Schedule 1

Deregulation Bill – in a Public Bill Committee on 4 March 2014.

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Approved English apprenticeships

Amendment proposed (this day): 7, in schedule 1, page 46, line 15, at end insert—

‘(c) be no lower than National Vocational Qualification Level 3 by 2020.’.—(Toby Perkins.)

Question again proposed, That the amendment be made.

Photo of John Cryer John Cryer Labour, Leyton and Wanstead

It is a pleasure to serve under your chairmanship, Mr Chope. When we adjourned, I had just finished a peroration about the conflict between belief in a pure free market and belief in some degree of interventionism, which is what we are talking about in this part of the Bill.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

My hon. Friend has reminded me of the intervention that I was about to make when we were cut off in our prime. Richard Hamer of BAE Systems summarised precisely the point my hon. Friend is making when he said that there needed to be “some control” of the regulation of the quality of apprenticeships,

“or else you could have a bit of anarchy with people doing their own things and quality not being as it should be.”––[Official Report, Deregulation Public Bill Committee, 25 February 2014; c. 29, Q67.]

That is what industry is saying, and it is precisely the point that my hon. Friend is making.

Photo of John Cryer John Cryer Labour, Leyton and Wanstead

I am grateful to my hon. Friend for that contribution. This goes to the heart of the debate that has been happening in this country since at least the 18th century. Ironically, it was the Tory party that tended to believe in intervention, rather than in the sanctity of markets. The party that became the Liberals—the Whigs, as they were then called—believed in the sanctity of markets. That clash of ideas has echoed through the centuries. It can be summed up by Hayek’s belief that once we intervene in a market and touch market forces, all is lost. The objection of the Opposition—as I said, it is probably shared by some Government Members—is that markets are not necessarily organic. They do not simply erupt naturally in society; they are made by people and I have always believed that they can be changed, directed and intervened in by men and women for the greater good.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Just to reinforce the point that my hon. Friend is making, it was one of the great tragedies of the 19th century that the British Government refused to intervene in the Irish potato famine—as a result of which hundreds of thousands of  people died and 1 million or more were forced to emigrate—because they would have been interrupting market forces. My hon. Friend is making a good point.

Photo of John Cryer John Cryer Labour, Leyton and Wanstead

That is a good example. History is littered with examples both of free markets being successful and of intervention being necessary. It is the 100th anniversary of the start of the first world war this year. The Asquith Government, who had many good qualities and many good politicians and Ministers among their ranks, believed in the completely untrammelled workings of the market, so very little planning went into 1914 or even into 1915. As a result, Britain experienced the 1915 shell crisis. If the Germans had attacked during that crisis, the result of the war would probably have been very different.

When the Factory Acts were passed, the argument was made that if people were no longer allowed to employ children, the British economy would go into a tailspin and would never be the same again. Yesterday, my hon. Friend the Member for Bolsover (Mr Skinner) happened to say that if it was not for the Mines and Quarries Acts, he would probably have been killed in the mines. Of course, some on the Government side might think that that would not have been entirely a bad thing.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

Order. I hope that the hon. Gentleman is not going to test my patience so early on in my chairing of the Committee. We are talking about quite a narrow amendment that would insert the words:

“be no lower than National Vocational Qualification Level 3 by 2020.”

That is essentially a prospective amendment, which relates to national vocational qualifications level 3. I hope that the hon. Gentleman will limit his remarks to the content of the amendment.

Photo of John Cryer John Cryer Labour, Leyton and Wanstead

Yes, I will, Mr Chope. I tested Mr Hood’s patience this morning, so I was just being consistent. I will return to the point in hand. We are talking about the Government regulating and setting standards. That means that the standards applied to apprenticeships are suitably, though not ridiculously, high. That will ensure that we pull up the minimum standards. There are many decent employers who will provide good apprenticeships and good grounding for the people who work for them. However, there are some employers who need to be pointed in the right direction. The amendment is directed at those employers.

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

It is a pleasure to serve under your chairmanship this afternoon, Mr Chope. The focus of much of the debate on the amendment has rightly been on quality, which we discussed in relation to clause 3 and are discussing again now. That is welcome because it gives me the opportunity to underline a point.

