My hon. Friend is the very antithesis of both ugliness and ubiquity; indeed, he is known for his integrity and truthfulness. As Keats understood, and Shaftesbury in the other place later, truth and beauty are intrinsically linked, and so my hon. Friend’s truthfulness
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has an aesthetic all of its own. On the specific point that he raises, the way in which colleges have, over time, been dictated to and controlled from the centre has largely been about funding mechanisms. Colleges have danced to a tune set around funding. He is absolutely right to say that greater freedom means being more flexible about funding. It means allowing colleges to devise the kind of offer that is right for their locality in the kinds of partnerships that my hon. Friend the Member for Brigg and Goole (Andrew Percy) described, and funding needs to reflect that.
We are on a journey, and not all of it can be done overnight. When I came into the job, I was able to put in place a number of important changes that stripped away some of the central control. Since that time, we have done more, and these amendments go a step further. But this is not the end of the journey. The destination we seek is what I began to describe a moment ago—a more eclectic, more responsive and more dynamic system. I am not, as you know, Madam Deputy Speaker, one to overstate my virtues, but I would go so far as to say that what we are doing in further education is a model of public service reform: a deregulated system that is free to respond to local circumstances; dynamic and innovative; flexible and, in my judgment, imaginative—I make no apology for using that word—about exactly what it does and how it does it; and uses funding to feed that kind of new beginning. As I said, though, I do not want to overstate the case.
Mr Stuart: My hon. Friend could see one of the reasons for the need for flexibility if he came to visit Beverley, as I have frequently invited him to do, where our excitement grows with each delay until he does so. He would see the area where the new East Riding college was to have been built but, because of the mess that was made of FE capital funding under the previous Administration, it looks like a bomb site in the middle of Beverley. As we move forward with these freedoms and with the excellent leadership that we have at East Riding college, I hope that we will see the college on that site in the near future.
Mr Hayes: Every day a new invitation for me to visit a different part of the country arrives, each one more seductive than the last, but none more attractive than the overtures of my hon. Friend the Chairman of the Select Committee. Tonight I will do what I rarely do in the House: I commit, from the Dispatch Box, to visit his college, because he has made this case so frequently and persuasively that I feel that I have been less than generous in my response thus far. I will certainly come to look at the specific circumstances that he described in his—as usual—pithy and well-informed intervention.
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Andrew Percy: Now that my hon. Friend the Member for Beverley and Holderness (Mr Stuart) has seduced the Minister into visiting East Riding, can he, while he is there, show us a bit of ankle and come to visit Goole as well?
Mr Hayes: I have made it clear that I am not going to give way at this juncture, because I fear that my right hon. Friend is trying to encourage me to stray, but I will give way to him in a few moments when I have made a little more progress.
There was a debate in the other place on the importance of staff and student governors in colleges. Ensuring strong staff and student representation on a governing body is of importance to me. During the passage of the Bill, I have had positive discussions with the National Union of Students and the University and College Union on this subject, as has my noble Friend Lord Hill. We were anxious to ensure that staff and student involvement helped not only to inform good practice in colleges but to shape the offer in those colleges. As a result of those discussions, we continue to require colleges to have such governors on their boards. The House will want to be reminded that this requirement was warmly supported by Baroness Jones of Whitchurch, who was
“pleased…that this commitment”
“honoured in both spirit and practice in the amendment”
“is indeed better than that tabled by those on our own Benches on this issue”.—[Official Report, House of Lords, 9 November 2011; Vol. 732, c. 332.]
I am most grateful to the Minister, who is being very generous in giving way. He spoke earlier about taking us on a journey, and even earlier he quoted Rab Butler. May I remind him of what Rab Butler said about journeys—that it is best to get off the train before it hits the buffers? With the light-touch approach that
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the Minister is suggesting, is there not a danger that some colleges may move assets overseas, to the detriment of the British taxpayer?
Mr Hayes: It is true, of course, that as we free up the system, some of the controls that have previously been in place—some of the levers that the Government could pull—will no longer be there. Frankly, however, I have to say to my right hon. Friend, to whose assiduity, eloquence and wisdom I have previously paid tribute, that if the price of freedom is that loss of control, it is a price worth paying for the benefit it brings in the kind of innovation, exercise of imagination, responsiveness and dynamism to which I drew the House’s attention earlier. That was certainly the view of the other place and, in general terms, the view of the Committee as we went through the Bill. There is growing cross-party acknowledgement that we can no longer predict and provide—that we do indeed need to create a more responsive system. I say that because the character of our economy is changing. Economic need is increasingly dynamic, and a system that is controlled from the centre would never be sufficiently nimble to respond to that commercial need. That is now widely acknowledged. The difference is that we are going about this with purpose, energy and enthusiasm.
Let me return to staff and student representation. It is important that we see the statutory requirement that I have described merely as a baseline. There are all kinds of other good things that we can do in terms of staff and student representation, but representation on governing bodies, it was argued persuasively, should be a baseline. Lords amendment 51 extends those changes to institutions that are not college corporations, but that have been designated by legislation to receive public money for the provision of further education. It would come into effect should they decide to change their existing instruments and articles.
Lords amendments 50 and 58 give colleges the power to close themselves, which is known as dissolution. Currently, only the Secretary of State can dissolve a college. The amendments remove that power from the Secretary of State and give colleges control over their own dissolution. Colleges will also have the ability to transfer their property, rights and liabilities to another person or body for the purposes of education. These amendments and the regulations that will be laid in support of them include a number of safeguards to ensure that any dissolution decision is taken only when all those affected—staff, students and the local community —have been properly consulted, and that the process will be transparent, recognising that colleges are providers of an important public service.
In Committee, the hon. Member for Hartlepool (Mr Wright), who is not in his place, but who was a diligent member of the Committee, raised questions about the likelihood that colleges would fail with these new freedoms. There is no evidence to suggest that the extra freedoms will increase the risk of failure. Notwithstanding what I said about the growing understanding of the need to allow colleges to be more locally responsive, it is worrying that there are those who believe that colleges will not rise to the challenge of the new freedoms and who believe that only through central Government control can we give the necessary protection to the common interest, which I have no doubt was in the heart of the
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hon. Gentleman. I do not think that he is right. Colleges have shown time and again that when they are given the opportunity to be their best, unrestricted, they can be so.
I am keen to address that point in more detail in relation to the amendments. Further education is a high-performing sector, with more than 95% of colleges judged satisfactory or better. Sometimes further education has been treated as what Sir Andrew Foster described as the “neglected middle child” of education, somewhere between schools and higher education. I see it more as the prodigal son, and not just that, but the prodigal son grown up. I want further education to be a favoured part of our education system because of the difference it makes to so many lives. The important thing is to ensure that where problems occur, there are robust monitoring and support systems so that colleges are given the opportunity and help to recover. It is right that we have in place the proper protections from failure because, as I have described, public interest is involved. A great deal of taxpayers’ money is involved too. However, we should not get to the point of creating an immense infrastructure to manage the college sector.
I think that it is correct to say, albeit with the benefit of hindsight, that after incorporation and the freedoms that colleges enjoyed as a result, we responded in a heavy handed way to the occasional, rare incidents of failure. It is reasonable to conclude that the advent and actuality of the Learning and Skills Council was an overreaction to the challenges associated with the new freedoms.
Andrew Percy: Will the Minister explain in more detail the process for consulting the local community, if a college fails or chooses to dissolve itself? I know he has said that that will be set out in regulations, but will he give us some idea of the robustness of the consultation that he has in mind?
Mr Hayes: In those exceptional circumstances, I would expect the consultation to be as full as possible. By that I mean that the views of all parties with a direct interest in the college’s affairs, including the local businesses engaged with the college, local learners and the wider community—the family associated with the college—should be sought fully over a proper timetable. Whatever means are necessary should be used to access those opinions.
Those circumstances will be rare, but I give an absolute assurance that the consultation will be full, fair and frank; that no action will be taken that would endanger the interests of the people whom I have described; and that the Government will play their part in ensuring that that takes place. As I have said, further details will be available to the House when regulations are laid.
As I have said, 95% of colleges improve after receiving support, but in the rare cases where recovery is not achieved and there is evidence of significant mismanagement, legislation gives the Secretary of State the power to intervene as a matter of last resort. I hope that that assures my hon. Friend the Member for Brigg and Goole that the protection of students and public investment is of fundamental importance. Although we are creating a very different regime for colleges, we will not neglect our duties in that regard.
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Mr Graham Stuart: I would like to take the Minister back to the intervention from my right hon. Friend the Member for East Yorkshire (Mr Knight). In East Yorkshire, the Harrier was developed with a lot of taxpayers’ money and then shipped abroad to become an American aeroplane. We rather fear that the Hawk will follow. Will the Minister reassure us, in more specific terms than he used in response to my right hon. Friend, that a college will not be so free that it can leave the country with its assets, if it suits the organisation rather than the needs of the taxpayers?
Mr Hayes: As I have said, where public interest is in jeopardy, the Secretary of State will retain powers under the Bill to intervene as necessary. I paid tribute to my hon. Friend a few moments ago for his patient endurance in respect of my forthcoming visit to Beverley. It was Ruskin who said,
“Endurance is nobler than strength, and patience than beauty.”
We can therefore take it that my hon. Friend is a patient endurer, more noble than strength and beauty. It is likely that the circumstance he describes would happen only rarely, but it is important that when a college wishes to transfer its property, rights and liabilities to another provider, the Secretary of State retains the kind of powers that he requested.
Lords amendments 53, 56 and 62 reinstate statutory safeguards relating to the specific governance and constitutional arrangements of voluntary sixth-form colleges that were inadvertently removed by the Apprenticeships, Skills, Children and Learning Act. It was the previous Government’s view that legislation should reflect the distinct constitutional position of voluntary sixth-form colleges, and they confirmed that they would look to reinstate those protections through legislation. We agree with that view, and it is what the amendments do. The new provisions cover what was afforded by previous legislation or Secretary of State directions.
