Construction Industry

Lord Macdonald of Tradeston Excerpts

Thursday 23rd October 2014 Lords Chamber

[Lord Macdonald of Tradeston (Lab)]

My Lords, as my noble friend Lord O’Neill of Clackmannan said in opening this splendid and vigorous debate, construction across the UK has a workforce of around 2 million, and a need for a constant supply of new labour with vocational skills and technical expertise to meet the demands of architecture and infrastructure that can be on the frontiers of radical design.

In the UK we are not short of ambitious projects. We on these Benches also welcome the promise of job creation implied by Labour’s commitment in support of the Lyons report target of increasing housebuilding and new homes. However, the urgent question is: how will the industry recruit enough workers, given the widening skills gap? The forecasts are alarming, as my noble friend Lady Prosser said in her excellent contribution.

Earlier this year, a cross-party group of parliamentarians, co-chaired by the noble Lord, Lord Best, and Nick Raynsford MP, published a report, No More Lost Generations—Creating Construction Jobs for Young People, which concluded that the expansion of construction over the next four years would create 180,000 new jobs. It also warned that about 400,000 building workers would retire over the next four years and would have to be replaced. That potential recruitment of almost 600,000 workers on present trends, across the next Parliament, is a huge challenge but also a great opportunity.

Many noble Lords will, I am sure, share my admiration and appreciation of the contribution made by migrant workers to our construction industry, particularly those from central and eastern Europe who are presently concentrated in London and the south-east. However, the years ahead offer a real opportunity to ensure the increased recruitment of young people from the UK. There is support now, across all parties, for more vocational training and for more apprenticeships, as we will no doubt hear in the debate that follows this one.

The annual apprenticeship starts now total just under 500,000 a year overall in the UK. Regrettably, the construction industry’s contribution to that total last year was just 7,300, which was only half the number for 2009. As my noble friend Lord O’Neill said, these are thorough four-year apprenticeships, and very desirable for young people. The Best-Raynsford report, which has the support of the Chartered Institute of Building and the Construction Industry Training Board, also points out that construction employs a smaller proportion of younger people than the UK economy as a whole—only 10% of those in the industry are aged between 19 and 24. The report suggests that the public sector should make more use of the levers available to it through procurement contracts and through planning processes to require training and employment commitment to apprenticeships from employers—a strategy that I trust a Labour Government would support. This route could also be used to explore a move towards greater diversity in gender and ethnicity in construction—a priority, given the very small proportion of young women being recruited.

Perhaps a positive initiative is the setting up of an apprenticeship commission, again with cross-party leadership, under Robert Halfon MP and my noble friend Lord Glasman, with backing from the Construction Industry Training Board, serviced by the think tank Demos. The chief executive of the training board, Adrian Belton, wants to see 120,000 new apprenticeship starts over the coming five years. That would be an average of 24,000 starts a year, which is certainly an improvement on the current 7,000 a year. The recently published review of innovation and industry strategy by my noble friend Lord Adonis, Mending the Fractured Economy, recommends devolving £6 billion from Whitehall, partly to strengthen local enterprise partnerships and increase investment in local housing, transport and adult skills.

Commitment to the key policies in the Adonis review will no doubt feature in the manifesto of the Labour Party next year, and I hope that it will then be implemented to boost construction of housebuilding and infrastructure, and to offer apprenticeships to the many thousands more young people whom the industry should be aspiring to employ and train. Will the Minister please update the House on what progress the Government believe they are making to address the growing skills gap through recruitment and training and the provision of apprenticeships?