The hon. Member for Chesterfield suggested that the only view the Government had on quality was that employers would take responsibility for it. That is clearly not what the Government argue. I am sure he welcomes the fact that we have a large number of very good organisations involved in the trailblazers—he quoted BAE and others—who will want to ensure good quality. They have underlined, and the Government  support the idea, that English and maths should be at the core of apprenticeships, and will form the base of skills and knowledge that can be transferred to future employment. The Secretary of State has a role in signing off the quality standards at the end of the process. We certainly want to ensure that quality remains at the heart of apprenticeships, and their success depends on that.

Other hon. Members highlighted other aspects, and I will touch on those that are relevant to amendment 7. My hon. Friend the Member for Birmingham, Yardley rightly pointed out that the consequence of the Opposition amendment could be that up to 500,000 people with level 2 apprenticeships would not be able to call themselves apprentices. The hon. Member for Derby North, who is not now in his place, referred to training schemes that lasted two months, after which an apprenticeship was granted. I draw his attention to the debate and ask him to come forward with the example that he quoted. I understand that now to qualify as an apprentice requires a minimum of a year’s training. He may have been thinking back to the time of the previous Government, when the quality of apprenticeships and the associated time required to be spent on training were not as great as now.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

Does the Minister share my concern that that will have not only an effect in future but a retrospective effect because it will throw doubt on intermediate apprenticeships even now?

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

I agree with my hon. Friend. That is exactly the impact that it will have. My hon. Friend quoted the number of people on level 2—500,000. I think that the number on level 3 is around 370,000. What we should have heard from the Opposition is how we get from that position to a position in 2020 when there will no longer be any level 2 apprenticeships. That would require a complete sea change in the numbers. It would clearly be an extremely complex process to get from here to there, and I did not hear how that was to happen.

The hon. Member for Derby North is now back in his place. Before he arrived, I asked if he could provide details of the two-month apprenticeship he referred to. I understand that it is not possible now to secure an apprenticeship without at least a year’s study. I would be interested to see his example. I think that his speech must have come from the Class War website, if there is such a thing. He is as obsessed with Margaret Thatcher as I expect some Government Members may be. To suggest that one Prime Minister is the root cause of every problem that the UK faces is excessive; he needs to refresh his arguments a little.

We also had a contribution from the hon. Member for Luton North, who underlined the importance of English and maths. They are fundamental. I said that once, and I am happy to restate that. We then had a number of Members saying how many A-levels they had achieved in maths. I want to put it on the record that, having achieved the equivalent of A-level maths, I am—perhaps under some duress—reacquainting myself with AS-level maths to be able to assist with homework. I confirm that, 30 years after taking such exams, that is proving to be a bit of a challenge.

We had a contribution from the hon. Member for Leyton and Wanstead, who said that there was clearly a conflict. There will always be an appropriate balance to strike between the free market and regulation, and I do not think that any Government Members would say that the free market should always let rip and regulation never has a role to play. Regulation clearly has a role to play.

Photo of Oliver Heald Oliver Heald The Solicitor-General

I do not know whether my right hon. Friend recalls that the Mines and Quarries Act 1954 was introduced by a Conservative Government.

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

I would love to claim that I did recall that, but that would be unusual because it came in before I was born.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The Solicitor-General is right that the Conservative Government brought in that Act in 1954, but at that time there was a social-democratic consensus. Would it not be wise to go back to that consensus, rather than this ideological battle between the free-marketeers and the socialists?

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

I thank the hon. Gentleman for his intervention, but I am happy to hide behind the Chair, who would not want me to stray into a philosophical debate of that nature. I return to the point raised by the hon. Member for Chesterfield, which was about small businesses. Quite rightly, we have heard a lot about the engagement of large employers such as BAE, Airbus and so on, but we need to ensure that we also engage small businesses. While companies such as BAE, National Grid and so on hire hundreds of apprentices, we also need to see tens of thousands of small businesses hiring one apprentice, because that is where we can make further substantial gains in apprentice numbers. I want to give him some information on what we are doing in that respect.

As part of the trailblazers pilot programme, we have identified the need to engage with SMEs. We are working on how to do that by evaluating their involvement with the schemes, making apprenticeships more relevant to them and engaging them. The hon. Gentleman will be aware of the Holt review and a number of proposals came out of that such as the development of the National Apprenticeship Service website, which provides specific guidance for SMEs on taking on an apprentice and a web tool that enables employers to identify more easily the training provider that best meets their and their apprentices’ needs. I refer my constituents to those services, whether they are people interesting in undertaking apprenticeships or employers interested in offering them. Funding rules have also been introduced that require providers to notify employers of the level of Government contribution to the funding of their apprenticeships training, which is intended to encourage employers to become more demanding of their providers and work is ongoing to develop a mentoring network to help SMEs that have recently taken on their first apprentices. We are seeking to engage small businesses as well as large businesses.

