The noble Baroness, Lady Dean, mentioned garden cities. Alongside our work to support the delivery of large-scale housing developments, we announced the establishment of an Urban Development Corporation to create a garden city of up to 15,000 homes at Ebbsfleet and have made available up to £200 million for infrastructure to support it. In April, we published our prospectus Locally-led Garden Cities, offering a broad support package for which expressions of interest were invited. We recognise that these schemes are complex infrastructure projects which take time to work up. However, positive discussions with a number of localities are ongoing and we expect expressions of interest to be submitted once proposals are fully worked up.

The noble Lord, Lord Jones, and the noble Earl, Lord Listowel, mentioned the importance of more housing in our construction industry. New housing construction orders have more than doubled since 2009. Registrations of new homes across the country are also at their highest since 2007. The noble Lord, Lord O’Neill, asked for more support for small builders. We are supporting builders through a number of programmes, including Get Britain Building, our Large Sites Infrastructure Fund and the Builders Finance Fund. These schemes ensure that sites are developed by large, medium-sized and small developers. Trailblazers will help small developers to get their act together.

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Our housing guarantee schemes are now open for business, supporting up to £10 billion of investment in large-scale private rented projects and additional affordable housing. These debt guarantees use the Government’s fiscal credibility to reduce the cost of lending. We know that the private rented sector is currently dominated by small-scale landlords, with larger landlords owning 10 or more properties accounting for only 1% of the market. We know that if we are to realise our ambitions for the sector we need institutional investment and we are taking bold steps to make this happen.

Following Sir Adrian Montague’s review that looked at how we should encourage institutional investment back into the private rented sector, we have set up an innovative Build to Rent Fund, originally worth £200 million but extended to £1 billion due to the strength of demand. This will finance the construction of large-scale, purpose-built, private sector developments and demonstrate that PRS works as a long-term investment proposition.

The noble Lord, Lord Prescott, spoke about affordable housing. We have introduced a new business model for the funding of affordable housing. The affordable rent maximises private investment, so with the current affordable homes programme, £4.5 billion of government grant levered in £15 billion of private investment. This will have delivered 170,000 affordable homes by March 2015. In this spending round we announced a further £3.3 billion of Government money, which, together with receipts from right-to-buy sales, will help lever in up to £20 billion of private finance on top, providing a further 165,000 homes in the three years to 2018. This will be the fastest rate of affordable housebuilding for at least 20 years.

We are starting to see the benefit of these measures through increased economic activity. This is being driven by local communities as well as businesses, including small and medium-sized enterprises. The figures speak for themselves in terms of the increased pace of economic activity in the housing industry. We have seen nearly 480,000 homes built since 2010, including over 200,000 affordable homes. Of course, housing, public and private, accounts for roughly 20% of all construction output and this debate is about the whole construction industry.

The quality of a nation’s economic infrastructure is one of the foundations of its rate of growth and the living standards of its people. That is why we have put long-term investment in roads, railways, energy, telecommunications and flood defences at the heart of our growth plan. We recognise that meeting the UK’s infrastructure ambitions requires a long-term, sustainable plan. That is why we published the first ever national infrastructure plan and have continued to update it. The £380 billion investment in the latest plan includes priority projects and programmes such as the Thames tideway tunnel, the Environment Agency’s flooding and coastal erosion programme, Hinkley Point C and offshore wind, HS2 and Crossrail and—who knows?—HS3.

On roads, we have taken funding decisions that will enable us to build at least 52 major road projects by 2020-21 and add over 750 lane miles of capacity to our busiest motorways and trunk roads. We have extended this approach to social infrastructure. In July 2014 we

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published a Government construction pipeline of forward work which included £116 billion of opportunities to 2020 and beyond.

We are not complacent. The noble Lord, Lord O’Neill, spoke very patiently on a subject he knows very well. So did the noble Lord, Lord Prescott, who was very much at the forefront of affordable housing in his time as a Minister. Through our comprehensive programme of reforms and investment we are laying the foundations for a sustained improvement in our housing supply and the wider construction market. Of course, we cannot do this alone—we need the support of communities, investors and industry—but together we can build more homes and a better built environment for generations to come. I thank the noble Lord, Lord O’Neill, for initiating this very important debate and I thank all Peers for their contributions. I have not been able to respond to all the issues raised, but I will be happy to write in response to the questions raised.

Lord Prescott: So everything is okay, then?

2.26 pm

Lord O'Neill of Clackmannan: My Lords, I thank all those who have participated in this debate. When I finished speaking, I realised that there were still a lot of things I wanted to say and I was greatly relieved to find that my colleagues filled most of the gaps I had left. I also thank my noble friend Lord Young and I hope that the Minister will get another chance on another day to reply to the debate in a more extensive manner than he was able to do in the 20 minutes he had at his disposal.

Motion agreed.

Young People: Alternatives to University

Motion to Take Note

2.27 pm

Moved by Lord Monks

That this House takes note of the case for improved alternatives for young people not attending university.

Lord Monks (Lab): My Lords, I declare an interest as an honorary Fellow of the City and Guilds of London Institute with a long interest in the subject of apprenticeships that is before us today. With announcements on apprenticeships this week by the Prime Minister and recently by the Leader of the Opposition, apprenticeship is, at least for a brief moment, centre stage. It might even become a sexy political subject; it is well over time that it does so.

I have been involved during my whole career in initiative after initiative. I joined the TUC in 1970 to service the trade union members of industrial training boards and I have watched and been involved with many policy initiatives since to try to improve the position of young people leaving school with few formal educational qualifications and no real future in the academic world. We simply cannot say over that period—I share the sense of failure—that we have been successful. In 1970, 44% of boys leaving

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school at the minimum age went into apprenticeships. At that time only about 5% of girls went into apprenticeships.

At that time we relied, to some extent, on the levy grant mechanisms of the training boards, with the principle that if an employer trained, he got the money back that he had paid, and some more. If he did not train, he had to contribute to the costs of those who did. That was a Conservative measure, I might add—the Industrial Training Act 1964—but it did not survive. In the 1970s most of the ITBs faded away. Construction, as we have just heard, still survives and there are some sector skills councils trying to carry on the sectoral approach to skills.

The challenge was taken up by the Manpower Services Commission, based on the Swedish Labour Market Board—again, the Conservative Party implemented this idea. But at the same time as the commission was getting going, apprenticeships collapsed. Why that happened is worth a study; my own view is that they collapsed because employers decided that they were too expensive—that four years’ apprenticeship was unrealistic. They were aided by the way in which youth culture developed in the 1960s and the 1970s, with young people thinking, “Why am I having four years of relatively low pay when I could get a semi-skilled or even unskilled job that pays much better? I’d like the money now rather than wait for it”. After that, in the early 1980s, many companies that had been exemplary trainers disappeared or became a lot smaller. Only a few sustained apprenticeships.

Despite many initiatives since and despite recent improvements under this Government and the last one, we still compare poorly on apprenticeship recruitment levels with other comparable advanced countries. Only 10% of UK employers currently take on apprentices, compared to three to four times that in Germany, Austria, Sweden and Australia. The most recent growth in the UK has been among older apprentices—at level 2 rather than the level 3 that is the norm in other countries. They tend to be in service sector occupations, where training has tended to be shorter and less stretching than it would be in manufacturing. Even so, only 5% of 16 to 18 year-olds are on apprenticeship programmes at present.

The institutional framework has something to do with our failure. In the past 30 years, there have been 61 Secretaries of State responsible for skills policy. Each has had their own agenda; each has wanted to make their mark on national life. Between them, they have produced 13 major Acts of Parliament and the policy area has been flipped, and sometimes flopped, between different government departments—and sometimes shared across multiple departments over the same period. There has been a succession of major reviews in this area by very good people, including the Dearing, Beaumont, Cassels, Tomlinson, Leitch, Wolf and, now, the Richard reviews.

Qualifications have been subject to bewildering and frequent change, with NVQs, GNVQs, AVCEs, applied GCSEs, diplomas, and now the current range of qualifications that is emerging. If you are still with me after those acronyms—and this is a wonderful area for

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acronyms, unintelligible to anybody but the most dedicated, never mind young people, their parents, employers and schools—you will probably agree with the House of Lords Economic Affairs Committee, which reported that,

“the system has suffered poor leadership and a string of initiatives that have not been implemented”,

properly. That is putting it politely.

All this tinkering, well exposed in a recent City & Guilds publication, Sense and Instability, has caused confusion and conflict. The battle rages still between the concepts of training young people to work in specific jobs and ensuring that training is broad enough so that occupational choices are not unduly limited.

This should be an area in which it is possible to build a longer-term national programme. That is what they have managed to do in those other northern European countries such as Germany and Austria, where social partnership agreements are the basis of respected and prestigious training. I was very struck once, on a visit to an engineering and technical school in Vienna, to see the 18 year-olds being taught in English. These were people who left school at the minimum age. Similarly, in a Dutch vocational college for catering, hospitality and so on, the requirement at the end of the course was to pass English at native level. That was an eye-opener to me, when I compared it to many places that I had visited in the UK.

There are initiatives. Labour is committed to boosting the number of apprenticeships to match the numbers going to university by 2025, using the Civil Service to start a fast-track scheme to hire non-graduates, forcing public sector contractors to recruit apprentices under new procurement regulations and giving employers more control over training funds. The Prime Minister this week committed to delivering 3 million more apprenticeships by the end of the next Parliament, by cutting unemployment benefits for 18 to 21 year-olds and introducing a youth allowance limited to six months, after which people will have to do an apprenticeship and a traineeship or community work. Housing benefit will be stopped for people of that age, the money saved going towards apprenticeships.

The latest review—the Richard review—focused on improving the quality of apprenticeships and the concept of industry being given greater responsibility for frameworks and standards, with a new emphasis on level 3 apprenticeships, higher expectations in English and maths, although not foreign languages, and grading as a key element of the level that people can attain. In a sense there is plenty going on, and the subject is receiving more political attention than it has done for some time. Additionally, the Government are consulting on channelling funding to employers rather than providers, although that has its own controversies.

Apprenticeship is an area in which trade unions play an important role. As the OECD noted recently, in countries with a long tradition of apprenticeship training, unions are a key player alongside employers and the institutional actors. In the UK, the TUC unionlearn programme continues to support high-quality apprenticeships that pay a decent wage, encourage equality and diversity in the recruitment process and

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aim to drive up employer demand and promote that in day to day work. The TUC broadly supports the Richard proposals.

We do have to change. Another OECD report made the following statement and, although I have not had a chance to check whether it is true, I put it before the House today. The OECD said:

“England is the only country in the developed world where the generation approaching retirement is more literate and numerate than the youngest adults”.

Skills shortages still exist in many areas where there is high youth unemployment. This mismatch and dysfunction is a feature that many people have tried to tackle and many people have not succeeded in remedying. There is a need for a wake-up, to which I hope that this debate will contribute. This is a plea to all parties to make a big effort to build up a stable national scheme for apprenticeships involving all the different stakeholders. It is not easy—a lot of good people have tried—but it is necessary to try again. We have had many useful initiatives, but few overall convincing plans. We have good apprenticeship schemes and some excellent companies, but not enough. I also like the university technical colleges. I went to a technical school myself, and a bit of the old-time religion might be useful in this area.

It is worth pausing a moment to look at what some other countries are doing. Germany, worried about the attraction of the academic stream to better-off young people, is now trying to make apprenticeships glamorous. For example, there is a programme to recruit apprentices internationally, offering £700 a month net, with free language lessons, relocation costs and paid visits home. That could threaten our fragile system, too, if young people wake up to this new, perhaps more glamorous alternative to traditional apprenticeships and higher education.

I have one final point. There continues to be much self-congratulation in Britain about our so-called flexible labour market, but flexibility too often means that anything goes in the world of work; it often means cheap and low-skilled work by low-productivity workers. The flexible labour market can undermine good training schemes. Let us remember what the Conservative Government of the 1960s tried to tackle—those employers that did not pay for training but poached people from those employers that did pay. We still have that problem, filled at the moment by a massive state subsidy to everybody to keep the numbers going in an upward trajectory.

The professions do not have a flexible labour market. They have regulated entry and training; you cannot just call yourself a doctor or a lawyer. Why is it so different for car mechanics or skilled catering workers? This is a manifestation of the “two nations” again. You should not be able to practise as a skilled worker in a crucial job without proper qualifications. Obviously, you cannot do this overnight—you would need a long transition period—but that should be the direction of travel. That should be a central feature of the next phase of the development of apprenticeships for young people in the UK. Employers who do not train should pay towards the costs of those who do. Noble Lords should remember that that was a Conservative Party principle of the 1960s.

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We should aim to have a more settled institutional framework—not treating training as a Whitehall version of “pass the parcel” between departments, some of whom do not really want it—at some stage in the future. A new Department of Employment would be my proposal to deal with this issue and some other aspects of the labour market, too. In these ways, with clear principles and less jargon and acronyms, we can develop an apprenticeship system of which to be proud. It should be one that widely encompasses girls as well as boys and that reaches out to minority communities; one that is a genuinely attractive alternative to the higher education route; and one that raises the nation’s woeful productivity rates, which cause so much concern to so many of us. It should also give young people—regardless of race, ethnic origin or sex—a decent start in an uncertain world of work, and narrow the skills gaps with our North Sea neighbours. We can do better; we must do better.

2.41 pm

Lord Baker of Dorking (Con): I thank the noble Lord, Lord Monks—a leading member of the trade union movement—for focusing the attention of the House on this grave problem. He highlighted that we are all suffering under the mantra of the education system, and that mantra is three A-levels and a university. That seems to be the only pathway to success. Indeed, the previous Labour Government, as one knows, set that as a target for 50% of young people. I look on this debate as the last funeral rites of that particular policy, because that is not a sensible policy to have.

This policy has led to a great deal of graduate unemployment. If you look at the number of graduates who left in 2012, and ask what they were all doing six months later—how many were working in retail, catering, waiting or bar jobs—you will find that, of those who studied fine arts, 29% were working in those jobs; media studies, 26%; performing arts, 23%; design, 23%; sociology, 22%; law, 19%; and foreign languages, 15%. Only when you come to engineering do you get very low figures of 4% or 5%. There is therefore a huge mismatch between what students are studying and where their jobs are going to be. When you consider that students are going to leave with debts of £40,000, at some stage in the next five or 10 years reality will break in, but it will take a long time to do it.