As Members know, I am a keen advocate of freeing colleges from central prescription, direction and control. Such things inhibit a college’s ability to become the master of its own destiny and stifle innovation and growth in our further education sector. The changes in the Bill will enable the Government to present the best case possible to encourage the Office for National Statistics to review its decision to reclassify colleges into the public sector. However, we are not merely responding to the ONS; we began this programme of reform long before we knew about the ONS reclassification. Indeed, it was one of the first things that I set out when I became a Minister. The changes that we have made in the Bill, including the ones that we have introduced at a later stage, are entirely in the spirit of the policy direction set out in the skills strategy which I published, following extensive consultation, last autumn. Indeed, they are in the spirit of the further consultation in which we were involved over the summer, which will lead to the publication of “New Challenges, New Chances”.
The truth is that the ONS reclassification has been a further spur to us, but has not caused us to change direction. If anything, it has cemented our determination to consider every aspect of college management and every means by which we could free colleges from bureaucracy and direction. That fresh thinking has inspired the changes that have been made to the Bill.
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As I have said, the changes, and our efforts to secure the private sector reclassification of colleges, have been welcomed, not least by the Association of Colleges. It considers that they will provide colleges with additional flexibility, allowing them to respond effectively to their local community and economy. I should like to place on record my gratitude to the Association of Colleges for its guidance and support, and indeed for how it has challenged us, in helping the Government develop this impressive legislation.
Lords amendments 28, 29 and 39 concern the business of colleges and inspection. You will remember, Madam Deputy Speaker, the report that the previous Government commissioned from Sir Andrew Foster. I have a copy of the summary here. They asked him to examine the potential of further education, and he concluded that the landscape that it faced was
“crowded with organisations charged with inspection, improvement or regulatory functions. There is unnecessary complexity and duplication of effort and further rationalisation is required.”
He also recognised, I think, that we needed to rethink how colleges were gauged, inspected and monitored. Knowing that we had some outstanding further education colleges in this country, we decided that the time was right to look afresh at inspection and regulation.
In that context, some of the comments that the Minister of State, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), made about schools pertain to colleges too. He dealt with the issue of the inspection of schools earlier this evening, and some of the same principles apply to colleges. In my visits to colleges across the country, I have continually been impressed by the quality of teaching, the standard of learning and the innovative systems that colleges put in place to maximise learners’ potential.
Lords amendments 28 to 30 provide for greater parliamentary scrutiny of regulations exempting further education colleges from inspections, by requiring that all regulations except the first set be subject to the affirmative procedure, so that both Houses can be assured that a full debate will happen before further colleges are exempted. We decided very early on that we wanted to limit the inspection of further education colleges, as we did in the case of schools. However, it is important that that exemption is qualified in the way that I have described. The Prime Minister spoke today of coasting schools, and nor do we want to see any coasting colleges. Although there is little evidence of them, it is important that the House can debate the matter as further exemptions take root.
I turn to Lords amendments 36, 43 and 100, which put the legal framework for apprenticeships on a more sustainable and realistic footing. I need not regale the House at length with how passionately I support apprenticeships—at least, not for more than a few minutes. As you know, Madam Deputy Speaker, I have championed apprenticeships both in opposition and in government, and the Government have turned our rhetoric into action by delivering the biggest growth in apprenticeships in modern times. I have said before, and I am happy to say now, that there is more work to be done. As we make that growth sustainable, we will need to consider bureaucracy and the quality and age spread of apprenticeships. It is absolutely right that we should do that, but let us not understate the growth that we have
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seen—29% growth in under-19 apprenticeships and 64% growth in 19-to-24 apprenticeships over two years, and a big jump in post-25 apprenticeships.
It is important to say that the previous Government had the same aims. Many times, previous Ministers, including the previous Prime Minister, estimated the likely jump in the number of apprenticeships and the number that would be necessary to fill skills gaps. However, this Government are actually delivering. We are making more opportunities available to more people to add to their skills, which will increase their chances of getting, keeping and progressing in jobs. We know from independent research that someone who has a level 2 apprenticeship is likely to earn £70,000 more over their earning lifetime than somebody who has not, and that somebody with a level 3 apprenticeship is likely to earn more than £100,000 more. That is roughly equivalent to a degree.
Margot James (Stourbridge) (Con): I congratulate my hon. Friend on the amazing increase in apprenticeships that he has outlined. I met my local college, Stourbridge college, and other colleges last week, and they reported a huge increase in apprenticeships over the past six months. Is he aware of another route into apprenticeships, which emerged during a meeting that I had the previous week with Stourbridge jobcentre? It reported that among 18 to 24-year-olds a route in was via two-week work experience placements. In many cases, they were being converted into apprenticeships.
Madam Deputy Speaker (Dawn Primarolo): Order. It is very interesting to hear of the extensive commitment that the Minister has personally to apprenticeships, and indeed to hear the point that the hon. Member for Stourbridge (Margot James) has made, but we are discussing Lords amendments. Although Lords amendment 36 is about securing the provision of apprenticeships in certain regulations, the debate is going a little wide of that. Perhaps the Minister could relate his comments to the amendments.
Amendments 36, 43 and 100 deal specifically with the so-called apprenticeship offer. As I said, apprenticeships play a key role in promoting growth and prosperity in British business and give renewed hope and purpose to our young people, who are so affected by the present climate. Through the Bill, we are redefining the apprenticeship offer. We are moving away from what I regard as an unrealistic guarantee that sought to require the Government to tell employers whom they should and should not employ. The previous Government took the view that the House could place a duty on the chief executive of skills funding to fund apprenticeships for anyone who wanted them. [Interruption.] The hon. Member for Cardiff West (Kevin Brennan) intervenes from a sedentary position, but he knows that in practice, the previous offer was undeliverable. There was much discussion of this matter in the other place. I pay tribute in particular to Lord Layard, who made this case forcefully and with whom I have enjoyed many discussions. He also writes persuasively about happiness
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—I read a recent essay from him on that subject. Happiness is all of our aims, is it not, individually and communally?
Mr Stuart: I am always focused on happiness. I thought I could increase the Minister’s sense of contentment if I attempted to correct him. Under the previous situation, there was an obligation not to fund an apprenticeship for anyone who wanted it but to provide one, outwith any ability necessarily to ensure that an employer came forward. That is why the Minister and the Government were right to make that alteration, not withstanding the complaints of Opposition Members.
Madam Deputy Speaker (Dawn Primarolo): Order. I am very glad that the hon. Gentleman got his point on the record, but we are not debating the previous Government’s record or apprenticeships generally; we are debating amendments on quite narrow points in the Bill. I know the Minister is really eager to come back to that.
Mr Hayes: As you say, Madam Deputy Speaker, we are debating the character of the apprenticeship offer. This Government take the view that we need further to refine the legal framework for apprenticeships. The debate on this subject in the other place was on the character of that duty. Lords amendment 36 places a new duty on the chief executive of the Skills Funding Agency to make reasonable efforts to secure employer involvement in apprenticeships. That is so important because we have changed assumptions of the nature of apprenticeships. We take the view that apprenticeships should intrinsically involve employment—making an offer separate from employment seemed nonsensical.
I make that point because until relatively recently, some apprenticeships—programme-led apprenticeships, for example—were not tied to employment in quite the same way. Lords amendment 36 was the outcome of a great deal of hard work and good will, as I have described. The overtures made to me by Lords Layard, Wakeham, Willis and Sutherland persuaded the Government and my noble Friends to devise an amendment that satisfies the wishes of those who want to place a clear duty in the Bill, but not one that the Government think is undeliverable.
Although I know some feel that I have summarised the Lords amendments all too briefly, those amendments put apprenticeships, the freedoms about which I have spoken, the changed inspection regime, the different role for the Government, the new emphasis on skills, and the mantra—I decidedly and deliberately put it that clearly—of freedom, flexibility, innovation and dynamism, at the very heart of this legislation. I think they improve the Bill significantly and I look forward to hearing whether the Opposition think so too.
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Front Bench. The Minister reminded us that my noble Friend Lord Layard has written about happiness, about which he is an international expert, alongside my constituent Ken Dodd, who has been writing and singing about such matters for a very long time.
The Opposition have serious wider concerns about the Bill, some of which, including on schools, were addressed in the debate on the previous group of amendments. Other concerns, including those on information, advice, guidance and the careers service, are outside the scope of today’s debate. I should like to focus on inspection, governance and apprenticeships. I echo many of the things the Minister said, and in particular his positive comments on the role of the Association of Colleges, and I look forward to attending its conference in Birmingham later this week.
I also echo what the hon. Member for Brigg and Goole (Andrew Percy) said about the importance of partnerships between further education colleges and the wider education system, including schools. In the debate on the previous group, we discussed the importance of co-operation and collaboration alongside autonomy and competition. We often discuss school-to-school and college-to-college co-operation and collaboration, but there is great scope for further co-operation and collaboration between schools and the further education sector.
Let me address the inspection of further education institutions. All hon. Members are seeking to strike a balance between autonomy and inspection—this is a similar debate to the one on schools, as the Minister said. Lords amendments 28 and 29 have much the same effect as Lords amendments 26 and 27. The former relate to further education institutions and the latter to schools.
The Opposition have a number of concerns that echo those we raised about schools, although they are not exactly the same. I should like briefly to put some of them on the record; they have been raised in previous stages both in this House and in the other place. We are concerned that exempting certain further education colleges from inspection will undermine the campaign for high standards in those institutions, and in particular we fear that the Government’s approach is simply to rely on a market effect, which could let down, for example, students who are currently studying. Their institution could struggle and yet nothing will be done, and there is no trigger for them to make an inspection happen. It is possible—we debated this with respect to schools—for a further education institution that at one time was high performing to slip for some reason. The lack of an inspection regime in such a situation could be a major challenge.
