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Economy: Skills Development

Volume 708: debated on Thursday 5 March 2009


Moved By

To call attention to the case for maximising the talent and skills available to the nation to ensure its future economic prosperity; and to move for papers.

My Lords, I am delighted to have secured this debate on what the Prime Minister has called the “talent challenge”. The Leitch review describes this as,

“next to national defence, probably the most important task and priority for the nation”.

I declare an interest as chair of the All-Party Parliamentary Group on Corporate Responsibility. We held an inquiry and issued a report last December on this issue. It covered the challenge and the response from many businesses, from which we took a huge amount of evidence. We were excited by many of the positive actions that are being taken to maximise the talents and the skills of our workforce. However, very much more still needs to be done if we are to restore the economic health of the nation when the current economic downturn comes to an end. The Prime Minister, speaking to senior business leaders in December 2007, said:

“British businesses need to do more at greater speed to unlock the talents of our people”.

I believe that they do. They understand that they are key levers for change, but they need the support of the Government as well if they are going to succeed.

Some 75 per cent of the people who will be in the workforce in 2020 are already in work. Our education system must therefore deliver people of all ages who are capable of contributing effectively to the future prosperity of our country. Devastating figures have been made available. Business in the Community points out that more than one in six young people still leave school unable to read, write or add up properly. With these figures, is it surprising that 5 million adults in this country lack functional literacy and 17 million adults in the UK have difficulty with numbers? That costs the UK economy about £10 billion each year in lost productivity. This is not surprising, but it really is a national disgrace and the Government need to give us assurances that they have adequate policies in place to address it. As well as better basic skills, schools, colleges and universities must deliver a more work-related agenda to prepare people for employment.

The City of London Corporation, in its report Skills in the City, made many points and echoed a lot of this. It said among other things that students should be signposted to further education institutions with established employer links, even if outside the area. Opportunities to improve the levels of local recruitment should be enhanced.

A lot of people argue that in the current dire economic situation neither public expenditure nor business overheads can sustain continued investment in education, apprenticeships, training and talent management. However, Universities UK points out that as a country we lag behind our competitors in the proportion of our population with higher-level skills, and in the medium and longer term our economy is likely to continue to need more, not fewer, graduates. Already the OECD has worryingly reported that, of its 30 members, the UK is 17th on low skills and 20th on intermediate skills. This is very serious. Neither the Government nor business can afford not to invest in the skills and talents of the workforce. If we do not have a solid bedrock of skilled and talented people, we will not be in a position to compete effectively in the lean, mean world that will emerge from the current recession.

Despite the onset of this recession, we have to realise that there are some sectors of our economy where skills shortages have persisted. By 2014, the demand for people to fill science, engineering and technology-related jobs is expected to increase by 2.4 million. Our inquiry report highlighted that one of the Government’s priorities has been to focus on key skill-shortage areas. In the light of those figures, I ask the Government what action they are taking to address this issue.

I have already made it clear that for the talent challenge to be faced successfully we need an effective partnership between the Government, local government and business. Our all-party group inquiry concluded that one action that the Government could take to help employers would be to simplify the accreditation route for the development of work-based skills and competences and qualifications, which need to be transferable across employers. This will be very important in an employment market where employees may well be seeking new work involving a change of skills. Employers have to understand what qualifications job applicants bring with them, and employees must have the opportunity where necessary to retrain.

The December 2008 report Re-skilling for Recovery: After Leitch said that there should be greater emphasis on reskilling and providing people who are already in the workplace with opportunities to re-enter education regardless of prior qualification. The Select Committee’s conclusion echoes one of the conclusions of our all-party group inquiry—that additional training for employees to enable them to enhance their skills and talents is so important that employers should be required to provide a written reason for refusing any employee’s request for time off work for training. In an article in the spring 2009 issue of the journal Ethos, Chris Humphries says,

“sharpening skills, not neglecting them, is the best way an employer can assist the people it might lose—as well as the people it is retaining”.

I could not agree more.

The London Bulletin, having drawn attention to the difficulties that its members face in recruiting suitably skilled staff in some areas, goes on to report what some London local authorities have done. The London Treasurers’ Graduate Finance Scheme is an example that has already attracted more than 100 graduates to finance roles across participating boroughs. The co-ordinator of the scheme said that the scheme was started,

“to increase diversity and make our profession more representative of London as a whole”.

That is exactly the positive sort of initiative that we need to see taking place in all sectors of our economy. However, I should like to ask the Minister what action the Government propose to take on our inquiry’s recommendation that they should require employers to give written reasons for turning down requests from employees for time off for training.

On a discordant note, Universities UK believes that in-work training and retraining have actually been made more difficult because of the funding that has been lost from equivalent and lower-level qualifications. I suggest that the Government have a real responsibility in this regard and I ask the Minister to tell the House what they intend to do to address this important issue.

We know that some businesses are already responding very well to the talent challenge and that Business in the Community and others are doing a fine job. However, what we really need is a high-impact campaign to raise awareness of the scope and urgency of the talent challenge facing the United Kingdom. I hope that this debate will help to draw some attention to the issue. The involvement of so many influential noble Lords should indeed help to achieve that objective.

We must also take on board the fact that our economy will be not only leaner and meaner but also greener: it must use less carbon and be more sustainable. This reflects the views of the majority of our population and is to be warmly welcomed. However, to change societal norms we will need people with new, green talents, and not just in the field of carbon capture and storage. All desk-based workers in offices will face terrific changes in their working practices. There might be more teleworking, as well as lower-energy PCs, networks and servers. We will need more skilled people in the fields of science, technology, engineering and maths—the STEM subjects—and we must invest in those subjects now.

Perhaps the most surprising of the many witness statements to our inquiry came from McDonald’s, the restaurants. We do not think of McDonald’s as incredibly intellectual, but it has a good story to tell. It has a scheme for apprenticeships that it plans to roll out nationally. The scheme combines continuous professional development with maths and English GCSEs and key skills. Communication and organisation skills are learnt on the job. Maths and English components are learnt online, in the employees’ own time. As they develop skills, they are awarded stars and get higher pay. Completing the scheme provides them with a qualification equivalent to five GCSEs, and the management development course has a clear path through four stages, from running a shift to managing a restaurant. These qualifications are becoming nationally recognised. There are many examples like this of splendid initiatives. We need to draw them together, publicise them and get more people involved.

The all-party group welcomed the creation of a single National Apprenticeship Service from April 2009, but recommended that clear accountability for apprenticeship provision should rest with one Minister in one department. I hope that the Minister will respond positively to this recommendation.

We heard powerful evidence about the importance of making the business case for education programmes. Our many examples included BAE Systems, the National Grid and Siemens Industrial Turbomachinery, which have all benefited from such programmes. They organise school visits where children become more aware of STEM-type subjects, because they understand that these subjects will probably lead in future to jobs for them. It was interesting to hear from National Grid, which realised that 40 per cent of its skilled workforce will reach retirement age in the next 10 to 15 years. It is vital for the company to have a reservoir of talent from which to appoint new staff.

We must do something for businesses—in particular small businesses—that set up apprenticeship schemes only to have their apprentices poached. Will the Government consider rewarding firms that train young apprentices who then go off to somebody else, so that in effect they are training for the benefit of the wider community? I hope that the Minister can do something about that.

It is important that we in the UK turn this global slowdown to our advantage. If we invest now in skills and talents, we will be the ones who survive. If we do not, we will face a skills shortage and an uncertain economic future. We have to learn from the companies that are already turning workers with no qualifications into successful managers. We must tackle the lack of investment in vocational training and the related snobbery that we are noted for in this country. Recessions are when employers feel most need to make efficiencies and cut costs. However, corporate social responsibility demands that we invest in our workforce now, so that we will be in a position to power our way out of the recession. I beg to move.

My Lords, I am delighted to be taking part in this debate, which was introduced by the noble Baroness, Lady Greengross. It is always a pleasure to speak in a debate that she is involved in, but following her opening speech is a little nerve-wracking. I thank her for giving us this opportunity to debate this important issue. It is one that is very close to the Government’s heart and one to which the Government are committed. I am delighted to be involved in the first debate that my noble friend Lord Young will be replying to; he is doing a tremendous job in his role as Parliamentary Under-Secretary of State for Skills and Apprenticeships.

There are many initiatives out there to encourage and support individuals to maximise their potential by acquiring or upgrading skills, which not only enhances their employment opportunities but gives them additional confidence and improves their skills for life. Many employers, large and small, are taking advantage of the support that the Government are offering to ensure that their workforce has the opportunity to upgrade their skills, often supported by their trade union, in particular by the union learning reps. In many businesses, they work closely with management to ensure that the skills required by the business are made available to their members.

The case for maximising talents and skills is being made to a great extent by sector skills councils, whose role is to support employers to increase UK productivity through skills. Critical among these sector skills councils is Semta, the sector skills council for science, engineering and manufacturing technologies. I declare an interest, as I work with a number of SSCs and Semta in particular. Semta’s footprint includes 76,000 companies and a 1.9 million workforce. UK engineering and science turnover was £204 billion in 2006. UK engineering and science exports were £145 billion in 2006, which is some 40 per cent of the total. Business R&D spending is driven by UK manufacturing; more than three-quarters of total business R&D expenditure is carried out by manufacturing businesses. The UK is a world leader in scientific R&D. Semta sector companies provide more than 8 per cent of UK gross value, equalling £67 billion every year.

The importance of these sectors has been highlighted recently by the Government, as Britain looks to industries which will help recovery and ensure that UK plc is up and running as soon as possible when we come out of the downturn. The Government’s manufacturing strategy was launched in 2008, with the majority of the commitments to be delivered by the end of 2009. This strategy contains actions to help businesses to exploit new technologies and innovation, making the most of the opportunities that are available.

However, as the noble Baroness, Lady Greengross, said, even before the current recession, science and engineering industries were struggling to develop the skills needed by them to ensure that their businesses thrive and prosper. Among engineering and manufacturing companies, hard-to-fill vacancies in engineering are costing the UK economy £823 million every year; 17 per cent of engineering companies have hard-to-fill vacancies; 21 per cent have skills gaps in the existing workforce and 70 per cent of these are technical skills. Only 11 per cent employ any apprentices or recognised trainees. Among bioscience and pharmaceutical companies, the situation is even more difficult. Some 39 per cent have hard-to-fill vacancies, 22 per cent have science skills shortages, and 29 per cent have skills gaps in the current workforce.

