Last September, the Jay report exposed the sheer scale of the sexual exploitation of children in Rotherham. Today, once again, our thoughts are with the victims and the horror to which they were subjected. The report provided evidence that the council, together with other

4 Feb 2015 : Column 296

public bodies, had failed in its duty to protect Rotherham’s children. It was therefore right for the Secretary of State to establish the inquiry that has reported today.

Louise Casey’s report is, frankly, damning. It reveals very serious institutional failings, continuing denial of the problem, a damaging culture of sexism, bullying and discomfort about race, a failure to address past weaknesses, a greater interest in protecting the council’s reputation than, apparently, in protecting children, a lack of scrutiny and failure to challenge other agencies, and ineffective leadership. If we are to move forward, everyone involved must accept the truth. It is clear that the council has not yet done so, and, as a result, does not currently have the capacity to heal itself. I agree with the Secretary of State that a fresh start is needed, and I therefore welcome the statement that has been issued by Rotherham council’s cabinet in the last few minutes. It reads as follows:

“As a cabinet…we must take responsibility. We therefore announce our intention to resign our positions as soon as transitional arrangements can be put in place.”

In the light of that, I support the course of action that the Secretary of State has just announced, and, in particular, the sending in of commissioners to take over the functions of the cabinet. As the right hon. Gentleman has acknowledged, it is a serious step to take, but the circumstances clearly warrant it, and I welcome the assurance he has given that his aim is to return responsibility to local democratic control when it is right to do so.

I have a number of questions to ask. When does the Secretary of State expect to be in a position to announce the names of the five commissioners, especially given the announcement that has just been made by Rotherham council about the current cabinet? What background and experience will he be looking for in appointing them? Does he intend to consult anyone when making the appointments? What progress reports will he and the House receive on the work that the commissioners undertake? What discussions has he had with the Education Secretary about Ofsted and its role in inspecting Rotherham, given the concerns expressed by the Communities and Local Government Committee?

When he commissioned the report, the right hon. Gentleman told the House that he had asked Louise Casey—in addition to her inspection of the council—to explore the links between Rotherham, the police and the justice system. Can he update the House on that part of her work, and when can we expect to see her findings, given that there will undoubtedly be lessons on which all local authorities should act? Sadly, as we know, the problems of child sexual exploitation are not confined to Rotherham.

The people of Rotherham—and all of us—remain angry, above all, with the perpetrators of the shocking abuse that took place over decades, and we are united in our determination both to see justice done and to act to prevent this from ever happening again. In doing so, we must also remain united in the face of those who will seek to use what has happened in Rotherham to divide the community.

Local authorities have great responsibilities, which they have a duty to exercise on behalf of the people they represent. When it comes to our children, there is no greater responsibility than to make sure that they are safe and protected. It is unforgivable that this did not

4 Feb 2015 : Column 297

happen here, but our joint task now is to work with the commissioners, the council, other public bodies and the people of Rotherham to put things right.

Mr Pickles: I thank the right hon. Gentleman for the tone and the substance of his response. He is bang on the money. By their wilful blindness to address this issue and by their reluctance to tackle issues relating to people of Pakistani heritage, they just made it worse. The problems we are going to face over the next few weeks, with those who will seek to exploit this, were made worse. We want to make it absolutely clear that the House is determined to deal with the question of child sexual exploitation without fear or favour. I very much welcome that.

On looking for commissioners, I consulted the right hon. Gentleman when we faced another situation and I shall be consulting him on this. Of course, we need to make it clear in that consultation that I am not in any way prejudicing the decision on whether to take the necessary action. That has to be clear. The cabinet has now resigned, which I think was the sensible thing to do. I do not think we can take that as the formal response, but I look forward to hearing what Rotherham has to say.

With regard to Ofsted, Louise Casey spoke to my right hon. Friend the Secretary of State for Education, and arrangements have been made to talk further about the points raised by the right hon. Member for Leeds Central (Hilary Benn). The right hon. Gentleman had the opportunity to look at the report and will know that there are certain references to and worries with regard to the police force. Louise Casey has also spoken to the Home Secretary and we hope to make progress, but the right hon. Gentleman will understand that there are certain matters it would not be seemly to talk about on the Floor of the House.

I am keen to get democratic control back to Rotherham. It is my intention to try to roll those services back. Initially, I looked at taking limited ones, but having looked through the whole process it was clear that it just simply was not possible. I needed to take the whole lot and then roll them back as quickly and as expeditiously as possible.

I have been involved with local government for the best part of 40 years. This is heartbreaking. This is terrible. I used to lead a large council. I can see the hon. Member for Sheffield South East (Mr Betts) on the Opposition Benches—he used to lead a very large council. I used to be the chairman of a social services committee. I just cannot understand how people with responsibility, both officers and members, could ever, ever have allowed this to happen.

Robert Neill (Bromley and Chislehurst) (Con): I share the sentiments expressed by the Secretary of State. For any of us who believe in local government, this is a tragedy. It is also, above all, a tragedy for the victims. I congratulate my right hon. Friend on the boldness of his measure. Can he, in taking the matter forward, ensure that the commissioners appointed have particular expertise in their ranks in relation not only to the child

4 Feb 2015 : Column 298

care issues that are so critical, but to proper corporate governance, proper employment procedures and proper understanding of electoral administration, all of which will be critical in the period going forward?

Mr Pickles: My hon. Friend’s advice is very sensible. I actually believe that this is now one of the plum jobs in local government. This is a chance to restore good quality local government. We shall be looking right across the piece for people with enormous experience. Rotherham deserves the absolute best. I can assure the House I am determined to get people of immense quality to bring about that necessary change.

Sarah Champion (Rotherham) (Lab): The report was very well researched. It is very robust and I accept it in full. I really welcome the intervention package that is being put in place, because Rotherham does deserve better. It has been let down. This is heartbreaking, but it is also disgusting—every page has a new horror on it. My plea is for the Secretary of State to put resources in place so we can move forward. I have been asking for five months for resources specifically to help the young people move on with their lives. We are not getting that and we need it.

I would like the House to recognise that this came about because of the tenacity of the survivors who kept coming forward and kept highlighting, over years and years and years, how they were being let down. They are the champions now, because they have caused the change that we so dearly needed for our town.

Mr Pickles: I agree with everything the hon. Lady says. It is certainly my intention to involve Members of Parliament from Rotherham to ensure that they are not just fully informed but able to participate in the strengthening. She makes a really good point about the way the report has been put together. It is very clear that this is a report in which the voice of the victim is heard. No one can say that the voice of the victim has been ignored here. We owe it to the victims of Rotherham to put something in place that we can all be very proud of.

Tessa Munt (Wells) (LD): The Secretary of State said that the council went to some lengths to cover up and silence whistleblowers. Will he consider some mechanism whereby councils are formally made aware, maybe through declarations similar to those for Members’ interests, to a council’s monitoring officer and to the Secretary of State, whenever a letter before action or any threat of legal action is issued by a councillor, so that threats against staff, ex-employees, opposition councillors and even MPs are out in the open?

Mr Pickles: My hon. Friend makes a reasonable point, but the real tragedy in terms of governance and dealing with victims and survivors of child sexual exploitation is that it is not as though the safeguards were not there. It is not as though the whistleblower process and the protections were not there. The council had all the policies written down, but they were not there in practice. If someone blew a whistle in Rotherham, they were persecuted and bullied. They had a very bad time. We need to apply the same high standard that exists in just about every local authority in the country to Rotherham.

4 Feb 2015 : Column 299

John Healey (Wentworth and Dearne) (Lab): As I said when the Jay report was released, our whole town was shocked and shamed by its findings. This report is also deeply and comprehensively critical of our council and our police. As my right hon. Friend the Member for Leeds Central (Hilary Benn) has said, Labour accepts Louise Casey’s findings and the actions the Secretary of State now plans to take. Locally, we will all work with the commissioners to put right in full the flaws set out in this report and to put in place in full the recommendations of the Jay report to help victims and bring perpetrators to justice. The Secretary of State has made a welcome promise to play his part. Will he start by releasing £750,000 of troubled families and transformation award funding withheld from Rotherham that the council and its agencies need to help to put right the problems set out in the Casey report?

Mr Pickles: That, clearly, is one of the first things I will look at. If the right hon. Gentleman will forgive me, I really want to address the elephant in the room. He said that Labour would do this. I do not expect anything less. I do not regard this as political at all. I fully understand that we are in a charged political system, but this is about a failure of local government. I could point to lots of Conservative local government where this would never happen. I have to tell the House that I could point to lots of Labour local government where this would not happen. This is almost a complete parody of what local government should look like.

Mr Andrew Robathan (South Leicestershire) (Con): I thank the Secretary of State for his statement. I think it is true that this awful situation was, to a certain extent, exposed by investigative journalism from The Times, which listened to the victims when the police did not. Today, there is another report, I understand, of two councillors and a police officer in the area who may actually have been personally involved. I know my right hon. Friend is not responsible for the police, but building on what he said to the Labour party spokesman, will he reassure the House that the police will be thoroughly held to account and will now help the victims?

Mr Pickles: I am sure the chief constable of the force will recognise that there are some difficult questions that need answering, and I am sure that, with the help of the Home Secretary and of commissioners, we can work together to ensure those past misdeeds are investigated and the necessary action is taken. From reading through this report, what is especially necessary is an attitudinal approach. We need to address that attitudinal point in the police, the council and society in general.

Kevin Barron (Rother Valley) (Lab): I thank the Secretary of State for giving me the opportunity to read the report earlier today in his Department. The inspection found that past and present failures to accept, understand and combat child sexual exploitation resulted in a lack of support for victims and insufficient action against known perpetrators. That is wholly unacceptable, and may I tell the Secretary of State that I wholly support the action he is proposing?

Mr Pickles: The right hon. Gentleman is a very distinguished Member of this House and I am very grateful to have his support. I know he will use his good offices to help rebuild a team of officers and a team of politicians that will be able to take Rotherham forward.

4 Feb 2015 : Column 300

Julian Smith (Skipton and Ripon) (Con): Taxis have been, and almost certainly still are, the trafficking method of choice of abusers and exploiters across the north. I welcome the Secretary of State’s strong words on taxi regulation, and I welcome this very robust statement. May I urge him and his Department to look at every taxi licensing authority across the north and make sure they are doing exactly the right thing?

Mr Pickles: My hon. Friend makes a very reasonable point, and I am particularly irked by the way in which taxis were used. A point has been made about putting in place new measures, but the regulations are pretty clear and straightforward. What we wanted was to see these regulations used. I wonder if I might answer my hon. Friend’s question in a slightly different way: I think lots of lessons will come out of this, and I will ensure that they are all learned very quickly by authorities that license taxis.

Mr Clive Betts (Sheffield South East) (Lab): I thank the Secretary of State for the fact that as Chair of the Select Committee I had an advance look at the report. I have also spoken to Louise Casey, who is going to come to the Committee so that we can explore some of these issues in more detail. I wholly agree with the Secretary of State that this is not a party political matter just because this is a Conservative Secretary of State and this is a Labour council; this is about putting arrangements in place to help the children of Rotherham, who have been let down in the past. May I press him on one point, however? If he decides to appoint commissioners and they find that they need extra resources, particularly to help the young people who have been exploited and abused in the past and now need counselling and other assistance, will he respond positively to any request they make for such financial assistance?

Mr Pickles: I shall look very carefully at that, and at the way in which victims and survivors are compensated—perhaps outside this particular. I suspect it is possible that the council itself may well be facing some significant law cases, which it will have to defend. But of course I shall look very carefully on this, and I will also look to the hon. Gentleman to offer some advice on the choice of commissioners as well as on the matters he asks about.

John Hemming (Birmingham, Yardley) (LD): Rotherham, like all local authorities responsible for children, submits a return to the Government on what is happening to the children—the SSDA903 return. Every year, Rotherham is audited on what happens with its finances, so that the finances are not fabricated. In the SSDA903 returns, certain children leave care for “other” reasons; they may be trafficked, they may be abused—we do not know. Would it not be a good idea for the Government to have an independent audit of what happens to these children, and what is happening to the children who leave care officially for “other” reasons?

Mr Pickles: The hon. Gentleman will know from many conversations I have had with him since I have held this post and before that I have a lot of sympathy with what he says, and that is one of the reasons why I am very proud to support the foyer movement. I certainly

4 Feb 2015 : Column 301

feel that as a nation we need to do a lot more in terms of offering assistance to people who leave the care system, but I go back to the point the hon. Gentleman just made: the returns looked great, but the reality on the ground did not.

