Young People in the Recession

Opposition Day — [15th Allotted Day] – in the House of Commons at 3:50 pm on 6th July 2009.

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Photo of John Hayes John Hayes Shadow Minister (Education) 4:37 pm, 6th July 2009

I beg to move,

That this House
deeply regrets that young people are amongst the principal victims of the recession;
is profoundly concerned that limits on entry to higher education mean tens of thousands of suitably qualified young people will be left without a university or college place in autumn 2009; is concerned by reports that graduates face the worst job prospects for decades;
regrets that the number of young people starting an apprenticeship is falling and that the number of young people not in any kind of education, employment or training has risen to nearly one million;
regrets that Ministers did not support proposals to fund 25,000 new Masters degrees in science, technology, engineering and mathematics subjects in this year's Budget;
and calls on Ministers to refocus Train to Gain provision to provide 100,000 extra training places and support the thousands of apprentices who risk losing their training places during this recession.

Youth is bound to hope. Benjamin Disraeli wrote that

"the Youth of a Nation are the trustees of Posterity."

As the recession bites, young Britons are being bitten hard; their hopes torn apart, their futures damaged. I move this motion, in my name and those of my right hon. and hon. Friends, in sorrow. We are sorrowful for the school leavers who hoped to go to university but will not; sorrowful for the graduates who hoped to find good jobs but cannot; sorrowful for the forgotten army of 1 million youths not in education, employment or training, who once dared to dream but now do not. Every Member of the House should share my sorrow that Britain in 2009 has come to this, and share my anger at a Government who could have done more and should do better.

As the economy shrinks, unemployment grows. The number of NEETs went up even in the good times. As the economy grew, we failed to give opportunities to young people, so what hope for them now? I hope that the Minister for Higher Education and Intellectual Property, who I know is a man of good faith and cares about these things, will apologise for the fact that we failed to provide opportunity for so many young Britons in constituencies such as his and mine. He knows that, as the economy grew and jobs were created, three out of four went to people coming into Britain rather than to people already here. As the demand for skills grows, the number of learners in further education plummets, advanced apprenticeship places fall and adult learning has all but disappeared from communities throughout the country.

As Britain's chance to compete becomes ever more dependent on a highly skilled, educated work force, the number of people with level 3 skills and above remains less than that in France and in Germany. According to the OECD, Britain is ranked 17th out of 30 nations for the number of people with above low skills. The UK suffers from a burning skills shortage; throughout industry, companies are firefighting that disaster and need a swift and effective response to the crisis. Almost two thirds of companies need skilled workers to satisfy demand, with shortages particularly keenly felt in the energy, water, engineering and construction sectors, according to the training provider, Empower Training Services Ltd.

I want to put it on record that I value the work of trade union learning representatives—I know that that applies to those on the Treasury Bench and hon. Members of all parties. They will therefore be as interested as I am to consider the TUC's most recent report on Britain's skills gap. It states that throughout Europe, between 40 and 45 per cent. of young people between the ages of 20 and 24 are in education or training—nearly double the UK rate. It states that 40 per cent. of adults aged 25 to 59 in work in the UK have no education beyond the age of 16, compared with 32 per cent. in France and only 13 per cent. in Germany. It also states that in France and Germany, between 60 and 65 per cent. of the population have qualifications equivalent to NVQ level 2 or above compared with only 40 per cent. in the UK.

I hope that Ministers will not go into denial today. I hope for a refreshing bout of honesty when they speak in the debate. If that happens, it will be clear that the number of those not in education, employment or training has grown by approximately 50,000 under Labour. The Government themselves class one in six 18-year-olds as NEETs, the highest figure since records kept under the current method began in 1994. We are failing those youngsters—failing to give them hope, opportunity and a chance to be the best they can. Failing them means failing us all; it is not right that Britain's hopes should be dashed in that way. The Government know that it is not right, and we know that they are not right for Britain.

Let us consider details that some on the Treasury Bench will find difficult. I do not want to be unnecessarily unkind; none the less, the House and the people we represent have a right to explore those details. First, let us consider university entrants. University clearing places are expected to fall by two thirds—that is why we highlighted university entrants in the motion. An estimated 16,000 new course places will be available on A-level results day, compared with some 43,000 in 2008. Despite that staggering fall, research suggests that demand for degree courses increased by almost 65,000. The Government have effectively put a hold on the number of university places in September, due to growing pressure on public finances. There are expected to be around 650,000 undergraduate courses this year. Any chance that the Government ever had of reaching their 50 per cent. target now looks remote.

The Million Plus group of universities says that that cap will leave thousands of bright teenagers on benefits. It states:

"Young people who might have gone to university face the real prospect of being relegated to the ranks of the long-term unemployed, with all the personal, family and health... consequences which this brings."

Interestingly, unlike in earlier recessions, a wide range of social groups will be affected. The group argues that everyone will be affected, from working-class school leavers to middle-class students. Some research suggests that students from the least advantaged backgrounds who, typically, tend to apply later for university, may be worst hit. That is certainly the view of the National Union of Students. Indeed, NUS president Wes Streeting has said:

"I have no doubt that those worst affected will be from the very backgrounds this government has sought to attract."

So much for widening participation.

It has been reported in The Times that

"when the Government cut 5,000 places for this autumn, just as the recession was prompting record numbers of applications, a serious squeeze became inevitable."

The Higher Education Funding Council has warned universities that they will suffer a cut in funding if they try to increase numbers. What does that mean in practice? The Minister knows the answer, so I hope that he will endorse, if not every word I say, then much of the sentiment. As a result of the changes,

"popular universities will stick rigidly to their offers so as not to exceed their quotas, rather than allowing some flexibility for promising candidates who don't quite make their grades. And there will be far fewer places in clearing".

That is what all the reports from the universities and elsewhere are telling us.

Photo of Kevin Brennan Kevin Brennan Minister of State (Department for Children, Schools and Families) (also Department for Business, Innovation and Skills), Minister of State (Department for Business, Innovation and Skills) (Further Education, Skills, Apprenticeships and Consumer Affairs) (also Department for Children, Schools and Families)

I am sure that the House would like to learn what the hon. Gentleman's pledges for this year would be if he were in government, so would he care to tell us how many additional university places he would pledge to fund this year and whether he would match the Government's September guarantee for each 16 and 17-year-old to have a place in education or training this year?

Photo of John Hayes John Hayes Shadow Minister (Education)

The hon. Gentleman anticipates the exciting part of my speech, which comes later— [ Interruption . ] I should have said "the even more exciting part of my speech, which comes later," when I shall regale the House with Conservative proposals and set out just how much better things could be and what a brighter future the Conservatives could bring in. However, I do not want to be rushed into that. I want to build the excitement among those on the Treasury Bench before satiating their demands for Conservative policy announcements.

The Minister, whom I welcome to his new role, will know that last year some 44,000 students won their places through clearing, but that figure could be halved this autumn. I hope that when the Minister replies to the debate he will indicate his projections for the number of students who will gain a place through clearing.

What about those who leave university? What are the prospects for graduates? The think-thank Centre for Cities says that between now and 2011, long-term youth unemployment will almost treble. Figures for short-term unemployment show that 900,000 young people are currently unemployed, but youth unemployment is expected to exceed 1 million in 2010. Some 16,835 graduates—roughly 8 per cent.—were unemployed six months after finishing their degrees, which compares with around 6 per cent. in the previous year. Five per cent. of graduates who were working were working in "elementary occupations", which is an increase of about 1 per cent. on the previous year. The number of students finding a place on "the milk round" has dropped by a third, as companies are forced to cut back.

Only 13 per cent. of university students received a job offer by March of their final years. Graduates in medicine and dentistry are the most likely to be in work, but there are many other disciplines where the prospects for employment—particularly employment relating directly to the degree studied, thereby matching graduates' hopes, aspirations, talents and ambitions—are limited. Indeed, more than one in 10 students with architecture, building or planning degrees are jobless, a figure that is of course linked with the decline in the housing market.

Photo of David Davies David Davies Conservative, Monmouth

I am listening to my hon. Friend with great interest. Does he agree that when people leave university with degrees in surf studies, as they do from Plymouth university, it is hardly surprising that they are unable to find jobs that match their expectations?

Photo of John Hayes John Hayes Shadow Minister (Education)

I would never want to say anything disparaging about Plymouth—or indeed any other part of this kingdom—and I would particularly not want to disparage our higher education system. However, it is absolutely right that, knowing the figures, people who consider their futures at school and beyond will increasingly look to those courses that are most likely to reward them with employment. That is a natural consequence of the process.

I am not utilitarian: I believe in study for its own sake. I believe in the power of learning, because it elevates people and builds a better nation. I believe in education for democratic citizenship. One of the reasons why I so resent the attack launched by Ministers on adult and community learning is not that adult and community learning typically takes people into further study and then into employment, although it often does, but that it has a worth beyond all that: it has a value for its own sake.

Photo of John Hayes John Hayes Shadow Minister (Education)

I will happily give way to my hon. Friend, who is a great authority on this matter, and who regularly defends adult and community learning in his constituency.

Photo of Christopher Fraser Christopher Fraser Conservative, South West Norfolk

I am grateful to my hon. Friend for that endorsement. Does he accept that not every child is academic, and that vocational skills are equally important if young people are to play a role in getting us out of this recession and in creating the prosperity that this nation deserves?

Photo of John Hayes John Hayes Shadow Minister (Education)

My hon. Friend is right. That is why the Conservatives have championed practical learning and made a strong case for the kind of vocational education and training that he rightly advocates. I will say a little more about that in a few moments.

In the Government's new guide, "Life after graduation", they have advised graduates to seek work in call centres. Professor Alan Smithers, the director of education and employment research at Buckingham university has said:

"This is a pretty gloomy analysis of graduate prospects", and so it is. Graduates face difficult times, and aspirant university and college students face a bleak future.

What of vocational learning of the kind that my hon. Friend Christopher Fraser has identified as so critical? It is critical for our economy because of the skills gaps that I mentioned earlier. It is also critical for the lives of many people who, through the acquisition of a skill or a craft, gain meaningful purpose as well as work. They gain a sense of pride and worth through real accomplishment.

Sadly, however, new statistics show a significant drop in the number of teenagers starting apprenticeships this year. In the academic year 2008-09, there was an 8.3 per cent. fall in the number of 16 to 18-year-olds taking up apprenticeships. There was a 2 per cent. fall in the number of 19 to 24-year-olds starting apprenticeships. There were 196,600 apprenticeship starts in the first nine months of 2008-09, and 80,200 apprenticeship framework achievements. There is a real problem with completion, though I acknowledge that the Government have made some improvements in that area. The Minister will say that, and it is important for me to say it, too. However, in return for that act of straightforwardness and—dare I say it?—generosity, will he for the first time acknowledge the plain truth that the number of level 3 apprenticeships represents a significant problem and that it has fallen on his watch? Level 3 was once the level at which all apprenticeships were fixed, and it still is among most of our competitors. Given the decline in level 3 apprenticeships, is it any wonder that many commentators believe that Britain will fail to compete as we acquire the skills that we desperately need? I hope that we will have a refreshing bout of honesty from the Minister about apprenticeships when he makes his speech.

Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire

Even though the Government have provided some assistance, 2,000 apprentices in the building industry have lost their apprenticeships as a result of losing their jobs in recent months, and only 36 per cent. of them have subsequently found another job. That means that more than 1,000 youngsters who were training for a skill now have no opportunity to continue to do so. If 1,000 university children had been unable to continue their courses because their university had closed, my goodness, there would have been a rumpus. Middle-class people would have marched in the streets. Is it not time that we did something for those apprentices?

Photo of John Hayes John Hayes Shadow Minister (Education)

It is certainly time that we rejuvenated the apprenticeship system, valued practical learning and invested in vocation training in the way in which my hon. Friend for South-West Norfolk has identified. He is right, frankly—for too long, we have assumed that the only form of accomplishment is academic. That is not good enough; it is failing Britain and many Britons.

Photo of Jim Knight Jim Knight Minister of State (the South West), Regional Affairs, Minister of State (the South West), Department for Work and Pensions, Minister of State (Regional Affairs) (South West), The Minister of State, Department for Work and Pensions

I am grateful to the hon. Gentleman for giving way with his usual courtesy. I was interested in the intervention we heard from Mr. Heald. As I recall, the only game in town at the moment for the construction industry is the investment put into school buildings and other public buildings—financed by the accelerated capital programme and the fiscal stimulus that this Government support. Does the hon. Gentleman support that?

Photo of John Hayes John Hayes Shadow Minister (Education)

The Minister is not entirely right, because level 3 apprenticeship numbers in the construction industry did not grow when the economy grew in anything like the measure they should. The Minister will know, although I do not want to parody Polish plumbers, builders, carpenters and so forth, that rather than take advantage of the growth in building over the past 10 years to give the kind of start that my hon. Friend Mr. Heald wants to give so many young people, we typically under-invested in training and under-supplied our key industries with our own people as a result and imported a great deal of labour. This is an open secret, is it not? Everyone in my constituency is aware of that, and I suspect that everyone in the House is too, so it is time that members of the Treasury Bench faced up and admitted it.

Photo of Lynda Waltho Lynda Waltho Labour, Stourbridge

I want to go back to an earlier point. I was impressed when the hon. Gentleman gave the Government credit for increasing apprenticeships vastly. I am desperately looking through my notes—I cannot find the figures—but I know that we are up to about 250,000. We need to compare that with 1997, when I was teaching young people about to leave school in the run-up to 1997. I was teaching them how to fill in UB40 forms at that time, but the opportunities have vastly increased under this Government. On Friday, I am going to visit a construction industry project in Wolverhampton, which is aimed at bringing homes up to a decent standard. About 30 young people have already been taken on and another 25 will soon join them. It is clear that the system is working very well in some places.

Photo of John Hayes John Hayes Shadow Minister (Education)

It is important that we in the House give credit where it is due, try to debate these matters dispassionately and do not resort to party political knockabout. Let me say that I have no doubt that many Labour Members, who I have heard frequently articulating their case, believe in apprenticeships as passionately as I do. I do not believe that the issue divides us along party lines, but it is a simple fact that for a very long time we have underestimated the force, the significance and the value of vocational learning and training. This may indeed go back further than 1997, but it has certainly not got much better since. I hope that when I come to announce our exciting policies—I know that enthusiasm is mounting—Lynda Waltho will greet them in the right spirit with the even-handed, open-minded, non-partisan enthusiasm that she personifies.

Photo of Natascha Engel Natascha Engel Labour, North East Derbyshire

I apologise for it in advance, but I want to make a political gibe. When I worked in the union movement, I was involved with workplace learning, so I know how difficult it was after 1997 to rebuild the apprenticeship system that had been completely destroyed before 1997. Where we have got to now is an absolute miracle, given where we started from—as I say, after the complete destruction of apprenticeships and all kinds of workplace learning.

Photo of John Hayes John Hayes Shadow Minister (Education)

The hon. Lady is straying into the kind of denial in which I suggested Government Members should not indulge. She will know that further education college numbers have fallen. She will know that level 3 apprenticeships have not grown at the rate Ministers occasionally claim they have—although not with too much conviction, as they know the figures as well as we do. She will know, I am sure, about the collapse in adult learning that I described. She will also know about the growing number of NEETs. I think it ill behoves her to make exaggerated claims for the Government's achievements in this regard when the facts tell an entirely different story.

Photo of John Hayes John Hayes Shadow Minister (Education)

I will give way to Simon Hughes, but then I must make a little progress.

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

I am glad that there appears to be general consensus that apprenticeships are a fantastically good and useful thing. As I said during Prime Minister's questions on Wednesday, I commend the Government for the announcement that they made last week. However, it appears—I hope that Ministers will respond to this point—that the new package for those under 25 who have not been employed for a year may not pay them for long enough to enable them to do the work that would allow them to gain the proper qualification that an apprenticeship confers. Those who advise me, including my local authority chief executive, believe that the payment is for only 32, 33 or 34 weeks, which will not allow them to obtain the work plus the opportunity to gain the qualification that they must have in order to take the next step.

Photo of John Hayes John Hayes Shadow Minister (Education)

The hon. Gentleman tempts me to go off at a tangent and speak about apprenticeships in more detail than I intended, but although I know that the House wishes me to speak at inordinate length, I will resist that temptation in order to give others a chance to speak. I will simply say that, for an apprenticeship to be meaningful, it must do three things. First, it must confer real competences. Secondly, it must be workplace-based and mentored so that people are given a real taste of the world of work. Thirdly and fundamentally, it must increase the individual's employability. That is partly about placement, partly about frameworks and partly, as the hon. Gentleman has said, about the way in which apprenticeships are managed and funded.

According to a recent report from the Skills Commission, which Ministers will have at their fingertips:

"Too few teenagers... are starting apprenticeships, partly because of poor careers guidance... expansion of the apprenticeship programme must not come at the expense of quality."

I think that that was the point made by the hon. Member for North Southwark and Bermondsey.

We need to ensure that those who advise young people understand the importance and value of apprenticeships. One survey revealed that teachers who gave advice and guidance knew so little about apprenticeships that the only subject about which they knew less was the Welsh baccalaureate. While the Welsh baccalaureate may be a fine thing in itself, it is not as relevant to people across Britain as I hope apprenticeships should be.

The Skills Commission says that although the number of apprenticeships is rising, only 130,000 businesses out of 1.3 million take apprentices on. That is what I meant when I told Natascha Engel that we should be modest in what we say. The commission also says that the Government should

"fully fund apprenticeships for everyone up to the age of 25—raising the age from 19."

At present, there is a disparity between post-19 and pre-19 funding.

Let me now tell the House what we will do. Our motion complains about the Government's failure in respect of university places, graduates, young people who are disengaged, and training, but Members will want to know what the exciting alternative is.

We do not merely propose new policies. We propose a whole new approach: a new way of thinking about education, and a new way of preparing children and young adults for the skills that they need. We will tackle the NEETs problem head-on with a £100 million-a-year package building on best practice, which is often in the charitable, voluntary and community sectors. We will provide bite-sized chunks of learning so that people can engage in the education that they need in the way that is most suitable for them.

People who were failed by the system first time around need to be handled carefully and skilfully, and we know how that can be done because there is evidence of its being done to best effect. We will provide an independent advice and guidance service with a presence in every school and college, and a high-street presence as well, to give young people the best possible advice. We will make apprenticeships easier by encouraging companies to run them, cutting unnecessary bureaucracy, instituting direct payments to employers, creating financial incentives for them to take on apprentices, and making more Government funding available upfront.

We will inject £775 million in support through lifelong learning accounts to provide a careers service of the kind that I mentioned and an apprenticeship programme of which we can be proud. We will also put an additional fund in place: a further £100 million a year so that we can rebuild the infrastructure of adult and community learning, which has been so eroded under this Government. [Interruption.] Well, as the Minister knows, the way we will fund that is by— [Interruption.]

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. We cannot have these sedentary interventions. It is much more helpful if any hon. Member who wishes to say something rises and does so in the usual way.

Photo of John Hayes John Hayes Shadow Minister (Education)

The Minister knows very well that we intend to fund that through dismantling the Government's Train to Gain scheme. Although it does some good work, it is cost-ineffective, has an immensely inefficient brokerage service, and has a dead-weight cost—which, other than the Government, almost everyone I have spoken to in industry, colleges and everywhere else acknowledges. It also often accredits existing skills rather than adds new ones. Apprenticeships are a much more effective way of training people. They are predictable and time-limited; we know what they cost and the value of the skills they confer. Adult learning is also critical, as it provides a bridge into learning for those who may have been out of learning, such as women returning to the workplace or previously disengaged young people.

Photo of John Hayes John Hayes Shadow Minister (Education)

I shall make some progress, as I want to pose the following questions to the Minister before I conclude, but I hope that I might have a chance to give way once more before I sit down.

Does the Minister expect the number of NEETs to continue to rise in the coming 12 months, and if so, by how much? Can the Minister explain why there was already a growing number of NEETs before the recession took hold? Will the Minister say why in May it was revealed that only 30 of the 1,395 apprentices on public sector training schemes were new employees, and why 98 per cent. of those on the Government skills national apprenticeship pathfinder schemes are already in the civil service? Will the Minister tell us his plan for the anticipated nightmare scenario when thousands of bright students may not be able to get the university or college place that they need? Will he also say a word about why there are so few apprenticeships at the Olympics site?

It is time for Ministers to forget the rhetoric and face the facts. Just a month ago, the independent think-tank Centre for Cities estimated that, under current Government policies, youth unemployment was set to triple. While we fail to act, we fail to help a generation of young people reach their potential. The House of Lords Select Committee on Economic Affairs concluded two years ago that many who "could and should benefit" from apprenticeships have not done so. The economists David Bell and David Blanchflower said in a Bank of England paper that applications from people from non-professional backgrounds have not risen for the past four years and there is talk of short-term sticking plasters.

This is the choice that we face: short-term sticking plasters or long-term reform. That is why we have taken the tough choices that I have described, with real investment in apprenticeship places. That is why we believe that the Government should make economies to pay for 25,000 extra masters degrees in STEM subjects—science, technology, engineering and mathematics—to help graduates in the coming months and years who cannot find the jobs that they need. I believe that a generation who have so much to offer should not be deprived of the education and training that they need. We offer hope for the future and a vision of a highly skilled Britain—a vision in which craft is elevated.

We have heard so much about Government failure; is this the best that the Government can do? Do Ministers seriously expect those whom they represent to stand for this? Is this really all that Britain can be?

I say that Britain is entitled to expect more. Government can do more, and Britain can be more, greater and better, but it will not be so unless we change direction. Until we head towards hope—new hope, a new Britain, a new Conservative Government.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property) 5:09 pm, 6th July 2009

I beg to move an amendment, to leave out from "House" to the end of the Question and add:

"recognises this Government's commitment to not repeating the mistakes of past recessions, and to ensuring young people are not trapped in long-term unemployment;
notes since 1997 there are 300,000 extra students in higher education and public funding has increased by over 25 per cent. in real terms;
praises this Government's commitment to helping graduates through the downturn, including an ambition for 5,000 extra internships this autumn;
notes investment in apprenticeships is over £1 billion this year and that in 1997 there were only 65,000 starts compared to 225,000 in 2007-08; further notes the success of Train to Gain in supporting over 1.2 million course starts;
further notes the September Guarantee offering all 16 to 17 year olds an apprenticeship, school, college or training place;
and commends this year's Budget for investing £1 billion in the Future Jobs Fund to guarantee a job, training or work experience for every young person unemployed for 12 months, part of a £5 billion investment in tackling unemployment.'.

