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Skills Base

My Lords, I congratulate the noble Lord, Lord Leitch, first, on his historic report and, secondly, on his uniquely authoritative and excellent speech opening this key debate. He has demonstrated remarkable foresight by choosing today of all days to initiate this debate. Even as this debate progresses, a new Prime Minister is choosing a new ministerial team, one of whom, Alistair Darling, said on the ““Today”” programme this morning that skills would be the top priority for this administration. That undertaking is to be welcomed with open arms and, I hope, an open mind. The Leitch report sets the agenda for the wider skills debate, setting out not only the problems of the here and now but also a clear prescription for the future. What is clear in the report and in this debate, from what the noble Lord said, is that everyone has to play their part—employers, employees, schools and colleges, and the state itself. Some time ago I had the privilege of serving with my noble friends Lord Forsyth and Lord Henley in the Department for Employment in what was then seen as the third economic department. We had similar debates and conversations, and I know that many observers will feel that this debate about skills and how to improve them is never-ending. What is certainly never-ending is the need to keep ahead of the game by investing in people. New technology makes new demands and requires new skills of us all. When I had the privilege of launching the modern apprenticeships scheme, with the assistance of the TUC and the CBI, there were no website designers. That is now a major, exportable industry, characterised by high levels of skills and high value-added. As the Leitch report puts it, "““being world class is a moving target””." I want to focus on financial services. I declare my interests as set out in the register, in particular as deputy president of the Chartered Insurance Institute. The United Kingdom truly excels in financial services and the sector is a major revenue earner for this country. The UK insurance industry is the third largest in the world and employs about one-third of a million people. The 90,000 members of the CII cover retail financial services, general insurance, and life and pensions. The institute is a leading professional body providing training and qualifications in the sector in the UK, giving it a unique vantage point in this debate. At the CII, we want to champion the need for increased professionalism in the sector. Professionalism and skills are, by definition, two sides of the same coin. The UK cannot afford to rest on its laurels, for nothing is sacred or guaranteed in the modern business world. As the wave of recent outsourcing demonstrates, emerging markets are already competing, and the noble Lord rightly mentioned India and China. Sadly, within our insurance industry today, only one employee in eight holds some form of insurance qualification. We must urgently improve on this. That requires us to invest in the current workforce and not just focus on the future one. Professional bodies such as the CII are already championing the need for employers to invest in their talent through continuous professional development. Just this week the FSA brought out a discussion paper on the retail distribution review, and at the heart of that paper is the need for the industry to ratchet up its levels of qualifications and professionalism. Otherwise, too many people within this great industry will be in serious danger of finding themselves stranded with adequate skills at best, skills that have not been and will not be refreshed. Firms and individuals must address this challenge. Professional bodies such as the CII are developing innovative ways to work with employers in identifying market trends and supporting skills best practice. We have developed a series of faculties within our membership to help focus on particular sectors and their needs, identifying specific skills requirements as well as skills shortages ahead of time. This helps to ensure that the CII’s services are employer-led. But if the Leitch proposals are to gain momentum, and I believe it is vital that they must, there has to be a concentration on economically valuable skills. This in turn demands a focus on skills that are highly relevant to the needs of employers. Who trains, wins.