Monday 11 July 2016
Business, Innovation and Skills
UK Steel Industry
Since Tata Steel announced its intention to restructure its UK operations, the Government have worked closely with Tata, potential buyers and other stakeholders including the trade unions and the Welsh Government, to ensure a sustainable future for the business. We remain committed to that objective, and to ensuring the continuation of primary steelmaking in South Wales.
Following the referendum on the UK’s membership of the EU, and a review of the bids received for Tata Steel UK, the board of Tata Group announced on Friday 8 July its intention additionally to explore options for retaining ownership of the business with strategic partners, including through a possible joint venture with ThyssenKrupp AG. Discussions are at a preliminary stage.
Tata has also announced its intention to sell separately its speciality steel business based in Rotherham and Stocksbridge, as well as two mills that produce steel pipes based in Hartlepool. Around 2,000 of Tata’s UK workforce are employed in the businesses that will be sold. None of the businesses that will be sold are supplied with steel from Port Talbot, and are separate business units within the group.
I met the Chairman of Tata Group in Mumbai on 8 July. During that meeting, Tata Group confirmed again their commitment to achieving an outcome for their UK operations that provides the business with the best long term prospects for a competitive and sustainable future.
The Government are committed to working with Tata to achieve that objective. We will remain in close contact with Tata during the sale process for the speciality steel and pipes business units, and as they develop their plans for the strip products business. The Government’s offer of support via an equity stake and/or loans on commercial terms to a future owner of the strip products business, which includes the operations at Port Talbot, remains.
Separately, the Government continue to work with the wider steel sector to improve the business environment in the UK, with a focus on ensuring their competitiveness in the long term. The Steel Council met for the second time on 8 June to consider the recommendations of its working groups. The vast majority of these recommendations are reflected in the UK Steel manifesto which was published last week, which I welcome.
We are already taking forward many of these recommendations and the Council has agreed to develop a common vision for the future of the sector in the UK, which will provide clarity around what Government, the companies and the workforce must do to ensure the steel industry remains competitive and more sustainable in the future. My Department will shortly commission further research to assist the sector in the development of its vision.
Post-16 Skills Plan
As a country, one of the most important challenges we face is reforming the skills system. Such reform is crucial if we are to ensure our country’s future prosperity and improve the life chances of millions of people.
We have a critical need for highly skilled people, trained effectively, to grow the economy and raise productivity. Weaknesses in the UK’s skills base have contributed to its long-standing productivity gap with France, Germany and the US. While international comparisons highlight our strong performance at graduate and higher skills levels, we perform poorly at the intermediate, skilled technician level. Indeed the UK is forecast to fall from 22nd to 28th out of 33 OECD countries for these intermediate-level skills by 2020[i]. Following the vote to leave the European Union, it will become more important than ever that we have a highly skilled workforce that boosts the productivity of the country and allows us to trade competitively across the world.
There is also a compelling moral case for change. Skilled employment leads to prosperity and security for individuals, while unskilled employment often means the opposite. We need to give all young people and adults the opportunity to gain the skills, knowledge and behaviours needed for the world of work.
We made significant improvements to the skills system in the last Parliament. We grew investment in apprenticeships, for example, and removed from performance tables thousands of poor-quality qualifications, that offered little or no advantage in the jobs market, as a result of the Wolf Report[ii]. But there are still serious issues which must be tackled. Technical education remains the poor relation of academic education, and there are key challenges we must overcome, including:
standards and qualifications are not always set by employers; instead they are too often set by a confusing mixture of awarding organisations and intermediary bodies which have not provided an effective voice for business;
the system is too complex and often difficult to navigate for both young people and adults looking to retrain; and
we have too little dedicated technical education at advanced levels (levels 3, 4 and 5) to meet this country’s need for technician-level skills, and study programmes are not always designed to deliver what is needed to move to skilled employment.
On Friday 8 July I published, and laid before Parliament, a Post-16 Skills Plan. This is our ambitious framework to support young people and adults in England to secure a lifetime of sustained skilled employment and meet the needs of our growing and rapidly changing economy.
The Skills Plan builds directly on the recommendations of an independent panel on technical education. The panel was chaired by Lord Sainsbury of Turville and its members were: Baroness Wolf of Dulwich, Sir Roy Griffiths Professor of Public Sector Management at King’s College London; Bev Robinson, Principal and Chief Executive at Blackpool and The Fylde College; Simon Blagden, Non-executive Chairman at Fujitsu UK; and Steven West, Vice-Chancellor and President at University of the West of England. The panel consulted widely, its deliberations were non-political and its conclusions are pragmatic. Its recommendations draw from international best practice and will place our system on a par with the best in the world.
Together, the Skills Plan and Sainsbury report set out a holistic strategy to tackle the current flaws with the skills system by:
building on the apprenticeship ‘Trailblazer’ approach by putting employers at the heart of the system and empowering them to take the lead in setting the standards in technical education;
ensuring that, alongside the already well-established academic option, this country has a high-quality technical option which aligns apprenticeships and college-based learning;
building on the experience of other countries with successful skills systems by developing a new framework of 15 technical routes to skilled employment, with each route grouping together skilled occupations where training requirements are similar;
developing a strong, dynamic, financially sustainable and locally responsive training provider base through area reviews and other reforms; and
putting in place a wider set of systemic changes, including making more data available and reforming careers guidance to inform student choice, and ensuring we have the right funding and accountability arrangements in place.
The Skills Plan is our overarching framework, with a common set of principles and a guiding vision. I am confident that it can lead to lasting change. We will work closely with employers, colleges and other training providers to develop detailed plans, and publish more detail later in the year.
The Report of the Independent Panel on Technical Education will be placed in the Libraries of both Houses.
This statement has also been made in the House of Lords.
[i]UKCES (2014) UK Skill Levels and International Competitiveness, 2013 available online at: https://www.gov.uk/government/publications/uk-skills-levels-international-comparisons-and-competitiveness
[ii]The Review of Vocational Education - The Wolf Report (2011), available online at: https://www.gov.uk/government/publications/review-of-vocational-education-the-wolf-report.
Deputy Chair of the Boundary Commission for Wales
I should like to inform the House that I have made the following appointment under Schedule 1 to the Parliamentary Constituencies Act 1986:
The honourable Mr Justice Lewis has been appointed as Deputy Chair of the Boundary Commission for Wales, effective from 1 August 2016 until 31 July 2019.
Governments Amendments to Wales Bill: Analysis of English Votes for English Laws
I am pleased to announce the publication of analysis of English Votes for English Laws in relation to Government amendments to the Wales Bill at Commons Committee.
The English Votes for English Laws process applies to public Bills in the House of Commons. To support the process, the Government have agreed that they will provide information to assist the Speaker in considering whether to certify a Bill or any of its provisions for the purposes of English Votes for English Laws.
The memorandum provides an assessment of tabled Government amendments to the Wales Bill, for the purposes of English Votes for English Laws, ahead of the second day of Commons Committee. The Department’s assessment is the amendments do not change the territorial application of the Bill.
This analysis reflects the position should all the Government amendments be accepted.
The memorandum can be found on the Bill documents page of the Parliament website at: http://services.parliament. uk/bills/2016-17/wales.html and I have deposited a copy in the Library of the House.