John Mann (Bassetlaw) (Lab): I called for this intervention publicly six months ago, so naturally I welcome it, but what about the inspectors? We have an inspection regime for children’s services and for schools, but what is being done to hold them accountable and to ensure that the inspection regime is hearing and seeing what is going on?

Mr Pickles: The hon. Gentleman makes a reasonable point. I am sure he has not found it possible to read the whole report yet, but it makes it clear that the inspection takes place, the inspectors make recommendations about what should happen, the council says, “You’re absolutely right, and here is our new policy,” and then nothing happens. The issue is the process between “We know we should do it” and “We aren’t going to do it.” That is why I am taking this intervention today—or, rather, why I am thinking about taking this intervention today.

Mr Peter Bone (Wellingborough) (Con): May I suggest one thing the Secretary of State might like to consider doing immediately about child abuse? When the child victims of human trafficking come into local government care, they are not recorded as victims of human trafficking. If they were, when they disappeared there would be an indication that the council was failing.

Mr Pickles: My hon. Friend takes a great interest in these matters so he will know that we are trialling advocates for young people in these kinds of circumstances, and if that proves to be successful I hope we will see it rolled out rapidly. One thing that has been clear from all these cases is that the voice of the victim and voice of the survivor is just not heard, and we need to hear their voice.

Ann Coffey (Stockport) (Lab): What is really shocking about Louise Casey’s findings is the existing level of denial among officers and councillors about the extent of child sexual exploitation in spite of the recent Jay report, but this is not unique to Rotherham. There is widespread complacency among agencies charged with protecting children and councils in believing CSE happens elsewhere. We need a sea-change in attitudes. What more can the Secretary of State do to ensure that councillors, who are really important, receive adequate training in awareness and identification of CSE in their areas?

Mr Pickles: The hon. Lady’s report on the same problem in Manchester was very illuminating, but we need only look at page 19 of the Rotherham report to see that 70% of current Rotherham councillors spoken to by Louise and her team disputed Professor Jay’s findings, and that was continuous—“The methodology was wrong, things were not right, they didn’t count this.” The figure of 1,400 is probably conservative in terms of the actual numbers involved. What is clear from Jay, Casey and the hon. Lady’s excellent report is

4 Feb 2015 : Column 302

that we need to understand that councillors in such circumstances have a special duty, and that is something I am going to look at most carefully, to ensure that people realise they have a role of intervention.

Diana Johnson (Kingston upon Hull North) (Lab): Local authority councillors have a specific role as corporate parents for some of the most vulnerable children in our community. It strikes me from what I have heard of this report that that role is misunderstood by many councillors. What more does the Secretary of State feel needs to be done to instil in councillors an understanding of this important role and the duty they have?

Mr Pickles: The hon. Lady makes a reasonable point, but I think we need to understand that, day in, day out in lots of local authorities, officers carry out that duty extremely carefully and diligently; Rotherham does not speak for the situation. Others may also need investigation but, sadly, Rotherham—this is not about the town but about the councillors and officials—is a peculiar leader in indifference and incompetence.

Mark Reckless (Rochester and Strood) (UKIP): When the Home Affairs Committee investigated child sexual abuse in Rochdale and in Rotherham, we did see a difference: there was at least some action in Rochdale, but we found complete denial in Rotherham, so I support the thrust of the intervention.

Even if single-party Labour control may not have caused what happened, it did allow it. Until UKIP broke through there in the local elections last year, there was virtually no party political competition in Rotherham. Pending the 2016 all-out elections, will the May 2015 elections go ahead to allow us to continue to hold the Labour councillors responsible to account at the ballot box?

Mr Pickles: The hon. Gentleman makes a very reasonable point about the way Rochdale approached this. The May 2015 elections will take place. However, let me say to him that this is about people’s lives. This is about protecting children; it is not about whether some grubby politician is elected or not. If we seek to turn this into some kind of political football, we will be as bad as the failing councillors of Rotherham, and I am determined that that should not be the case.

Mark Reckless: On a point of order, Mr Speaker.

Mr Speaker: Points of order come afterwards; I will take one then.

Mr Steve Reed (Croydon North) (Lab): I congratulate the Secretary of State on his response to Louise Casey’s excellent report. He will know that I led a council whose children’s services had been rated by Ofsted in the bottom 3% nationally at the time of my election, but was rated as the best in the country by the time I left. The key to that improvement was acknowledgement of failure, clear expectations of staff and councillors, high quality training, but above all else voice for the vulnerable children, and that means giving them the power and the mechanisms to force those who do not want to listen to hear what they are saying and act on it. What mechanisms

4 Feb 2015 : Column 303

does the Secretary of State envisage councils adopting so that all vulnerable children in this circumstance can be heard?

Mr Pickles: I am not sure whether that was a job application. The hon. Gentleman is right, and the point is that we do not need to invent something to empower young people and the service; it is all there in plain sight, day in, day out in local authorities. The quality and emotional intelligence might vary, but it is there. That is why I am hopeful: I think we can turn Rotherham around relatively quickly, and I look forward to the day when the commissioners are a distant memory. I regret that the hon. Gentleman rules himself out for the post, but he may have views.

Seema Malhotra (Feltham and Heston) (Lab/Co-op): I, too, recognise the work of Louise Casey in this excellent report, and I thank the Secretary of State for his statement. When I visited Rotherham earlier this week with my hon. Friend the Member for Rotherham (Sarah Champion), we held a girls’ safety summit. The young women we talked to said that they felt that, in dealing with the issues Rotheram is facing, people were talking about them, not to them, and all that they heard was coming through the media. They felt hugely vulnerable, but nobody was actually speaking to them as young people. Has the Secretary of State considered as part of his plans what message of reassurance can be given to young people across Rotherham about how they will be protected in future?

Mr Pickles: The hon. Lady makes a very reasonable point, and I would expect the commissioners to start that process. There are, after all, five commissioners, and although we cannot expect them to do everything we will be asking them to offer leadership, to give courage to officials and to get them running in some kind of proper order. Everything the hon. Lady referred to is available in other local authorities, although not necessarily all, but I am absolutely determined that the fundamental, systemic failure of local government we have seen in Rotherham will not be allowed to spread like a cancer elsewhere. In truth—forgive me for saying this—this is a wake-up call for all local authorities: the Government will not stand idly by and watch them fritter away good resources and let down their populations.

4 Feb 2015 : Column 304

Points of Order

2.25 pm

Mr Russell Brown (Dumfries and Galloway) (Lab): On a point of order, Mr Speaker. I wrote to the Prime Minister just a few days before Christmas seeking his support for those who have gone voluntarily to dangerous locations in Africa where people are suffering from and dying from Ebola. I felt that their unstinting and selfless work should be recognised and acknowledged in some formal way, and I received an acknowledgement of that letter, but have heard nothing further.

I was somewhat surprised that earlier today, in response to a question from the hon. Member for Stourbridge (Margot James), the Prime Minister said that he was looking to recognise such volunteers and was taking that forward. Is it not somewhat discourteous to announce that in this place when he has not even replied to my initial letter?

Mr Speaker: I am grateful to the hon. Gentleman for his point of order and I do understand why he feels aggrieved at not having received a reply to his letter. It is not a matter of order for the Chair and although all letters should of course be answered, it is not for me to say quite where the letter is in the system. I am sure that the Prime Minister, as a matter of course, responds to many thousands of letters and does his best to do so in a timely and courteous way. Whilst understanding the hon. Gentleman’s irritation—and I do—perhaps we can just take pride in the fact that there is to be such recognition. He has got his point on the record, but if it is understood by him and by the House, I think it best to leave it there.

Michael Fabricant (Lichfield) (Con): On a point of order, Mr Speaker. As we approached midday today, the noise in the Chamber went up, as so often happens just before and during Prime Minister’s questions, and I and others, and yourself too, found it even more difficult than usual to hear colleagues asking and Ministers answering International Development questions. Although it is natural that the noise level goes up and it is right and proper that you try to control it, I do wonder whether the microphone levels may be lower than they used to be, or whether the loudspeakers at the back of the seats are perhaps turned down a bit too much because of fear of feedback. May I ask that the technicians investigate this, so that we can better hear not just you, Mr Speaker, but Ministers and questioners?

Mr Speaker: I am sure that these matters can be looked into, and I think I can say without fear of contradiction to the hon. Gentleman that we will always profit by his counsels. We will leave it there for now.

Mr Peter Bone (Wellingborough) (Con): On a point of order, Mr—

Mr Speaker: I will come to the hon. Gentleman; I am saving him up. I saved up the hon. Member for Lichfield (Michael Fabricant) momentarily, and we have now dealt with him. Let us first hear a point of order from Mr Reckless.

4 Feb 2015 : Column 305

Mark Reckless (Rochester and Strood) (UKIP): On a point of order, Mr Speaker. The hon. Member for Bassetlaw (John Mann) was shouting in my ear, so I did not hear the Secretary of State’s answer to my question—will councillors elected in Rotherham in 2011 be held to account at the ballot box in May, or is the Secretary of State extending their term by a year?

Mr Speaker: I appreciate that. I think the Secretary of State did give a clear answer, although I understand the hon. Gentleman’s point. It is a perfectly reasonable question and I am sure the Secretary of State is happy to repeat his answer.

The Secretary of State for Communities and Local Government (Mr Eric Pickles): The 2015 elections continue as normal.

Mr Speaker: I am very grateful to the Secretary of State. A last point of order, I think, for now, from Mr Peter Bone.

Mr Bone: On a point of order, Mr Speaker. We have had two exceptionally important statements today, and with your great courtesy, as usual, you have got every Back Bencher in. However, it is a little unfair on the Opposition, on a day when they have two official Opposition day debates. We do have the Leader of the House here. Is there any mechanism whereby we can extend today to make up for the two hours the Opposition have lost?

Mr Speaker: The hon. Gentleman is nothing if not fair-minded, and a champion of the rights of all parliamentarians. As he knows, I would be perfectly happy to sit here for an indefinite number of hours because I enjoy nothing more than listening to all hon. and right hon. Members from all parts of the House expressing their views. There may be people attending to our proceedings who think, “What a strange chap”, but the fact is that I like listening to hon. and right hon. Members. I do not sense any great desire on the part of the Leader of the House urgently to accommodate the hon. Gentleman’s fair-mindedness, but he is a very fit and lithe fellow and if he wishes to leap from his seat to offer comfort and encouragement to the hon. Gentleman, there would be no happier Member of the House than I.

The First Secretary of State and Leader of the House of Commons (Mr William Hague): Further to that point of order, Mr Speaker. Of course we try to avoid having a large number of statements on Opposition days, but

4 Feb 2015 : Column 306

sometimes it is unavoidable and there were good reasons for having both those statements today. I am sure that that is understood across the House. To extend the ensuing debate would have required a motion to be placed on the Order Paper earlier, and that has not been done.

Mr Speaker: I am grateful to the Leader of the House. I shall take this opportunity to mention that nine Back Benchers are seeking to contribute to the first debate, on apprenticeships, and 11 to the second debate, on electoral registration. In conformity with our normal procedures, there can be no time limit on Front-Bench speeches, but I feel sure that in each case the Minister and shadow Minister will tailor their contributions accordingly in order to facilitate their Back-Bench colleagues, which is a way of saying, “Get it out pretty pithily”. We will leave it there.

Bills presented

House of Commons Commission Bill

Presentation and First Reading (Standing Order No. 57)

Mr William Hague, supported by Tom Brake and Mr Sam Gyimah, presented a Bill to amend the House of Commons (Administration) Act 1978 so as to make provision about the membership of the House of Commons Commission, so as to confer a new strategic function on the Commission, and so as to make provision about the exercise of functions on behalf of the Commission or its members.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 169) with explanatory notes (Bill 169-EN).

Right to Buy and Right to Acquire Schemes (Research) Bill

Presentation and First Reading (Standing Order No. 57)

Tim Farron, supported by Dr Julian Huppert, presented a Bill to require the Secretary of State to undertake a programme of research into the costs and benefits of extending control of all aspects of Right to Buy and Right to Acquire schemes entirely to Local Authorities, including the operation and consequences of such schemes and the introduction of the right of Local Authorities to suspend them; to report to Parliament within six months of the research being completed; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 6 March, and to be printed (Bill 167).