The biggest problem facing the next Government is going to be filling the skills gap, which in our society is absolutely enormous. The Royal Academy of Engineering has estimated that we will be short of 45,000 STEM graduates a year for the next five or six years. That really is a shatteringly high figure. When it comes to technicians and professionals, the numbers are even larger. British industry is short at the moment of 850,000 of those. At the same time, we have 750,000 youngsters who had 11 years of free education and cannot get a job, so something has to be done. The skills gap can only be filled by a major change in schools, FE colleges and universities. I will deal first with schools.

As a result of recent policy, many schools are now dropping technical subjects below age 16. One of the adverse and painful effects of the Wolf report was to

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throw out a large number of technical subjects. I agree that some should have been dropped: they were rather casual and not very good; but the baby has gone out with the bath water. A range of students at 16 are now just doing basically academic GCSEs. There is a slight movement towards design and technology, but only a third of GCSE students take that exam, and most of them do the soft options of food and textiles. Only a quarter of that third do resistant materials. These figures there are really very shattering, but when it comes to other technical subjects it is worse: electronic products, only 1.4% of students; and systems and control, 0.6%. We have to give more technical, practical education to pupils below 16. It is a major priority for us.

The reason for that was touched upon by the noble Lord, Lord Monks. If you compare the countries in Europe, in our country, 30% of students below 18 have some experience of technical education. In Germany it is 60%. In Austria it is 80%; Austria has the lowest level of youth unemployment in Europe and the lowest number of NEETs. It does that by stopping the national curriculum at 14 and having a series of specialist colleges. As the main founder and proponent of the national curriculum, I would now argue for the national curriculum to stop at 14 and for having specialist colleges—something to which more educational specialists are coming to agree, including Michael Wilshaw.

It has to start in schools, and this is one of the reasons why, six years ago, with Ron Dearing, I set up the process of establishing university technical colleges. I was very glad to have had the support of the noble Lord, Lord Monks, on those. These are large colleges with 600 to 800 students operating a working day from 8.30 to 5, with shorter school holidays. Crucially, for two days a week, the students make and do things with their hands and design things. I believe that learning by doing is just as important as studying. We are proud that one of the advantages of these colleges—we have 30 open at the moment, and another 30 will open in the next two years—is that, so far, not one of our students leaving at 16 or 18 has joined the ranks of the unemployed. They have got either a job or an apprenticeship, stayed on at the UTC to do A-levels, gone to another college or gone to university. That is a record that any school in England should be very proud of, and we are actually achieving it.

Alongside UTCs, we now have career colleges, which were announced last year. They deal with the non-STEM subjects. Already, within a year, three of those have been established: one in Liverpool doing catering and hospitality for students 14 to 18; one in Bromley doing catering and hospitality; and one in Oldham doing graphic art and digital technology. I ask the House to consider—and this is not really accepted by the education system so far—that we now have an education system that stretches from age four to 18; if you have that, you first have to say to yourself, “Why have exams at 16?”. There is really no need for GCSEs. The only reason for a 16 year-old exam was that was when you left school. I had to have a thing called a school certificate in 1950, and that proudly showed what I achieved. I showed that to any employer whom I went to talk to. You do not need that now, with education going on to 18. This

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gives us a chance to resurrect the concept and importance of the 14 to 18 stream in our schools, something that Labour almost grasped last time with the Tomlinson report.

Finally, I turn to apprenticeships. I agree very much with several of the things the noble Lord, Lord Monks, said. There are far too many apprentices between the ages of 20 and 30 at the moment. Apprenticeships are about people from 16 to 18. There, the records are, frankly, not very good. The figures on that are that at 16, there are 20,800 apprentices; it sounds like a lot, does it not? The Whips are waving to me, but if they hang on just a moment, I am about to finish. They should not be anxious; I am only the second person to speak in this debate. I will be quick. The 20,800 figure is only 3.2% of the age group. At 17, the figure is 40,000, only 6% of the age group; at age 18, the figure is 55,000, only 8.4% of the age group. Those numbers are going down. The funding system has to be looked at again to ensure that those numbers go up. Certainly, UTCs can take apprenticeships; they are the only schools in the country that do that: 50 are at the JCB Academy and another college next year is Dartford, which is going to have apprenticeships in January.

This is an important debate. The country has to accept the fact that fundamental changes have to be made in all of this area of education. We are finding that some of the senior students at UTCs at 18, having got places at universities, turn them down. They turn them down to become higher apprentices: to go to work at Rolls-Royce or Network Rail or National Grid or Babcock, where they earn £15,000 a year and immediately do foundation for degrees. After 18 months it is up to the company to decide whether, at the cost of the company, to send them to a university for an honours degree. These are the sorts of careers that we must now be establishing in all our schools.

2.50 pm

Baroness Morris of Yardley (Lab): My Lords, I, too, very much welcome this debate and thank the noble Lord, Lord Monks, for introducing it in the way that he did. He gave a history of our ineptness in managing to keep vocational studies and qualifications firmly on the agenda. If noble Lords want a glimpse of what our economy will look like tomorrow, they need to look at what we are investing in skills today. There is no doubt that we are not getting it right at the moment.

The noble Lord, Lord Monks, mentioned institutional failure. I want to look at the structure of the way that we work because I agree with the noble Lord, Lord Baker, that it is not just about changing apprenticeships and vocational studies but about looking right across the piece at 11 to 18 provision and beyond and trying to get a different format for providers and qualifications.

I agreed almost entirely with what the noble Lord, Lord Baker, said, with the exception of one of his comments. I think that we were right to expand higher education and to set the 50% target. We are still behind other nations in the number of people who go on to higher education. We went wrong in giving priority—inadvertently, I think—to the 50% target and thereby sending out a message that the other forms of provision did not matter. That was never

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intended but it was a consequence of establishing that priority. I learnt that in politics you cannot say that you are giving priority to one thing without sending out the message that you are giving no or less priority to another. That situation desperately needs to be remedied, but in a way we are a victim of our history, which has served us very well. We can all think back to higher education, apprenticeships and further education, and semi-skilled and unskilled work. Some people, especially those of us in a particular age range, look back to the 1950s and 1960s, when apprenticeships were stronger, and say, “We got it right then”. In a way we did, for the economy and the society that existed then. However, the economy has changed and the expectations of society and of individuals have also changed. We have carried forward with us all the prejudice and different statuses and values inherent in that system. Despite the fact that the economy and people’s aspirations have changed, we still live in the past and think that higher education is at the top of the pinnacle and the place worth going to and that apprenticeships are for those who have not got into higher education. However, we still think that they have done better than those who end up in semi-skilled and unskilled work. I am convinced that the necessary first step is to break out of that mindset.

The irony is not that we have not changed our view but that all the institutions have changed. Higher education is not like it was in the 1960s. It is broader, includes vocational work and takes in a wider group of people and helps more people to achieve their aspirations. FE has changed. It offers a far broader range of courses and serves far more people. Workplace and employment routes have also changed. We are in the same position—it is almost as though we do not catch up with life. But if noble Lords look at how higher education has changed and at what further education is doing and at the best of our employment routes, they will find the answer and the way forward. It is in that respect that I most agree with what the noble Lord, Lord Baker, said. If we address only the bits that do not work, we will constantly be trying to glue them on to the bits that we think do work. The truth is that we have never really looked at that whole package from unskilled work to higher education to see what it means. The world is not made up just of those who go to university and those who get apprenticeships; it is also made up of those who could go to university but choose not to do so and want a different route and those who at 18 or 16 do not yet have the qualifications to get them into an apprenticeship or into university.

If we are to get this right, we need to have a structure that meets the needs of all those groups—that is, from those who leave school because they have learning difficulties and gain the minimal academic qualifications to those who gain three A* at A-level, or whatever else we dream up. People have to have a choice and the route they choose must make sense to them. I think the problem is that we are too in love with universities and we do not love the alternatives quite as much. We see that reflected in the advice that we give to our own children and our friends give to their children. At the end of the day, the big test is whether we say to our bright sons and daughters who could get three A grades at A-level, “Don’t go to

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university. Take one of these other routes”. I shall not ask noble Lords to put their hands up but I suspect that we are not there yet. I suggest a list of component parts that need to be put in place if we are to get this right: easily understood and trusted qualifications; continuity of qualifications for a framework that does not change every 18 months; well qualified teachers, lecturers and instructors; well equipped and high-quality institutions; good progression and career opportunities; recognition by society of the worth of a course of study; and help and support in the transition from school to work. The only problem is that the only bit of the system that ticks every one of those boxes is higher education. That is why it goes from strength to strength and why I would advise my son or daughter to choose it. It is coherent and we know what it means. The challenge now is to make sure that each of those components and bits of the jigsaw are available for those who are able enough to go to university but choose not to do so, those who want to take an apprenticeship and those who at this stage in their development do not have the skills or qualifications to do it but will want to do so in the future.

The noble Lord, Lord Monks, listed the relevant reports. I was the Secretary of State for Education responsible for some parts of those reports. For some reason it is more difficult to be courageous in the skills arena than it is in many other areas of that portfolio. Therefore, I say to anyone who takes forward that agenda, “Be brave, do what you think works. Don’t look back to Tomlinson and say that you wished you had done it 10 years ago. Be consistent and stop changing your mind and link in with schools at the younger end of the age range and with the world of work at the older end”.

2.56 pm

Lord Addington (LD): My Lords, this is one of those odd debates where I suspect that a great deal of agreement is going to break out on the problems that arise and the solutions to them. We shall then take a deep breath and fight savagely over small differences in implementation. However, that seems to be the nature of what we do.

The noble Lord, Lord Monks, spoke about a huge array of subjects. I asked the Library what was available in further education and found that there were eight levels with a variety of qualifications. I noticed that the letter “Q” was used very often in further education courses. It probably meant something different on each occasion it was used. Finding your way through this will always be immensely difficult. As the noble Baroness, Lady Morris of Yardley, pointed out, higher education is easier to understand as a concept but we are in agreement that we must get slightly more coherent about what we are doing.

Whatever else they have done, apprenticeships have given this sector a publicity boost and a way forward. I do not think that most noble Lords present have had to suffer hearing me go on about my next point, but we managed to make a massive mistake when we brought them in as we effectively excluded anybody with dyslexia or a reading problem from taking them. We had decided in our great wisdom that employers

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needed employees who had studied English. In the university sector you could get assistive technology that allowed you to get through your course if you had a problem with English. It appeared that employers wanted competence in reading English and could not function without it. This issue turned out to be basically about people refusing to move their ground, not understanding the technology and not responding to change. I do not think that we should have to introduce a Bill into Parliament to make such changes. We should be slightly more flexible and open. The Children and Families Act has resulted in greater emphasis being given to those with special educational needs. However, many problems still remain in this regard because traditionally they have not been seen as something that the higher education sector and other education provision deal with. Although they have a legal duty to do so, they are not very good at it. For instance, they are not required to publish, the way schools are, what they will do so that parents and students can look at it and know what support they will get.

I am dyslexic myself and the British Dyslexia Association, of which I am a vice-president, started out getting a little trickle but is now getting quite a stream of people presenting to their helpline with problems in further education. The Government provide voice-from-text technology that helps read stuff back to you but only 30% of colleges have taken it up. It is an appalling situation that so few colleges are taking up something which is given to them free and allows students to access and get through their courses.

JISC TechDis—he says, staring down and wishing he did not need glasses—is a body which has been looking at technology but is about to be wound up. Technology is a great way forward. I am a convert to it myself and use voice recognition all the time. Technology has a huge advantage: it is cheaper than having support tutors all the time; you can take it away with you and it allows you to be independent afterwards. Why are we not embracing and using it in this field? We are not just teaching people how to use their educational skills—acquiring reading, mathematics and writing—we are giving them skills in how to cope in life. If you have one of these disabilities it is with you for life. You will always learn more slowly and have more problems. If a person can find a way round it and embrace it they can function in the modern world. We can help with this but we do not seem to be embracing it.

I hope the Minister will tell us what will actually happen and what pressure we will place on colleges to make sure they do their best and match the achievements of the schools and higher education, which mainly came through the DSA. Let us see if we have as happy a situation after the reforms and changes to the DSA. I trust we will be talking about that in the future. I hope they can do something here because there are two good examples. At the moment, colleges are just becoming aware that we have this problem. If you have the problem at school you have it there too. I hope they can tell us that they are admitting this, getting involved and taking it on. If they do not, they are guaranteed that a large section of this target area—the group we are trying to skill up—is always

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going to underachieve and, in a large part, fail. We can avoid a lot of that now by taking on practice which is well established in the rest of the education field. Joined-up government should mean something and not just be a slogan that is brought out to fill the last 30 seconds of any set speech.

3.03 pm

Lord Bhattacharyya (Lab): My Lords, I congratulate my noble friend Lord Monks on securing this important debate. Along with many noble Lords speaking today, he deserves great credit for this issue having moved to the top of the political agenda. I declare my interest as chairman of Warwick Manufacturing Group at the University of Warwick. A university chair may seem an unusual interest to declare in this debate, but WMG has a strong focus on those who do not traditionally enter higher education. These young people can achieve extraordinary things. I think of Chris Toumazou, who left school at 16 without enough CSEs for sixth-form college, and has since progressed from City and Guilds to Regius professor. Although exceptional, his career demonstrates the transformative potential of technical education. As many noble Lords have said, we in Britain are, sadly, far behind our global rivals in realising this potential.

This is not a new problem. The Feilden and Finniston reports, and many others, said the same thing. Worse, as the Secretary of State, Vince Cable, has acknowledged, over the last 30 years,

“there has been a hollowing out of our post-secondary provision”,

against even that poor record. Too few young people are getting a good technical education and moving from there into well paid work. Today, businesses fear having to use scarce resources to train young workers in everything from basic literacy to technical skills.

