I hope that the Minister will be able to tell everyone in the Chamber a little about our colleague, the Under-Secretary of State for Education and Skills, the hon. Member for Corby (Phil Hope).

It is a pleasure, Mr. Hancock, to lead this debate on behalf of the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Corby (Phil Hope). I can reassure hon. Members that he is doing extremely well, and he has been heartened by the many messages of support that he has received from Members across the House. Indeed, it was at his prompting that the subject of today’s debate was proposed; as the Chamber knows, he takes a significant and key interest in driving our skills agenda forward. Thanks to his initiative, we have the opportunity this afternoon to discuss the case for making Britain the home of world-class skills. In a very real sense, I believe that what we do now to shape our country’s skills will affect our prosperity for generations to come.

At the end of last year, Lord Leitch published his independent report on the skill needs of the United Kingdom in 2020. The report set out the current state of skills in this country, the challenges that we face and what more we need to do to meet them. It was effective, detailed, accurate and robust. All around us, we see evidence of enormous and growing international competition, and the report focused on that phenomenon. The evidence shows that Britain took 100 years to double its gross domestic product after the industrial revolution and that America took 50 years, while China has taken only 10 years to do so. Today, the G7 countries account for half of the world’s GDP. By 2015, that is likely to fall to a third.

Computer speed doubles every 18 months. The number of people with an iPod doubles every year and, staggeringly, the number of people with a blog doubles every few months. The progress of countries such as China and India during the past decade, too, has been staggering. With nearly double-digit growth rates, they are not only focused on becoming the manufacturing centres of the world but are concentrating just as much on high-end, highly skilled service industries. That is a further challenge for us. In fact, India’s service industry is growing at twice the pace of the rest of the economy. China and India are investing in their future. Each year, their more than 2,000 universities produce more graduates than all the countries of the European Union combined.

If that challenge is treated as an opportunity rather than a threat, the future is not one of doom and gloom. If we grasp the nettle and do what is necessary to prosper in our changing world, a great prize awaits our country and its citizens—a prize of prosperity, of new and exciting careers for all, and of high-quality public services that only a thriving economy can produce. However, it is more than that. The prize of more and better skills will empower people, and enable them to find better jobs and earn more money. It will improve their quality of their life and that of their families. If we upskill Britain, we will improve our economic performance, and we will also improve social justice. I strongly believe that giving people the skills to enable them to succeed, to sustain themselves and to compete in the workplace is the best and most effective way of obtaining social justice and tackling poverty. It is right to prioritise the improvement of basic skills and employability, because that is how we will achieve the biggest impact on people’s lives. That is why the Government welcomed the Leitch review and the stretching skills ambitions that it set out for 2020. The key to success is the continuous investment of time and resources in the education and skills of all the British people, whatever their age, background or circumstances.

In setting out that challenge, it is crucial to recognise that we are not starting from scratch. Much has already been achieved. We have reduced the number of adults in the work force who are without the equivalent of five good GCSEs by more than 1 million—that is a significant achievement—and more than 1.5 million people now have their first skills for life qualification. Investment in the further education sector has risen by 50 per cent. in real terms during the 10 years in which the Government have been in power. That is in stark contrast to the 14 per cent. real-terms cut in the five years to 1997. We have trebled the number of apprentices to 250,000, and we have 18 of Europe’s top 50 universities, including six of the top 10. However, we all know that it is not only about achieving challenging targets, important as that is. It is also about those who have fought their own personal battles, achieved personal successes and transformed their lives.

Sandy Leitch recognised the improvements in our schools over the past decade. Since 1997, we have doubled spending per pupil in schools; we now have 36,000 more teachers and 150,000 more support staff. Every year, about 95,000 more 11-year-olds reach the standard expected in English and maths, and 85,000 more pupils obtain five good GCSEs—when English and maths are included, 62,000 more pupils make the grade. Welcome as that progress is, it is not good enough, and we must face up to some difficult truths. For a start, 70 per cent. of the 2020 workforce has already left school. Detailed analysis of statistics in the Leitch report reveals the challenge posed by changes in the economy and the jobs profile. The number of skilled jobs will increase over the coming 13 or 14 years from 9 million to 14 million, yet at the same time, the number of unskilled jobs will fall from 3.5 million to 600,000. Unless we can equip our people with the skills to cope effectively with that scale and pace of change, not only will they and their families lose out as a result of increased poverty and social isolation but we will become uncompetitive in the world economy.

We inherited a legacy of under-achievement in schools that means that almost 50 per cent. of adults—some 17 million people—have difficulty with numbers. About 5 million people are functionally illiterate. Our staying-on rate beyond the age of 16 is below the average of member countries of the Organisation for Economic Co-operation and Development. The productivity of our workers falls below that of our main rivals in France, Germany and the United States—that is the challenge that we have to face. Sandy Leitch’s vision is of a Britain that by 2020 has world-class skills, and he sets out a road map to achieve that vision through specific, demanding targets, including the requirement that 95 per cent. of adults should be able to read and write properly and use numbers; that 90 per cent. of people should be qualified to at least level 2; that 1.9 million more people should have a level 3 qualification; that the number of people undertaking apprenticeships should double to 500,000 a year; and, crucially, that more than 40 per cent. of the population should be qualified to degree level or above, although I believe that we need to go significantly beyond that. We must aim high and act quickly if we are to move the country to the upper quartile of the OECD skills rankings. Our mission is to do all that we can to meet those targets and to transform skills in this country. I genuinely believe that we have a once-in-a-generation opportunity to change this country’s attitude towards skills.

Will the Minister give us some indication of how the OECD skills ranking works? I agree with much of what he said about the importance of skills—if I catch your eye, Mr. Hancock, I hope to say a little more about that—but we should ensure that by putting policies in place that focus on the OECD rankings, we do not suffer from targetitis. We should do so not for the sake of it but to ensure that our work force have excellent skills in the decades ahead.

I will develop my answer either later in the debate or in writing, but I understand that the ranking is an assessment of the attainment level in specific core competences and skills that relate to the international equivalents of our level 2 and 3 qualifications. I will happily provide the hon. Gentleman with further details.

We need to raise dramatically the awareness and aspirations of the British people to develop their skills. Employers must understand the value of skills and the crucial need to invest in their staff. Individuals should take action, too, to address their own skill needs. To do so—and this debate is contributing to that end—we need to raise dramatically the skills profile. We can certainly do so through skills competitions, such as those hosted by UK Skills, which showcase the high standards achieved by our young people. In 2011, we can take advantage of the significant opportunity of hosting the WorldSkills competition to show the world just how good our young people are at everything from welding to web design. Coming just a year before the 2012 Olympics and Paralympics, the competition presents us with a wonderful opportunity to link excellence in sport with excellence in skills.

Of course, achieving world-class skills comes at a cost, and we should not resile from that fact. The Government are willing to bear their fair share of the cost, but we must focus our investment where it will do the most good which, to put it bluntly, is where the market fails. However, where there is significant private gain, it is only right that employers and individuals increase their investment. Even with the most generous state support, unless there is commitment from employers and individuals we simply cannot face up to those challenges. Sandy Leitch rightly says that world-class skills are about a shared partnership, with responsibilities balanced between Government, employers and individuals. It is not something that Government can do alone; we are all in this together.

New investment must be in things that employers, large and small, want—not in a bureaucratic and centralised master plan. To respond to the Leitch ambition, the skills system must change and adapt quickly. We need to turn the traditional method of delivery on its head, and training must directly meet the needs of business and the learner. It is no longer enough to leave companies to hope for the best, and simply expect training providers to come up with the right course for them. We need a streamlined system that is not only responsive to, and shaped by, the views and needs of employers, but is genuinely employer-led through the sector skills councils.

Crucially, we need qualifications that meet the needs of the new economy. The new diplomas that are being developed with industry will provide an exciting, aspirational and stretching programme of learning for all young people. They will appeal to the most capable students, preparing them for the most demanding university courses. That is a critical issue that we need to get right. Universities must work with us and embrace the development of diplomas, because unless all universities, particularly research-intensive universities, recognise and value diplomas, they will not work as effectively as they need to do. We must also provide help to students planning to enter the work force directly at the age of 18 and to those who find an academic curriculum insufficiently attractive.

Our train to gain initiative is crucial, too, and its funding will continue to increase to more than £460 million next year. The initiative is truly demand-led, and it uses independent brokers to give a company the training that it needs to improve its business. When looking at the initial evaluation of the initiative, I was pleased that employers responded positively to the independent brokerage, which they believed gave them the quality provision that they seek. I was pleased, too, to see that a proportion of the older work force accesses training through train to gain—interestingly, about 27 per cent. of over 45 years-olds do so. That is a better success rate than previous training initiatives, and it is part of the reason why the initiative is so important.

I am pleased that, following the further education White Paper, the Learning and Skills Council has started trials for the new learner accounts. Learner accounts will ensure that individuals wanting to learn have the best choice of learning options, the support that they need to choose the right learning for them, and the funding support to be able to take up opportunities. When we were developing the FE White Paper, we considered making a commitment to trial learner accounts at level 3. I had a discussion with civil servants that resembled a “Yes Minister” moment. Given the problem with individual learner accounts, my civil servants said, “Well, it would be a really brave decision, Minister, if you went down that route.” We decided to do so, because whatever the flaws in the design of individual learner accounts—and we need to get that right in the new system—wherever I have been over the past two years, people in the system have said that individual learner accounts achieved something significant by unlocking the potential, enthusiasm and commitment of learners, thus making a contribution to their learning. If we can get that right, it will help us to make progress.

Overall, a business-led, Government-backed, individually responsive approach is essential if we are to make the enduring changes that are necessary to rectify weaknesses and to face the future with confidence. Just as economies and societies change both globally and nationally, so do the demands of business. We must create a sustainable skills system that can adapt quickly to meet those changing needs. The FE White Paper and the Further Education and Training Bill that is progressing through Parliament, set out the reforms that will equip the provider system to deliver the strategic challenge of transforming 14-to-19 education and the skills of our adult work force. Those reforms will transform the FE sector into the skills powerhouse of this country’s economy.

Of course, I agree with the Minister that FE is critical to delivering the skills agenda. Like him, I am a great supporter of further education colleges, so why has he not introduced the process of self-regulation recommended by Sir Andrew Foster in his report last year, which many colleges seek and which they are more than capable of implementing? Self-regulation by degree is surely the way to allow colleges greater independence so that they can innovate and excel.

We certainly are responding to the need to move towards a system of self-regulation. Indeed, Sir George Sweeney headed up a working party with which the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Corby and I have vigorously engaged. A set of proposals are forthcoming on how to move over time towards a much more clearly defined system of self-regulation. It is critical that we get the detail right. The hon. Gentleman will know, as he and I talked about it on the Floor of the House this morning, that the proposal to enable high-quality and high-performing further education colleges to award their own foundation degrees is a significant step in that direction. However, we must ensure—and we are doing so—that the quality framework is right.

We accept Sandy Leitch’s recommendation for a commission for employment and skills to give employers a stronger voice, and we will move forward quickly on that proposal. That voice is vital if we are to realise our ambition of integrating business with employment and skills services. Over the coming months, the Government will engage with a range of stakeholders to discuss how best to develop the package of recommendations in the Leitch report. That will help us to finalise the Government's response and develop an implementation plan linked to the comprehensive spending review.

In conclusion, one of the most important changes that we need to make is in people’s attitudes. The old culture of a job for life must be replaced by a new culture of learning for life. We must create a system of learning that flows into the veins of this country and becomes as much a part of the British psyche as tolerance and fair play. We need every single person in Britain to join us in the mission to upskill the country and deliver our vision of world-class skills.

It is a great pleasure to speak in this debate on skills and I am pleased to add my remarks to those of the Minister in offering my best wishes to the Under-Secretary of State for Education and Skills, the hon. Member for Corby (Phil Hope)—whose constituency is, of course, in east Northamptonshire—who has been in all our thoughts and prayers. We look forward to seeing him back on duty across the Dispatch Box as soon as possible.

The Minister rightly started by saying that skills matter. They do, indeed, matter. They matter for Britain as a whole because of their effect on economic competitiveness, principally through productivity. As he said, they matter in the context of an increasingly complex world, but they also matter for all Britons. I was pleased to hear him say that that was because of the impact of people’s skill level on their well-being and sense of purpose and worth. For millions of Britons, a craft profession and a skilled future are critical to their sense of worth and purpose. Those things make a difference to lives—they change lives.

When we debate skills, it is useful to begin by clearing up any uncertainty about the definition of skills. Because basic skills are often included in the general terms that we apply, it is easy to misunderstand what skills really are. Lord Leitch, among many other useful things, defines skills for us. He says in his report:

“Skills are capabilities and expertise in a particular occupation or activity.”

It is usually, although not exclusively, a practical activity, I would say.