4 Feb 2015 : Column 307

Public Sector Efficiency (Employee Participation)

Motion for leave to bring in a Bill (Standing Order No. 23)

2.32 pm

John Pugh (Southport) (LD): I beg to move,

That leave be given to bring in a Bill to require public sector bodies to include in their annual reports and similar documents their responses to suggestions and proposals made by public sector employees for the efficiency and improvement of their service.

I hope that you will enjoy this, Mr Speaker. The introduction of this Bill is almost an act of atonement in itself. Over the past few decades, the House has been much occupied by what we like to refer to as public sector reform. In any word association test involving a member of the governing classes, the term “public service” would immediately elicit the word “reform”. In fact, we could mischievously define a public service as something that a politician feels the need to reform.

The words “public sector reform” in the mouth of a politician inspire dread and despair in equal measure in the hearts of those who work in the public sector. We in this place have happily burdened those people with restructuring, targets, changes in governance, commissioning, reorganisation, monitoring and so on, all in the laudable pursuit of greater efficiency, better performance and better value for the taxpayer’s pound. In the process, however, many of those changes have distorted practice in predictable and unhelpful ways and burdened public servants in frustrating ways. They have not always been aligned with professional judgment and they have rarely if ever boosted productivity and real efficiency.

My predecessor as MP for Southport back in 1906 was John Astbury QC. He is memorable for the following sentiment, which has found its way into several books of quotations. He is reported to have said indignantly:

“Reform? Reform? Are not things bad enough already?”

In truth, there has been quite a difference between reform and genuine improvement. Reforms are largely suggested by bright young things in think-tanks or consultancies who have little real-time experience of the institutions they wish to reform. Improvements usually come from incremental changes and from the example of those who toil day to day in a service. Initiatives cooked up here in the Commons have generally had little positive impact on productivity or the lived experience and daily work of those who actually do the work. We do not improve schools by calling them academies, and we do not improve hospitals by calling them foundation trusts. On a wet Thursday afternoon in the classroom or a busy Friday night in an accident and emergency department, the title on the board outside or the exact style of governance will make scant difference to how things actually turn out.

There is a negative view of public sector workers that sees them as a bunch of unionised time servers who need constantly to be checked on or coerced lest they traduce the public interest and squander public resources. In my experience, however, that is not how teachers, nurses, policemen and local government workers are. They are really very different from that. It is not naive to think that most public sector workers are happier

4 Feb 2015 : Column 308

serving the public interest, that they want to do it well, that they would sooner act with real purpose than to little effect and that, like all of us, they reflect on what they do. They pick out waste and spot inefficiency, and they get frustrated and downhearted when well-intentioned Governments misdirect or burden them or when service heads who are trying to please their masters ignore their reasonable representations. They do not necessarily need or benefit from ministerial decrees laying out in fine detail how they must pursue their craft. Nor does it help to follow up such decrees with heavy-handed inspection regimes that are more about bureaucratic compliance than genuine effectiveness.

The public sector ethos is not dead, but it must be cultivated and revived and not confused with commercial or personal self-interest. It is not unrealistic to think of the mass of people working on the front line as a huge untapped resource. My fear is that their advice will too often be ignored or drowned out by a plethora of desperate initiatives imposed from on high. I am therefore suggesting that a duty should be laid on public sector organisations of more than 50 people—this would not apply to smaller organisations—to include in their annual report or similar document their front-line workers’ suggestions for the improvement of the organisation or the efficiency of its services, along with the responses to those suggestions.

I am not denying the management’s right to manage; nor am I promoting some kind of Maoist upheaval. I am opposing the consistent turning of a deaf ear towards those on the front line. I believe a small step such as this would provoke a culture change, just as the introduction of diversity checks, health and safety checks and sustainability checks has done. The burden of dealing with a constrained budget would be a shared burden. The work force and their experience could be co-opted into plans for recovery, development and efficiency.

This approach is not unknown in the commercial sector, where good management walks the shop floor not in pursuit of grievances but in pursuit of good ideas. Under the Bill, organisations would be forced to respond to what staff had to say, or to ask themselves why their staff had so little to say. This would not be the same as assessments of staff satisfaction, although I would argue that a consulted, creative, involved staff is most likely to be a happy staff, and that staff are unavoidably involved in the pursuit of efficiency because they, like us, know the huge financial challenges that the country is facing.

The National Audit Office reliably tells us that local government is near to bankruptcy, that NHS finances are on a dangerous trajectory and that the thin blue line of the police force is becoming ever less visible, while the demands of the public show no sign of abating. Most of the economies that we have succeeded in making so far have been achieved through wage controls or manpower reductions. We are essentially doing less or paying less, but that does not equate to genuine efficiency improvements. We need to get much smarter.

We cannot revert to the polarisation that sometimes occurs in times of social stress whereby the public sector is set against the private sector and one is seen as a negative cost to the other. A good public sector and a vibrant private sector are the two pillars of a thriving

4 Feb 2015 : Column 309

society. Successful industry—we can learn from that—has learned the futility of micro-managing from the top, and learned to use properly those it employs.

Given the scale of the financial challenge that confronts the public sector, it could be said that what I am suggesting is mere tinkering, but incremental change mounts up. Incremental change is good change, and good cultural changes, if they are to occur at all, require buy-in at all levels. Good practice can be spread only by those who are involved in the practice. As hon. Members will recall, right at the start of the coalition the Prime Minister and the Deputy Prime Minister called for mass consultation within the public sector because of the colossal challenge we all face, but Governments are impatient, Ministers often do not want to manage, and in a flash we had restructurings galore, most notably the Health and Social Care Act 2012. That is not the way to go.

Incorporating our public sector workers in the pursuit of genuine efficiency is not cosmetic. It is not simply a way of affording them the necessary dignity that they deserve, but is a genuine attempt to prompt and provoke cultural change and a practical way of boosting the productivity that we badly need. There is a place, I admit, for consultants, for think-tanks, even for political intervention, and for testing against external and internal standards, but there is no case for ignoring the daily experience of well motivated staff or under-estimating their desire to work well to high professional standards. What I am trying to do is to amplify their voice and hard-wire it into the system. That is what this Bill endeavours to do.

Question put and agreed to.

Ordered,

That John Pugh, John McDonnell, Meg Hillier, Mr John Leech, Andrew George, Mike Thornton, Greg Mulholland and Jeremy Lefroy present the Bill.

John Pugh accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 March and to be printed (Bill 168).

4 Feb 2015 : Column 310

Opposition Day

[16th Allotted Day]

Apprenticeships

Madam Deputy Speaker (Dame Dawn Primarolo): I advise hon. Members, both Front Benchers and Back Benchers, that there are under two hours for this entire debate. I will do my best to make sure that everybody gets in. Depending on the length of the opening speeches, there will be a time limit, which I will let the House know as soon as I can.

2.43 pm

Mr Chuka Umunna (Streatham) (Lab): I beg to move,

That this House believes that more high-quality apprenticeships are essential to the future prospects of young people and future success of the economy; notes with concern that the number of 19 to 24-year-olds starting an apprenticeship has fallen by 6,270 in the last year, that 24 per cent of these apprentices are receiving no formal training, and around one in five are not receiving the appropriate minimum wage; calls on the Government to institute a ten-year national goal to grow the number of apprenticeships for young people and boost the standing and value of technical and vocational education so that the same number of young people that go to university undertake a high-quality apprenticeship; and further calls on the Government to use the money it already spends on procurement to require suppliers for large Government contracts to offer new apprenticeship opportunities, safeguard apprenticeship quality with new standards so that all apprenticeships are at at least level three and last a minimum of two years, ensure Government plays its part by creating thousands more apprenticeships in the civil service, give city and country regions a role by devolving money for adult skills and give a central role to business through sector bodies to drive up standards and increase apprenticeship places.

I note what you have said about time, Madam Deputy Speaker. I shall try not to drone on for too long.

I want to put this debate in context. It is not simply a debate on apprenticeships. The issue of apprenticeships is central to a wider debate about our economy and whether it is fit for purpose. The changing nature of the world is full of opportunity for Britain. Technology is transforming the way we live. New emerging economies with ballooning middle classes are providing a mass of opportunity for our businesses, but these forces of change are also bringing challenges: how do we deliver the goods for our people when the uncertainty which follows from all this creates insecurity for many?

As I have said before, the answer is to shape these forces of change and do all we can to ensure that everyone can access the opportunities available—in short, to ensure that everyone is connected to the new global economy and has a stake in the future. That requires an economy producing good, decent jobs that are fulfilling, afford a level of dignity, respect and security, and, above all, pay a wage that people can live off. Sadly, that vision is but a dream for too many in Britain today. Under the current Government, average wages have fallen by £1,600 a year on average. They have fallen by more than £3,200 in my constituency. Almost 5 million people are not earning a wage that they can live off. We are seeing rising insecurity, with 1.4 million zero-hour contracts. There are 3.5 million people in work who say they want extra hours.

4 Feb 2015 : Column 311

As a result of all this, our fiscal deficit remains stubbornly high at £91 billion. The Office for Budget Responsibility was clear in its autumn outlook published with the autumn statement that the Government have failed to meet their two fiscal mandates in this Parliament because stagnating wages have led to a fall in national insurance and income tax receipts. However, the living standards crisis that I refer to and the persistence of the deficit are symptoms of a bigger problem: the failure of Government to help raise productivity across our economy.

Sure, Britain leads in aerospace, the automotive industry, business services, chemicals, the creative and digital industries, food, green tech and pharmaceuticals, among other industries. We should celebrate the success in these sectors, but across the economy overall, the gap between UK productivity per hour worked and the rest of the G7 grew to 17% in 2013, the largest difference since 1992. So on average it now takes a British worker until the end of Friday to produce what a German or French worker has finished before they clock off on Thursday.

Mr Jonathan Djanogly (Huntingdon) (Con): I am sure the hon. Gentleman will want to remark on the success in my constituency under this Government, with apprenticeships doubling to 1,500 a year. It is not just a matter of problems; it is also a matter of dealing with success. In many parts of the country where there is high growth and unemployment is falling—in Huntingdon it has fallen to 1%— we need better training so that employers can invest in their staff to deal with the lack of skills that exists as our economy improves.

Mr Umunna: I agree that quality is important, but apprenticeships in the hon. Gentleman’s constituency have fallen by 11%. Many apprenticeships are not the high-quality apprenticeships that I think he refers to. Many of them are level 2.

There has been much debate in economic circles as to why we have gone backwards on productivity so fast under this Government. People have pointed to the lack of business investment, which is compounded by the problems that businesses have faced in getting access to finance, but skills shortages in our economy are also holding Britain back. Too many young people in particular do not have the skills our businesses require when they leave secondary education, and even among those who do have skills and qualifications, there is a mismatch between their skills and the demand for technician-level competency, particularly for jobs requiring people with science, technology, engineering and maths skills—the STEM skills.

To address this we need a major expansion of high-quality vocational and technical education, in particular apprenticeships for young people, offering more and better work-and-train opportunities in all sectors of the economy, giving them those skills which employers say are lacking.

Jake Berry (Rossendale and Darwen) (Con): On the number of apprenticeship starts in the hon. Gentleman’s constituency, will he comment on the fact that in 2010 340 people started apprenticeships and last year 880 people started them. Why does he think the number of apprenticeships has doubled in his constituency?

4 Feb 2015 : Column 312

Mr Umunna: I will explain the numbers shortly. The number of young people on apprenticeships in my constituency has fallen by 18%, and in the hon. Gentleman’s constituency the number of apprenticeships overall has fallen by 18%.

Richard Graham (Gloucester) (Con) rose—

Andrew Gwynne (Denton and Reddish) (Lab) rose—

Mr Umunna: I will give way to—

Mr Djanogly: On a point of order, Madam Deputy Speaker. The hon. Gentleman said that the number of apprenticeships in my constituency had fallen, but I am looking at the House of Commons published figures—

Madam Deputy Speaker (Dame Dawn Primarolo): Order. Mr Djanogly, you are continuing the debate; that is not a point of order for the Chair. We are pressed for time, and we need to make sure we hear the opening speeches from both sides and have the debate. You have not indicated that you want to speak, whereas others have. We need to get on to the debate, so I call Chuka Umunna.

Mr Umunna: I was going to give way to the hon. Member for Gloucester (Richard Graham), before giving way to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne).