Where then will we find the 830,000 engineers who, as the noble Lord, Lord Baker, just said, we need to replace retiring technicians? I do not want him to blush but one solution is strengthening technical education before 18. Technical schools were the orphan of Butler’s tripartite system. The university technology colleges set up by the noble Lord, Lord Baker, now give us hope and a chance to rectify that mistake. This autumn, we at WMG opened our first UTC, with a curriculum designed by the university and supported by leading engineering firms such as Jaguar Land Rover. Jaguar Land Rover requires another 20,000 technician workers in the next five years and we cannot find them. We have recently received government permission to open another in Solihull. Businesses support the academy because they can see how it will prepare students for a career. Parents are enthused because they see the quality of education their children get from a top university. I believe resources currently dedicated to free schools should be redirected to extending the UTC programme, as a first step in restoring technical schools in the educational pantheon.

Once these students have reached 18, they need a clear path to a widely recognised vocational status, such as the German technical engineer. Today that path is hard to find. We have seen a 40% decline in the number of people studying for HNCs, HNDs or foundation degrees. I would not mind if this was the

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result of limits being put on these poor-quality courses. Sadly, we have seen falls in fields such as engineering and computing, precisely where we need growth.

Changing this requires a new approach to student funding in further education. What progress has been made since the Secretary of State agreed to reconsider student funding for quality FE courses? Will the Government commit to expand advanced learning loans to under-25s? To be fair, the Government are keen to support apprenticeships, as the Prime Minister’s announcement of 3 million apprenticeships demonstrates. However, increasing the number of apprenticeships while degrading the brand should not be a consequence of a focus on large numbers. We must prioritise extending the number of higher and advanced apprenticeships for under-25s. The key to achieving this is a greater partnership with small and medium-sized businesses. The Holt review showed that only one in 10 SMEs offers apprenticeships. The proportion offering higher and advanced apprenticeships is even lower.

To offer quality apprenticeships, smaller businesses need support to impart quality skills, with a curriculum that they own and help deliver. We therefore need to improve the skills provision of FE colleges and their reputation with local businesses. This is essential if we are to deliver courses that employers will value, pay for and send their young workers from the factory floor to college to complete.

Achieving this shift is a challenge not only for the Government, but for my own sector. If we want to change vocational learning, companies, FE colleges and universities must work together to give technical education a higher status. At WMG we do this by supporting modular degrees designed with employers, so apprentices can learn at their own pace and companies pay their full university salaries for that to happen. This creates broader access to degree and sub-degree courses. There is huge demand for these programmes, and the potential to expand such courses is massively clear, whether through FE colleges, in workplaces or online colleges.

Personally, I prefer the former two options, as they give a greater prospect of quality control and student interaction. In such a model, further education colleges would benefit from closer integration with universities in providing courses that have high status with students. Employers would welcome universities genuinely interested in helping them give greater opportunity to their workforce. Universities would be foolish to miss this opportunity.

Lord Baker of Dorking: Before the noble Lord sits down, may I give the House an opportunity to recognise the enormous contribution he has made to technical education in our country? Through the Warwick Manufacturing Group, he has driven forward the reputation of Warwick University to become one of the best universities in the world. He has also supported, I am glad to say, the university technical college, opened only last month, and he and I will visit it tomorrow. I thank him for his support because Jaguar now wants a second one. His personal contribution in the whole scale of technical education is quite remarkable.

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Lord Bhattacharyya: I thank the noble Lord very much. Building a better bridge to career success via technical courses is the only realistic prospect for student expansion. That means thinking in radical ways about the nature of vocational provision, from recruitment to integrating work and study.

I started by mentioning Professor Chris Toumazou. If his story tells us anything, it is that in the forgotten half of our young people we will find the talent, ambition and capability to transform our nation. We must not neglect their potential.

Lord Newby (LD): My Lords, I remind all noble Lords that this is a time-limited debate. When the clock hits “6”, it means that the speaking limit has been reached. The consequences of speakers going over their time is simply that the Minister will have significantly less time to reply to the points that they have raised and the questions asked of her.

3.11 pm

Baroness Taylor of Bolton (Lab): My Lords, it is a great pleasure to follow my noble friend and I echo and endorse the comments of the noble Lord, Lord Baker, about my noble friend’s contribution. When he was speaking, I agreed with just about everything he said, although I flinched when he mentioned the word “tripartite”. However, we have moved on sufficiently, especially when we are talking about 14 to 18 year-olds, to talk about technical schools without all the horrors of the old tripartite system. We have added something that is increasingly accepted.

I, too, congratulate my noble friend Lord Monks on initiating this debate. It is very appropriate that someone with his wealth of experience should be taking a lead on this. However, like him and others who have spoken, I find it somewhat depressing that we have not made more progress on this issue in the past 20 or 30 years. I have been speaking on it, mainly in another place, for a long time and although we think that we are making progress, somehow it does not happen.

It is a long-term and, as we have heard, increasing problem. While, like my noble friend Lady Morris, I am proud of many of the things that the Labour Government achieved, I am sorry that we have not made more headway or had the breakthroughs in these areas that many of us had hoped for. We have seen other countries doing things differently and tried to learn from them and look at what they are doing but have not actually made a breakthrough, despite all the welcome initiatives.

One of the problems, which was touched on earlier, is that we are talking not just about education reforms but cultural problems as well. My noble friend Lord Monks talked about young people in the 1960s thinking that other things were more glamorous than apprenticeships. A lot of people find university life more attractive and grown up, and more of an expression of freedom, than an apprenticeship. I have looked at the proposals that our party has put forward to improve the situation. My noble friend talked about our plans for apprenticeships. We have been talking about the idea of a gold standard, technical baccalaureate for

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16 to 19 year-olds and looking at how employers’ accreditation can work, the quality of work placements and how you can build them into a credit system. It is an impressive package.

We have also said—and I am sure that the noble Lord, Lord Baker, would be interested in this—that we would like to transform some of the higher-achieving further education colleges into institutes of technical education to underpin the kind of education that so many people want. We also want to see new technical degrees as a pinnacle of vocational education, not just as something that people talk about as second-rate. I am very happy to support all those proposals, as I am sure my noble friends are. However, I have to say that their delivery will be extremely challenging. It is a problem, as my noble friend pointed out, and cultural factors have undermined past attempts to make progress.

That brings me to the core of the problem, which was touched on earlier—the status of different types of education. In the United Kingdom, this is far more of a problem than it is in many competitor countries, and it costs us dearly. There is a clear and unfortunate distinction, a real division of esteem, between university education at the pinnacle and absolutely everything else. That gives a false assumption about the relative importance of different sectors. This is one of the things that is so difficult to counter if we are to make real improvements. Many problems spill over from the whole issue of status. We have a hierarchy in funding as well as in status. If we are going to give young people more choice, we have to find some way in which to break this down. As I say, it may be the university image or peer-group pressure, but there is a certain snobbishness in education that says that universities are okay and everything else is second-rate. It is really difficult to counter this.

I want to mention one factor that could make a difference and help counter this problem of a lack of parity of esteem. We need a unified qualification structure, including a credit accumulation system based on modular courses, as my noble friend Lord Bhattacharyya mentioned. That could be done using the best practice of existing qualifications, whether they are academically oriented or geared to vocational skills. It could allow for credits from either sector to contribute towards a final qualification. That could help us to break down the barriers, challenge the difficulties that arise, help to meet the skills gap and give real choice for many individuals. We need individuals to have choice, which is not only in their interests but a really important issue for our whole economy.

3.17 pm

Lord Rees of Ludlow (CB): My Lords, I declare an interest as a member of Cambridge University and as an honorary fellow of City and Guilds.

The huge expansion in the university sector is welcome but a downside is that it has not yet led to sufficient differentiation among universities. More relevant to this debate, there is still too sharp a demarcation between universities and other post-18 education. We have become trapped in the mindset that everyone who can get into university should go to one, even

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though many might do better with some alternative. I would go further and say that there is a fast-diminishing fraction for whom the traditional specialised degree is optimal. That is why some of our brightest young people are being enticed to American universities where disciplinary “stovepipes” are more permeable. More and more jobs require a degree—even an irrelevant degree—as an entry ticket, a fact that suppresses mobility by closing off career options to non-graduates to a greater extent than in the past.

However, despite expanding enrolments, many talented young people who could benefit from universities are still being denied the chance. That is happening to those who have been unlucky in their schooling and do not, by the age of 18, have the attainment level to qualify for the most competitive university courses. Even worse, they generally have no second chance. Options are also foreclosed for those who enter university but drop out before completing three years. They are described as “wastage” and it is hard for them to get back into the system, even if their circumstances change.

How much better it would be if all students could be given credits for what they have achieved, wherever they achieved it. They could then say, as Americans do, that they have had two years of college, and if these credits were recognised by other universities, they could be slotted again into the system. Transferable credits, although advocated for many years, have not caught on. Apart from at the Open University, it is all too rare for students to be admitted into the second or third year of a course on the basis of credits from other universities, HNCs or other FE qualifications that they have obtained earlier.

Our most selective universities should reserve some fraction of their places for those who have earned credits online or from another university, or come via some further education or part-time route. This would enhance fair access, and lead to a more diverse student body at Oxbridge and the rest of the Russell group.

More generally, universities will need to offer more options for students, ranging from part-time courses to intensive ones compressing a degree into two years. Online learning, in which the OU has a world lead, has a growing role. The so-called MOOCs may have been overhyped in the context of traditional undergraduate courses, but they will surely have a role in vocational courses for mature and motivated students. Other UK universities should support the OU by supplying content for such courses on its FutureLearn platform.

Finally, I wish to say a word about pre-18 education. We should keep pushing not only for technical education and apprenticeships, but also for a broader curriculum within the traditional sixth form. Tomlinson was, as we have heard, stymied by the last Labour Government for electoral reasons. Those with long enough memories will recall that the analogous Higginson proposals were killed off by Margaret Thatcher with the mantra about the gold standard of A-levels. The universities, by the way, deserve a lot of blame. They impede attempts to broaden the school curriculum by still favouring applicants who have had a narrow focus when selecting their competitive courses.

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When the House of Lords Science and Technology Committee reported on STEM education, we deplored the fact that only 10% study any maths beyond the age of 16. We do not say that they should all do A-level maths, but an appropriate curriculum could be devised for them. There is clearly an urgent need for greater numeracy in almost all occupations and indeed for all citizens.

Of course there will be even more demand for lifelong learning. Books such as The Second Machine Age and Martin Wolf’s FT articles remind us of how the advance of machines and robotic techniques will replace workers in manufacturing. But the jobs most vulnerable to machines are not just blue-collar occupations. For instance, lawyers are vulnerable. It may prove far easier to automate much of their routine work, such as conveyancing, than the work of plumbers or skilled carpenters, teaching assistants and carers. They are the people whom we need keep training.

Be that as it may, the notoriously conservative education sector surely needs greater flexibility if it is to meet the changing pressures that society will place on it. That is why we should welcome this debate.

3.23 pm

Lord McFall of Alcluith (Lab): My Lords, I warmly welcome the debate initiated by my noble friend Lord Monks on the grounds of my being an early school leaver at 15 years of age, who started off in the vocational line, and also subsequently as a deputy head teacher responsible for what we damagingly refer to as “Christmas leavers”. These were young people who were in school but were not going to university, damaging their self-esteem in the process. Compared with their contemporaries in full-time higher education, these young people in the vocational scheme had a lack of structured support and pastoral care. Consequently, the challenges facing them were considerable. They faced these challenges largely alone. The best advice matching their skills and abilities was absent.

Such individuals—and the poorer ones in higher education—are still coming off worst in Scotland. A recent study by Edinburgh University’s Centre for Research in Education, Inclusion and Diversity concluded that only students from relatively high-income homes enjoy consistent, superior benefits from the Scottish education system. It has seen a transfer from low-income to high-income households. It adds that the Scottish system of higher education does not have the egalitarian, progressive effects that are commonly claimed for it.

It is important to debunk these notions. The bias against poorer individuals and those not in higher education is even more skewed. If there is an opportune time to reappraise this bias it is now. Youth unemployment in the country is greater than 17%; there are almost 900,000 young people still not in work.

The age of austerity is giving way to the age of secular stagnation. The characteristics of this are high unemployment, increasing poverty, wage stagnation and debt burdens. As we have seen this week with this Government, debt burdens do not decrease. The buzzword in the markets, the IMF, the World Bank and other global institutions is

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“investment”. We need an economic system that offers hope, not despair, and one that serves the interests of everyone.

We have cheated our children through lack of public investment and a failure to provide jobs. The policy for young people has failed. My noble friend Lord Monks referred to the document, Sense and Instability, produced by the City and Guilds. That looked at the record for the past 30 years. He quoted a number of points, not least the 61 Secretaries of State. The policy has been flipped between departments or shared with multiple departments 10 times since 1980.

Given this catalogue of failure, we can conclude only that a single youth policy agenda across government departments is necessary. Devolution to local level, where the needs fit the training, is very important, because of the huge gap in skills. That way we could encourage diverse, high-quality routes into work. Is it not time to commit to a youth guarantee to fill that skills gap—a guarantee that gives high-quality training placement or a paid job? My noble friend Lady Taylor said that such a youth guarantee should establish parity of esteem between vocational education and the academic route.

We must recognise that the UK economic has been damaged since the financial crisis in 2008. The Institute for Public Policy Research concluded recently that full economic recovery will not solve the youth unemployment problem. The link between youth unemployment and economic growth, between youth unemployment and GDP, is broken—not least in the striking mismatch between what people are training for and the types of job available.

Without radical change by the Government focusing exclusively on a coherent youth policy and a decentralisation of the responsibility for skills development to local level, where the needs of availability of young people with the required skills coalesce, and without the parity of esteem between vocational and academic education, we shall simply repeat the mistakes of the past. The next generation’s economic, social and life-enhancing prospects are too important to allow such an opportunity to change course. We cannot allow that to happen by default.

This debate has been timely and crucially relevant. I congratulate my noble friend Lord Monks for instigating it.

3.29 pm

Lord Layard (Lab): My Lords, this debate is about the low skills of the non-graduate workforce. For years, we thought that the answer to that was more full-time vocational education, so we introduced, first, the GNVQ, as has been said already, and then the diploma. Both of them failed because that is not the way to get skills to the people in a form that employers want. It was also not the form of training that the young people wanted—they wanted to earn at the same time as learning.

