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Westminster Hall

Tuesday 23 June 2009

[Mr. Eric Martlew in the Chair]

Skills Gap

Motion made, and Question proposed, That the sitting be now adjourned.—(Kerry McCarthy.)

9.30 am

Mr. David Anderson (Blaydon) (Lab): It is a great pleasure to appear before you, Mr. Martlew, at what is perhaps the start of a new era, with our new Speaker. It appears that our Conservative comrades are outside, already plotting for the next one.

I speak as chairman of the all-party group on coalfield communities, a post that I took up three or four months ago. The group’s secretariat is supplied by the Alliance, which represents 70 local authorities in the traditional industrial areas of England, Scotland and Wales and was brought together from the Coalfield Communities Campaign and Steel Action. The Alliance promotes the case for traditional industrial areas and recognises problems that have not gone away 30 years after the huge deindustrialisation programme carried out by the Opposition, who are not opposite us today.

Bob Spink (Castle Point) (Ind): May I also note that there is not a single Tory Front Bencher or Back Bencher present for the debate? That speaks volumes about the Conservative party’s attitude to older industrial areas.

Does the hon. Gentleman agree that although the Government deserve enormous praise for their work on apprenticeship schemes, those schemes should be more traditional and work-based to help to get essential skills back into the areas that we are discussing?

Mr. Anderson: As a former apprentice, I could not agree more. There should be more traditional apprenticeship schemes, but there can be modern apprenticeship schemes in the modern world.

The Alliance will make available a report called “What a Waste”, giving detailed information about what is happening on the ground to people who are trying to find work in the modern world, but have been left behind by 20 or more years of problems. In many ways, things are now worse for those people than they were even 20 years ago because we face a much more global marketplace. The only answer is to give people in such communities the skills they need to face those challenges. I realise that the Government are focused on that, but I make no apology for saying that the people we are talking about are a special case, given the situation that they have faced for so long.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Does my hon. Friend agree that we need not only training and apprenticeships, but the creation of jobs? Does he agree that regional development agencies have an important role in creating job opportunities for people in older industrial areas?

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Mr. Anderson: I agree with my hon. Friend. I first met the Prime Minister years ago, when the demand was for education, education, education, which I agreed with. However, he said that what we really needed was jobs, jobs, jobs. That is the key, because if people do not have work, everything else is a problem.

The RDAs are doing a great job and have been a fantastic success, even though there have been problems. However, the Tories are committed to destroying the RDAs if they get back into power—I hope that the day never comes. Again, the Conservatives are not here to answer for themselves.

David Taylor (North-West Leicestershire) (Lab/Co-op): Like my hon. Friend, I represent a former coalfield area and am a member of the all-party coalfield communities group.

Although my constituency has been in the lowest quartile of seats for unemployment for much of the past 12 years, there has been a significant surge of unemployment lately. One problem that older people face in going back to work is age discrimination, especially in areas such as ours. Many lack the self-confidence to retrain or to submit themselves for different occupations. How does my hon. Friend think that we can tackle that? Will proposed legislation be effective in tackling age discrimination in employment?

Mr. Anderson: I agree with my hon. Friend’s comments and will come on to how we can help people to get back to work. I welcome the proposals on age discrimination, but they will be good only if they work in practice. We must ensure that we have direct contact with the people concerned.

I was an apprentice for the National Coal Board. There was a good training system for people who worked for the nationalised industries in the ’60s and ’70s. People were well educated and supported by their employers. The vacuum left by the demise of such bodies because of deindustrialisation has never been filled. In the communities we are discussing, there have been high levels of sickness, of people going on invalidity and incapacity benefits and not being encouraged to come off them, of serious mental health problems and of social problems. In the early 1990s in the area that I come from, people who had not had their car stolen or their house burgled were not the norm. Drugs came into areas that had never had such problems before. There were endemic housing problems, which have still not been addressed properly.

That background frames the educational needs that we are discussing. We are still trying to recover from the loss of major employers in the coal mining, steel, textiles and engineering industries. That problem is found in many parts of England, Wales and Scotland. It impacts on individuals, their families and the economy. Employers now require a work force with different skills and workers who are able to adapt to change. In the new economy, there are fewer opportunities for men and women with no formal qualifications. It is all well and good, and proper, for our Government and society to aspire to a world in which a university degree is the norm. However, we must accept that this country has at least 6 million unskilled workers.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): Unfortunately, I will be unable to stay for the whole debate because I am serving on a Committee at 10.30 am.

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The promise of the ’80s was that the old industries, such as coal and shipbuilding, would be allowed to run down and would then be replaced by new industries. In my constituency, Hewlett-Packard, the new electronics firm, has just informed 700 of its workers that they will be sacked. In my view, the only reason is that the manufacturing base is being transferred to the Czech Republic. Such modern employers are taking advantage of the employment legislation in this country, which means that they can sack unskilled and unqualified workers. The UK is the easiest place in Europe to get rid of workers.

