Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [ Lords ] (First sitting)

Peter Swallow Excerpts

Committee stage
Thursday 13th March 2025 Public Bill Committees

[Neil O’Brien]

That is a perfectly good question. Of course, this Government are a big fan of quangos and have, I think, created—net—28 more quangos since it came to office. Some can be the right thing to do, so I am not necessarily criticising the Government for that. In this case—I cannot remember if the hon. Lady was around when we were creating the apprenticeship levy—the reason why it was made independent of Government and an employer-owned body was that we were, for the first time, creating something that is quite common in the rest of Europe, the apprenticeship levy.

The levy is intended to stop—to be blunt—good employers who invest in their workforce and the skills of their workforce being taken advantage of by those who do not. That meant doing something controversial, which in effect was requiring them to pay into the levy—in many ways, it is like a tax—but they could get their money back through the apprenticeship levy. However, in return for that big change, requiring larger employers to put their own money into skills, we wanted to ensure that the whole thing would be truly employer-led, rather than politician-led.

Of course, current Ministers are brilliant—this is not any criticism of them—but we legislate for the ages, not for whoever is currently the Minister. Ministers change, and sometimes there have been instances—I am horrified to tell the Committee—where politicians have foibles or funny ideas of their own, which are not necessarily reflected in the wishes of employers and what they want from the skills system. That was why we put the system more into the hands of employers.

[Peter Swallow (Bracknell) (Lab)]

It is interesting to hear the shadow Minister speak about business’s view of the apprenticeship levy. When I speak to businesses in my constituency, they tell me that the apprenticeship levy was not flexible enough and was not working, and it was preventing them giving opportunities to young people. That is exactly why so many businesses have welcomed the changes that this Government are bringing in. Has he not heard the exact same from businesses in his constituency?

[Neil O’Brien]

Even before we set up the levy, I always heard employers expressing concerns about the idea of a levy of any kind. In many instances, they would prefer just to keep their money and not spend it on skills at all. The fact that they were not spending on skills is the reason why we brought in a levy—it was quite a contentious thing, and quite a centrist thing in lots of ways.

As the Institute for Fiscal Studies pointed out in its recent paper on the Government’s proposals to change the levy, the danger, if we start to make these things too open-ended, is that we completely collapse the concept. It notes what happened with things before, such as Train to Gain, where what we end up with is pure dead-weight—we get zero additionality.

To reduce the idea to absurdity, if we were to say that employers can spend the apprenticeship levy on whatever they like, there is no point in having a levy, is there? That is because we would have just gone around in a circle. There is no point taking money off people and saying, “You can do whatever you want.” The whole point of containing that expenditure to apprenticeships was, as well as wanting to prioritise apprenticeships, to avoid the very real problems that the Institute for Fiscal Studies pointed out with previous schemes such as Train to Gain, where we ended up with huge amounts of dead-weight. It did not work, and the amount of money spent by employers on such things went down.

I am absolutely ready to hear criticisms of, and improvements to, the idea of the levy. In a moment, I will talk about some of the challenges that will be thrown up by the Government’s proposals to move large amounts of money out of apprenticeships through the reforms to the levy.

--- Later in debate ---

[Damian Hinds]

I am very grateful; who knows where this conversation might take us? Last time I looked, 1563 was not in the past five decades. The hon. Lady says that every generation should try to reform, and that may well be true. I do not know how many generations she calculates there are in a 50-year period, but as sure as anything, there are not 12, let alone 13.

Those many bodies over the years have been mirrored by a true panoply of qualifications and awards: traditional apprenticeships; modern apprenticeships; the YOP or youth opportunities programme; the YTS, or youth training scheme; City and Guilds; the TVEI, or training and vocational education initiative; the NCVQ or National Council for Vocational Qualifications; NVQs or national vocational qualifications, which are still in use; GNVQs, or general national vocational qualifications, which became BTECs and diplomas; the 14-to-19 diplomas, which are not quite the same thing as the Tomlinson diplomas; Skills for Life; traineeships; and all together between 100 and 200 recognised awards and organisations, excluding those that do only end-point assessments.

[Peter Swallow]

rose—

[Damian Hinds]

I have not forgotten another one, have I?

[Peter Swallow]

I simply wish to say to the right hon. Member that it was not too long ago when he was on the Government Benches and presiding over the very system in question. As he has helpfully elucidated for everyone, we are dealing with an incredibly fractured landscape, which is precisely the challenge that the Bill proposes to address. In all frankness, given the fractured nature of the landscape, which he eloquently identified, should he not support any attempt to bring it together?

[Damian Hinds]

Yes, but the Bill does not do that, and if the hon. Member thinks it does, I am afraid he is mistaken.

Some years ago, I used to sit on the Government Benches and was a Minister at the Department for Education, as the hon. Member said, and on many occasions I have had a close interest in these areas. There was a cross-party coming together in the early to mid-2010s, which resulted in the Sainsbury report. The noble Lord Sainsbury, as the hon. Member may know, is a Labour peer who devoted a great deal of his life and the work of his foundation, the Gatsby Foundation, to trying to improve something that in this country, historically and by international comparison, we have not been tremendously good at: technical and vocational education and training. The Independent Panel on Technical Education, which convened in 2015 to 2016, took a broad overview of exactly the fractured landscape that the hon. Member talked about. By the way, I have missed out the page of my notes where I was going to go through all the qualifications that someone could do at level 3 to age 18, which is a similarly sized list.