Eventually, by about 2009, the previous Government accepted that the main alternative to university education should be apprenticeships. That was an enormous step forward and it led to the apprenticeships Act. The most important thing in that Act was the guarantee

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offered that by 2015 every young person with minimum qualifications would be entitled to the offer of an apprenticeship. It was an extraordinarily important step because only a guarantee rather than a numerical target energises a system, and there are people for whom a solution has to be found.

Unfortunately, the coalition Government repealed that part of the Act. As has been said, they switched their main focus of expansion from youth apprenticeships to apprenticeships for those over 25, and we now have fewer youth apprenticeship starts than we did in 2009-10. However, there is a figure that I want to highlight. Among young people aged 18 today, only 8% are in work-based learning, 51% are in full-time education, and 41% are doing neither. That is a shocking fact which I hope will be addressed as a result of this debate. We need a completely new deal for that 41%, and I think that the right deal is to reintroduce by 2020 an apprenticeship guarantee. I will say a word or two about how it might be structured slightly differently from before and how it might be delivered.

As in Germany, the main type of apprenticeship has to be at level 3, as has been said already, but employers are going to accept on to such apprenticeships only those youngsters who already have a decent record of achievement. Therefore, we need a solution for the people who do not at that point have a decent record of achievement. We have to establish a new system of pre-apprenticeship courses in further education colleges which are explicitly aimed at getting somebody qualified for an apprenticeship. These courses, which exist only sporadically at the moment, would of course include work experience, but I think that if they were provided in a framework where young people knew that if they completed them properly they would be entitled to an apprenticeship, they would be overwhelmed with applicants.

Therefore, we need an apprenticeship guarantee with two parts. First, every young person under 21 should be entitled to take a pre-apprenticeship course and, secondly, everybody who successfully completes such a course should be entitled to the offer of a level 3 apprenticeship. Of course, others would also be entitled to the offer of a level 3 apprenticeship, such as those who had five good GCSEs, including maths and English, and those who have completed a level 2 apprenticeship or traineeship, as well as the new tech bacc, proposed by our party. I repeat that we need to think in terms of a guarantee with two parts: a pre-apprenticeship for anybody without qualifications to offer and a level 3 apprenticeship if they complete that successfully. Of course, the whole system of applications has to be integrated with the university application system through UCAS.

The second question is: how can we find places for all these people? Obviously it is in the collective interests of business to provide them, but pressure and exhortation has to be applied to individual employers, and that role has to fall on the National Apprenticeship Service, which was set up by the apprenticeships Act. The service’s record has not been perfect but it is the only national body with local outreach that could possibly be capable of doing the job. Of course, it will also need money to pay for the training subsidy that goes to the employer of each apprentice.

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Fortunately, there is now a lot of money in apprenticeships, but it is going to the wrong people—to those over 25. Therefore, we have the scope, without huge extra expenditure, to redirect money to solve the problems of getting our young people off to the right start in life. Surely we ought to accept that our moral obligation is greatest to the people at the very beginning of their careers. Our obligation is especially to those 40% who are completely missing out at the moment. This is the time when we need to give them a new deal.

3.34 pm

The Lord Bishop of Coventry: My Lords, I join others in thanking the noble Lord, Lord Monks, for leading this timely debate, in which I have learnt a lot. Perhaps I may speak rather anecdotally, and from where I come—Coventry. It is a city with two universities, both of which have an extraordinarily impressive history in relating to local businesses and developing qualifications, teaching and research that serve the world of work. The local economy of Coventry would have been in great difficulty in recent years without the excellent and genuinely multilayered provision from Coventry University and Warwick University, and I join the noble Lord, Lord Baker, in his congratulations and deep appreciation to the noble Lord, Lord Bhattacharyya, for his work in this area.

Nevertheless, senior businesspeople in the city repeatedly tell me that there is still a serious gap in skills and that their businesses are undernourished without the young people with the skills and capacities that are needed. At the same time—this reflects a reality that the noble Lord, Lord Monks, referred to at the beginning—my diocese, or my patch, has worryingly high numbers of young people not in education, training or employment. The reasons for that are complex but many of the young people I see who are not in work, education or training seem to be themselves undernourished, lacking the sorts of skills and capacities that will help them to find the employment that will raise their dignity and give them the possibility of a fulfilled future.

Perhaps I may share with the House some of my findings on my travels around Coventry and Warwickshire, including visits to schools, conversations with business leaders and interactions with further education colleges and universities. I have four observations.

First, the range of post-16 educational opportunities, even as they are now, need to be made known to young people and their parents at the earliest possible point. Primary education should begin to open up the range of possibilities available to young people so that multiple routes into post-16 education and employment— traineeships, apprenticeships and further education courses—can be appreciated. To repeat a point that has been made, these have equal nobility and value to the route that is more familiar to many of our teachers and certainly to us—that is, GCSEs, A-levels and university.

Secondly, I very much appreciated the passionate comments of the noble Lord, Lord Addington, about further education colleges. However, from my own experience in Coventry and Warwickshire, they seem to be unsung heroes of our education system. I have

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been deeply impressed by the young people I have met in local FE colleges and by the liberation that their transformative education is giving them. I have heard many stories and they have been very moving.

As I look around, further education colleges seem to be key partners with the wider business community, working with local employers to design curricula, playing a strategic part in their LEPs, integrating work experience into courses and providing—I have seen some evidence of this—the sort of traineeships that the noble Lord, Lord Layard, referred to. They also provide the educational framework and tuition for apprenticeships.

I think it is worth saying that, although the focus in our debate is on young people, FE colleges train a high proportion of adults, giving vital opportunities for reskilling. While essential in its own right, the presence of adults as role models adds value to the formation of young people. It raises the bar of maturity in colleges and helps to breed the personal and social capacities of confidence, self-motivation and respect that the world of work demands and responsible human living requires. FE colleges are multi-generational communities of learning at the heart of their local communities. Hubs of educational activity, they deserve to be acclaimed and supported as vital components in not only the growing of skills but also, in so doing, the development of confident human beings. The potential of FE colleges should be further exploited and the possibilities of relationships with other institutions developed.

My third observation follows closely and reinforces much of what has been said. Apprenticeships need greater support and much more systematic and strategic attention than they are being given even at the moment. As I observe, the larger companies—JLR has already been referred to—have impressive traineeships for young, unemployed people and apprenticeships at GCSE stage. However, I hear from local business leaders that they need more help to incentivise support and to reward them for taking on apprentices, particularly at times of instability in the economy and uncertainty in their own industries.

My fourth observation is simply to say that I have seen the way churches, other faith communities and charities can have a significant role, not least through mentoring young people. To give an example of interventional work, I was with the YMCA recently and a young woman told me that without the accommodation that the YMCA had provided for her she would not have been able to enter her training course with the sort of stability she needed.

3.41 pm

Baroness Nye (Lab): My Lords, I, too, thank my noble friend Lord Monks for instigating this most interesting debate. I remind the House that the previous Labour Government were committed to ensuring that by 2015 there would have been an apprenticeship for every suitably qualified 16 to 17 year-old. There were just 65,000 apprenticeships when Labour came into office but nearly a quarter of a million in 2010. I welcome the fact that the figures for the post-25 age range have gone up since but the statistics, as has been said, for those aged under 19 have fallen and the unemployment rate for 16 to 17 year-olds is far too high.

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As my noble friends have said, this is why Labour’s commitments to match the number of school leavers becoming apprentices to the number going to university and for a gold standard vocational tech bacc qualification are so important. Half the UK’s largest companies do not offer apprenticeships, and there is a case for trying to see that every supplier that bids for public contracts over a certain amount is asked to provide apprenticeships and training opportunities. It would mean that companies with good practices would then be on a level playing field with those that did not invest in skills and training.

However, I would like to talk about a group of young people who desperately need attention—those, as the right reverend Prelate has just mentioned, who are not in education, employment or training. It is an issue that has had cross-party consensus, I think possibly due to the fact that it is so difficult. I declare an interest as a trustee of the Young Women’s Trust, which aims to improve the lifelong opportunities for young women by addressing the poverty, inequality and discrimination that many of them face and to give them a forum where their voices can be heard.

In April this year the YWT launched an inquiry focusing on young women who are NEET—I apologise for using the acronym but if I do not use it I will get into trouble with the time limit—because for more than a decade there have been more 18 to 24 year-old women in this bracket than young men. In fact, one in five 18 to 24 year-old women is NEET and that figure is worse in some parts of England. The cause is not motherhood, which is a common perception, because only 24% have children. These young women will be affected for life by this experience but the country is missing out too, as the cost to the Government is more than £1 billion per annum in lower wages, lost taxes and increased benefit bills.

One of the initial results of the inquiry, which is due to finish early next year, has highlighted that these young women feel they have been let down by the career support and advice they have been given. When there are five hair and beauty practitioners chasing a single job, but two jobs for every construction worker, it does not make sense for girls to be three times more likely to be told to become hairdressers when boys are six times more likely to be told to think about IT or plumbing.

One young woman from Birmingham whom the YWT inquiry met said:

“I come from a working class area where it is difficult for girls to get anything but waitressing jobs. Boys get jobs quicker—they can get jobs in building”.

It had never occurred to her that she could get an apprenticeship to work in the building trade herself so that she could get a better paid job too. We need to encourage diversity of aspiration regardless of gender so that all girls can fully contribute to the world they live in.

We should look again at what happened during the building of the Olympic park. The Olympic Delivery Authority started the Women in Construction project to help women access training and employment opportunities on the site, which meant that more than 1,000 women worked on constructing the park and village. It achieved that by adopting an evaluation

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scorecard which meant that contractors had to address equality and diversity issues if they wanted to win a contract.

I am sure the Minister will say that the number of women starting apprenticeships has doubled but I hope that she will agree with the Business, Innovation and Skills Committee, which said that,

“such inequality, especially in a publically-funded scheme, is not acceptable”.

The Government’s changes to the careers service are under attack from all areas, with even the CBI questioning their laissez-faire approach. Careers England says that eight out of 10 schools have dramatically cut the advice they provide. Currently too many young people—boys and girls—are dropping out of education and training. The consensus from Ofsted, the business community and the Education Select Committee is that the current careers advice and guidance provision is inadequate, lacks independence and is failing the young people that need it most.

Ofsted has also identified that too few schools work well enough with local authorities to target guidance for students at risk of becoming NEET. The new Secretary of State for Education—I think with her women’s inequality hat on—said recently in a speech to the Wealth Management Association that the Government were committed to providing better careers advice to young women at school, and I look forward to the Minister giving us more details about that this afternoon. Knowing the options is so important. Teachers are not always best placed to know about workplace opportunities. Young people need to talk to adults who have been through vocational routes, which is why so many of them say they find out through family and friends.

There are also limited opportunities for second chances for young women who are NEET. For example, 55% of young women who are NEET have not received any training or education since they left school, college or university. That is why Labour’s jobs guarantee will help all young people who have been unemployed for a year. Those aged 18 to 25 who have been out of work for 12 months or more would be offered 25 hours of work, preferably in the private sector, on the minimum wage, and the employer would have to guarantee compulsory training. This will go hand in hand with a new settlement for lifelong learning that does not discriminate between academic or vocational routes and, I hope, by gender.

3.47 pm

Lord Liddle (Lab): My Lords, I thank the noble Lord, Lord Monks, and congratulate him on introducing this debate. This is one of the central challenges facing British society, both economically and socially. Unless we can do something about vocational education we will face an increasing problem of NEETs, of which my noble friend Lady Nye has spoken. Opportunities for young people without qualifications are in secular decline. Unemployment rates for people without skills are rising and this is a huge social challenge. At the same time, we have the economic challenge of the huge skills shortages that we know exist in STEM subjects in technician-level jobs. That is a major barrier

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to us becoming a more successful industrial country. There is now a bit of an opportunity to reindustrialise ourselves.

There have been many expert speeches today, and I am not an expert in this field, but I have thought about it as someone involved in politics for a very long time. What has always struck me is how we have known about this major problem in our society—certainly for decades, though some would argue for over a century—yet no Government have managed to crack it, despite effort, lots of activity and lots of public money. Something about our politics explains this failure. It is partly a lack of ability to build consensus about how we do things—consensus that can last and survive a change of Government.

I remember that when we came to power in 1997 we had two very big promises on vocational education, both of which are worth reminding ourselves of because they show how Governments can fail as well as succeed. One was that we would establish a university of industry, which sounded wonderful—a kind of Open University for skills. The other promise was to establish an individual learning account which, again, sounded an absolutely wonderful idea where employers, individuals and the taxpayer could contribute to a pot of money with which people could decide for themselves how to improve their qualifications. Both of those great ideas bit the dust. Indeed, the ILA was a bit of a disaster and had to be withdrawn at very short notice.

A bit of my bedtime reading at the moment is the excellent book by Tony King and Ivor Crewe, The Blunders of our Governments. This is an area in which there have been blunders by Governments, with too many interventions from the top down by Ministers who try to change things. In future, we have to learn the lessons of that and try to think longer term on how we tackle these problems.

We should look to one of the great successes of Britain, which is our university system. Why are the universities successful? They are autonomous institutions, have a mixed economy of funding and have the ability to decide their own strategy. In vocational education we do not have that number of strong enough institutions and we must put the effort into remedying that systemic failure. What sorts of things would I look at? I would think about how we expand the excellent idea of university technical colleges. I do not think that they will really expand unless we empower our cities to do more in this area. Cities have a crucial role in deciding what skills are needed to be developed in their area.

Secondly, we have our colleges, as the right reverend Prelate said. At present, too many of them are chasing funding streams rather than thinking about how, as institutions, they play a role in the development of their local economy. I think that somehow we have to liberate the colleges. We need to give professional bodies, such as the engineering bodies, a much bigger role in deciding on technical qualifications which should become the ticket for the job. I believe that we need to correct the overflexibility of our labour market. I have come to the view that we will not make progress in this area unless we incentivise employer co-operation sector

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by sector, so that money for training is provided in return for controlled entry standards and decent pay for people who are doing apprenticeships. The Government have actively to try to bring employers together and perhaps recreate the kind of partnerships that used to exist in some areas with the industrial training boards. It is the institutions that need to be developed if we are to make this sector as successful as our universities have been.