Richard Graham: I seek the hon. Gentleman’s thoughts on three quick points—

Madam Deputy Speaker: Order. Sit down please, Mr Graham. This is not the opportunity to make three quick points—it is an intervention. [Interruption.] No, I am going to be really strict on this. You wish to speak in this debate as well, and I am doing my best to protect time for Back Benchers. The convention of an intervention is: one point relevant to the point being made. So not three points, but one, thank you.

Richard Graham: Thank you, Madam Deputy Speaker. My one point is simply to ask the shadow Business Secretary whether he has considered what the impact of 2 million apprentices is on the wages of the lower earners, and whether it is not natural that a substantial increase in the number of apprenticeships will lead to more people not earning quite as much as they will in the future when they are better trained.

Mr Umunna: I thank the hon. Gentleman for his one intervention. I will come on to deal with pay and the 2 million figure he gives, but first I will give way to my hon. Friend.

Andrew Gwynne: May I thank my hon. Friend for the support that he and the Labour Front-Bench team gave to my private Member’s Bill in the previous Session? The Government talked it out, and does he not think that that was a wasted opportunity, because for every £1 million of capital investment in public procurement, we could have secured an additional apprenticeship?

Mr Umunna: My hon. Friend is absolutely right about that. I congratulated him at the time on his Bill,

4 Feb 2015 : Column 313

and we should continue to remind this House of the efforts that were made then and the wasted opportunity to which he refers. The reason he introduced that Bill was clearly because he read the OECD’s review of vocational education and training, which found that few countries achieve strong engagement in vocational education and training without a strong apprenticeship system. Now, that will not automatically happen on its own. Government must play an active role, not in a top-down, command-control fashion, but by using their convening power in an enterprising, entrepreneurial way, working in partnership with business to address the problem and to increase productivity. Before I explain how we aim to achieve that and consider what the Government have done during this Parliament, when I will touch on that 2 million figure, I want to say something about our record, because I am sure it will be referred to.

I accept that when Labour left office there was an outstanding need to increase the number and improve the quality of apprenticeships in our country, but before Government Members get too excited, I should say that it would be wrong to claim we did not make any progress. In government, we more than quadrupled the number of apprenticeship starts from a woeful 65,000 under the previous Major Government in 1996-1997 to 280,000 starts in our final year in office. Apprenticeships were simply not on the radar when we entered office; they were very much on the radar when we left office. We used the weight of government to begin the culture change we need. So from the 2012 Olympics to Building Schools for the Future projects up and down the country, we linked the creation of apprenticeships to public procurement across a number of Departments. We set up a dedicated National Apprenticeship Service to support and expand apprenticeships. I speak to many young people who tell me that they were signposted to the apprenticeship they are now doing by visiting the service’s website. Of course, it was also Labour in government that established national apprenticeship week in 2008, and the week is now an annual event in the national calendar. I am proud of our record. I am proud that this Labour party rescued apprenticeships from the scrapheap.

The current Government have sought to build on the foundations we put in place. They say that since we left office they have overseen the creation of 2 million new apprenticeship starts, and the hon. Member for Gloucester referred to those. I do not think there is any point boasting about numbers if the apprenticeships are not of sufficient quality. I will come to that in a moment, but first let us look at their claimed numbers. How many of the 2 million apprenticeships are really new apprenticeships and how many have emerged as a result of rebadging—in other words, re-labelling existing work a person is already doing in the workplace as an apprenticeship? A very large proportion of additional apprenticeship places created by this Government have come in the post-25 age brackets. The largest percentage rise in apprenticeships under this Government has actually been among the over-60s, where the increase has been 520%. According to the 2014 apprenticeship pay survey, 93% of adult apprentices already worked for their existing employer before starting their apprenticeship. That would suggest that many existing training schemes,

4 Feb 2015 : Column 314

such as those delivered under the old Train to Gain programme, have simply been rebadged and re-labelled as apprenticeships.

That is the situation on apprenticeships for adults. The shortage is perhaps most acute among young people, so what is happening to apprenticeship starts there? The number of 19 to 24-year-olds starting an apprenticeship has fallen by more than 6,000 in the past year. In fact, the number of 19 to 24 apprenticeship starts is currently falling in every single region outside London. Overall, the share of apprentices who are under 25 has fallen from 84% in 2009-10 to 64%, and the share of apprentices who are under 19 has fallen from 43% in the last year of the Labour Government to 28% under this one. So the simple fact is this: for all the boasts, there has been some jiggery-pokery with the numbers. The bottom line is that we need many more apprenticeships and we need to raise employer demand for them. Half our large employers do not offer any apprenticeships at all in Britain today—that is totally unacceptable. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), the shadow skills Minister, has said previously, when it is harder to get an apprenticeship with Jaguar Land Rover than it is to get into an Oxford college, it is pretty obvious that more needs to be done.

The numbers are one thing, but I said that I would say something about quality. In most other northern European countries apprenticeships are level 3 qualifications lasting between two and five years, and they include at least one day a week of off-the-job learning, as well as significant on-the-job training. In England, most of the growth of apprenticeships in recent years has been at a level that would simply not be recognised in those countries. Just 35% of our apprenticeships are at level 3 or above, and just 2% are at level 4. In fact, according to the Department’s own figures, published in its apprenticeship pay survey, one in five apprentices does not even receive any formal training at the moment. The figure increases to almost a quarter of those in the 19 to 24 age bracket, who are not being properly trained. If we truly want to ensure more parity of esteem between the academic and the non-academic—between the way people view university degrees and the way they view these types of vocational and technical qualifications—how can we hope to do that when they are not of sufficiently good quality? We have got to raise standards. Even where apprentices are receiving training, far too many of them are still not receiving the appropriate minimum wage—15% are paid below the appropriate national minimum wage, with the figure rising to 20% for 19 to 20-year-olds.

I will come on to address how we intend to encourage more private sector employers to provide more and better quality apprenticeships appropriate to their needs, but surely government, as one of the biggest employers in the country, should be setting an example, both in recruiting as many apprentices as possible and in providing good-quality apprenticeships. The civil service apprenticeship scheme hired just 200 apprentices in 2014. That is 200 out of more than 400,000 civil servants, which is just not good enough. Never mind the Departments themselves, Government should be doing more in this area. They should use their clout as a procurer of goods and services to get more employers in the private sector to provide apprenticeships.

4 Feb 2015 : Column 315

Our Labour colleagues in local government have already been leading the way in utilising procurement to boost apprenticeship numbers. Newham, Knowsley, Sheffield and Manchester have all developed strategies to use procurement contracts to create apprenticeship opportunities for young people locally. Central Government should do the same, as those opportunities are simply not happening to the degree and on the scale required.

Bill Esterson (Sefton Central) (Lab): My hon. Friend makes the point about the importance of using the procurement system and Government money to drive improvement in apprenticeships. Does he agree that we need do that all the way through the supply chain so that smaller businesses, and not just larger ones, can and do take on apprentices?

Mr Umunna: We should do everything that we can to encourage all businesses to take on apprenticeships. We need to be mindful of the fact that sometimes that can be a bit more challenging for smaller businesses, and we should think how we can better support them to take on apprentices. It seems to me that, if there were fewer frameworks and more sector-driven apprenticeship frameworks, we could make the system less bureaucratic. But, absolutely, we should do as much as we can to make it easy for businesses to take on apprentices.

Jake Berry: On a point of interest, I have recruited an apprentice to work for me in my parliamentary office. When the hon. Gentleman says that we should do all that we can to recruit apprentices, I just wondered whether he has done so himself.

Mr Umunna: My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) says that he has. I have not been able to because I am right up to my limit on my staff allowance, but I would very much like to. One challenge in representing an inner-London seat is the amount of casework that is involved, but I would love to take on an apprentice if we could all convince the Independent Parliamentary Standards Authority to provide us with more money to do so.

I have talked about what our record was and what this Government are doing, but what do we plan to do in the future? At the Labour party conference in 2014, my right hon. Friend the Leader of the Opposition outlined our ambitious six national goals for Britain in 2025, which included ensuring that as many school leavers go on to apprenticeships as go to university. That will require a dramatic increase in numbers. To achieve that, we will work in partnership with employers to ensure that apprenticeships are appropriate to their needs, which in turn will boost employer demand for them.

We will give employers, through sector and industry bodies, a greater role, ensuring that courses reflect their skills needs and that rigorous standards are set. The aim is for a skills system that is better aligned to the needs of employers and that delivers a pipeline of talented employees. We will also look to boost take-up by employers locally, which is best done by colleagues in local government working with their businesses locally and by those coming together to form combined authorities. We need to see more of such practice. Just look at the incredible progress that has been made by the Labour-run authority in

4 Feb 2015 : Column 316

Leeds under the leadership of Sir Keith Wakefield. The city’s new apprenticeship hub has doubled the number of apprentices in the city, especially among small and medium-sized businesses. Labour colleagues in Plymouth, Bury and Reading are actively engaging with local employers to boost apprenticeship opportunities, too, and we want to see lots more of that.

Alongside such practice, we would use the money that the Government already spend on procurement to require major suppliers on Government contracts to offer new apprenticeships. In that way, we can create thousands of new apprenticeship opportunities. That builds on the successful approach of the previous Labour Government. It is an approach that has been backed by the cross-party Business Innovation and Skills Committee, which has suggested that a minimum of one new apprenticeship place could be created for each £l million spent on public procurement. So a major project such as HS2 could, under Labour’s plans, lead to the creation of as many as 33,000 new apprenticeships.

As I said earlier, quality matters. Under Labour’s plans, all apprenticeships would last a minimum of two years and be level 3 qualifications to safeguard the trusted and historic apprenticeship brand, which has been tarnished in recent years. Those new rigorous standards would ensure that apprenticeships are, once again, a trusted gold standard and address the way they have been downgraded under this Government.

We were attacked for setting high standards by the Deputy Prime Minister in a frankly embarrassing and cack-handed response by him at Deputy Prime Minister’s questions last March. He lambasted us for apparently wanting to halve the numbers of apprenticeships by requiring that all apprenticeships be set at level 3 and last for at least two years. The truth is that we want to rename intermediate apprenticeships to protect the “apprenticeship” brand. Apprenticeships that do not currently meet the criteria will continue but under a different name.

The Deputy Prime Minister also got very excited about the use of the word “deadweight” in the independent report into apprenticeships that was produced for us. Chaired by the Institute of Education’s Professor Chris Husbands, the report recommended that we adopt those criteria. What the Deputy Prime Minister failed to notice when he got himself so excited about the use of the word “deadweight” is that the Business Secretary had published a report in 2012 with the title “Assessing the Deadweight Loss Associated with Public Investment in Further Education and Skills.” Clearly, the sooner the Business Secretary successfully carries out his coup of his party, the better.

Stephen Lloyd (Eastbourne) (LD): Does the hon. Gentleman agree that a key reason for retaining level 1 as an entry for apprenticeships, is that apprenticeships offer an opportunity for lots of young people who do not have the education or the academic skills? If we do not let them in through a level 1, they will not have the opportunity to go up the apprenticeship ladder. That is a profoundly important point.

Mr Umunna: I am talking about not doing away with the qualifications of levels 1 and 2, but calling those levels something different and maintaining the badge of

4 Feb 2015 : Column 317

quality for apprenticeships by having them at level 3 and above. That will bring us in line with many other European countries.

Steve Rotheram (Liverpool, Walton) (Lab): My hon. Friend is absolutely right about protecting the apprenticeship brand. Level 1 is a pre-apprenticeship entry qualification. Levels 2 and 3 are recognised by the industry. A person cannot go on to a building site with a level 1, but they can with levels 2 and 3.

Mr Umunna: I agree with my hon. Friend.

I have already talked about compliance with the national minimum wage. To tackle non-compliance and non-payment, Labour would give local authorities new powers to investigate and enforce the minimum wage. Hopefully, that will reduce the 15% of apprentices—[Interruption.] There will be headlines about how I cannot pronounce the word “apprenticeship”. Perhaps I should go back to school myself, but, to be honest, people mess up my name all the time. But, yes, we should be giving local authorities more of a role in identifying companies that are not complying with the requirements under the national minimum wage regulations.

Finally, we will make it very clear that we expect Departments across Government to provide apprenticeship opportunities. If we are elected in 91 days’ time and I am given a job by Prime Minister Miliband, I will be working with colleagues in the Labour Cabinet to ensure that we increase the number of apprenticeship opportunities across Whitehall.

