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My Lords, I declare an interest as an honorary Fellow of the City and Guilds of London Institute with a long interest in the subject of apprenticeships that is before us today. With announcements on apprenticeships this week by the Prime Minister and recently by the Leader of the Opposition, apprenticeship is, at least for a brief moment, centre stage. It might even become a sexy political subject; it is well over time that it does so.
I have been involved during my whole career in initiative after initiative. I joined the TUC in 1970 to service the trade union members of industrial training boards and I have watched and been involved with many policy initiatives since to try to improve the position of young people leaving school with few formal educational qualifications and no real future in the academic world. We simply cannot say over that period—I share the sense of failure—that we have been successful. In 1970, 44% of boys leaving school at the minimum age went into apprenticeships. At that time only about 5% of girls went into apprenticeships.
At that time we relied, to some extent, on the levy grant mechanisms of the training boards, with the principle that if an employer trained, he got the money back that he had paid, and some more. If he did not train, he had to contribute to the costs of those who did. That was a Conservative measure, I might add—the Industrial Training Act 1964—but it did not survive. In the 1970s most of the ITBs faded away. Construction, as we have just heard, still survives and there are some sector skills councils trying to carry on the sectoral approach to skills.
The challenge was taken up by the Manpower Services Commission, based on the Swedish Labour Market Board—again, the Conservative Party implemented this idea. But at the same time as the commission was getting going, apprenticeships collapsed. Why that happened is worth a study; my own view is that they collapsed because employers decided that they were too expensive—that four years’ apprenticeship was unrealistic. They were aided by the way in which youth culture developed in the 1960s and the 1970s, with young people thinking, “Why am I having four years of relatively low pay when I could get a semi-skilled or even unskilled job that pays much better? I’d like the money now rather than wait for it”. After that, in the early 1980s, many companies that had been exemplary trainers disappeared or became a lot smaller. Only a few sustained apprenticeships.
Despite many initiatives since and despite recent improvements under this Government and the last one, we still compare poorly on apprenticeship recruitment levels with other comparable advanced countries. Only 10% of UK employers currently take on apprentices, compared to three to four times that in Germany, Austria, Sweden and Australia. The most recent growth in the UK has been among older apprentices—at level 2 rather than the level 3 that is the norm in other countries. They tend to be in service sector occupations, where training has tended to be shorter and less stretching than it would be in manufacturing. Even so, only 5% of 16 to 18 year-olds are on apprenticeship programmes at present.
The institutional framework has something to do with our failure. In the past 30 years, there have been 61 Secretaries of State responsible for skills policy. Each has had their own agenda; each has wanted to make their mark on national life. Between them, they have produced 13 major Acts of Parliament and the policy area has been flipped, and sometimes flopped, between different government departments—and sometimes shared across multiple departments over the same period. There has been a succession of major reviews in this area by very good people, including the Dearing, Beaumont, Cassels, Tomlinson, Leitch, Wolf and now the Richard review.
Qualifications have been subject to bewildering and frequent change, with NVQs, GNVQs, AVCEs, applied GCSEs, diplomas, and now the current range of qualifications that is emerging. If you are still with me after those acronyms—and this is a wonderful area for acronyms, unintelligible to anybody but the most dedicated, never mind young people, their parents, employers and schools—you will probably agree with the House of Lords Economic Affairs Committee, which reported that,
“the system has suffered poor leadership and a string of initiatives that have not been implemented”,
properly. That is putting it politely.
All this tinkering, well exposed in a recent City & Guilds publication, Sense and Instability, has caused confusion and conflict. The battle rages still between the concepts of training young people to work in specific jobs and ensuring that training is broad enough so that occupational choices are not unduly limited.
This should be an area in which it is possible to build a longer term national programme. That is what they have managed to do in those other northern European countries such as Germany and Austria, where social partnership agreements are the basis of respected and prestigious training. I was very struck once, on a visit to an engineering and technical school in Vienna, to see the 18 year-olds being taught in English. These were people who left school at the minimum age. Similarly, in a Dutch vocational college for catering, hospitality and so on, the requirement at the end of the course was to pass English at native level. That was an eye-opener to me, when I compared it to many places that I had visited in the UK.
