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World Class Skills 2020

It is a great pleasure to speak in this debate on skills and I am pleased to add my remarks to those of the Minister in offering my best wishes to the Under-Secretary of State for Education and Skills, the hon. Member for Corby (Phil Hope)—whose constituency is, of course, in east Northamptonshire—who has been in all our thoughts and prayers. We look forward to seeing him back on duty across the Dispatch Box as soon as possible. The Minister rightly started by saying that skills matter. They do, indeed, matter. They matter for Britain as a whole because of their effect on economic competitiveness, principally through productivity. As he said, they matter in the context of an increasingly complex world, but they also matter for all Britons. I was pleased to hear him say that that was because of the impact of people’s skill level on their well-being and sense of purpose and worth. For millions of Britons, a craft profession and a skilled future are critical to their sense of worth and purpose. Those things make a difference to lives—they change lives. When we debate skills, it is useful to begin by clearing up any uncertainty about the definition of skills. Because basic skills are often included in the general terms that we apply, it is easy to misunderstand what skills really are. Lord Leitch, among many other useful things, defines skills for us. He says in his report:"““Skills are capabilities and expertise in a particular occupation or activity.””" It is usually, although not exclusively, a practical activity, I would say. I suppose that the reason why we include core skills or basic skills in the definition is that people can do little else without them. If a school leaver is functionally illiterate or innumerate, their chances of prospering by acquiring other skills are, by definition, limited. It is absolutely right, therefore, that we focus on core skills. Even if the Government hit their targets, there will, by 2020, be 4 million illiterate adults and 12 million innumerate adults. By that, I mean adults with less than the literacy and numeracy skills expected of an 11-year-old child. In professional terms, in terms of acquiring other skills, that is functional illiteracy and innumeracy, particularly as the demand for unskilled work plummets, as the Minister said. I note his figures; I have read them before. According to Government estimates, by 2020, the demand for unskilled labour will fall from 3.5 million jobs now to 600,000 jobs, so people who do not have those core skills and have no real chance of acquiring them are not only unlikely to acquire the additional skills that would enable them to get a job; there is very little likelihood of an unskilled job being available to them as time goes on. The reason for that is that we are an advanced economy and are becoming a more advanced one. Let us be clear: we will never again make tinplate metal toys and be able to compete with the Chinese in doing so. An advanced economy needs advanced skills. Our future is as a high-tech, high-skill economy, competing with the best in the world. The economics are plain, but let me refer again to the Leitch report—the interim report this time. Leitch estimates that one fifth of our productivity gap with France and Germany is the result of our ““comparatively poor skills””. We must be careful about international productivity comparisons, because unemployment is higher in both France and Germany. If we examine the productivity of the work force as a whole, rather than just those in work, we see that it is higher in the UK, but it is true that in respect of both intermediate and higher-level skills, we are disadvantaged compared with the USA, France and Germany in the move towards an ever more advanced economy. In acknowledging that the Minister knows that skills matter, I will, perhaps predictably, be fairly critical. I do not want to send him off into the snow a dispirited and downcast man. That would be cruel, but there are some home truths that have to be told during the—hopefully—short time that we have together. I have said that the Government’s literacy and numeracy targets will leave the nation ill equipped for the future. I have to put it to the Minister that the number is being topped up by 40,000-plus young people who leave school each year illiterate and/or innumerate; I think that the figure was 44,000 for the last year, according to the answer to a parliamentary question that I tabled. If we are topping up that number, we will inevitably end up with a growing number of NEETs. You, Mr. Hancock, know that I am referring to young people between the ages of 16 and 24 who are not in employment, education or training. Their number has indeed grown since 1997. I fear that that hopeless underclass that we have created—I make no apologies for using those strong terms—will never work in some cases, unless we address their needs in a considered, thorough and urgent way. I called for ardent and urgent action in the House last week on this subject. When we examine the figures for different parts of Britain and recognise that in some places the number of NEETs is 12 or 15 per cent. of the total population of that age group, we inevitably conclude that that is a significant problem. The number of NEETs means, of course, that there are people who are not acquiring skills to fill needed jobs. Is it not curious that we are importing skilled labour from abroad at the same time that we have 1.3 million young people not in employment, education or training? Let me qualify the figure a little, because the Minister will jump up in a moment and say that they are not all people who are ready and able to work. The number includes gap-year students and some people with quite profound difficulties—mental health difficulties, addiction problems perhaps and other problems that might make it difficult for them to gain employment easily. However, even using the most conservative estimate, if we deduct those people and a few other varied groups—new age travellers perhaps and one or two others—we end up, I think, with a figure not much short of 1 million for those young people who would like to and should be able to work but who have in effect been cheated by the system of their chance to succeed. That is not acceptable. Indeed, it is a pretty damning indictment of the Government.