I suppose that the reason why we include core skills or basic skills in the definition is that people can do little else without them. If a school leaver is functionally illiterate or innumerate, their chances of prospering by acquiring other skills are, by definition, limited. It is absolutely right, therefore, that we focus on core skills. Even if the Government hit their targets, there will, by 2020, be 4 million illiterate adults and 12 million innumerate adults. By that, I mean adults with less than the literacy and numeracy skills expected of an 11-year-old child. In professional terms, in terms of acquiring other skills, that is functional illiteracy and innumeracy, particularly as the demand for unskilled work plummets, as the Minister said. I note his figures; I have read them before. According to Government estimates, by 2020, the demand for unskilled labour will fall from 3.5 million jobs now to 600,000 jobs, so people who do not have those core skills and have no real chance of acquiring them are not only unlikely to acquire the additional skills that would enable them to get a job; there is very little likelihood of an unskilled job being available to them as time goes on.

The reason for that is that we are an advanced economy and are becoming a more advanced one. Let us be clear: we will never again make tinplate metal toys and be able to compete with the Chinese in doing so. An advanced economy needs advanced skills. Our future is as a high-tech, high-skill economy, competing with the best in the world. The economics are plain, but let me refer again to the Leitch report—the interim report this time. Leitch estimates that one fifth of our productivity gap with France and Germany is the result of our “comparatively poor skills”. We must be careful about international productivity comparisons, because unemployment is higher in both France and Germany. If we examine the productivity of the work force as a whole, rather than just those in work, we see that it is higher in the UK, but it is true that in respect of both intermediate and higher-level skills, we are disadvantaged compared with the USA, France and Germany in the move towards an ever more advanced economy.

In acknowledging that the Minister knows that skills matter, I will, perhaps predictably, be fairly critical. I do not want to send him off into the snow a dispirited and downcast man. That would be cruel, but there are some home truths that have to be told during the—hopefully—short time that we have together.

I have said that the Government’s literacy and numeracy targets will leave the nation ill equipped for the future. I have to put it to the Minister that the number is being topped up by 40,000-plus young people who leave school each year illiterate and/or innumerate; I think that the figure was 44,000 for the last year, according to the answer to a parliamentary question that I tabled. If we are topping up that number, we will inevitably end up with a growing number of NEETs. You, Mr. Hancock, know that I am referring to young people between the ages of 16 and 24 who are not in employment, education or training. Their number has indeed grown since 1997. I fear that that hopeless underclass that we have created—I make no apologies for using those strong terms—will never work in some cases, unless we address their needs in a considered, thorough and urgent way. I called for ardent and urgent action in the House last week on this subject. When we examine the figures for different parts of Britain and recognise that in some places the number of NEETs is 12 or 15 per cent. of the total population of that age group, we inevitably conclude that that is a significant problem.

The number of NEETs means, of course, that there are people who are not acquiring skills to fill needed jobs. Is it not curious that we are importing skilled labour from abroad at the same time that we have 1.3 million young people not in employment, education or training? Let me qualify the figure a little, because the Minister will jump up in a moment and say that they are not all people who are ready and able to work. The number includes gap-year students and some people with quite profound difficulties—mental health difficulties, addiction problems perhaps and other problems that might make it difficult for them to gain employment easily. However, even using the most conservative estimate, if we deduct those people and a few other varied groups—new age travellers perhaps and one or two others—we end up, I think, with a figure not much short of 1 million for those young people who would like to and should be able to work but who have in effect been cheated by the system of their chance to succeed. That is not acceptable. Indeed, it is a pretty damning indictment of the Government.

Will my hon. Friend give way?

I would be delighted to give way to my hon. Friend, who is a great champion of the vulnerable.

My hon. Friend rightly identifies the significant number of unemployed and, indeed, unemployable young people in this country today. He referred to the fact that they were being kept out of skilled and semi-skilled jobs. Is it not the case that the large-scale and unprecedented immigration to this country also means that, to a large extent, many of the unskilled jobs in the hospitality industry and the like are being kept out of the reach of those among our under-23s who might be able to qualify for them?

Yes. That is a very good point and I shall explain why, but I shall do so only having said first, for the record, that economies do deal with migration in order to meet economic need. They always have and they always will. Economies draw people in as they have growing labour needs, and people leave when those needs decrease, so I am not prejudiced about the issue, but I take my hon. Friend’s point. This is why it is a profound one. If we examine the profile of immigration to Britain, it would be quite wrong to assume that the bulk of it over, say, the last 10 years—I pick 1997 purely out of the air, of course—has been skilled migration. We have let into Britain a very large number of unskilled migrants, and at a time when the demand for unskilled labour is plummeting, according to the Government’s own figures, I am not sure that that is either laudable or wise.

I welcome the clarification that the hon. Gentleman has given in response to the point made by the hon. Member for Cities of London and Westminster (Mr. Field), because we are in potentially dangerous territory. I ask the hon. Member for South Holland and The Deepings (Mr. Hayes) to confirm that a substantial element of the migration has been in response to the fact that unemployment is at historically low levels in this country. There are 500,000 jobs that we cannot fill from our own citizens—not exclusively from our own citizens—because unemployment is so low, which is a good thing.

Yes, that is true, but I point out again, at the risk of being repetitive—certainly not boring; that would not be possible—that there are 1.3 million NEETs. I noticed the Minister nodding his head when I qualified that number, but I cannot believe that any fewer than 1 million of those could not, in the right circumstances and with the right opportunities and the right help, usefully be employed.

The Minister is right that there is a relationship between migration, economic demand and unemployment, as there has always been. I am concerned about the nature of some of that migration. I represent an area in Lincolnshire that has a low-skilled, low-wage economy with high levels of employment. There is a big demand in the food and food-related industries for labour, some of which is seasonal and part-time, and in recent years, large numbers of migrants have been used to fill those gaps.

I have repeatedly made the case locally and nationally that we have to be cautious about exploitation, not on the part of the big companies, which do their best to ensure that that does not happen, but by the labour agents, or gangmasters, as they are popularly known. We have to be careful about the other circumstances in which such people find themselves in relation to housing and health, and about the pressure on local infrastructure. We must also be careful that the employment of such workers is not used as a means of holding down wage costs rather than creating strong, secure, long-term jobs with decent wages for Britons of all races, colours and creeds.

We have to be a little careful about deeming migration to be a net economic good. Migration Watch recently did a study into the economic effect of migration in which it balanced the growth that it helps to sustain against infrastructural costs for roads, housing, health and education. The picture is not entirely clear. I shall not say too much about this because I do not want to get bogged down, but we must exercise great caution when assuming that migration is necessarily, implicitly always a positive in these kinds of circumstances.

The Minister said that by 2020 we will need 5 million more highly skilled workers, but 3 million fewer unskilled workers. That reflects the findings of the Leitch report; indeed, the Secretary of State said the same in the House last year. The Minister also said that 70 per cent. of the 2020 work force will consist of people who are over 16. That means that we have to upskill and reskill the existing work force. It will not be enough simply to provide the right opportunities for school leavers. It will not even be enough to do that and to engage the NEETs gainfully.

We must look at how we can improve the opportunities of those who are already in the work force, but that is not always a straightforward job, because people have to adjust their skills to meet changing economic and commercial demands. We have a mountain to climb. More than one third of adults do not have a basic school-leaving qualification—double the proportion in Canada and Germany—and the Government do not have an acceptable record regarding the literacy and numeracy of school leavers.

Given the mountain that we have to climb to achieve world-class skills by 2020, one would expect the Government to do everything they can to increase participation in training, but it has fallen in the past couple of years. Participation in further education was down by 13.6 per cent. last year—back to where it was in 1997. Participation in adult and community learning was down by almost 10 per cent. last year to well below its 1998 level. Work-based learning was down by 6.5 per cent. to below what it was in 2000, when figures were first compiled.

I want to amplify that last point, because the decline in adult learning is sometimes parodied as merely a decline in recreational opportunities for prosperous middle-aged and older people who tend to live in the leafier parts of constituencies such as that of my hon. Friend the Member for Cities of London and Westminster, and in small pockets of constituencies such as mine. Of course that is not true.

Much adult and community learning is an important bridge back into learning and work for people who perhaps did not prosper the first time around. That is why I emphasise that work-based learning has declined, as have adult and community work-related courses. This is not simply about people who would like to study Mandarin or basket weaving. It is about people trying to equip themselves to re-enter the work force. That is particularly important given the profile of the work force now and in the past decade.

The Minister is an authority on these matters, so he will know that many of those who enter the work force are from the ranks of the non-employed, such as women who left employment to bring up a family and who seek to re-engage in employment later in life. They have been able to do so in great numbers in the past decade or more. That bolstered our work force at a time when, had they not done so, demographic change would have made life very difficult for British businesses. If we remove the bridges that they need to cross to do that, we will do British business and the British economy no favours at all.

Will the Minister give us an absolute assurance, in line with those that have been asked for by the National Institute of Adult Continuing Education and others, that he will wage a war on the decline in adult learning? That is an important element in providing the sort of world-class skills that we need for 2020. Both he and I want to achieve that.

I am intrigued by this. I read the hon. Gentleman’s recent speech, or pamphlet, about the development of Conservative policy on skills, and I understood it to advocate a shift in provision and financing towards intermediate skills at the expense of lower level skills. If that assumption is correct, how can I regard what he is saying at the moment with any credibility?

The Minister shows his characteristically incisive and sure touch, but let me explain the point. It would be better if he had also read the document that I have here, which sets my speech in a broader context. I am happy to let him have a copy of it, Mr. Hancock; I know that you keep a copy of it by your bedside. It is called “Towards a Virtuous Circle of Learning”. In that paper and the policy paper, I conclude that too much of business’s investment in skills is spent on remedial training to compensate for failures elsewhere in the system.

One in three employers tells us that they spend money on teaching their new staff how to read, write and count; on soft skills, which are a principal concern for employers; or on high-level skills that are a commercial necessity—the training of airline pilots is an example that might spring to mind if one is going on holiday soon. As a result, intermediate learning falls between the cracks, as do the resultant intermediate skills.

Adult education is usually conducted at further education colleges and is funded by the Government through the Learning and Skills Council. That has historically been an important route to the kind of intermediate skills that I argue we lack. It is people’s first step back into learning and acquiring intermediate skills. The Minister gets around colleges just as much as I do, if not more. As he will know, colleges that try to attract students to become craftsmen such as plumbers—I do not know why we always use the example of plumbers, but they have become an iconic profession—sometimes sign people up to a non-accredited course before signing them up to an accredited course, particularly if those people are uncertain about their core skills. The Government have focused heavily on accredited courses, but I have some doubt about the effectiveness of such an approach, because it narrows the funnel through which people can come back into learning. The two things are not incompatible, but perhaps we can talk the issue through later in the debate, because I do not want to get bogged down in it now.

For my money, there are three big omissions in the Leitch report. I take the report as our text because this is the first opportunity that the House has had really to explore it. The Minister rightly focused heavily on its analysis and recommendations, and it is, indeed, the most recent comprehensive assessment of skills with which we have to work. None the less, there are three gaps, the first of which relates to the role of further education colleges. When I put that point to the Secretary of State, he said, “Well, that wasn’t Leitch’s remit.” However, given that Andrew Foster’s report made it absolutely clear that FE colleges’ move towards self-regulation was a critical means of delivering the skills agenda, it is surprising that Lord Leitch did not take up that baton and run with it and that he did not talk about how such an approach might work in terms of his analysis and recommendations.

I should therefore like the Minister to refocus on the issue. He talked about the Further Education and Training Bill with some pride, which is understandable, given that it does some important things. However, it is pretty ironic that at the same time that we are considering giving FE colleges foundation degree-awarding powers, we are also giving the Learning and Skills Council new, draconian powers to sack professionals such as college governors, managers and principals. It is ironic that, on the one hand, we want to trust FE to do more, but that, on the other, we trust it so little that we must make it accountable to the LSC, rather than to its own governors and to learners. I am not sure, therefore, that the Bill is all that it might have been. I would have hoped that it would give more scope to the proposals set out in the Leitch report and certainly to those set out in the Foster report, given the time between the publication of that report and the Bill. It is not good enough to say, “We didn’t have long enough.”

The second big gap in the Leitch report concerns business engagement. It is pretty weak to say, “Sign this pledge. If you don’t, the sword of Damocles hanging over your head will strike at a future date.” It is pretty weak to send Digby Jones around the country, like some mad advocate of temperance, expecting people to sign the pledge. Leitch might more usefully and helpfully have looked at all the other means by which one might engage employers. He rightly talks about the need to move to a more demand-led system and away from the largely supply-led system that we have now. I know that the Minister shares that sentiment, by the way, because I have heard him express it. However, we must define what that system means and certainly how we will engage employers.

I have no definitive view on that issue, but the Minister will know as well as I do that various things have been talked about. One might have thought that Leitch would consider the issue of a licence to practice, which might be voluntary, and which might be based on the model used by Investors in People, the British Standards Institution, the International Standards Organisation, the Association of British Travel Agents, estate agents and Corgi gas-fitters—there is any number of examples. I am not yet in a position to announce such a scheme as my party’s policy, but I would certainly have wanted Leitch to investigate it further.