The new Ofsted chief inspector, Sir Michael Wilshaw, was quoted in the previous debate by my hon. Friend the Member for Cardiff West (Kevin Brennan). The chief executive’s point was about schools, but it applies to further education colleges as well—the principle is much the same. The conditions that would render a further education institution exempt from inspection are not clear. If the Minister has the opportunity, with the leave of the House later, I should like him to clarify the Government’s thinking on when a further education college will be deemed exempt.
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section (5) of the Education Act 2005 must be subject to the affirmative procedure. There is no requirement for an affirmative resolution the very first time the exemption criteria are outlined. I invite the Minister to explain his reasoning for that and to assure us that the measure is not simply being rushed through because of Ofsted’s budget situation. Given the seriousness of the step that is being taken, and the lack of public consultation on it, the Opposition believe that there should be an affirmative resolution the first time as well as on subsequent occasions, and have tabled an amendment to that effect.
The Minister referred to issues of governance. As Lord Hill acknowledged on Report in the Lords, Labour peers, led by my noble Friend from the Labour Front Bench, Baroness Jones, made important arguments on this issue. Labour Front Benchers in the other place tabled an amendment to reinstate the rights of students and staff to be represented on further education colleges’ governing bodies. As the Minister outlined, the Government brought forward an amendment on Third Reading in the other place to guarantee governing body places for staff and students. Lord Hill said:
“It may help if I inform noble Lords of discussions between the noble Baroness, Lady Jones of Whitchurch, and my honourable friend, the Minister for Further Education, Skills and Lifelong Learning”—
“retain requirements for staff and student governors…The Government have brought forward these changes to support our case for the private sector classification for colleges, in accordance with the policy of successive Governments. It was not our intention to encourage colleges to remove staff or student governors from college governance arrangements. I know that colleges greatly value the contribution that those governors make.
Having listened to the arguments that were put to him by the noble Baroness, Lady Jones…my honourable friend”—
“and I have spoken further. We have decided that the Government will return at Third Reading with their own amendment, which will give effect to what the noble Baroness's amendment seeks to achieve.”—[Official Report, House of Lords, 1 November 2011; Vol. 731, c. 1135.]
Let me thank the Minister for his generous tribute to my noble Friend and also echo her thanks and appreciation to him and his colleagues in the Department for this important change to the legislation. Participation in the governance of FE colleges is an important part of student citizenship, as well as contributing to good governance. I would like also to put on the record our appreciation to the National Union of Students for its excellent work on ensuring that the relevant amendments were agreed.
Nobody in this House could doubt the Minister’s personal commitment to apprenticeships. We welcome the amendments that impose a duty on the chief executive of the Skills Funding Agency to make reasonable efforts to secure employers’ participation in apprenticeship training for all young people in the specified groups covered by the redefined offer—that is, 16 to 18-year-olds and 19 to 24-year-olds with a disability or learning difficulty assessment, as well as young care leavers. Without those amendments, the Bill would have simply taken opportunities away from our young people. The Minister mentioned the assiduity of my hon. Friend the Member for Hartlepool (Mr Wright) in Committee, where he said that the clause in question represented a wholesale degrading in the value the Government place on apprenticeships; that it is a retrospective step, stopping
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the duty to create apprenticeships for suitably qualified people; and that instead of creating jobs, transferring skills to young people, and boosting the economy, this clause does the exact opposite.
Lords amendment 36 is a significant improvement, but we believe that there is scope to go further. As the Minister has set out, under the legislation introduced by the previous Labour Government, the chief executive of the Skills Funding Agency had a duty to secure an apprenticeship place for every suitably qualified person within certain specified categories. The previous Labour Government’s policy was that the agency was under a duty to find an apprenticeship for every qualified young person who wanted one. They had to be given two choices about the sector that they wished to enter. That was removed in the original draft of the Bill, but as the Minister has said, a cross-party group of peers, led my noble Friend Lord Layard, achieved an important Government concession that required the agency to make reasonable efforts to involve employers in apprenticeship training, which has led to Lords amendment 36, which we welcome.
“If you look at the situation in our country, it is clear that academic young people are offered a clear route to a skill and a useful role in society. They can see where they are going. That is not the case for less academic young people. There is no clear route that they can see they are entitled to go down. The result is low levels of skills and a degree of alienation…If you look at this from a young person’s point of view, we are raising the education participation age. It is quite difficult to see how we are going to be able to do that in a way that is acceptable to young people unless these apprenticeship places are available to them. We need legislation that states the main aims of our education system. For that 16 to 19 year-old group, we have a lacuna. We cannot fill it by ministerial statements and assurances, as Ministers come and go. We expect the basic structure of our educational system to be reflected in the laws of the country.”—[Official Report, House of Lords, 14 September 2011; Vol. 731, c. GC274.]
I make no apology for quoting Lord Layard at some length, because he set out a challenge for us all, in all parts of the House, to address the issue—it is not a new issue, but one that none of us has got right in decades of trying—of how we provide a high quality route for those who will not necessarily follow the route into higher education. Through our amendment (a) to Lords amendment 36, we would like to strengthen the slightly moderate language used in the Government’s nevertheless important concession. My concern is about what will count as “reasonable efforts”. In particular, what rights of redress will young people have when they cannot get an apprenticeship and do not think that reasonable efforts have been made?
Steve Rotheram: My hon. Friend has outlined the move in emphasis away from securing employment for every qualified person and towards involvement with employers. Will he join me in congratulating Liverpool city council, for instance, which has decided to use an innovative model to create 2,000 new apprentices?
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settlements from central Government, has been able to create a new programme. I thank him for that opportunity, although I am in grave danger of moving beyond the scope of this debate, so I shall return to my speech.
Our amendment would change the term “reasonable” in Lords amendment 36 to “best”. In contract law, making a “best effort” requires a higher level of commitment than making a “reasonable effort”. Our amendment would place a greater duty on the chief executive to secure employer participation in apprenticeships for the specified groups and would reintroduce, in part, the previous Government’s commitment, which placed a duty on the chief executive to find an apprenticeship for all who wanted one.
This is a major challenge for us all. In a recent speech, my right hon. Friend the Leader of the Opposition set out a new policy on apprenticeships, giving a commitment that in future all major Government contracts should
“go to firms who commit to training the next generation with decent apprenticeships,”
“go to those who don’t.”
I invite the Minister today to consider making a similar commitment on behalf of the Government. I seek assurances from him about how the new clause proposed by Lords amendment 36 will be implemented in the context of the Government’s broader approach to apprenticeships. For example, concerns have been raised about Train to Gain places being replaced or rebadged as apprenticeships. Today we have seen early coverage in the media of a report—to which I understand the Minister has contributed—by the Institute for Public Policy Research, due to be published later this week, setting out concerns that younger people are not getting a fair share of the increase in apprenticeships. I appreciate that there is a balance to be struck, and we very much welcome older workers having the opportunity to take up apprenticeships, but with youth unemployment almost certainly set to hit 1 million this week, we need to maintain the important focus on young people and the opportunity that is provided by having an apprenticeship place.
Mr Graham Stuart: The hon. Gentleman is giving a thoughtful speech. In light of his amendment (a) to Lords amendment 36, which seeks to ensure that the chief executive should try to make reasonable efforts to secure employers’ participation, does he agree that we would not wish this or any other Government to get on the hook over the numbers? We must maximise the numbers, but also ensure that we have quality. If we have apprenticeships that do not lead to a major improvement in the earning potential of the young people in question, we will have betrayed them. If courses do not last long enough to give them the skills to raise their value in the market place, we will have betrayed them. It is important not only to provide opportunities, but to ensure that they are valuable opportunities that deliver lifelong benefits.
I found myself in agreement with much of what the hon. Gentleman had to say in the earlier debate on schools, as I do with what he has just said. He makes a critical point, which enables me to bring my remarks to a close. Clearly, with 1 million young people unemployed, having high-quality apprenticeships
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is going to be a vital part of a strategy to address that problem, but it must not become simply a numbers game. I would like apprenticeships to become the gold standard of vocational education. I attended an Edge Foundation event a few weeks ago and made the point that it would be wonderful if the parents of a 17 or 18-year-old who gets an apprenticeship were as proud of their daughter or son getting that apprenticeship as they would have been of them getting into higher education. That should be what we aspire towards, and at the heart of that is quality, as the hon. Gentleman said.
Mr Stuart: In the light of the requirement to try to secure places, does the hon. Gentleman agree that apprenticeships need to be for a decent period and that an important part of making them work for employers—thus being provided and sustained in the long term—is that the rate of pay should not be too high? The aim should be to make the ticket at the end the valuable part; that is when the benefit comes. Keeping the rate of pay relatively low and ensuring that it lasts for a decent long time will mean that the apprenticeship will work for the company and that at the other end the young person will earn considerably more money.
Stephen Twigg: I might be told off by Madam Deputy Speaker, but let me say that the quality of the education and training elements of the apprenticeship are vital. What we must not do, however, is allow apprenticeships to become a form of exploitation. A balance has to be struck. Clearly, an apprenticeship should be first and foremost about quality education and training, but with a decent amount of pay, too, for those who are apprentices.
I am grateful for the opportunity to contribute to the debate. These are very important issues. I do not believe that any Opposition Member doubts the personal commitment of the Minister, particularly on apprenticeships. We have concerns that we have expressed previously about the impact of other changes—the abolition of the education maintenance allowance and the trebling of tuition fees—and we would be very concerned if there was any weakening of the apprenticeship brand. Let us perhaps forge a cross-party national consensus to the effect that we want apprenticeships to increase in number, but more importantly we want to see them as a high-quality gold standard for those young people who follow a vocational route of education.