There is also a demographic issue that is worrying. Some 31 per cent of bioscience and pharmaceutical employees and 42 per cent of the engineering and manufacturing workforce are aged over 45. Forecasts prior to the recession estimated that engineering alone needs 38,000 new skilled employees to be recruited every year for the next five years. Many of us recognise that, unless we maximise talent and skills in line with the needs of these businesses, we will stay in recession longer and fail to take growth opportunities when recovery comes.

There is evidence that companies that do not invest in skills during recession are two and a half times more likely to fail than those that do. That is where Semta, using its sector expertise and credibility, can get involved, working with the employers to identify what their skills needs are, how they can get them and how to ensure that the skilled workforce makes a difference to the bottom line. This is now a one-stop shop, and I am sure that the noble Baroness, Lady Greengross, will be pleased to know that a lot of things are happening in the areas she has been expressing concerns about.

Fortunately those that get help to develop a wide and flexible skills base will be well placed to adapt to changing conditions and to respond to future opportunities. Help is at hand, through Train to Gain, and the Compact, which Semta and a couple of other sector skills councils in England now have in their toolkit. They enable employers to access support and funding for a wide range of skills needed by their sector. These include apprenticeships as well as management and leadership for companies with between five and 250 employees.

I ask my noble friend to consider more flexibility around the availability of this qualification, so that it could be extended both to larger companies, so that they have the opportunity to access it, and in terms of the number of employees in any organisation that can take advantage of this valuable and necessary qualification. Businesses are pushing for these two areas. I hope that my noble friend will look at this, particularly in this downturn, when many employers are using downtime in production to support their employees in gaining this qualification. This is a great approach, which has been taken by the unions and management in many, many companies.

Business improvement techniques are also part of the compact, at either level 2 or level 3 NVQ, with the opportunity for funding level 4 currently being negotiated with the Learning and Skills Council, along with, importantly, Skills for Life qualifications such as literacy, numeracy and English as a foreign language—all mentioned by the noble Baroness, Lady Greengross.

Hundreds of companies are already taking up the offer and almost £25 million has been committed to ensure that businesses have the right people with the right skills at the right time. The National Skills Academy for Manufacturing is supporting these initiatives through its network of approved training providers, which are delivering programmes such as business improvement techniques and other key skills to support the businesses.

Last year alone the Skills Academy programmes helped companies to achieve a £12 million benefit for a £2 million investment in skills. That is a 6:1 return on the investment—I would suggest that is real value for money. That is fairly typical of the return on investment from productivity and competitiveness programmes.

Semta-run pilots in the West Midlands showed that for government funding of £18,000, companies got an average of £94,000 in profit in a single year. Just roll this out over 50 companies in each English region, and we could reap a £42 million sustainable improvement and provide 2,400 business improvement qualifications.

Let me share a couple of examples of real life practice that is going on. Wedge Group Galvanizing, which employs 850 people in the West Midlands, by investing in management and team leader development between 2006 and 2008, increased its output by 18 per cent, increased productivity by 7 per cent and customer satisfaction by 20 per cent. Jackson Keay, which employs 70 people in Nottingham supplying gas cylinders and other pressured containers, as a result of doing B-IT and leadership and management NVQs, brought delivery lead time down from three weeks to five days, boosted productivity by 40 per cent and increased its turnover from £2.3 million in 2006 to £3.5 million in 2007.

Two weeks ago I visited automotive suppliers PP Electrical Systems in the Midlands. It employs 154 people and has improved its quality from 93 per cent to 99.8 per cent, with Semta support for its productivity improvement programme and its training schools.

I realise that I am running out of time but I want to make a big plea for what we should be doing with regard to young people. I refer to the apprenticeships that have been designed and had targets set for them following the Leitch review. Those targets have been exceeded by 12 per cent but we must not take our foot off the gas.

In conclusion, the Big Bang Fair, held yesterday and today at the Queen Elizabeth II Conference Centre, was attended by 6,000 enthusiastic and energetic young people looking at 14-to-19 diplomas. They were absolutely inspiring. Let us not forget that, when we come out of this recession, it is today’s young people and businesses with the right skills that will shape the country’s economic future. By maximising the available talent and skills, we will ensure the UK’s future economic prosperity.

My Lords, I, too, congratulate the noble Baroness, Lady Greengross, on what is of course a most timely debate. I dare say that I will repeat some of her remarks. As a nation, we face some serious challenges, as well as the difficulties confronting the global economies. I declare an interest as the employer of a small business in the care sector.

It is paramount, especially in the current climate, that we look seriously at how we nurture existing talents and skills and how we ensure that those who require assistance with retraining and reskilling find the process easy and as free from stress as possible. The Leitch report identified an urgent need to tackle the lack of skills in the United Kingdom in addressing the need to become a knowledge-based and skilled workforce. We all know that by 2020 30 per cent of the working population will be over 50 years old, and so there is an even greater urgency not to detract our attentions from the very important need to revisit learning, training and flexibility in achieving qualifications.

As an employer, it is of course in my interest to see that my staff receive the right tools to equip them to carry out their duties properly and to add self-worth to what they do and that, wherever possible, I assist them in acquiring skills outside their job role so as to help the community at large. I imagine that most good employers seek the same sort of return. However, it is increasingly frustrating when the qualifications demanded as mandatory by the Government add very little value to the work that is carried out but are a simple tick-box exercise so that the Government can announce how many NVQs have been delivered. Can the Minister say how NVQs delivered by providers are monitored and assessed? In my own business, the delivery of level 2 and level 3 NVQs has been inconsistent and poor.

Knowing that by 2020 30 per cent of our working population will be over 50 and that jobs are currently being lost across all sectors, will the Government now consider not cutting ELQ funding, as this will impact hugely on those desperately trying to reskill? In fact, 1.44 million adult-learner places have been lost in the past three years. Turning to those who will be our future workforce, surely it is unacceptable that more than 350,000 children did not achieve five GCSEs at A to C grades, including English and maths, and that 128,000 did not even achieve a single GCSE at grade C. We are failing these young people. We also need to look at why 40 per cent of our children still leave primary education having failed to meet the accepted minimum standards in literacy and maths.

To be a knowledge-based and well skilled population, it is essential that we look closely at the quality and depth of the subjects that we teach. It is crucial that, whether young people are taking on vocational education and training or preparing for higher education in FE colleges and universities, our educational systems are rigorous and challenging. STEM subjects will play an increasing part in the development of research and new industries, and in building on our strengths as leaders in the fields of engineering and the development of new technologies. A declining number of pupils have been taking A-level science subjects. Can the Minister say what measures the Government are taking to ensure that more pupils take science at A-level?

If we are to ensure that we retain a leading edge in the world in developing new technologies, the Government must ensure that universities do not have to spend valuable resources providing remedial support to students who arrive poorly equipped in the standards expected of those entering higher education. The Government have trumpeted the benefit of apprenticeships. Apprenticeships are an extremely useful way of providing young people with the tools to enter the world of employment supported by employers and local educational institutions. However, the Government have fallen short of the target they set. I am sure the Minister is aware that employers are keen to support apprenticeship programmes, but they find the process complicated. What are the Government doing to support employers, particularly small employers, to offer apprenticeships? Does the Minister accept that in this difficult economic time some employers may struggle to do so? Is he aware that just 7 per cent of employers are aware of the national apprenticeship scheme? Can he say what measures the Government are taking to ensure that employers and industry are aware of training initiatives?

The Government are obsessed with concentrating all their efforts on one end of the age scale. We are an ageing population. I do not detract from the importance of ensuring that our children and young people receive the best possible start in life, complete with a good education and the opportunity to achieve their best in employment and civic life. However, people lose their job at all ages, and we need to respond to the different challenges that people face in middle age and when approaching retirement. What are the Government doing to help individuals who are not at the start of their working life but more towards its end? Does the Minister agree that an all-age careers service is crucial and that learning new skills must not be limited to young people?

My final remarks will be on the retraining of women. After the Women and Work Commission produced its report, the then Chancellor, now the Prime Minister, Gordon Brown, in his March 2006 Budget allocated £40 million for retraining and upskilling programmes for women. There are more than 500,000 fewer women in further education or skills training now than in 2005, and an estimated 500,000 women across the UK who want to return to work cannot find part-time jobs. Women returners are not identified as a specific group in the Government’s unemployment figures. How many women have applied for retraining since March 2006 and how many have received it? Where has the £40 million been spent? How are the Government monitoring the success of their investment?

This debate is extremely important, particularly in these difficult times. There are many talented and skilled people in our country; if we are to be world leaders, not just average, and to compete with the emerging economies of China, India and other countries and to strengthen our systems at every level, the Government have a lot more to do.

My Lords, this is a timely debate, and I congratulate the noble Baroness, Lady Greengross, on initiating it. Since my brief is children, schools and families, I intend to concentrate my remarks on business and enterprise education in schools because if the noble Baroness’s objectives are to be fulfilled, we must start at the bottom with young people.

One might ask why children should be taught this subject. There are two main reasons. First, employers tell us so. They complain that school leavers are not “job ready”. I do not think they mean just that young people's basic skills—important though they are—or even subject knowledge, are inadequate. I think they are also referring to the soft skills: being able to work in a team; being self-motivated; having an open attitude to learning from experienced people; being able to keep accurate records; being able to relate well to other workers; and even such basic things as attending regularly, being on time, reliable and conscientious. They also complain that young people have no idea of the realities of the world of work: the fact that nothing happens unless you do it; that you have to take responsibility; and that a company has to make a profit or everybody loses his job, a matter which we have all come to realise very clearly recently. Good business and enterprise programmes can teach all these things, engage young people and help them to have fun and enjoy school. The second reason is that we have a responsibility to children to prepare them for life in the real world, which they will enter when they leave.

There are many ways in which young people can learn basic skills and subject knowledge, and schools are addressing the soft skills in a number of ways. Personal, social, health and economic education is now a statutory part of the curriculum, which is right because it is really education for life. There is also the SEAL programme: social and emotional aspects of learning. This develops emotional literacy: how to negotiate in conflict situations, cope with stress and understand other people’s feelings. All those are useful every day in the world of work.