3.54 pm

Lord Sheikh (Con): My Lords, I, too, would like to thank the noble Lord, Lord Monks, for tabling this debate and to commend him on his excellent speech. This is an important subject. It is essential that we discuss the alternatives for young people who do not attend university, and even more important that young people not attending university are themselves aware of these alternatives.

Our vocational qualifications system has grown too complicated, bureaucratic and hard to understand. I personally am a big supporter of apprenticeships and that is why I want to focus particularly on this subject today. I welcome the fact that this Government have overseen the biggest ever boost to apprenticeships. My party has also committed to delivering 3 million more apprenticeships over the next Parliament. The Government have made huge headway since they came to power in raising the status of apprenticeships so that young people leaving school view an apprenticeship and going to university as having equal merit. That is long overdue.

The role of government should be to provide people with the foundations that they need to better themselves. It should not favour one path over another but provide the equality of opportunity that means that people can go on to do what they want to do and do it well, knowing that as long as they work hard and do the right thing the Government are firmly on their side.

An important step in advancing the standing of apprenticeships has been the move to pay apprentices a national minimum wage. Apprentices are paid from the first day of their apprenticeship. For those for whom university is not suitable, I am sure that the prospect of earning while working and learning is a very inviting one. What is also important to recognise is that when securing an apprenticeship many young people get themselves a job for life. There is a vast number of examples of people who have started working for a company as an apprentice and worked their way up throughout their career. That gives a boost not only to young people, who know that their employer can offer them career progression, but to employers, who can only benefit from having people at the top of their companies who have first-hand experience of all areas of their business.

I am pleased to see that apprenticeships are becoming increasingly popular with 16 to 17 year-olds, with 15% more of them in apprenticeships compared to last year. Schools are legally required to secure independent careers guidance for 12 to 18 year-olds that includes information on the full range of education and training options, including apprenticeships. However, in 2013,

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Ofsted’s study of the early implementation of that duty found that apprenticeships were rarely promoted effectively, especially in schools with sixth forms. I fear that this may have more to do with finance than it does with education. The fact is that schools get in the region of £5,000 for each pupil that they keep on post 16, so they may not want to lose them. I encourage the Government to look into this and find out what is the best way around it, because without doing so there is concern that apprenticeships, skills and our young people will always be held back.

Apprenticeships are critical to tackling the skills gap that exists in Britain, which has held Britain back in its export and manufacturing capabilities. We need to expand our manufacturing base: manufacturing should be as important as my own business, that of financial services. We are still massively underperforming as a nation, with the UK ranked 23rd in the world for manufacturing output per head and 114th in the world for manufacturing output as a share of GDP. We must put employers in the driving seat to create new apprenticeship standards that will deliver the skills and businesses we need to compete. The Government must do all they can to make apprenticeships more responsive to employers’ needs and help to raise standards. I welcome the fact that measures are being brought forward which will give English apprenticeship funding directly to employers, following a recommendation from the independent Richard review.

Apprenticeships help not only young people; they help the country and the wider economy. The National Audit Office estimates that for every £1 invested by the Government in an apprenticeship, the economy gets between £18 and £28 back. Employers are getting involved in the design of apprenticeships to make sure that people gain the skills they need for a job. Apprenticeships provide young people with much needed experience that often leads to a full-time job, bringing real value to the businesses that take them on and motivating these individuals to gain skills and qualifications. High-quality, rigorous vocational education is essential to our future prosperity and to improving the life chances of millions of young people.

3.59 pm

Baroness Turner of Camden (Lab): My Lords, I too would like to thank my noble friend for introducing this debate. As every noble Lord has said, it is on a very important subject that is not often discussed this fully. It is a great pity that while many young people would like to go university, they often fail to get there. For poorer families, the cost is far too great. An article published recently in the Times alleged that a child would have to start saving from birth to have enough money to meet the costs of a university education. Of course, those in power over us—Prime Ministers, Chancellors and leading Ministers—have virtually all been to university, a point that is not lost on the young people who want to go. We are an advanced society so we really must arrange for people to have access to training in order to participate and to be able to obtain the sort of jobs they need. A number of speakers in the debate have indicated that there is a shortage of skilled people and we have to do something about that.

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Many references have been made during the course of the debate to apprenticeship schemes. I am very glad that these have now been accorded a great deal of eminence and I hope that they will be improved upon. Of course, most of those who talked about them did not feel that they are as effective as they ought to be and that they should be developed. Improvements are being made through the introduction of technical colleges, but obviously a great deal more needs to be done in that direction. I am particularly concerned about the effect on women, a point that has also been made. Many years ago, when I was a member of the Equal Opportunities Commission, I remember that we introduced the WISE campaign, which stood for Women Into Science and Engineering. We had some success with it. We went to talk to schools and parents and we tried to persuade them that the study of engineering and of science generally was an appropriate way to ensure that girls would be trained. We now have women scientists and engineers, and that used not to be the case in the old days. That is the result of the successful campaigns we ran then, and there is no reason why we should not build upon what we achieved.

Many speakers have referred to the trade union movement, which has a long record of assisting people so far as education is concerned. Certainly a number of my parliamentary colleagues owe the fact that they have had a good education to their having won trade union scholarships, in many cases to Ruskin College. But it is not only a question of awarding scholarships; the unions have also been assisting in providing training in other ways. The TUC’s Unionlearn team has already found some success in providing training for those who missed out earlier in life. Many employers respect what the unions have done in this regard and have been willing to assist in ensuring that union members receive proper training. That is an important issue so far as trade union membership is concerned. My own union, Unite, has been deeply involved in pushing for better arrangements for people to be trained in the more advanced industries, in which there is alleged to be a shortage of suitable employees.

I hope that, as a result of our debates today and some of the recommendations that have been made by noble Lords, we are making some progress in a difficult area. We need to involve ourselves in helping young people, who need our help and assistance if they are to participate in training. Our two debates interlock: the first spent a lot of time, quite legitimately, on the whole issue of housing and housing poverty. We have young people who do not have proper housing and live in very crowded circumstances. It is not easy for them to study and to try to get into training schemes. That is all part of the problem that we have been discussing today.

I hope that the Government take seriously some of the suggestions that have been made. We need a framework in which young people can be assisted and trained for the future. It matters to all of us, not only to the young people themselves—it is important to the rest of society. I thank my noble friend for introducing the debate and I hope that the suggestions that have been made by a number of people are seriously considered by the Government.

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4.06 pm

Lord Jones of Cheltenham (LD): My Lords, I, too, congratulate the noble Lord, Lord Monks—I was going to say my noble friend; he is a friend, really—on securing this debate. It dovetails nicely into the one that we had earlier.

I look forward to the day when a completed apprenticeship is regarded as being just as valuable as a completed degree course. The two need the same status so that individuals feel equally valued by society. I particularly want to talk about the opportunities for apprenticeships in construction available to those who decide not to attend university.

When having work done recently on my house, I wanted a properly trained architect, bricklayer, plasterer, carpenter and electrician to make sure that the job was done properly. These skills are becoming more difficult to find. The latest figures, which show rising employment and falling benefit claims in the UK, have shed light on a skills timebomb. Official data showed that the number of bricklayers claiming jobseeker’s allowance dropped to 1,775 in August from a peak of 15,425 in March 2009. It also showed construction wages up by an annual 4% in July. That makes construction at the artisan level one of the strongest performing sectors for pay growth, while in the wider economy wages are failing to match inflation.

The numbers reflect the rise in work for an industry that shed many skilled workers during the recession. When projects were cancelled and new work dried up, many either left or chose not to join the industry. The sector lost almost 400,000 people. Another 400,000 are due to retire over the next five years, according to the Construction Industry Training Board. Now, as builders take on new work, the shortage of skilled tradespeople has allowed bricklayers and other subcontractors to ramp up their hourly rates. We are returning to the age of the “Loadsamoney” plumbers, plasterers and painters that plagued the Thatcher era and are symptomatic of a cost-push inflationary spiral affecting housebuilding costs. A number of government-funded apprenticeship schemes are in place, but they need to attract many more young people to construction if we are to solve the appalling housing shortage.

Some time ago I tabled a Written Question about the shortage of skills in the construction industry. The noble Viscount, Lord Younger of Leckie, replied:

“There has been no specific assessment of the availability of skilled personnel for the home building sector.”

That was a surprise. He went on:

“The Construction Industry Training Board’s latest Construction Skills Network Report forecasts an annual recruitment requirement for the construction sector, including home building, of 36,400 a year for the 2013-2018 period.”

We are nowhere near that. He added:

“Under the auspices of the Construction Leadership Council, the house building industry is developing an action plan to address two immediate priorities: improving the image of house building and attracting back experienced workers who left during the recession, and other workers with relevant skills.”—[OfficialReport, 11/6/14; col. WA 253.]

To attract young people to construction, we need fewer screaming headlines in our media predicting a construction slump, which happened after the August

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figures for construction were released. We are now in late October, and the August figures are ancient history. Let us face it: there is no news value in the fact that construction can go up as well as down in its output, so it will be ignored by most people working at the sharp end. Construction has been on a meteoric trajectory over the past 18 months. With all parties now writing their manifestos for the next election, it is clear that building more homes will be a common theme. The view from the ground is that construction will be a good place to be for many years to come. If we want to attract young men and women into construction, they will not be assisted by foolish national headlines based on limited data that imply that construction is still a rollercoaster industry. I am not sure that we can do much about the reporting of the Office for National Statistics figures, but the Government have a role in ensuring that the construction sector has a stable future with a sufficient number of properly trained personnel to build our future.

I heard about a young woman who decided not to go to university. Her teachers and parents were horrified and tried to change her mind, but she wanted to be an electrician and was very determined. She took an apprenticeship and was successful. Now, four years later, she is earning more than her older brother who went to university. Unlike him, she has no student debt; nor does she have a drink habit. More importantly, she is happy, and her parents are not horrified any more.

4.12 pm

Lord Macdonald of Tradeston (Lab): My Lords, I, too, thank my noble friend Lord Monks for securing this excellent debate. The growing support for vocational training and apprenticeships is encouraging. As a time-served engineering apprentice, I hope that it restores some of the esteem that vocational training once had.

Labour Party policy on vocational education and training draws on the work of our skills task force, led by Professor Chris Husbands. Labour’s commitment will also be reinforced by the recent report of my noble friend Lord Adonis, Mending the Fractured Economy, in which he advocates a major expansion of high-quality vocational education and apprenticeships promoted locally to address skills shortages. In addition, Ed Miliband appointed Maggie Philbin, the former presenter of “Tomorrow’s World” to chair another task force on digital skills. Her recent report, Digital Skills for Tomorrow’s World, makes many practical and affordable recommendations, starting with schools, where digital training must begin if those who later choose a vocational route are to succeed.

To put that in context, the digital revolution is gathering pace and that will have a profound effect on the alternatives available to young school leavers. The McKinsey Global Institute recently listed what it described as Disruptive Technologies: Advances that will Transform Life, Business and the Global Economy. The first was the mobile internet. The second was the automation of knowledge work. The third was the growing network of sensors embedded in our lifestyles—the internet of things. At number four was that other arcane advance, cloud technology. Fifthly, there was the more familiar

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threat to jobs: advanced robotics. Those are the five horsemen of the digital apocalypse, as sketched by the consultants of McKinsey.

The risk to jobs is also highlighted by Oxford University academics Carl Frey and Michael Osborne, who conclude that jobs are at risk of being automated in almost half of all occupational categories over the next two decades, including repetitive functions in management and professions largely untouched until now, such as law, accounting, medicine and academia.

It is not easy to give career advice on how young people might shelter from this gathering storm. When the Economist listed the jobs most likely to survive computerisation, in its inimitable way it led with recreational therapy, then dentists, then personal trainers and then—the right reverend Prelate will be glad to hear—members of the clergy. The serious point is that almost all alternatives for young people not going to university will also be digitised; therefore, the factor that might be of most help to most young people will be to improve their digital skills.

The trend in the jobs market points towards self-employment and the forced flexibility of contract work. An insecure portfolio future of short projects, collaboration, marketing and pitching for work will require good social skills and familiarity with all aspects of social media online. A positive hope is that the popularity of social media among young people, with all its risks and allure, will help close the gender gap, with more young women keen to learn digital skills. As we heard from the noble Lord, Lord Addington, technology and online access may also be a new way into work for people with disabilities and could encourage ethnic groups into wider roles across the economy.

I confine myself to recommendations from our Labour reviews on education and the need to start with smaller steps on the first rungs of the ladder. A promising start has been made in English primary schools with a new computing curriculum. The view of Labour and our commissioned digital skills report is that we should now ensure that each school has the funding to support the ambition. Similarly, teachers must be trained in computing as a matter of urgency through properly resourced continuous professional development. Each school could be encouraged to recruit a governor with expertise in computing and they could network best practice across their local schools. Business and professional bodies should collaborate to create a national online service dedicated to digital career advice. The pressing importance of digital skills must be acted on now at all levels of education. Additionally, schools could have a key role in hosting community access to digital infrastructure and expertise. Beyond the school gates, as the right reverend Prelate the Bishop of Coventry said, further education institutions could play a key role if they are able to adapt quickly to the new priorities.

In conclusion, I do not think that this Government or previous Labour Governments have done too badly compared to global competitors across the developing digital economy. The digital revolution is now global and constantly changing, so a degree of confusion and false starts is inevitable. However, a priority for government in this area must be to reduce the bewildering number

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of overlapping organisations and initiatives—that blizzard of acronyms referred to by my noble friend Lord Monks. The Government should rationalise, cut duplicated costs and ensure that young people exploring their career options can navigate the digital world with skill and confidence. Can the Minister tell the House what progress they have made in cutting through the clutter?

4.18 pm

Baroness Prosser (Lab): My Lords, I too wish to add my thanks to my noble friend Lord Monks for putting this debate on the agenda today. Yesterday, quite opportunely, a gas engineer came to my house bringing with him a young apprentice whom I managed to quiz about his training experience. I asked him what role his school played in guiding him into his current position: it turned out to be zero. An annual visit from the careers service to address the school assembly seemed to be the sum total of it. He decided himself to apply for an apprenticeship with British Gas and registered on its website. His period of learning lasts for three years, with some time with a qualified engineer and with some college-based work; and then he is on his own, but with a buddy system in operation for help and guidance.