Mr. Anderson: It is a shame that my hon. Friend will not be here for the rest of my speech. I will ensure that he gets a signed copy of the transcript when it is finished.

My hon. Friend’s point is correct. It is more important than ever that we tackle this issue because in the global marketplace, employers will act in the manner that he describes. They will go where the work can be done cheapest. If we do not recognise that, the 6 million or more unskilled people in this country will be left even further behind, as will people who have the skills but nowhere to work. As my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) said, skills and jobs must go together.

There is a huge mismatch between the unemployed and job vacancies, with older industrial areas being disproportionately affected. People in such areas have been reliant on manual work and skills. Younger generations often miss out on opportunities because employers have chosen not to go into such areas. The shortfall in skills and qualifications has therefore become intergenerational. Even in times of prosperity, men and women with low skills or no formal qualifications struggle to get work. Although I hope that we are starting to move out of the recession, it has given cause for even greater concern.

Low skills have a negative impact on the economy and industry. If we cannot compete, we will not have a decent economy that employers want to come to. Having large numbers of low-skilled workers is a barrier to economic development. Employers in high value-added industries that require high skills generally look elsewhere. Few employers are keen to train workers from the start. They want to hire skilled and experienced people from the local area, and they certainly do not want to confront shortfalls in basic literacy, numeracy or computing. If we truly aspire to be a world-leading economy, we have to ensure that as many citizens as possible can contribute to the wealth of the nation.

Many streams of Government funding are aimed at men and women with lower skills who are already in work. Such initiatives are absolutely correct, but they fail to meet the needs of those who are most socially excluded. In the meantime, initiatives to address shortfalls in basic skills remain the poor cousin—the funding is patchwork and the delivery is piecemeal. Engagement is a key issue. Although many individuals want to improve their skills, their previous experience of education often deters them from engaging with learning, and those types of learners are the hardest to reach. Many people’s
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experience of school and education involved them being told that they were doomed to failure. Once such people have failed, they do not want to go back into education. Such a situation, and the fact that they are often not encouraged to go back into education, means that we have been left with problems.

David Taylor: Does my hon. Friend agree that further education, in particular, is one of the ways in which people can return to work more speedily? In my area, we have Stephenson college, which was named after the great George Stephenson, who was born in Wylam, just across the river from his constituency. Does my hon. Friend fear, as I do, that if the Conservatives were to return to power, they would repeat their track record on further education and it would be neglected in a way that would damage the sort of people we represent? I hope that the spokesman for the Conservatives, the hon. Member for South Holland and The Deepings (Mr. Hayes), will give us a birthday present—seeing as it is his anniversary today—and say that they have recanted their attitude in that regard from the 1980s.

Mr. Anderson: There is absolutely no doubt that further education colleges are some of the unsung heroes. They do tremendous work in my area—the brand new college in Gateshead is an example—but there is still a need to help those who are hardest to reach. My hon. Friend’s concerns are real. It is clear that the Conservative party did not put any money into further education structures before 1997. From what we are now hearing, the Conservatives will cut what money has been made available, and there are real worries that the future will be a rerun of the past. We must do our best to ensure that the Conservatives are not allowed to return us to such a situation.

Professionals who work with adult learners agree that pre-engagement work is essential. That usually involves intensive one-to-one mentoring. People who would like to cross a school or college threshold can be persuaded back into education through more informal channels. However, once an individual has engaged with the learning process, there is a need for ongoing support. That type of initiative fits in well with the Government’s aspiration to move the economically active away from welfare and back into work. However, such initiatives never seem to get the priority they deserve.

What is the size and scope of the problem? First, we must accept that most skill levels are not evenly spread. The report that I mentioned sets out that the percentage of people with no formal qualifications ranges from less than 10 per cent. in the south-east and south-west to, for example, 17 per cent. in the west midlands. All the regions of the north, the midlands, Scotland and Wales have an above average share of adults with no formal qualifications. There is a clear regional divide between the more industrial areas and the more prosperous half of England, which is south of a line from the Severn to the Wash.

The challenge that we face was spelled out clearly in the Leitch report. If we are to have a chance of filling the skills gap, we have four targets to reach by 2020. First, we need to achieve 90 per cent. functional adult literacy and numeracy, which would be an increase from a 2005 level of 85 per cent. for literacy and 79 per cent. for numeracy. Secondly, more than 90 per cent. of
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adults need to be qualified to at least national vocational qualification level 2, which would be an increase from the 2005 level of 69 per cent. Thirdly, we need to shift the balance of intermediate skills from NVQ level 2 to 3 and boost the number of level 3 attainments to 1.9 million. As the hon. Member for Castle Point (Bob Spink) mentioned, we also need to increase apprenticeship numbers to 500,000 a year. Fourthly, we need to exceed the figure of 40 per cent. of adults qualified to NVQ level 4 and above, which would be an increase from 29 per cent. in 2005.

