost £62,000 for every household in the country—and we must never forget that, under Labour, £1 in every £4 that was spent by the Government was borrowed.

[Mr Stewart Jackson (Peterborough) (Con)]

Does my hon. Friend agree that it ill behoves the Opposition to oppose every spending reduction over the past 10 years, including every reduction in welfare spending, yet also to make completely uncosted promises that amount to £63 billion?

[Graham Evans]

My hon. Friend is absolutely right. In the previous Parliament, the Opposition opposed every single reform made by the then Government, and they have also opposed all the reforms of the current Government. They call our approach austerity; I call it living within one’s means. We have to take the difficult decisions. Judging by the £30 billion black hole in the Opposition’s counter-proposals, however, they have forgotten the mistakes of the past.

[Callum McCaig (Aberdeen South) (SNP)]

While talking about the need to balance the books, the hon. Gentleman made a bizarre analogy comparing the country with a family. When he is sitting at the dinner table, can he raise interest rates, print money and quantitatively ease? His analogy is completely and utterly defunct.

[Graham Evans]

I did not catch the hon. Gentleman’s final word, but I use that analogy because when I was at school we used to have home economics, and we have to make difficult decisions at home. I was merely making the point that we all have difficult decisions to make. That analogy applies not only to families throughout the country, but to the Government. I am sorry that the hon. Gentleman does not feel it is a good analogy. Perhaps I shall wait to hear his speech and comment on it.

I welcome the Chancellor’s steps to return balance to the country’s finances and to continue the Government’s commitment to take the lowest earners out of tax altogether by raising the personal allowance to £11,500. I sat on the Work and Pensions Committee in the previous Parliament, when the Government’s mantra was helping to make work pay. That is the right course of action to take.

I come to a subject that is very close to my heart, and I declare an interest as the chairman of the all-party group on beer. I welcome the relief of £1,000 for pubs with a rateable value of less than £100,000, which will benefit 90% of pubs. I also welcome the discretionary fund, which enables local authorities to make awards to businesses in their areas on a case-by-case basis. However, I am somewhat disappointed about the inflationary rise in beer duty, which is now 43% higher than it was a decade ago, 13 times higher than the rate in Germany, and significantly higher than those of our major brewing neighbours in Europe. None the less, the Government do have a proud track record of three reductions in beer duty, a beer duty freeze and the removal of the hated beer duty escalator. Although I welcome the introduction of duty bands to target high alcohol-by-volume white ciders to encourage responsible drinking, it is important to remember that 70% of the drinks bought in pubs are beer.

The current bracket for reduced-rate beer sits at 1.2% to 2.8% ABV. However, current HMRC duty receipts demonstrate that, in the six years since the policy was introduced, such beer represents just 0.15% of the market. I know that the Minister will be aware of the cross-industry campaign to split general beer duty rate into two tiers— 2.8% to 3.5%, and 3.5% to 7.5%—and to reduce the duty rate for 3.5% ABV beers, which have much less alcohol in them than the UK average and are highly drinkable for UK consumers. I hope that we can work together on this matter over the coming month to encourage a broader selection of lower strength beers to become part of the norm in UK drinking culture. I will be encouraging the industry to step up to the plate with lower strength beers that can be drunk and enjoyed in the great British pub.

This Government have a plan to build an economy that works for everyone, and the Budget continues with that plan by building on the foundation of our fundamental economic strength. It makes sure that our economy remains strong so that we can properly fund our public services, it helps ordinary working families to make ends meet, and it makes it clear that Britain is open for business.

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[Mrs Hodgson]

I do not want to take anything away from Wales, especially with colleagues from Wales in the Chamber, but duplication does not make any sense, especially when there is so little funding around, and we definitely do not want to take any support away from Nissan. I am pleased that my hon. Friend made that point.

Currently, only a minority of parts used to build a Nissan car are made here in the UK, through a 38,000-strong supply chain workforce across the UK, with 27,000 of those jobs based in the north-east.

[Graham Evans]

What an exciting constituency the hon. Lady represents! My understanding is that one of the reasons Nissan decided to stay in her constituency is the cluster of battery technology companies. Is that true?

[Mrs Hodgson]

Yes—I am pleased that the hon. Gentleman makes that point. Electric battery technology is going from strength to strength. I was very pleased to see that there was an announcement on electric vehicles and battery technology in the Budget.

However, we see a predicament looming on the horizon as we begin to leave the EU—WTO tariffs. Ministers have given countless reassurances that we will strike a deal with the EU that does not mean we have to fall back on the 10% WTO tariffs. Yet only this weekend this was blown out of the water when a leaked document showed the Prime Minister’s willingness to fall back on those terms, regardless of the economic impact they may have. That was then reiterated by the Foreign Secretary on TV, also over the weekend. This would be catastrophic not only for the country but for my constituency and the businesses there. In the case of Nissan, falling back on to WTO tariffs and crashing out of the customs union would cause significant delays on products coming into the country that they rely on.

Another issue is that overseas parts currently used to build Nissan cars would have to be reduced significantly to meet the WTO rules of origin. The Society of Motor Manufacturers and Traders has said that cars need to have 50% local content to meet the rules of origin and be classed as British-made, and that could prove a major problem for Nissan. This is where the materials catapult comes into play. Not only would it reinvigorate the supply chain with innovation, especially in skills and jobs, but it could act as a way to mitigate the issues arising from the potential impact of WTO tariffs on manufacturing. I cannot make this point strongly enough the House: this catapult could also mean potential jobs growth. If we take the case of reducing overseas content in Nissan cars, it could significantly boost the UK supply chain and create tens of thousands of new UK jobs, which could seriously transform the manufacturing sector in the UK. Catapults could help in part to achieve the resilience I have talked about, and I hope the Government will listen and look again at the potential of a materials catapult.