Leitch might also have looked at a levy system—perhaps a voluntary one—which would surely have a bit more weight and force than a pledge. One business man told me, “We are quite happy to have ‘hail fellow well met’ meetings with the LSC once a month over coffee, but it doesn’t matter a lot until we have to stump up.” There is a sense in which there is a relationship between commitment, money and funding, and a voluntary levy system could have been explored, although I would not favour a return to compulsory levies, for reasons with which you will be familiar, Mr. Hancock. Equally, Leitch might have looked at the range of fiscal options available to engage employers. Again, I do not take a definitive view on that, but we need to have a debate about it as a House and as a nation, and it is a pity that Leitch did not look at the issue a little more closely.

The final gap in the Leitch report is, frankly, pretty big: he did not really explore the bureaucracy, regulation and micro-management of the skills agenda, which dog so much of the good work that is done. FE colleges tell me, as I am sure that they tell you, Mr. Hancock, and other hon. Members, that they are constantly dogged by micro-management. Seventeen bodies have oversight or a regulatory role in the FE sector, according to Foster, and that is repeated in the Leitch report. Surely, we need to treat FE as grown up and to give FE colleges much more capacity to innovate and much more opportunity to self-regulate. Of course there must be lines of accountability, because public money is involved, and Ofsted must continue to play a key role.

The Quality Assurance Agency for Higher Education, too, can play a role, as it will in relation to foundation degrees, for example. There will be the necessary protections if we move to self-regulation, and there must, of course, be some long-stop accountability back to the Government. However, as we know from Ofsted’s current inspections of FE colleges, very few colleges are in desperate measures or unsatisfactory; the vast majority are satisfactory or better, and some are very much better. By undervaluing the expertise, professionalism, imagination and creativity of FE professionals, we will sell them short and, perhaps worse, we will sell learners short. We therefore need to look at the issues of bureaucracy, over-regulation, control and micro-management and at the way in which the system is managed and funded. Bluntly, that means that we will again have to look closely at the role of the LSC, which is a very large body.

Again, I have not taken a definitive view on the issue, and I have simply said that we must think again about the ways in which we might manage the skills agenda. Like Leitch, I would like to see an enhanced role for sector skills councils, which are employer-oriented bodies. There are problems with that, and the Minister knows them. They include the issue of cross-sectorial skills and the fact that some councils are not yet fully up to speed. In addition, we need to ensure that they take sufficient account of the industry bodies that already exist in certain sectors and make the most use of them. There are, therefore, issues with that model, but it is a good way of managing the system more effectively. It would be odd to give sector skills councils strategic responsibility without also giving them funding responsibility, because such a mismatch does not bear any kind of logical analysis.

The essence of Leitch’s report—his analysis of the problem, his emphasis on why skills matter, his definition of the scale of the mountain that we must climb and his strong emphasis on building a demand-led system—make his report an extremely welcome addition to the wider debate and critical to our debate this afternoon.

I want to deal with only a few other matters, briefly, because I can see that many other hon. Members want to contribute to this three-hour debate. They are matters that concern the whole House. First, the Secretary of State was—I do not say it lightly—a little blasé this morning when challenged by my hon. Friend the shadow Secretary of State on apprenticeships. Yes, he is right to say that things have improved in relation to the number of drop-outs. I acknowledge that, but, my goodness, it is from a very low base. The idea that we could have, according to the sector, anything from 20 to 60 or 70 per cent. of people dropping out—the Minister raises an eyebrow, but there are one or two in that range, and if he checks I am sure he will find that that is right—is not acceptable, is it? A certain number of people have always left apprenticeships, as they have moved into full-time work earlier than expected. That has always been the case, historically. However, we have a big problem with apprenticeships and the number of people who do not complete them. It is no use just starting the race: what matters is winning it, and we want all our young apprentices to be winners.

The second problem with apprenticeships is that too many lack employer engagement. When I say that to people, they throw their hands up in horror. They say, “What is an apprenticeship if it is not linked to an employer?” I should guess that everyone’s image of an apprenticeship is much the same: going to a firm, learning a craft and working with experienced people who know the job. However, it came to my attention only in the past week that in one region of Britain half the apprenticeships had no direct employer engagement. Not only that, but a significant number of apprenticeships are not mentored. There is no skilled, grey-bearded craftsman looking after and encouraging, teaching and inspiring the young apprentice. Apprenticeships have become rather different from the apprenticeships that were once valued and highly esteemed, which taught real competencies that lasted for life.

The second issue on which I want to say a brief word is train to gain. The Government place immense faith in train to gain, and they are right that it is critically important to encourage small and medium-sized enterprises to take training seriously. It has always been a problem historically: the chances are that for someone who works for a big firm training options will be available, but small businesses sometimes struggle to think about and invest in training as much as they need to. I was a director of what was originally a small, and later a medium-sized, IT company. When a company is very small people are too busy dealing with the weekly and monthly imperatives to worry much about what might happen three, six or 12 months down the line. I am sure you know that, Mr. Hancock. That is the sort of problem that faces small businesses when they deal with issues such as training; the payback from training is obviously, usually, longer term. However, I am still to be convinced that train to gain is the right way forward.

There are three problems: first, the dead-weight cost, which was recognised by those who closely studied the pilot scheme, when there was 85 per cent. dead weight. Hon. Members will remember what was said about that at the time, by independent commentators with no political axe to grind. Secondly, there is some evidence of a problem with training people in things that they already know. Someone who is already doing something perfectly satisfactorily goes on a course, to be trained to do it satisfactorily. That is not helpful, or a good use of public money. Thirdly, there is a need to ensure that the brokers are a useful bridge between educators and business, and not an unnecessary one. There is a slight risk, in that regard, in cases where further education has formed or could form direct relationships with local industry, of clogging up the system a bit by putting into place a network of brokers. I do not have a dogmatic view about it, but there are questions that need to be asked about train to gain.

The third and final matter that I want to touch on is vocational diplomas, which are so critical to world- class skills. Vocational diplomas mark an important opportunity to get vocational education from 14 to 19 right. I have welcomed them in the House, as the Minister knows. However, it is a very ambitious plan to set up 13 diplomas covering a very wide range of skills, and to expect them to be of the necessary rigour. It is a big ask of education—of schools and colleges. It will necessitate new relationships, of a kind not seen before, between schools and schools, and schools and colleges. Those collaborations should include higher education, where appropriate, and employers. We cannot see the matter as an agenda only for secondary schools. They will not be able to do it; it is as simple as that. They need to draw on the resources and expertise of all the organisations I have mentioned, to provide the quality that young people deserve.

There are worries about the fit between the diplomas and other vocational qualifications, in some cases. I hope that the Minister will say a word now or later about that. It has been raised with me several times. There is a need for a tight fit so that people can move from one vocational qualification to another. There are doubts, also, about the coherence of the system, if consistency across the diplomas cannot be guaranteed. I hear that some of the diplomas are indeed rigorous and devised around what employers say is necessary, but that some are rather less so. The reputation of diplomas will depend on their all fitting the bill and meeting the standard. If one or two are not up to standard I fear that the esteem in which they are held will suffer; they will not be recognised by employers and the opportunity may be wasted.

I have spoken at some length but the subject is important, and it is the first chance that we have had to explore some of the issues arising from the Leitch review. I wonder, Mr. Hancock, whether I may at this juncture ask the Minister to facilitate a debate on Leitch on the Floor of the House. We have not had one, and it is a major report. It is highly significant for education and the economy, and hon. Members on both sides of the House would welcome the opportunity to contribute to such a debate on a day other than a very cold Thursday afternoon in Westminster Hall.

We agree that skills matter and that they are a matter of economic performance. However, I end where I began: they are also about social cohesion, social mobility and social justice. I want to elevate practical learning because I want a new generation of craftsmen, who are proud of what they do, and who inspire pride in others. That is an ambition that I know Rab Butler had when he introduced the Education Act 1944 and spoke of education for democratic citizenship. If it was good enough then, surely it is good enough now. Let us see skills as we see education as a whole, in that noble context, and let the debate be a beginning of a cross-party commitment to that elevated view of vocational learning and skills.

I have been a Member of the House 21 months or so, and this is the first time that I have taken part in a debate chaired by one of my colleagues, Mr. Hancock. So, it is a pleasure to see you in the Chair, although I am sure that you would rather be on your way back to Portsmouth.

I am at this debate today because I am the Lib Dem shadow spokesman on further and higher education, but I am also a member of the Select Committee on Education and Skills, which is chaired by the hon. Member for Huddersfield (Mr. Sheerman). He always says that, when we have a discussion on skills, the public gallery is less full than it is on many other occasions and the press do not turn up. It is slightly disappointing that this afternoon’s exchange of views is taking place between the Front-Bench spokespeople, rather than it being a fully-fledged discussion on this vital issue. I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on turning up, although he will have the shortest journey home. Given the snow, I suspect that the journey home has been high in people’s minds. I hope that “Worst Great Western” will not let me down when I get back to Paddington later this afternoon.

The title of Lord Leitch’s report is “Prosperity for all in the global economy—world class skills”. We face big challenges in this globalised world at the beginning of the 21st century. Let us consider the various league tables. Perhaps the most frightening thing is stated early in the report: we are at risk of being in a situation where we “run to stand still”. It is not my job this afternoon to say that progress has not been made, because I recognise that this country’s educational provision is different from what it was in 1997. However, no matter how much progress we have made, we must remember that the rest of the world has changed too.

Countries that used not to be our competitors now compete more than adequately. South Korea lay in ruins 50 years ago, and it still has a madman over the border, but it now tops the league in attainment at age 16 and staying-on rates, whereas our own country ranks 23rd in educational attainment at 16 and staying-on rates. There is some way to go before we are a world-class country in educational terms.

The Minister mentioned the number of graduates being turned out every year in India and China. We have a huge task ahead if we are to increase the number of people participating in higher education and to provide the improvement in intermediate skills and school-level skills, on which much of the debate has focused.

The hon. Member for South Holland and The Deepings (Mr. Hayes) finished by mentioning the 14-to-19 diplomas. They featured highly in Education questions this morning. The Secretary of State said that he thought that the first five diplomas in the initial tranche of collaborations were on track to be delivered by 2008, and I hope that he is right. It is vital that the diplomas succeed and are seen to be a success at the start, otherwise there is a terrible danger that they will not be taken up when they become a fully fledged national entitlement in 2013.

There are early warning signs that things might not be quite as on track as the Secretary of State indicated this morning. My Select Committee colleagues and I visited Lewisham college earlier this week and heard concerns from the coal face. People who will be delivering the diplomas, if they are successful in the gateway, are worried about the content of some of the diplomas. Worries have also been expressed in evidence to the Select Committee. Important work still needs to be done to ensure that the diplomas are a success by the time that we come to their early implementation in 2008.

I shall not reopen the debate about whether that is an implementation of the Tomlinson report—I suspect that we have been over that many times and doubtless it will be discussed again at some point, but now is not the time to do so. My other worry came when I heard the Minister for Schools tell the Select Committee that he expected the first collaborations to take part in the diplomas to build on what exists already. I worried that the diplomas will be delivered in the colleges, and in the schools that are collaborating with colleges, where a great deal of vocational education goes on already, and that vocational opportunities might not be widened to the whole family of schools.

That is our worry about the Tomlinson report. We said that it was a missed opportunity to bring together GCSE, A-level, and vocational courses in one diploma, so that everyone takes the same named qualification, delivered in every state school and college in the country. There is a danger that we will continue the current divide where some people do vocational education and other children, depending on where they are in the country, struggle with the only academic offer that is available to them in their schools and do not have the opportunity to access the vocational training that the diploma should open up to them. None the less, we desperately want the diplomas to succeed.

It has been said a couple of times by the Minister for Higher Education and Lifelong Learning and by the hon. Member for South Holland and The Deepings that 70 per cent. of the work force that will need to be in place by 2020 is already in place—the Leitch report is all about where we need to be in 2020. Some 70 per cent. of that work force has already completed its formal, compulsory education. We also know that demographic change will take place over the next decade. Fewer teenagers will be entering the labour market or entering further and higher education, so it is all the more important that we invest in the existing work force. Leitch says that that is a tripartite obligation on the employer, the employee and the Government, but I think that there must be a step change in the attitude of some employers.

I was lucky that when I graduated I joined what was then one of the world’s largest consulting firms. It is now called PricewaterhouseCoopers and is the world’s largest consulting firm. The training that I received to get my professional qualification and the on-the-job training were second to none; the investment was huge. That situation was replicated in all the other large consulting firms, the legal firms and the other professional bodies that many of my friends joined. Even those who went into the large companies would have had a similar experience. One of my political colleagues in Bristol left school with only a handful of GCSEs, but she works for a large insurance company and it has invested in her and ensured that she is able to get financial planning qualifications.