The amendment would ensure there were no approved English apprenticeships at NVQ level 2 by 2020. The Government have been quite clear that apprenticeships should be skilled jobs that require sustained and substantial  training to reach competence. That is set out in the Government’s response to the Richard review of apprenticeships and in the published criteria for the standards for the trailblazers pilot programmes.

Mr Richard recommended that some level 2 apprenticeships should continue to have a valuable role to play. He also said that a level 2 qualification is acceptable if it reflects a real job that requires a substantial level of training, but not if it is solely a stepping stone to a level 3. We are in agreement that Doug Richard made a thorough and detailed investigation of apprenticeships. That is what he recommended and he did not call for the abolition of all level 2 apprenticeships.

We have taken steps to encourage more high level apprenticeships, for example, by supporting the development of apprenticeship frameworks up to qualification level 7, or the equivalent of a master’s level. I am pleased that higher apprenticeships have seen the greatest growth in recent years with numbers more than doubling between the academic year 2011-12 and 2012-13.

The Bill will allow employers to make proposals for apprenticeships. There are no restrictions on the level of the apprenticeship. I hope hon. Members will agree that employers are best placed to decide the appropriate level for an apprenticeship. This is a central element of schedule 1, namely for employers to have more say in the content of apprenticeship standards. I urge the hon. Member for Chesterfield to withdraw his amendment.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills) 2:15, 4 March 2014

This has been an excellent debate. We have heard how important the commitment to quality is from both sides of the Committee. The question is how we make that commitment real. As the Minister was talking about the difference between the two sides, I was reminded how seamlessly the two coalition parties appear to be all the same thing. I will be reminding the electorate of Chesterfield of that with some enthusiasm over the next 14 months.

I will take a couple of points raised by the Minister. First, he said that 500,000 people who are doing level 2 apprenticeships would not be classed as having an apprenticeship. That is not true. The measure is not about retrospectively taking an apprenticeship off someone who has already done one. It is about saying that from 2020, all we want to do is try to catch up with our northern European neighbours who say that a level 3 qualification is the point at which it becomes an apprenticeship.

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

Does the hon. Gentleman agree that the logic of his position is that he is saying to all people who have level 2 now or might achieve it in the near future that, in fact, their qualification does not really count as an apprenticeship because according to his party apprenticeships only start at level 3?

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

That is an interesting point. The hon. Member for Birmingham, Yardley asked a moment ago if the amendment would throw retrospective doubt on the quality of the apprenticeship. He said that literally moments after the Minister himself had said, “Oh well, of course, in Labour days, apprenticeships were not  worth a lot, they were done in a few weeks, but now we have toughened them up.” So he was doing precisely the same thing himself; looking back at how apprenticeships were in the past and dismissing them. We are not saying that level 2 qualifications have no value, or that people who have done them should in any way be diminished. What we are saying is, “Let’s do as our northern European competitors and some of those countries that we would recognise as being slightly more successful than us in retaining their industrial base have done. They seem to have the commitment to skill hardwired into their economy. Let’s make the apprenticeship the gold standard”. Let us also recognise that there is a role for level 2 qualifications. We would not abolish all level 2 qualifications, but we would recognise that they are different to an apprenticeship. That is what the amendment is about.

The amendment is one that people should support, because we are all committed to quality. It gives plenty of time for us to look at the alternative paths that people might take—we have until 2020. However, it is drawing a line in the sand where Britain says, “We want to be as good as the rest. We want to win a race to the top. We want the quality of our investment in young people to be as good as that of our foreign competitors.” As a result, we say that by 2020, level 3 qualifications should be classed as apprenticeships and we recognise that level 2 qualifications are not that gold standard. That is what the amendment seeks to do and I strongly commend it to the Committee.

Question put, That the amendment be made:—

The Committee divided: Ayes 8, Noes 10.

Division number 5 Decision Time — Schedule 1

Aye: 8 MPs

No: 10 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly negatived.

Question proposed, That the schedule be the First schedule to the Bill.

