Apprenticeships

Lord Liddle Excerpts

Thursday 14th October 2010 Lords Chamber

[Lord Liddle]

My Lords, I, too, thank my noble friend Lady Wall for initiating this important debate. We have had a lot of interesting and impressive speeches, not least from my noble friend Lord Layard, who has contributed more to public policy in this field than possibly any other single individual, but also from a bevy of noble Baronesses on my side of the House who have spoken from their experience as trade unionists and have given a valuable illustration of the practical benefits that this trade union experience brings to this House.

My own interest in this topic is that I was an adviser to the Secretary of State for Business in the final 20 months or so of the Labour Government and did a lot of work in this field at that time. I came to the view that, while the Labour Government had done so much, there was still an awful lot more to do. This became more critical after the 2008 crisis when it was clear that we needed to rebalance the British economy and move to real engineering from financial engineering. We will not do that unless we do something about our apprentice and technician training in this country.

There is also a social issue. We need to find a way of providing decent jobs for people in this country who do not go to university. What we see is a terrible hollowing out of our labour market. There was a disappearance of what I call decent working-class jobs in the previous generation. In the knowledge and service economy we get a polarisation, with earnings racing ahead at the top and, at the bottom, many people in work but poor at the same time. The jobs in the middle that provided decent opportunities have disappeared. The only way we can rebuild that is through much more focus on apprentice and technician training. It is a mammoth economic and social challenge. The noble Lord, Lord Wakeham, was absolutely right: it has been a challenge for Britain for more than a century but it is even more urgent now.

The fact that it is urgent is accompanied by a great fear that in the coming public spending cuts the resources for investment in this key challenge for Britain simply will not be available. I add a few reflections of my own on how the Government might try to avoid such a situation. First, it is essential that if the apprentice guarantee is to be effective, we have to get the schools much more involved in a vocational curriculum from a fairly early age. People talk about a vocational curriculum but it is a little more expensive to provide than so-called academic learning. As the per capita payments to schools are squeezed, which I fear they will be, there is a danger that the money for the expansion of vocational education will also be squeezed. I have a suggestion and I would like to hear what the Minister thinks about it. A pupil premium for children from disadvantaged backgrounds has been talked about. It is a good idea but let us have a premium for schools that not only take in a disproportionate number of children from disadvantaged backgrounds, but deliver good vocational outcomes. We need to give priority to that in our school system.

Secondly, we have to use the money that is available for training as effectively as possible. The Labour Government concentrated a lot of money on basic skills and level 2 qualifications. There is a very strong social case for that. However, we ought, in a period when we have to be rigorous about our priorities, to focus on apprenticeships and workplace training. We have to provide better support than we so far have for advanced apprenticeships, as well as level 2 apprenticeships. When I was in the department, the idea of public support for advanced apprenticeships always caused much difficulty with the Treasury, which had a doctrine of market failure. Its view was that market failure applied at the bottom of the labour market but if apprentices were needed higher up the scale, surely employers would spend the money to provide the apprentices themselves. I do not think that has worked in practice for a long time. We must do something about it.

We have to focus the available money on building partnerships with groups of employers to provide apprenticeships. The noble Baroness, Lady Drake, used the wonderful phrase “collaborative intervention”. We must encourage more collaborative intervention by government to get employers to act. I agree with the noble Lord, Lord Sugar, that public procurement is a possible lever here. I also agree that we should be looking at so-called licences to operate as another vehicle—basically saying that you cannot do a job unless you have a proper qualification. When there is great pressure on public finances, the case for statutory intervention in this area, particularly on a sectoral basis, becomes a lot stronger in order to get employers to work together. We—certainly noble Lords on these Benches—will have to look at that again.

Thirdly, we need to develop ladders of opportunity between basic apprenticeships, advanced apprenticeships, technician classes and between level 3, level 4 and degrees. I know that there are many problems attached to the Browne review but I was thrilled by its recommendation that the discrimination against part-time students that exists in the present system should be ended. That was a very positive feature of the Browne review. I rather agree with my noble friend Lord Bhattacharyya that we could make progress by enabling people to get loans for apprenticeships as well as for degrees. The fact that these loans are not available for apprenticeships in the way that they are for undergraduates is disgraceful discrimination against the working class.

We also need expansion on the part of universities that concentrate on teaching—the post-92 universities. I am a director of one in Cumbria. They must focus much more on developing bridges between apprenticeships, technician classes and degrees. Those institutions will need a lot of help to make that adjustment. I should like to feel that the Government are aware of that need and will act on it. We should put apprenticeships at the centre of our economic and social policies. We need stronger partnerships with employers; to put funds and choices in the hands of students; to have real workplace experience in apprenticeships; and to develop pathways to advanced and higher levels of excellence. Only if we do these things will we have some hope of achieving the resurgence of private sector dynamism and jobs growth on which the coalition Government’s future certainly depends.