If someone is lucky enough to work for a large consulting firm or a large quoted company, the chances are that their employer will have a positive attitude to investment in human resources. We know that that is not always the case throughout the economy. Small and medium enterprises need to make a cultural shift if the step change in the skills of our work force is to take place.

I see that the hon. Member for Blackpool, South (Mr. Marsden) has joined us. I believe that it was the principal of Blackpool college who told the Select Committee that somebody came to take up one of its courses, but when her employer was told that the fee would be £70, he shook his head and said no. He was not willing to invest even that paltry sum in somebody’s education.

First, I apologise for not being able to attend this debate before now, Mr. Hancock. I wish to amplify the point that the hon. Gentleman is rightly making. That company was unwilling to invest not just in one employee but in a number of employees.

I thank the hon. Gentleman for reinforcing my point. This is where I share much of what the hon. Member for South Holland and The Deepings was saying. Leitch is quite weak in that area. He relies on a pledge—a voluntary commitment—by employers to invest in their employees so that 90 per cent. of the work force are up to level 2 standard qualifications by 2020. The report says that if we do not see significant evidence that they are making that step change in just three years’ time, by 2010, more intervention might be needed. Perhaps the Minister will tell us what intervention he thinks might be needed in three years’ time. He might be confident that employers will make that step change in attitude.

We should encourage a culture of minimum entitlement for employees of all firms—an expectation that as one progresses through one’s career one will receive at least a minimum investment in training each year. That could be expressed in hours or days. I suggest that five days of training is the sort of level that should be considered.

Employers often say that they are afraid to invest in training because, if they invest, someone will poach their well-trained staff, and those staff will go to a firm that perhaps has not invested in training. If we achieve the culture shift that I am describing, however—such that every small and medium enterprise in the country invests in training, along with larger enterprises too—the fear of poaching will disappear. If employers invest in their human resources, the fact that there is turnover between firms and that people move around in the natural order of things can be a good thing, because people can bring with them the practical experience that they have gained with other employers.

The Chairman of the Education and Skills Committee, the hon. Member for Huddersfield (Mr. Sheerman), has joined us. He will remember that when we in the Committee considered further education, one of the worrying issues that we identified was that there seemed to be, if not hostility, a lack of understanding between employers and further education colleges on what an FE college could offer to an employer, and on what an employer could reasonably expect of an FE college. That is a second area in which a change in attitude is needed, and there is much that can be done, by the Learning and Skills Council among others, to bridge that perception gap.

It is for that reason that I am slightly wary of one of the strong recommendations in the Leitch report, which was that much of the power over skills budgets and course provision should lie in the hands of employers. We need a more positive attitude from employers before too much power is handed to them. There is a risk in certain localised economies that, if employers are the main arbiters of the training provided in a community, there will not be flexibility in relation to individual needs and local economic development.

I think back to where I grew up. The body that is now the university of Glamorgan was originally the Glamorgan school of mines. It provided what was probably the only training that was available to my grandfathers in their day, and undoubtedly that training was what local employers wanted. It did not exactly facilitate labour mobility, however, and I am concerned that employers might sometimes have too much control over courses.

Change is also needed in employers’ attitude to the sort of people who are employed. Earlier, I mentioned demographic change—there will be fewer teenagers in the next decade and we know, in any case, that we live in an ageing society. I can announce that I am now 40—my 40th birthday was recorded at a Select Committee meeting a few months ago—so I am fully aware that when one reaches 40 there is a change in the attitude that one can usually expect from people. When one is over 50 and still in the work force, even more age-related discrimination can be experienced.

Some large providers actively invest in older workers—B&Q is perhaps the best known. That example should be followed. It is essential that we invest in the existing work force and in older employees if we are successfully to compete in the future. Much the same could be said in relation to the employability of disabled people. There is a stark gap if one studies the educational attainment statistics for disabled and able-bodied people and the employment chances of those groups. That is unacceptable, and attitudes need to change on that as well.

In future, that kind of perception change will be an economic necessity for firms and for the economy in general, rather than just a matter of combating discrimination. I echo the words of the hon. Member for South Holland and The Deepings about cuts in adult and community learning. He was right that change will require rather more than Sir Digby Jones charging round the country demanding that employers meet the pledge. Sobriety has been mentioned, along with hope, but hope will not be enough to deliver what is needed—we need firm action.

There will be a change of Prime Minister some time this year—we think so anyway. On the last occasion of a change of Labour Prime Minister between elections, in the mid-1970s, Mr. Callaghan took the opportunity of becoming Prime Minister to announce that education would be his main passion. I hope that whoever succeeds the current incumbent, be it the Chancellor or whoever, will say that skills will be the number one priority of his Government.

Let me move from intermediate skills to higher-level skills. I was surprised that the 42-minute speech of the hon. Member for South Holland and The Deepings, despite capturing our attention, did not include any mention of such skills. They are just as important if we are to compete in the global economy during the time scale of the Leitch report. The report’s target is for 40 per cent. of the adult work force to be educated to degree level, instead of the current 29 per cent. That would be a significant change, and it is a challenging target. The current participation rate among 18 to 30-year-olds is approximately 42 per cent., but that rate has been stuck at the same level for some time, and we need urgent work to improve it, and to get more people involved in higher education.

One way to do that is to deliver higher education in FE colleges. There has been mention of the fact that that is being done, but it was not the case previously. FE colleges might be very keen to get involved, but some of them have told me that they are not getting the necessary resources, particularly when those resources are compared with those available to universities. We should ensure that widening participation through further education does not mean delivering higher education on the cheap.

Foundation degrees were also mentioned. There will shortly be debates on the Floor of the House and in Committee on the Further Education and Training Bill after it is received from another place, so I shall postpone most of my comments on that subject until then. However, my party’s mind is currently open on whether FE colleges should be allowed to award the degrees.

Vocational degrees are already a great success in HE institutions. I do not know whether the Minister keeps it by his bedside, but I am sure that at some point he has read the Universities UK report entitled “Higher level learning: Universities and employers working together”, which is excellent, and from which I shall draw a couple of examples. The report predicts that the games software and electronic publishing industry, which is worth £65 billion to the UK economy, will achieve 20 per cent. growth in graduate employment over the period addressed by the Leitch report. According to statistics from the Universities and Colleges Admissions Service, there are currently on offer 76 degree-level courses in games design, together with 52 in games technology, and 38 in games production. According to my maths, that makes 166 degree courses in higher education up and down the country, from Aberdeen to Plymouth. Those are courses that no one would have taken five or 10 years ago, so great change is happening.

A few months ago I visited the university of Bedfordshire, in Luton. There was much excellent work, and I met the professor of virtual reality. That does not sound like something that one expects to hear, but he was very much a real person, with real students who are going on to do real jobs, and who will earn a substantial amount of money in the gaming industry after graduation. The UK is a world leader in the gaming industry—it is ahead of Japan.

The Minister mentioned the Olympics, so I shall mention sport and leisure courses, which higher education also delivers. For example, there is a course in applied golf management studies, at which the popular press and some of our colleagues have often sneered unjustly. The course is offered by the university of Birmingham, a Russell group university. The course is heavily over-subscribed, and employment at the end is almost guaranteed. Such courses, sometimes sneered at as Mickey Mouse courses, are nothing of the sort; they are incredibly successful, and the employment outcomes are usually stronger than those of the more traditional degrees, such as history, which I studied more years ago than I care to mention. Higher education is flexible, and it has delivered successful skills-related courses.

We live in a fast-changing economy; it is probably changing at a faster rate than in the 18th century, when this country was the first to industrialise. People were bewildered by change at that time, and they protested against it. People, unless they are of a certain age, are no longer bewildered by change. They understand that they need the skills if they are to benefit from it.

I mentioned the gaming industry. I could mention aero-engineering. On my doorstep in Bristol, a huge amount of research and skills-related work is taking place at Airbus and at other firms to examine how we can use plastics rather than metals in aeroplanes not only to increase the efficiency of the airliners, but to combat climate change. If we invest more in renewable energy, we can take advantage of the skills and employment opportunities that it makes available.

I have mentioned demographic change a couple of times. One of its ramifications is a change in the building industry. We know that many more houses and smaller properties must be built. At the City of Bristol college, and at Lewisham college, which I visited earlier this week, one sees huge growth in the popularity of courses in plastering, bricklaying, kitchen design and plumbing. As the hon. Member for South Holland and The Deepings mentioned, upskilling has never been more vital.

The comprehensive spending review is coming up, and we will be watching closely to see how high a priority education and skills is for the Chancellor—possibly the future Prime Minister. We will also be watching to see whether the pledge to match investment in schools with private sector investment has any prospect of delivery, and whether there will be growth in higher education investment, which does not compare to the extra money invested in schools—over the past 10 years, higher education investment in percentage growth terms has been nowhere near as generous.

We will also be watching to ensure that there is no anticipated growth in fee income rather than Government investment, and to ensure in particular that there is continued Government commitment to further education and skills, so that it is not the unloved middle child of the educational world mentioned by Sir Andrew Foster in his report.

Our work force definitely needs upskilling. It is good for economic prosperity and for the well-being of individuals. Depending on which report one reads, the United Kingdom is either the worst country in terms of social mobility, or it is just behind the worst country, the United States. The Leitch report mentions many challenges that this country faces. There is much for us to do, and this debate will become ever more vital over the next few years.

I thank the Minister for his report—I well understand the hard work that he puts into the subject. He knows that I have served on the advisory committee of the London School of Commerce for the past two years, and higher education issues and international concerns, on which I shall speak later, have come to the fore.

As the hon. Member for Bristol, West (Stephen Williams) pointed out, there is little doubt that vocational training has for far too long been a Cinderella item on the education and skills agenda. The Government are right to identify that fact and to create a vision for the next decade or so. I support the fact that the Leitch report pays significant attention to the role that further education must play in remedying the skills deficit. There is little doubt, however, that we urgently need to up our game.

The biggest risk posed by globalisation is that it will leave many people in its wake. However, the Minister got it absolutely right when he discussed challenges and opportunities, rather than focusing only on risks, or considering the subject in a downbeat manner. He was absolutely right, too, to identify the fact that we are seeing not just the outsourcing but increasingly the offshoring of ever more skilled roles to India and to China in particular. Hundreds of thousands of computer science students graduate in China and India every year, and there is a rather miserable comparison to be made with the 3,500 computer science students who graduated in the last full year in the UK.

I have been to India, China, Bangladesh and Kuala Lumpur to observe their education systems at first hand, and I have seen tremendous growth areas. We have great benefits in this country: we have a relatively skilled work force—we must not be complacent about that—and we have the great advantage of the English language, which is the world language of business and continues to provide us with tremendous advantages. However, as my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) pointed out, those advantages must extend to all parts of the community. There is a big risk to social cohesion, and I shall say more about that later in relation to immigration. However, we do not want to discourage very skilled people from coming to this country. Indeed, here in London we have some of the most skilled people not only in investment banking, but in a number of professional fields.

Equally, part and parcel of life in a cosmopolitan and globally focused country is the fact that unskilled workers come here for a short period, whether as seasonal labourers or as young people wishing to take advantage of life in London for a year or two before returning home. However, that aspect of globalisation gives rise to some important concerns about social cohesion that are especially applicable to London. At the same time, the UK is wedded to a European model of high benefits and increasing employment regulation, with a 35 or 48-hour week that would make many people laugh. I would have supported the Government if they had retained our opt-out of the social chapter, but they have done good work and I hope that they continue to do so to ensure that employers have the flexibility to make the working week as long as possible. In India or China, people regard the prospect of being allowed to work for only 48 hours a week as laughable. It is certainly by no means the norm, and we will lose enormous opportunities and our place in the world economy in the decades ahead if we do not become more flexible.

Employment regulation will be the legacy of the Chancellor of the Exchequer, but like most micro-economic meddling, it takes a decade or so to work through the system, so only in the decades ahead will we experience the precise disadvantages of the thinking behind that policy. In the general debate about education and skills, too much attention is paid to schools or universities. Education should not be regarded as ending at age 16 or in one’s early 20s. I entirely agree with the hon. Member for Bristol, West: it is easy to be derisive about so-called trendy degrees such as media studies, and the real challenge is to make such courses robust and relevant, ensuring that there is greater employer involvement.

The creative industries, alongside financial services, and the energy, tourism and hospitality industries, are vital to this country. Some of the most important, cutting-edge employers in the computer games industry are based in Soho in my constituency. It is—and in the years ahead it will continue to be—an enormous industry, even though it had not even been heard of 10 years ago. [Interruption.] Does the hon. Member for Huddersfield (Mr. Sheerman) wish to intervene?

No.

I thought that the hon. Gentleman might be a great player of computer games. We must remember that that field will provide job opportunities in future. That is not to say that we should deride the teaching of physics, chemistry and other robustly academic subjects at university, but we must look to a more flexible employment future. Less attention should be paid to whether 35, 40, 42 or 50 per cent. of young people go to university and much more to the need for lifelong learning and adult education, as my hon. Friend the Member for South Holland and The Deepings said. Indeed, as the hon. Member for Bristol, West pointed out, almost with disappointment, 42 per cent. of the current cohort of 18 to 19-year-olds wish to go to university, and that percentage has remained the same for the past few years.

