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World Class Skills 2020

The hon. Gentleman has made his point very robustly. I shall resist the temptation to take up his challenge, but I accept that the quality assurance system is strong and robust. It needs to be, given the importance of the education system—particularly the higher education system—as a great export further afield. The reality, however, is that many people who do not go to university will embrace five, or perhaps six, careers during a working life that may extend into their 70s, given the fact that the retirement age is likely to rise. If we are not adaptable, our work force will not be able to survive in a world that demands high value-added, high-resolution outcomes, especially in manufacturing. I was relieved to hear what the Minister had to say about proposals to deal with the fact that the unskilled work force will diminish by about 75 to 80 per cent. in the period we are discussing. Clearly, we must work with some urgency to ensure that the most vulnerable in society are not left behind. I do not believe that there is anything wrong with a high-wage economy, but those wages must be earned in a globally competitive market. It is very important that training is not simply regarded as either the Government’s domain or as something on which they have all the answers. We must provide robust training, the content of which must largely be dictated by employers and prospective employers. I hope that you will forgive me, Mr. Hancock, for addressing issues that are slightly closer to home. In London, the signs are a little less promising, and the Minister will be aware that the effect of the skills gap on the most vulnerable members of the indigenous population is quite stark. There has been an influx of thousands of Poles, Lithuanians and others from the A8 countries during the past three years. Those people have worked extremely hard and made a tremendous contribution to our country, both economically and in other ways, by undertaking skilled and semi-skilled jobs, particularly in construction, tourism, catering and hospitality. In London, however, unemployment is at 8.7 per cent., and it is rising. Indeed, that level is the highest of any region in the country. London’s unemployed are often functionally unemployable, and they lack the skills, application and the aptitude to hold down jobs. As for the Olympics in 2012, it is, I fear, wishful thinking to expect that there will be a bonanza of construction work for local workers in the poorest parts of the east end, as has been recognised by Sir Robin Wales, the elected Labour mayor of the borough of Newham. We have to ensure that the skills are there so that workers have both the aptitude and application necessary to hold down a job. Given the short time available, I would like to say a few words about the eastern part of my constituency. The City of London corporation has provided me with a brief for this debate, detailing some of its concerns. As the Minister is aware, the City has a very proud record of looking eastwards towards the deprived boroughs that are its neighbours, such as Tower Hamlets, Hackney, Newham and Islington. London’s leading role as an international financial centre is widely recognised, and the City has always thrived on internationalism. In fairness, it thrived on it before the first world war, but for many years afterwards internationalism seemed to go away. It was tax regulation in the early 1960s in the USA that largely led to the emergence of the eurobond and eurodollar market, and internationalisation was reinforced by the big bang 21 years ago. Of the estimated 450 authorised banking groups in the capital, the City is currently home to 255 from abroad. The square mile generates over $1,100 billion in foreign exchange turnover each day—about a third of the global share—and it is the world’s leading market for international insurance. Indeed, it is recognised as such by the Treasury. As someone who represents the City of London, I am relieved about that, because 10 years ago, many people in London feared that a Labour Government would mean problems for the City. I am not suggesting that it has all been plain sailing, but credit must go where it is due, and the Treasury has a pretty good record in the City of London. Some regulatory measures have not been enforced, although the story is not entirely positive. More importantly, by allowing non-domiciled individuals to remain here to work, we have ensured that there has not been a flight of capital. Indeed, regulation and tax from abroad have been of great benefit. The Sarbanes-Oxley arrangements in the United States during the past five years caused great damage to New York as a financial capital, and London has been the chief beneficiary. Part of the continuing appeal of London to foreign companies is its cosmopolitan status. Frankfurt and Tokyo, for example, are primarily marketplaces for domestic participants, in which foreign players are, perhaps unwillingly at times, granted access. London, and to a lesser extent New York, are characterised by foreign nationals trading with each other. The City is essentially a large international marketplace responding to the need of Governments and companies in Europe and throughout the world to borrow and raise capital. In November 2005, the City of London corporation published research into competitive advantage, which was based upon a number of surveys of professionals in the financial services industry in more than 20 countries. They were asked about the key components of competitive advantage and asked to rank the world’s major financial centres against those criteria, thereby providing a detailed overview of practitioners’ perceptions of London’s position. That research ranked skilled personnel as the most important factor in the competitiveness of an international financial centre. The provision of leading-edge education and training services in the UK is central to maintaining our reputation, and it is the key to the development of the professional competences that will sustain London’s position in future. Although London’s dominance in the UK economy brings certain problems with it, there is no doubt that without a strong City of London, this country would face grave financial concerns. Our training and education services are internationally recognised as providing career opportunities in financial and professional services, both in London and the UK as a whole. The City of London has a growing interest in the skills agenda, which will help it to maintain its leading position. It recognises that for the financial and business sector to prosper, skills are of the utmost importance at graduate and non-graduate levels. Recent research published by the City of London corporation highlights issues of importance and makes a number of key recommendations. The ““Skills in the City”” report noted a number of key areas for intervention, including the need to raise employers’ awareness and their perception of vocational qualifications; improve basic skill levels; enhance students’ ability to perform successfully at interviews and selection days; and enhance opportunities for employers to improve the levels of local recruitment. Those are some of the soft skills to which my hon. Friend the Member for South Holland and The Deepings referred. Soft they may be, but they are none the less important, as they must be developed not only by youngsters, but by people throughout their working lives if they wish to pursue another career. At the other end of the spectrum, the corporation focused on the graduate skills needed in the financial and related business sector, as it is aware that recruitment is an international activity and some jobs attract high achievers from other EU countries and further afield. University and higher education institutions are a key pillar of the knowledge economy, and they provide the dynamic for innovation through research and development. As world class business competes in the City, the best universities, too, compete in a global marketplace. Separate research conducted by the Financial Services Skills Council highlighted a number of recommendations for higher education institutions and City-type employers, including the need for greater co-ordination between sectors if future discussion of graduate skills is to be productive. It suggested that without that co-ordination, broad dialogue would not improve and that interaction would remain limited to pockets of effectiveness. We need better employer co-ordination of existing and prospective higher education institution relationships. If the higher education sector is to remain strong in this country, we must recognise that it operates in a globally competitive marketplace. Undergraduates—and, perhaps more importantly, their parents, who pay the fees—will increasingly look at education from a much more global perspective. It is a matter of concern that some 18-year-olds in this country are leaving school to do a first degree in the United States of America, rather than going to one our best universities. By contrast, our top universities are still enormous draws for some of the brighter students in India, China and elsewhere. One hopes that that will continue, but we should not be complacent. The importance that the City attaches to skills is reflected by the lord mayor’s focus on skills as the central theme of his mayoralty, up to November 2007. He will focus on the City in particular as a centre of excellence for professional education, training and qualifications. The initiative, ““City of London—City of Learning””, aims to raise awareness of the quality and portability of UK qualifications through promotional events during the year. As the Minister will be aware, 90 days of promotional events will take place beyond these shores. It is of key importance that we focus on that element of vocational and relevant employer-led training.