Skills: Importance for the UK Economy and Quality of Life

Lord Harrington of Watford Excerpts

Thursday 9th May 2024 Lords Chamber

[Lord Harrington of Watford (Con)]

My Lords, it gives me the greatest pleasure to follow my noble friend Lord Elliott’s maiden speech, to which I will return a bit later. First, I thank the noble Lord, Lord Aberdare, for allowing us to have this debate. Of all the many speeches, I will refer particularly to that of my noble friend Lord Baker, who I have been a willing acolyte and devotee of for many years. I congratulate him on the work he has done for the UTCs. We have heard an excellent maiden speech from my noble friend Lord Marks of Hale—which is the wrong side of the Pennines to me, as well as to my noble friend Lord Elliott. I look forward to many contributions from him in the future.

I must briefly return to my noble friend Lord Elliott, because our lives have a lot in common. I am following him today, but he followed me to Leeds Grammar School, which we both attended—unfortunately for me, with a 20-year gap. He chose to be Lord Elliott of Mickle Fell, which, as he explained, is where his grandparents come from. It has a link with Leeds Grammar School. My noble friend referred to it as one of the highest peaks in Yorkshire. For me, it was a place of terror and one where I had absolutely no skills whatever; it was the location of our school outward bound centre, which I am sure my noble friend thrived at. For me, I promise your Lordships, it was not the highlight of a school career.

Our paths crossed again in later life in London. He has shown skills in so many things that he has done, with his work as a policymaker with very successful groups, such as the TaxPayers’ Alliance and others, for which he deserves absolute credit. I wish in 2016 he had used his skills in, from my perspective, a rather better direction than Vote Leave. He did say he was not going to mention Brexit, and I will not, but I have remained, and remain to this day, a major fan of the noble Lord, Lord Elliott. The work he has done has always been to do with business and jobs, as typified now by the Jobs Foundation that he mentioned.

I speak in this skills debate as a person who prided myself, in my business life, on training apprentices and giving people opportunities in life. Luckily enough, in my political life, my first job was as an apprentice adviser to David Cameron in 2011. That was probably because he could not fit me in to promote me to be a Minister at the time, but I took it as being very important. With Nick Boles and others, I worked on the apprenticeship levy. The apprenticeship levy, to me, was an excellent idea because it felt that, if businesses were paying to train apprentices, they would in fact hire apprentices. It sounds very simple, but very good in theory. It was only some years later, when I reappeared as Business Minister, following other jobs, that I found most meetings I attended had people criticising the apprenticeship levy. It did have its faults—and it does have its faults to this day. But its achievements have been very significant in increasing the number of apprenticeships.

I am delighted to see Robert Halfon here in the Chamber today. He has contributed so much to skills. One of his early jobs in that was probably taking over from me as chairman of the grand-sounding Apprenticeship Delivery Board. Actually, it was all of our responsibility to bring apprenticeships to the forefront of companies that had not considered them otherwise.

Many good things have come from that. We have seen ups and downs with apprenticeships, but the overall trajectory seems very good. We have seen the implementation of a lot of different standards, and apprenticeships in fields that had never dreamed of before. Degree apprentices, banking, estate agencies, accountancy—you name it, a lot of people have been given an opportunity in life that they would not have had otherwise.

I would like to say, though, on the crucial manufacturing sector, which is absolutely at the centre of the skills debate and of most plans to bring about growth in the UK economy, I am very concerned. Starts have gone down from 120,000 to 45,000 per year, according to Stephen Phipson of Make UK, an organisation which has done so much in the training of apprenticeships. We have tried to look into why that has happened, because most people would think that apprenticeships in engineering, manufacturing and things like that are natural types of apprenticeship. There are a number of reasons. It appears that private training companies are dropping out of apprenticeships training. Their costs have gone up dramatically and the figure placed for these apprenticeships—which I think was £26,000 per year—has not increased over the time. Of course, the cost of providing those apprenticeships has gone up, so many have dropped out. We need to recognise this, and to get these firms back into providing apprenticeships.

Secondly, there are other providers, such as colleges of further education; they appear to be dropping out of training these kinds of apprenticeships as well. We have tried to find out why. There are a few technical matters: for example, they are not allowed to use the apprenticeship levy for capital expenditure. Of course, if you are training engineers, the tools and the equipment are extremely expensive. It seems to me rational that they should be allowed to use the kind of money from the levy to facilitate that, because it is as much part of the apprenticeship as the labour.

So we need to look into this carefully. I hope that this Government and future Governments will listen to Make UK and to people who really want to see apprenticeships succeed, because they know how important the skills agenda is to the economy.