As I said, I am absolutely ready to hear detailed thoughts and to have the detailed discussion about how one improves all these different things, and I am pleased that the hon. Lady’s local college seems to be highly successful in delivering these things. Every year, on average, twice as many people started apprenticeships under the last Government as started them under the previous Labour Government, so we did get a lot more of them, as well as higher quality. I do not know what the 90 bits of paper are, but I am absolutely ready to hear and to talk about ways we could improve those matters.
On the point about SMEs that the hon. Lady raised, that is exactly why last March we moved to 100% funding for SMEs—to make things easier for them. I agree with the hon. Lady: there is a lot to do to make it easier for SMEs to participate in the levy-led system. I am just not convinced that any of the concerns she raises will be addressed by shutting down IfATE or setting up Skills England. She might hope that they will be—I hope that they will be—but I do not see anything in this legislation that will fix any of the problems that she complains about. Obviously, we hope that collectively we will solve the problems in the system.
There are quite a lot of concerns—including concerns among those on the Labour Benches, which I will come on to—about the transfer of IfATE’s powers to the Secretary of State compromising the independence with which apprenticeships and wider technical qualifications, such as T-levels, are accredited, and diluting the voice of employers. As numerous people have pointed out, we would not and do not accept that on the academic side, where we have both independent exam boards and Ofqual creating and monitoring specifications and exams. This is yet another example of our treating the academic side—the route that most of us went down—differently from the technical side. As the Labour peer Lord Knight has pointed out:
“The problem that some of us have with the Bill is that it feels like the second half is missing. The second half is the establishment of Skills England as a statutory body…Being subsumed within a division of the Department for Education…is problematic. The Minister needs to reflect on it.”—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC87.]
As another Labour peer, Baroness Blower, pointed out,
“the appropriate move from where we are would be to a statutory body”.—[Official Report, House of Lords, 21 November 2024; Vol. 841, c. GC90.]
Stephen Evans, chief executive of the Learning and Work Institute, said that giving Skills England legislative backing
“would…cement the body’s independence.”
In contrast, the Bill originally introduced by the Government did not even include the words “Skills England”. The very act of a further reorganisation, even if one thinks it is a good idea, is likely to further compound the effects of the Budget and the decision to move apprenticeships money to other things. I will just rehearse that for a moment. Obviously, the Budget saw a £40 billion overall tax increase and the largest part of that is a £25 billion increase in national insurance, which is squarely targeted on part-time and lower-income workers. It hits exactly the tier of the workforce that is typically the apprenticeship kind of tier. Of course, apprenticeships do not require payment of national insurance, but when we see lots of employers, as we do now, shedding jobs in that tier, that is inevitably bad for the number of apprenticeships.
That is compounded by what the Government want to do in terms of taking money out of apprenticeships. There has been some confusion about that, because safely before the election, Labour in opposition had the idea that it was going to let employers take 50% of the money from the levy and spend it on things that were not apprenticeships. Then, as the election drew nearer, that idea seemed to disappear and did not feature any more. Lots of people assumed that it was gone. Then I assumed it was definitely gone, because I asked the current Minister—whom we have here today—in Westminster Hall whether the 50% target still stood, and the Minister said that the policy was under review. Then a couple of weeks later, in oral questions, when we asked the Secretary of State whether the 50% target still stood, she said that it did, even though lots of people in industry think that that is not the plan.
This whole question about how much of the money will be taken out of apprenticeships and put elsewhere is shrouded in confusion. I would love it—I would be delighted—if the Minister could talk about that point today and tell us whether it is still 50%. It is a binary thing: it either is 50% or is not. I would love the Minister to tell us the answer one way or another. At the moment, the levy raises about £2 billion a year. If the Government take 50% of that money out, they might think that is a good thing. They might say, “Yes, we want employers to be able to spend a billion quid on other stuff.” But if they take all that money out of apprenticeships, one thing they will definitely have is fewer apprenticeships. They could say it is fine—