Business: International Competitiveness

Lord Young of Norwood Green Excerpts

Thursday 16th January 2014 Grand Committee

[Lord Young of Norwood Green (Lab)]

My Lords, I, too, congratulate the noble Baroness on introducing this debate on a vitally important topic. It has been fascinating to see and hear the different perspectives. I did not take issue with many of the points raised by the noble Baroness. She mentioned the Patent Box, and we ought to claim a bit of the credit for that for the previous Government, whose idea it was.

However, I stumbled a bit when she confessed her desire to increase the number of grammar schools. As an ex-grammar school student myself, I must admit that the quality of my education was good, but I do not think that in the 21st century that is really the answer to our problems. We are far more likely to succeed with the model of university technical colleges which the noble Lord, Lord Baker, has been proselytising, if we are serious about inspiring the next generation of young people to get involved in craft and engineering. That seems to me to be a much more important way forward than trying to reintroduce grammar schools.

The noble Baroness also made the point about job creation, and one public sector job lost and four new jobs in the private sector. Of course we welcome the expansion of jobs in the private sector, but with some of them there is a price to be paid. A significant number are not full-time jobs but part-time jobs, and they do not actually fulfil the requirements of many people who need a full-time job. I do not quarrel with the expansion of jobs in the private sector, but we ought to get it into perspective.

Similarly, there is the question of the importance of education and apprenticeships. Of course, I applaud the work of the Government in building on our rejuvenation of what was in fact a dying apprenticeship scheme. My only problem with the current approach is that there is sometimes a desire to quote numbers. However, many of them, as we found out from examination, are adult apprenticeships which are really reskilling rather than being real apprenticeships. For me, with 1 million young people unemployed, the real focus ought to be on the age ranges of 16 to 24 and 16 to 18.

As has been said, a number of companies are doing well in recruiting apprentices—names such as Jaguar, Range Rover and Rolls-Royce. Yes, they are success stories, but far more worrying is the fact that still at best 8% of British companies have apprentices—that is the real nub of the problem, if we are serious about improving our skills—and still only one-third of FTSE 100 companies have apprentices. We have a long way to go in promoting that. There are still too many companies that believe that training is some other company’s problem, not theirs.

A couple of things have not been mentioned in this debate that interest me. One is the quality of management. We still have some way to go. I forget the exact figures from the Chartered Institute of Personnel and Development, but it was something like one in five managers having any training. So if we are serious about addressing the quality of the products and productivity itself, then surely that is one of the things that the Government need to focus on: improving the quality of managing.

I cannot help reflecting on another issue that no doubt impacts on Britain’s ability to export, and that is the cost of energy. We are all struggling with how we are going to deal with fracking and shale gas but I do not believe that we can ignore it. Look at what has happened in the States: the impact of low energy costs is not insignificant. I do not want to spoil the debate by focusing on the negative but a number of contributors today have indicated that we are not doing as well as we should be. The noble Lord, Lord Green, said, in relation to the nature of the recovery, that it was fragile. There is still a worry that the level of debts and the housing bubble are not really what we seek to do. If we are talking about sustainable growth then surely it does not matter which party you are a member of, but the latest figures are still worrying.

I look forward to hearing from the Minister whether he thinks that—I conclude on this—the biggest constraint that businesses have with regard to expanding and exporting is the thorny question of credit finance. A number of noble Lords have pointed out that the current efforts by the Government have not remedied this problem, but the latest proposal for a small-owned business bank itself may not be sufficient. I think it was the noble Lord, Lord Paul, who drew our attention to the German model. Whichever model we create, we must ensure that it delivers on what British businesses, especially small businesses, require, and that is reasonable rates of credit and finance.