John Bird, co-founder of The Big Issue, writes following his visit to Lowestoft at the invitation of Peter Aldous MP.
Peter Aldous raises the issue of coastal erosion in Norfolk and Suffolk and in particular the homes that have tragically been lost to the sea in Pakefield. He calls on the Government to review the support provided to such households so that they receive parity of support with homes flooded by burst rivers or heavy rainfall.
Peter Aldous (Waveney) (Con)
Over the past six weeks, the Suffolk and Norfolk coast has taken a real battering. Homes have tragically been lost to the sea, not least in Pakefield in my constituency. Will my right hon. Friend review the support provided to such households and businesses, to ensure that they receive parity of support with those impacted by pluvial and fluvial flooding?
The Secretary of State for Environment, Food and Rural Affairs (Steve Barclay)
As a fellow east of England MP, I know what a fantastic champion my hon. Friend is for his constituents and how rigorously he will ensure that those points are made. He, as an experienced parliamentarian, will also know that many of those fiscal issues are for colleagues within the Treasury, but I am very happy to have discussions with him and to make representations where required.
Peter Aldous highlights the success of the Great Yarmouth and Lowestoft enterprise zone and secures a meeting with the Minister to discuss how to enhance the enterprise zone so that it can continue to create jobs in the low-carbon energy sector.
Peter Aldous (Waveney) (Con)
T9. The Great Yarmouth and Lowestoft enterprise zone, which was set up in 2012, has been very successful. With no investment zones in the east of England, will my hon. Friend meet my right hon. Friend the Member for Great Yarmouth (Sir Brandon Lewis) and me to consider how best the enterprise zone can be enhanced, so that it can continue to create jobs in the low-carbon energy sector? (900464)
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I would be delighted to meet my hon. Friend and my right hon. Friend the Member for Great Yarmouth. We have no plans at present to amend enterprise zones, but I am keen to ensure that their constituents continue to reap the rewards of levelling up, including the £100 million of investment for Sizewell C and freeport east, which will generate thousands of jobs across his region in new low-carbon technology.
Peter Aldous welcomes the 110 measures to boost growth introduced by the Chancellor in his Autumn Statement and highlights three areas that he believes need further work: investment in skills, protecting the most vulnerable, and levelling up the east of England - particularly in relation to renewable energy and coastal erosion.
Peter Aldous (Waveney) (Con)
I congratulate my right hon. Friend the Chancellor on his autumn statement, which was well thought through, soundly based and properly reasoned. Post covid, with war in eastern Europe and the middle east and with the ongoing cost of living crisis, his task is an incredibly difficult one. With 110 growth measures, he has rightly recognised the need to boost growth, but as he has stressed, that growth must be secured on sound foundations and must not take the form of a reckless, debt-fuelled rush for growth. There are areas of reform that I believe he should have covered, such as business rates, social care funding and special educational needs. However, this autumn statement is very much a step in the right direction, and provides a platform on which he and the Government can build in the coming weeks and months.
I will briefly cover three areas, the first of which is investment in skills. My right hon. Friend the Chancellor recognises the importance of that investment to improve productivity and secure sustainable economic growth. In that respect, the announcement of £50 million to increase the number of apprenticeships in key growth areas is to be welcomed. However, there remains a need for a long-term strategy to enhance skills. I look forward to an update on the work of Sir Michael Barber, which was announced in last year’s autumn statement; a significant uplift in revenue funding for further education colleges and training providers; and a review of the apprenticeship levy, which was a welcome initiative when it was introduced in 2017, but is in need of reform so that it can perform to its full potential.
Secondly, we need to continue to protect the most vulnerable. Covid’s tail has been harsh and long and, along with the Russian invasion of Ukraine, has created the kind of cost of living crisis that we have not seen for 100 years. Last year and this year, the Government have stepped up to the plate to support people. As such, many of last week’s announcements are to be welcomed, including increasing the national living wage, increasing all working-age benefits in full by 6.7%, boosting pensions by 8.5% in line with the triple lock, and significantly increasing the local housing allowance.