However, without these soft skills and some understanding of business, young people leaving education will find life in the workplace very hard and employers will not be happy. So the Government ordered in 2003 a review by Howard Davies of business education in schools, and, as a result of its findings, allocated £60 million to secondary schools every year. That means roughly £17,000 per school, depending on size.

The schools can spend the money in many different ways but, before they start, there are certain basics to consider. Ofsted recommends they develop enterprise learning as part of a coherent programme of vocational and work-related learning, establish a clear definition of enterprise learning and ensure that it is understood by staff and pupils alike, identify the learning outcomes that they are seeking, recognise that enterprise learning has implications for teaching and learning styles, and develop effective methods of assessment.

Pathfinder projects show that the most effective schools take an inclusive approach: providing in-school training for staff, who then include enterprise learning through changes to lessons in other curriculum subjects, as well as through specific enterprise activity. At key stage 4, students now have to do five days of enterprise activity. It is a pity if schools feel that the only thing to do is find work experience placements for them. Apart from the fact that this can be very difficult for schools, some of the placements are pretty meaningless. I have had a number of students working with me during their work experience week, so I know that it can take up a lot of one’s time finding suitable and useful experiences for them.

However, schools can do other things, such as business or community projects, mini-enterprises or attending enterprise days and events. A good example comes from a school in Hertfordshire and was targeted at year 10 vocational education students. The aims were to develop entrepreneurial skills, create links with community partners, open up vocational routes into FE, produce resources to share with other schools and publicise their success. An outside training provider delivered a three-day inset course to the staff called “Nurturing the Entrepreneurial Spirit”, which helped staff plan and develop a number of small-scale vocational enterprise projects and create a choice of learning opportunities.

In a short time, the mixed group had a horticultural enterprise project linked to a BTEC course and accredited by a local FE college. The first venture produced bulb and plant bowls for sale, but the project expanded from there and enhanced the young people’s self-confidence as well as leading to qualifications.

There are many successful examples of this kind, but Ofsted reports that they all have in common the fact that they gave staff sufficient time to develop the programmes. A technical college in an inner London borough had a particular interest in entrepreneurship following a visit to secondary schools in the USA. In particular, the staff on the visit looked at the National Foundation for Teaching Entrepreneurship (NFTE) schemes of work and decided that they could be adapted for use in their own school. Staff were sent to Massachusetts to receive NFTE training and a pilot programme was set up with disaffected year 10 students, which was very successful.

However, there is no need to go to the USA since the NFTE programme is now available in this country under the banner of the Enterprise Education Trust—which brings me to the subject of partners. This organisation is one of many partners working effectively with schools to deliver business and enterprise education.

The trust now reaches up to 90,000 pupils a year and works with more than 2,000 companies that provide managers to go into schools to inform, involve and inspire young people about business and enterprise. NFTE trains teachers to deliver its BTEC accredited personal development programme and it is currently negotiating a place in the new scheme of diplomas. Students are taught practical enterprise skills and run their own businesses to make real money, which is a great motivator. Real business people come in to help. NFTE has a particular focus on social disadvantage but an evaluation of the programme by the University of Warwick found that it was used effectively across the ability range, engaging the very able as well as less able students. I think that this is very important, since we should not be seeing programmes such as this solely as a way of engaging the disengaged, although they do. We need the brightest and best to go into business and not to see academia and the professions as their only career options. Our country needs very bright people to take up careers in business.

The trust also runs Business Dynamics which runs one or two-day programmes in which business people come into schools and talk about their jobs. Young people can get first-hand information right from the horse’s mouth about career options, what skills they need to go into different careers and on the financial side of business. The trust’s Achievers International programme gives students the opportunity to trade online with schools overseas, developing their entrepreneurial, ICT, communication and modern language skills all at the same time. So there are lots of options.

The £60 million of Davies funding for business and enterprise education is not ring-fenced but relies on inspection by Ofsted. The result in practice has been that a lot of the money has not been spent on B&E education but on other school requirements, as shown by the DCSF’s own research. The use of this money for other things is particularly marked in schools in disadvantaged areas which are under acute financial pressure. However, it is exactly those schools that the Government wanted to help by giving them the money in the first place.

The consequences of this are twofold: the Learning and Skills Council and related agencies have largely stopped their funding, which was once very significant; and private companies are now less likely to fund enterprise education because they have the impression that the Government are doing it. I am a supporter of devolving management of funding to schools to let them make their own decisions and I am not usually in favour of ring-fencing. However, this situation requires some sort of action. I can quite understand schools that do not have enough funding to provide for pupils with special needs diverting the Davies money in that direction. Of course, under the Liberal Democrat policy of the pupil premium, schools would not be in that position. However, there is plenty of choice of willing and able partners in the marketplace to help schools with B&E education and it is important in the interests of all their pupils that this work is done somehow. I finish by asking how the Government plan to address this difficult situation.

My Lords, I am very grateful to my noble friend Lady Greengross for securing the debate. I am sure that there is no one who does not agree that there is a very strong case for maintaining skills and talents, and fostering them. At present, it is not just an obvious fact but an urgent need in this country. It calls, as my noble friend said, for a campaign across government departments so I very much hope that the Minister is on close speaking terms with his colleagues as this will involve much more than one ministry.

I want to address not the general question but to concentrate particularly on the question as it relates to adults, many of whom are newly unemployed and seeking to increase their skills and acquire new qualifications to help them to look for work. Although I do not intend to address the general question, I have three small points, so it is very much a matter of the trees rather than the woods.

First, it is essential that jobseekers should have flexible access to further education and training and should be entitled, as far as possible, to free further education, subject perhaps to means tests. I hope that the Minister can assure the House that the Government will take a new look at the whole question of fees for mature students and part-time students, because they are a great disincentive for someone who has been recently made redundant to believe that they cannot get financial support if they want to retrain or train for employment for the first time.

I beg the Government to take the question of part-time and mature students extremely seriously and not create an obstacle whereby they incur huge debts that will simply exacerbate the terrible position that many people are in as they face unemployment for the first time. This is a very important point and the whole question of jobseekers and jobseeker’s allowance should be clarified and simplified so that it is possible for people to count as jobseekers and be paid jobseeker’s allowance while engaging in one or two years’ training or in part-time training and courses. At the moment, the situation seems unclear. I ask the Minister to assure the House that a new look will be taken at our newly dire situation.

Secondly, my sadly missed friend Lord Dearing invented the concept of the language ladder up which talented students at school or college could climb fast, according to their ability rather than age, gaining progressive qualifications as they went regardless of age, on the model of the long-established Associated Board of Music examinations, which people can take after approximately a year’s work—less if they are very talented. Schoolchildren and grown-ups should be able to work together to take these recognised qualifications. This works well for languages, and the proposal was welcomed by the then Minister, the noble Lord, Lord Adonis.

The language ladder is in place in a lot of schools and colleges. The scheme should be extended to encompass more than schools and colleges, including adult learners who could join classes wherever they were held locally, and either brush up their rusty language skills or start to learn a new language alongside their juniors. I know that this would require a certain amount of negotiation at local level between individuals who wanted to join a class and the school or college that was providing it, but this kind of thing has been going on in community schools and colleges for a long time; it generally works well and is to everyone’s advantage, including young people who benefit from having adult classmates. That is also very much appreciated by teachers, who like teaching this kind of mixed group of people at different stages of maturity.

It is important that the concept of the ladder should be extended beyond school and college, but it should also be extended beyond languages, because many technical subjects, such as IT and others, could well be taught whereby talented people could increase their skills and climb up the ladder fast, alongside their younger classmates. I hope someone can take responsibility for ensuring that this ladder approach to step-by-step qualifications is extended beyond school and music or languages. People seeking qualifications, such as the newly unemployed, could latch on to diploma courses originally designed for 14 to 19 year-olds. Having adults latched on would be beneficial for everybody. Many people, particularly women now facing unemployment, left school with very few qualifications and this would be a chance for them to catch up.

Thirdly and lastly, the Government’s commitment to inclusive education generates a vast and largely under-filled demand for teaching assistants, many of whom bear the greatest part of the burden of supporting children with various disabilities in mainstream schools. It is essential that these people are properly trained. Access to proper training for teaching assistants, which might in some cases lead on to full teacher training but need not necessarily do so, ought to be widely available to people facing unemployment, whatever their age and sex. We urgently need teaching assistants if standards in schools are to be raised. They would fulfil two functions: first, they would be learning how to do something which they did not perhaps know they had the skill to do but found that they have, and secondly, they would be supporting a large number of children who are struggling at the moment, often largely in the hands of untrained and inexperienced young teaching assistants. This is, in a way, the creation of a new profession, which would be extremely well adapted to those now facing a future without employment, not knowing what they are going to do. These training courses should be widely advertised and offered to the newly unemployed, both men and women.

I hope the Minister can promise that such a scheme will be looked at. Advertising these courses is an important part of what the noble Baroness, Lady Greengross, said about the need for a campaign. We need to face our dicey future with the knowledge that a lot of people need help now but will willingly take on training and new learning and should be encouraged to do so.

My Lords, at a time of financial and economic crisis, it is understandable that businesses cut back. Difficult as it is, this is not the time to neglect training and skills. It is more urgent than ever to provide our workforce with the skills they need. I quote here from a report by the All-Party Parliamentary Group on Corporate Responsibility:

“As the economic situation facing the UK and the rest of the world becomes more difficult, the talent challenge becomes more not less critical”.

And I pay tribute to the noble Baroness, Lady Greengross, and the All-Party Parliamentary Group on Corporate Responsibility for its effective and instructive inquiry.

Our debate today is important. Only through government, employers, educationalists, the workforce and parliamentarians working together can we meet this challenge on skills. When we learn from OECD statistics that our 45 to 54 year-olds are rated 17th in the world for their level of education, and workers in their 20s are judged to be 25th in the world, we know we have a problem. The corporate responsibility report put the challenge neatly:

“The need for a high level campaign on skills and talent must become as familiar and urgent as the issue of climate change”.