Mr Hayes: The hon. Member for Liverpool, West Derby (Stephen Twigg) raised a number of points, which I shall try to address in my closing remarks. I would like to speak first to amendment (a) to Lords Amendment 29, under which the first as well as any subsequent regulations exempting certain providers from Ofsted inspection in particular circumstances would be subject to the affirmative procedure. The hon. Gentleman asked me particularly to address those matters.
My hon. Friend the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), has already spoken about a related amendment to the schools inspection exemption. The same intentions lay behind the exemption for further education providers and our plan, in essence, is to exempt outstanding colleges. I will listen, however, to the points raised. I do not have a dogmatic view on this matter, and as we move to a lighter-touch inspection regime, it is important to do so with appropriate caution.
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I would like to deal with one particular concern. Where students feel that an outstanding institution is not maintaining high standards, Ofsted will take very seriously any comments students might make as part of the risk assessment, which could trigger an inspection. My hon. Friend the Minister spoke about the risk assessment process, and it is important that it is tied closely to the view of students about the quality of teaching and learning in an institution.
I spoke to the National Union of Students today about representation on college governing bodies, which we discussed when we dealt with the amendments to which the hon. Member for Liverpool, West Derby also referred. As I described earlier, we view such representation as a baseline. Representation on governing bodies does not provide the whole answer for learner or staff engagement. Learners and staff should be engaged at a policy level in plotting the strategic direction of a college. As we move to a more freed-up system, so learner choice and learner judgment will play an increasingly critical role in how colleges evolve. I hear what the hon. Gentleman says about the process. We are moving ahead boldly, but cautiously. At this juncture, it is probably best for me to leave that there.
Amendment (a) to Lords amendment 36 would require the chief executive of skills funding to make “best” efforts rather than “reasonable” efforts in respect of apprenticeships. Of course I understand the intention to strengthen the focus on the delivery of this important objective. It is crucial to maintain and, indeed, improve the quality of apprenticeships while we grow their number. When something grows rapidly, it obviously creates a pressure on quality. Inevitably, the momentum will lead to more employers and more providers becoming involved and more individuals becoming apprentices—including people who might not have done so if the system was smaller. I believe that places an extra responsibility on us to ensure that the integrity of the brand is retained by an appropriate emphasis on quality, and as I said on the Floor of the House a few days ago in a different debate on a different subject, we will do that. The hon. Member for Liverpool, West Derby is right to say that this amendment, and his argument about it, draws attention to the issue of quality. The debate in the other place and the discussions to which he referred—I pay tribute once again to Lord Layard and others—helped us to concentrate our thinking on maintaining and improving the quality of the apprenticeships offered.
Mr Graham Stuart: Does my hon. Friend agree that the number of apprenticeships going on to level 3 is a big indicator of quality and that we want more apprentices getting to level 2 to go on to level 3? Has he given any more thought to providing a more flexible level 3 offer for 16 and 17-year-olds who often find that, if they want to go on to level 3 after completing level 2, the funding gets cut in the current system?
Mr Hayes: The hon. Member for Liverpool, West Derby spoke a little about the age spread of apprenticeships in arguing for his amendment. Although he did not deal particularly with the point that my hon. Friend the Member for Beverley and Holderness (Mr Stuart) just raised, this is not the first time that my hon. Friend has mentioned it. It is important to devise a system that maximises the prospect of progression, in the way that he describes.
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The good news is that the biggest proportion of growth in the numbers that were drawn to the House’s attention a week or so ago was in level 3 apprenticeships. I think that that rather frustrated the critics who had assumed that the biggest proportionate growth would be at level 2. In proportional terms, the number of level 3 apprenticeships has grown at the fastest rate over the last year. I can also inform my hon. Friend of a fact that has not been in the public domain until now: indications suggest that the length of apprenticeships among those aged over 25 is increasing. That is also rather counter-intuitive for those who listen to the critics from the bourgeois left, the glitterati and chatterati who look down their noses at practical learning in a way in which you and I do not, Mr Deputy Speaker.
My hon. Friend was, however, right to draw our attention to other measures that we might take in respect of progression. I know that one of his suggestions is that we should look at ways of helping people to undertake parts of a level in which they were otherwise already competent. There may be ways in which we can adopt a more modular approach to progression. I do not intend to discuss that at length now, because it is not entirely pertinent to the amendment, but it is relevant to what has been said by my hon. Friend and by the hon. Member for Liverpool, West Derby, who also made a point about the age spread of apprenticeships.
Jim Shannon (Strangford) (DUP): In other regions of the United Kingdom, such as Northern Ireland, education, including further education, is devolved. In Northern Ireland it is possible to obtain gold-plated apprenticeships that can accompany the education and training that are also needed. Have the Government considered similar action to help apprentices to secure better final qualifications?
Mr Hayes: The hon. Gentleman has made a useful comment. The way in which apprenticeships are perceived, and the experience of the apprentices themselves, are critical to whether apprentices are likely to make progress. Those who have had a good experience of the early stages of apprenticeship may well progress to a higher level, perhaps in the companies that have taken them on, which will be good for both the business and the individual.
“Improving the skills of young people, while essential, cannot be the sole solution to achieving world class skills. Improvements in attainment of young people can only deliver a small part of what is necessary because they comprise a small proportion of the overall workforce. Demographic change means that there will be smaller numbers of young people flowing into the workforce towards 2020.
More than 70 per cent of the 2020 working age population are already over the age of 16.”
The hon. Member for Liverpool, West Derby is right to say that we should not think in terms of two alternatives. This is not about providing a valued and valuable route to practical learning through apprenticeships for younger people but not doing so for people in their 20s or 30s
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who want to upskill or reskill, such as the level 3 apprentices whom I met recently at Jaguar Land Rover in Halewood, near Liverpool, not a million miles from the hon. Gentleman’s constituency. Both those things can be achieved through an apprenticeship offer of the right kind.
Stephen Twigg: I entirely agree that we are not talking about two alternatives, but does the Minister share my concern about the fact that, according to the IPPR report, there is a large growth in the number of apprenticeships for those over 25, a pretty large growth in the number for those aged 19 to 24, but a much smaller growth in the number for 16-to-18-year-olds?
Mr Hayes: I think that we need to calibrate the system to ensure that there is a good age spread. I probably should have emphasised to an even greater degree—you know what I am for understatement, Mr Deputy Speaker—the need to make growth sustainable. If it is to be sustainable, it will be necessary to address issues such as those that have been raised tonight. By “sustainable growth”, I mean growth that offers older learners the opportunities to upskill and progress that were mentioned by my hon. Friend the Member for Beverley and Holderness—opportunities to create a vocational pathway of the quality that we both seek, the “gold standard” for apprenticeships. I had used that term myself, and the hon. Member for Liverpool, West Derby may have read it, imbibed it subliminally and repeated it. I know that he would normally have attributed it; perhaps it was by accident that he did not.
We also need to be constantly vigilant about the quality of the offer. Let me set out some of the things we are doing in that respect. I have made it very clear to the National Apprenticeship Service that poor provision should be eliminated. We have to be very tough on any provision reported to us that we investigate and find not to be of sufficient quality.
Neil Carmichael: Does my hon. Friend agree that one key measure of the success of apprenticeships—this certainly applies to levels 2 and 3, and is consistent with his views about economic growth, sustainability and so on—is what happens in manufacturing and engineering? Does he agree that all the measures that we should be thinking of in terms of developing that sector should be implemented?
Another bit of good news when we saw the figures from the statistical release was the substantial growth in manufacturing and engineering apprenticeships; the number of starts was 47,000, which was an increase of 20% on the 2009-10 figure. So we had very strong growth in the very apprenticeships that my hon. Friend rightly identifies as crucial to our future prospects. Interestingly, the figures clearly show that there is growth across the system. Again rather counter-intuitively from the perspective of the critics, there has been growth in sectors where employment more generally has either slowed or declined. So apprenticeships seem to be bucking the trend in areas such as manufacturing and engineering. Even in construction, where there has been a very sharp decline in employment, apprenticeship numbers have
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held up. That suggests that businesses are investing in training and in their future, and that apprenticeships are succeeding. This is a flagship policy, devised in opposition and delivered in government.
Bob Stewart: Has the Minister considered—I am sure that he has—the thought that a great number of high-quality individuals have had considerable technical training in the armed forces? Could they come in at level 2, with this possibly leading on to level 3? Is that part of the system he envisages?
Mr Hayes: This weekend, I was looking at a submission that suggested that we might ask the National Apprenticeship Service to look specifically at people who have left the armed forces. I am particularly concerned about those who have left the armed forces with a disability. One of the challenges that the previous Government faced and that we face too is in ensuring that the apprenticeship system is accessible to as many people as possible, and I do not think we do well enough by disabled potential apprentices. I asked, at the very early stages of my distinguished ministerial career, for the NAS to examine that area closely, but I want it to re-examine it. I particularly want the NAS to examine what we can do for disabled ex-servicemen.
Bob Stewart: I hope that the Minister will forgive me, because he has almost made the point I was going to make, which is that we could involve disabled ex-servicemen as part of this system. That would be a superb way of helping them to get into decent employment in civilian life.
Mr Hayes: I am glad that I anticipated my hon. Friend’s point. Foresight is not essential for a Minister, but it is a great advantage, particularly when it can be displayed on the Floor of the House of Commons.
My hon. Friend the Member for Stroud (Neil Carmichael) mentioned growth and others have talked about progression, so in dealing with the remark made by the hon. Member for Liverpool, West Derby about happiness, I wish to draw his attention to Yeats. I know that the hon. Member for Cardiff West (Kevin Brennan), the shadow Minister sitting next to him, is a fan of Yeats. Lord Layard did such good work on this particular amendment, so I shall cite the following from Yeats:
“Happiness is neither virtue nor pleasure nor this thing nor that but simply growth, We are happy when we are growing.”