There is no doubt that there is both a skills shortage and a skills mismatch in the UK at present. It is in that context that I am supportive of the back to work plan, which the Secretary of State for Work and Pensions went through earlier. However, I emphasise two notes of caution. First, the deficit in investment in skills and training that has been prevalent for most of this century means that a lot of people are a long way from the workplace. We should not underestimate the challenge of equipping those people with the skills they need to first hold down jobs, and then embark on rewarding career paths. Secondly, there are people—those with deteriorating neurological conditions, for instance—who are very worried about the forthcoming review of the work capability assessment. We must do all we can to support them through what will be a period of upheaval, and ensure that we avoid situations where those who are palpably unable to work are asked to do so under the threat of sanction. My concerns have been allayed to a large degree by what my right hon. Friend said in his opening speech, but it is important to emphasise those points.
Thirdly, in the east of England and particularly along the Suffolk and Norfolk coast, there is enormous potential for long-term, rewarding jobs in the low-carbon energy sector. In that context, last week’s various announcements to promote the renewables sector are very welcome. What I would emphasise is that to make the most of that great opportunity, it is vital that as the Government implement their levelling-up agenda, the east is not overlooked. In his speech, my right hon. Friend the Chancellor announced some new investment zones to follow on from those that were revealed in the autumn statement, none of which was in the east of England. We have a successful enterprise zone in Lowestoft and Great Yarmouth, and I hope we can look at reinvigorating it.
My final point on the need for levelling up in the east of England is that we are the lowest-lying region in the UK, and we have a long and porous coastline. That means that we are particularly vulnerable to flooding and coastal erosion, which are being accelerated by climate change. In recent days, many homes have disappeared over the cliff in Pakefield in my constituency. That has brought despair and desperation to many, and moreover creates risks from dangerous cliffs and the exposure of world war two sweeper markers, which have been detonated today. Thanks are due to the emergency services for all that they are doing, working in appalling conditions to keep people safe, but communities are at severe risk—not only Pakefield, but communities right up and down the Norfolk and Suffolk coast.
Over the course of the next few weeks, we must look very closely at the coastal protection budget and its operation. I urge my right hon. Friend the Chancellor to liaise very closely with my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), who is getting up to speed with his new and challenging brief at the Department for Environment, Food and Rural Affairs.
Peter Aldous urges the Government to speed up the draft proposals for the new police funding formula which were promised to Suffolk police back in January and also for the Home Office to work with the police to improve the use of out-of-court disposals which will relieve pressure on the local force.
Police Funding Formula
Peter Aldous (Waveney) (Con)
12. What progress his Department has made on reviewing the police funding formula. (900292)
The Minister for Crime, Policing and Fire (Chris Philp)
I thank my hon. Friend for his question. He is a tireless campaigner on this issue. I completely accept the need for a new police funding formula. We have been working on it extremely hard, with colleagues across government. I hope to have something further to say on the topic shortly, but in the meantime we are getting as much money as we can to frontline policing. This year, we have an extra £550 million going to frontline policing and £330 million going to support the police pay rise, which makes £880 million extra for policing this year.
Peter Aldous
I am most grateful to my right hon. Friend for that answer. Nevertheless, it is concerning that Suffolk police were promised draft proposals for the review back in January. I urge him to get those to our local force as quickly as possible and, in the meantime, to work with it to improve the number of out-of-court disposals, where better delivery will relieve pressure on those in the force, who are working incredibly hard.
Chris Philp
They are indeed working incredibly hard. I am delighted to tell the House that Suffolk police currently have 1,425 officers, which is more than at any time in their history, and they have that in common with England and Wales as a whole. I support what my hon. Friend said about out-of-court disposals, which have an important role to play, particularly in treating drug and alcohol addiction, and mental health issues. I will work with Suffolk and other forces to make sure that those are widely used.
Peter Aldous writes for FE Week.
The 2017 reforms to the apprenticeship system were ambitious, and rightly so. They demonstrated two fundamental understandings: first that for apprenticeships to succeed they needed a long-term, sustainable funding source, and second that they had to be rigorous if they were to win the confidence of employers and learners. The apprenticeship levy was designed to deliver the former while a host of other measures would ensure the latter.
From my conversations with some of the country’s leading apprenticeship employers, it has become increasingly clear that several of the provisions within the 2017 reforms that were aimed at driving growth and quality are now proving counter-productive and restricting take-up.