I am mindful of the time, Madam Deputy Speaker, so I will conclude. I do not think that there is a huge difference in views across the House, but it all comes down to competent, determined delivery of policy across Government. We are determined, across all Government Departments, to do all we can to reform and grow our economy. The provision of more and better quality apprenticeship is a key part of that and will help us to ensure that more people can achieve their aspirations and dreams. It is for that reason that I commend this motion to the House. I am clear that there is only one thing to do this May and that is to vote Labour.

3.9 pm

The Secretary of State for Business, Innovation and Skills (Vince Cable): I am delighted that the Opposition have chosen apprenticeships as the topic for this debate. The motion’s opening line is an admirable statement of what we are trying to do:

“That this House believes that more high-quality apprenticeships are essential to the future prospects of young people and future success of the economy”.

“Hear, hear” to that. It offers a good definition of what the Government have been doing: the number of apprenticeships has doubled from just over 1 million to 2 million over this Parliament, and as the hon. Member for Streatham (Mr Umunna) has emphasised quality, I should say that the proportion of advanced and higher apprenticeships and longer apprenticeships has risen systematically as a result of our reforms.

We are therefore very comfortable debating apprenticeships. Indeed, the only subject that we would be more comfortable debating is job creation, which I think the Opposition have chosen for next week—the

4 Feb 2015 : Column 318

hon. Member for Streatham is very brave. I was trying to understand their thought processes in approaching the question. I suspect that they said to themselves, “Well, the Government actually have a pretty good record on all this stuff, so let’s try to find a negative number to debate. It doesn’t matter what it is, so long as it’s negative.” They did find a negative number. In 2013-14, for one year, and for one age group, there was a slight reduction—4%—in the number of apprenticeship starts. That fact is quite correct, but the argument built around it is utterly specious.

Let us look at that age group—19 to 24-year-olds—because it tells a good story about what has actually happened. I do not want to dismiss older apprenticeships, as the hon. Gentleman did, because many of them are extremely valuable in raising the productivity of the labour force. The time series gives us a good analysis of what has happened during our time in office. In the year before we came into government there were 114,000 apprenticeship starts for that age group, and in the last year for which we have records, 2013-14, the figure was 159,000, which means there was a 40% increase in the age group he defines as the most important. As has already been pointed out to him, there has been a 60% increase in Streatham, and a 75% increase in Hodge Hill.

The number of starts is one way of measuring apprenticeships, but in some ways participation is a better measure, because it captures the benefits of longer apprenticeships and fewer drop-outs. The situation with participation is even stronger. It suggests that over that period the numbers grew from 210,000 to 309,000, which is a 46% increase. Overall, participation in apprenticeships grew by 73%, and for advanced apprenticeships—level 3 and above—participation has grown by 90% under this Government.

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): I thank the Secretary of State for giving way; he is being characteristically generous. I am glad that he has focused on the fall in the number of apprentices under the age of 25. Does he think that that trend can be reversed with the budget that the Chancellor has set out for his Department, as implied by the fiscal path for the years ahead? He knows as well as I do that if the science budget is protected, that implies a 44% cut for the Department. Does he think that it will be possible to reverse the fall in the number of apprentices with that kind of settlement?

Vince Cable: It is certainly possible, as I think we shall see when we get the 2014-15 figures. I agree with the right hon. Gentleman that we should be investing more in apprenticeships, not less. That is certainly my clear objective. He might not have noticed, but the autumn statement included a commitment to £40 million extra for higher and advanced apprenticeships over the next two financial years, so we have every reason to be optimistic about achieving continued growth.

The figures I have cited, which I do not think are disputed, actually understate the improvement achieved, and for precisely the reason that the shadow Secretary of State emphasised: the necessary shift to longer apprenticeships and higher level apprenticeships. When we came into government, the share of level 1 was above 40% for that age group, and it is now only 10%.

4 Feb 2015 : Column 319

We decided in 2012 not to include level 1 within the definition of an apprenticeship. As the hon. Member for Liverpool, Walton (Steve Rotheram) pointed out, that was entry level. We now call those traineeships, so there is progression. It is valuable to have level 1, but we no longer describe it as an apprenticeship. If we take out the very short courses, in particular, which tended to dominate in the earlier period, we see that the number of people in the 19-to-24 age group has actually doubled, because of the preponderance of very short courses in the apprenticeship programmes we inherited.

Let us look at the higher level apprenticeships. For level 3 the number of starts has doubled. For higher—level 4, foundation degree and above—we have seen a tenfold increase since we came into government, from 1,700, which was negligible, to 18,000. There is an important point to make about levels. I think that the hon. Member for Streatham dismissed too easily the value of level 2 apprenticeships.

Mr Umunna indicated dissent.

Vince Cable: Well, he seemed to imply that they were not quite apprenticeships. Actually, there is a lot of statistical evidence that people who do a level 2 apprenticeship and no more have significantly higher earnings than those who do not—about 11% or 12% over a three to five-year period. There are many important trades, such as bricklaying, in which a level 2 qualification offers valuable progression into a badly needed occupation. The hon. Gentleman is right that we should be moving up the level chain, which we are doing, but I do not want him or anybody else to devalue level 2 qualifications or to seek to eliminate them.

Mr Umunna: I agree with what the Secretary of State is saying. I am seeking not to devalue level 2 qualifications but to bring us up to—[Interruption.] Well, Mr Graham says that we want—[Interruption.]

Madam Deputy Speaker (Dame Dawn Primarolo): Order. Mr Graham is not taking part in this exchange. Just make your intervention, Mr Umunna.

Mr Umunna: What we are proposing is to bring us up to the same benchmarks as our competitors, who are more productive than we are.

Vince Cable: I hope that is a clarification that level 2 will not be removed from the hon. Gentleman’s definition of an apprenticeship, should he find himself in government. I hope that the Deputy Prime Minister is not right that this is some kind of ploy to reduce the numbers and save money.

Richard Graham: My right hon. Friend makes an extremely valid point. It is quite extraordinary that the shadow Secretary of State has not read his own motion, which states very clearly

“so that all apprenticeships are at least level three”.

What is the role for level 2? My right hon. Friend is right to question that.

Vince Cable: That is a valid clarification.

4 Feb 2015 : Column 320

Mrs Caroline Spelman (Meriden) (Con): Does my right hon. Friend share my concern about the message that the hon. Member for Streatham (Mr Umunna) is sending to young people in my constituency who are studying hard right now for level 2 qualifications, and about the message he is sending to the colleges and staff who are working hard to ensure that they have the sorts of relationships with employers that can make that happen? Should he not think more carefully about what he says?

Vince Cable: The right hon. Lady is absolutely right. Level 2 qualifications are valuable in themselves, as she rightly emphasises, but they are also part of a progression route. Many people who do a level 2 qualification take a break before going back and doing a level 3. I hope that we have now clarified that level 2 is a part of apprenticeships.

Steve Rotheram: With regard to proper apprenticeships, it depends on what a person’s qualification is on entry. With a lower qualification threshold, they would do a national vocational qualification level 2, on the way to doing an NVQ level 3. It is not either/or; it is part of an apprenticeship.

Vince Cable: That is very helpful. The hon. Gentleman clearly speaks from experience and knowledge, and we respect that.

The figures are very clear: we have seen a big increase in volume and a big increase in quality. That did not happen by accident. It is important to talk through the constraints on the public finances that I inherited, and on which the hon. Member for Streatham elaborated with regard to the problems that will face the next Government. When I came into office, I was told that the previous Government had planned to cut the Department’s budget by 25% had they returned to office. That was clear and explicit. Indeed, we have had to confront that in office. Let us be clear that it would have been no different had he been doing my job.

The Department’s budget is dominated by two items: higher education, including teaching and student support, and adult skills. There are other, smaller items such as industrial support and science. We were therefore faced, in office, with some very painful and difficult decisions. The advice I got from the Opposition, in a particularly shrill and angry way, was that we must give priority to university undergraduates—future graduates. We did the calculations and found that had we followed the advice from the Opposition, and had we introduced the policy that I think—it is not totally clear—they are now considering introducing on tuition fees, we would have had to cut the adult skills budget by about 40%. Within that, we would have had to cut apprenticeships by even more, because, being of higher quality, they are more expensive than other forms of training. Apprenticeships, which the hon. Gentleman described as growing steadily throughout the time of the Labour Government, as they did, would have been emasculated as a result of the public spending cuts that I think his party would have made had it been in government, and that I was being advised to make.

I then made a decision, which I think was one of my better ones, to listen to the advice, to reject it, and to do the exact opposite. We took a serious political hit on higher education, but we did the right thing in ensuring

4 Feb 2015 : Column 321

that universities were properly funded and that we got a fair repayment system. We also made the decision to invest more, not less, in apprenticeships. That is how we have got to where we are, with not only the volume but the quality. That is because we followed up getting the volume by taking short apprenticeships of below one year out of the system; by significantly supporting advanced and higher level apprenticeships; and, perhaps most importantly—the hon. Gentleman did not mention this at all—by introducing employer ownership through giving business a greater say in how these funds are allocated. In all those ways, we have improved quality.

Let me deal with some of the other critical comments in the hon. Gentleman’s speech and motion. First, he quoted the figure, as he did when he was on television with me the other day, regarding what he calls the lack of formal training—[Interruption.] Indeed, there was a survey that suggested that some apprentices—

Mr Umunna: It was your survey.

Vince Cable: There were a substantial number of surveys; I am quoting the one that the hon. Gentleman has highlighted.

Mr Umunna: It was your survey.

Vince Cable: We have published a survey in which 24% of apprentices said that they had not received formal training. The hon. Gentleman has built his criticism around that.

Mr Umunna: It was your survey.

Vince Cable: I am not disowning the report; it clearly exists. [Interruption.] Perhaps the Opposition could be a little less silly and just try to follow the argument. The key is in the word “formal”. Many people do good apprenticeships in business that involve informal work in the workplace, and many people define good training in that way. The survey that we conducted, which the hon. Gentleman is having a little giggle about, tells us very clearly that 90% of those trainees are satisfied with their apprenticeships, while 72% are very satisfied. Ninety-seven per cent. said that they had been trained—sometimes informally, sometimes formally—and 90% got a job. Perhaps most crucially, there is a very high earnings premium. I have quoted the figure for level 2, and for level 3 it is significantly higher—about 16% three to five years after graduation. The proof of the pudding in is in the eating: these apprenticeships do provide satisfaction, jobs and higher salaries for the people who do them.

Let me address the minimum wage. The survey shows that 15% of people are not being paid the minimum wage. That figure is clearly too high, and unacceptable. The motion says that it is “one in five”. I am not sure who did the maths on this, but one in five is not 15%. Perhaps we need compulsory maths for Opposition Front Benchers as well as apprentices. The key point is that 15% is way down on the 30% figure that we inherited. As the hon. Gentleman knows, because he has been part of these debates during the past year, we have significantly improved enforcement measures. We have increased penalties from £5,000 per firm to £20,000 per person, we have introduced naming and shaming, and we have increased the enforcement budget by 30%.

4 Feb 2015 : Column 322

We do take the minimum wage seriously. We believe that it must be enforced and that it should apply to apprentices as it should to anyone else.

The hon. Gentleman is right that procurement is a lever for the public sector to employ. We already have many examples of good practice in public sector procurement. Crossrail is a company that has really committed itself to high levels of apprenticeships. There are a couple of practical problems, as I hope he recognises; I think he hinted at one of them. First, for small and medium-sized enterprises and social enterprises, where we are trying to increase the share of public procurement, there is a conflict of objectives. Do we regard getting SMEs into procurement as more important than increasing their number of apprenticeships? There is no clear answer to that. Secondly, companies that are required to introduce apprenticeships would simply add that to the cost and it would be passed on to the public sector, so instead of a direct subsidy through our 50:50 payment system we would be providing indirect subsidies. These are not crippling objections. We need to reflect on how we can better use public procurement, but crude legislation and compulsion is probably not the best way. I accept that public procurement is a good vehicle, and we have to work on this.

Bill Esterson: I agree that it is a real challenge, given the current situation, to enable more SMEs, particularly the smallest businesses, to take on apprentices. Does the Secretary of State agree that countries such as Germany have cracked this problem over many years, and that there are things we can apply from Germany and elsewhere to achieve the goal of getting more small businesses to take on apprentices?

Vince Cable: The hon. Gentleman is right. There is a German model that seems to work for that country, and Austria is another example. Their approach is different from ours, but it has given them consistently high levels of skills in manufacturing industries, in particular. We should learn from that. There is an element of compulsion and levying that we have moved away from in the UK. However, I am certainly happy to learn from Germany on this and other things.