How big is the gap in the specific areas about which I am talking? Let me go through some of the figures in the report—I will need to put my glasses on to do so. Nationally, an average of 54 per cent. of the adult work force are at or below NVQ level 2. However, the figure is 70 per cent. in Corby, 70 per cent. in Merthyr Tydfil, 64 per cent. in Easington in the north-east, 60 per cent. in Sunderland, 59 per cent. in Blyth Valley, 56 per cent. in Carmarthenshire, 58 per cent. in South Tyneside, and 67 per cent. in Stoke. There is a huge gap, and for every 100 people looking for jobs, at least 13 and sometimes 26 people will not have even a chance.

The percentage of adults with no formal qualifications whatsoever is even more worrying. The average for Great Britain is 13 per cent., but that figure is 24 per cent. in both Newcastle-under-Lyme and Knowsley. The figure for my constituency in Gateshead is 17 per cent., and it is 21 per cent. in Blaenau Gwent and 14 per cent. in Durham county. Work that has been done there shows that deprivation is almost endemic. Unless we challenge this problem, we will not put that right.

The report makes a start at dealing with the problem, and the policy and actions that the Alliance believes need to be pursued are set out in it. I shall pick up on a few of those points. We need to get to grips with the issue of low-skilled adults and we need to build adult skills. A large number of adults without NVQ level 2 qualifications are in the middle and later part of their working lives—they are the over-35s and, especially, the over-50s. The Government’s focus on improving workers’ skills has led to a concentration on funding skills at levels 2 and 3 for the under-25s. That is fine, but it leaves less funding for other forms of learning and for older groups.

Current Government policies encourage providers to seek out quick wins that guarantee funding. Sadly, that disadvantages many adults with low-level skills, who often need time to develop motivation and confidence before they commit to a formal training course. The education and training system does not address the needs of those socially disadvantaged adults.

Jim Sheridan: My hon. Friend paints a bleak picture. Does he agree that the Government should be complimented on introducing the modern apprenticeship scheme? He may recall, as I do, that after leaving school at 15, we had between the ages of 15 to 16 to get a trade. If people did not do so, they were destined for a life of unskilled work. Will he comment on the positive aspects of the modern apprenticeship scheme?

Mr. Anderson: There is no doubt that the modern apprenticeship scheme has been a success, as have many other schemes that the Government have introduced. In particular, I note their encouragement of things such as
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union learning reps. Again, we have tried to find out whether the Conservatives support that. It will be a sad day if they ever come back into power, but if they do, will they continue such schemes? It has been shown clearly that individual support from someone people know and can relate to is much welcomed in the areas I have mentioned. The Government’s work has been good—I am not denying that—but we are talking about a core group of people who have been left behind. We have to make that journey to ensure that they catch up. Part of that is renewing the focus on hard-to-reach low-skilled adults.

The national investment in education and training is now enormous, but the multiplicity of funding regimes is still a significant problem. The number of funding streams that come through so many different Departments means that it can be difficult to identify the funding that can be obtained specifically for low-skilled adults. There is a need for better information, advice and guidance to services, and there should also be improved communication about funding opportunities.

The short-term nature of much funding can make it very difficult to plan from one year to the next. That is often particularly unhelpful for local community organisations. Small community and voluntary organisations in disadvantaged areas need easier access to funding and we should reduce the bureaucratic burden on them. Those organisations spend too much effort chasing funding when they should be delivering services. The result of the funding situation is that a lot of initiatives for low-skilled adults are based on short-term projects and programmes, which struggle to provide long-term, lasting results. There is a need for long-term funding and for successful local projects to be rolled out across England, Scotland and Wales. We are calling for clearer access to funding, but for it to be sustained funding, because that is the only way in which we can deliver effectively.

It is also necessary to mention the key issue of pre-engagement. Not enough is done to provide first opportunities, which are most likely to appeal to men and women with low skills and low self-confidence, and which will help them to take the first steps back into learning and the labour market. That is partly because public policy is concentrated on providing formal education and training that leads directly to qualifications. That is fine, but it has led to a mismatch between available provision and what is actually needed to engage people in the first place. If people do not become engaged, they will not take the next step.

Many men and women feel that they have nothing to gain from improving their skills. In some areas, there are deep-seated cultural attitudes, often with specific historical roots, that lead them to discount the benefits of learning. One of the causes can be the benefits system, or, more specifically, the fear of losing benefit, which can act as a powerful disincentive to engaging in learning. Personal development, community learning and other first-step adult learning and further education provision are vital to making progress with harder-to-reach individuals. There needs to be much more recognition of and support for first-step initiatives, which are vital.

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