The Economy and Work

Part of Debate on the Address – in the House of Commons at 3:13 pm on 26th May 2016.

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Photo of Stephen Twigg Stephen Twigg Chair, International Development Committee 3:13 pm, 26th May 2016

It is a pleasure to follow Chris White who made a thoughtful speech. I concur with him on the importance of an industrial strategy.

The Chancellor spoke today about the Government’s plans for devolution. I want to focus on that and, in particular, on the importance of devolution for the economy and jobs in the Liverpool city region. The number of young people in the Liverpool city region who are not in education, employment or training is significantly above the national average. Among 16 to 18-year-olds, the national figure is disturbing at 4.7%, but the Liverpool figure is 6.3%—one in 16 of those young people—which is far too high and a key challenge.

The agreement between the combined authorities and the Government does several things. It devolves the adult skills budget; it moves the responsibility to work on employment support for harder-to-help claimants, so that the city region will work with the DWP; it devolves the apprenticeship grant for employers; and it institutes an area-based review of post-16 education and training. There is huge potential to provide more quality and employment apprenticeship opportunities, and I hope that the combined authority and, next year, the newly elected Mayor will work with the Government both to use these powers and to explore what further devolution is needed.

The challenge of youth unemployment is enormous. I welcome the fact that it has fallen in recent years, although I share concerns about the quality of some of the jobs that have been created, particularly for the large number of young people on zero-hours contracts. Even with that fall in youth unemployment, our rate is double that of Germany. Part of the reason for this is the quality of the technical and vocational education that we provide in contrast to Germany’s.

I welcome the fact that we will have an area-based review in Liverpool, and I recognise that the failure fully to address the issue of vocational education is a long-standing failure by Governments of both parties. However, I seek assurances from Ministers that the Liverpool city region will have the powers it needs to reshape and restructure local skills to meet the demands of a changing economy. I welcome the powers that are being devolved, but I would like us to go further. It is not sufficient for the city region to lead on skills at 19-plus; I want it to lead on skills at 16-plus and, in fact, I want it to lead on skills at 14-plus and to address the issue of 14-to-19 education.

Last week, I urged the Education Secretary to look at the potential for the devolution of powers held by her Department. There is a very strong case for the powers of the regional schools commissioner to be devolved. Liverpool city region could then take the lead in the planning and commissioning of school and other education places. It would be an opportunity for local communities, employers, young people and others to shape the education and skills programmes that we need.

Devolution is not just about power, but about funding. Liverpool city region has been hit hard by cuts in central Government funding since 2010. I support and welcome devolution, but this must not be an exercise in devolving the blame for cuts. I urge the Government to look again at the scale of the cuts taking place in cities such as Liverpool. The Chancellor spoke about localisation and I recognise its strong advantages, which my hon. Friend Mr Reed set out so eloquently, but for the poorest parts of the country, such as the city of Liverpool, there is a big downside. We stand to lose substantial resources, and I ask the Government to think very carefully about how they implement this change. If we get it right, devolution can make a real and lasting difference, creating the properly paid, high-quality jobs for the future that Liverpool city region needs.