Photo of Tom Brake Tom Brake The Deputy Leader of the House of Commons

I thought I should say a little about schedule 1 because it explains a lot of what the Government are doing in terms of how we will implement this change, which will give employers a much greater degree of responsibility for apprenticeships than currently. Schedule 1 enables the Government to deliver the necessary reforms to apprenticeships. The changes simplify the system by removing roles such as English apprenticeship issuing authorities and the certificating authority. The changes give the Secretary of State the power to manage the associated functions or delegate as necessary. There will be a new “approved English apprenticeship”. These apprenticeships will be made under apprenticeship agreements or alternative arrangements described in regulations.

Part 1 will introduce a new chapter into the Apprenticeships, Skills, Children and Learning Act 2009. New section A1 would alter the definition of an English apprenticeship to reflect the planned reform. It describes an apprenticeship agreement. The agreement is not new and new section A1 ensures that apprentices must be employed and that there must be an explicit agreement between employer and apprentice that the employee will work and study towards a specific apprenticeship. Alternative apprenticeships are also not new; they allow for exceptions to cover circumstances where apprentices cannot work under an apprenticeship agreement, for example where an apprentice becomes redundant during the apprenticeship. Secondary legislation will set out which apprentices are covered.

New section A1 would also allow the Secretary of State to set simple conditions for apprenticeship agreements, for example ensuring that the agreements are in writing. The schedule introduces the new idea of an approved apprenticeship standard in new section A2. Approved standards will replace the apprenticeship frameworks that currently set out the content and other features of apprenticeships within a particular sector. Frameworks include qualifications and other requirements that apprentices must meet. Standards will define occupational competence and will focus on outcomes. Currently, issuing authorities—generally the sector skills councils appointed by the Secretary of State—issue apprenticeship frameworks. In the future, the Government will encourage employers, or consortia including employers, to be actively involved developing outcome-focused standards and making proposals before submitting them to the Secretary of State for approval and publication.

New section A3 would give the Secretary of State the power to issue apprenticeship certificates, copies of certificates and the power to charge a fee. New section A4 would give the Secretary of State the power to delegate any function—other than making regulations—to a designated person. For example, he is likely to delegate the power to issue certificates to a third party. New section A5 replicates an existing provision in the 2009 Act on the status of apprenticeship agreements. The section provides that an apprenticeship agreement is not to be treated as a contract of apprenticeship, as recognised at common law, but is instead to be treated as being a contract of service. Apprentices on apprenticeship agreements will continue to have the same employment rights and duties as they have at present. We plan to work with employers to develop some further guidance on drafting an apprenticeship agreement.

New section A6 deals with variations or inconsistencies within English apprenticeship agreements. New section A7 deals with Crown servants and parliamentary staff who do not have usual contracts of service, so this provision allows apprenticeship agreements to apply to their employment agreements.

Part 2 deals with consequential amendments. Apprenticeships are a devolved matter; some of the apprenticeship sections in the Apprenticeships, Skills, Children and Learning Act 2009 apply to both England and Wales, so many of the consequential amendments are to separate the two, leaving the sections applying only to Welsh apprenticeships. Other consequential amendments deal with the removal of the role of apprenticeship-issuing authorities in England. Issuing authorities are mostly sector skills councils appointed by the Secretary of State to issue apprenticeship frameworks.  Frameworks will be replaced by new standards and the Secretary of State will have the power to approve and publish these.

Currently, we have an English certifying authority, the Federation for Industry Sector Skills and Standards, which is responsible for the issue of apprenticeship certificates. Again, we are bringing the power to issue certificates back to the Secretary of State, who may then choose to delegate the function. Lastly, some of the consequential amendments deal with changes in terminology, including the change from apprenticeship frameworks to apprenticeship standards. Part 3 applies only to Welsh apprenticeships and allows Welsh Ministers to issue or withdraw apprenticeship frameworks in the absence of an issuing authority.

In conclusion, the simplification of apprenticeship legislation will help to engage a wider range of businesses and will allow employers to see a clearer link between their investment in apprenticeship training and an increased relevance of apprenticeships. I commend this schedule to the Committee.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I do not want to speak at great length about schedule 1, but this lays out some of the basis on which the proposals will be taken forward. We remain of the view that it is incredibly important that there is a real commitment to quality and we support the idea of greater involvement for employers in what is happening in terms of apprenticeships within their environment. We recognise the value and importance of that but, at the same time, there are things in the next clause that we will be scrutinising. Ultimately, business across Britain can be assured that there is widespread commitment in this House to apprenticeships and we want to make sure that that commitment is not only to the best opportunities for our young people but also to quality.

Question put and agreed to.

Schedule 1 accordingly agreed to.