Will the hon. Gentleman give way?

If I may, I shall quickly make this point. I am concerned that many young people are making a decision based partly on finance, but also on the robustness of the courses that are on offer. In many ways, the explosion in the growth of university education over the past decade and a half or so has meant, as is the case in other spheres, that quality has gone out of the window, and has been sacrificed for the sake of quantity. Many youngsters make an intelligent economic, market-based decision, because they believe that they would gain more by going into full-time employment than by taking a university course.

Will the hon. Gentleman give way?

I shall give way first to the hon. Member for Bristol, West.

First, I would like to clarify the fact that the 42 per cent. participation rate applies to 18 to 30-year-olds; it does not refer just to school leavers. Secondly, the hon. Gentleman is quite right that people make an economic decision. They do so partly because they fear the amount of debt that they will accumulate on graduation, as a result of living costs and the £9,000-worth of fees that they have to pay for most courses. I know many people who would have benefited from, and whose lives would have been transformed by, higher education, but who decided instead to leave school at 18 with good A-levels and go into banking or whatever. They will earn good money, but their lives will be quite different because of the decision, imposed on them by the Government, to avoid extra debt.

I shall put my life in my hands and give way to the Chairman of the Select Committee on Education and Skills.

I thought that the hon. Gentleman was making rather a good speech until he spoke about a diminution in quality in certain university courses. One often hears that, usually from a certain former chief inspector of schools writing in the back pages of The Sunday Times, but what really irritates me is the fact that people never say which universities or which courses they are talking about. I have not found any such universities or courses, and I think that there has been a change. People may decide that university is not for them, which is a wise choice if it is not right for them at the time. However, I do not appreciate an attack on the quality of courses in universities when there is no evidence of any diminution in quality.

Without giving away particulars, I had a speaking engagement at University college London last week, and a professor from a university in the north of England made a point about the explosion in student numbers in the past 10 years. He had been an academic at that university for 25 years or so, but he reckoned that there was a significant diminution in numbers. That may be an isolated case, but it was brought to my attention. Perhaps I could discuss the details with the hon. Gentleman in private, but I would prefer not to do so in the Chamber.

No, it must be on the record. I am sorry, but this is a serious matter. We have an important quality assurance system in this country and I am satisfied with the quality that it ensures. That kind of over-dinner whispering in people’s ears is very damaging to the higher education sector. I think that the hon. Gentleman is talking about Oxford, because he knows it well. If, however, he is talking about universities in the north of England, I challenge him to say so on the record because I am a north of England MP and I do not believe that there is one element of truth in what he said.

The hon. Gentleman has made his point very robustly. I shall resist the temptation to take up his challenge, but I accept that the quality assurance system is strong and robust. It needs to be, given the importance of the education system—particularly the higher education system—as a great export further afield.

The reality, however, is that many people who do not go to university will embrace five, or perhaps six, careers during a working life that may extend into their 70s, given the fact that the retirement age is likely to rise. If we are not adaptable, our work force will not be able to survive in a world that demands high value-added, high-resolution outcomes, especially in manufacturing. I was relieved to hear what the Minister had to say about proposals to deal with the fact that the unskilled work force will diminish by about 75 to 80 per cent. in the period we are discussing. Clearly, we must work with some urgency to ensure that the most vulnerable in society are not left behind.

I do not believe that there is anything wrong with a high-wage economy, but those wages must be earned in a globally competitive market. It is very important that training is not simply regarded as either the Government’s domain or as something on which they have all the answers. We must provide robust training, the content of which must largely be dictated by employers and prospective employers. I hope that you will forgive me, Mr. Hancock, for addressing issues that are slightly closer to home. In London, the signs are a little less promising, and the Minister will be aware that the effect of the skills gap on the most vulnerable members of the indigenous population is quite stark. There has been an influx of thousands of Poles, Lithuanians and others from the A8 countries during the past three years. Those people have worked extremely hard and made a tremendous contribution to our country, both economically and in other ways, by undertaking skilled and semi-skilled jobs, particularly in construction, tourism, catering and hospitality. In London, however, unemployment is at 8.7 per cent., and it is rising. Indeed, that level is the highest of any region in the country. London’s unemployed are often functionally unemployable, and they lack the skills, application and the aptitude to hold down jobs. As for the Olympics in 2012, it is, I fear, wishful thinking to expect that there will be a bonanza of construction work for local workers in the poorest parts of the east end, as has been recognised by Sir Robin Wales, the elected Labour mayor of the borough of Newham. We have to ensure that the skills are there so that workers have both the aptitude and application necessary to hold down a job.

Given the short time available, I would like to say a few words about the eastern part of my constituency. The City of London corporation has provided me with a brief for this debate, detailing some of its concerns. As the Minister is aware, the City has a very proud record of looking eastwards towards the deprived boroughs that are its neighbours, such as Tower Hamlets, Hackney, Newham and Islington. London’s leading role as an international financial centre is widely recognised, and the City has always thrived on internationalism. In fairness, it thrived on it before the first world war, but for many years afterwards internationalism seemed to go away. It was tax regulation in the early 1960s in the USA that largely led to the emergence of the eurobond and eurodollar market, and internationalisation was reinforced by the big bang 21 years ago.

Of the estimated 450 authorised banking groups in the capital, the City is currently home to 255 from abroad. The square mile generates over $1.1 billion in foreign exchange turnover each day—about a third of the global share—and it is the world’s leading market for international insurance. Indeed, it is recognised as such by the Treasury. As someone who represents the City of London, I am relieved about that, because 10 years ago, many people in London feared that a Labour Government would mean problems for the City. I am not suggesting that it has all been plain sailing, but credit must go where it is due, and the Treasury has a pretty good record in the City of London. Some regulatory measures have not been enforced, although the story is not entirely positive. More importantly, by allowing non-domiciled individuals to remain here to work, we have ensured that there has not been a flight of capital. Indeed, regulation and tax from abroad have been of great benefit. The Sarbanes-Oxley arrangements in the United States during the past five years caused great damage to New York as a financial capital, and London has been the chief beneficiary.

Part of the continuing appeal of London to foreign companies is its cosmopolitan status. Frankfurt and Tokyo, for example, are primarily marketplaces for domestic participants, in which foreign players are, perhaps unwillingly at times, granted access. London, and to a lesser extent New York, are characterised by foreign nationals trading with each other. The City is essentially a large international marketplace responding to the need of Governments and companies in Europe and throughout the world to borrow and raise capital. In November 2005, the City of London corporation published research into competitive advantage, which was based upon a number of surveys of professionals in the financial services industry in more than 20 countries. They were asked about the key components of competitive advantage and asked to rank the world’s major financial centres against those criteria, thereby providing a detailed overview of practitioners’ perceptions of London’s position. That research ranked skilled personnel as the most important factor in the competitiveness of an international financial centre.

The provision of leading-edge education and training services in the UK is central to maintaining our reputation, and it is the key to the development of the professional competences that will sustain London’s position in future. Although London’s dominance in the UK economy brings certain problems with it, there is no doubt that without a strong City of London, this country would face grave financial concerns. Our training and education services are internationally recognised as providing career opportunities in financial and professional services, both in London and the UK as a whole.

The City of London has a growing interest in the skills agenda, which will help it to maintain its leading position. It recognises that for the financial and business sector to prosper, skills are of the utmost importance at graduate and non-graduate levels. Recent research published by the City of London corporation highlights issues of importance and makes a number of key recommendations. The “Skills in the City” report noted a number of key areas for intervention, including the need to raise employers’ awareness and their perception of vocational qualifications; improve basic skill levels; enhance students’ ability to perform successfully at interviews and selection days; and enhance opportunities for employers to improve the levels of local recruitment. Those are some of the soft skills to which my hon. Friend the Member for South Holland and The Deepings referred. Soft they may be, but they are none the less important, as they must be developed not only by youngsters, but by people throughout their working lives if they wish to pursue another career.

At the other end of the spectrum, the corporation focused on the graduate skills needed in the financial and related business sector, as it is aware that recruitment is an international activity and some jobs attract high achievers from other EU countries and further afield. University and higher education institutions are a key pillar of the knowledge economy, and they provide the dynamic for innovation through research and development. As world class business competes in the City, the best universities, too, compete in a global marketplace. Separate research conducted by the Financial Services Skills Council highlighted a number of recommendations for higher education institutions and City-type employers, including the need for greater co-ordination between sectors if future discussion of graduate skills is to be productive. It suggested that without that co-ordination, broad dialogue would not improve and that interaction would remain limited to pockets of effectiveness.

We need better employer co-ordination of existing and prospective higher education institution relationships. If the higher education sector is to remain strong in this country, we must recognise that it operates in a globally competitive marketplace. Undergraduates—and, perhaps more importantly, their parents, who pay the fees—will increasingly look at education from a much more global perspective. It is a matter of concern that some 18-year-olds in this country are leaving school to do a first degree in the United States of America, rather than going to one our best universities. By contrast, our top universities are still enormous draws for some of the brighter students in India, China and elsewhere. One hopes that that will continue, but we should not be complacent.

The importance that the City attaches to skills is reflected by the lord mayor’s focus on skills as the central theme of his mayoralty, up to November 2007. He will focus on the City in particular as a centre of excellence for professional education, training and qualifications. The initiative, “City of London—City of Learning”, aims to raise awareness of the quality and portability of UK qualifications through promotional events during the year. As the Minister will be aware, 90 days of promotional events will take place beyond these shores. It is of key importance that we focus on that element of vocational and relevant employer-led training.

I am following the hon. Gentleman with interest, as I, too, have received the City of London’s briefing. It is worth mentioning—but it often does not get mentioned—that although higher education rightly boasts of its enormous contribution to this country’s invisible earnings, professional training is equally a huge invisible export earner. That training is entirely delivered by the private sector to people coming to this country to train to be lawyers, accountants, chartered surveyors and so on. The UK’s professional qualifications are valued the world over and earn a lot of money for this country through such teaching and training.

I entirely endorse that point. Indeed, I said earlier that we should not see training as something on which the Government have all the answers, because in many ways providing it often comes down to employers.

An integral element of the corporation’s initiatives in the year ahead will be the development of an internet-based database that will be linked to the websites of key professional bodies, universities and training providers. That will be accessed through a range of sites, including those of Government and City institutions, and through UK missions and the work of the British Council, in which the Minister has had a strong involvement.

It is of course important to recognise that the cluster of international capital and expertise represented by the City is potentially fragile. Global businesses and their highly skilled work forces do not necessarily have an innate loyalty to the UK. They wish to conduct business where the legal, fiscal and regulatory environment is most cost-effective for them, and where the physical infrastructure, along with the general human environment, best meets their needs. With London as its financial centre, the UK has demonstrated its capacity to attract and retain such businesses. To continue doing so there might be a requirement for public policy changes. Such changes are being discussed as part of the Chancellor of the Exchequer’s initiative on the international promotion of the City.

Thank you for allowing me to make a longer contribution to this debate than might otherwise have been possible, Mr. Hancock. The relative paucity of speakers is largely down to the weather conditions, rather than anything to do with the importance of the subject. I am glad that I had a chance to speak a little more generally, as well as to discuss aspects specific to the City of London. I appreciate that the Minister may not feel the need to make any great comment in the latter regard at this juncture, given that some specific suggestions were put forward.

Before the hon. Gentleman concludes, is he concerned that the City of London takes a high percentage of our brightest graduates, who are expensively educated at our universities, but who seem not to use their maths, engineering and other highly desirable skills in the public services, such as the civil service, local government and the health service? Is he worried that the City, which he represents, is taking too big a share of the great talents of our country?

The hon. Gentleman makes a valid point. I graduated from Oxford university in 1987.

The degrees are not as good as they used to be.

They were not that good in my time either, but that is another matter. In 1987, a significant proportion of the undergraduates reading engineering or mathematics went into the City, and I suspect that almost all of them do so now. That contrasted with the position only 15 or so years before, because in 1971, one seventh—14 to 15 per cent.—of Oxford undergraduates went straight into teaching.

There is no doubt that what the hon. Gentleman described is a concern. The reality is that we live in a globally competitive world. I fear that if we suggested that some of our brightest and best should not come to London, at least initially in their careers, they would go to New York, Paris, Hong Kong and further afield. That is a concern, but it is much more important that we have a successful financial services industry. Without such a thing based in the City of London, this country would be in deep trouble.

I would, however, point out that although many of our very brightest undergraduates and graduates spend a few years in the City of London, the attrition rate is quite horrific in certain professions, such as law and accountancy—the hon. Member for Bristol, West and I are both in that mode. The attrition rate is high, and many people decide in their early 30s to have a second career in the public services. The situation is not necessarily to be feared, although I well understand the reasons why, particularly in some of our important regional centres, some of the brightest and best are moving further afield.

