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Work Force Skills

Volume 450: debated on Thursday 26 October 2006

2. What assessment he has made of the relationship between the level of skills in the work force and economic growth; and if he will make a statement. (97057)

7. What assessment he has made of the relationship between the level of skills in the work force and economic growth. (97062)

We have created the new deal for skills, which we will expand. We have the new train to gain programme, which we will also expand after the Leitch report is published. We have increased education spending from 4.7 per cent. to 5.5 per cent. of GDP—investment which we will not cut in future years, but will increase.

With 20 million students graduating in China every year and 2 million in India, can my right hon. Friend reassure me that the Government will seek to resource fully the recommendations from the Leitch review so that the United Kingdom can continue to compete in the global knowledge economy? Will he reject any tax proposals that come before him that would undermine our education service and take us back to where we were 20 years ago?

I can assure my hon. Friend that when the Leitch report is published the national debate on skills for the future will be led by this Government. We want to see more people who are in work at the moment acquiring the skills for the future so that British workers can get jobs that are available because they have the skills to do so. We wish to see more students able to study at university and college and more students staying on at school to get the necessary qualifications. We have already increased education spending from 4.7 per cent. to 5.5 per cent. of national income. We will continue to increase that figure in future years. What we will not do, in the interests of both stability and public investment, is go for irresponsible tax cuts in preference to investment in education. What we will not do—as I now find is another policy of the Conservative party from their economic policy review—is to introduce vouchers to pay for our public services. I hope that Conservative Members are aware that that is now their new policy.

Is my right hon. Friend aware that all the evidence that comes to my Committee—the Education and Skills Committee—suggests that the massive investment in education and skills over the years of the Labour Government has resulted in a direct improvement not only in millions of people’s lives but in the dynamism of our economy? [Interruption.] Yes, in our report that was published yesterday we called for more expenditure, greater investment and a speedy material increase in the amount of money going to individual pupils.

Will my right hon. Friend respond to my question—[Interruption.]

When we took office, expenditure per pupil was £2,500 in our state schools. Today, the expenditure is £4,500. It is rising—

The shadow Chancellor says from a sedentary position that to increase expenditure from £2,500 to £4,500 is meaningless. That is an illustration of just how the Conservatives treat the very big issue of how we fund education in our state schools. We have increased spending from £2,500 to £4,500; we will increase it to £5,500 by 2007-08. As for capital investment per pupil, I have to tell the House that it was £100 when we came into power and it is now £650 on average per year. That is expenditure on IT, computers, buildings and equipment. That will rise to £1,100 in the next spending round. It will be above the level that is spent in private schools, as we move to our aspiration that state school pupils get the same teacher-pupil ratios and advantages in education as are available in private schools. I thought at one point that there was all-party support for that, but unfortunately the Conservatives have gone for irresponsible tax cuts.

Does the Chancellor accept the economic analysis published earlier this week that a liberal and flexible approach to the work force, reflected in substantial skilled and unskilled immigration, has boosted growth, reduced inflation and boosted the Government’s revenue? If he agrees, what estimate has he made of the possible cost to the British economy of the Home Secretary’s U-turn on that policy this week?

We have always said, we continue to say, and I hope the hon. Gentleman agrees, that migration to this country must be managed. We must get the balance right between the number of people we need to fill the skilled jobs that are available and a policy for managed migration to this country. I hope that that is still the policy of the Liberal party. We have benefited enormously from immigration in this country and we continue to do so, but there will always be—as there should be—managed migration to this country.

Why are the Government cutting adult education grant funding to Essex county council, which is resulting in the closure of Grey Friars adult community college in Colchester? Does not that make the Government’s commitment to skills in the work force rather hollow?

I would have thought that the hon. Gentleman supported what we are doing; in other words, what we are doing is—[Hon. Members: “Cuts!”] Well, we are putting the money through the employer, through the train to gain scheme. The employer and the individual will buy their courses from colleges where that is appropriate. If the college is providing the right service to the employer and the employee, it will get the business; if the college is not providing the right service, it will have to do so in future. I would have thought that was the policy of the Conservative party, but if that, too, has changed between tonight and today, perhaps the hon. Gentleman will tell me.

Funding for higher national certificate work-based learning programmes for engineers is very important. Will my right hon. Friend clarify what the Government are doing to improve the skills of our engineers?

In recent weeks I have met many people who raised with me the question of how China and India are funding vast expansions of engineering training. Here in Britain we need more engineers and we have to persuade more people to study engineering: partly through the reputation of science and engineering, which we must enhance; partly through encouragement to young people through vocational training in their schools, which we are expanding at present; and partly through the train to gain scheme, which is now in companies, where nearly 100,000 people are benefiting and gaining qualifications that they can add to. Some of those people will go on to become engineers. In those three ways, we will pursue a strategy to get more engineers in the economy and to value more the work that our great engineers do for this country.

Does the Chancellor agree that there is something seriously cock-eyed in the relationship between skills in the work force and economic growth and performance, when people such as those at my local university in Chelmsford, who have trained for between two and three years to become highly skilled nurses, could not find a job when they completed their training because the local NHS trust had to make 250 nurses redundant last week?

The fact of the matter is that nearly 80,000 new nurses are being employed by the national health service. The fact of the matter is also that the NHS budget is rising by between—[Interruption.]

Order. I have to say to the hon. Member for West Chelmsford (Mr. Burns) that he asked the Chancellor a question, so he should let him reply, and not shout at him—[Interruption.] I am not responsible for the Chancellor’s answer—that is one thing I am not responsible for.

There are 80,000 new nurses in the national health service and more than 20,000 new doctors. The health service budget will expand next year. I believe that nurses now in training will get jobs in the future, but the one policy that would prevent them from doing so, and prevent us from expanding the NHS, is to go for irresponsible tax cuts in preference to investment in public services.

Local black country business leaders assure me that skills and training are essential for the future economic well-being of my locality. Can my right hon. Friend assure me that in the spending review they will be given high priority in future spending plans?

I accept what my hon. Friend says. As he knows, the Leitch report is considering all aspects of skills for the future of our economy, and is looking into how we can persuade both those in the workplace, and those who will join the workplace later, to get the skills necessary for the future. I agree with him that that must be a priority for the nation as it faces the global challenges ahead, but let us be honest: that will require us to spend a higher share of national income on education and training, and it will require employers, as well as Governments, to spend more on education and training. We cannot do that if we have irresponsible policies, promising reckless tax cuts that would put our country’s public services, and the stability of the economy, at risk.