There are initiatives. Labour is committed to boosting the number of apprenticeships to match the numbers going to university by 2025, using the Civil Service to start a fast-track scheme to hire non-graduates, forcing public sector contractors to recruit apprentices under new procurement regulations and giving employers more control over training funds. The Prime Minister this week committed to delivering 3 million more apprenticeships by the end of the next Parliament, by cutting unemployment benefits for 18 to 21 year-olds and introducing a youth allowance limited to six months, after which people will have to do an apprenticeship and a traineeship or community work. Housing benefit will be stopped for people of that age, the money saved going towards apprenticeships.
The latest review—the Richard review—focused on improving the quality of apprenticeships and the concept of industry being given greater responsibility for frameworks and standards, with a new emphasis on level 3 apprenticeships, higher expectations in English and maths, although not foreign languages, and grading as a key element of the level that people can attain. In a sense there is plenty going on, and the subject is receiving more political attention than it has done for some time. Additionally, the Government are consulting on channelling funding to employers rather than providers, although that has its own controversies.
Apprenticeship is an area in which trade unions play an important role. As the OECD noted recently, in countries with a long tradition of apprenticeship training, unions are a key player alongside employers and the institutional actors. In the UK, the TUC unionlearn programme continues to support high-quality apprenticeships that pay a decent wage, encourage equality and diversity in the recruitment process and aim to drive up employer demand and promote that in day to day work. The TUC broadly supports the Richard proposals.
We do have to change. Another OECD report made the following statement and, although I have not had a chance to check whether it is true, I put it before the House today. The OECD said:
“England is the only country in the developed world where the generation approaching retirement is more literate and numerate than the youngest adults”.
Skills shortages still exist in many areas where there is high youth unemployment. This mismatch and dysfunction is a feature that many people have tried to tackle and many people have not succeeded in remedying. There is a need for a wake-up, to which I hope that this debate will contribute. This is a plea to all parties to make a big effort to build up a stable national scheme for apprenticeships involving all the different stakeholders. It is not easy—a lot of good people have tried—but it is necessary to try again. We have had many useful initiatives, but few overall convincing plans. We have good apprenticeship schemes and some excellent companies, but not enough. I also like the university technical colleges. I went to a technical school myself, and a bit of the old-time religion might be useful in this area.
It is worth pausing a moment to look at what some other countries are doing. Germany, worried about the attraction of the academic stream to better-off young people, is now trying to make apprenticeships glamorous. For example, there is a programme to recruit apprentices internationally, offering £700 a month net, with free language lessons, relocation costs and paid visits home. That could threaten our fragile system, too, if young people wake up to this new, perhaps more glamorous alternative to traditional apprenticeships and higher education.
I have one final point. There continues to be much self-congratulation in Britain about our so-called flexible labour market, but flexibility too often means that anything goes in the world of work; it often means cheap and low-skilled work by low-productivity workers. The flexible labour market can undermine good training schemes. Let us remember what the Conservative Government of the 1960s tried to tackle—those employers that did not pay for training but poached people from those employers that did pay. We still have that problem, filled at the moment by a massive state subsidy to everybody to keep the numbers going in an upward trajectory.
The professions do not have a flexible labour market. They have regulated entry and training; you cannot just call yourself a doctor or a lawyer. Why is it so different for car mechanics or skilled catering workers? This is a manifestation of the “two nations” again. You should not be able to practise as a skilled worker in a crucial job without proper qualifications. Obviously, you cannot do this overnight—you would need a long transition period—but that should be the direction of travel. That should be a central feature of the next phase of the development of apprenticeships for young people in the UK. Employers who do not train should pay towards the costs of those who do. Noble Lords should remember that that was a Conservative Party principle of the 1960s.
We should aim to have a more settled institutional framework—not treating training as a Whitehall version of “pass the parcel” between departments, some of whom do not really want it—at some stage in the future. A new Department of Employment would be my proposal to deal with this issue and some other aspects of the labour market, too. In these ways, with clear principles and less jargon and acronyms, we can develop an apprenticeship system of which to be proud. It should be one that widely encompasses girls as well as boys and that reaches out to minority communities; one that is a genuinely attractive alternative to the higher education route; and one that raises the nation’s woeful productivity rates, which cause so much concern to so many of us. It should also give young people—regardless of race, ethnic origin or sex—a decent start in an uncertain world of work, and narrow the skills gaps with our North Sea neighbours. We can do better; we must do better.