I will talk about the issue from a business perspective. Before becoming a parliamentarian, I was in small business, latterly as managing director of a 30-employee plastics manufacturing company. I can truly say that in my time in business some years back, I cannot claim to have really put training at the top of my agenda. Therein lies the problem. In a small business, be it a shop, a service or a manufacturer, you have to deploy many skills, particularly because, as an owner or owner-manager, time is your enemy. That is why I welcome the culture in which we operate today, with its emphasis on skills, vocational education and stepping up apprenticeships. The message needs to be strong on training, and bureaucracy must be kept to a minimum. Wherever possible, financial help must be available to the small business sector.

Again, in my time in business, one area which I considered very important and in which I tried to influence my workforce—I did so in other areas as well, of course—was management, so my key plea today is that there should be awareness that quite often our management skills in this country are very low. I had to address this when I took on my business, and it was one area in which I managed to have some success. Management is a talent and a skill which not every business provides.

When talking from a business perspective, we need to listen. Strong messages go out, such as, “Businesses not only should but must invest in skills or they will not survive”. I agree, but the powers that be need to know that small businesses can easily agree but not so easily achieve. There have, over the years, been placements of civil servants in companies such as BP and many big businesses, but I recommend to the Minister that the legislators, be they civil servants, Ministers or parliamentarians, are released to work not only in large businesses but in the small business sector, whether in a garage, a shop or wherever. I guarantee that, in a short time, the people involved would see just what challenges small businesses face.

At this point, I am indebted, as I am so often, to the Federation of Small Businesses, which is working effectively to promote the interests of this sector. In a recent report on apprenticeships—to return to the need to help the small firm—it says that microbusinesses in particular struggle with the administrative burden of setting up an apprenticeship, organising training and securing financial support. It is said that 99.3 per cent of all businesses in the UK are small businesses, so it is important for the small business sector to be engaged. It must therefore be enabled to be involved as easily as possible. The Federation of Small Businesses called for the greater use of group training associations. Such associations can help to remove the burdens of bureaucracy involved in taking on apprentices, but I strongly suggest that they should be well represented by those with experience in the small business sector.

As part of a campaign to help small businesses to participate, the financial help that is available needs to be publicised. Following a recent survey, it emerged that 95 per cent of businesses were unaware of the wage contributions that were on offer to train an apprentice. However, there are problems with the finance on offer; it is too bureaucratic to obtain, too difficult to understand, and when firms take up the opportunity they say that the money does not reach them for as long as three months. We need more publicity about what is on offer and more efficient payment procedures. Why can we not have payment within a month? I hope that the Minister will take account of that point, and others pertinent to the small business sector. Another recent finding, from a survey of 9,000 SMEs, was that only one-fifth of respondents indicated that they expected to increase actual expenditure on skills and training over the next two years, so there is still much work to be done.

I thank the noble Baroness, Lady Greengross, again for this debate and for the work done within the corporate responsibility group. Many other organisations are showing great commitment in this field, be it the IoD or all sorts of others concentrated there. That kind of concentration was not there when I was in business. It is impressive to see how much effort and enthusiasm is going into this, and how many organisations are involved. We somehow need to keep up and increase training, so that we can fully take advantage of opportunities when we reach better times once again.

My Lords, I, too, congratulate and thank the noble Baroness, Lady Greengross, on introducing this debate. I also congratulate her on her excellent and comprehensive opening speech and work in this area. This subject has become especially important now that the huge sums of money that we earned in recent years in the financial sector are likely to be much reduced, and more of our workforce will have to turn to making things to sustain our gross national product and, perhaps more importantly, to contain our ballooning trade deficit. We will only succeed in that by increasing the fraction of our workforce who are capable of making things, whether they be physical objects, works of art, entertainment or culture, rather than merely being able to profit from handling other people’s money.

I will leave it to others to extol the virtues and needs of the creative industries, as they are called; I hope that someone does that today. As an engineer—and I declare my fellowship of the Royal Academy of Engineering, and my membership of the national academies of the United States, China and Australia—I will concentrate on some of the skills needed to create and manufacture new products. Several ingredients are needed to create successful new products. First, we must understand what people need and want, so that we produce popular things. Secondly, we need ambition and leadership. Perhaps most importantly—along with needing a strong science base—we need innovation, underpinned by excellent design and engineering. Finally, we need adequate and efficient funding. All of these will require talented people with a rounded education across a range of skills.

It is not sufficient to have a strong science base—which, of course, we do—we must also have a good understanding of the needs and desires of the market, and the engineers to put science into practice and produce the manufacturing systems that will get the products to the marketplace before our competitors. I shall talk about the breadth of our education system and the distribution of talent across that range of activities, first, as regards technicians—as many of your Lordships have already done so excellently—and, secondly, as regards research engineers: those, like me, who have spent their lives attempting to design high-technology products that never existed before, or to use new ideas and science to improve existing products. The engineers who do this must have a thorough knowledge of the science that underpins their subject and a practical knowledge of finance and manufacturing. But it is also important that they are supported by expert technicians, who are practised in the latest art of their subject.

Traditionally technicians have been trained through apprenticeship programmes that involve on-the-job training coupled to more formal study at colleges and universities. Regrettably, many of these programmes were abandoned in the recessions of the 1970s and 1990s, at least by the less successful engineering companies. As we have heard, many companies are unaware of national apprenticeship schemes today. Companies that sustained their training programmes have in general benefited and flourished. Expert technicians are a precious resource that should be protected at all costs, especially in a recession. Government support for technician training has been essential in good times, and should be extended now to help in the current crisis.

It is also important to train mature workers, as well as those leaving school. There are many working as electricians, plumbers, builders, et cetera who are capable of being trained and taking on more complex tasks, for example in the aerospace and energy industries. There are also technicians in fields that are no longer relevant, who will be eager to be retrained if the resources are available. Finally, there is a crucial need for more technicians to run teaching laboratories in schools. The poor state of school laboratories was a major factor, identified by the report of the Select Committee on Science and Technology in 2006 in its inquiry, which I chaired, into science teaching in schools, as explaining the fall-off in the number of students wanting to study science. Will the Minister confirm that the Government are doing as much as they can to support the training of technicians of all ages for industry, and for schools?

I turn to the creative professional engineers. In many, perhaps most of our competitor nations, especially the emerging economies, the career of choice for young people who have the ability to excel in science and mathematics is engineering. Many of these talented young people will also have the ability to excel in the arts, humanities and social sciences, but they will choose engineering, because they see it as being the most effective way in which to change the world. In the UK, the exceptionally talented are more likely to be advised to pursue careers in law, medicine, science, the arts, the Civil Service and even the media. This will be reinforced by what they see around them in terms of recognition and reward. Fortunately, this situation has improved somewhat, particularly in our top universities where engineering applicants are as highly qualified as any other group of students, but we would be deluding ourselves if we thought that the fraction of our most brilliant young people wanting to be engineers is comparable to that of our rivals.

We need to do more to allow young people to learn about the excitement of careers in engineering if our nation is to prosper. Part of the problem is that our secondary education system that relies on A-levels in practice forces young people to choose between the arts and humanities and science and engineering at a very early age when they do not have sufficient information themselves to make a decision. They are forced in effect to accept what their teachers and parents say rather than wait until they can judge for themselves. By the time they have the information it is often too late as they do not have the breadth of subjects needed to change. This is especially the case for engineering, for which many universities are only interested in mathematics and physics. For this reason, I prefer the broader curriculum of the international baccalaureate, but I realise that I am in a very small minority in wanting this and that our universities are unlikely to give up wanting students to be highly specialised so that they can handle specific courses.

What we can do, and what we are doing, which I strongly support, is to develop programmes and events for young people that will tell them about the excitement of careers in engineering and science. As the noble Baroness, Lady Wall, told us, just such an event is going on at this very moment only a couple of hundred metres away in the Queen Elizabeth II Conference Centre. This is the Big Bang UK Young Scientists and Engineers Fair, organised by the Engineering and Technology Board and the Science Council, and supported by all of our engineering and science academies and institutions. It is a landmark event, celebrating young people’s achievements in science and engineering, which includes inspirational shows, workshops and presentations—covering the entire science and engineering community—to stimulate young people, ensuring that this talent is nurtured for the future. This is just the sort of thing that we should be doing.

I end by asking the Minister for reassurance that the Government recognise the importance of attracting the brightest people to creative engineering, and are doing what they can to ensure that young people are aware of the excitement of careers in creative engineering. If we are to sustain our gross national product, let alone balance our trade, we need the brightest engineers we can find.

My Lords, I, too, thank the noble Baroness, Lady Greengross, for initiating this debate. It is always timely to discuss raising the profile of skills and encouraging practical achievement, but it is particularly timely when set against the current financial situation.

In this country we have, for generations, held academic and intellectual achievement in high regard, and the UK retains internationally renowned universities that compete with the best in quality of teaching and research. We applaud this success, but regret that it has been at the expense of, rather than alongside, our regard for work-based skills. As noble Lords have pointed out, we face a shortage of people with the higher-level skills required for 21st century jobs. The latest report from the UK Commission for Employment and Skills asserts that prosperity depends on jobs and productivity, and both depend on skills. The commission was set up to maximise UK economic competitiveness and social cohesion through world-class employment and skills. It is sobering to see that the latest analysis of the workforce indicates that 33 per cent have higher-level skills, against the Leitch aim of 40 per cent. At the bottom end, there are 28 per cent at the lowest level, against Leitch’s aim of 10 per cent. Hard work will be needed on all fronts to reach these targets.

The credit crunch has certainly sharpened the focus on building foundations for future economic success. It has become more urgent that we look for all possible opportunities in all parts of the workforce. It is interesting that this debate has attracted attention from many different quarters, including manufacturing and technology, the service sector, finance and education. I, too, will refer to the first of these, success in manufacturing and technology and the STEM subjects. As the noble Lord, Lord Broers, and the noble Baroness, Lady Wall, have already mentioned, it is a curious coincidence that we are having this debate at the same time as, across the road, people are taking part in the newly established National Science Competition, competing to become the UK Young Scientist or UK Young Technologist of the Year. This is alongside the Young Engineer for Britain competition.

Such skills are fundamental to our economic recovery, whether as part of innovation in manufacturing, IT or finance. If we are to generate enough young people to work in these sectors, it is a high priority that their interests should be stimulated by effective and enthusiastic teaching in schools and that their achievements should be appreciated by parents and valued by society. I suggest that competitions can play a powerful part in motivation, in raising the profile of the skills and in raising standards. There is ample evidence of this in the work of UK Skills, which runs national competitions aimed at developing skills and training. Winning a training award or a skills competition brings considerable benefits and prestige to the winners. It raises morale in the industry and attracts business.

