Employment and Training

Rebecca Smith Excerpts

Monday 6th July 2026 Commons Chamber

[Rebecca Smith (South West Devon) (Con)]

This draft order will allow the Engineering Construction Industry Training Board, known as the ECITB, to continue collecting a levy on employers in order to fund training and address skills shortages. The engineering construction industry underpins many of the services that we rely on every day: heating our homes, supplying clean drinking water, or providing the energy and fuels that keep our economy moving. The levy helps to ensure that we have the skilled workforce needed to build and maintain critical infrastructure, a workforce essential to the UK’s future energy security and economic growth.

The order continues the board’s established approach of setting levy orders for a three-year period. Under the proposals before us, the levy rates for employees working on site will remain at 1.2% of total enrolments and rates for off-site employees will remain at 0.33%. That is unchanged from the 2023 levy order. As we have heard, exemptions will continue to be in place for smaller employers.

This draft order is particularly relevant to my constituency. Devonport dockyard, in the neighbouring Plymouth Sutton and Devonport constituency, and its supply chain provide thousands of highly skilled engineering and construction jobs across Plymouth and the wider south-west. Indeed, the UK’s continuous at-sea nuclear deterrent has been maintained from Plymouth for over 70 years and will need a trained workforce—something that Team Plymouth is working hard to deliver. As major investment continues in defence and nuclear infrastructure, it is critical that we maintain a steady stream of skilled engineers, technicians and apprenticeships.

I can confirm that we Conservatives will not oppose the order. However, this debate is a useful opportunity to scrutinise the Government’s plans to address the issues with recruitment and retention.

As the Minister has already said, the training levy clearly commands industry support, with 85% of levy-paying employers voting in favour of it in 2025, representing 98% of the levy paid. The levy system plays a vital role in developing a consistent pipeline of home-grown engineering construction workers. According to research commissioned by the ECITB in 2024, 65% of employers felt that, without the levy and grant system, the training would not take place. In an increasingly fragile geopolitical climate, it is vital that we have a well-trained domestic talent pool across those sectors.

The levy works because it is driven by industry need. Companies understand their workforce requirements far better than Whitehall ever could, and we should be empowering businesses to create jobs, not burdening them with ever greater costs and then attempting to compensate through Government schemes that seek to manage the consequences of labour shortages after they have arisen.

One reason levy rates are not being increased is that employers are already facing higher operating costs, not least because of Labour’s damaging national insurance hikes. That is classic Labour economics: making it more expensive to hire people, then intervening with subsidies to solve a problem of the Government’s own making. As I have said before, most employers would rather keep more of what they earn and invest it themselves than have the Government take with one hand and give a little back with the other. I believe such details are included in the explanatory note.

The levy proposals are expected to raise a total of £137.9 million over the levy periods between this year and 2028. We must ensure that this levy delivers the workforce that the industry needs. More than 70% of employers are now experiencing significant hiring challenges, up from 53% in 2021. According to the ECITB’s 2025 report, the main reasons for skills shortages include

“a shortage of qualifications and skills among candidates, a mismatch between candidate expectations and what employers can offer, a limited applicant volume, mobility and location issues, and increased competition among employers and other sectors.”

To make matters worse, the engineering construction industry faces an upcoming wave of retirements. Almost 15% of the workforce are already over the age of 60. Workers in craft roles, in particular, are in short supply. Concerningly, about one in four welders and one in five pipefitters are over 60. Although the number of workers under 30 has slightly increased since 2021, from 14.7% to 16.8%, new entrants are not yet arriving quickly enough to offset experienced workers leaving the industry.

We know that the ECITB invested £28 million in training grants and new entrant programmes in 2024, supporting more than 2,000 new entrant starts, including 1,000 apprentice starts and more than 500 graduates. That is to be welcomed, but those numbers must keep growing if the industry is to replace retiring workers while simultaneously expanding the workforce needed for future projects. The industry will face peak demand for workers in four years’ time, and 40,000 extra workers will be needed for major projects by 2030, according to ECITB forecasts. That does not even take into account the demand in manufacturing sectors not covered by the ECITB. I accept that the Minister said that 5,000 places have been filled but, given that 40,000 figure, we will need further work on this.

Can the Minister outline what further steps the Government are taking, alongside the ECITB’s work, to attract new entrants into the workforce? Given the significant training costs that employers incur, does he believe that current ECITB grant support is sufficient to incentivise employers to expand recruitment, particularly in occupations facing the greatest shortages? We know that retention is equally critical, so could he confirm what proportion of apprentices, graduates and new entrants supported through the ECITB are still working in the industry 12 months after completing their training?

The Government have recently consulted on proposals to bring together the Construction Industry Training Board and the ECITB in a single body. As those responses are considered, I would welcome further clarification from the Minister on how the specialist needs of the engineering construction sector will be protected. Constituencies such as mine rely on highly skilled engineering and technical workers to support major defence and nuclear infrastructure, but we also need construction workers to build new homes and the like, and it is important that those skills are not overlooked within a larger organisation.

I want to ask the Minister another question, if I may. Since the removal of local training groups by the Construction Industry Training Board, I have heard that money for regional employer networks has not been found in certain regions, and as a result those networks have not been properly set up. We have debated that point in the past, and I appreciate that it is not entirely related, but it is about employment and training. How is the Department working to mitigate the apparent failure of the regional employer network hubs that were being set up?

To conclude, the engineering construction industry requires a strong pipeline of skilled workers. There is clear evidence that employers continue to support the levy system, but I would welcome the Minister’s response to the points I have raised about recruitment, retention and the future direction of the ECITB. If we are serious about delivering our ambitions on energy, infrastructure and industrial growth, we must be equally serious about investing in the workforce that will make those ambitions a reality.