I welcome this debate. We all know that Mr. Hayes cares passionately about apprenticeships and formal adult learning, and he expresses that with a great amount of humour, usually in Committee or in this Chamber. This afternoon, not only have we seen that humour on display again, but he has shown a great deal of audacity by calling this debate in order to slash Train to Gain numbers to fund his half-proposals.

We have heard nothing from the hon. Gentleman about the central issues that are important to young people in this recession. I thought that the Conservatives might finally be up front about the £610 million of cuts to our universities and skills budgets announced by the Leader of the Opposition in a flurry on 5 January—those cuts would have a particularly catastrophic impact on young people—but of course we heard nothing about them. I thought that we might hear whether the Conservatives now support our ambition to enable 50 per cent. of young people to go to university, but of course we heard nothing about that. I thought that we might hear whether the Conservatives now support our policy to raise the participation age in education and training to 18, but we heard nothing about that. I thought that we might hear whether the Conservative party will match our September guarantee of a paid-for place in education or training for every 16 and 17-year-old, but we heard nothing about that from the hon. Gentleman.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

The 50 per cent. target was an ambition of the former Prime Minister for some a considerable time—I believe for 10 years. Given that we have never reached more than 42 per cent., does the Minister agree that it is time to stop looking at numbers and targets and, instead, to concentrate efforts on children and teenagers who need more practical help, such as that provided by the apprenticeship schemes? We should not be focusing on that ambiguous target of 50 per cent. which neither this Government nor the next one are likely to reach.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

I am surprised then that the hon. Lady and her party do not support the September guarantee for 16 and 17-year-olds. She will be surprised to learn that the Leader of the Opposition proposes to cut £610 million from the Department's budget, and I hope that she has written to him about that. I am surprised that she also disagrees with the concerns that her Front-Bench team have expressed in the motion about young people's chance of attendance at university.

However, let us first concentrate on what we all agree on. All hon. Members could cite many examples from their constituencies of the local effects of this global recession, whether on an 18-year-old struggling to find their first job or on a 55-year-old facing up to redundancy for the first time. So let me restate my conviction, and that of all my Labour colleagues, that those suffering from the downturn have a right to expect the support of the state, because the cost of failure is high. Those of us who grew up in the 1980s in inner-city communities such as the one that I represent or in other parts of our country, particularly former coal mining areas, recognise what it was like at that time to be cast aside and cut adrift with the failed youth training scheme. We know, only too acutely, how important it is that the Government are on the side of our young people, investing in them, not cutting budgets—that is what I hope to set out.

We should invest when the times are good, as we did when others opposed us. This Government increased the number of young people going to university. Last year, 330,000 people from England were accepted to a university, compared with 250,000 in 1997, with the percentage of young people from the poorest backgrounds up 80 per cent. last year.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

This Government have also taken economic recession to a new level. We now know that this is the worst economic slump since the 1930s, but in my constituency, unemployment is now 82 per cent. higher than it was in 1997, entirely on this Government's watch.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

The hon. Gentleman has not seen the latest from the OECD, which says that unemployment in Britain is the lowest in the G7. I remind him of a former Conservative Chancellor of the Exchequer who said that unemployment was a price worth paying, as it went over 3 million.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

I thank the Minister for providing the figures for teenagers starting university last year. Can he also tell us how many dropped out within the first 12 months?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

The hon. Lady raises an important issue, which goes back to something that goes to the heart of the Conservative motion, and I will come on to that. We should ensure that we manage growth and do not cut the funding. My Department, through its widening participation budget for the Higher Education Funding Council, will ensure that the funds are there so that universities can invest in retention. Therefore, across the HE sector, it is right to say that retention has improved, compared with some of the problems that we faced in 1997.

Photo of John Hayes John Hayes Shadow Minister (Education)

The Minister knows that, notwithstanding the immense amount of money that the Government put in to widening participation, social mobility in Britain has declined. People from the sort of disadvantaged backgrounds that he mentioned a few moments ago are less likely to prosper now than they were in the year of my birth, 1958. It is indefensible that so many people from the community that he represents and others like it are being failed by the system.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

We recently had a very good debate initiated by my right hon. Friend Mr. Milburn in relation to his work on the panel considering access to the professions. The issue of social mobility is complex, and that is why the Prime Minister asked my right hon. Friend to look into those matters. Compared to the cohort in 1958—the hon. Gentleman's cohort—the 1972 cohort, to which I belong, entered higher education in 1990, under the Conservative Administration. If we compare their approach to participation, unemployment—such as the YTS—and apprenticeships with our approach to unemployment, which includes investment, the new deal and now the September guarantee, we can start to explain what social mobility is about and why we must invest in those areas.

Photo of John Hayes John Hayes Shadow Minister (Education)

In that connection, will the Minister say something about those young people not in education, employment or training—the so-called NEETs? Figures from the labour force survey suggest that in 2001 there were 671,000 NEETs and in 2008 there were well over 800,000. That growth was during a period of economic success, not failure—what will it be like after this recession? Will the Minister be as straightforward about that as he has been about the other subjects?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

I will come on to the subject of young people who are not in education or employment, but the hon. Gentleman knows that if he is right on this issue, he should support the September guarantee, and he has not been able to do that. He also knows that there are more 16 to 18-year-olds in education, employment or training than ever before in our history.

Of course, the hon. Gentleman is right to say that any downturn will affect the young. That is the nature of this debate and that is why all the things that we are doing to invest and support them are so essential. However, he will not help those young people if he cuts adrift the skills on which their parents depend through Train to Gain. He has repeated again to the House, to my great surprise, that he would abolish the Train to Gain budget and he has done so against a backdrop in which the CBI and the Institute of Directors have said that they depend on Train to Gain. He would abolish it—how would that help? How would it help the young people who are dependent on those apprenticeships? How would it help the 61 per cent. of companies that say that it helps their productivity or the 66 per cent. of companies that say that it helps their competitiveness? How would it help them to come forward and offer apprenticeships?

Photo of John Hayes John Hayes Shadow Minister (Education)

Of course, we acknowledge that some good work is done under Train to Gain. However, I said that it is cost-ineffective. Perhaps I can ask the Minister to comment on a statistic. There were 666,800 Train to Gain starts in the first nine months of 2008-09 and 290,000 Train to Gain achievements. With that rate of success, it is hard to defend a policy that the Government are putting all their emphasis on. They have all their eggs in this basket. Would they not be better backing apprenticeships, adult community learning and the kind of policies that I have laid out?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

We are backing apprenticeships. That is why we rescued them and they are now up to 250,000 starts. We are backing adult learning. That is why we have a transformation fund of £20 million and why we put £210 million into informal adult learning every year. The hon. Gentleman's party has set its face against the deputy director of the CBI, who said that he was "concerned" by the plans of the official Opposition as Train to Gain is a programme that is designed to ensure public funds are invested in training and that it delivers improved business and work force performance. Miles Templeman of the Institute of Directors has said that

"the principle of the initiative has great merit and the focus of policy should be on improving the service rather than diverting funds away."

That is what he has said, and that is why we have invested that £1 billion.

Surely it is axiomatic that we cannot impoverish the parents of our apprentices, many of whom rely on the skills for life programmes, the literacy programmes and the numeracy programmes. Many of them do not have GCSEs and have taken the opportunity to get those level 2 skills. How can anyone take that away from them and away from companies and then say that they would divert the money to apprenticeships having already said that they will cut £610 million from the budget? The House deserves better. The hon. Gentleman knows that, and I am frankly surprised by the nature of the debate that he has set out this afternoon, given its importance.

That is why we have invested in programmes such as Aimhigher for our new graduates—again, the Opposition were opposed to that—and funded universities to reach out to those from disadvantaged backgrounds, through summer schools, university taster lessons and mentoring schemes. Every university in the country now has links with local and regional schools. We have increased student support with 40 per cent. of students now expected to receive a full grant on top of a very generous loan. Again, we have been opposed when we have attempted to increase the budget that we give to our universities. Since 1997, we have increased investment in higher education by 25 per cent.

The hon. Gentleman will also remember when he talks about the base of employment that our young people need to go into and when he talks not just about the skills but the sectors of the economy that we will need to rely on in the future—I suspect that that is why he made the recommendation in relation to masters programmes in science, technology, engineering or mathematics—that essential to that will be our science budget. Again he will remember that, in the 1990s, leading academics campaigned to save British science. We came to power; the campaign wound up. We have doubled the science budget and safeguarded it with a ring fence. I would love to hear whether the official Opposition will match that and keep the ring fence. The research councils are now receiving £2.4 billion more than they did in 1997. The Universities Funding Council—from what I heard this morning, I understand that it is one of the non-departmental public bodies that might be abolished, although it safeguards the autonomy of our universities—has also seen its budget rise exponentially.

Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire

As the Minister will know, I have a great concern that a lot of young people leave school unable to read, write and add up properly and that a rising number of young people are not in education, employment or training. The number was going up during the good years; its looks as though it will probably go up even more in the bad years. If everything is going as well as he says and it is all absolutely fantastic, with every Government scheme pumping in money and helping people in all the ways that he mentions, can he explain why on earth such large numbers of people—40,000 a year—leave school unable to read, write and add up properly? Why is the number of NEETs going up?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

Well, we have discussed this before in the House, and the hon. Gentleman will know that the overall cohort of young people has increased in the country anyway, because of the demographics and habits of the baby boomers— [ Interruption . ] That is not my generation. He will know that we have increased or seen a continued rise in the GCSE and A-level attainment of our young people. As I said before, there are more 16 to 18-year-olds in education, employment or training than ever before, and that is good news. But he will also know—I think that we discussed this previously in the Education and Skills Committee—that one of the reasons why we wanted to take the participation age to 18 was, indeed, to ensure that we did more, and that is why we have also proposed the September guarantee, neither of which is supported by the Conservative party, and I struggle to understand that. So investment in the good times is important, and in these more difficult times, it is important that we continue to invest.

Student numbers will continue to rise with 18,000 more applicants from England last year and 23,000 more this academic year. The cash available to students has increased by 4 per cent. since last year. In cash terms, we are planning to spend more than £5 billion on student support this year, and we will continue to invest even more next year. I hope that hon. Members will recognise that that is one of the most generous packages in the developed world.

We recognise that the downturn has a huge impact, not just on universities but on communities. That is why we set up the economic challenge investment fund, worth £58 million. It helps young people to find internships, working with universities and spin-outs, including on knowledge transfer. It also supports businesses, whether local, regional or proximate to our universities, at this difficult time. As I have said, we should also invest in our research budget. The science budget has risen by £160 million this year, and now totals £3.7 billion.