Preparations are under way for the biennial WorldSkills Competition, to be held in London in 2011. If we are to maximise skills and talent, we have to showcase them and produce role models to inspire further effort, but we need not wait two years to put resources into training those who will represent the UK against the cream of the world’s skilled young people in 2011. I seek reassurance that the Government will indeed support UK Skills and WorldSkills in the run-up to 2011. The following year, of course, we have the 2012 Olympics where we will see sporting skills, but in preparation, the Olympic site is already offering training and apprenticeships across a wide range of industries linked to construction. That is high-profile work, and will, I hope, encourage people into the sector.

To turn to the service industries, when I first joined City & Guilds many years ago, I spent more than a year assigned to the division which administered vocational qualifications for hair and beauty, retail, health and social care. In hairdressing qualifications, the demands were high. They called for science, design, creativity, customer service and therapy. The work has low pay and the hours are long, but it has one of the highest happiness levels, with great job satisfaction. It is also an industry where the UK has an international reputation, including an array of East Londoners who have led and inspired—names known world wide such as Vidal Sassoon, Joshua Galvin and Trevor Sorbie.

The care sector is in greater and greater demand. Better health awareness and medical advances mean survival for the very young, very old, very ill, very disabled, very damaged: people who would previously not have survived, but who now, with the help of those who care, live fuller and more productive lives. Retail is going through as hard a time as any, but retail and selling skills will play a key part in our recovery. This country has been branded a nation of shopkeepers—by Napoleon, allegedly, although I do not think that it was his comment originally. Going even further back, Tacitus in 98AD wrote that London was,

“a busy emporium for trade and traders”.

That continues within the City of London today, with the skills and resources that have brought major economic benefits to the country. Of course, some of that prosperity has now been shown to be unsound, and trading and financial institutions are having to concentrate resources on reviewing and rebuilding. There is of necessity more energy behind the work of the City of London Corporation, to which the noble Baroness, Lady Greengross, referred, to ensure that school leavers are enabled to develop employability skills. But the City also needs access to a workforce already skilled and flexible if it is to maintain its position as the leading global financial centre, which has apparently been confirmed today.

One by-product of the recession could and should be an increase in the value of vocational qualifications. There is real evidence that parents, teachers and students are looking with greater respect at vocational pathways. They realise that acquiring skills is the route to employability with better opportunities for fulfilling and rewarding jobs as unemployment rises. The Government are turning to apprenticeships as the vehicle of choice for tackling unemployment and skill shortage. We on these Benches support the lifting of age restraints to enable adults to acquire new skills. We note the £1 billion apprenticeship budget, which is to be boosted by an additional £140 million, and the aim to get more than 250,000 apprentices starting their training in the next financial year. That is ambitious: it will not be easy to find all those work placements, either in the public or the private sector, but it shows how much value is being placed on practical learning.

In this House, we have spoken before of the crucial work of further education colleges, not only in the education and training of 16 to 18 year-olds, but in offering new skills and training to adults. Colleges need to be allowed flexibility and assured funding, to use their expertise to best effect to meet local needs. By harnessing their resources to those of employers, benefit will be more rapidly felt by individuals, communities and the economy of the country.

I am grateful that this debate has provided your Lordships with the opportunity to add support from this House to all those who are working to see us through the recession, in order to emerge a stronger and a better country.

My Lords, I, too, thank the noble Baroness, Lady Greengross, for initiating what we would all agree is a timely debate. Bearing in mind what I am about to say, I should declare my interest as Deputy Chairman of Channel 4, President of the Film Distributors’ Association and as a former chair of Skillset.

I emphasise the timeliness of this discussion because I think we have entered one of those periods in history where we need to review a whole set of fundamentals. We have to ask ourselves what we see as the principal drivers of a sustainable economy over the coming years, and maybe even the coming decades, and how best we might prepare for the opportunities and the challenges that lie ahead.

A few weeks ago, in a debate about the current state of the economy, I drew your Lordships’ attention to the fact that this country’s present ratio of debt to GDP is around 47.5 per cent, which in historical terms is not at all unmanageable. Without doubt that ratio will, over the next few years, rise to 60 per cent or maybe a little more. The great economic debate this country should be engaged in is exactly what that additional, say, 15 per cent is to be spent on. Do we simply “bail out” the present or do we thoughtfully invest in the future? This is territory in which the great clash of conflicting ideas should be taking place.

Listening to the Prime Minister speaking yesterday in Washington to the joint session of Congress, it sounded to me as though he, at least, has already made up his mind. As he put it,

“we must educate ourselves out of the downturn, invest and invent our way out of the downturn and re-tool and re-skill our way out of the downturn”.

He went on to say:

“Every time we build a school we demonstrate our faith in the future. Every time we send more young people to university, every time we invest more in our new digital infrastructure, every time we increase support for our scientists, we demonstrate our faith in the future … We cannot merely plan for tomorrow today. Our task must be to build tomorrow today”.

That is pretty heady stuff. I would be surprised if there were a single member of your Lordships’ House who would wish to other than echo his words or support his purpose.

To help turn those words into deeds I should like to offer a couple of suggestions. This very morning, HEFCE announced a list of changes to the level of grants accorded to higher education institutions. Among the 15 institutions undergoing cuts are the Institute of Education, Goldsmiths College, the Royal College of Art, the University of the Arts, London and Ravensbourne College of Design and Communication. Were I asked to make a list of the 10 institutions in this country most likely to deliver the type of creative future the Prime Minister would appear to be describing, then these same five institutions would unquestionably be on my list. As Private Eye might say “shurely some mistake”, but happily it is not too late to correct it. I very much hope that my noble friend the Minister will use his influence to do so.

I also add my voice to that of the noble Baroness, Lady Verma, when she mentions the hapless decision to scrap ELQs. That is a hopelessly inappropriate decision to have made and at this point in the employment or unemployment cycle it should be revisited.

It has long been my contention that any sustainable vision of the future must be built on maximising the talents and the skills of our people. I mean all of our people: whatever their age, whatever their background, and wherever they happen to live. I have spent the past couple of decades arguing with just about anyone who would listen, and indeed many who would not, that investment in our talent and skills base remains the only viable way to build a future for us as a successful and economically coherent nation.

By investment, I am referring not simply to the public sector investment, but to the private sector investment as well. Along with a relatively small band of fellow travellers, I have remained a strenuous and entirely unapologetic advocate of compulsory levies to support statutory levels of investment and training — modest levies of the kind the film production sector pays to support investment in the Danny Boyles and the Mike Leighs of the future—people who can deliver both economic value and cultural confidence to a country very hungry for success.

However, at every turn those of us who dared to argue for the logic of training levies were dismissed as the enemies of the free market. We were told by supposedly wiser heads that our modest proposals would simply drive up costs, while driving away investment. Put more bluntly, we were swatted away with arguments emphasising the overwhelming importance of light-touch regulation, arguments that in hindsight amounted to little more than assertions of self-interest and private gain. In fact, it is my contention that creating secure sources for continuing investment in training has quite the opposite effect. Investment in training is the best possible antidote to cost inflation. The larger the talent pool the more viable the cost of employing that talent is likely to be. Over time the talent pool itself starts to act as a magnet for investment both from within the UK and indeed overseas. This in turn serves to increase the capital available for re-investment in training and something really quite close to a virtuous circle has been created.

My noble friend Lord Carter, the Minister for Communications, Technology and Broadcasting, is currently in the midst of his final report on Digital Britain. I welcome his strong commitment to the importance of education and skills. Just a few weeks ago, in his interim report, he said that,

“we cannot afford to treat education and training for digital technologies as just another ‘vertical’ subject area. It underpins everything we do in the 21st Century”.

I completely agree with him. An abundance of talent of every kind is the only certain way of ensuring a bright future for the whole of our creative industries, and if you combine that with a consistent supply of world-class skills, and you have held down costs, you will be creating an unbeatable combination. Maybe it is because this is so self-evident that it gets remarkably little attention. But that being the case, why do I get the strong sense that many private sector employers, who honestly should know better, seek to evade or sometimes even avoid their very obvious responsibilities? Were he not constrained by his responsibilities on the Front Bench, I would certainly ask my noble friend Lord Davies to support me in the belief that the involvement of the private sector in training has been at best a marginal success.

If you need evidence of what I am saying, look no further than the fact that one of the very first acts of ITV on being released from a slew of seemingly onerous PSB obligations was to all but walk away from its long and previously entirely honourable commitment to training. In his chairman’s statement accompanying yesterday’s financial results, Michael Grade said:

“Our priorities are being aligned to the changed economic context … when the cycle turns and the economy comes back—and it will—ITV will be in good shape”.

Michael Grade is an experienced businessman and a much admired friend of mine. He is also sufficiently experienced as a programme maker to know that the possibility of losing a generation of skilled professionals could all too easily be the death knell of those sectors of the creative industries in which he has spent the best part of his life. Is it possible that in its newly found freedom ITV believes that it will have no further need of programmes made possible by the talents and skills emerging annually from the National Film and Television School and the training schemes supported by Skillset, the sector skills council for creative media? Or is it that in withdrawing from its commitment to training ITV is tacitly acknowledging the possibility that it will just not be around long enough to require the services of the next generation of talent? That is bad enough news for the talent but it throws a huge question mark over the company’s belief in its own future.

Personally, I would be surprised if Ofcom or the Secretary of State anticipated that the removal of this vital underpinning of our national talent base would be the first unintended consequence of what at first glance must have seemed a pretty rational series of decisions. Well, now they have been warned; and, once again, it cannot be too late for the Minister and his colleagues to put things right.

Perhaps I may finish with an anecdote. I had a meal yesterday with an ex-colleague who runs the largest post-production house in the UK and maybe one of the largest in the world. It employs 800 people at an average salary of £60,000 a year. He is finding it absolutely impossible to hire skilled people from the UK. Most of his new hirings, as this business grows, are coming from France and Germany. How could we possibly have allowed this situation to occur? At the very high end of technology, where technology meets creativity, we are having to import technologists and creative people from France and Germany. It is very bad news indeed.