On legal and accountancy services, there is little doubt that both Leeds and Manchester—as well, of course, as Edinburgh and Glasgow—are significant financial centres, although I appreciate that they have to contend, at least at the undergraduate level, with the prospect of losing some of the brightest and most talented individuals, who come to London in the first instance. London is a city state in many ways— even as far afield as Portsmouth, house prices are distorted by the international strength of London as a financial centre—but that issue is worthy of an entirely different debate. The Minister will perhaps wish to limit his contribution to some of the more general comments made this afternoon.

I apologise, Mr. Hancock, for having been unable to attend earlier.

I want to make a contribution to this debate wearing two hats—first, as a member of the Education and Skills Committee. The hon. Member for Bristol, West (Stephen Williams) has already spoken and our formidable Chairman, my hon. Friend the Member for Huddersfield (Mr. Sheerman), has intervened a number of times.

Secondly, I speak as chair of the all-party skills group, which is closely linked to the National Skills Forum. What our group has tried to do is an echo of what the Government are trying to do generally. Membership of the group includes not only parliamentarians but sector skills councils and many key businesses and further education colleges. That bringing together of business, parliamentarians and further education establishments is at the heart of much of what Leitch has to say. I should also mention that the involvement of the educational charity Edge is important in supporting the activities of the National Skills Forum.

I should like to start by talking a little about the focus and emphasis that both Leitch and the Government place on apprenticeships. At the beginning of the report, in the executive summary under the sub-heading “A compelling vision for the UK”, Lord Leitch discusses how vital it is to shift

“the balance of intermediate skills from Level 2 to Level 3.”

The paragraph goes on:

“Improving the esteem, quantity and quality of intermediate skills. This means 1.9 million additional Level 3 attainments over the period and boosting the number of Apprentices to 500,000 a year”.

The Chancellor and Ministers have said on several occasions that that figure is very important, and I would not disagree at all. The Government’s achievement in expanding both the range and number of apprenticeships is to be applauded, as is that ambitious target.

However, the target brings with it two or three questions and responsibilities. The first is to look at some of the inherent problems in respect of apprenticeship completion rates. They are extremely variable, although there has been significant improvement. Whether they are traditional or modern, apprenticeships are highly affected by the regional and sub-regional economic circumstances in which they are taken on. One of the problems, particularly true of sectors such as construction, is that in areas of robust economic activity, such as London and the south-east at the moment, it is difficult, given some of the traditional structures of apprenticeships, to keep people—particularly younger people—in the schemes.

The hon. Member for Bristol, West and I joined other members of the all-party skills group earlier in the week on a visit to Lewisham college. We saw a whole range of activities there—people were being trained in traditional subjects such as construction and in some of the newer subjects such as fashion, cookery and related skills. However, one of the interesting things mentioned by one of the trainers, who was supervising a group of 16-year-olds doing bricklaying, was the potential for young people who became skilled through the courses and qualifications at the college to get lucrative work in the following three to four years—the figures mentioned were between £150 and £180 a day. Of course I accept that that circumstance is particular and specific, given the building boom in London, all the developments such as the Thames Gateway and associated projects, and—last but not least—the Olympics.

Nevertheless, there will always be such pressure in those key areas. We want apprenticeships in whatever subject to be as robust and detailed—and, increasingly, as flexible and portable—as possible. Only with flexibility and portability can we encourage some of those, particularly younger people, who see economic riches or benefits from throwing in their apprenticeships and going straight to another form of work, to complete apprenticeships. Alternatively, if they are not able to complete them in one place, they could take the ingredient component parts, such as coursework, and do them somewhere else. Such issues are not new, and the academic sector is grappling with them as part of the discussion of framework supportability. They are particularly important in respect of apprenticeships.

I do not think that the hon. Gentleman was here when I spoke earlier. I made the same point as he is about apprenticeship completions. Does he agree that an important factor is ensuring high levels of employer engagement in apprenticeships? If people in apprenticeships see that there is a logical step into work and, perhaps, a likelihood of staying with the employer with which they have trained, the drop-out problem is likely to be less profound.

I agree that employer engagement is very much part of the process. Furthermore, employer appreciation of the pressures on young people in such circumstances is also important. We need to consider how the framework of apprenticeships works and is addressed.

In the context of the ambitious apprenticeship targets, we also need to consider more proactively apprenticeships for older workers. The hon. Member for Cities of London and Westminster (Mr. Field) referred to the number of career changes that people make, and not only those that bring them to this place. That is an important point. Some such career changes are voluntary; others are enforced or relate to periods of economic activity or illness.

It is therefore important that we consider the potential for apprenticeships for older workers, particularly women. I pay tribute to companies, foresighted in that respect, that are setting up pilot schemes. I am thinking particularly of a British Gas pilot scheme to attract older women as apprentices. That has been extremely successful, and also successful in taking them forward thereafter. As we consider the ambitious apprenticeships target, we have to think about their structure and nature and how they can be made as portable as possible and as compatible as possible with people’s changing economic expectations and circumstances.

That brings me to the issue of older workers, which I wish to deal with specifically. Many people have already raised it. Leitch points out the importance of adult skills, and the focus of his report is very much around older workers. However, we must go beyond mantras about the importance of older workers and, for that matter, adult learners, and consider some of the current pinch points and pressures.

I shall quote some of the Age Concern’s comments about Leitch and the comprehensive spending review. It welcomes what Leitch and the Government have said about the untapped potential of skills in older people, and it recognises that the figures on demographic change, to which other Members have referred, are a powerful stimulus, leaving aside issues of equity, to our putting greater focus on older workers. However, it believes that progress towards acknowledging the issue—it is an issue not only for the Government but also for employers—has been somewhat patchy thus far.

Age Concern stated that it

“believes training people over 40 is essential for future skills needs yet there has been no progress from 2000 to 2005”—

that is a little harsh, but I understand where the organisation is coming from—

“in up-skilling older workers. The Government must outlaw age discrimination in adult learning if they expect people to work longer. There is also an important role for education in sustaining the well-being and independence of older people.”

That relates to the concerns that have been raised about leisure courses in this debate.

Age Concern goes on to say—here there are some specific points that the Government might pick up on—that a new approach to adult learning

“is crucial and should be addressed by the long term spending plans of the Comprehensive Spending Review. To achieve the skills mix envisaged by the Leitch Review over the next decade there will need to be a sustained increase in the training of mature workers with low skills. This will demand a radical shift in policy and delivery, to reverse the existing emphasis on young adults. Training of people over 40 should be prioritised within the Skills Strategy and New Deal for Skills programmes”.

Age Concern gives two or three further examples of what it would like to see: action on the Leitch review’s commitments to join up Jobcentre Plus and the skills sector; the Leitch report age-proofed by analysis of the impacts that it would have on all adult learners, especially those who are over 40 years old; and age targets built into all Department for Education and Skills training programmes, including train to gain and the level 2 entitlement. I am not a great fan of quotas or tick-box culture, but that focus is an important one to take on board.

When we consider the enormous challenges in respect of skills, taking into account the numbers that are required and the demographic situation, we must also focus more on the employment of people with disabilities. The hon. Member for Bristol, West touched on that issue, and I want to give one or two other figures. According to the Disability Rights Commission, more than 20 per cent. of disabled people are economically inactive, and the figures are also grim if broken down by disability. Only one in 10 people with severe learning disabilities are in work, and only two in 10 with mental health problems are in work.

The commission said that the employment gap for disabled people can be explained largely by the educational attainment gap. I would add to that—it is a sad fact—the historic attitudes of employers, even when they take on board disabled people, about the treatment of disabled people and their capacity for progression. I am glad that those attitudes are being remedied, at least in some quarters.

I am grateful to the hon. Gentleman for giving way a second time. I just want to draw his attention to a project that I visited a few weeks ago in Haringey called ROSE, or real opportunities for supported employment. It is run with the local further education college, it engages local employers and it successfully places youngsters with multiple learning disabilities and severe learning disabilities in employment. There are good models out there. We must identify them and see how their good practice can be shared. I pay tribute to the work that is done by that project.

I agree with the hon. Gentleman that there are some good initiatives, but the issue is one for public policy as well. As I said, the explanation—to a degree, at least—is the educational attainment gap. I hope that these things are about to change, and I believe that they are beginning to change, but, historically, we have not carried through the attention that we gave up to the age of 16 to pupils with special educational needs or disabilities, whether in mainstream or specialist schools. That issue was touched on in our Select Committee report on special educational needs, albeit more lightly than any of us would have wished. I believe that many of us would have wished to look further into the matter. A key element is that what we do in post-16 education for people with disabilities will, inevitably, have an impact on our ability to employ them, and their ability to build on skills at a later date.

I wish to discuss briefly a matter that is not unrelated to the issue of how we get economically inactive people—those who, in the words of the National Institute of Adult Continuing Education, do not fit—back into the work force, as well as upskilling and training further the existing work force. I also want to discuss what the hon. Member for South Holland and The Deepings (Mr. Hayes) referred to as soft skills. I have used that phrase on several occasions, but I have never been entirely happy with it. The danger with the expression “soft skills” is that it somehow gives the impression to people who perhaps are not familiar with some of the lexicon that the skills are less important, or less verifiable. Without trying to be politically correct about it, I use in my own speeches and comments the words “enabling skills” a bit more, because that is what we are actually talking about. The word “enabling” also brings on board the issue of progression, which I know is an important one for the Government, and rightly so.

Last year, as part of adult learners week, I was asked to give a speech to NIACE. If I may, I would like to refer to some of the things that I said on that occasion about these issues. I said:

“If we are talking about getting adults—whether disaffected young people in their late 20s who have failed to get decent qualifications previously, people of all ages with learning disabilities who have fallen through the gap, or older people in their late 40s and early 50s, casualties of redundancy in disappearing services or manufacturing industries who have been ground down by either having no job or a very low-skills one for several years, to return to skilled work the sort of skills they will require—whether we call them ‘gateway’ or ‘enabling’ ones—are not linear or narrowing but clustered. They are ones that will put a premium on developing self-confidence and interpersonal skills—including timekeeping and being at least to some degree self-starters.”

Those are the skills that will enable the people who I am talking about to adjust more easily

“to rapid change in the workforce or their employment or give them the qualifications to cope, and where necessary move on.”

Another thing that we do not want to do is bring people into the work force with a great deal of training and support, whether through Department for Work and Pensions programmes or anything else, get them a job and then find, despite their willingness to progress, that they feel stuck. That, I think, is a damaging situation for them and for the country, and it is not helpful to the ethos of progression that the Government rightly promote. We need to think of it in those terms when we talk about enabling skills.

I want to say something, too, about the absolute and central importance, in my view, of a regional approach to the sort of things that Leitch talked about. In his interim report in December 2005, Lord Leitch reminded us, and justly so, that although many of our regional cities had revived—he justly praised that revival, as I am sure that most of us do—the skills profile countrywide remains skewed. In the interim report, he quoted the figure that nearly four out of every 10 working adults in the north-east, Yorkshire and Humberside have skills below the level equivalent of five good GCSEs compared with only a quarter or so in the south-east. If one breaks down those statistics even further, even within relatively compact geographical regions, one can see significant discrepancies and differences in the acquisition of qualifications between large metropolitan cities and second-level—or second-tier—cities or towns with smaller populations.

Hon. Members will not be surprised to hear me say that this is the point at which I will make reference to my constituency. Blackpool, rather like Preston, is a classic example of a second-level city or town that has been dependent on a particular industry for a long time and where the skills base, historically, has been low and relatively poor. I refer, obviously, to the leisure and tourism industries. The stay-on rate in school, further education or beyond has also traditionally been disappointing. We have to be careful that in our economic and regeneration policies we focus on the particular concerns in regions and in that second-level of towns or cities. The Learning and Skills Council needs to address that in its overall plans.

The other thing about the skills requirements and skills challenge in Blackpool is that, like most seaside and coastal towns, although there are one or two large employers such as Blackpool pleasure beach and a few other major leisure industry employers, the vast majority of people who are involved in the tourism and leisure industry are, of course, involved via small and medium-sized enterprises and, in many cases, via what one might regard as micro-businesses. It is essential that as the Leitch programme is carried through, the interests and involvement of those small and medium-sized businesses, and of the micro-businesses in particular, are engaged.

One of the things that I and other members of the Select Committee on Education and Skills sometimes hear is that the views and concerns of employers are not always necessarily, completely or comprehensively covered by the sector skills councils that cover the area, however good or active those councils are. In considering how we take through Leitch’s agenda for 2020, the Government must always be mindful that we cannot always rely entirely on an updated corporatist approach, if I can put it that way, to how sector skills councils deliver on some of the important things that Lord Leitch talks about in his report.

The other day, at Lewisham college, we heard how although it is important that in order that qualifications are fit for purpose for 2020 and beyond the views of employers should be carefully and well represented, it is also important that when we bring on board the new qualifications—the new 14-to-19 diplomas, five of which are scheduled to be on the market by 2008—at every stage there should be a close involvement between further education colleges and the views of individual employers, as well as the sector skills council. There is a difficult balance to be struck.