Andrew Gwynne: There are also some very good examples here in England. May I commend to the Secretary of State the work of Labour-controlled Tameside council, which covers part of my constituency and which has established a local apprenticeship company from which SMEs can draw down apprentices, even though the local authority is running the company?

Vince Cable: Yes, I believe there are lot of good models of that kind, and I commend the one that the hon. Gentleman mentions.

That leads on to another issue that the shadow Business Secretary raised—devolution and how we capture decision making to a local level. He is right that we should have as much devolution as possible. That is what we are trying to do through the city deals and the local deals. There are many good models. Leeds is one, and Manchester is also getting off the ground. Sheffield is pioneering a lot of the local-level commissioning of apprenticeships that is particularly good for getting through to SMEs.

4 Feb 2015 : Column 323

Devolution is not simply about local government or LEPs. One thing we had to do when I came into office was strip away some of the bureaucracy governing further education colleges as leading providers. We had to simplify greatly a very bureaucratic top-down system. Devolution is also about devolving to companies, and one of our major initiatives—employer ownership schemes and the trailblazers, which set industry-level standards—has reduced bureaucracy for small companies and helped them at industry level to formulate standards that they can use. Devolution is not just about local government.

Mr Robin Walker (Worcester) (Con): Does the Secretary of State agree that LEPs can be great champions of apprenticeships when they are given the power to do so? Today, the Worcestershire LEP announced that the ambitious target it set itself of having 10,000 people participating in apprenticeships in the county by 2015 has already been achieved. Is that not an example of how by using the existing structures in our existing counties, rather than creating artificial regions, we can drive forward apprenticeships and skills?

Vince Cable: That is one of the examples. The LEPs have demonstrated the success of devolution and there are many other models. I know that my hon. Friend the Member for Eastbourne (Stephen Lloyd) has done brilliant work locally by simply working with local colleges and local authorities. There are many local examples and that is what we should be trying to achieve.

I know that you want to bring more people into the debate, Madam Deputy Speaker, so let me make two points in conclusion.

Mr Byrne: Before the Secretary of State concludes, will he update the House on the potentially quite sweeping changes to how we fund apprenticeships in this country? The Minister for Skills and Equalities’ predecessor launched a wide-ranging consultation on direct payment through the PAYE system, but on 13 January the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), told the House that the process was in a state of suspended animation and that no further reform would be made. Will the Secretary of State tell the House this afternoon what on earth is going on?

Vince Cable: Our objective is to try to make the system of employer ownership much more extensive. We have had great success with our pilots and are anxious to extend the system. Different models have been canvassed and there has been a ministerial statement describing very clearly where we are. We are keen to do this in a way that creates incentives rather than disincentives for small businesses. The right hon. Gentleman is quite right that we are not rushing into a scheme prematurely, but are consulting. That is exactly what Governments do, and when the Government are returned, if I am still in this post, I am sure that we will see a lot of action in that area.

Let me make my two concluding points. First, the shadow Business Secretary mentioned the importance of the status of apprenticeships. That is absolutely right. For far too long we have had a two-tier system under which supposedly clever people went to university and those who failed went on to vocational courses. We need to break that down. It is being broken down and

4 Feb 2015 : Column 324

there is a change in perception. A recent survey suggested that 57% of parents are willing to recommend an apprenticeship course to their children. Many of them can see the economic advantages of such a course and the status is changing.

The big issue is the one the shadow Business Secretary started with. I agree that for the sake of the economy we need significantly increased investment in people and skills. The figure we have in the Department is that every £1 million invested in apprenticeships yields an £18 million return to the economy. It is essential that we extend rather than contract the number of apprenticeships. We have a proud record of doing that and I want to see it continue.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. It will be obvious to Members that there is little time left in the debate and that many people wish to speak. We will therefore have a five-minute time limit on Back-Bench speeches.

3.32 pm

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): Although I am speaking in part about an inquiry by the Select Committee on Business, Innovation and Skills that took nine months and made many recommendations, I shall try to keep my comments within the time limit.

I welcome the debate and the cross-party agreement on the importance of apprenticeships and the skills agenda. I find the concentration on figures and party-political point scoring, shall we say, about the number of apprenticeships supremely unhelpful in determining our skills needs and how we will meet them. The Government, to their credit, have been prepared to invest £1.6 billion in apprenticeships in the past financial year, but we have seen a fall in the number of starters. Notwithstanding the substantial increase in the number of apprenticeships overall, we know that the increase has been much lower in construction and engineering apprenticeships, which are incredibly important in the development of our economy.

If we take the education system as a whole and add in the money we put into the apprenticeships programme, we see that we are investing a huge amount of money but are not addressing the skills imbalance in the economy. I will single out two crucial areas in which we need to improve our performance if we are to address the problem. The first area is the education system, particularly the careers service in schools. Much has been said about parity of esteem, and I welcome the concentration by my hon. Friend the Member for Streatham (Mr Umunna) on reinforcing the status of apprenticeships, which is absolutely vital if we are ever to change the mindset in schools. If I have time, the second area on which I will comment is engagement with small businesses, but I will first talk about schools and the culture in the education system.

When the Committee visited Sheffield, it came across a very bright apprentice who had been offered a university place at school, but was virtually ostracised when he told the school that he would take an apprenticeship; he was not even invited to the school’s end-of-term event. That experience is reflected more widely. The

4 Feb 2015 : Column 325

Edge Foundation has said that 26% of those surveyed had been actively discouraged from becoming apprentices. I do not blame schools or teachers, because they are delivering on an agenda set by the Government. If the Government want to change the situation, they must set the agenda on Ofsted and monitoring to ensure that vocational training receives the same support and promotion in the education system as universities and A-levels.

Mr Robin Walker: Will the hon. Gentleman give way?

Mr Bailey: I will certainly give way to my colleague on the Business, Innovation and Skills Committee.

Mr Walker: I agree completely with the Chair of the Select Committee. I recently held an event in my constituency for apprentices to talk to school careers advisers. One thing that came across very strongly was that apprentices and their employers told careers advisers that people expected to increase their earnings in the long run by going for an apprenticeship. Careers advisers seem to start from a natural assumption that apprentices are paid less. Does the hon. Gentleman agree that that is one of the myths we need to take on? The long-term earning potential of apprentices is often much higher.

Mr Bailey: I entirely agree. For too long the careers service has been seen as a bolt-on to the educational process, as reflected in criticisms by the Education Committee and Ofsted. I am not satisfied that the guidance issued to schools in April fully addresses that issue. The ability to understand a student’s potential and to place them in the most appropriate skills setting is absolutely essential both to the individual involved and to the economy as a whole. That area of education is grossly neglected.

I want to move on briefly to small businesses. In my experience, blue-chip companies understand apprenticeships, deliver on them and play a vital role. However, our economy is dominated by small businesses—more than 90% of businesses are small ones—and it is generally recognised that that sector has the potential to increase employment. It is essential to get more small businesses to take on apprentices, but all too often they do not have the capacity, time or finances to train them in skills.

I accept that the Government have recognised the need for more employer involvement, but the latest statement on 13 January fell short of what small businesses need both in relation to the funding regime and the guidelines necessary for them to have the confidence to take on apprentices. There is a lack of clarity and too much bureaucracy, and the Government need to take a consistent approach to small businesses if we are to overcome the problem.

3.39 pm

Maria Miller (Basingstoke) (Con): In my constituency of Basingstoke, the number of apprenticeships this year is double the number in 2009 under the last Government. Over the past four years, there have been more than 6,000 apprenticeships—1,600 in the last year alone.

I thank all the businesses who take on apprentices and the colleges that work so hard to make apprenticeships such a success. I am sure that the Opposition spokesman,

4 Feb 2015 : Column 326

the hon. Member for Streatham (Mr Umunna), did not want to suggest that those businesses were simply rebadging existing training programmes, because that would belittle the incredible work that the many hundreds of businesses in my constituency that take part in the schemes put into making them a success.

I welcome the announcement by my right hon. Friend the Prime Minister that a future Conservative Government will make a £1 billion commitment to delivering 3 million more apprenticeships by 2020. That is the sort of commitment that businesses in my constituency want to see.

Why do I think that apprenticeships are so successful in my part of Hampshire? It is for three reasons. First, apprenticeships are part of the culture. We have one of the longest-running apprenticeship schemes in Basingstoke at the Atomic Weapons Establishment. Employers believe in apprenticeships because they have seen how they work, whether it is Fujitsu or MiniTec. Whether they are large or small, businesses have seen how apprenticeships deliver quality staff.

Secondly, businesses in Basingstoke believe in apprenticeships because we have one of the top-performing colleges in Basingstoke college of technology, which delivers hundreds of apprenticeship schemes every year in subjects as diverse as IT, web design and child care. Such organisations are leading the way, and we should be celebrating them today.

The third element, which was picked up on by my hon. Friend the Member for Worcester (Mr Walker) in his intervention, is the role of local enterprise partnerships. My local LEP, Enterprise M3, put apprenticeships at the heart of its skills and employability strategy that was published two years ago. It is that leadership and commitment, which has come right from the top, that has helped us to secure so much support, particularly through growth deal funding, which has supported the establishment of key skills centres right across the LEP. That is just the sort of support that we need for this programme.

I want to make three further points in the time that is available to me. First, the hon. Member for Streatham made it clear in his opening statement for the Opposition that the motion focuses on young people, and rightly so. However, he seemed very dismissive of the role of apprenticeships for older people who have been established in the work force for a number of years. He needs to consider that position more carefully. My local college delivers three quarters of its apprenticeships to people who are over the age of 18.

Mr Umunna: It is entirely wrong of the right hon. Lady to describe me as dismissing apprenticeships for older people. My point is that we need to increase the numbers dramatically, particularly in respect of young people. It is totally wrong of her to misconstrue my comments in that way.

Maria Miller: I am grateful to the hon. Gentleman for making his position clear. It was a little less clear in his speech. The teaching staff at my local college will want to hear what he has just said, because it is important that we have a lifetime approach to training for people in our work force. Training does not stop when we leave college, school or university; it goes on through our lives. Apprenticeships offer an incredibly strong way for

4 Feb 2015 : Column 327

people to increase their skills and ensure that they have a high level of employability, particularly in areas such as mine, where we estimate that 50% of the job opportunities will require a higher education qualification in the future.

Secondly, I want to focus on the quality of apprenticeships. I commend the Government for driving up the standards of apprenticeships in recent years. However, I do not think that we should devalue the importance of level 2 apprenticeships. They are an immensely valuable way of making up for lost time at school or college for youngsters—or, indeed, older people—who do not have basic qualifications. I hope that the Opposition would want to rephrase the motion, because it tends to suggest that they are devaluing level 2 apprenticeships or writing them off altogether. I would not endorse that at all.

Finally, I know that the Minister is looking at funding routes that enable employers to get involved in apprenticeships, and I would like to talk to him about the process used by the Skills Funding Agency to allocate growth funding—perhaps he will meet me separately to discuss that. Currently, the SFA requires providers to recruit additional apprenticeships and then bid for funding. Opportunities to bid for funding are every three months, but the agency does not guarantee that extra funding will be allocated in that process. Colleges and employers should work together to maximise the opportunities for apprenticeships, and we must ensure that we do not lose opportunities simply because of the slowness of the process.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. I am afraid I was rather optimistic with the five-minute time limit, because five minutes plus interventions becomes seven minutes. I must now reduce the time limit to three minutes, although I will be kind to the hon. Member for Liverpool, Walton (Steve Rotheram) as he had no warning about that.

3.45 pm

Steve Rotheram (Liverpool, Walton) (Lab): Like many hon. Members, in just 92 days I will have reached the end of my first term as an MP. In my mind, it is still inconceivable that I have made it from being an apprentice on a massive building site to being, well, an apprentice on a massive building site, and although my political apprenticeship is about to be completed, the Palace of Westminster is not a bad site to work on. When I walked through the gothic archway that leads to the Chamber for the first time, flanked on either side by the familiar green Benches that I had only ever seen on the telly, I thought that I would be the only brickie in Parliament. But no—not only is my hon. Friend the Member for Derby North (Chris Williamson) a former bricklayer, but no less than the Deputy Speaker himself is a time-served, trowel-carrying member of the building fraternity.