It is my most sincere hope that the final report of the noble Lord, Lord Carter, will help to usher in a significantly increased investment in this critical area, thereby helping to contribute to an economic upturn in which the Prime Minister’s ambitious vision for tomorrow’s Britain will at last be realised.

My Lords, I should like to add my voice to the expressions of appreciation for the tireless work of the noble Baroness, Lady Greengross, who has not only championed this report and debate so effectively this afternoon but striven throughout the years to push the argument for corporate responsibility in the political and business spheres. I am appreciative, too, that in the introduction to her report, The Talent Challenge Facing the UK, the noble Baroness has so wisely linked the issue of skills and talent development to what she calls social cohesion and social justice, terms that we use frequently in this House but do not frequently connect to the issue of learning. The report says:

“It accords with the UK’s vital national interest in avoiding the conditions in which rising crime, political extremism and violence may flourish”.

It goes without saying that an underskilled workforce, a young and uninspired school leaving group and those who lack the capacity for work provide the seeds for social unrest.

The report goes on to address the issue that I will focus on in my few short remarks. Section 3.1.1 of the report, under the heading “Supporting Secondary Education”, states that it is vital to look at skills as more than just a technical issue. I quote again from the report of the noble Baroness, Lady Greengross:

“These include not simply the technical skills and formal qualifications traditionally required, but broader cognitive and interpersonal skills such as the ability to think creatively, to communicate effectively, to work in teams, to solve problems and to be able to take calculated risks”.

Speaking in January of this year at the financial services sector conference on skills, Speak up for Skills, Roy Leighton, chairman of the Financial Services Sector Council, talked about the future of the financial services industry, which as we know has been much challenged if not criticised over the past few weeks. He said that it was necessary to create an industry that was investing in,

“the people, culture and values that the industry needs, at all levels”.

He went on to say that the council had identified that the future financial services sector would be reliant first and foremost on getting the correct leaders and managers who were client-facing and who had been trained and developed through what he called “soft skills programmes”, alongside a continued investment in the upskilling of entry-level jobs in subjects such as financial literacy to workplace skills.

In the light of everything that noble Lords have said about the necessity for technical, apprentice-related and entrepreneurial skills, what soft skills are needed for the financial services industry to survive and succeed? I declare an interest as a director of the audit, tax and advisory firm KPMG. Last Sunday, to our delight, our firm received the Sunday Times best large employer award for 2008. Also on Sunday, KPMG won the Sunday Times lifetime achievement award for being one of the top three employers in each of the past five years.

Why has KPMG managed to succeed at this level? In the financial services industry, it is essential to be driven by values. It is through the values of integrity, responsibility, transparency, fairness, prudence, what I call a culture of fiscal duty or, in other words, saving, and a culture of fiscal loosening—in other words, generosity and philanthropy—that people learn the soft skills of an appropriate commitment to their communities and not just to their technical expertise. Some of those skills will have to be built into the training that we will require in the future.

One other dimension is mentioned consistently in the report. I shall quote from the briefing provided by Business in the Community, which has also displayed its passion for ensuring not only that we think about these things well, but that the nation thinks about them well, too. It says that it is vital to raise aspirations,

“in both the classroom and the workplace”.

Why do we need raised aspirations alongside exceptional technical, vocational, values-based and intelligence skills, as well as the values that are necessary to build competence back into our financial services industry? We need aspirations because our young men and women need a vision of their value and place in society, and their contribution to it, to end the drain on our economy of the continuous take and the waste of laziness, so that we empower people to become contributing givers and empower the rest of our world to work towards equality of opportunity in both economics and employment.

How do we raise aspirations? Every teacher struggles to find both the time and the emotional energy to do it. I am married to a teacher and therefore I witness virtually day in, day out the strain that all teachers live with. I have one challenge to the Government in this debate, which is that they should think about making an economic investment change. Instead of continuing with what I see as the important school building programme, which was initiated under the previous Prime Minister and carried on under this one, why not recognise that the most important skill that children can have is to gain relational empowerment through getting alongside aspirational and inspired teachers?

Buildings are fantastic—all of us love to be trained and to work in high-quality, modern and well equipped buildings—but they do not provide inspiration; people do. I feel that it is more important to empower teachers to be exceptional individuals, which means resourcing them to have the time to learn, to think, to be fresh for one-to-one interactions and relationships, to have the time to get alongside young men and women and to inspire them onwards to the next steps of their development. They should also themselves have the time to take account of issues in the world and think about how to respond to them. Capital programmes are fantastic, but they are not the same as people development. In that area of investment, we would spend our money more wisely.

I have some personal experience of this. I shall not name the person involved, but next Monday one of the people visiting me here is a young lady whom I taught when I was a teacher in 1980. At that time, she was 13 and she was one of the more troubled young ladies in my class. She was not necessarily one of the most able in the class, either. Now, with three degrees to her name and the leadership of a significant NGO, she is visiting me for the third time, after my having taught her 29 years ago. That necessity to inspire and to give aspiration is vital for young men and women to feel that they have a place as contributors in our society.

Having mentioned my firm, KPMG, I should like to add one further dimension to my remarks. We have participated in the Prime Minister’s Global Fellowship alongside HSBC, Tesco and Tata. The four major international corporations last year supported 120 young men and women from not necessarily the top schools, but reasonable to good schools in the UK. We supported them to gain training experience internationally. We ourselves took on 30 of those young people to work in our businesses in Brazil, India and China over six months. It was a huge encouragement and joy to witness all 120 of them gathered in our headquarters last December and to see how much their lives had changed by being motivated by their capacity to work in effective businesses such as HSBC, Tata, Tesco and KPMG around the world. That is what business can do to help to drive this with energy and passion. I am delighted to be part of encouraging us all not only to step forward but to hold on to the values that are necessary for making young men and women the bright leaders of the future.

My Lords, I join other noble Lords in thanking and congratulating the noble Baroness, Lady Greengross, on introducing this very important and timely debate. I declare an interest as a member of the corporation of Guildford College, which is a further education college.

In some senses, this debate has been something of a reprise of a debate that we had last year on the Leitch report. The report, to which the noble Baroness, Lady Greengross, referred, by the All-Party Group on Corporate Social Responsibility, The Talent Challenge Facing the UK 2008 to 2020, reminds us of the challenge and the very ambitious targets set by the Leitch report which the Government have taken up. In some ways, the Apprenticeships, Skills, Children and Learning Bill, which was introduced in the House of Commons last week, picks up the challenge of the Leitch report and carries it forward.

The report by the all-party group also reminds us that today we face different circumstances. The Leitch report was written at a time when Britain was looking forward and expecting continuing growth. We are now in recession, and the all-party group reminds us that in a period of recession achieving those targets is all the harder but all the more important. As the report and many of those speaking today have reminded us, as we emerge from that recession, we need to be in a position to seize the opportunities presented for new enterprise. In order to do this, it is essential to make the most of our talents.

This debate about what Britain should do when it emerges from recession takes me back almost 30 years to when I was working in an organisation called the National Economic Development Office at the end of the 1970s and the beginning of the 1980s. I was working in the central secretariat of Neddy at the time and watching the indices of production, of sales and of inventories dropping through the floor in much the same way as today. We were confronted in that central secretariat by this whole question of why Britain’s productivity was so low compared to our competitors. The answer was then, as it is today, that we were on the cusp of a technological revolution, that we were using equipment that was often 20 years out of date and skills that were often 30 years out of date, and that we needed desperately to upgrade our education and training programmes, as well as to invest in new technologies.

If you think through that period, the message was that the future lay with brain not brawn and that a massive investment was needed to upgrade and improve our skills profile. In those days, only 14 per cent of the age cohort were going through university, and over 40 per cent of young people left school when they were 16. Massive investment was needed, in particular in science and technology, in the STEM subjects that we still come back to. So in a sense the problem was exactly the same as the problem we have today—that we have far too many people with low or no qualifications, and not nearly enough with the intermediate and the higher-level qualifications. In particular, we needed to concentrate on the STEM subjects, the technicians and the supervisors and down the lines, the teachers who were so important in growing that new generation.

Much has happened over the last 30 years. We saw all kinds of initiatives—the YTS, the YOP, the TOP, the Manpower Services Commission, the GNVQs and the TVEIs. Significantly perhaps, until 1997, the proportion of GDP invested in education remained at or below 5 per cent. The proportion of GDP going to R&D fell from 2.5 per cent to 2 per cent. Since 1997 we have seen—I am glad to say this—a very considerable investment in education and training. We are now closer to somewhere in the region of 7 per cent of GDP. Sadly in R&D we have failed to raise it above that 2 per cent. Although the Government—and I have to say this—have done a good deal to put money, through the research councils, into academic science in particular, we have seen a continuing poor performance on the part of industry in relation to R&D. The exception has been—and the noble Lord, Lord Broers, mentioned this—a number of key manufacturing industries such as pharmaceuticals and aeronautics that continue to lead at the front. But many other industries have a very disappointing record in this particular area.

While we may have invested, the world has moved on very fast. As many of those who have participated in this debate have noted, Britain may have moved on, but other countries have moved on even faster. Our productivity still lags way behind our competitors. The OECD tables show us 17th among 30 OECD countries in terms of low skills and 20th in terms of the intermediate skills. Although we now have somewhere in the region of 35 per cent of young people under 30 holding degrees, we have fallen behind countries such as Singapore, Taiwan, South Korea and Finland, which have overtaken us and moved ahead of us. There is a continuing problem with productivity, and the answer remains that we need to invest in education and training. That should be, and in many senses has been, top of the agenda.

The report of the all-party group brings out a lot of very important issues which have been referred to today, including the continuing need for emphasis on the science and technology, engineering and mathematical subjects. Those are absolutely crucial to the taking up of new technologies, not only in the electronics field but in the creative fields as well. The marriage or fusion of the digital technologies and the creative arts is vital, and it is essential that we make this investment.

There is also a need to put emphasis on enterprise education in schools. My noble friend Lady Walmsley told us what is going on in schools, but we also need to bring in the soft skills mentioned by the noble Lord, Lord Hastings. It is important that we train our young people in those soft skills. There is a need to strengthen vocational training initiatives and especially apprenticeships. That was raised by many speakers, including the noble Baroness, Lady Wall, and my noble friend Lord Cotter, and I want to come back to it in a moment. There is a need for incentives to encourage both employers and individuals to invest in training and to recognise the benefits obtained from training. The noble Lord, Lord Puttnam, was absolutely right to say that in industries such as the film industry, which he knows, but also in the construction and construction engineering industries, a levy system helps to promote training, and perhaps we should look at that more seriously. The noble Baroness, Lady Verma, mentioned the need for incentives for employers in small and medium-sized enterprises to invest in apprenticeships.