I have deduced three things from this. First, it demonstrates a yawning gap between the education service and the world of work. A lack of understanding, knowledge, interest, concern—call it what you will—there is far too much evidence that schools cannot and largely do not handle this work. Given this situation, which we have known about for some time, can the Minister explain why it was decided to devolve delivery of the careers service to individual schools and what plans the Government have to improve matters?

Secondly, I concluded that this was a good training model—partly on the job, partly college-based learning, and with access, as time went on, to the buddy system. Thirdly, and very importantly, I concluded that this young man had shown initiative. He wanted to be a gas engineer and had sought out the website to find out how to go about it and make himself available. Nothing comes for nothing in this life and putting one’s best foot forward is an essential ingredient of progress.

Earlier this year, a piece of work was done jointly by the Industry and Parliament Trust—I declare an interest as deputy chair of its trustee board—and the UK Commission for Employment and Skills, which identified many good examples of traineeships and apprenticeships that are equipping people to gain qualifications and experience in a variety of fields. We met the trainees from British Sugar, who are studying for a level 3 diploma in process engineering. We also met trainees working with Whitbread’s Premier Inns. Hospitality is, of course, a large and growing part of our economy and the company has pledged to provide 50% of its training opportunities to 16 to 24 year-old NEETs. We also met with the car builders Nissan, QinetiQ, the providers of high-tech services, Rolls-Royce, M&S, HSBC, Nestlé and others.

One theme which came through loud and clear was the shortage of school leavers who have studied the STEM subjects. Can the Minister advise

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the House of any actions taken—or intended to be taken—to address this issue, which, it has to be said, has been with us for a long time? In her reply, I hope that the Minister will also address the need to encourage more girls and young women to study the STEM subjects. I hope that she may be able to tell us that there is a plan in action to achieve this.

In his opening remarks, my noble friend Lord Monks mentioned the City & Guilds report Sense & Instability, in which it expressed regret at the constant churn and change, over a long period, of government policies, priorities and practices. It calls for better long-term planning for skills policy, which would be linked to long-term economic needs, greater coherence between central and local government, greater scrutiny and better checks and balances. Currently, skills and learning are divided between two government departments, making a difficult situation even more difficult. If we are to be fit and able to compete properly on the world stage then we need to up our game and ensure that every young person receives proper advice and guidance, enabling them to contribute in the most suitable way possible.

The industrialists of the 19th century, who made vast sums of money from the manufacture of textiles, armaments and shipbuilding, et cetera, did not encourage their sons to continue in trade—there were no daughters involved here, of course—but sent them off to the professions to be doctors and lawyers, and so on. That industrial snobbery remains with us today and it is up to us all to do what we can to chase it away. It is long past its sell-by date.

4.23 pm

Lord Young of Norwood Green (Lab): My Lords, I, too, congratulate my noble friend Lord Monks on what has been an absolutely fascinating debate. I do not envy the Minister having to try to sum up and respond to all the suggestions she has received.

I want to make a few points. If there is one thing that we all share—there are some common objectives—it is that we all want to enhance the quality of apprenticeships as well as increase their numbers. It is sometimes difficult to achieve the quality as well as the quantity. I acknowledge this Government’s commitment to apprenticeships but they are building on the achievements of the previous Labour Government, who, as my noble friend Lady Nye reminded us, rescued a dying apprenticeship scheme. There were just 65,000 apprenticeships, with a 27% completion rate; as my noble friend reminded us, when we left office there were nearly 280,000, with a 72% completion rate.

We did something else that tends to be forgotten: we said that careers advice in schools should span the whole range of careers and we built that into an education Act. As we constantly hear, that is honoured more in the breach than in the commission. We also raised the participation age—not the school leaving age, as people constantly say, but the participation age. We tried to ensure that every young person was either in work, education or training, and if they were in work, that they were receiving some training.

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We did not get everything right. I do not go as far as the noble Lord, Lord Baker, who said that we should not have gone for the target of sending 50% of young people to university. We did not get it all right, but we did raise the aspirations of a lot of young people who would not even have thought about going to university. It worked for some and not for others, but it was not the wrong thing to do. I accept that it had the unintended consequence that my noble friend Lady Morris identified. Towards the end we started to rescue the situation when we recognised the importance of apprenticeship and commissioned the Leitch report on skills. This is not an easy thing to get right.

I thank my noble friend Lord Monks for his history lesson on qualifications. It is absolutely baffling and we need to try to rationalise it. My noble friend Lord Macdonald and I are the only ex-apprentices in the Chamber at the moment. There may be others but they have not revealed it. It gives you an advantage in that we went through the scheme and it provided us with great careers in the end.

There is one thing that I criticise the Government for in relation to apprenticeships and that is that they made a fetish of the numbers when, as the noble Lord, Lord Baker, said, we ought to have a narrower focus. I would not be quite so narrow as to say focus on 16 to 18 year-olds, although I regard those as vital. Even if we go as far as 24, if we look at the increase in 25-plus since 2009-10, for under-19s we have seen a minus 4% change in apprenticeships, while for 25-plus we have seen a 352% increase in apprenticeships. It does not matter what figures you look at—I am looking at figures provided by government sources. If you look at the number of starts in apprenticeships in the 2013 academic year, there were 117,800 at under-19, 156,900 in the 19 to 24 age range and 157,000 by those aged 25 and over. Of course, there is a role for reskilling, but whether these should be badged apprenticeships is a question that the Richard review commented on. When we get these huge figures reported by the Government it is, unfortunately, misleading.

The other problem that the Government had to resolve was the emergence of the six-month apprenticeship. The Government have come some way, not enough, in saying that for an apprenticeship to be an apprenticeship, it has to be at least a year. We do not think that that is enough; we think that it should be two years. Worse still, we had employers who were not even paying the minimum wage: that is another problem. If we are talking about enhancing the status of apprenticeships we have got to make sure that we are serious about that so that boys and girls, and their parents, can feel confident about the quality of the career they are going to embark on.

As part of the House of Lords outreach programme I was at a secondary school near me and at the end of the question and answer session I asked how many of them were going to university. All the hands shot up. This is a very diverse but not particularly affluent area. I said that I was glad to see they were not deterred by fees, and then I asked about the alternatives. After about a minute or so, one young girl mentioned apprenticeships, although she did not really know much about them. I said that it was a bit unfortunate

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that the school was not giving those young people the full range of career options. We know that some of them will regret that university choice, because it will not be for them, and it will cost them a significant amount of money. So if we are talking about getting the status of apprenticeships enhanced, we have to do something about this conflict of interests that seems to infect most schools in the country. They are rewarded if they keep pupils on in the sixth form, and that seems to be their goal. Therefore, advice about alternative career options is just not good enough.

I am glad that the noble Lord, Lord Baker, paid tribute to the late Lord Dearing as regards establishing university technical colleges, which do their bit to enhance vocational qualifications. That is still going to be a challenge for us. So many people have given us such interesting information as we have gone through this debate. My noble friend Lord Bhattacharyya has shown what can be done. But if we are serious about ensuring that there is a viable alternative, we should not pose this as an either/or choice for young people, because it is not a matter of either taking up a vocational choice or going to university. As we know, one can lead to the other, so we should not present it in that way. We want young people to realise that they are both valid and important career choices, and we want to get them both having the same amount of esteem, if they go down that route.

I could not help smiling when my noble friend Lady Nye talked about telling young women that there are alternatives to hair and beauty. I agree, but as a man you have to be careful how you say that. I do not want to demean hair and beauty—and there is an apprenticeship scheme for that choice. There is a danger of an apprenticeship snobbery developing, whereby people think that it is only a real apprenticeship if it is in engineering. There is a whole range of good-quality apprenticeships. That is what we have to ensure.

If we gain power after the next election, we have said that we want to safeguard the trusted and historic apprenticeship brand, which we think has become a bit tarnished under this Government. We have announced that under Labour we would ensure that all apprenticeships are quality apprenticeships, are at level 3 and last a minimum of two years.

I end with a question for the Minister. Why do this Government continue to resist the point that significant public sector procurement contracts should carry with them the requirement of training and apprenticeships? We did it in the Olympics and it was successful, and we did it with Crossrail; something approaching 400 apprenticeships were achieved from that—and not only that, but practically everyone in the supply chain awarded apprenticeships. I am absolutely puzzled about this matter. If the Government have a serious commitment to enhancing the number of apprenticeships, they should ensure that procurement contracts require that guarantee.

4.33 pm

Baroness Williams of Trafford (Con): My Lords, this debate is an incredibly important one, certainly given the progress made in this area by this Government over the last four years, and I thank the noble Lord,

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Lord Monks, for raising it, as well as all of your Lordships who have contributed with a wide breadth of experience. It is also interesting to hear about the various backgrounds that people speak from. Given that it has not been mentioned today, I thought that I should declare that I availed myself of a polytechnic education—I will just put in a plug for that.

I shall try, in the course of my responses, to address as many of noble Lords’ points as possible, although I have a raft of papers here with notes on. If I do not address everything, I promise to write to noble Lords whom I have neglected to respond to.

Just how much education and training can do to improve the prospects of young people and, indeed, the well-being of our society as a whole, is something that those of us on this side of the House are always eager to discuss. It is worth noting—and I also get these figures from government sources—that there are 91,000 fewer people not in employment, education or training at age 16 to 18 than there were in 2009, so this is at its lowest recorded level. Across the age group of 16 to 24, there is a significant improvement in those young people in employment, education and training, showing just how much progress is being made in this area.

Recognising the importance of education and training was one of the founding principles of the coalition Government. Since 2010, it has been one of the cornerstones of our programme for government. This is a principle based neither on accident of birth or parentage, nor on some whim of the state about who should and who should not get a chance in life, but on how individual effort and achievement must be encouraged and recognised. I sense that this is a point on which the noble Lord, Lords Monks, and I are likely to agree.

More than 50 years ago, the late Lord Robbins enunciated the great and good principle that higher education should go to those with the wish and ability to benefit from it. Of course, the noble Lord, Lord Layard, was closely involved in that work and is entitled to some of the credit for a principle by which successive Governments stood until after the turn of the century. This was also an era of targets and clutter—as the noble Lord, Lord Macdonald, called it—in the public sector. I point to one of those targets today—and many noble Lords have actually spoken about this. The target of 50% of young people going into higher education was a target that was never reached, as my noble friend Lord Baker pointed out. Even after the benefits that the successful introduction of tuition fees have brought to our universities and the highest-ever numbers of 18 year-olds applying, the latest provisional figures for 2012-13 show that still only 43% per cent of 17 to 30 year-olds are going to university, which is roughly the same proportion as under the previous Government.

The noble Lord, Lord Monks, and other noble Lords asked us today the highly pertinent question of what happens to all the others. At the time, this was a rather forgotten issue, although it would be unfair if I failed to acknowledge those enlightened individuals—and I speak now particularly of the noble Lord, Lord

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Adonis, who is not in the Chamber today—who pressed for the creation of more vocational opportunities for those young people who do not go to university, alongside more places for higher study.

The economic crisis and the UK’s declining position in world skills indices made such calls even harder to ignore. Therefore, when they came to power, the present Government did not advocate further deepening the ancient division between our two societies of educational haves and have-nots, but instead pledged that there would be a place in work or high-quality training for every young person who does not go to university.

Despite all the pressures on public spending in recent years—and this has again been alluded to today—we have gone far towards delivering on that pledge. Notably, we have increased to their highest-ever level the number of people participating in an apprenticeship, set shortly to reach 2 million. We introduced a completely new programme of traineeships for those 16 to 24 year-olds who need to further develop the skills and experience needed to compete for an apprenticeship or other job. We introduced a new and better approach to vocational training in schools in the form of technical awards for 14 to 16 year-olds and tech levels for 16 to19 year-olds.

What we have today is not a forgotten 50% but a whole generation at last given cause to hope for the future, to look forward with confidence to succeed in the world and in life, just as apprenticeships have for literally centuries offered the skills that this will require. Of course, they continue to do so and with over 1.9 million delivered since the beginning of this Parliament, and nearly 850,000 people currently participating in an apprenticeship, we are well on course to meet the ambition of 2 million places by the end of the year, to which the Prime Minister has committed us.

Part of the reason for this is the Government’s willingness to invest even in difficult times. I say to the noble Lord, Lord Bhattacharyya, that this year’s Budget made available £170 million in additional funding over 2014 to 2016 to extend the apprenticeship grant for employers. This will fund more than 100,000 additional incentive payments for employers to take on young apprentices aged 16 to 24, providing a major boost to their job prospects. I confirm the point made by the noble Lord, Lord Sheikh, about the minimum wage being paid, although I take on board the issue raised in that regard by the noble Lord, Lord Young. I hope that he will write to me giving further details on the possibility that this may not be the case, and I will be very happy to reply to him.

From January 2015, the scheme will focus on companies with fewer than 50 employees as opposed to fewer than 1,000 employees, as is currently the case. Employers can receive £1,500 per apprentice for up to 10 new 16 to 24 year-old apprentices. This is already proving a powerful incentive, with 95,200 apprenticeship starts made using the grant since February 2012.

The Budget also made available £20 million in funding over the same period for new support for employer investment in apprenticeships that include an element of higher education up to postgraduate level, which will provide apprentices with the high-level technical skills that employers increasingly need, and

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to which many noble Lords alluded. This applies also to new starts for apprenticeships from the 2014-15 financial year. This will complement the £40 million funding over 2014 to 2016 for 20,000 more higher apprenticeships announced in the last Autumn Statement, more than doubling previous volumes.

However, an equally large reason for success lies in our willingness to engage with employers co-operatively and constructively. Many noble Lords have spoken of employers needing to engage, co-operate and take the driving seat in delivering future skills, but quality has to be the key here also. Quality is whatever commands the confidence of a potential employer in an individual’s ability to do the job. It makes sense, therefore, for employers themselves to be given the buying power needed to determine the skills content of an apprenticeship, from the traditional manual trades to the newer areas in which we find apprenticeships—areas such as IT and law. This is precisely what the funding changes we have introduced over the last couple of years are designed to do.