“No likely end could bring them loss
Or leave them happier than before.”
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Mr Hayes: Perhaps we will see the end of this speech, but not the end of my career, not the end of this Government and not the end of my time here, which I see stretching a great long distance into the future.
Let me return to the points made by the shadow Secretary of State for Education in respect of the Lords amendment and particularly the apprenticeship offer. He implored us to go further. Indeed, his amendment to the Lords amendment asks us to do so. He asks us to strengthen the offer, having acknowledged with typical generosity, the progress that we have made in this respect. I will again take seriously his remarks about how we market this. An important part of what we do with apprenticeships is selling the product. I have made it clear to the National Apprenticeship Service that its job is as a marketing and sales organisation. Its job is to get more companies to understand the value of apprenticeships, more individuals to understand the opportunities that they provide to them personally and more providers to rise to the challenge and to ensure that they are in the best place possible to deliver apprenticeships. As a result of his overtures, rather than accepting the amendment to the Lords amendment—he would hardly expect me to do that—I will look again at how we can market the renewed offer in the most effective way possible.
Neil Carmichael: On marketing apprenticeship schemes, does my hon. Friend agree that the key area that we should focus on is small and medium-sized enterprises, because they need to grasp the opportunities that apprenticeships can bring them and the apprentices?
Mr Hayes: Yes. In opposition, of course, it was our policy to offer a financial incentive to support SMEs, which we felt would have a real and perceived risk associated with taking on apprentices, through the means of some kind of payment. We were unable to do that because of the financial constraints that affect the whole Government, but we can make more progress in respect of bureaucracy. We need to make the system accessible, straightforward and simple. We need to get rid of the bureaucracy that has sometimes inhibited small businesses from engaging in the apprenticeship programme. Yes, we will go further, and spurred on by my hon. Friend’s enthusiasm, I will make further announcements on reductions in bureaucracy, specifically for SMEs. He is right that their engagement in apprenticeships is critical, not least because if we are to spread apprenticeships and seed them into every community, village and town, we cannot simply rely on the excellent apprenticeship schemes of major businesses, such as BT, BAM, BAE, the Royal Navy, Ford Motor Company, EDF, the Royal Air Force, Sellafield, Bentley Motors, Jaguar Land Rover, GE Aerospace, Caterpillar, Honda and others. We need to have apprenticeships in smaller businesses and micro-businesses, too, such as those in my constituency—in the small villages and towns, where if we were to ask young people in particular to get an apprenticeship, they could only do so locally, because of travel and accessibility issues.
The Minister has just spoken about micro-businesses. MPs are almost micro-businesses. I would like to know how many MPs have put their money where their mouths are and taken on apprentices. I am one of them. Other Government and Opposition Members have taken on apprentices, but a vast number
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of MPs have not done so. If we all took on just one apprentice, we could create 650 apprentices in the House.
Mr Hayes: I have written to colleagues to that effect. I make that plea once again. The hon. Gentleman is right to offer that clarion call to Members of Parliament to take on apprentices. I have one in my office. I hope that the shadow Secretary of State is thinking about taking on an apprentice. I know that he will do so speedily, following the words that he has heard from the Dispatch Box today.
The National Apprenticeship Service is already actively promoting apprenticeships with employers and ensuring that apprenticeships are highly prized by businesses and apprentices. It provides an online vacancy matching service for employers and prospective apprentices. It already has a dedicated employer-facing field force to recruit new employers in the way that I have described.
We have had a short but helpful debate. We have heard an interesting appraisal of some of the issues already considered carefully in the House of Lords. I feel that the Government have illustrated that we listen and learn during the passage of legislation. Sometimes there are those who say that our scrutiny of legislation in this place and the other place is imperfect, but as a Conservative I take a conservative view of institutions. I am proud of this House and this Parliament. The Bill is a good example of Opposition and Government contributing to scrutiny in a way that has improved legislation. The other House and this House have interacted, both formally and informally, to make the Bill even better than it was when it started. It is important legislation which does important things in respect of apprenticeships, further education and, as we have already heard from the Minister of State, my hon. Friend the Member for Bognor Regis and Littlehampton, schools. The whole House can support the Bill with a degree of confidence in the scrutiny that it has received, and a degree of excitement about the difference that it will make to individuals and communities across our nation.
The House divided:
Ayes 191, Noes 285.
Ainsworth, rh Mr Bob
Bailey, Mr Adrian
Bain, Mr William
Balls, rh Ed
Barron, rh Mr Kevin
Beckett, rh Margaret
Begg, Dame Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr Joe
Betts, Mr Clive
Blears, rh Hazel
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brown, rh Mr Nicholas
Brown, Mr Russell
Campbell, Mr Alan
Clarke, rh Mr Tom
Clwyd, rh Ann
Cooper, rh Yvette
Cunningham, Mr Jim
Darling, rh Mr Alistair
David, Mr Wayne
De Piero, Gloria
Denham, rh Mr John
Donohoe, Mr Brian H.
Doran, Mr Frank
Eagle, Ms Angela
Ellman, Mrs Louise
Francis, Dr Hywel
Glindon, Mrs Mary
Godsiff, Mr Roger
Goggins, rh Paul
Hain, rh Mr Peter
Hamilton, Mr David
Hanson, rh Mr David
Healey, rh John
Hepburn, Mr Stephen
Hodge, rh Margaret
Hodgson, Mrs Sharon
Howarth, rh Mr George
Jones, Mr Kevan
Jones, Susan Elan
Kaufman, rh Sir Gerald
Lammy, rh Mr David
Love, Mr Andrew
Mahmood, Mr Khalid
Marsden, Mr Gordon
McCann, Mr Michael
McFadden, rh Mr Pat
McGuire, rh Mrs Anne
McKenzie, Mr Iain
Meacher, rh Mr Michael
Meale, Sir Alan
Michael, rh Alun
Miliband, rh David
Moon, Mrs Madeleine
Morris, Grahame M.
Murphy, rh Mr Jim
Murphy, rh Paul
Raynsford, rh Mr Nick
Riordan, Mrs Linda
Robinson, Mr Geoffrey
Roy, Mr Frank
Ruddock, rh Joan
Sheerman, Mr Barry
Skinner, Mr Dennis
Smith, rh Mr Andrew
Spellar, rh Mr John
Stuart, Ms Gisela
Sutcliffe, Mr Gerry
Thomas, Mr Gareth
Timms, rh Stephen
Umunna, Mr Chuka
Watts, Mr Dave
Whitehead, Dr Alan
Winnick, Mr David
Winterton, rh Ms Rosie
Wright, Mr Iain
Tellers for the Ayes:
Nic Dakin and
Amess, Mr David
Arbuthnot, rh Mr James
Bacon, Mr Richard
Baron, Mr John
Bellingham, Mr Henry
Beresford, Sir Paul
Binley, Mr Brian
Blunt, Mr Crispin
Bone, Mr Peter
Brake, rh Tom
Brazier, Mr Julian
Bruce, rh Malcolm
Buckland, Mr Robert
Burley, Mr Aidan
Burrowes, Mr David
Campbell, rh Sir Menzies
Carswell, Mr Douglas
Chope, Mr Christopher
Clappison, Mr James
Coffey, Dr Thérèse
Davis, rh Mr David
de Bois, Nick
Dodds, rh Mr Nigel
Dorrell, rh Mr Stephen
Duncan Smith, rh Mr Iain
Dunne, Mr Philip
Ellwood, Mr Tobias
Evennett, Mr David
Foster, rh Mr Don
Fox, rh Dr Liam
Francois, rh Mr Mark
Gale, Mr Roger
Gauke, Mr David
Gibb, Mr Nick
Goodwill, Mr Robert
Gray, Mr James
Greening, rh Justine
Gyimah, Mr Sam
Hammond, rh Mr Philip
Harper, Mr Mark
Haselhurst, rh Sir Alan
Hayes, Mr John
Heath, Mr David
Herbert, rh Nick
Hollobone, Mr Philip
Hughes, rh Simon
Hunt, rh Mr Jeremy
Huppert, Dr Julian
Jackson, Mr Stewart
Jenkin, Mr Bernard
Jones, Mr David
Jones, Mr Marcus
Kennedy, rh Mr Charles
Knight, rh Mr Greg
Lansley, rh Mr Andrew
Laws, rh Mr David
Lee, Dr Phillip
Leech, Mr John
Leigh, Mr Edward
Letwin, rh Mr Oliver
Lewis, Dr Julian
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
McCrea, Dr William
McIntosh, Miss Anne
McLoughlin, rh Mr Patrick
Moore, rh Michael
Morris, Anne Marie
Mundell, rh David
Murrison, Dr Andrew
Nuttall, Mr David
Offord, Mr Matthew
Osborne, rh Mr George
Poulter, Dr Daniel
Prisk, Mr Mark
Raab, Mr Dominic
Randall, rh Mr John
Redwood, rh Mr John
Reid, Mr Alan
Robathan, rh Mr Andrew
Robertson, Mr Laurence
Ruffley, Mr David
Sanders, Mr Adrian
Scott, Mr Lee
Shapps, rh Grant
Shepherd, Mr Richard
Smith, Miss Chloe
Soames, rh Nicholas
Spencer, Mr Mark
Stanley, rh Sir John
Streeter, Mr Gary
Stuart, Mr Graham
Swayne, rh Mr Desmond
Syms, Mr Robert
Timpson, Mr Edward
Tyrie, Mr Andrew
Vaizey, Mr Edward
Vara, Mr Shailesh
Villiers, rh Mrs Theresa
Walker, Mr Charles
Walker, Mr Robin
Ward, Mr David
Whittingdale, Mr John
Williams, Mr Mark
Wilson, Mr Rob
Wollaston, Dr Sarah
Yeo, Mr Tim
Tellers for the Noes:
Mark Hunter and
Question accordingly negatived.
