A route-map to Labour’s revolution in apprenticeships

Britain faces a stark choice: a race to the bottom in skills and wages or a race for the top in the demanding 21st century economy.

Fifty years ago, only 20% of young people left school with any qualifications at all.  Now the figure is 90%. Forty years ago, less than 8% of young people went on to university. Now the figure is nearer 50%. These are great, progressive achievements. But the success we have won for some young people should not blind us to the continuing challenges of others.

A year ago the Labour leader Ed Miliband highlighted the plight of the "forgotten 50%" of young people who do not go to university. He set up a Skills Taskforce, of which I am the independent chair, to suggest practical, deliverable solutions for these young people. Last month, in the first of three final reports, the Taskforce called on Labour to embark on a national mission to double the number of high quality apprenticeships.

Less than one in 10 employers offer apprenticeships in England, compared to three or four times that number in our main European competitors. And while the UK has are some exceptional apprenticeships – such as those at Rolls Royce, Siemens, Heathrow Airport and Transport for London – much of the recent increase has been in apprenticeships that would not be recognised in these countries. Apprenticeships should be a high quality training route into work for young people, but a shocking 70% of apprentices are existing employees, up from 48% in 2007, and 94% of these apprentices are over 25 years old. A fifth of apprenticeships last for less than six months and 20% of all apprentices report receiving no training at all.

This is bad for business and for the economy. Many employers say they cannot get the skills they need to succeed and in some sectors the lack of training has led to severe skills shortages. Most importantly, the lack of good training and work opportunities caps aspiration and prevents young people from fulfilling their potential.

The Skills Taskforce makes a simple proposition: it offers employers a 'something-for-something' deal.  Employers should be given more control over skills funding and standards, and in return should be asked to create more high quality apprenticeships in their sectors and supply chains.

Nearly half of employers say that the prospect of trained staff being poached by rival firms deters them from training employees. So the Taskforce also recommends asking business what powers they need to ensure they can deliver the expansion in apprenticeships we need to rebuild the economy, such as the power to introduce levies or training requirements. It should then be up to employers, working with other stakeholders at sector level, which of these powers they will use. The public sector can and should take a lead, through both its own provision – the current provision of apprenticeships in the public sector is unacceptable – and driving behaviour through procurement.

If this sounds ambitious, it should. If it sounds impossible: it is not. Continental systems, including the German and Austrian education and training systems, already do it. The challenges are not ones of principle, but of will, and the prize is considerable.

At the Labour Party conference, Ed Miliband took on the challenge to double the number of high quality apprenticeships and said he would give employers the power to call time on free-riding by competitors who do not train. Labour also committed to our recommendations to ensure that apprenticeships are gold standard qualifications that employers and young people can trust: Level 3 or above and lasting at least two years. 

This is a good start to a major transformational task. Britain faces a stark choice: a race to the bottom in skills and wages or a race for the top in the demanding 21st century economy. Britain must not join the race to the bottom. Our goal is to transform the opportunities available to young people through efforts to develop a high skill, high productivity economy.

Chris Husbands is the director of the Institute for Education and chair of Labour’s Skills Taskforce.

Ed Miliband speaks at the Labour conference in Brighton last month. Photograph: Getty Images.
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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.