Without employers, meaningful vocational training just cannot happen. Learning on the job presupposes that there is a job on which to learn. There is absolutely no point in just telling employers to get on with it. A large number have already recognised the value of apprenticeships in meeting their businesses’ present and future skills needs. I am very pleased that the armed services, in which the noble Lord, Lord Monks, among other noble Lords, served his apprenticeship, remain a shining example of this.

That is a nettle no previous Administration have dared to grasp. But with about 1 million young people not in education, employment or training, we saw no realistic alternative. That is why the substantial extra investment in their prospects that I have mentioned, coupled with measures to increase their employers’ confidence in the programme, have been absolutely necessary. With that, too, young people themselves can be reassured that the qualifications for which they study have already been validated by those who will eventually judge what they are worth. How different from the days not long ago, before Professor Wolf’s timely review, when literally thousands of often meaningless qualifications and a plethora of competing acronyms, to which noble Lords referred, vied for the attention of students and employers alike.

Following my introduction, I should like to try to address every single point that noble Lords have made. I will start with the noble Lord, Lord Monks, who talked about us comparing badly to other countries in certain sectors and said that some apprenticeships were very much skewed towards the service sector. The national colleges and UTCs are responding to sectoral demand for the hard, STEM subjects. He also talked about the change in qualifications being confusing. The change is simple to understand: to give them a chance in life, students need to have maths and English GCSE by the age of 19. It is also simple to understand that young people can choose between doing a work-based training programme or a vocational, technical or university qualification.

The noble Lord, Lord Monks, talked about the Richard review and about employers being given more autonomy in terms of money going straight to them.

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He also talked about the types of skills they will require. The trailblazer scheme, the UTCs and the national colleges have all gone some distance to address this. He also spoke about skill shortages. The UTCs, the trailblazers, the tech levels and tech awards should also start to address some of these problems. He also made a point about Germany making apprenticeships more glamorous. In this country, demand for apprenticeships is so high that we are not having to glamorise them. Germany suffers from the different problem of demographic change, which means it has fewer people to fill jobs, and it will have to address this in the future. By the same token, I have experience of companies in this country which have had to import skills from Germany. We must get better at providing the skills to meet the demands of employers.

My noble friend Lord Baker touched on the issue of the huge shortage in engineering. To hear his words has been music to my ears because for the last 10 to 15 years in local government it has been woeful. At the last count, there were 48,000 engineering vacancies for 24 people available to do them. He also talked about skills and put out the slightly controversial case for no exams at 16. I am not sure that I agree with him on that as I would not like to shock a young person into their first exam at 18 or 19. However, I thank him for his long-standing commitment to and hard work in improving technical education for 14 to 18 year-olds. Our investment in UTCs so far has led to 56 either open or preparing to open, providing 35,000 students a year with a high-quality technical education, driven by employers. I make the point again about employers being in the driving seat.

In terms of supporting 14 to 16 year-olds to develop practical and technical skills and knowledge alongside their GCSE study, the key stage 4 qualifications known as technical awards, which I have already spoken about, will be taught from September 2015. These will encourage an interest in technical subjects such as engineering and technology and others will develop practical skills such as woodwork or dressmaking. My noble friend Lord Baker made the point that apprenticeships should be for young people. The funding system prioritises apprentices up to 19 years old but we need more employers to offer young people a chance to show what they can do, assuming the best of them not the worst. This may be a bit of a gap in the system but the links between businesses, schools and colleges are absolutely key for the future.

My noble friend Lord Addington talked about apprenticeships requiring an English qualification, which is a specific challenge for those with dyslexia. Apprenticeships give young people the opportunity to develop a range of skills, and experts such as Professor Wolf have stressed how a good level of English and maths is essential to support career progression. As the noble Lord, Lord Monks, pointed out, other apprenticeship schemes considered to be world leaders include maths and language skills because they are so important. However, my noble friend is absolutely correct to say that we need to ensure that reasonable adjustments are available. The current skills funding rules include a statement making this absolutely clear, and we continue to seek other ways in which to promote adjustments to support learners. My noble friend also

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talked about support for dyslexia and the JISC. It is not being wound up; it is in a strong financial position and has secure funding for the short term at the very least. It is, however, restructuring and some regional centres may close. He also made the point about employers being more engaged and willing to play their part in assisting apprentices with dyslexia.

The noble Lord, Lord Bhattacharyya, talked about money shortages for employers. I have already gone some way in talking about that, but for every pound that an employer spends the Government will spend £2, up to a cap. He also said that the Government should fund courses that employers value. I wholeheartedly agree and that is why we are reforming apprenticeships to put employers again in the driving seat of design and delivery. This is why we have introduced the tech levels that I have spoken about for 16 to 19 year-olds, and all tech levels are backed by at least five employers or a relevant industry body. That is important in terms of giving confidence in the workplace and providing parity of esteem, which so many noble Lords talked about. Examples of the firms that are backing the tech levels include John Deare, Lovell, Proctor & Gamble and the Royal College of Veterinary Surgeons.

The noble Baroness, Lady Taylor of Bolton, talked about the cultural problem for women of apprenticeships, which seem to be skewed towards boys or men. I have looked at some of the figures and there is actually a challenge there in terms of engaging girls better. She also talked about some sort of technical baccalaureate. It was, in fact, introduced in September of this year. It is an alternative to A-level; I am not sure whether it is on the same basis as the Labour Party is suggesting but, for noble Lords’ information, the performance tables will be produced in 2016.

The noble Lord, Lord Rees, said that not everyone should have to go to university. That is the way in which this country needs to culturally change. Not everyone has to go to university. I went to a polytechnic and it is no shame to do an apprenticeship. In fact, some of the most successful people I know have done apprenticeships.

I am aware that time has run out and I am barely half way through answering noble Lords’ points. If I can, I will write to them in due course because I am aware that there are about 10 noble Lords left to respond to. I thank all noble Lords who have taken part in this debate.

4.54 pm

Lord Monks: I thank the Minister for her conscientious reply. Those who await her follow-up points in a letter do so with bated breath. I thank my noble friend Lord Young for his remarks. I am not sure that he got apprenticeship to be sexy, but he keeps trying and is always very interesting on this subject.

I thank everybody who contributed to this important debate. We must raise the attention, interest and dynamism behind the area of vocational education and training for these young people, and I hope that this is the first point in a lot of attention that this House gives to the subject.

Motion agreed.

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Question for Short Debate

4.55 pm

Asked by Lord McConnell of Glenscorrodale

To ask Her Majesty’s Government what action they are taking to support economic and social development in Malawi.

Lord McConnell of Glenscorrodale (Lab): My Lords, Malawi is a nation of about 15 million people. It is a peaceful, democratic nation and a proud member of the Commonwealth. It is a landlocked country, but Lake Malawi is one of the most stunning lakes, and the ninth largest, in the world, with more species than any other. On 6 July this year, Malawi celebrated the 50th anniversary of its independence, on 6 July 1964. I thank those responsible for my opportunity to secure this Question for Short Debate. I am also delighted that observing the debate this evening are His Excellency the High Commissioner Bernard Sande and colleagues, who have joined us for our deliberations.

Since 1964, Malawi has seen many ups and downs. In 1994 it celebrated the introduction of multiparty democracy and in that time it has seen development in many ways. Malawians are a proud and good people, and good friends to the UK, and to Scotland and Scots in particular. Scotland’s relationship with Malawi goes back 150 years to the time of Dr David Livingstone, that pioneer who was described by Kenneth Kaunda as Africa’s first freedom fighter. Livingstone’s successors, such as Dr Robert Laws, who ran the Livingstonia Mission for decades, and Mamie Martin, who pioneered girls’ education in that part of Africa, were all committed to helping Africans develop Africa themselves. This was not the traditional colonial relationship but one that was much more about mutual respect.

In the 1950s it was the Scots who stood strongest with the Malawians, first to oppose their movement into the Central African Federation, which was a disastrous step by the then British Government that pulled together southern and northern Rhodesia with Nyasaland, as Malawi was then called. Secondly, the Scots supported the Malawians during the state of emergency that followed; in 1959 this included the General Assembly of the Church of Scotland leading the international voice that said that it was time for a daring and creative transfer of power to the people of Malawi. The transfer happened just five years later.

In the first independence Cabinet in 1964, a Scottish lawyer, Colin Cameron, one of the few non-Africans to serve in a Cabinet in post-independence Africa, served as Minister for Works and Transport. Forty years later, in 2004, he was to become one of the inspirations behind the Scotland Malawi Partnership, when Strathclyde University, which had been home to Dr Livingstone almost two centuries before, established with the two Lord Provosts of Glasgow and Edinburgh the partnership. This was reinforced and strengthened in November 2005 by a co-operation agreement between myself as First Minister of Scotland and the then President Bingu wa Mutharika.

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The co-operation agreement was based, as all the work over those 150 years had been, on mutual respect, development and working together. Today, the Scotland Malawi Partnership has hundreds of members. It is a non-governmental organisation that has in its membership all of Scotland’s universities, half of Scotland’s local authorities and hundreds of schools. There are health projects and active health partnerships operating in everything from epilepsy to midwifery and from prosthetics to rural GP advice.

A recent survey showed that 94,000 Scots and almost 200,000 Malawians are now actively engaged in these links, and that 200,000 Scots and more than 1 million Malawians benefit from this activity, which contributes mostly in kind about £40 million to Malawian development every year. It also showed that there is widespread support: that 46% of Scots personally know somebody who is involved in people-to-people links with Malawi, and that 74% of Scots have been in favour of those links overall. It is a unique and special model. My first question to the Government is: will they encourage others around the world to look at similar opportunities to link either parts of nation states or small nation states with smaller areas in the developing world in a way that develops mutual respect and mutual benefit but, ultimately, development as well?

The second matter that I wish to address damages that respect and good will, and it is the issue of UK visas. The good will and respect that have been developed are regularly threatened by the shambles surrounding the UK visa system for those in Malawi and other poor countries trying to get to this country. The system is dysfunctional, it is certainly disproportionate and it is, in my view, deeply damaging. From the 15-page application form that people have to fill in to the posting of passports to countries far away, which then have to be returned on time but regularly are not, to the proof of wealth that is required as evidence to secure a visa to come to this country, to the cashless system that encourages sharks to charge a fee to use their credit cards, as people pay them cash—all these measures have led to a whole series of people month after month being denied the opportunity to come to this country from poor communities in Malawi, and indeed elsewhere, in order to contribute to debates and discussions here, even when their host is a highly reputable UK or Scottish organisation or even a government body.

This is an issue that the Government need to take more seriously than they have done in the past. What steps will they take to clear up this chaos and improve the system in the short term? In the longer term, will they initiate a proper investigation to see how the system can be made more likely to contribute to the good relations between this great friend of Scotland and the UK, rather than damaging the relations that are being developed today?

As the 50th anniversary celebrations got under way this year, Professor Peter Mutharika, the new President of Malawi, said very clearly that,

“we need to transform our country from being a predominantly importing and consuming country to a predominantly producing and exporting country … we must strive for economic and development independence”.

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I am sure that all of us wholeheartedly endorse and support that vision. However, today in Malawi 60% of the population still live on less than £1 a day. For every 1,000 children born, 68 will die before the age of five, and one in 200 women will die in childbirth. Although 24% of children will have had diarrhoea in the last two weeks, only 16% will have gone to secondary school. Malawi today is still only 170th out of 187 in the Human Development Index.

While there has been progress towards the MDGs on HIV and child mortality, Malawi is unlikely to meet the MDG targets on poverty, primary education and maternal health. Growth and development has been damaged in recent years by political instability, by economic ups and downs and by some more serious problems, as well as by the recent “cashgate” scandal that the new Government are trying so hard to deal with. As a result, UK aid has been partly suspended and direct support to the Government has been suspended indefinitely.

My final questions to the Government are about that UK aid, which is so critical, along with that of other donors, in the short term at least, to securing Malawian development towards the vision of economic independence. First, can the Minister outline for us what plans the Government have in the medium term to move back to a system of general budget support and sectoral budget support that would reinforce the capacity of the central Government of Malawi to deliver for its citizens?

Secondly, what support is the UK providing to build the capacity of central government and national institutions in Malawi to help ensure that scandals such as “cashgate” do not happen again? Thirdly, I have to tell the Minister that I found it very difficult to secure these figures from the DfID website, which I found to be a little bit out of date in places, including referring to the future elections in 2014 rather than the ones that had just happened.

I ask the Minister, if she can tonight, to outline exactly where UK aid is going at the moment. What is the expenditure targeted towards and what is the impact of that expenditure this year? I think that is important information that reinforces the friendship between our two countries and also allows us to hold the Government accountable for that expenditure.

In conclusion, Malawi is for very good reasons regarded as the warm heart of Africa. The friendship between our two nations, not just Scotland but the whole United Kingdom and Malawi, will be there for a very long time. I hope that, in addressing these questions this afternoon, we will be able to contribute to that friendship and move forward together to development and proper independence in the future.

5.06 pm

Lord Steel of Aikwood (LD): My Lords, the House should be very grateful to the noble Lord, Lord McConnell, for initiating this short debate on a small, faraway country of which many people know little but which he and I know extremely well. I join him in congratulating the Scotland Malawi Partnership. I was on the preparatory committee that set up that partnership and he was the First Minister who saw it

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implemented. It has gone from strength to strength. The Scottish Parliament and the Scottish Government have continued to support it very strongly, and I endorse what the noble Lord said. When the noble Lord referred to the history of Malawi, I remembered on one occasion sleeping on the bed of Dr Laws in Livingstonia—not an experience I would recommend to anybody. It was simply a bed constructed out of rope.

In a very short speech I want simply to raise two issues. The first is the question, to which he alluded, of “cashgate” and our aid programme. The figures may not be on the DfID website but sources in Malawi suggest that some $500 million went missing over eight years during the period of the previous Government in Malawi. That is, according to Malawi sources, something like 30% of Malawi’s total budget. When you think that it is a very small country with a population of 16 million and an economy smaller than the London Borough of Hackney, you realise that the damage done by the “cashgate” scandal is enormous. Therefore, it is understandable that not just Her Majesty’s Government but the new Malawi Government are doing their best to see that those who were responsible for this are brought to book.