14 Nov 2011 : Column 659
14 Nov 2011 : Column 660
14 Nov 2011 : Column 661
14 Nov 2011 : Column 662
Business without Debate
That the draft Al-Qaida (Asset Freezing) Regulations 2011, which were laid before this House on 11 October, be approved.—(Angela Watkinson.)
Business of the House
That, at the sitting on Tuesday 22 November, notwithstanding paragraph (2)(c)(i) of Standing Order No. 14 (Arrangement of public business), Opposition business may be proceeded with, though opposed, for three hours; proceedings shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Mr Heath.)
That, at the sitting on Wednesday 23 November, paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motions in the name of Edward Miliband as if the day were an Opposition Day.—(Mr Heath.)
That Geoffrey Clifton-Brown, Bob Russell and Mr Shailesh Vara be discharged from the Administration Committee and Graham Evans, Mark Hunter and Simon Kirby be added.—(Geoffrey Clifton-Brown , on behalf of the Committee of Selection .)
14 Nov 2011 : Column 663
Finance and Services
That Mr Brooks Newmark be discharged from the Finance and Services Committee and Mr Shailesh Vara be added.—(Geoffrey Clifton-Brown , on behalf of the Committee of Selection. )
That Tom Blenkinsop and John Cryer be discharged from the Treasury Committee and Mr Pat McFadden and Teresa Pearce be added.—(Geoffrey Clifton-Brown , on behalf of the Committee of Selection .)
Swansea Coastguard Station
Nick Smith (Blaenau Gwent) (Lab): I would like to present this petition, which I strongly support, to save Swansea coastguard station. It has been signed by more than 160 constituents of Blaenau Gwent and is supported by the hon. Member for Gower (Martin Caton).
The Petition of residents of the constituency of Blaenau Gwent,
Declares that there is a fierce reaction to the wholly unexpected proposed closure of the Swansea Coastguard Station, which will affect 28 staff, and declares that the Petitioners fear that lives will be put at risk if the proposal goes ahead, as the Petitioners are unconvinced that new technology would be an adequate substitute for close proximity between the coastguard and other emergency services.
The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to reconsider the decision to close Swansea Coastguard Station and ensure that a coastguard station remains at Swansea.
And the Petitioners remain, etc.
14 Nov 2011 : Column 664
Legal Aid for Gypsies and Travellers
Jeremy Corbyn (Islington North) (Lab): I am very pleased to present a petition that is strongly supported by my hon. Friend the Member for Hammersmith (Mr Slaughter). He wanted to present it, but I am doing it on his behalf and on behalf of the Community Law Partnership. The petition concerns the Legal Aid, Sentencing and Punishment of Offenders Bill and complements a similar petition of 1,000 signatures that was delivered to the Prime Minister last week. We believe that the Bill is having a disastrous effect on the provision of advice and representation to Gypsies and Travellers on accommodation issues. The petition has my full support and has been signed by 25 members of the Community Law Partnership.
The Petition of the Community Law Partnership on behalf of Gypsies and Travellers,
Declares that the Legal Aid, Sentencing and Punishment of Offenders Bill, if brought into force, will have disastrous effects on the provision of advice and representation to Gypsies and Travellers on accommodation issues. Gypsies and Travellers are one of the most disadvantaged groups in the United Kingdom. The bill denies them access to the legal advice and assistance which is available to any other group. It is due to the failures of successive central and local Governments to ensure adequate site provision that some 25% of the Gypsy and Traveller population who live in caravans are on unauthorised encampments and unauthorised developments. This is through no fault of their own.
The Petitioners therefore request that the House of Commons urges the Government to ensure that Legal Aid in the Legal Aid, Sentencing and Punishment of Offenders Bill is available for Gypsies and Travellers to defend evictions from unauthorised encampments and to be advised and represented in the County Court and High Court planning matters.
And the Petitioners remain, etc.
14 Nov 2011 : Column 665
Green Investment Bank (Leeds)
Greg Mulholland (Leeds North West) (LD): I am delighted to have secured this debate on one of the Government’s flagship commitments: the establishment of the green investment bank. I shall focus in particular on the Leeds city region bid to host the bank’s headquarters.
As you are in the Chair, Mr Deputy Speaker, it would be remiss of me not to point out that this coming Saturday the Leeds city region’s Elland Road ground will host the final of the four nations rugby league tournament, following the sensational performance by the England team against New Zealand in Hull in Yorkshire and the Humber, and I want to put it on the record that the Leeds Rhino players made a wonderful contribution to that victory.
The Leeds city region has an extremely strong case to be the home of the GIB. It is being established to provide an infrastructure for a green economy with sustainable long-term growth. That will involve unprecedented investment in green economics. Operating at arm’s length from the Government, it will bring together cross-sector financial, economic and environmental expertise with private capital and investment. The GIB is one of the most exciting policy ideas in the coalition agreement, but it must deliver on the bold vision laid out for it, including the task to innovate and to challenge—to do things differently.
The GIB is a big opportunity for the Leeds city region, and for Yorkshire and the Humber as a whole. It presents an opportunity to showcase the unique mix of expertise, infrastructure and communication links in the region. It is also an opportunity for the Government to show they are serious about innovating, regenerating and doing things differently.
“For years, our prosperity has been pinned on financial wizardry in London’s square mile, with other sectors and other regions left behind. That imbalance left us hugely exposed when the banking crisis hit...It’s time to correct that imbalance. We need to spread growth across the whole country, and across all sectors.”
Julian Smith (Skipton and Ripon) (Con): I congratulate my hon. Friend on securing the debate, and am delighted that he is talking about Yorkshire as a whole, rather than just Leeds, because there are many examples of community-led energy projects in my constituency, and throughout our region we have a phenomenal track record of delivering on green projects and investment.
I thank my hon. Friend for his comments, and I also thank the other Members representing constituencies in the region who are present. I shall be very happy to take interventions from any of them, in order to show that there is cross-party support on this issue, but I should also make it clear that I will only take
14 Nov 2011 : Column 666
interventions in support of the Leeds city region bid. Those supporting other regions and bids can get their own debate, just as I have this evening.
Simon Hughes: As a London MP, I am very clear that the GIB should be located not in London, but in one of the other parts of the country. I hope my hon. Friend regards that as a helpful comment, although he must realise that I cannot be explicit as there are also other bids. It is definitely right that the GIB should not be located in London, however.
Greg Mulholland: That is very helpful, and I thank my right hon. Friend very warmly for his intervention. Whether it is as popular with his constituents as it will be with mine, I do not know, but I thank him for it and agree with his sentiment.
The vision for the green investment bank is admirable and exciting, and the case for its location in Leeds is similarly exciting and innovative. They seem to be an excellent match. The Leeds city region already has a mission to become a world-class, low-carbon economy, and at the same time, as we know, the Government have said that they want to be the greenest Government ever.
As my hon. Friend the Member for Skipton and Ripon (Julian Smith) said, the Leeds city region is wide and diverse, covering the whole of west Yorkshire, parts of neighbouring north and south Yorkshire and the 10 local authority districts of Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield, and York. With close to 3 million people, a diverse resident work force of 1.5 million, 106,000 businesses and an economy worth £53 billion per year, it is a region to be taken seriously.
Jason McCartney (Colne Valley) (Con): I, too, congratulate my hon. Friend on securing this very important debate. He mentions Kirklees, my local council, and I shall add some more statistics from our part of the world. David Brown engineering in Lockwood, Huddersfield, has just received money from the regional growth fund for its offshore wind turbine gear technology; the transition town movement in the valleys of my constituency, Holmfirth, Slaithwaite and Marsden, is up and running; and on a more regional basis, in west Yorkshire and beyond, there is also co2sense Yorkshire, an organisation leading the charge in Yorkshire for carbon capture and storage technology. Does he agree that it all adds up to a fantastic case for Yorkshire to secure the green investment bank?
14 Nov 2011 : Column 667
Greg Mulholland: My hon. Friend lays out a key part of my speech: so much of what the green investment bank is determined to do is already happening in the Leeds city region. He also demonstrates powerfully that the bid is supported by the public sector, including those 10 local authorities, the private sector, the third sector and, indeed, by MPs from all over the city and Yorkshire and Humber regions.
Fabian Hamilton (Leeds North East) (Lab): I congratulate my hon. Friend and constituency neighbour on securing this debate. Does he accept and acknowledge that, under the control of all parties, Leeds city council has played a crucial role in pioneering environmental schemes over many years? Does he acknowledge also the efforts of a former Member, Paul Truswell, who was the first chair of the council’s environmental committee and undertook pioneering work way back in the 1980s? Leeds has a very good record, and it is one of the reasons why the bank should be situated there.
Greg Mulholland: I thank the hon. Gentleman, my constituency neighbour, for that contribution. He correctly notes that wonderful and groundbreaking work has taken place at Leeds city council, and, as he knows, I am the green champion on Team Leeds, with which Leeds MPs specifically are involved. It is an initiative of the Leeds, North Yorkshire and York chamber of commerce, and I am happy to carry on that work and to do what I can to voice it on behalf of Leeds and all those other areas.
The Leeds city region has three fundamentally important things to offer as the location for the green investment bank: first, its location; secondly, its incredible talent in finance, business and the green economy; and, thirdly, its excellent value in allowing for the bank’s affordable establishment as quickly as possible.
Greg Mulholland: I said that I would take contributions from all hon. Members from the region. The right hon. Gentleman’s constituency is on its southern tip, so as long as he is supportive I will certainly take an intervention from him.