In the Select Committee, we have heard the emphases on that tension already. There is a difficult balance to be struck between forging ahead ambitiously with the 14-to-19 diplomas in order to deliver precisely the sort of thing that Lord Leitch talks about in the report, where he says how essential those new diplomas are, and ensuring that they are properly embedded in the acceptance of the learner, the employer and the colleges that have to deliver them before we move on and discard some of the types of qualification that were available. If we do not strike that balance, there is a danger that we will fall between the two stools.

In conclusion, we have been set a great and challenging agenda by Lord Leitch. I hope that some of the issues that I have raised today will mean, first, that we will always remember that the devil is in the detail and, secondly, that when those things are followed through—this applies to Government, to Government agencies such as the LSC, and to officials as well as to the sectoral agencies—we will constantly monitor what is working and will not be afraid to revise targets or emphases as we see the results of what is happening.

I shall be brief. I think it is always a bit of a cheek when one comes into a debate late. However, I have been here quite some time and was in another Committee before so could not get here. It is a sign of the times that we are spoilt for choice when it comes to skills today: the Chancellor of the Exchequer and the Secretary of State for Education and Skills are jointly hosting a big conference across in the Queen Elizabeth II conference centre, we had Education and Skills questions today, and much else has been going on.

Two years ago, a group of us formed the all-party skills group, the National Skills Forum and the Skills Commission, which I jointly chair. We did so because of the irritation we all felt—particularly in the Select Committee—that every time we discussed early years or mainstream education, higher education or much else the press were there, as were the radio and the TV, but as soon as we turned to skills no one came. I got a bad reputation with the media for berating them for not turning up for discussions on skills.

In those two years, we have seen some amazing changes in terms of the level of interest and how we have managed together—with a lot of help from Government and from Opposition parties—to raise skills up the political agenda. That is where we are today, and in a sense this debate in Westminster Hall is a symptom of that success. We must get that success embedded over time, because we have to maintain it and work at it.

I think the subject is very important. I came into politics because I wanted a society in which every individual could push their talent to the full, could find all the skills that they had in them and could push them until their lives were made full, in the best sense of that word. In some senses, that flowed into a desire to get people the skills that would allow them to live the good life, by which I mean having a decent job, the ability to raise a family, to have a decent home and to go on holiday—all those things that we know intuitively are about the good life and that we all want for our constituents. On the one hand is personal fulfilment; on the other is being able to hold down a good job that provides a reasonable income. A knock-on from that is the fact that we need the skills to make the individual, the community and society successful. We need to sell our industrial wares—our industrial and manufacturing sectors are still large and successful, and we all know about our services in the City of London, Leeds, Manchester and other cities such as Bristol. We want a successful economy, but we also want the individual to use all their potential. Sometimes when we make speeches we emphasise one aspect rather than another, but of course the two must always go together. That is why I got involved. I was lucky to end up as Chairman of the Select Committee on Education and Skills, because with a good group of colleagues of all parties I can do something. Our Committee’s watchword is to add value. We do not inquire into matters about which we cannot do anything; we try to add value to the process.

The Committee has just embarked on a major inquiry into skills. We have seen so much activity in skills over the past two or three years that we thought it was time for the Select Committee to draw it all together. We have had a great deal of change on the ground, but we have also had other big changes—the sector skills councils, the modification and the pending further modification of the learning and skills councils, the change in the nature of apprenticeships over a number of years, and the introduction of train to gain. Much has been going on, and we now have the two stages of the Leitch report. We are doing a kind of wrap-around inquiry into skills that we hope will add value.

In a sense, we are undertaking a similar inquiry—it is in parallel—into universities. You will remember, Mr. Hancock—I think you were a Member 10 years ago, although quite unfairly you spent a brief time away from the House—that when the Dearing report was published in 1997, it was said to have taken a 20-year perspective but that after 10 years he would like to make another evaluation of our commitment to higher education. The Dearing report had all-party support, and this year, 2007, is the 10th year. I would be interested to know whether the Department will provide independent evaluation of those 10 years; if so, perhaps we ought to curtail our work because that is what we are putting our hand to at the moment.

I return to the skills that we are talking about today. When we first started our network of groups, pushing skills up the agenda, we identified something called world skills. We cannot call them the Olympics of skills, but they are the parallel of the Olympics and they take place every two years in capital cities throughout the world. When we started getting organised, we found that bids had been made—it was familiar competition—by the Australians and the French to host the world skills event in 2011.

With all-party support, and with a favourable wind from the former Minister of State at the Department for Education and Skills, now the Secretary of State for Environment, Food and Rural Affairs, we managed to win that competition for London. It is appropriate that the year before the Olympics, we will have a world skills event in London. It gives us the opportunity to build in some new skills. Some of us are talking of adding sustainability skills, and perhaps we should consider adding a range of other new skills.

We all tend to get pulled into discussions about plumbers, electricians, bricklayers and so on, and there is nothing wrong with having such skills. Indeed, the other day I was lobbied hard by a gentleman from Lancashire who wanted to impress on me the problems of farriers. Apparently, there are many farriers but they have only one apprentice and within two years of gaining his qualifications he is in competition with the farrier who trained him. However, I also learned that the farrier’s average wage is £50,000 a year, so it is a good occupation.

One problem, which I mention in passing, is that, like those in many other occupations, farriers live in a different world to those who go into full-time education. Part-time students do far worse than full-time students. They find it difficult to get funding for courses and they cannot borrow money for it. There are two worlds, one for skills and one for certain kinds of higher education. As Chairman of the Select Committee, many people lobby me about that problem, but if we want a world in which people are constantly upgrading their skills we must make available not only a good range of courses but the necessary funding. Sometimes, we miss out on the funding.

The hon. Gentleman is making a good contribution, particularly on the need for flexibility to allow various types of people to access education. Part-time courses, more flexible learning and different types of learning are essential. Does he agree that part of that is getting the right advice, and that that will be helped by having an all-age careers service?

The hon. Gentleman has his finger on the right button. All of us would like to see an all-age careers service. We may talk about that on another occasion in some depth—it could make a good topic for the Select Committee.

I turn now to the challenges to skills. My Select Committee is coming to the end of a major inquiry on the sustainable school. We have been looking at the building schools for the future programme. What hits one between the eyes when inquiring into such an important subject is that it was much stimulated by the Prime Minister and by the Secretary of State for Environment, Food and Rural Affairs when he was at the Department for Education and Skills. There was a tremendous urge, at the beginning of the building skills for the future programme and the whole education, education, education mantra, for education to be about something that Joseph Chamberlain believed in—the transformational ability of education to change lives and communities. That was at the heart of the whole process of building skills for the future. We looked at how education and training are changing. It sometimes worries me that skills have to keep up with the modern changes—how one gets skills and how one goes through the skilling process.

Luckily, in most areas we have the advantage over our European colleagues in that we have always believed in outcome-based educational qualifications, whereas our European neighbours have been much more firmly rooted in time served. That always seemed strange to me, but it is still the case. The exception in the UK is in our apprenticeship world, where emphasis was always placed on time served rather than qualification. We must increasingly emphasise outcomes in terms of skills, and give people modern methods to acquire those skills and gain their qualifications as fast as they can. That does not mean watering them down, but we need to use new techniques.

The more we looked at the sustainable school—I am not giving away any secrets; we have not completed the report, so I am not in Purdah—the more we knew that the way in which teachers teach and students learn is going through a radical change. Research shows that, with the traditional methods of one teacher and 25 or 30 students, only 20 per cent. of the information is retained. By putting children into a different context, so that they own the learning process in small groups, they retain 70 per cent. of what has been taught in that environment. We are seeing, as shown by evidence from the National Endowment for Science, Technology and the Arts spin-off, the Futures Laboratory, that there are new techniques. Some of us have had the privilege of seeing that on the ground. The education and learning process will go through a revolution in our time, and advanced in age as some of us are—me in particular—we will see a transformation. It has been a long time coming, but it will happen very quickly and it will happen in the skills sector too.

I hope that the sector skills councils will take note that the way we frame skills has changed and that they will harness that. In our country, everybody knows that our universities are some of the best in world—the Americans have good universities as well, but in competition with any other parts of the world we are absolutely up there in terms of first-class university higher education. It is not just the traditional ivy-covered universities that are in that category, about which I have a small disagreement with the hon. Member for Cities of London and Westminster (Mr. Field). The fact is that all our universities are pretty damn good and many that were not universities long ago have steamed up the ratings—for example, Warwick and York. My own university—the university of Huddersfield—has a tremendous reputation and one of the best reputations in terms of how students rate courses and levels of employability.

We have a fine world-class higher education system, but we cannot take it for granted. It has to be worked on because we live in a competitive world. However, that traditional image is in contrast with our skills base. When people talk about skills they say how good Germany and the Nordic countries are, but we are not even in the frame. For a long time, there has been something sadly lacking in the way that we have approached skills. We must put our hand to improving skills through using the best technologies and teaching methods.

I said that I would be brief so I will finish by raising an issue that provides a commercial for my private Member’s Bill. The Bill does not have much hope of becoming law because the Government will not adopt it and it is No. 15 in the ballot. The Bill is not about raising the school leaving age; it is about what I consider an iniquity.

We have a commitment to “Every Child Matters” and the five outcomes for children. I know that the Liberal Democrats would like the voting age to be lowered to 16, but I disagree with that as children are children until they are 18. Legally, they are still children until they are 18 in most respects in our country. I believe that the “Every Child Matters” outcomes should apply to 16 to 18-year-olds and that it is a disgrace that some children—usually not our children—get into employment or work without training. That is unacceptable for any child.

It is wrong for children at 16 to go into unemployment, to go into nothing or to go into work with no training at all. We should do everything that we can to make that impossible. I know that that is difficult because it is complex. It is also wrong that when children leave school they do so without having permission and that they just disappear. When schools are asked where those children have gone, they say that they do not know; and if the further education sector is asked where children entering FE have come from, or what joins up the cohort of children who left school at 16 and those arriving at 16-plus education, it does not know. Indeed, I was talking to an MP today who said she is having terrible trouble locally because she tried to get all the education providers in her constituency together to find out whether they can share databases so that they know where those children are. There is a deep reluctance among the education providers in her constituency to collaborate in that.

If we care about skills, we should have a system that gives someone coming up to 16 a leaving certificate as part of a leaving process that not only provides permission to leave, but gives good advice on the next stage in that child’s life for skilling and education. At the moment, that is lacking. The hon. Member for South Holland and The Deepings (Mr. Hayes) said that we should have a life-long careers service and I absolutely agree, but let us start that when it really matters, at the age of 16.

At the last count, there are 220,00 people between the ages of 16 to 18 whom we call NEETs—not in employment, education or training. That is a difficult challenge to deal with. I know that we sometimes make political capital out of that, but the fact is that a significant percentage of those young people have special educational needs which were not picked up early on, and they were not put in the right environment to tackle those deficiencies.

I apologise, Mr. Hancock, if I have gone on for a little longer than I promised. There are an amazing number of things that we can do to skill our nation and we must use new techniques and technology. I feel suicidal on a Sunday after I have read the Sunday papers, particularly the articles of someone who writes for The Sunday Times. Those with an interest in education would want to shoot themselves after reading some of those articles. However, on the Monday I might go to a school, college or a work-based learning environment where I would see highly energised kids, fantastic teaching and learning, and a world that I do not recognise from what I read in the newspapers. I see a world of good education and training, which is changing and improving all the time.

We have genuinely had an exceedingly good debate and one of the things that gives me confidence in all of us collectively driving the skill agenda forward is the knowledge and commitment that has come across in every contribution.

In the brief time available, I will respond in detail to some of the points made, starting with the comments of the hon. Member for South Holland and The Deepings (Mr. Hayes)—someone I know has real knowledge and commitment to these issues. However, I take issue with a few of the things that he said and the terminology that he used. He stated that 40,000 young people leave school illiterate. That is simply not a figure that I recognise. There is a danger when we talk about functional illiteracy and innumeracy that people automatically jump to the conclusion that we mean illiteracy and innumeracy per se, and I think that the hon. Gentleman may have been doing that. It is important to give examples of what we mean by functional literacy. For example, that may involve a student who is moving to a new flat being able to contact and inform the bank of a change of address appropriately—either in person, over the telephone or in writing. Those are crucial and essential skills and it is right that we try to ensure that everyone has them. However, not having those skills is not the same as saying that someone is illiterate. We need greater clarity on those issues.

There was then a significant debate started by the hon. Member for Cities of London and Westminster (Mr. Field) on migration. When we talk about eastern European migration, we need to recognise that that was an inevitable consequence in many ways of the decision to enlarge the European Union—the Opposition strongly supported that, as did the Government. Nevertheless, there are pressures that we need to manage. Part of the pull factor is that we have 500,000 jobs in the economy that we cannot fill—it is crucial that that is clear. That is not a consequence of our not having a high enough skills base; it is a consequence, in a significant part, of the low levels of unemployment in this country.