A recent roundtable discussion on the topic hosted by Ofsted outstanding apprenticeship training provider, MBKB and attended by some of the country’s leading apprenticeship employers repeated many of the calls I have heard from industry.
What’s the rush?
While the levy has successfully driven employer-funded apprenticeships, there is a feeling among some in industry that the two-year expiration on levy funds is inadvertently encouraging the adoption of a ‘spend it or lose it’ mentality. This leads to rushed financial decisions rather than strategic workforce development.
We need a more nuanced and flexible approach to the levy. Extending the expiration period could encourage more thoughtful expenditure, aligning training initiatives with long-term business strategies.
Tailored to suit
There is also a common feeling that reform is needed to address the rigidity of apprenticeship minimum duration requirements.
The 12-month minimum length of apprenticeship, for example, while suitable for some programmes, does not necessarily align with the operational demands of others. For instance, I have heard that certain schemes, such as in retail and customer service training, would be more effectively delivered in shorter, more intensive programmes – to the benefit of apprentices, training providers and employers. Meanwhile, others are being completed too quickly.
A reform to the system that legislates for a more flexible approach to minimum length requirements would enable better tailoring of apprenticeships to specific job roles and industry needs.
Pay and progression
Poor retention rates in apprenticeships also demand attention. The feedback from industry leaders suggests that a combination of factors (including the apprenticeship wage structure and lack of clear progression pathways) contributes to high drop-out rates.
Some have argued that increasing the apprenticeship minimum wage could positively impact apprentice retention rates by providing financial stability and demonstrating the value of their contributions. In turn, this would enhance job satisfaction and commitment. This is an option, among many, that the government could consider to improve retention.
A changing world
The way forward is not to dismantle what we have built but to listen, adapt and refine. This refinement is not just about making minor tweaks; it is about ensuring our apprenticeship system remains relevant, responsive and effective in a rapidly changing economic landscape. Modifying our approach as the circumstances change is a cornerstone of good policymaking.
Continuous examination reforms in the UK since 1986 underscore a crucial lesson to policy makers: complex policies demand calculated, large-scale improvements over time, ensuring long-term benefits and stronger foundations for future generations. There is no reason this dynamic logic of policy making should not be applied to improving the apprenticeship system.
As we see a shift away from traditional emphasis on university degrees, apprenticeships stand to play a pivotal role in filling the skills gap. This will only happen if they are attuned to the evolving needs of learners and employers.
While the foundations of the 2017 apprenticeship reforms are robust, targeted amendments are necessary – and will continue to be. By refining the levy, introducing flexibility in programme lengths and addressing retention challenges, we can ensure that our apprenticeship system remains a key driver of skill development and economic growth.
And by continuously drawing on the wisdom of industry, we can sustain them as the pivotal and adaptive avenue for career advancement today’s ever evolving world requires.
Peter Aldous makes the case for the introduction of an energy social tariff to protect vulnerable households in an era of high energy bills and backs calls for a consultation on the form that the tariff should take to be undertaken straightaway.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve with you in the Chair, Sir George. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing this debate and setting out in comprehensive detail the evidence base for an energy social tariff. I also thank the Backbench Business Committee for granting the debate.
Everyone should have access to a warm and secure home. For the majority of people, that will be provided through the marketplace, although our energy market is imperfect and invariably, at all times, in the interest of fairness, there is a need for Government intervention. Before the current cost of living crisis, that intervention was provided predominantly through the energy price cap, which, while not perfect, performed an important role. The energy price cap has been increased today, although from what we have heard from the hon. Lady, and from the feedback that I am receiving, that will be of limited relevance to many of those who are struggling with their bills.
The dramatic increase in energy prices, primarily caused by the Russian invasion of Ukraine, has necessitated a different approach, and to their credit the Government have stepped in with more direct support over the past 18 months to two years. My right hon. Friend the Chancellor of the Exchequer continued with that strategy yesterday in his autumn statement, and I particularly welcome the increase in the local housing allowance. I have also heard that, as the hon. Lady has outlined, there is some concern as to whether he has done enough. I think he has tried, and I hope he has done enough, but in many ways I am on tenterhooks to see whether he actually has.