Photo of John Hayes John Hayes Shadow Minister (Education)

I do not want to interrupt the right hon. Gentleman's flow, but he must acknowledge that he cannot have it both ways. In answer to the question asked by my hon. Friend Mr. Heald about NEETs, the Minister said that it was not the number, but the percentage, that counted, because of changing demographics. He seamlessly went on to discuss the number of students, and moved from percentages to numbers. If the issue is about percentages, let him explain why the Government have stalled in their ambitions to move towards a 50 per cent. target. If it is about numbers, let him answer my hon. Friend's question more directly.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

I think that Hansard will demonstrate that I did no such thing, and I will not be bullied into thinking that I did. I should just say that I am incredibly proud that this Government have taken the participation rate up to about 43 per cent. That is a huge achievement. What really impresses me, and should really impress the whole House, is that when one looks behind those figures at constituencies such as mine, Tottenham, or at Camberwell, Peckham, Brixton, Moss Side in Manchester, or inner-city Sheffield, one sees that in all those areas, there has been a rise of more than 100 per cent. in the number of young people from the poorest communities going to university. I applaud that. It is a noble ambition, and one that we should retain by investing. I have to remind the hon. Gentleman that that is in marked contrast to the position of his party when it was in office.

The Conservative party tried to expand higher education, but it did it on the cheap. Public funding per university student fell by 36 per cent. The learning experience of students and the financial viability of universities paid the price for that. Lord Patten of Barnes, a Minister in that Government, has admitted publicly that that Government doubled the number of students by halving the investment in each of them. As he said, that meant

"poorer pay, degraded facilities, less money to support the teaching of each student."

That is his record in government, and we can never go back there again.

The hon. Member for South Holland and The Deepings doth protest too much. If Mr. Lansley is to be believed, the Opposition's proposed cuts in education would mean cutting 32,000 university places. Who has got it wrong: the hon. Member for South Cambridgeshire or the hon. Member for South Holland and The Deepings? We need an answer.

We should not forget that getting a place at university has always been, and should be, a competitive process. This is a nervous time for students and parents, as they wait for A-level results, but this year, as always, every student who has an offer from a university and meets the grades will get a place. Against a backdrop of expansion, with 300,000 more students in the higher education system than in 1997, we should remember that we are talking about a competitive process. In any year, the proportion of applicants who gain a place is around 80 per cent. Britain's world-class university system, which produces a record number of universities in the highest positions in the league tables, deserves the very best applicants. But those who are unsuccessful on their first attempt often reapply, and 80 per cent. are successful second time round.

We also recognise that this year's graduates face a more challenging labour market than has been the case for many years. We are not alone in that. This is a global downturn and its effects are being felt everywhere. In China, 1.5 million graduates failed to find jobs last year, a 500,000 increase from 2007. In the USA, over a million graduates lost their jobs in 2008. But, as Carl Gilleard of the Association of Graduate Recruiters said today,

"though things will be harder, their degree is a valuable asset and . . . there are still opportunities out there for those who do their research".

The statistics bear this out. The unemployment rate for those with graduate-level qualifications today is three times lower than those qualified to level 3 or below. The report from the Association of Graduate Recruiters also showed that graduate jobs are still out there. Nearly 40 per cent. of the top graduate recruiters are increasing their graduate programmes, or holding recruitment steady.

For graduates who are unable to secure a job, we are taking action. We launched graduate talent pool, a new website that brings together a graduate matching service, information and guidance and an employer response line. Employers can now upload details of their internship vacancies, and graduates can register their contact details ready for the full service that will go live later in the summer. Microsoft, Network Rail, Marks and Spencer and the police service are just some of the companies up and down the country that are offering internship places.

I am pleased that we have secured over 4,000 confirmed internships so far, and I hope the hon. Gentleman will do all he can to ensure that companies, businesses and organisations increase their number of internships. My Department is pledged to increase the number of internships. I am not sure what he has been able to do in that regard.

We are funding 29,000 graduate-level volunteering places through the organisation v. We are funding 3,000 extra places for graduate entrepreneurship training and help with business start-ups. In his contribution the hon. Gentleman spoke about an additional 25,000 masters places, but the truth is that postgraduates have been a great success under this Government. We currently have 450,000 postgraduate students and 300,000 of those are in STEM—science, technology, engineering or mathematics—subjects. Over the past 10 years, STEM masters have risen 90 per cent. The record there is good, as our international success demonstrates. We are ahead of the United States and Germany, according to the OECD. Indeed, we come fourth in the OECD in terms of producing science and engineering doctorates.

Photo of John Hayes John Hayes Shadow Minister (Education)

The Minister spoke about people studying a second time. Was it a mistake to cut the funding from ELQ, given that many people now need to retrain? Does the right hon. Gentleman regret that and will he reverse it? Would not equivalent or lower professional qualifications give people a chance to find a new direction during the recession?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

We have had the debate across the Chamber before. The question in relation to equivalent level qualifications is whether—should I choose to do a third degree, or if the hon. Gentleman chose to do a second degree, should the people of South Holland and The Deepings cast him aside at the next general election— the state should fund our studies. My view, and our view, is that the state probably should not fund it: the hon. Gentleman should pick up the tab himself. However, there are strategically important subjects, and, if he decides that his several years in politics have not been worth while and he wants to take up engineering and make a serious contribution to the future of this country, perhaps we ought to consider funding that second degree. We have been strategic with the money, because we have rightly said that we should prioritise and fund those who do not have a degree at all in preference to those who are taking a second degree. That is a noble position, and it is the right one.

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

The Minister referred to ELQ as equivalent level qualifications and then talked about second degrees, but of course ELQ stands for equivalent or lower qualifications. What about the detrimental effect that that £100 million a year cut has had, therefore, on university-delivered community education programmes, which not only give people a taste of learning but encourage others who have a degree but want to take a second, non-degree qualification—for instance, teachers who want to be trained in counselling to support a pupil? We talk a lot about equivalent degrees, but what about lower qualifications?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

We are bringing forward an increased number of postgraduate loans for people to take up, and the hon. Gentleman will recognise that we have increased the budget for higher education by 25 per cent. precisely to ensure that the increase in provision that he wants is in place. I was at Birkbeck, university of London, last week and it has benefited from the expansion, notwithstanding the ELQ policy, as has the Open university. We will continue to support people, and the question is: what are the priorities in an economic downturn and are we getting them right? I say that we are. We cannot fund everything, and we have to be cognisant and conscious of what people are happy to fund themselves with the right support and signposting from the Government.

Let me end by referring to another issue on which the hon. Member for South Holland and The Deepings spent some time—apprenticeships. I simply repeat very proudly that this Government rescued apprenticeships from near-collapse 12 years ago. We should never forget that the Conservative party tried to abolish apprenticeships, but now it has the brass neck to call for more apprenticeship places to be funded. I remember 18 months ago reminding the hon. Gentleman, across this Chamber, of the completion rates when the Conservatives were last in office, and let me remind him again: in 1997, just one quarter of apprentices completed their courses.

The Conservatives really pulled off a trick: not only did they run the programme into the ground, with the lowest number of apprenticeships that this country has ever seen, but they managed to establish a situation in which three quarters of apprentices did not complete their courses. We have got the completion rate up this year to 65 per cent. That is a real achievement, and it is a tribute to the examiners, employers and the young people themselves. We have also increased the number of apprenticeships. We have also discussed level 3 apprenticeships across this Chamber, and there are not only more level 3 apprenticeships this year than there were when the hon. Gentleman's party left office, but more level 2 apprenticeships, so we will take no lessons from him on apprenticeships.

The hon. Gentleman said nothing about the guarantees that we have put in place for young people facing six or 12 months of unemployment. We have established a huge fund of £1 billion for future jobs, to prevent young people—particularly those from the most deprived areas—from going into unemployment. Instead of that, the hon. Gentleman has taken the money away from union learning reps, from those who lack the basic skills of literacy and numeracy and from those who did not get GCSEs in the first place. He has set his party against the CBI and the Institute of Directors—that is the sort of contribution that the Conservative party would make to young people and this country. That is why young people are safe in the hands of this Labour Government.

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills) 5:45 pm, 6th July 2009

We are having this debate against the background of a deep and deepening recession. However, the 2009 recession does not necessarily have the characteristics of previous recessions. It is not necessarily characterised by large lay-offs in particular trades, such as shipping and steel. Furthermore, it will not necessarily be geographically concentrated and it is not the result of an external inflationary oil price shock. This recession is primarily the result of a heart attack in the banking sector. Just like natural heart attacks, it resulted partly from ignoring all the warning signs and partly from a failure to take preventive measures. The Government are culpable on both fronts.

The recession leads us into uncharted waters. It will hit all sectors of the economy, including financial services—obviously—and retail. Familiar names will disappear, and have disappeared, from our high streets. The construction industry is having a particularly painful time and, as Mr. Hayes said, graduates face an uncertain future. They are also leaving university with a large burden of debt.

The Government themselves have said that they do not know how the recession will pan out; that, at least, was their excuse for not providing us with a comprehensive spending review that would have enabled us to know the context of the tough choices that all three parties will face at the next general election. Perhaps the Government are not providing it because they can predict the political future of the next six to nine months and do not want clarity about the tough choices that they will face.

In this recession, unemployment will affect every community around the country. Before I came to this debate, I looked at the House of Commons Library synopsis of unemployment figures by constituency. My own constituency of Bristol, West is often characterised as a reasonably prosperous part of the country, and it certainly has a diverse economy. In May 2008 unemployment there stood at 1,079 adults; by May 2009—the latest month for which we have figures—unemployment there had soared to 2,042 adults. That represents an increase of 123 per cent. over those 12 months. That unemployment figure is still lower than that of 1997, but it is heading rapidly back towards it. In the neighbouring seat of Bristol, North-West, unemployment is already higher than it was 12 years ago.

The recession will hit every age group—but particularly young people, the subject of this debate. Young people have been the main victims of the recession so far. The Government's own statistics show that 40 per cent. of those currently unemployed are under 25, despite the fact that that age group represents only 14 per cent. of the labour force. In 1997 one third of the unemployed came from that age group. In the past 12 years, the employment prospects of young people have worsened.

When he became Prime Minister, Tony Blair talked of his ambition to build a "young Britain"; I think he even got someone else to write a book of that title for him. In fact, after 12 years of a Labour Government we have worsening unemployment prospects for young people, despite the billions that the Government have spent over that period.

Photo of John Hayes John Hayes Shadow Minister (Education)

The picture is even worse than the hon. Gentleman paints it, because we have not only that situation but a Government who are reconstructing the funding and management of skills, creating a byzantine structure that is a mixture of Jackson Pollock and Heath Robinson. Is it not time that there was an end to reorganisation and a start to greater clarity about the Government's intentions for young people, to tackle the problems that he describes?

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Before the hon. Gentleman responds, may I say to the House that although we started this debate with quite a lot of time to spare, that time is now rapidly running out and several Members are still seeking to catch my eye? I would be grateful if all those concerned would bear that in mind.

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

I think that the record will show that over the past four years the contributions by this Front-Bench spokesperson have usually been somewhat briefer than those of the mover of the motion, but I shall endeavour to speed up.

The hon. Member for South Holland and The Deepings may be tempting me down the path of the announcement on quangos made by his leader. As regards the Higher Education Funding Council, perhaps he is catching up with the policy announcement that we made six months ago. It would be much better to have one adult learning council bringing together the whole panoply of quangos that exist in this sector so that we have some strategic leadership. Every employer or employer representative group that I meet says that one of the things that they most lament about the Government's record is the labyrinthine system that they have constructed in the skills sector, which makes it incredibly difficult for employers to negotiate their way round it, and equally difficult for potential employees to find out which might be the most appropriate training route for them.