The hon. Member for South Holland and The Deepings also said a great deal about adult learner numbers. Let me be make it clear that, as I have said on a number of occasions both in the House and up and down the country, we are not cutting funding for the further education sector. We have increased funding by 50 per cent. in real terms over the past 10 years. What we are doing is changing the priorities, and we are prioritising and spending significantly more on adult basic skills and the roll-out of the train to gain initiative. That will mean that there is relatively less money than in the past for what might be described as adult leisure and recreation. That does not mean that I do not value that provision, but it does mean that we might have to ask the individual to pay a little more.

There has been recent coverage of adult learner numbers relating to what happened between the years 2004-05 and 2005-06, which was before the major change in strategy and funding took place. As time goes by, what will, to some extent, better reflect an accurate picture are the recent surveys from colleges suggesting that they are responding positively to the changes in fees. Most colleges expect growth in full-cost activity during 2006-07. They suggest that increases in full-cost provision could offset most of the reduction in publicly funded places, and if that growth in full-cost provision continues it could completely offset the reduction in publicly funded adult places. A shift is taking place. Part of what we are seeking to do is to get individuals to make a greater commitment and a greater contribution, and it is important that we see that process through to the end.

The hon. Gentleman spoke about his belief—we crossed swords on this—in the need, as I understood it, to shift the funding priority towards intermediate skills. However, without additional funding—I know that his party is committed to significant cuts in public funding—if the funding priority shift takes place and expenditure is moved to intermediate skills, it will of necessity mean that there are cuts further down the qualifications framework. That is a cause for real concern.

That cannot be allowed to stand on the record, because the Minister knows that there are real doubts about the cost-effectiveness of the way in which skills are managed and funded in this country. I shall not go into great detail about some of those concerns; suffice it to say that we think the whole skills system could be funded and managed much more cost-effectively than it is now, without a loss to learners.

For that statement to carry credibility, one needs to be specific, in terms of cost-effective management of provision, about what the Conservative party actually means.

We will be.

Well, people who work in the skills area and the further education area will need a great deal of convincing on the issue, given the track record of the Conservative party when it was in power. It cut funding to further education colleges and skills providers significantly in real terms, which is a huge contrast with what has happened in the past 10 years.

The hon. Gentleman talked in some detail about the proposals regarding intervention by the Learning and Skills Council where colleges are performing poorly. Those provisions are before Parliament at the moment in the Further Education and Training Bill. First, it needs to be made clear that because of improved success rates and improved quality in further education, we are talking about a very small number of providers but, where all else has failed and learners at local level are not being adequately provided for, there is a need to intervene to put in place a better framework.

The hon. Gentleman referred to Sandy Leitch’s proposal to get employers to sign the pledge to commit to level 2 training. He seemed to suggest that he very much opposed that, but did not give a great deal of detail about what he would put in its place. He did argue in favour of voluntary levies and voluntary licences to practise, and certainly nothing in the Leitch report argues against that. Indeed, there is already provision for a voluntary levy, and a clause in the Further Education and Training Bill strengthens that provision where a majority of employers are in favour.

The hon. Gentleman talked about over-regulation by the Learning and Skills Council. Let me be clear. Just as I would not with any other funding body or regulator, I do not claim that the LSC is perfect, but there has been significant change on the part of that organisation. There have been significant improvements. The latest change has been a significant change to the way in which it delivers on behalf of the Government. The move to a regional tier and a much more sensitive and in-touch system of local teams will help to improve delivery by the LSC further. The hon. Gentleman implied—he will correct me if I am wrong—that there ought to be a radical restructuring. I have to say that, in government, I am not a huge fan of massive, ongoing, permanent revolution within the structures, because when that takes place the people who are charged with doing the job of delivering on the ground are focusing not on delivery but on whether they will retain their job and where their next job is coming from, and there is a dip in performance.

The hon. Gentleman talked about apprenticeship completion rates. In the 1990s and the early part of this decade, there was significant concern about completion rates for apprenticeships, but since then there has been a substantial improvement, from 24 per cent. in 2001-02 to 53 per cent. today. I am confident that we can continue to improve and move towards the completion rates found elsewhere in Europe.

The hon. Gentleman also talked about—I think that the hon. Member for Bristol, West (Stephen Williams), who speaks for the Liberal Democrats, used this terminology as well—about vocational diplomas in relation to the 14-to-19 agenda. When we talk about specialised diplomas, it is important that we do not pigeonhole them as exclusively vocational. If we do that, we risk ending up with some of the mistakes that have taken place in the past. Those diplomas will provide a blend of practical and theoretical learning, and we need to take them forward robustly, engaging with employers and—I think that this was said as well—with higher education institutions. If the process is ultimately to succeed, we need every university in the country, including research-intensive universities, to work with us so that they can recognise and value those qualifications as an entry criterion for university. If that does not take place, there are dangers that the system will not succeed.

The hon. Member for South Holland and The Deepings talked about the train to gain initiative. He expressed some concern about the dead-weight issue. That concern was highlighted during the pilot phase. It has been addressed and is being addressed in the national roll-out. It is important to underline the degree to which that initiative is succeeding. Since the roll-out last August, train to gain has engaged about 8,000 new employers and enrolled about 50,000 new learners. Fifty-six per cent of employers engaged—this is a very important finding—have been from the hard-to-reach category, which is a target group. Let us consider the research and the evaluation of what employers are saying about the initiative: 89 per cent. engaged have been satisfied with the service provided and 75 per cent. have been extremely satisfied. That shows that that very radical initiative—under which, for the first time in this country, adults in the workplace have been told that if they do not have their first full level 2 qualification, the state will step in to guarantee that—is very much moving in the right direction.

I listened to what the hon. Gentleman said about wanting and seeking a debate on the Floor of the House. It would be good to debate skills on the Floor of the House. We will obviously do that when we consider the Further Education and Training Bill. Clearly, there is an option for the hon. Gentleman in terms of Opposition day debates. That will involve a debate on priorities that he will have to undertake with his Front-Bench colleagues.

I welcome the fact that the hon. Member for Bristol, West started by recognising that educational provision has improved and is quite different from what it was in 1997. Sometimes in education debates—this chimes with the comments made by the Chairman of the Education and Skills Committee, my hon. Friend the Member for Huddersfield (Mr. Sheerman)—I wish that we could have a more balanced, rational discussion about the genuine progress that is being made. I do not claim that everything that we have done in the past 10 years in education, skills and training has been perfect, but some articles in national newspapers are a travesty of what is happening on the ground up and down the country. There have been significant improvements, although I would be the first to admit that we face further challenges.

The hon. Member for Bristol, West said—I noted this carefully—that he had an open mind on the issue currently before Parliament in the Further Education and Training Bill, which is further education colleges gaining degree-awarding powers. I have to say that that is not the tone of the comments that I have heard from his noble Friends during the passage of the Bill thus far. If that is his view, I hope that it will come through strongly. I take the firm view that if we are to address the significant skills challenge that we face, particularly at the higher levels, we need as much flexibility and innovation in the system as possible. The contribution that FE colleges can make on that front is to be welcomed. Of course, we need to get the quality criteria right, but we are doing that, and that will become clear as the Bill proceeds through the House.

The hon. Gentleman then discussed the funding of universities. I say this gently, but when we debate the need to improve the financing of our universities, the Liberal Democrat position is wholly lacking in credibility. I have said this several times: where they have power and influence, as they do in Scotland, they support a system of post-graduate repayment that is no different in principle to our system in England. The Lib Dem think-tank recently came out in support of what the Government are doing.

I must correct the Minister on his two last points. First, the system in Scotland is quite different to that in England and Wales. In Scotland, the system involves a £2,000 one-off graduate contribution, and that is it. The levels of debt from tuition fees in England and Wales are on quite a different scale. Secondly, the think-tank is an independent one, not a Liberal Democrat one. We all have think-tanks that say things we rather wish they did not.

When one hears Liberal Democrats up and down the country decrying the fee system in universities, one gains the impression that they are wholly opposed to any concept of post-graduate repayment, yet when they are in government, as they are in Scotland, they support that principle. That needs to be clearly stated.

The hon. Member for Cities of London and Westminster asked me about the OECD rankings. I shall write to him on this, but they are broadly rankings of attainment levels and therefore do provide a robust explanation of our relative performance.

The hon. Gentleman went on to discuss the social chapter and the 48-hour working week. I agree that we need labour market flexibility, because if we do not have it we ultimately pay the price through higher unemployment. There is a balance to be struck, and that is why we were right to sign up to the social chapter and why we should not legally force people to work for longer than 48 hours a week if that is not their choice.

There have been social trends and changes of attitude in this country to which politicians need to respond. There were reports in today’s newspapers about a piece of research into people’s concerns about the work-life balance. The Government have made significant improvements on that issue. Simply saying that we should force people to work for longer is not sustainable in social terms, and would, in the long run, cause real concerns about economic performance.

I strongly disagree with the hon. Gentleman about there being too much focus on the expansion of higher education. We need to put into context our target of having 50 per cent. of the under-30s participate in higher education by the end of the decade. We are still below the OECD average in terms of higher education participation. The research evidence shows that 50 per cent. of the jobs that will be created in the coming period will require graduate-level qualifications. Elsewhere in the world, they are not having this navel-gazing debate about whether it is right or wrong to get more people educated to the highest levels. They are actually doing it.

I also disagree with what the hon. Gentleman said about young people making intelligent decisions and moving away from higher education. I do not see evidence of that. Indeed, I very much look forward to seeing next week’s figures on applications for higher education courses, because I believe that there will be some improvements. There is, however, an issue about the 50 per cent. target, important though it is, being too blunt an instrument, because it refers only to the under-30s. Sandy Leitch was right to say that we also need a broader work force participation target. We need to capture and upskill older people and train them to higher levels. That is why the higher education train to gain initiatives that we are rolling out are so important.

The hon. Gentleman also talked about the importance of the City of London. I hope he recognises that the new financial skills academy that was announced before Christmas, which will be both employer-funded and Government supported, will help to continue our excellent financial services sector. He paid tribute to the Government’s oversight of that sector.

I pay tribute to the work of my hon. Friend the Member for Blackpool, South (Mr. Marsden) in championing the skills agenda. He highlighted the importance of apprenticeships and the need to keep young people in them. I agree that we need to ensure, as we take that agenda forward, that there is as much flexibility and portability as possible with qualifications. More than 130,000 employers currently offer apprenticeships. That is a significant improvement, but we need more in many parts of the country. Our work in that regard, that of hon. Members present and in particular that of the Apprenticeship Ambassadors Network, is extremely important.

My hon. Friend made several points about the importance of older workers and about addressing their skill needs. Initiatives that we have taken, such as extending the level 3 entitlement from those aged up to 19 to those aged up to 25, have been a positive step forward. I am heartened and encouraged by the initial evidence from train to gain, which shows that 27 per cent. of the people who have thus far been engaged with it were over 45. I discussed this issue with Age Concern, which recognised the progress that that demonstrated in comparison with previous initiatives.

I applaud train to gain, but I am picking up the idea that in some areas train to gain money is not getting to the training, but that colleges and universities are putting it out to other people and taking a 20 or 30 per cent. slice off the top, so that only about 70 per cent. goes to training. Will the Minister stop that?

I assure my hon. Friend that we are watching the scheme very closely. We are in the first year of the national roll-out and we are tracking carefully what happens, not only across the country but by area and region. I agree with my hon. Friend the Member for Blackpool, South that in any drive to change the system, and in any set of initiatives, it is crucial to monitor what happens, be flexible and respond as the situation changes.

My hon. Friend the Member for Huddersfield spoke about the importance of the skills priority, of which he has long been a champion. He made an important point about part-timers, particularly in higher education. I hope he will acknowledge that the change that we made last year—bringing in a 27 per cent. increase in the part-time student grant—has certainly helped and has been welcomed right across the country. We need to keep monitoring that area closely.

Finally, my hon. Friend talked about what should be the effective school-leaving age, although that is not the kind of language that we should use when discussing this issue. I know he agrees about that. No one is suggesting that we should force young people for whom it is not the best route to stay in school until they are 18. However, he made a powerful case. The Government are considering this important issue with real interest. There could be real merit in ensuring that everyone up to the age of 18 retains an involvement in and commitment to education and training if it were done flexibly, either part-time or full-time, through off-the-job training or in-work training with employers, perhaps in a school or college. That could be very powerful socially, economically and educationally. That is why it is important actively to explore these issues and consider them properly. We have had a good and constructive debate, and I am sure that we will all work together to push this agenda forward.

Thank you, Minister. I thank all participants for a very interesting, good-humoured and good-natured debate. On behalf of everyone present, I ask the Minister to pass on our good wishes to the Under-Secretary of State for Education and Skills, the hon. Member for Corby (Phil Hope), and wish him every success in the treatment that he is receiving. We hope to see him back here soon.

Question put and agreed to.

Adjourned accordingly at half-past Five o’clock.