That said, it is clear that in the medium-to-long term—when I talk about the medium term, realistically I am now talking about 2024-25 onwards—a different approach is required to protect the most vulnerable. The energy price cap on its own has run its course, and it is thus appropriate to consider a social tariff, which can provide longer-term, more targeted support for the most vulnerable households.
The fact that we need such support is clear from the evidence base we heard about from the hon. Lady and from the feedback that we all receive in our constituencies from those who come into our surgeries, often with heartbreaking stories of the challenges they face. Those messages are reinforced by the briefings we all received ahead of this debate—as the hon. Lady said, we have received a great many of them—from such organisations as Citizens Advice, Mencap, Marie Curie, the Royal National Institute of Blind People, the Cystic Fibrosis Trust and Scope. All those organisations have one thing in common: their clients—the people they look after, whom they support and whose needs they articulate to us as Members of Parliament—are the most vulnerable. They are the people who are the most challenged at this time.
It is also important to thank those churches and other faith groups, charities and volunteers, aided by local councils right throughout the country, who have reached out and are supporting those who are struggling with their energy bills. A network of warm rooms has now sprung up across the UK, which shows British society operating at its very best.
From my perspective, as I have said, the case for a social tariff is proven. It is now necessary to move on to the more complicated and difficult challenge: how to design that tariff and then introduce it. We have received a great many representations ahead of this debate; the one I found particularly interesting and relevant was the report of the Social Market Foundation from March this year, entitled “Fairer, warmer, cheaper”. That report is a good starting point for the discussion about the form that a social energy tariff might take.
As we have heard, the Social Market Foundation concluded:
“The current system of policies supporting households with high energy bills is inadequate for an era of high energy bills”—
one that is, I fear, likely to continue for the foreseeable future. It recommends a social tariff arrangement whereby households that spend an excessive proportion of their income on energy bills should receive targeted financial support to reduce those bills in the form of a social tariff. The Social Market Foundation also points out that the precise form of the social tariff warrants further consideration, but its own analysis suggests that the most progressive and fiscally efficient form is a lump sum payment. I will return in a minute to the precise form that the tariff might take.
The Social Market Foundation believes that the social tariff should be funded from general taxation—a view that the hon. Member for Motherwell and Wishaw articulated and with which I concur. It also rightly emphasises that at the same time as we introduce an energy social tariff, we need to significantly expand the energy company obligation scheme so as to improve the energy efficiency of homes. As we have heard, we have a very leaky housing stock; we have made some progress in improving it, but there is a long way to go. It is absolutely vital that we are not diverted from that pressing and crucial task, and we must significantly step up our efforts in that regard, with funding for the ECO continuing to be raised via on-bill levies.
As I have mentioned, the issue on which there is some dispute and where there is a need for discussion is the form that the tariff should take: whether it should be a social tariff or what is known as a block tariff. That is a complicated debate and I am not going to go into it in any great detail now—that is why we need the consultation that I am going to plead for in a minute, and which the hon. Lady already asked for. National Energy Action, which does great work in this field, favours a social tariff: it believes that a block tariff would be distributionally unfair and would create very vulnerable users. The counter- argument in favour of a block tariff is that it would incentivise energy efficiency, which should be a long-term goal and objective and is a challenge we must not shirk.
In conclusion, although I shall not go into any detail as to the design of the tariff, we need to get on straightaway and talk about it. It is ironic that, as the hon. Member for Motherwell and Wishaw said, we are having this debate the day after this year’s autumn statement. If we go back a year to the autumn statement of 2022, my right hon. Friend the Chancellor undertook to
“develop a new approach to consumer protection in energy markets, which will apply from April 2024 onwards.”
That commitment was reiterated in the April just gone by the Department for Energy Security and Net Zero, which set out the intention to consult this summer.
This is a very important task, as well as an incredibly complicated one, and we need to be getting on with it as quickly as possible. April 2024 is six months away, and I am not sure that that provides us with sufficient time to have an energy tariff in place for 2024-25. I know that there will be other distractions but, for an awful lot of vulnerable people, it is vital that we put that longer-term arrangement in place. I am not begrudging the support that has been given—the sticking-plaster approach of short-term support—but the longer-term approach is vital.