As the hon. Gentleman observed, the number of 16 to 24-year-olds not in education, employment or training has now hit 935,000—and the rise has largely been concentrated among the over-18s. He also mentioned social mobility. It is important to note that only a negligible proportion of NEETs are children of graduates. Only 1 per cent. of the children of professional parents become NEETs, but the proportion is 7 per cent., rising to 11 per cent., among the children of those with a routine occupation. After 12 years of a Labour Government, we still have a fairly immobile society.

Let me turn to graduate unemployment. This weekend, Bristol university had celebrations for the centenary of the granting of its charter. This week, graduation parties will be taking place in Bristol—and, I am sure, in universities all over the country. However, those celebrations over the champagne, cake and sandwiches, which many of us remember, will be tempered by the conversations taking place among those brand-new graduates. People will be asking each other, "What job are you going to?"—that is certainly what I remember from 20 years ago—but they will also be wondering about their employment prospects. This will probably be the most gloomy set of graduation parties ever, as people have to admit to each other that despite their achievement they still have no job to go to.

We should remember that this cohort of new graduates are from the top-up fees generation—the first people to leave the higher education funding regime with £9,000 of fee-related debt that they will have to pay off during their working career. What a total change from the prospects that they thought must have been opening up in front of them back in the autumn of 2006 when they commenced their studies.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

This is an opportunity for me to ask the hon. Gentleman, who has flip-flopped on this issue on several occasions, what is, today, the official position of the Liberal Democrats in relation to top-up fees.

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

I am entirely happy to provide the Minister with that clarification. The official position today is the same as it was yesterday, a year ago, and at the time of the 2005 general election. My party remains opposed to the tuition fees method of funding higher education; at the next general election I, like all my fellow candidates, will be standing on that platform. Just as at the last general election, our manifesto will be a fully costed document in which we set out how we would fund our commitments to students and graduates.

In 2007, 6 per cent. of graduates were still unemployed after six months; in 2008, that figure had risen to 8 per cent. We do not know what will be the relevant statistic for the current cohort of graduates, but everyone expects it to be significantly worse. As was widely reported over the weekend and in this morning's newspapers, the Association of Graduate Recruiters has said that graduate job prospects are down by 24.9 per cent. this year. That is affecting employers across the piece, whether they are blue-chip companies or professional firms.

Only last week I spoke to a colleague in chartered accountancy who said that the number of graduate entrants into that profession, which is an enormous employer of graduates from across many different disciplines, is down by a third in many firms. As we might expect, the numbers are down in banking and financial services. The numbers going into engineering are down by 40 per cent.; as we know, the construction downturn is affecting all our constituencies. I would not like to be a new architecture graduate at any of the graduation parties taking place around the country. People who invest a significant slice of their life in qualifying to be an architect—much longer than for many other degree programmes—are entering an uncertain future.

Overall unemployment is also predicted to increase. Most economists agree that at some point in 2010 unemployment is likely to reach 3 million again. That brings back memories for many of us in the Chamber. The Minister has mentioned his memories of the early 1990s. I am sure that some of his colleagues, like my hon. Friend Simon Hughes and myself, will also remember the misery of the 1980s. [ Interruption. ] Yes, perhaps even the 1970s. If this Government are still in office, Labour MPs should hang their heads in shame when we reach the statistic of 3 million people being unemployed. What a record for a Labour Government. Will they be going on marches for jobs and publishing pamphlets condemning the Government of the day, as happened in the 1980s? I somehow doubt it.

What has been the Government's response, particularly for young people? A couple of measures were announced in the Budget. First, there was the jobs or training guarantee. However, as my hon. Friend the Member for North Southwark and Bermondsey pointed out earlier, there are many uncertainties around that programme. In order to qualify for it, a person not only has to be under 25 but must have been unemployed for more than a year. Moreover, it is not intended to start until some time early next year. It is completely uncertain how many people will benefit from it and whether it will really make a difference to young people. As my hon. Friend said, someone who is currently in work or in an apprenticeship wants protection now, rather than having to wait for a year in unemployment before relief is afforded to them.

There was also the announcement of the future jobs fund, involving 150,000 jobs; at least a number was put on that proposal. It specified that 50,000 of those places should be in sectors such as social care—that is a worthwhile area, but one of the debates that we will have at the next general election is about the size of the state—and that another 50,000 should be in so-called growth sectors. The example given was hospitality. I do not know what world the Government live in, but I would have thought that hospitality is not usually a growth sector against the background of a recession: that is a triumph of hope over experience. It also seems to be a triumph of spin over fiscal reality. The Government are keen to announce large sums of money for initiatives when there is not much clarity as to when they will start or what they will deliver, but at the same time they are cutting existing budgets—those of the regional development agencies, for instance. The South West of England Regional Development Agency has had its budget for this year cut, which means that some of the programmes that it would have funded in the city of Bristol, such as the regeneration of Stokes Croft, have had to be chopped.

Young people leaving school or college who wish to enter higher education this year will face uncertainty as they await their A-level results. We know that the Government have cut the growth in the number of places, but why has that happened? We had a statement last week from the new Department for Business, Innovation and Skills about next year's student maintenance support settlement. I remembered last year's announcement, when the Government botched their figures. Their predictions for the number of people who would qualify for student support were completely wrong. That is why they are having to cut the planned growth in the number of places this September.

It is extraordinary to do that against a background of recession, because we know from all previous recessions that the typical response, especially of young people, is to try to shelter in education and training. It is also extraordinary when there is a bulge in the number of young people expecting to go to university. The number of 18 to 21-year-olds is about to peak, before it falls for the rest of the decade. What an extraordinary time to restrict the number of places in higher education.

The Million+ group, which represents most of the post-1992 universities, has rightly pointed out that clearing, which has been a facet of higher education for as long as I can remember, is unlikely to be a feature this year. That will damage many universities that have had a successful record of widening participation. I also fear the effect on the fair access proportions in our research-intensive universities if they have to turn away marginal applicants.

The Minister said that higher education places were an academically competitive process. Of course they are, but his response to the situation appeared to be—he can tell me if it is not—that someone who does not succeed this year can by all means come back next year. That will not give much relief to young people who get their A-level results this year and then find they do not have a place.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

Given that the hon. Gentleman has said that he would abolish tuition fees and that we should create a situation of unmanaged growth in additional student numbers, is he saying that the Liberal Democrat position is to cut the unit of resource in order to fund extra places? What I said was that there would be growth. There is growth this year of 18,000 places, and there will be growth, but the Government have to look carefully at managing it, while listening to universities.

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

The Minister has questions for me, and at the next general election we can by all means have those debates, but the sector has questions for him. In particular, will he agree that the cap that has been put in place this year could be lifted? If so, will the places be fully funded so that quality is maintained? At the very least, will he agree to be flexible with universities? This year, for the first time, they will face financial penalties if they depart from the caps and constraints that have been put on them.

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

Is the hon. Gentleman really telling the young people of Bristol that they have to wait until the next general election to know how the Liberal Democrats would fund extra places?

Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

No, and I think the record will show that that is not what I meant in response to the Minister's earlier intervention—but it is he who has got us into this mess. The Government's botch-up over the number of people who would qualify for student grants last year has forced the cut in the planned increase in places this year. That will affect people who started their A-levels or other qualifications two years ago and are now waiting for their results and hoping for a place. The Government have moved the goalposts.

To emerge from this recession, we will need a skilled work force at skilled technician, post-apprenticeship and degree level. We also need to protect those currently in apprenticeships, which is why we favour diverting growth in the Train to Gain budget to funding employers' off-the-job training costs. We also need a national bursary scheme to incentivise students to take subjects that are critical to this country's economic future. We need higher education itself to be more flexible to enable adults to study part-time, and we need the financial regime that those adults face to be on a fair basis and equal to the regime for those among their peer group who study on traditional, full-time degree programmes.

Of course, all that needs to be underpinned by independent advice and guidance, as the hon. Member for South Holland and The Deepings and I have mentioned so many times in debates such as this, so that people can be steered into the subjects that we will need for this country to prosper in future, particularly engineering and sciences. That is essential if we are to have not just a sustainable economy but a sustainable society, and have any chance of meeting our 2020 climate change targets.

The previous Labour Government are remembered in history, as they entered their final months, for the winter of discontent. This Labour Government, as they enter their final phase, will be remembered for a summer of despair for the young. With unemployment heading towards 3 million, we know that this Prime Minister and this Government have not abolished boom and bust. The Prime Minister has said—I heard him say it in the Chamber a short while ago—that he came into politics in the 1980s because of unemployment. We should therefore all be sad—and he and his Government should be particularly sad—that unemployment will now be part of his legacy.

Photo of Natascha Engel Natascha Engel Labour, North East Derbyshire 6:05 pm, 6th July 2009

It is a real pleasure to follow Stephen Williams, and to take part in the debate. I have been the chair of the all-party youth affairs group for about a year, I am currently the honorary president of the British Youth Council and I have been a trustee of the UK Youth Parliament. Youth issues, and at the moment especially the plight of young people during the recession, are therefore particularly close to my heart.

I wish to pick up on a number of things that hon. Members have said, but I first make the general point that when I meet young people, as I do quite frequently during the course of events here in Parliament, I find that one really important thing is to ensure that we give them a bit of hope. What I have heard in the debate has been depressing, because without a doubt young people fare far worse during a recession than anybody else. That has always been true, and it will be true in future.

However, we must not talk down the possibilities of what young people can do, especially those from more disadvantaged backgrounds. We need to give them hope and identify what they can do, not just to support them through the recession but to give them some idea about what they can do at the end of it. We can offer them possibilities during the recession that mean they are far better equipped to get much better work and opportunities at the end of it.

I wish to say a big thank you to YMCA, the Foyer Federation and especially the Institute for Public Policy Research, whose youth tracker report on young people and the recession, which I hope everybody here has read, has been absolutely invaluable in considering how we can better gear our policies to ensuring that young people are not only looked after and supported through the recession but better equipped at the end of it.

Professor Gregg of the University of Bristol said in the youth tracker report something that is worrying and that we must all bear in mind. He stated:

"People who experience long durations of unemployment in their youth still have sizeable wage penalties in their 40s".

We all talk about our personal experiences of recessions, but what happens to young people in the current recession will have an impact on their lives when they are in their 40s. When we look back at the policies and legislation that have been put in place in former recessions and see where people in their 40s are, we see the significance of ensuring that we look towards the future. It is in the next 20 or 30 years that the impact of the recession will become clear.

We have to take a long-term view. That is the role of Government, and it is why the Government have put forward many of their policies. I want to emphasise the positive before I lay down some markers about things that I would change during the recession. What we are doing will support young people and give them the hope to get through the recession.

We should use the recession as an opportunity to put right discrimination against young people, who have always been slightly discriminated against. If we consider unemployment in the past two decades, we see that when it was at a record low of 5 per cent. for the general population, the figure for young people aged between 18 and 24 was 10 per cent. That is a dramatic statistic, which shows how we as a society view young people.