John Healey: I thank the hon. Gentleman for giving way and congratulate him on securing the debate. I wanted to add a fourth and a fifth point. Fourthly, Leeds is an established financial services centre; and, fifthly, our region, the Yorkshire region, is ahead of many others when it comes to environmental technologies and industries. Does he accept that even in south Yorkshire we recognise the case for Leeds to be the centre for the green investment bank? It has—unusually, from south Yorkshire—our full support for that move.
I thank the right hon. Gentleman very warmly for that contribution. When the Leeds city region team established its bid, one crucial thing was to see whether Sheffield and south Yorkshire would come on board in support. That support is very important, and I hope that the Minister listened to the right hon. Gentleman’s contribution. Of course, having the green
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investment bank based in Leeds would, indeed, be a bonus for south Yorkshire, as it would for the whole region.
We have excellent transport links in the Leeds city region to the north-west, to Scotland, to the north-east and, of course, to London. However, one thing that people perhaps do not understand is that the Leeds city region is the largest manufacturing centre in the United Kingdom. I do not know whether the Minister is aware of that. Crucially, locating the green investment bank in the Leeds city region would place it closest to some of the UK’s most exciting low-carbon sustainable investment opportunities.
We already have a track record of such projects, including electric transport infrastructure, offshore energy, carbon capture and storage, biomass and renewable energy production. As has already been said, there is also a real commitment to green ideals in the Leeds city region. That comes from the public sector, but it also comes from the private and the third sectors. In April this year, the Leeds city region published a business survey which showed that, in respect of environmental innovation, 47% of businesses in the region reported that they had already taken significant action to reduce carbon dioxide emissions. That demonstrates that we are at the forefront of the transition to a low-carbon economy.
As I said to the hon. Member for Colne Valley (Jason McCartney), so much that the green investment bank wants to do and wants to invest in is already happening in the Leeds city region. We have to accept that decarbonising the industrial and manufacturing sectors will be one of the green investment bank’s biggest challenges. Our industrial past has left us with a huge challenge. Yorkshire and Humber as a whole is home to the UK’s largest cluster of industrial CO2 emissions, equivalent to half the domestic emissions of the UK. Our three coal-fired power stations generate 17% of the UK’s energy alone. Drax power station in the region is already co-firing with biomass in a bid to achieve its aim to generate 12.5% of its electricity in that way. That makes it the largest project of its kind in the world. It has plans for three new dedicated biomass-fired plants, which would together add a further 900 MW to the UK’s energy generation.
The Leeds city region is also at the forefront of the development of carbon capture and storage. The project under construction at Ferrybridge will provide the technical evidence needed to underpin large-scale demonstration plants across Europe. The Leeds city region is also leading the way on the delivery of domestic retrofit. Since the feed-in tariff subsidy began, Leeds has had the second biggest take-up of microgeneration technologies in the UK. It is second only—this will certainly please the right hon. Member for Wentworth and Dearne (John Healey)—to another of Yorkshire’s economic powerhouses: Sheffield.
My hon. Friend the Member for Colne Valley mentioned Kirklees. The Kirklees warm zone scheme is viewed as national best practice in funding and delivering domestic retrofit, and it has reduced fuel poverty in some of the most deprived wards in the country. Building on that experience, the Leeds city region is now establishing a city-wide retrofit programme and is advising the Department of Energy and Climate Change on the deployment of the green deal. And that is just in the Leeds City Region.
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Hilary Benn (Leeds Central) (Lab): I join others in congratulating the hon. Gentleman on securing the debate. He is making a very powerful case for the Leeds city region bid. As he is talking about homes, does he agree that it is important to have innovation in housing if we are to tackle the CO2 challenge? For example, the pioneering greenhouse project in Beeston in my constituency has taken a derelict building and turned it into flats. At the last count, that project had won 27 or 28 awards and is producing heat from ground source heat pumps and recycling water. It is a living, breathing example of what can be done and a good illustration of the kind of innovation that can be found in the region. That is precisely why the bid from the Leeds city region should be successful.
Greg Mulholland: I thank the right hon. Gentleman, my other neighbour, for his support in this campaign. That is a strikingly innovative project. While we have the Minister here, we should suggest that he visit projects of that nature; the only thing is that he and his team will probably need about a week to see many of the wonderful things that are going on in the Leeds city region.
A little further afield, in East Yorkshire, we have offshore wind on the Humber—a project that has been developed with significant expertise from the Leeds city region across the financial, legal, manufacturing and engineering sectors. The region’s traditional sectors, such as manufacturing, will develop the low-carbon technologies of tomorrow, as in the case of David Brown, a company mentioned by the hon. Member for Colne Valley.
That leads to the second reason why Leeds city region should get the green investment bank: the incredible talent that we have. As the right hon. Member for Wentworth and Dearne has already said—he rather stole my thunder, but it needs to be repeated again and again, so I am happy that he has done so—Leeds is the leading UK centre for financial services outside London, with 120,000 people working in the sector and over 30 national and international banks based in the city. I do not know whether the Minister is aware of this, but Leeds city region has the biggest financial sector outside London—bigger than any of the competitors currently bidding for the location of the green investment bank.
Mr David Ward (Bradford East) (LD): As a Bradford MP, it pains me somewhat to say too much in favour of Leeds, but I hope that the Minister is catching the drift of this debate. We are aware of the rebalancing strategy from the south to the north regarding finance and manufacturing, but it is crucial to rebalance within regions too. The fact that so many MPs are here from so many parts of the region is testament to our belief that such a move would be good for the whole of the region, not just good for Leeds.
Let me say this one more time, because I have heard doubts cast on it: Leeds is the second biggest financial centre in the country—not Bristol and not Edinburgh. I will give some figures. Financial advisers in the Leeds
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city region were responsible for almost 200 deals in 2010, worth £10 billion to the economy. If that is not music to Ministers’ ears, I do not know what is.
Jason McCartney: I praise my hon. Friend for the positivity of his arguments. He is laying out a compelling case for the bank’s coming to Yorkshire. Does he agree that another big element is the certainty, unlike in some other potential locations, that there will not be a referendum on independence in Yorkshire—no matter how much I would like one, as a born Yorkshireman? We do not want to be negative about anywhere else, but Yorkshire does not have that uncertainty about potential referendums on independence.
Greg Mulholland: My hon. Friend makes a very important point. The show of unified support for this bid from all political parties is vital, and I am afraid that the political situation is different for some of the bids to which he refers.
In 2009, there was a 32% rise in the value of deals in the financial district in Leeds, despite the value of deals in the UK falling by 16% in the same period. Three banks and four building societies have already chosen to locate their headquarters in the Leeds city region, including the headquarters of the UK’s largest financial insurance provider and its investment function, responsible for £75 billion-worth of assets, as well as 10 private equity firms, including the UK’s leading mid-market equity house. We do not just have a big financial sector; we also have the right skills set to support the green investment bank’s products. The sector has direct and recent experience in establishing new financial institutions, with the financial service sector in the Leeds city region having been involved in the delivery of 19 of the past 21 building society mergers.
Nigel Adams (Selby and Ainsty) (Con): I, too, congratulate my hon. Friend on securing this Adjournment debate. Does he have any idea of the number of jobs that would be created in Yorkshire and in Leeds in particular if the green investment bank was won by the Leeds bid?
Greg Mulholland: Of course, the point of the green investment bank is not to deliver jobs itself—although a few hundred people will work in and around it—but to bring in investment through projects and the knock-on effects. Those projects will be not only in Yorkshire and the Humber, but all around the country. The Minister might be able to give some idea of the Government’s vision for delivering growth for the economy and employment all around the UK, delivered, crucially, from the Leeds city region.
Julian Smith: I refer back to the hon. Gentleman’s comments on the type of financial services that Leeds possesses. It is the home of mutual organisations and of a different kind of financial services than is seen in the City of London. That character, which he painted so eloquently, has to be part of the pitch for Leeds.
That is an important point and it is right of the hon. Gentleman to reiterate it. We must all keep doing so again and again to Ministers. I apologise to the Minister for taking so many interventions. It is
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rather nice to have so many positive ones. It will, however, take me a little longer to make my contribution than I had originally thought because of that.
As well as the financial expertise and talent in the region, we have the professional and business services that would be integral to the success of any new banking institution. Five of the UK’s largest law firms and 150 accounting firms, including nine of the 10 largest UK practices, are based in the Leeds city region. Crucially, the professional and business services sector in the region has a strong record in supporting the delivery of low-carbon schemes. It is in demand for doing so across the UK, with a number of projects having been advised and structured by businesses from the Leeds city region. One example—and we will provide more to the Minister—which is from the other side of the Pennines, is the UK’s largest wind farm on Scout moor in Manchester. Top legal teams based in Leeds, such as Addleshaw Goddard, regularly advise on international green projects, such as the latest power project in Saudi Arabia and a solar project in South Korea. This expertise and talent is already delivering what the green investment bank wants to do not just in the UK, but around the world.
Finally on talent, the region also has the necessary environmental expertise. The region’s carbon capture and storage programme has been led by co2sense. That is one of a number of Leeds-based expert organisations that drive innovation-led low-carbon projects in the Leeds city region and that would support the bank in its activities. It has been delivering the objectives of the green investment bank in the region for the past four years. It has invested in low-carbon infrastructure projects across the region.
We also have the Centre for Low Carbon Futures, which is a partnership of universities that has a track record in providing expert advice to the Department of Energy and Climate Change. It includes the centre for climate change economics and policy at the university of Leeds. We also have Science City York, which is a partnership company of academics and the private and public sectors that has expertise in bio-renewables. It has directly helped to establish more than 100 new technology companies.