The former President, Joyce Banda, in a lecture at the LSE this month, said that she was alerted to this scandal at the tail end of her regime by Alexander Baum, who was the European Union representative in Malawi. That enables me to say that I do not share the general view that has been put about that the European diplomatic community is somehow less effective than our own. In my many visits to Malawi, I have found that the small diplomatic community there worked together more cohesively than I have seen in any other country. I pay tribute to the European representative as well as to our own.

In the lead-up to the referendum after Dr Hastings Banda’s period, I was involved in the struggle to bring better democracy and transparency to Malawi. It must be frustrating for the population of Malawi to realise that they have suffered under kleptomaniac rulers who have made a mockery of democracy. I know that our Government and the German Government have financed the external audit that is trying to track down what exactly happened. The United Kingdom has to be tough on this issue. It cannot resume the full aid programme until it is resolved. It should also warn even the new Government that extravagance will not help. There have been press reports from Malawi that the current President took 68 people with him to the General Assembly of the United Nations in New York—not a good example to set when he is doing his best to track down the blatant corruption of the previous Government.

Although we have suspended budgetary aid to the Government, I hope that it will still be possible for DfID and other organisations to continue to give direct programme support to various factors in Malawi. In the areas of health, education, agriculture and support for the judiciary, it is important that, even though we cannot give government budgetary aid, we continue to give direct assistance.

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To give an example from my own experience, the last time I was there, which was a couple of years ago, I visited a hospital which was very well organised. It had rural outreach clinics and took drugs out to the villages on motorbikes. Somebody had given about a dozen motorbikes to the hospital. I am not a motorbike expert but I think they were probably Chinese—they were quite cheap—and a lot of them had broken down. In fact, there was only one left that worked; the others were all in a shed. Here is an example of when a little ingenuity and a little money, to get a mechanic out there to cannibalise the motorbikes so they could work again, would greatly increase the efficiency of that service. Not a large sum of money was involved. That is the kind of imaginative thinking that our hard-pressed DfID staff in Malawi should be looking at. The Government should be willing to finance such individual projects even if they cannot give direct help to the Malawi Government.

The second issue I want to touch on is the visa regime, ably mentioned by the noble Lord, Lord McConnell. As it affects Malawi, it is particularly bad because visa applications have to go to Pretoria in South Africa. Under the Malawi rules, one cannot pay in rand without clearance from the banks. The whole thing is a bureaucratic nightmare. We had a debate on this issue, which is totally unsatisfactory, in the Moses Room a few months ago. We have lost accountability for the visa service. It has been farmed out to an agency, which in turn has farmed it out to subcontractors, presumably on a cheap contract basis. The result is that the service is extremely expensive for Malawi citizens and it is very time-consuming. Mr Tom Greatrex the MP who represents Blantyre, David Livingstone’s birthplace, feels very strongly about this. He has raised it several times and is about to have an Adjournment debate in the Commons on the issue.

In the mean time, I want to make two suggestions, which my noble friend might pass on to the Home Office. First, I do not understand why, when people are coming for short contributions to public seminars of a kind that I complained about before, and will be here for only a few days with firm sponsorship, those issuing the visas cannot telephone the sponsors to make sure that the application is genuine. The idea that visa applications are rejected because people might overstay or give up their careers, families and everything else in Malawi to stay in Britain is simply ludicrous. Another suggestion is that we might change the visa system to insist that sponsors for short-term visits should themselves sign declarations accepting responsibility for the person returning and being liable to a fine if the person does not return. That might cut through a lot of the bureaucracy and establish a visa regime that is fit for purpose.

Better still, I would like to be rid of the agency and go back to the system we used to have. I can remember as an MP on several occasions having to phone a high commissioner or an ambassador and say, “I hear that so-and-so has made an application for a visa and has been turned down. Can you have a look at this?”. They would look at it and say, “This is why it has been turned down. It is perfectly reasonable. It is good policy not to let this person come here”—or, alternatively, they would say, “We have looked at this. It is bureaucratic

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nonsense and we are issuing the visa”. There is no accountability any more. It has gone. If we cannot get it back, at least steps should be taken, as the noble Lord said, to ensure that the system is improved. I hope that the Home Office will respond in the debate which Mr Greatrex is having shortly in the other place and will come forward with positive ideas on how to improve the system for the benefit of good relations between Malawi and ourselves.

5.15 pm

Lord Collins of Highbury (Lab): My Lords, I, too, want to thank my noble friend for initiating this debate tonight. As we have heard, Malawi is one of the poorest and least developed nations in the world, ranking 170 out of 187 in the Human Development Index and with rural poverty increasing in the last decade to 57% of the rural population.

Although fragile and despite many challenges, DfID’s latest annual report—which, I accept, is a little out of date—shows that Malawi’s macroeconomy is displaying some signs of improvement. There is no doubt that progress has been achieved through DfID’s focusing on the key priorities of attacking poverty and inequality, and through investment in education, health, agriculture, water and sanitation, with an emphasis on the rights of girls and women—that is absolutely right. DfID has promoted wealth creation and economic growth by expanding its private sector development portfolio to improve growth in the agricultural sector.

More women are being helped to access finance through village savings and loan schemes. Of the 26,000 additional people supported to access credit through DfID in 2013-14, 21,000 were women. DfID’s work in resilience is helping to improve rural incomes and reduce the vulnerability of farmers to external shocks. An additional 74,000 people were supported to cope with natural disasters in the 2013-14 period. In the same period it helped 140,000 people to have access to clean water and improved sanitation, and by 2015 it will have supported 750,000 people in that way.

Despite DfID’s work supporting accountability reforms and preparing for the 2014 general elections, poor governance and corruption continue to prevent Malawi from achieving its full potential. As we heard from noble Lords tonight, DfID has frozen its direct budget support to Malawi as a result of the so-called “cashgate” scandal, which saw substantial sums of aid funds going missing, with the Government of the then President, President Banda, being heavily implicated in the diversion of funds. This is the second suspension of direct aid arising from corruption in the past three years. As we have heard, the suspension is ongoing despite the May 2014 elections, which saw the removal of President Banda and her replacement with Peter Mutharika.

Clearly, we support the move to suspend aid if there is strong cause to believe that misappropriation is happening. However, for a country so dependent on aid, this is a huge hit, especially when other donor nations have also frozen budget support. I am of course aware that DfID believes that sufficient action has not been taken to address financial and management issues under the new Administration. However, in these circumstances there is a need for DfID to engage

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closely with the new Malawi Government to ensure that there is a clear road map of steps that can be taken that will lead to the reinstatement of budget support.

In that respect there are a number of questions that I would like to ask the Minister, which have been reflected already by noble Lords, particularly my noble friend. First, have DfID Ministers met with Malawi Government representatives to discuss progress on tackling corruption and steps towards the resumption of budget support? Secondly, what assessment has been made of the willingness of the new Government to take serious steps to improve financial management? Thirdly, what was the outcome of the DfID-funded forensic audit team operating in Lilongwe to attempt to identify misappropriated funds?

Despite the progress I have referred to, Malawi still faces huge challenges in health and education, where just 66% of young people complete their secondary school education. Can the Minister highlight for noble Lords what impact the suspension of budget support is having on public services? Is the department happy that the continuing funding for NGO-based programmes in Malawi is proving effective at limiting that impact? Moreover, as and when budget support recommences, is there the potential for back payments to be made that will help to reverse the negative impact of funding shortages on public services?

Sustained youth unemployment, underemployment and low pay are a severe drag on the nation’s ability to tackle poverty levels, a situation that is set to be exacerbated in a nation where almost 47% of the population is under the age of 14. As I have indicated, the UK’s development programme for Malawi rightly includes a substantial private sector development programme, but it is not clear that it is adequately focused on the particular issues of youth unemployment or on moving people from precarious work into more secure and properly remunerated jobs. The private sector development programme concentrates particularly on the oil seed sector and on reforms that would help to grow it as an export sector, but as with much agricultural work in Malawi, wage levels and working conditions are extremely poor. Is there enough focus on encouraging sustainable, properly remunerated employment in this sector, and how is DfID ensuring that its funding and support for agricultural regulatory reform strikes the right balance in enabling private sector led employment growth while protecting the small-scale farmers who make up the bulk of Malawi’s rural population from land grabs and unfair practices?

Some 20,000 farmers in Malawi currently benefit from fair trade schemes, particularly in the tea, coffee and groundnut sectors, with premiums being reinvested in rural schools, healthcare and infrastructure. However, with 90% of the population working in agriculture, there is clearly enormous scope for further expansion. Yesterday, along with my noble friend, I met with members of the team from the CDC Group who highlighted the direct investment being made in a company in the DRC to develop palm oil—in a very difficult situation for arable operations. This has already resulted in improved wages. I discovered that the negotiations with the trade unions were carried out on

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television, so they were there for everyone to see; it is a practice that we could perhaps adopt here because it might improve things. A major ingredient of the success which the CDC highlighted was the level of co-operation between DfID officials locally and the CDC in assessing the resilience and sustainability of what is clearly going to be a long-term investment. Does DfID’s private sector development programme in Malawi provide a specific focus on and assistance to the fair trade sector? Also, in encouraging British investment in Malawi, does the department, along with the high commissioner, actively seek to promote fair and ethical trade opportunities?

The noble Lord, Lord Steel, and my noble friend have raised the issue of visas, and I want to repeat their questions. In the end I would ask the Minister to ensure that there is a review of the current operation to assess its effectiveness, proportionality and impact on the current system of civic and community links. As my noble friend so ably put it, we must recognise the essential role that civic society can and should play in Malawi and among its partners in the United Kingdom—particularly, as we have heard in the debate, in Scotland. We must strengthen both economic growth and good governance.

5.25 pm

Baroness Northover (LD): My Lords, I thank the noble Lord, Lord McConnell, for initiating today’s debate and for his passionate and well informed introduction. I also welcome His Excellency the High Commissioner and others from the high commission who are interested in the debate today. The noble Lord, Lord McConnell, has a deep and long-standing interest in Malawi. He points out that there are particularly close links between Scotland and Malawi from David Livingstone onwards. He outlined very effectively how close those links are today. We have, of course, close links in the United Kingdom with other developing countries, often developed from a shared history, as in the case of a number of other African countries, and from diaspora links, as with Pakistan and Bangladesh.

The noble Lord, Lord McConnell, notes that Malawi celebrates 50 years of independence this year. In that time, it has achieved a significant reduction in child mortality, an increase in food production, free primary education for all and the establishment of a multi-party democracy, with a vibrant free press and civil society and a series of peaceful elections. Development assistance, including from the United Kingdom, has been critical but that is quite a series of achievements.

Yet, compared to some of its neighbours, Malawi’s progress has been slow. Average life expectancy at birth remains 55 years, 90% of people live without electricity, and only 28% of girls finish primary school. Landlocked and resource-constrained with a high population growth, Malawi continues to face the problem of lifting its people out of deeply entrenched poverty. Development assistance that addresses the underlying barriers to progress remains essential.

The recent multi-million “cashgate” corruption scandal, to which noble Lords have referred, in which it was discovered that significant amounts of public money

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had been stolen through systematic manipulation of the Government of Malawi’s public financial management system, was, and continues to be, of great concern to the UK. This money was stolen from the Malawian people, setting back much-needed poverty reduction. My noble friend Lord Steel and the noble Lord, Lord Collins, make extremely clear how significant this has been.

At the request of the Malawian Government, the UK funded—reference has been made to this—a forensic audit of government accounts to establish the extent of “cashgate” losses, the methodology used and those involved. Now the final report has been handed over, Malawi’s law enforcement agencies must continue to work methodically to bring the perpetrators of “cashgate” to account through the courts and deliver justice for the Malawian people. I assure the noble Lord, Lord Collins, that we are monitoring this very closely. The United Kingdom is committed to ensuring that every pound of UK aid money achieves its intended results and maintains a zero-tolerance approach to corruption. This is why, in concert with other donors, we took the decision to stop providing all financial aid to the Malawian Government in November 2013. There can be no consideration of putting UK funding through government financial systems in Malawi until the necessary actions to strengthen these systems have been taken and independently verified. We will keep this situation under review.

While we cannot work through government systems, the UK continues to work with Government and others for change in Malawi. The noble Lord, Lord McConnell, asked about capacity building to avoid future “cashgates”. The new Government of Malawi have committed to a greater degree of transparency and we will be working with them to take broader and sustainable action to tackle corruption and foster a culture of integrity in public life. As I have said, we are monitoring this very closely.

The noble Lord, Lord Collins, asked about meetings with Malawian Ministers. A Minister in the Foreign Office, my honourable friend James Duddridge, whom the noble Lord will know, met the Malawian Minister of Foreign Affairs at the United Nations General Assembly recently.

The United Kingdom remains one of Malawi’s major development partners but, as I said, is not routing that support through the Government. We continue to provide a large programme of support to reduce poverty and assist poor people across Malawi through other channels. I assure the noble Lord, Lord Collins, that we work hard to ensure that the poorest people do not suffer further as a result of “cashgate”.

I also note the projects that my noble friend Lord Steel mentioned. I hope that noble Lords will be reassured to know that in the financial year to March 2015, the United Kingdom is providing £61 million of bilateral support to the people of Malawi, representing 2% of its national income. That is complemented by the UK’s considerable contribution to Malawi through other channels, including the World Bank, the European Union—to which my noble friend Lord Steel paid tribute—the Global Fund to Fight AIDS, Tuberculosis and Malaria, UK-based NGOs, and regional programmes.

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United Kingdom support creates educational opportunities for girls and boys, supplies life-saving drugs to the health sector, tackles undernutrition in young children and in people living with HIV, and provides vital inputs to farmers. The noble Lord, Lord Collins, mentioned several of those areas.

We are delivering significant demonstrable results for poor people. Since 2011, the United Kingdom has helped more than 350,000 women to access family planning services. By 2015, more than 400,000 women will have improved access to security and justice. By 2016, we will have ensured that 750,000 more people have access to safe, clean water. Our support enabled 5.2 million people to vote in recent general and local elections.

Those results are underpinned by important transformational changes: governance reforms, health systems improvement, transparency and accountability for citizens, and girls’ and women’s empowerment. We enable households and communities across Malawi to build resilience to climate change and chronic food insecurity. However, we are well aware of the need, as the noble Lord, Lord Collins, outlined, for people to have jobs. That is vital.