I have a criticism to make about the national minimum wage. We should use the recession to examine differential minimum wage rates. If we are considering raising the school-leaving age to 18 and if we accept the need for some sort of apprenticeship minimum wage rate, there is no excuse for a developing rate. From October, 16 to 17-year-olds will be on an hourly minimum wage of £3.57; the rate for 18 to 21-year-olds will be £4.83, and the adult rate will be £5.80. For me, it is a straightforward matter of equality. If people are doing equal jobs, they deserve equal pay. We should use the recession to tackle that.

We should also examine the 16-hour rule. We should encourage young people, including older young people, to study, stay in education and get trained in the skills that they need to get out of the recession. As my hon. Friends know, the 16-hour rule means that people can stay at college for only 16 hours a week before being classed as studying full time. A student studying full time is said not to be available for work and cannot therefore claim benefits. We want to get the most disadvantaged to study, but they need the support and security of benefits to know that they can do that, and they are massively disadvantaged by the 16-hour rule. It means that either they study too slowly to get the qualifications that they need to make them employable or they start dropping out. If I could choose only two things to re-examine seriously, they would be the minimum wage and the 16-hour rule.

Photo of David Drew David Drew Labour, Stroud

Does my hon. Friend accept that many among the group that she mentioned suffer learning disabilities and mental health problems, and that we should encourage those young people in particular back to work through study? They are currently disadvantaged by the 16-hour rule.

Photo of Natascha Engel Natascha Engel Labour, North East Derbyshire

That is a good point. Young people from more disadvantaged backgrounds—for example, those from broken homes, those who have been homeless and are encouraged back into studying, those who have chaotic lives—benefit from the security and safe environment in which to learn that studying can provide. My hon. Friend mentioned people with learning difficulties and mental health problems. When security is taken away from vulnerable groups of people, their problems are exacerbated. If we encourage more young people into further education and apprenticeships that provide a secure environment, that can only be to the good.

The recession means that many more people will go to Jobcentre Plus and claim jobseeker's allowance. Hon. Members mentioned that, this summer, a group of school leavers will be searching for training opportunities and jobs. As school leavers, they will be less experienced and tend to have fewer qualifications, so they are far more likely to end up in jobcentres. We must therefore ensure that jobcentres are fully equipped and have staff who are fully trained to deal with young people. Not only being unemployed, but going into a jobcentre can be terrifying at that age.

Let me revert to the message of hope and to considering the motion and the amendment. It is silly to say that the September guarantee, whereby all 16 and 17-year-olds will be guaranteed an apprenticeship, or a college or training place, does not give hope. Encouraging people to stay in some sort of education—apprenticeships, training or schools—until they are 18 is a good thing. It is not a tick-box exercise, and I think that the recession will ensure that the target is reached naturally.

The future jobs fund is also a good idea that will give many young people hope. However, unless it has employers' full support, it will not work. Young people who have been out of work for 12 months will be guaranteed a subsidised place for six months, but I do not think that the amount of time is so important. It is important that employers take some responsibility and ensure that they mentor the young people in those workplaces so that they either stay there or move on to something else in which they are involved. It is important to ensure that they learn something and get something out of the experience.

We must take a more holistic approach to getting through the recession, give young people, especially all those who are now between 16 and 25, a message of hope, but appreciate that we are not talking about a sausage factory for getting children from school into work. Although work is fantastic, we must also recognise that recessions hit families hard, sometimes leading to marriage breakdown, arguments, children running away from home or simply leaving home without the support that they need. We must look at the bigger picture and ascertain how to help children and young people who are between 16 and 25 and ensure that they are okay when they leave school and attend jobcentres, start training or, hopefully, go into some sort of further education. We must consider how we make sure that we look after their mental and physical well-being, give them the maximum number of opportunities and the hope that is necessary to see them through.

Photo of David Davies David Davies Conservative, Monmouth 6:17 pm, 6th July 2009

We are lucky to have present so many Front Benchers, who have given so freely of their time and made such lengthy analyses of the problems that the recession has caused young people. My analysis will, of necessity, be much briefer. As I see it, we have a huge shortage of skills and jobs—we are losing approximately 2,500 jobs every day—and a large surplus of people coming into this country. Net migration is about 237,000—of course, gross migration is much higher. As some people come in, others decide to leave. However, of those who come in, some unfortunately go on the dole and are supported by the British taxpayer through different benefits, but others find jobs, some that British people could doubtless fill, as the Prime Minister originally suggested.

What are we doing wrong? In the short time that I was on the internet looking through university degrees this afternoon, I managed to discover the problem. Many degrees that we offer will simply not lead to the jobs to which people aspire—indeed, they will probably lead to no jobs. The work of 10 minutes revealed that the University of Plymouth offers a degree in surf studies. I do not have a degree, but I spent 20 years surfing, week in, week out in Wales, and I know that there are only about four jobs that one could get with a degree in surfing: surf instructor; working in a surf shop; surf board designer, which simply requires a practical frame of mind, and surfing professional—a handful of people manage that every year, and nobody checks whether they have a degree. That is not much use to anyone.

Thames Valley university offers, among the film and theatre studies that one would expect, a three-year science degree in culinary arts management. I asked myself, what is that? It is something to do with being a pastry chef. Under the section headed "Career progression", we learn that

"A graduate would expect to gain a position as a commis chef"—

I think that is some sort of trainee chef—

"progressing to chef de partie, sous chef and eventually executive chef".

So there we are: a three-year science degree and what can people hope for at the end? It is to become some sort of trainee chef.

My favourite example was from Metropolitan university, which is offering something called game studies. For a minute, I optimistically thought that it might be something to do with game theory, a respected branch of economics, but no. One clicks on the link to read that

"Videogames have emerged as a major new force," blah-de-blah, "contemporary culture," and so on, and that the course will

"allow you to study them academically," but with "theoretical" and "practical approaches." Apparently, the course

"covers the nationally recognised Game Study syllabus"— whatever that is—

"and is excellent career preparation."

Photo of David Davies David Davies Conservative, Monmouth

I would be delighted to give way to the right hon. Gentleman—does he want to apply for a job?

Photo of David Lammy David Lammy Minister of State (Department for Business, Innovation and Skills) (Higher Education and Intellectual Property)

I suspect that the hon. Gentleman has nothing against, for example, the music industry. Will he acknowledge that the games industry is now a bigger part of our creative economy than the music industry?

Photo of David Davies David Davies Conservative, Monmouth

I have nothing against the music industry or the games industry. I have nothing against PlayStations either; indeed, I used to have one. What I have a problem with is people writing a thesis on how to get to level 10 on "Grand Theft Auto". I do not think that that is a good use of three years or of the taxpayer's money, nor do I think that it will lead to a job. If the right hon. Gentleman wants to lecture me about economics, let me tell him that I see things in a fairly simple way— [ Laughter. ] Yes, I do not— [ Interruption. ]

Photo of David Davies David Davies Conservative, Monmouth

I do not have a degree, but I am quite happy with that fact. I study history as an interest and what I have learned is that since man started herding animals together, all societies have had four requirements: food, shelter, construction and an ability to make tools to make life better for the next generation. Those are the basic fundamentals of any economy, but let us look at what goes on in 21st-century cities. [ Interruption. ] The Under-Secretary, Mr. Wright, laughs, but let me tell him something.

Let us take food. We still need food, yet what have we done to our farms and our farmers? We have absolutely destroyed them. We are now dependent on imports, with more than 50 per cent. of our food coming from abroad. What about shelter? We cannot find anyone from within this country to take part in major construction projects such as the Olympics. We have imported workers from abroad because we do not have the necessary skills. What about warmth? That was what stone-age men needed—I see it as energy today. We still have enough oil in this country to supply our needs, but we have to bring in lots of specialist people from abroad to fill the jobs on North sea oil rigs. We are dependent on the middle east for our oil and on the Russians for our gas. We do not even have a nuclear industry any more—we are dependent on the French for that, having destroyed our own nuclear industry. Those are jobs that we could have created. When stone-age man was making tools out of bones and things—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I hope that in the time remaining the hon. Gentleman will concentrate his remarks on the motion.

Photo of David Davies David Davies Conservative, Monmouth

I will, Madam Deputy Speaker.

I have learnt that in 2007 the Germans were still running a €200 million trade surplus in exports. That is what we should be training up our young people to do, but we are not doing any of that, because, as the Minister said, we have decided to concentrate on the creative industries and financial services. Both of them—

Photo of David Davies David Davies Conservative, Monmouth

No, I will not give way. The right hon. Gentleman had well over half an hour earlier and took all sorts of interventions that turned into mini-speeches. He mentioned the creative industries— [ Interruption. ] Yes, we have chased after creative industries, but in a downturn we should be thinking about the four areas that I have mentioned, in which there will always be jobs for people. However, we have had to give out thousands of work visas—this is on the Government's figures—to people who know about things such as computer services, financial services and health and medical services. We are importing people from abroad because we do not have the necessary skills. We are shutting science departments in various universities, closing chemistry laboratories and stopping physics courses so that the right hon. Gentleman can push his idea of the creative industries for people.

It was the Prime Minister himself who talked about British jobs for British workers. There are still jobs out there, but they are not being filled by British people because they do not have the skills. We are pushing more than 50 per cent. of the population through university to do Mickey Mouse degrees—at great cost to the taxpayer and themselves, because they come out with all sorts of debt—yet we still cannot match the skills that are required to the skills that we produce. That is what is wrong. I look forward to somebody—anybody—following up on the Prime Minister's promise and creating British jobs for British workers, but it will not be the right hon. Gentleman.

Photo of Christopher Fraser Christopher Fraser Conservative, South West Norfolk 6:26 pm, 6th July 2009

Given the time constraints we are under, I shall try to restrict my comments to the debate in hand. However, following my hon. Friend David T.C. Davies, let me say that there are many subjects beyond the motion that need separate debates.

I am pleased to stand up for the young people of South-West Norfolk. I know that all hon. Members here will be concerned by the fact that almost 1 million 16 to 24-year-olds were not in education employment or training in the first quarter of this year. That is an issue that my hon. Friend Mr. Hayes mentioned from the Front Bench. It is also an ongoing problem that I hope the Minister took on board and that I hope the Minister responding to this debate will address. That figure is unacceptable and does our nation no good. We look to young people to help us out of this economic downturn, because their contribution to our economic success will be vital.

Last week, we heard from the Secretary of State for Children, Schools and Families about the Government's plans for our schools system. I hope that the Minister will accept that not all children are necessarily academic and that vocational training provision is equally important for young people. I hope that he will address that in his closing comments.

What is the Minister's response to the Local Government Association's suggestion that more power should be given to local councils to provide local training courses, which would be funded from a reduction in jobseeker's allowance claims? Unemployment has hit Norfolk hard, and the manufacturing sector in Thetford in particular. According to the most recent figures, the number of people on JSA has increased by almost 96 per cent. in one local authority area in my constituency and by more than 82 per cent. in another. Those are shocking figures, and many young people will inevitably be included in them, having fallen victim to the recession.