Fabian Hamilton: Given all that the hon. Gentleman has said, it is no surprise that one of the most innovative low-carbon, recycled fuel power stations was opened on the border between our two constituencies at Buslingthorpe Green just a month ago. I had the privilege to open it with the lord mayor of Leeds. It generates 2 MWe and is run on recycled cooking oil. I hope the hon. Gentleman would agree that that is exactly the kind of project that the green investment bank could encourage throughout the country. Leeds has shown that it has the expertise to have the bank right in the heart of the city and the region. Does he agree that that is the sort of project that needs support?
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Projects up and down the country are already being advised and structured by companies from the Leeds city region. The only biomethane project in the United Kingdom to be completed, in Didcot, was assisted by advice and structuring from the region. As the Minister has heard clearly—I hope the message has got out—the Leeds city region is involved in developing economically sustainable businesses in the green and low-carbon sectors not just in the region, or in the United Kingdom, but around the world.
The third and final key reason why the green investment bank should be based in the Leeds city region is one that I know is music to any Minister’s ears in the current economic climate. The region offers outstanding value for money, through available and affordable office space and competitive staffing, recruitment and location costs. It has a portfolio of high-quality, low-carbon buildings that could house the bank at excellent commercial value. Leeds has offered the best value for money office space among the major European business cities for the past three years, according to Cushman and Wakefield’s annual rankings, offering more competitive value than Bristol, Edinburgh and Manchester, the other cities bidding for the bank. The region also has more buildings that are rated excellent by the Building Research Establishment environmental assessment method—the world’s leading design and assessment method for sustainable buildings—than any of the other cities bidding.
Through existing organisations, the Leeds city region also already has the skill sets required to assess opportunities, make funding recommendations, save time and money on set-up costs and get the bank up and running as quickly as possible.
I want this to be a positive speech, but I have to put it on record that I, and other Members from the region, find it very frustrating that doubts have somehow been cast on some of those incredibly strong credentials of the Leeds city region. There are some strange misunderstandings, considering the very clear facts and the hugely strong case for the region. Some of us may feel that it is another example of something of a blind spot in parts of Westminster and Whitehall when it comes to our region. Perhaps we need to shout a little louder, and we shall. I hope that today, I have put the case forward and left little doubt in the minds of Ministers and others about the incredibly strong case for the region.
The Leeds city region and its surroundings have the specialist knowledge, skills, location and professional supply chain needed to support the green investment bank and its customers. As the House has heard, the potential for green investment in the Yorkshire and Humber region is huge, and the opportunity for the green investment bank in the Leeds city region is enormous.
The Minister knows that the green investment bank is hugely important for the UK, as a global leader on the environment, and the Leeds city region has the formula to make the bank deliver. As I said at the outset, the bank is an exciting and innovative vision, which I support, as I am sure do all right hon. and hon. Members who are in their places. We believe that it is an excellent fit with the innovation, expertise and infrastructure that already exist in the Leeds city region.
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I know that the Government are serious about the green investment bank and the vision of what it can deliver towards a sustainable, greener economy. The message that I want to leave with the Minister, and with the team who will award a city the green investment bank, is that we in the Leeds city region are just as serious. We are serious not just about the bank being in Leeds, but about its succeeding, excelling and helping the UK to that more sustainable, greener economy.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): I begin by adding my congratulations to my hon. Friend the Member for Leeds North West (Greg Mulholland) on not only securing the debate but leading a remarkable song of harmony. He talked about music to my ears, and I must say—I say it with due care, as you are a professional Lancastrian, Mr Deputy Speaker—that I have not seen quite so many Yorkshiremen together and singing in such harmony, not just from west and north but from the south part of Yorkshire as well. It is very nice to see and hear. I hope that that same harmony can be maintained as proposals are put forward.
If I may say, my hon. Friend put his case very effectively. I might also congratulate him on his genius of having 57 different points as to why we should have the green investment bank in Leeds but under only three headings. That was a masterful performance.
Let me say from the start as someone who regularly goes to Leeds that I totally share the view that it is a first-class city with many advantages and a strong commitment to going green in our economy. I thank, for example, the local enterprise partnership and its partners for the comprehensive business case they have submitted for locating the green investment bank in the city. I was lucky enough to be in Leeds just a few weeks ago at the unveiling of the Yorkshire Post business club, when I heard first hand just how much support there is for this institution to be located in the city.
The green investment bank is a key component of this Government’s commitment to a transition to a sustainable low-carbon economy, which will complement other green policies, which I will touch on briefly later, to drive forward growth in the sector, which by 2009-10 was already worth some £116 billion.
As we have heard from several hon. Members, Leeds has a long and illustrious industrial history, often at the forefront of innovation. It is one of the UK’s largest manufacturing bases. We have heard that it is home to many international businesses. Leeds has also been able to make that difficult transition from industrial powerhouse to a thriving hub for financial services. It is true that outside the City of London, it is the largest financial centre in the UK.
As several hon. Members have pointed out, Leeds has a number of other important emerging strengths, including environmental sciences, bioscience, and even digital and creative industries. Even in these challenging times, growth can clearly be seen in the increase in exports not just from Leeds, but from the Yorkshire and Humber region, which grew to £3.8 billion in the first quarter of this year compared with last year. When I go to the city, I see a sense of confidence and optimism when I look, for example, at the investment of £350 million in the Trinity retail and leisure development, or at the £60 million investment in Leeds arena.
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As several hon. Members have said, the green economy has become increasingly important, and the Leeds city region demonstrates its focus on a sustainable economy in several ways. I had the pleasure of attending the official launch of the Aire valley enterprise zone. Its focus is on low-carbon industries and it expects to create up to 9,500 new jobs by 2025, and to add something in the region of £550 million of economic output to the city region. As my hon. Friend the hon. Member for Leeds North West mentioned, the enterprise zone in the nearby Humber region should generate nearly 5,000 jobs by 2015, particularly through its focus on offshore wind manufacturing.
When I went to the city, I was also struck—several right hon. and hon. Members mentioned this—that there is a genuine local commitment to going green in local initiatives, such as the better business environment forum or the Leeds climate change charter. Leeds is one of only four cities in the UK that is designated as an environment city. Local people recently celebrated the European year of volunteering environmental theme with projects including river cleaning, action mornings to maintain the Gledhow valley woods—I am getting a generous nod so I trust my pronunciation was correct—and a comprehensive scheme of planting bulbs and flowers in public places. That happens in other parts of the world regularly, but it is nevertheless part of that voluntary wish to recognise the value of a genuine sustainable community and economy.
I appreciate that there is a genuine commitment to a green, low-carbon future right across Leeds. Nationally, the Government are taking real action to try to put the whole economy on that path. Over the summer, the Department for Business, Innovation and Skills, the Department for Environment, Food and Rural Affairs and the Department of Energy and Climate Change published plans that map out the Government’s approach to building the green economy and show what that means in practice for business. The plans set out the range of policies we are using to support the transition to a green economy and the opportunities that we have created, but also the implications for some of those traditional businesses, which, as various right hon. and hon. Members have mentioned, will need to change how they operate to develop in future.
We understand that to invest the substantial resources required in this area, business needs to be certain that the low-carbon sector is not a passing fad, as some sceptics might believe. That is why we are seeking to provide certainty and why, for example, we are committed by law to providing a 50% reduction in carbon emissions by 2025. We have launched the world’s first incentive scheme for renewable heat, which should increase investment in green-heat technologies by £7.5 billion by 2020. We have also announced the green deal, under which householders, businesses and landlords will be able to improve the energy efficiency of their homes and buildings at no up-front cost. We have also introduced a carbon price floor, proposals on electricity market reform and a range of initiatives to encourage the roll-out of low-carbon vehicles.
To that end, good progress is being made on the green investment bank. It will be the first of its kind in the world, which is why it is one of this Government’s first priorities. Capitalised with £3 billion, the green investment bank will complement other green policies
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to help accelerate the leveraging in of additional private capital. The key is that the green investment bank must be a new but enduring institution, rather than a series of Government interventions, and an institution that addresses the areas of under-investment that have persisted in spite of the other measures that I have mentioned. Our green objectives are ambitious, and to achieve them we need tailored and targeted financial intervention to overcome under-investment in those key areas. The green investment bank will work towards the double bottom line of both achieving significant green impact and making financial returns.
As we have seen from this and other debates in the House, there is a real interest in the operation of the green investment bank and how it will be established, so let me turn to that. To assist us, we have appointed an advisory group, led by Sir Adrian Montague, to advise on a range of issues, including not just the institution’s strategic priorities, but the conditions and the market in which it will operate. The priorities will be decided by the Secretary of State and reviewed regularly by Ministers and the institution’s corporate board.
The question at the heart of this debate is the bank’s location. The location is critical to the bank’s success, and although it will not be a large institution, it is clear that people already see it as a valuable organisation—an asset, as I think one hon. Member described it—to wherever it is located. I can tell the House that we have received applications from 20 cities and towns, including Leeds. They have indicated that they would like to be considered as the location of the green investment bank. We intend to set out the details of the criteria and
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the process for determining the location of the green investment bank before Christmas, in just a few weeks, with a view to making the final decision in 2012. Our proposals for the green investment bank will need to be approved by the European Commission before we can establish it as a fully independent financial institution. We expect approval by mid-2013. In the interim, to accelerate our transition to a green economy, the Government will begin making early investments in green infrastructure from April 2012.
We are committed to taking action now to enable the transition to a green and growing economy, and we welcome Leeds’ active, positive and energetic contribution to this debate. We will continue to build on the progress that we have made, which is why we welcome the support from all the main political parties for the principle of an enduring and independent institution that will help to set the UK firmly on its course towards a green and growing economy.
To summarise briefly, I congratulate my hon. Friend the Member for Leeds North West on raising this important issue and emphasise that no decisions have yet been made—if that is an assurance to him—on the location of the bank. We will ensure a fair and transparent process when we decide on the location. All interested parties will be given an equal opportunity to submit an expression of interest, so that due consideration can be given to all submissions to ensure a full and equitable process.