The Prime Minister was challenged by young people on the programme “Stand Up Be Counted”, and he said that although the apprenticeship wage is not that high, the training and experience that someone gets should lead to a good job. However, he did not say what he is doing to address the problem of wage rates. My party is right to advocate equality between an apprenticeship

4 Feb 2015 : Column 328

and an undergraduate degree, but there must be greater focus on training people for specific sectors where there is real employment growth.

The Construction Industry Training Board construction skills forecast predicts that the construction industry will need more than 200,000 entrants over the life of this Parliament. That is in part to cope with political priorities such as house building and road improvements, but also to deal with an ageing population in the work force, with many workers reaching retirement age. That means that an average of 40,000 construction workers will need to be trained each and every year. To put that in context, in the last financial year just over 1,000 apprentices completed construction apprenticeships.

Construction was hit hard by the global financial crisis and the Government’s austerity measures, and thousands of workers lost their jobs or were replaced by cheaper migrant workers. We have seen the continued casualisation of the industry, and the latest practice of umbrella companies top-slicing workers’ wages. That is why I am proud of the campaign led by my union—the Union of Construction, Allied Trades and Technicians—to stop quick-buck merchants and unscrupulous employers damaging the reputation of the whole industry in a way that puts off many young people from considering construction apprenticeships as an attractive employment option.

The situation is stark and a number of factors require addressing immediately. Careers advice is patchy at best, and we must get away from the perception that construction is just for low achievers. The gender imbalance is still acute. Out of the 13,500 apprenticeship starts last year, only 250 were female, and for the best part of a decade construction has not been an industry that guarantees secure employment.

Liverpool city council has a great apprenticeship model, should others be looking to replicate its success. However, unless the Government are serious about filling the considerable skills shortages that exist in the construction sector, it will be extremely difficult to deliver those infrastructure priorities and we will need to import increasing numbers of skilled workers from abroad.

I firmly believe that the Government can change the circumstances of ordinary people for the better, and if I am re-elected in a few months’ time and come back here, the Labour Government that we will form will give hope to a new generation that is looking for high-quality skills, training and employment in our costed apprenticeship programme. I hope I am returned to see it.

3.49 pm

Jake Berry (Rossendale and Darwen) (Con): I am sorry we have only a short time to discuss apprenticeships, which have changed my constituency massively over the last five years of this Government. In 2010, 630 under-24s were claiming jobseeker’s allowance, and in the year before the election, there were 600 apprenticeship starts. During that time of high youth unemployment in my constituency, we saw something really bizarre: both the vacancy rate and, in certain sectors, the number of unemployed people rose. It was completely counterintuitive. The reason was that young people were leaving school

4 Feb 2015 : Column 329

without the menu of skills that our local high-tech, high-quality engineering and manufacturing businesses wanted.

We have heard about the importance of encouraging smaller businesses to take on apprenticeships. I took it upon myself to visit all the small businesses in my constituency and say, “Why are you not embedding apprenticeships in your business?” In 2010-11, I found that lots of those businesses, for myriad reasons, had simply given up on apprenticeships. I visited a weaving mill in Darwen and said to the owner, “It’s fantastic to see all your looms still going”—people think we have lost our textile industry in Lancashire, but it is still going strong—“but every single person working them has white hair.” I do not mean to criticise anyone with white hair, but in 10 years, if he has not got apprentices back into his business, his highly skilled British manufacturing business will shut.

The mill owner, along with other great employers in my constituency, such as JJO plc and WEC Engineering, came together to launch apprenticeships campaigns with the simple aim of recruiting 100 apprentices in 100 days. We have now had three of these campaigns. In the first one, we recruited 160 apprentices in 100 days; in the second, we recruited more than 200; and in last year’s, we recruited more than 300. In fact, the tie I am wearing for this debate was woven by a young apprentice who benefited from one of those campaigns. It is three campaigns old and is beginning to look its age—and it gives evidence of the number of lunches I have worn it for as well.

Businesses in my area embraced apprenticeships, so we have cut by half—to just 320—the number of unemployed young people and doubled the number of apprenticeships to more than 1,100. I am grateful for the support of businesses in my area in doing this.

3.53 pm

Mr Gordon Marsden (Blackpool South) (Lab): I congratulate my Front-Bench colleagues on tabling the motion and focusing on 19 to 24-year-olds. When I had the honour to serve on the Front Bench, one of the things I took to it from my experience in Blackpool was that 19 to 24-year-olds were a key group that must not be left out of the process. Many in that age group have missed out on chances, perhaps because of disability, caring responsibilities, lifestyle or family disruption, but theirs is a key group for progression. There is certainly good practice in respect of that age range. I think of the “build up” programme in Blackpool college, which brings many apprentices into construction; the Lancashire apprenticeships scheme; and the skills and jobs fair I held last year involving 300 young people and 40 to 50 business participants.

As we have seen today, however, the Government were slow to match their rhetoric on 19 to 24-year-olds with the statistics. Why are they failing? In part, they are failing because they made such a disastrous mistake on traineeships. Traineeships were first mooted in 2012 by the Deputy Prime Minister. The idea was dawdled over for 18 months, and then became part of a long wrangle between the Department for Work and Pensions and the Department for Business, Innovation and Skills

4 Feb 2015 : Column 330

over the definition of benefits. It had no marketing budget and no proper sell to colleges, and there was a continued failure to consult employers, as we see even today in comments in

FE Week

. The 19 to 24 age group needs to be encouraged.

This is a Government who, while lauding apprenticeships in the round, have hindered the potential to access them in detail. This perspective has constantly been undermined, as we have heard, by the lack of co-operation from the Department for Education, not least in relation to the shambles of careers advice. This Government have commissioned good reports from business people such as Doug Richard and Jason Holt, but then failed to act quickly or effectively on them. They have not listened to what businesses and business organisations have said—and none more so than on the policies of procurement, which we introduced in government with some wonderful examples such as Crossrail.

We have commissioned a trio of reports on FE, skills and apprenticeships, and we have recognised the need for mechanisms to secure a critical step change in the take-up of apprenticeships by small and medium-sized enterprises. As I pointed out when I spoke at Training 2000 at Bolton in 2012, greater connections with the supply chain about training and other things are all key mechanisms to getting things across to benefit 19 to 24-year-olds.

That is why in our devolution proposals we talk specifically about skills and apprenticeships. They offer a key role not just for local councils, but for unions and union learning fund people. In that process there must be a key role for apprenticeships in the service and creative sectors, as well as in logistics and transport. We are going to have infrastructure projects that will produce £50 billion of spend over the next few years. We need to make sure that significant numbers of apprenticeships come from that, rather than having the record of hype and disconnect between BIS and DFE, which has too often blotted out this Government’s copybook on skills, training and apprenticeships. We need a strategy of progression, which the Opposition Front-Bench team are taking forward.

3.56 pm

Stephen Lloyd (Eastbourne) (LD): It is a pleasure to speak in the debate. The limited time available means that I shall have to circumscribe what I was going to say. First of all, I appreciate that this is an Opposition day debate, so I appreciate that the Opposition will find things that they think we have done badly, and vice-versa. However, I want to rise above that, because the most positive aspect for me is that both sides recognise that apprenticeships have gone through—possibly started by the Opposition—a transformational process. I believe that the coalition has broadly carried that on successfully, so I am hopeful that whoever are in government after the general election will keep their feet flattened down on this whole apprenticeship agenda. It has been absolutely transformational for many hundreds of thousands of people across the nation.

I was the first MP after the general election to launch 100:100. It is not just that I was optimistic about defeating my coalition colleagues in Eastbourne, but that with a business background I had a clear understanding and appreciation that when good apprenticeships are

4 Feb 2015 : Column 331

put in place, they are both tremendously successful in securing employment for those who have been apprentices and beneficial to the companies involved. We achieved 181 rather than 100; since then, more than 3,500 apprenticeships have started in Eastbourne. It has helped to lift the confidence and mood of the constituency considerably. I am sure that it is also likely to be one reason why we have come through the recession so successfully.

I pay particular tribute to Sussex Downs college, whose apprenticeship unit has been outstanding. I have worked closely with the college right from the very beginning, and continue to do so. It is running at a conversion rate, for a number of different apprenticeship sectors, of 92%. I want that in Hansard, so I refer again to a 92% conversation rate of apprenticeships into jobs. Colleagues will know that very few Government employment schemes ever run at that rate of conversation. I congratulate Sussex Downs on its apprenticeship scheme.

Finally, on the status issue, I have been working closely with a number of different groups to try to set up something called “the Royal Association of Apprenticeships”. Depending on what happens after the general election, I hope to continue to make progress on that project. I am keen to work with leading Opposition figures as well, because the status aspect of apprenticeships is crucial, and if we could put together something like a royal association and make it work, it would enhance the status and gravitas of the whole concept of apprenticeships. I think this is necessary and will provide an important part of the jigsaw to improve apprenticeships generally for long into the future.

It has been a privilege to speak. Apprenticeships have been a game changer, and I look forward to that continuing for the next 20 years.

3.59 pm

Bill Esterson (Sefton Central) (Lab): I am glad that the hon. Member for Eastbourne (Stephen Lloyd) mentioned the important role played by training providers in supplying the off-the-job learning that is such a crucial factor in apprenticeships. Hugh Baird college in Sefton does a fantastic job in partnership with the employers who look after the apprentices, across a range of sectors.

When I visited Michelin Tyre in Stoke a couple of years ago, I met engineers who were in their late 40s or early 50s. They were the youngest engineers in the company until a year or two ago, when the company suddenly realised that it had no way of replacing its engineers. We heard the same story from the hon. Member for Rossendale and Darwen (Jake Berry). Michelin now employs a number of young, high-quality apprentices, who are doing fantastic work and developing the skills that the company needs. As we have heard, that is a familiar story.

The construction industry in the north-west needs 1,500 new bricklayers and 1,500 new roofers each year. Where are those skilled jobs to come from unless we get the apprenticeship agenda right? I hear from schools in my constituency that fewer pupils are studying vocational subjects such as design and technology. Of course we need to encourage young people to go to university, but all too often we value academic learning and qualifications at the expense of vocational learning and qualifications. The culture needs to change, but I fear that we are far

4 Feb 2015 : Column 332

from reaching that point. Whether deliberately or not, we distinguish between the two, and that absolutely has to change. As I said in an intervention, it is simply not an issue in Germany, where the vocational and academic paths run alongside each other. As is implied in the motion, the technical baccalaureate is important in enhancing the status of technical education and qualifications, as well as addressing the shortage of skills in the STEM subjects.

Concern was expressed to the Education Committee about the damage caused by the reduction in the number of professional careers advisers, and the removal of work experience as an option for many young people. Businesses have told me in my constituency, as well as in evidence given to our Committee, about the difficulties that that causes in preventing young people from being exposed to the fantastic opportunity that is presented by apprenticeships.

We must increase the number of apprentices. We need to make it far easier for businesses to take them on. We also need to make apprenticeships far more attractive to young people, and to ensure that vocational qualifications and learning in this country are regarded as being of the highest standard and value. That is why the motion is so important. I hope that it is passed, so that both our young people and the country as a whole can benefit.

4.2 pm

Neil Carmichael (Stroud) (Con): I will set my remarks in the context of the successful Government industrial strategy, because it has driven the need for 83,000 additional engineers every year. I think it important to concentrate on our apprenticeship programme, which must start to fill that huge gap. The need is obvious. For example, £100 million has been invested in Airbus, in my constituency and elsewhere, to push forward the frontiers of technology, and firms in my constituency such as Renishaw, ABB, Delphi and Lister Shearing all want more engineers, because their order books are full and their export opportunities significant.

I want to make three points. First, we must ensure that the relationship between business and education improves by making it possible for business to tell education what it needs, and for education to appreciate the sheer numbers that are required in certain areas. That, of course, must include a focus on STEM subjects. Secondly, I think that further education colleges are the unsung heroes of this story. It might be worth while for us to start thinking about a kind of Russell group to include the very best FE colleges, so that they can lift themselves up, celebrate their success, and become the key deliverers of some of the apprenticeships to which I have referred.

Thirdly, we need to talk about apprenticeships in much more glowing terms than we often do, and one way to do that is to have a proper award. It is not enough just to give apprentices something from the business. There should be an award that says, “Wherever you are and whoever you are, you’ve done it and you should be proud. Here’s a certificate to salute that fact.”