I am aware of cases where young people have been caught by a "last in, first out" policy, which without a doubt knocks their confidence when they happen to be in their first job. I have had many letters from young people who have lost their jobs and are desperate to retrain, but are prevented from taking up a full-time course because it will take between six and 18 months to get them on one. What advice can the Minister offer young people in South-West Norfolk who want to reskill but are unable to do so for a considerable period? Does he accept that the current economic climate gives rise to a genuine need to relax the rules on jobseekers' ability to apply for full-time training courses?

That is an issue that I have raised before in the House, as well as one on which Natascha Engel commented. The Minister confirmed that many FE colleges structure their courses to be compliant with the 16-hour rule that operates in respect of JSA, which the hon. Lady also mentioned, but what about those who want to enter full-time training? That is an important issue, and one that increasingly fills my postbag as a constituency Member, so I would genuinely like to hear the Government's response. The fact that so many young people are eager to retrain is, of course, extremely encouraging. However, does the Minister accept that it is incumbent on the Government to ensure that all those who wish to enter training are given the access that they need?

I would like to mention the specific challenges for those living in rural communities. Young people in South-West Norfolk have to travel longer distances to jobcentres and training courses. As a result, they face higher fuel costs. As I have said many times in this House, a car in my constituency is a necessity, not a luxury. For a young person on a course, that adds an extra financial burden that is not placed on those living in urban areas. What consideration is the Minister giving to young people living in rural areas who not only are struggling as a result of the recession, but are hampered by their geographical location? What advice can he offer them?

Since I was elected, I have always been keen to speak out in support of the role of apprenticeships in helping our economy to flourish. However, over the past year, there has been a fall of some 8 per cent. in the number of 16 to 18-year-olds taking up apprenticeships, while for 19 to 24-year-olds the figure has fallen by just over 2 per cent. Does the Minister agree that now is the time for more people to start apprenticeship schemes, not fewer? Like other colleagues, I have seen evidence in my constituency that many of those who are halfway through their apprenticeships are being made redundant as a result of the recession. What provision is available for those young people?

Does the Minister accept that more needs to be done to reduce the excessive red tape associated with certification and inspections, so that more companies will be encouraged to open up workplace apprenticeship schemes? Small businesses and enterprises often find it difficult to take on apprentices because of the high costs involved, despite the desire of those who run them to make a genuine effort to bring new young people into the business, train them up and help them to succeed, for the sake not only of the business but of the wider economy. Let us not forget that small business and enterprise was the backbone of our economic success in the 1980s and 1990s, and it should be the backbone of our success as we pull out of this recession.

Let us also remember that Governments do not create jobs—businesses do. It is the role of the Government, in my constituency as much as in any other, to create the environment in which business can thrive. We have heard many words today about what the Government might or could do. Can we now focus directly on empowering business people to do their job properly, so that the fiscal stimulus that was mentioned by the Minister earlier can be directed at people so that it affects the bottom line and so that they can make a contribution accordingly? What hope can the Minister offer a small business that wants to run an apprenticeship scheme but feels unable to do so financially?

I shall turn briefly to an issue that affects many of my colleagues in Norfolk as well as me. I make no apologies for raising the Learning and Skills Council's funding crisis and its effect on further education provision. I have raised the matter in the House before. I was dismayed by the recent announcement that only 13 out of the 144 frozen college building projects have been given the go-ahead. Furthermore, all 13 are in Labour-held constituencies, and none is in Norfolk. Will the Minister look at the problems at Easton college and City college, both of which serve my constituents? They have both been left in the lurch. Does he acknowledge that this fiasco has left thousands of young people wondering whether they will be able to access the high-quality training opportunities that they deserve?

In my constituency, a forum has been put together in support of the new Thetford college. The aim is to build an innovative education facility for 14 to 19-year-olds that will boost the local economy and provide hope for a town that has historically been associated with deprivation, social exclusion and unemployment. Does the Minister recognise that projects such as those, with strong roots in local communities across the country, must be supported and encouraged as much as possible, not just in cherry-picked constituencies but in areas where we have fought long and hard for the young people, and particularly in my area of South-West Norfolk? Young people in Norfolk and elsewhere want a bright future anchored in a good education, with excellent training opportunities and support when times are tough. What assurances can the Government give to the young people in my constituency who are afraid that their futures will be jeopardised by this recession?

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire 6:33 pm, 6th July 2009

As the last speaker from the Back Benches, I have just a few short minutes, so I think I will abandon my speech and concentrate on just one of the points that I was going to make.

I feel that I am standing here as much as a mother as an MP, because my daughter opened her university results today and we all found out what grade she had got. It was a great day for us. I have now been a university mother for six years, and my children are the first on either side of the family to go to university. We are therefore incredibly proud of them, and Jennifer is also incredibly proud of her result—[Hon. Members: "What did she get?"] I am not allowed to say.

I want to talk about the targets for getting our young people into university. To set that in context, I would like to tell the House what I have noticed during my six years as a university mum, not only in relation to the daughter who got her degree today but to the older one as well, and to the groups of their friends whom I have got to know.

The first thing that has surprised me is the number of children who drop out in their first year. The figures that I saw when I was on the Education and Skills Select Committee were quite staggering, particularly the number of young people who drop out as a result of mental health problems and depression. It has occurred to me that some of the people doing certain courses at universities such as Newcastle and Bournemouth should not be doing those courses in the first place. They were not their courses of choice; they were the courses that they were offered subject to their GCSE results at school. They were not passionate about or even interested in the subject; they had been offered the course while going through the clearance process. Those people were often the ones who dropped out after the first year.

Sadly, many of those young people were also getting depressed and unhappy at university because they were not doing an appropriate course. On top of that—leaving tuition fees aside—the loan that those students, and my girls, were getting was £1,000. Out of that, they were paying £300 a month for their hall of residence, £5 to use the washing machine, £3 for the dryer, and so on. The costs mounted up, and the £1,000 student loan did not go very far. It did not enable them to eat, for example, and if they came from a family that was unable to subsidise them, they would become more and more depressed.

Students would also become depressed because they could not find employment to subsidise them while at university. An example is a student who started the course with my daughter. He applied for a job as the supervisor of a hand car wash, as he had to work in order to stay at university. He could not manage on the £1,000 student loan. He was refused the job because everyone else working at the car wash was Polish and, as he could not speak Polish, he would have been unable to supervise them. The situation was similar in every bar, café and supermarket in that town.

That poor boy dropped out of university; he did not come back after the Christmas break. Without employment, he could not afford to stay on, but he still has his first term's student loan to pay off. Moreover, that was at a time when we were not facing a recession; it was in better times. As I said, my daughter graduated today, but she is facing a grim future. Although she will not find employment, the interest on her student loan and those of all her fellow graduates will be racking up while they try to find work. We have known for the past year that she would graduate and probably not find employment.

Along with many hon. Members, I have employed American interns. There is one aspect of the education system in America that I really like. The academic year is split into six months for studying and six months for working, if work can be found. The students can work and save up for their six months of studying. That increases the number of students who can gain access to university. It gets more bums on seats; it gets more children through.

I have commented on the 50 per cent. target; I think that it should be 100 per cent. Every child should be entitled to access to the type of education that they want, be it academic or an apprenticeship or whatever. I just wish that we had had access to similar educational opportunities when I was at school. The time has come to think out of the box when we look at our young people and our universities. During a recession, to say that we want to get 50 per cent. of our young people through universities, often studying inappropriate courses that will not equip them for employment even if they finish them, does them a disservice. Given what we are facing, the Government and the Opposition have a duty to take a radically different approach.

We are burdening young people—my daughter is just one of them—with student loans and they do not know how they are going to repay them. They do not know when they will get a job and begin to repay them. The interest on student loans is racking up—it started to be payable on my daughter's loan today—yet there are no prospects of jobs.

Will the Minister take this thought away? In other countries, where things are done differently, more people go through universities, and with less financial hardship. Perhaps we should be less dogmatic in our approach, and start to be slightly more adventurous and ambitious in how we regard our young people and the academic education that we offer them.

W

Is there perchance a video available for this speech?

Submitted by Withington Observer

Photo of David Evennett David Evennett Shadow Minister (Business, Innovation and Skills) 6:39 pm, 6th July 2009

We have had an important and interesting debate this afternoon, with many issues raised on very important matters, reflecting the current economic situation and the problems that our young people face. Our motion highlights our concerns about young people in the recession. It sets out the current problems and the failings of this dying and discredited Government, and proposes some positive measures to help alleviate this worrying situation. Regrettably, the Government do not seem to be listening to facts this afternoon, and they do not seem to have the degree of concern that they should have about the principal victims of the recession: our young people. I believe that this recession has been made worse by the Government's failures and failings.

We heard from the Minister for Higher Education and Intellectual Property a long diatribe, with the usual history and spin in equal measure, but he failed to raise his game to the occasion as we would have expected. On the other hand, my hon. Friend Mr. Hayes, in moving the motion, displayed his usual vigour, constructive argument, robustness, policies and logical argument— [Interruption.] No, the Minister must listen further: I am never biased; I am objective and rational.

My hon. Friend the Member for South Holland and The Deepings posed several questions to the Minister, who regrettably did not answer them and was rather partisan in his response. We were all disappointed by his flawed history lesson and his rewriting of history with artificial passion. He seemed to paint an idyllic picture, which is not borne out by the experience of people in London. The Minister is a London MP, and the suffering of young people in London as a result of the recession is among the worst. If everything has been so good over the past 10 years, as the Minister tried to tell us, why do we have the problems that we are debating today?

Before we go any further, let me correct the Minister. As usual, he did not paint the whole picture when he talked about apprenticeship statistics. The official figures show that despite his target of providing more apprenticeships for young people, the number of 16 to 18-year-olds starting an apprenticeship fell by 8 per cent. in the first three quarters of 2008-09. The Minister did not tell us that. The number of 19 to 24-year-olds starting an apprenticeship fell by 2 per cent. Both figures show a reduction in the number of apprenticeships.

Regrettably, too, the number of NEETs—the people not in employment, education or training—has increased from 671,000 or 13 per cent. in 2001 to 810,000 or 13.6 per cent. in 2008. On both the percentage and the figures, the Minister failed to come clean, as my hon. Friend the Member for South Holland and The Deepings highlighted. That is the problem with the current Government; no one believes what they are saying. The spin and the complacency that we have seen are the Minister's rather disappointing message today.

Across the country, people are losing their jobs and families are struggling. Official figures show that unemployment is hitting young people hardest. My hon. Friends and I are concerned about the future for our young people, as I am sure are the Minister and some of his hon. Friends, although not many of them are in their places. About 935,000 young people aged between 16 and 24 are not to be lightly dismissed if they are not in employment, education or training. I have already pointed out the increases.

When the Government came to office in 1997, the youth unemployment and NEET rates were much better than the OECD average. However, the UK's position has deteriorated and it is now far worse than the average in the OECD—worse than that of our competitors. This recession, together with the Government's cuts to sixth forms, apprenticeships and the crisis in further education college capital funding means that the problems faced by NEETs are set to get worse in the next few months. Research by the university of Sheffield and the Prince's Trust suggests that if unemployment reaches 3 million, 1.25 million or 40 per cent. of those will be under the age of 25. Let us not forget that that is a huge figure. Overall, as the Government admit and as can be seen in the figures, unemployment at 2.2 million is far too high—and, also on their admission, set to rise. Lives are blighted, talent is wasted and the human cost of unemployment is a very serious matter. [Interruption.] It is no good Ministers just barracking. These are facts that they do not like to hear, but we are going to tell them.