The importance of good and impartial careers advice was not mentioned by many speakers, but it is significant that in a recent IAG survey only 24 per cent of teachers saw apprenticeships as being a good route. The noble Baroness, Lady Warnock, spoke of the need to rethink the benefits training equation and to recognise that, rather than penalise those who seek to retrain while on benefits, we should encourage them to do so. Perhaps, above all, there is a need to maintain these training initiatives through the recession.

I want to talk briefly about two things. The first is apprenticeships. For young people, going through an apprenticeship—the noble Lord, Lord Hastings, gave an example of this—is the most satisfying and fulfilling way of learning the skills that they need. Therefore, it is absolutely vital that the apprenticeship scheme goes forward and is successful. However, I want to raise one or two questions. Why does the new Bill that we have before us make life so complicated? Why does it require the sector skills councils to be reaccredited and revalidated? Why are the Government not backing the 14-to-16 young apprenticeship scheme? Why have they muddied the field by introducing the diploma as a third way between the academic GCSE and A-level and the work-based learning route of apprenticeship, establishing no clear pathway or progression route from the diploma into the apprenticeship? Why have they created the divide between the under-19s and the over-19s? At a time when we are anxious to see older people upskill and reskill, why do employers have to pay fees for those in their workforce who are over 19, whereas they are subsidised if they go through the Train to Gain route? All kinds of anomalies and complications have been introduced here which we need not have.

Finally, I should like to say something about the gender gap. It is a scandal that, for example, only 2.6 per cent of the apprenticeships in engineering are taken up by women. Women succeed at GCSEs and A-level and go on to universities, at many of which they top the degree lists, yet they do not fulfil themselves in the workplace. Why is that? All kinds of issues arise here but I pick up again the need for impartial careers advice. The hair and beauty industry mentioned by my noble friend Lady Garden is very important, but why do we see such a vast number of young ladies going into hair and beauty and the health and social care industries but not into the manufacturing and engineering industries? It is very important that they get proper impartial advice at the right age: 13 or 14. Other points put forward by the all-party group were the continuing need for flexibility in work patterns, in terms of the right to ask for flexible hours, to recognise difficulties that parents face in juggling young children and working and the difficulties of being reabsorbed into the workplace. The noble Baroness, Lady Warnock, suggested making it much easier for people to study part time. Women have been hit by the nonsense in the ELQ regulation. I hope that the Minister can give us some good news on that. I am sorry, I have gone over my time. I beg the House’s pardon. I wanted to make some of these points.

My Lords, this has been a fascinating debate. There have been so many enlightening and helpful contributions from around the House. I am sure the Minister will agree that it is clear and encouraging that we are united in our belief that education, skills and training are key to our future, now more than ever. I take this opportunity to join other noble Lords in thanking the noble Baroness, Lady Greengross, for securing this important debate. I congratulate her and the All-Party Group on Corporate Social Responsibility on its report and apologise to her for arriving a moment after she started speaking.

I should declare an interest as a shareholder in an information technology support company, which has a deep interest in the highest level of skills in its workforce, as the result of the sale to it of a similar company that I ran and of which I was a substantial shareholder. I very much appreciate the words of the noble Lord, Lord Cotter, about the importance of the small business sector.

As unemployment escalates, we must invest in the most efficient and practical ways to ensure that people have the opportunity to maximise their talents, skills and employability. As the noble Baroness, Lady Greengross, said, we must improve on the current situation. It is vital that employers pull in the right direction. I am glad that my noble friend Lady Verma and other noble Lords were helpfully able to give us the perspective of the employer. Nevertheless, as the noble Baroness, Lady Greengross, also said, the Government must set the framework for this and help rather than hinder that process. Between 2001 and 2007, £7 billion was spent on basic skills courses. Despite this enormous investment, the Public Accounts Committee skills for life meeting on 29 January reported that large numbers of the adult working population are still functionally illiterate and innumerate. The noble Baroness, Lady Greengross, and my noble friend Lady Verma both mentioned this. The noble Baroness, Lady Sharp, referred to our poor position in international productivity league tables.

This is all the more galling when one learns that, in certain cases, the Government have had to find solutions from overseas to plug the skills hole. The noble Lord, Lord Puttnam, gave us a shocking example. Another is that immigration rules were recently relaxed because the nuclear power industry needed to fill 60,000 jobs and there was a national shortage of people with the right skills. Perhaps the Minister can explain what action is being taken to make sure that the right skills training and education is being implemented so that in this time of economic crisis, we will have the workforce with the necessary skills to fill the nearly 200,000 posts that are expected to be required for the 2012 Olympics, to which the noble Baroness, Lady Garden, referred. Lack of training has meant that, as the UK Statistics Commission discovered, up to 80 per cent of new jobs since 1997 have gone to migrant workers. Indeed, whatever would we have done without them?

In further education, we see a deteriorating situation. Between 2005-06 and 2006-07, the number of learners over 19 in all publicly supported provision fell from 3.1 million to 2.4 million, a decline of more than 20 per cent in a single year. A significant part of the problem here is that, as Sir Andrew Foster reported,

“a galaxy of oversight, inspection and accreditation bodies”,

controls further education, meaning that the system is at risk of strangulation. Recognising this, the Government have pledged to replace the bureaucratic Learning and Skills Council. They propose, however, to bring in three new bodies: a skills funding agency, a national apprenticeship service and a young people’s learning agency. Concerns have been raised by some of those responsible for running the system that this will exacerbate some of the existing problems of bureaucracy. My noble friend Lady Verma and the noble Lord, Lord Cotter, referred to that. How much will the new bodies cost?

The Government have recently told us that participation in the apprenticeship system as a whole has increased; indeed, the word “renaissance” has been used. But of course this must be taken in context. The Government claim that the number of apprentices in learning has increased dramatically; indeed, the Minister argued that when answering a question that I asked a few days ago. However, the reality is that the number of people being trained to the vital level 3 is now lower than it was a decade ago. The Adult Learning Inspectorate has warned that,

“some apprentices can potentially achieve the full requirements of the apprenticeship framework without having to set foot in a workplace”.

This is echoed by Ofsted, which has recently confirmed that many of the new apprenticeships created by the Government are merely virtual. I hope that the Minister will be able to explain that.

At the beginning of this year, the Prime Minister announced a new target of 35,000 apprentices for next year. We welcome that, and hope that the Government will be able to meet it. However, this scheme must be quality-driven as well as target-driven. Do the Government have any plans to help to increase the provision of level 3 apprenticeships? As my right honourable friend David Cameron said in a speech on 10 February, we need a change both in jobs and in training. Our current training system is based on the assumption of a growing economy and a system delivered by big bureaucracy and top-down targets. We need more front-line skills building and to do much more to help those who have been made redundant to get back into work as soon as possible.

We must look to the future. It is vital, as several contributors to the debate, including the noble Baroness, Lady Walmsley, have said, that our young people are given all the support that they need to achieve their potential at school. The noble Lord, Lord Hastings, spoke of inspiring aspiration. They should also be given high-quality careers advice—the noble Baroness, Lady Greengross, and the noble Baroness, Lady Sharp, quite rightly emphasised that—to help them start their working lives.

In 2004, the proportion of 16 to 18 year-olds not in education, employment or training was 9.6 per cent. Despite a government drive to reduce this proportion to 7.6 per cent by 2010, it had increased to 10.5 per cent by the end of last year. What are the Government doing now to make sure that this percentage falls?

As my noble friend Lady Verma rightly said, it is crucial that we not only support young people about to enter work but also pursue a policy of lifelong learning to help those already working. Once again, this was mentioned by the noble Baroness, Lady Greengross, as well as by the noble Lord, Lord Broers, who gave us a fascinating insight into the technical and engineering area, so vital to our future success. What are the Government doing to help people retrain, reskill and develop their talents to maximise their employability? Has any consideration been given to bringing back funding for ELQs, which the Government cut in June last year and which were designed to address exactly this problem? The noble Baroness, Lady Greengross, my noble friend Lady Verma and the noble Lord, Lord Puttnam, among others, raised that. What do the Government think about the Conservative idea of a community-based, all-age careers advice service? Do they have any plans to implement such a proposal?

We are all in this boat together and we all want to win in the drive to upskill and reskill to put us in the best possible position to emerge from the downturn. We must do that. I ask the Minister to take on board all the ideas raised in the debate and use them to ensure that in future we achieve real success.

My Lords, I, too, extend my grateful thanks and appreciation to the noble Baroness, Lady Greengross, for initiating this debate and for presiding over the all-party parliamentary group report. It is an excellent report, which gave us a lot of food for thought and raised issues in a very constructive way. In thanking the noble Baroness sincerely for that report, I shall try to touch on a number of the issues that it identified. We have had a wide-ranging debate and if I had an hour or so to spend I could touch on every point that was made; if I skip lightly over one or two, it is not because they were not valuable and interesting but because I am time-limited and conscious of not only the time but the day, so I hope that noble Lords will forgive me.

The Skills for Life strategy has been mentioned by a number of contributors to the debate. The importance of making progress on literacy, numeracy and other skills was first identified by the noble Lord, Lord Moser, who drew our attention to the problems in his report. It was then identified once again by the noble Lord, Lord Leitch, in his report. Clearly, there is no room for complacency but, in times as difficult as these, we ought to acknowledge the progress that has been made. I prefer to see the glass as half full rather than half empty. If we do not make what I call a contextual analysis, there will be a feeling of, “Why bother, as we will never make any progress at all?”. That is not the case. We have massively increased investment in education and training and we are seeing some returns.

We spend £1 billion a year on Skills for Life. The Leitch report set out our targets: 95 per cent with functional literacy by 2020, which reflects the standards of the top 25 per cent of OECD nations. To reach that level by 2020 would be a huge achievement. Our public service agreement to improve the literacy, language and numeracy skills of 2.25 million adults by 2010 was met in June 2008, two years early. Without by any means being complacent, I should have liked some acknowledgement of the real progress that has been made. For the next three years, we are talking about an additional nearly 600,000 people of working age achieving a first entry level 1 or above literacy qualification and an additional 300,000 people of working age achieving a first entry level 3 numeracy qualification, which will take us to 81 per cent numeracy. We know that we still have more work to do, but there has been real and significant progress.