Those three ideas are designed to improve what we understand an apprentice to be and to show why we value them so much. In my constituency, I try to do all these things in different ways. I established a festival of manufacturing and engineering, which is geared to ensuring

4 Feb 2015 : Column 333

that schools and business have an ongoing relationship. I salute the successful apprentices and firms who drive up standards and ensure that our real and growing economy is equipped with the skills to deliver the output and productivity we need. They are being created by various measures and by the long-term economic plan.

4.6 pm

Richard Graham (Gloucester) (Con): It falls on me to be tail-end Charlie in this debate on which so much consensus could and should have been reached, as the hon. Member for West Bromwich West (Mr Bailey) pointed out. We all, across the House, share enthusiasm for apprenticeships: their improvement, their widening and their breadth. Unfortunately, today that opportunity was lost in what was, frankly, a disgraceful speech by the shadow Business Secretary. His dire, tribal attempt to rubbish this Government’s—and, above all, the country’s —remarkable achievements in growing apprenticeships and shrinking youth unemployment led to a string of inaccurate and, frankly, almost offensive claims. Let me try to deal, very briefly, with some of them.

The shadow Business Secretary said that the numbers of young apprenticeships were down. The Secretary of State pointed out that they are slightly down for 19 to 24-year-olds in 2013-14. In Gloucester, however, they are still more than 80% higher than the comparable figure when the previous Government were in power, and were more than double that figure in 2012-13. Overall, apprenticeships for 19 to 24-year-olds in Gloucester are at 1,730 in the past three years, compared with 740 in the last three years of the Labour Government. The figures, however one tries to twist them, are remarkable.

The shadow Business Secretary said that many of the apprenticeships were not worth the paper they are written on. How insulting to the 5,000 new apprentices in Gloucester. He said, and it is in the motion, that level 2 apprenticeships are not worth anything at all. Let me tell the House that that is completely wrong. The evidence shows that many apprentices do a level 2 apprenticeship—for example, in business administration—for a year and then go on to do a level 3 apprenticeship in the second year. I know this to be true as the second MP to hire his own apprentice. The shadow Secretary of State admitted that he himself does not have an apprentice and I do not believe that any others on the Opposition Front Bench do. I am happy to take an intervention. [Interruption.] The shadow Minister, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) is saying that he does have one, which is encouraging, but it is disappointing that the shadow Business Secretary does not and does not have that first-hand experience.

Jake Berry: Very briefly, because I know we are pushed for time. On the point of MPs having apprentices—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The hon. Gentleman has already made many interventions. I am sorry, but we are at the end of this debate.

Richard Graham: I think my hon. Friend was going to make the point that it is important that we lead by example and employ our own apprentices wherever possible.

4 Feb 2015 : Column 334

The shadow Business Secretary went on to talk, with an element of derision, about the number of apprentices over 60 who have started since this Government came into power. I hope that my older constituents, Age UK and others will have noted that point carefully. In fact, he offended almost everybody I can imagine, including all the businesses, training colleges, councils and the NHS in Gloucester that have taken on apprenticeships in the past five years and have done so much to give the opportunities to young people that all of us across this House surely agree is incredibly important. In a sense, his final words rather summed up his speech. He finished by saying that he will be voting Labour. Well, I am delighted for the Leader of the Opposition that he has the vote of his shadow Business Secretary, but if that is the summary of his party’s strategy, it is pretty disappointing. We heard nothing about the opportunities to widen apprenticeships into more sectors, including nursing; the opportunities from the pilot scheme the Government have run to let employers take control of their training funds; and the ways in which the guilds can offer apprenticeships. There were many things that could and should have been covered today, and it is a great disappointment that they were not. I will certainly not be voting for this motion, but I do agree wholeheartedly with all the Members of this House who support apprenticeships and want to see more of them.

4.10 pm

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): I am not sure which debate the hon. Member for Gloucester (Richard Graham) was in, but he certainly constructed a few windmills of his own to tilt at. No doubt, that will be of interest to his local press in what I know will be a tight contest.

This in general has been a very good debate. It has been especially heartening to see interest across the House in driving behind a shared ambition to boost the number of apprenticeships, to close the skills shortages and gaps that bedevil so much of our economy and to close the looming large productivity gap that my hon. Friend the Member for Streatham (Mr Umunna) alluded to in his opening remarks. The fact that there is now a 20% productivity gap between this country and the rest of the G7 is shocking, and it is going to make it very difficult for us as a country to earn our way out of the cost of living crisis in which this coalition Government have landed us.

It is simply impossible for us to raise wages in the way we want to unless we raise productivity rates and that, in turn, is going to require us to raise the level of skills in this country. As my hon. Friend said, we are very proud of our record in government in rescuing the apprenticeship programme from the Conservative Administration back in 1997. I think the grand total then was 65,000 apprentices, and we are very proud that we were able to raise that number to nearly 300,000 by the time we left office. We achieved that through some concerted policy measures, not least the creation of a National Apprenticeship Service, which was extremely successful in its short life. I am glad the current Government kept it on, although I am afraid it is now a somewhat eviscerated version of its former self.

We were the first Government to introduce a national apprenticeship week back in 2008, but crucially we learned the hard way—and it is a shame these lessons

4 Feb 2015 : Column 335

were not taken up in the way they could have been—that public procurement could be used to drive up apprenticeship numbers, and I was very pleased to see on Monday deep below Tottenham Court road the extraordinary work that Terry Morgan and the Crossrail team are undertaking there. That public procurement project has now driven about 440 new apprenticeship numbers into the system. That is a very good example of public procurement being used to increase the number of apprenticeship opportunities for our young people.

A number of hon. Members have noted with appreciation that there is a degree of consensus in this debate, and the Government did do some things that sought to build on the firm foundations left by the last Labour Government. The skills strategy published in 2010 committed to improving apprenticeship standards, and the higher apprenticeship fund was a welcome innovation, as was the money for higher apprenticeship numbers that the Secretary of State referred to in response to an intervention from me.

The question, however, is whether the scale of this Government’s ambition is anywhere near the level that is needed to get this country out of the hole into which they have put us. It has been argued this afternoon that there are four or five important areas where the Government’s apprenticeship reforms have fallen short. First, there is the question of whether there is enough training in the apprenticeships that are available today. The Secretary of State did an heroic job of defending the data his Department published, but the truth is that nearly a quarter of the 19 to 24-year-old age group do not receive any formal training, which means an apprentice in England gets under seven hours of training a week. We do not think that is good enough, and neither do the Secretary of State’s own advisers. In fact, the Doug Richard review set the target at 20% for off-the-job training each week so, on the Secretary of State’s own data and by his own measures, his Department is failing to deliver the right level of training for apprentices. That obviously has a knock-on consequence for pay. I am glad the Secretary of State acknowledged that 15% of apprentices not receiving the minimum wage was a scandal and was not good enough and more action needed to be taken to end that abuse. If young people know that an apprenticeship is something that is not properly paid and where the Government are content to look the other way when they are abused by employers, it is going to be harder, not easier, to draw young people into apprenticeships. The level of ambition in driving out low pay from apprenticeships is not good enough, and I am afraid we did not hear enough on that front from the Secretary of State this afternoon. I hope the Minister will correct that deficit when he winds up.

It is pretty clear to us that apprenticeships are currently too short. Approximately a third of English apprenticeships last under 18 months—a shortcoming compared not simply with international standards but with other parts of the United Kingdom. In Northern Ireland only 12% of apprenticeships are that short, and only 17% are in Scotland. So the Government have much further to go in increasing the length of apprenticeships just to match other parts of the United Kingdom.

The measures undertaken to increase the number of higher apprenticeships are welcome, but the truth is that only 2% of apprentices go on to degree-level skills.

4 Feb 2015 : Column 336

There is no vocational, professional and technical path to a degree-level skill worth its name in this country, and we are absolutely determined to change that.

A number of Members rightly pointed out that underlying many of these shortcomings are problems in not just the apprenticeship system but the education system. The fact that we do not require everyone in our country to do English and maths up to the age of 18, as we recommend, is a problem. The fact that there is no gold-standard technical baccalaureate at the age of 18 is a problem. The fact that this Government have undertaken the wholesale destruction of our careers service is a problem, and the Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), and my hon. Friend the Member for Sefton Central (Bill Esterson), were absolutely right to point the finger at that problem, which we will be determined to fix.

Our young people face the challenge of a world in which one in six of their peers is still out of work. If they want to go to university, they will graduate with a bill of £44,000—a debt that, on average, they will not pay off until they are in their 50s. Not enough apprenticeships are available to them because the numbers are going down, and neither are there a meaningful number of opportunities to take them on to degree-level skills. The fact that only 2% of apprentices go on to acquire degree-level skills is a major problem that employers, particularly in engineering and science, argue is holding our country back. Many companies are not re-shoring jobs because of the skills shortage. Mike Wright, chief executive of Jaguar Land Rover, said in an independent review commissioned by my right hon. Friend the shadow Chancellor that we are graduating only approximately half the number of engineers we need to make good the skills gap. That means that we have to transform the number of technicians coming on line each year through the apprenticeship system. Right now, the Government simply do not have plans in place to fix that imbalance.

The Secretary of State was sanguine about the fiscal outlook for his Department, but the truth is that if the Chancellor gets his way and the science budget is protected, the BIS budget will be cut by some 44%. The Secretary of State knows as well as I do that that is not deliverable—certainly, his civil servants do; it is not a fiscal settlement that will allow him to build the bigger, better apprenticeship system that we need.

A different level of ambition is needed. We should set a goal of sending over the next 10 years as many young people into a high-quality apprenticeship as head on to university. That is the level of ambition we need in this country, and if we are to deliver on it, we need to get several things right. First, we need to ensure that our apprentices can compete with the best in the world, which is why level 3 is the right level of ambition. Level 2 is an important step on the road to that qualification, but if we want to compete with the best in the world and close the productivity gap, we need to set our standards high, not low. We therefore need radically to expand the number of higher-level apprenticeships. That is why the Leader of the Opposition has said clearly that our priority in expanding the university system is to create thousands of new technical degrees that would allow apprentices to go on and study up to degree-level skills. Those are the kind of skills that our science-based businesses are asking for.

4 Feb 2015 : Column 337

We need to accompany these changes with radical measures to devolve spending to city regions, which will often know their local labour market best, but above all we must harness public procurement on a completely different scale compared with the ambitions set out by this Government. That point was wisely made by the Chair of the Select Committee. I am glad that there is a shared ambition across the House on the aspiration but there needs to be a practical policy in place to deliver that aspiration, and Labour Members are determined to practise what we preach.

4.20 pm

The Minister for Skills and Equalities (Nick Boles): It came as a bit of a surprise to learn that the Opposition were proposing a debate on apprenticeships, because as we have heard during this excellent debate, the Government can point to a remarkable record of success in their apprenticeship programme. We heard from my hon. Friend the Member for Gloucester (Richard Graham) that the number of apprenticeships in his constituency was 80% higher in the past year than in the last year of the previous Government, and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) told the House that, through his efforts to create jobs fairs and no fewer than three apprenticeship fairs, unemployment in his constituency was now 50% lower than it was when he was elected to Parliament. We heard from my right hon. Friend the Member for Basingstoke (Maria Miller) that her local college, Basingstoke college, was keen to invest more money every year to create more apprenticeships, and I will of course be delighted to meet her and the college principal to discuss ways in which the college can bid more effectively for money in-year when it can identify ways to grow its programme.

I was particularly pleased to hear from the hon. Member for Liverpool, Walton (Steve Rotheram), who brought to the debate the enormous advantage of having completed an apprenticeship himself. I have no idea why he chose to give up that honourable trade for the one that he is now pursuing, but I am nevertheless full of admiration for him. He made an important contribution —compared with the woolly and glib thinking of those on his Front Bench—in pointing out the crucial importance of level 2 apprenticeships, particularly in construction. It would simply be wrong to tell the young men and women who are doing a level 2 apprenticeship in bricklaying that it was no longer going to be called an apprenticeship, even though they were employed, working hard, going to college and training, and even though they were securing valuable qualifications, of which many more are needed.

We also heard from my hon. Friend the Member for Stroud (Neil Carmichael), who made the particularly important point that there was a key link between apprenticeships and the industrial strategies that the Secretary of State for Business, Innovation and Skills has brought in. He also said that we needed to work with local economic partnerships to create apprenticeships that support the local growing sectors in his constituency and elsewhere. I am sorry that I have not yet been invited to his festival of manufacturing and engineering, but I look forward to receiving an invitation to the next one when he is re-elected in May.