We have had some interesting and effective contributions, particularly from my hon. Friends, to this important debate. Stephen Williams, who speaks for the Liberal Democrats, was moderate and constructive in his approach. He highlighted the complexities of training routes and spoke about employment rates for graduates and the reduction in their job prospects. All those issues are a matter of real concern for all of us— [Interruption.] If the Minister would only listen and stop talking he might be able to work with us and see what can be done to improve the situation.

Natascha Engel spoke with real passion about the consequences of unemployment for young people. It was her belief that we need a long-term view. Of course a long-term view is important, but today we are talking about the issues that are affecting people now. Today is the most important thing. Of course we look in the long term, but we are concerned about those young people being hit by the recession now. The hon. Lady raised concerns about the unfairness of the minimum wage for young people and said that the 16-hour rule needed review. I will leave it to her Ministers to take those matters into account.

My hon. Friend David T.C. Davies was his usual robust self, highlighting aspects of higher education courses that he did not like and speaking about skills shortages, which are important.

My hon. Friend Christopher Fraser, who is assiduous in supporting and speaking up for his constituents, made a reasoned and effective speech. He commented on the plight of the unemployed in his area and the travel problems experienced by young people in attending their courses. That is very important in rural areas, particularly when unemployed people have to travel in order to go on courses.

My hon. Friend also highlighted one of the great tragedies of the present Administration: the funding crisis in FE colleges. As he pointed out and as I was going to point out myself, only 13 colleges have been given the funding that they requested—13 out of a huge number which in good faith made claims out of determination to improve their facilities so that young people, and not-so-young people, could be trained and retrained. The Government's response is shocking.

My hon. Friend Nadine Dorries made a short but very effective and powerful contribution, and I am sure that we will all want to pass on our congratulations to her daughter on the success that she heard about today. My hon. Friend spoke with real concern about students who drop out of courses and about the depression that students on inappropriate or ill-advised courses or those worried about finance—a matter of real concern for young people today—might experience. She also highlighted, as did the hon. Member for Bristol, West, that another result of the recession is fewer job opportunities for those coming out of college or university this year. That, too, is a matter of great concern.

As we heard from my hon. Friend the Member for South Holland and The Deepings, despite the Minister's attempt to gloss over it, the number of adult and community learning places has been cut dramatically in the past four years by 1.4 million—at the very time the country was heading towards recession. The Government have cut those places with the result that young people are not getting opportunities to train or to learn new skills.

We heard, too, that FE enrolments have plummeted, despite increases in the budget of the Learning and Skills Council. The LSC has effectively delivered less for more money. It is no wonder that the Government want to get rid of it and replace it with three quangos.

The time left for debate is very short, but I would like to deal with the crisis in higher education, particularly for those who want to go to university. The Minister said that everyone will get a place and that there will be no problem— [Interruption.] Yes, he did. He said that there would be no problems for anyone getting the qualifications. He glossed over the problem, as he does so well and so regularly. Well, I thought that it was lamentable Lammy[Hon. Members : "Oh!"]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The hon. Member may wish to withdraw that remark.

Photo of David Evennett David Evennett Shadow Minister (Business, Innovation and Skills)

Of course I do, Madam Deputy Speaker, but when one is being barracked from a sedentary position [Interruption.] Well, Conservative Members believe in reasoned debate.

The Government must start a new approach to ensure that young people have a better future. As our motion highlights, we have put forward proposals to try to alleviate the recession and its effect on young people. We look to the Government to take some of our suggestions on board. Today we have discussed, for instance, funds for adult and community learners, the Government's "equivalent or lower qualifications" cuts, and the reduced opportunities for those who return to work and for older people. The aim of our fund is to encourage further education enrolment and help people to acquire new skills.

The young people of our nation face a bleak situation because of the recession. We need a Government with vision, ideas, and proposals to alleviate the current crisis and build for the future. Our motion is a positive start. The Government are decaying, out of touch and incompetent. It is time for them to go, and for us to have a new Government who can do something for our young people.

Photo of Kevin Brennan Kevin Brennan Minister of State (Department for Children, Schools and Families) (also Department for Business, Innovation and Skills), Minister of State (Department for Business, Innovation and Skills) (Further Education, Skills, Apprenticeships and Consumer Affairs) (also Department for Children, Schools and Families) 6:50 pm, 6th July 2009

This has been an important debate, to which there have been excellent contributions from Members on both sides of the House. I greatly enjoyed the speech of Mr. Evennett, who, as ever, was passionate in putting his side of the argument. In emphasising the importance of now, he did not explain how cutting £5 billion now from Government spending and not matching the September guarantee now would help our young people through the recession, but no doubt he believed what he said.

I commend Stephen Williams for his speech. He pointed out—interestingly, I thought—that there were fewer unemployed people in his constituency now, at the height of the recession, than there had been in 1997. Notwithstanding the seriousness of the economic downturn and the issues that we have debated this evening, that is testament to the Government's efforts to create jobs.

Photo of Kevin Brennan Kevin Brennan Minister of State (Department for Children, Schools and Families) (also Department for Business, Innovation and Skills), Minister of State (Department for Business, Innovation and Skills) (Further Education, Skills, Apprenticeships and Consumer Affairs) (also Department for Children, Schools and Families)

Time is very short. As the hon. Gentleman knows, I am usually delighted to spar with him. It is, I think, testament to the strength of job creation over the past 10 years that even now, when a recession is upon us, the employment rate is higher in his constituency than it was back in 1997.

My hon. Friend Natascha Engel called on us to have some hope, and I think that she was right to speak of hope for young people. One of the things that has emerged from the Government's 50 per cent. target is that more than 50 per cent. of young people from all socio-economic backgrounds now say that they want to go to university. There has been a big change in recent years, and it contrasts with some of the archaic attitudes taken by some, although not all, Opposition Members. In January 2006, when the present Mayor of London was shadow Minister for higher education, he said:

"I wouldn't dream of having a numerical target. It's crazy to chivvy people into university when they are not suited to it."

That typifies the attitude that is sometimes displayed by the Conservative party.

David T.C. Davies—whom I like immensely; we are colleagues from Wales—made what I would describe as a proper Tory contribution to the debate. He told us what he thought university and education should be all about, but rather down-played the importance of the creative sector of the economy. That is not the only part of the economy, of course, but the hon. Gentleman's speech showed that creativeness and entertainment are an important part of our national life, even if his comedy was sometimes inadvertent.

Christopher Fraser made a serious point when he spoke of the need for local authorities to take more responsibility for 16 to 18-year-olds. That is exactly what the Government are doing through some of their further education policies. I agree that we should try to cut red tape for small businesses when it comes to apprenticeships, but I do not think that cutting Train to Gain is a very good idea if businesses are to be helped to improve the skills and aptitude of their work force. The hon. Member for Bexleyheath and Crayford mentioned that. I hope that he will ask his Front-Bench colleagues to revisit that policy, because I do not think it would be wise to take £1 billion from Train to Gain at this time.

The hon. Gentleman mentioned the Learning and Skills Council. I have acknowledged in the House the mistakes made by the LSC in the capital programme, but I can tell him that there is a capital programme. There has been record investment in recent years, the LSC has announced a further half a billion pounds of investment, and the Government have a forward programme of capital investment in further education, which his party has not guaranteed to match. I urge him to talk to his Front-Bench colleagues about that.

Photo of Christopher Fraser Christopher Fraser Conservative, South West Norfolk

Will the Minister give me a guarantee that he will meet the consortium from Norfolk to discuss the issue at the earliest possible opportunity before the recess?

Photo of Kevin Brennan Kevin Brennan Minister of State (Department for Children, Schools and Families) (also Department for Business, Innovation and Skills), Minister of State (Department for Business, Innovation and Skills) (Further Education, Skills, Apprenticeships and Consumer Affairs) (also Department for Children, Schools and Families)

I shall be happy to meet the hon. Gentleman and a representative from his constituency, although as I have inherited a large backlog of meetings from my predecessor, it may not be possible before the recess.

I, too, offer my sincere congratulations to Nadine Dorries and to her daughter on her success in obtaining her degree. The hon. Lady expressed the view that a number of people should not be taking up university places, because of the drop-out rate. Her party's motion calls for us to provide more university places this autumn although we have already achieved a record level, but I accept the sincerity and seriousness of her contribution. What she said about the American system of credits was important, and I know that my right hon. Friend the Minister for Higher Education and Intellectual Property is dealing with the issue.

A number of issues raised by both Front Benchers and Back Benchers deserve further discussion, not least that of apprenticeships. Despite the impression given by the Opposition Front-Bench team, the Government have rescued apprenticeships from oblivion. In 1997, the number of apprenticeships was dwindling to next to nothing and only 23 per cent. of that small number were completed, but we have trebled the figure. In January the Prime Minister announced a further £140 million package providing 35,000 additional places this year, which will allow us to deliver more than 250,000 apprenticeship starts. As I said, in 1997 the equivalent number of apprenticeships was 75,000, with fewer than a quarter being completed. I do not think that we are about to take a lesson on that from the Opposition. Mr. Hayes mentioned level 3. In fact, the level 3 proportion of starts for 16 to 18-year-olds is rising, and the overall number has risen this year as a proportion of the number of apprenticeships being taken.

The subject of NEETs was also raised. We should bear in mind that people are not always in that position through no choice of their own. Some young people on gap years tend to be included in the count, as do young carers, people with disabilities, and people who volunteer. The fact is, however, that almost 80 per cent. of 16 to 18-year-olds were in education or training at the end of 2008, the highest ever rate. Six million are now working or in full-time education—the figure was 5.2 million in 1997—and the proportion of 16-year-olds not in education, employment or training is 5.2 per cent., the lowest rate for more than a decade. Obviously, because of the recession, the picture is serious. However, it is not entirely negative. As a result of the Government's commitment with the September offer and their commitment to apprenticeships, the number of 16 to17-year-old NEETs will fall, and more people will stay in education.

Time is short. Let me end by saying that there was a time when it was said that unemployment was a price worth paying, and that there was no such thing as society. That is no longer the case. This Government are committed to helping young people and helping people through the recession, and we will continue to do that.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

The House divided: Ayes 190, Noes 287.

Division number 181 Opposition Day — [15th Allotted Day] — Young People in the Recession

Aye: 190 MPs

No: 287 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House recognises this Government's commitment to not repeating the mistakes of past recessions, and to ensuring young people are not trapped in long-term unemployment; notes since 1997 there are 300,000 extra students in higher education and public funding has increased by over 25 per cent. in real terms; praises this Government's commitment to helping graduates through the downturn, including an ambition for 5,000 extra internships this autumn; notes investment in apprenticeships is over £1 billion this year and that in 1997 there were only 65,000 starts compared to 225,000 in 2007-08; further notes the success of Train to Gain in supporting over 1.2 million course starts; further notes the September Guarantee offering all 16 to 17 year olds an apprenticeship, school, college or training place; and commends this year's Budget for investing £1 billion in the Future Jobs Fund to guarantee a job, training or work experience for every young person unemployed for 12 months, part of a £5 billion investment in tackling unemployment.