An enormous number of people have contributed to that progress, such as those in FE and schools. My noble friend Lady Wall drew to our attention the huge role that union learning reps have played in encouraging adults back into learning, often tempting them with the bait of IT skills when we know that some of the skills that they lacked were not just IT but literacy and numeracy.

The noble Baroness, Lady Greengross, asked about requiring employers to give written reasons for turning down requests from employees for time off for training. I listened carefully to the points that my noble friend Lord Puttnam made on training levies. We are where we are on them; where they are working in the construction industry, as the noble Baroness, Lady Sharp, reminded us, they work well. We are trying to change the climate, culture and behaviour.

I draw noble Lords’ attention to two important changes. First, the education Act that we only recently passed raised the participation age and meant that every young person between the ages of 16 and 18 cannot go into that terrible vacuum of joining an employer who provides no training at all—if we assume that that person enters the world of work. That was an important step change. Another change was on the right of employees to request time for training. Yes, it is a cautious step forward, but it is a step forward. I assure the noble Baroness, Lady Greengross, that we will ensure that there is a written response to employees’ requests for time off for training. We are not yet in the state that I would like us to be in, whereby we could guarantee that every employer participated in training, but we are making progress towards that essential goal.

My Lords, I am sorry to interrupt my noble friend’s flow. I do not think that he will have an answer, but he could write to me. We are in new and uncharted territory. I, and I am sure the House, should like to know under what circumstances the Government would be prepared to revisit the issue of statutory levies, or are there no circumstances whatsoever in which that will be revisited?

My Lords, all that I can say is that I will take away that question. I would not say that there are no circumstances in which that would happen, and I take the point that my noble friend makes about the uncharted territories that we are in. However, we are spending more than we have ever done before; look at what we are spending on apprenticeships alone. These are huge amounts that require the participation of employers. Look at the progress that we have made on things such as the Skills Pledge and Train to Gain. These are huge investments that are sucking in more employers than we have ever had previously participating in training.

In my maiden speech, I took the time to muck up the Latin for “There is more than one way to skin a cat”, although I cannot remember it now. I would never say never, because that would be imprudent at this rostrum. All that I would say to my noble friend is: look at the whole panorama of what we are doing on training. The debate on “to levy or not to levy” will continue, and I have no doubt that it will be continually assessed, but I draw his attention to the significant overall efforts that we are making on training.

I cannot resist attempting to respond to the contribution of the noble Baroness, Lady Garden. First, her speech was excellent; anyone who can quote Tacitus in this debate is pretty good in my book. The noble Baroness, Lady Sharp, lamented the fact that so many young women choose hairdressing and beauty. I was at an FE college in Crawley recently, where all the auto trade apprentices were, of course, male. When I turned my head to look at the catering group, I noticed that every single student was female. We know that we have a gender gap; we have plans, and we have addressed the issue in a publication that I recommend to noble Lords if they have not had the chance to look at it, World-class Apprenticeships: Unlocking Talent, Building Skills for All. That was our response to the Leitch report and it made real attempts to address our gender gap in apprenticeships through developing critical masses of people. It addressed not only the gender gap but, as someone else mentioned, the ethnicity gap. The LSC is embarking on work to address those issues. I agree with the noble Baroness on that.

I could not help smiling in relation to hairdressing. While we have not solved all the problems, it is still an occupation which does not pay people what they deserve. We made some strides when we introduced the minimum wage. That had a profound effect on that occupation and was an important step forward.

We have been pressing to get more apprentices and training in the Olympics, trying to draw in people from surrounding boroughs, including people we need to take off that NEET register—the difficult to employ. Many people are having some success and we are driving hard on that.

I draw your attention to another important policy change. We have now ensured that there are no legal hurdles for writing into public procurement contracts the right to specify numbers of apprentices and training. That is another important step forward.

My Lords, the Minister says that there are no legal obstacles to writing this in. Are the Government insisting that on all public procurement contracts the contractors take on apprenticeships?

My Lords, it is certainly our intention to write that into public procurement contracts. We are on a journey here, constructing guidance. In many areas, people are not yet aware of their ability to do that, but that is the direction that we are intending to go. Our first task was to ensure there were no legal obstacles to doing that and we have completed that task.

A number of noble Lords drew our attention to the benefits of competitions in raising people’s awareness of the importance of skills. The noble Baroness, Lady Walmsley, drew our attention to the Big Bang competition taking place across the road as we speak in the QE2 conference centre, and the noble Baroness, Lady Garden, drew our attention to the WorldSkills championship, which we are investing in. We have an organisation working on that, so I hope that it will be a great precursor to the Olympics, which itself is committed to having a skills legacy.

The noble Baroness, Lady Verma, said that we were obsessed with one end of the age scale on apprenticeships. That is not true; we used to be but we have changed that. Last year we had 27,000 adult apprenticeships. It is a huge growth area, 50 per cent up on the previous year.

My Lords, I apologise for intervening again. Can the Minister clarify whether, except in exceptional circumstances, for anyone over 25 who signs up for an apprenticeship, the employer, or the apprentice themselves, has to meet 50 per cent of the fees?

My Lords, fortunately it is not the apprentice but the employer. Why do we make the distinction? We do not have unlimited funds. We take the view at the moment that the adult apprentice brings to the employer a bit more experience than the 16-to-18 year-old. I am not saying it is a perfect solution but that is why we did it. It certainly does not penalise the apprentice and it has not stopped the massive increase in adult apprenticeships. I am not denying the distinction or claiming that it is perfect, but given that politics is the language of priorities, we have to decide where we are going to focus. As keen as I am to create adult apprenticeships, I am even keener to ensure that we meet our 16-to-18 targets, where there has been a bit of a decline. We are making a huge effort to increase the number of apprenticeships with £140 million announced for a further 35,000 apprentices —21,000 in the public sector and 15,000 in the private sector. That is a challenging target, as someone has already remarked.

I make no apology for describing apprenticeships as a renaissance, as I did in the previous debate. Again, we would be doing ourselves and this country an injustice if we did not acknowledge that apprenticeships were nearly dead in 1997. We had only 65,000 apprenticeships in that year, just over a quarter of which were completed. However the noble Lord, Lord De Mauley, juggles the figures, he cannot fail to acknowledge that 250,000 apprenticeships this year, with a 65 per cent completion rate—nearly two-thirds of them—is a massive leap forward. I do not deny that we need to do more to ensure that we push up the level 3 apprenticeships—we will work hard on that—but that is a massive achievement. That is acknowledged throughout. We need to build on that, and we are doing so with the £140 million which I mentioned.

Not only that, we recently announced the idea of overtraining: asking employers whether they would take on more apprentices to provide their supply chains. We put that out to competitive tender and had a superb response. The exact figure will be announced soon. It has created thousands more apprenticeship opportunities. I say sincerely and genuinely to this House that every apprenticeship opportunity that we create is a beacon of hope, either to a young person or to an adult. It really is. It is making a contribution to social cohesion, which was mentioned in this debate, and to social mobility. Again, I ask noble Lords to look at the progress that has been made.

The noble Lord, Lord Cotter, made an interesting contribution. He was candid enough to admit that he may not have devoted as many resources to training as he should have done, and I welcome his candour. What are we doing for small businesses? We have focused £350 million specifically on SME training: not on the training that we think they need but on the training that they told us they need, such as in business improvement techniques. That has been a success. We are seeing a significant take-up.

People ask how we get these small and medium-sized employers to buy into the idea of recruiting apprenticeships. We do it, as the noble Lord, Lord Cotter, reminded us, through group training associations. There are some really interesting models out there, including a number of generic models. We are encouraging all sorts of progress in that area, and we will invest more money in GTAs. We think that that is the way forward for SMEs. I can give noble Lords a number of examples. In one training association, something like 360 employers shelter under its umbrella. They offer real employment placements.

I have to part company with the noble Lord, Lord De Mauley, on apprentices. It is true that there used to be doubt about what constituted an apprenticeship. We have taken away that ambiguity about apprenticeships by saying that it is absolutely clear that there must be a work placement with it. You cannot complete an apprenticeship with only college-based experience. It must have a work placement with it. We have made that absolutely clear in the apprenticeship Bill. The completion figures that I gave are genuine. In the past, we have had learning apprenticeship programmes, but they do not count towards apprenticeships. We might have young apprenticeships which, I might add, are a very good example of encouraging young people to understand the nature of apprenticeships through work experience one day a week.

Very briefly, because I am running fast out of time, we have the huge task of raising people’s awareness of apprenticeships and the value of things such as engineering, which the noble Lord, Lord Broers, mentioned. We know that we must raise the status of that. It is unfortunate that, whenever I meet young apprentices, I have yet to meet one who tells me that they were encouraged by their teachers at school to go for an apprenticeship. Last week, when I went back to the floor, I met some young apprentices in a telephone exchange—not one that I had worked at, but one that I knew well. One young apprentice remarked, very perceptively, “Wouldn’t it be good if schools celebrated their young people who achieve apprenticeships as much as they celebrate those who achieve a university place?”.

Given that I have run out of time, I will endeavour to answer any other points made in writing. I thank again the noble Baroness, Lady Greengross, for introducing this vital debate.

My Lords, I start by thanking every noble Lord who has taken part in this debate. I am most grateful to them, and my gratitude extends to the other members of the all-party group. I know that those who could not be here—including those from another place—will read the report of our debate with much interest. We have covered a huge amount, from small children to very mature adults, from assistant teachers to management training, and all the different skills, both hard and soft, that are needed.

I thank the Minister for displaying both his personal commitment to what we have been talking about and the commitment of the Government, which I do not think is in question. There is an acknowledgment that, if we are to get out of this recession, we must all work together through a political as well as an economic consensus on what needs to be done. We wanted to highlight, partly, that the role of business is essential and, with the Government’s help, we have to facilitate that in order to achieve what we all want on behalf of the future of our country. While thanking everyone most sincerely, I beg leave to withdraw the Motion.

Motion withdrawn.

House adjourned at 6.07 pm.