I would be grateful if, in her summing up, my hon. Friend the Minister, who does great work in this policy area, could provide us with details of when the consultation will get under way. Time is of the essence. We will not have it in place this winter—no way— but we do need it in place for 2024-25.
Peter Aldous highlights the success, after a challenging start, of the apprenticeship levy in creating higher-level apprenticeships in larger firms, but, he says, there is a need to provide more opportunities for younger people and new entrants to the labour market. He proposes a number of changes to the levy, including extending the expiration period for levy funds, making the minimum duration requirements for apprenticeships more flexible, and increasing the apprenticeship minimum wage to improve retention rates.
Peter Aldous (Waveney) (Con)
It is a pleasure to see you in the Chair, Dr Huq, and I congratulate my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) on securing this debate, which is well synchronised with the Chancellor’s autumn statement.
If we are to unleash sustained economic growth and enhanced productivity, we need a fully functioning labour market. It requires an entry system that enables people to pursue their chosen career path and opens up opportunities in sectors that are vital to our future economic prosperity, such as low-carbon energy on the East Anglian coast. A vital means of achieving that goal is through the apprenticeship levy, which the Government introduced in 2017 as part of a package of reforms of the apprenticeship system. Those measures were rightly ambitious, and they were based on two principles. First, for apprenticeships to succeed, they must have a long-term, sustainable funding source. Secondly, apprenticeships must be rigorous, so as to gain the confidence of both employers and learners. The apprenticeship levy is designed to deliver the first of those objectives.
Six years on, I think that we can say that the levy is here to stay, but it has had a challenging start, and it has had to go through a great deal, including covid, the consequences of the war in Ukraine, and the cost of living crisis. There have also been outcomes that were neither intended nor foreseen. Now is the time to pause and refine the system.
The Association of Colleges provides the secretariat to the APPG on further education and lifelong learning, which I chair. It has identified the following challenges. There has been a dramatic decline in the number of people undertaking apprenticeships in recent years. It is now down to 60,000 young people starting apprenticeships each year. In the past six years, we have lost 160,000 engineering and manufacturing apprenticeship training places, at a time when those sectors are crying out for more staff.
The levy has been very successful in creating higher-level apprenticeships in larger firms, but there is a need to provide apprenticeship opportunities for younger people and new labour market entrants. Many small businesses are put off by the bureaucracy, as we have heard. Local skills improvement plans provide an appropriate local framework for meeting the needs of local labour markets, but we need a national strategy, so as to address such challenges as the technical skills gaps at levels 4 and 5. There is a worry that the budget allocated is nearly fully committed, though I accept that it is not necessarily all being spent. There is a need to consider how to either increase the levy and maintain growth through existing funding, for example by reforming the transfer mechanism, or look for savings that will not impact on quality.
As to how to improve the system, there should be a focus on new job starters, and consideration should be given to returning to the recommendations of the 2012 Government review, which stated:
“Apprenticeships should be redefined…clearly targeted at”,
and promoted to,
“those who are new to a job or role that requires sustained and substantial training.”
In addition, the following technical changes to how the apprenticeship levy operates should be given full consideration. First, there is a sense among some in the industry that the two-year expiration on levy funds is inadvertently encouraging the adoption of a “spend it or lose it” mentality, leading to rushed financial decisions, rather than strategic workforce development. A more nuanced, flexible approach is needed. Extending the expiration period could encourage more thoughtful expenditure, in which training initiatives are aligned with long-term business strategies.
Secondly, I am receiving feedback that the apprenticeship minimum duration requirements are too rigid. The 12-month minimum length for an apprenticeship, while suitable for some programmes, does not necessarily align with the operational demands of others. We need a more flexible approach to minimum length requirements that enables better tailoring of apprenticeships to specific job roles and industry needs. Thirdly, poor retention rates in apprenticeships require attention. High drop-out rates appear to be due to a combination of factors, including the apprenticeship wage structure and lack of clear progression pathways. Some have argued that increasing the apprenticeship minimum wage could help, by providing financial stability and demonstrating to apprentices the value of their contribution, thereby enhancing job satisfaction and increasing commitment. That is an option that, among many others, the Government should consider to improve retention rates.
In conclusion, the 2017 apprenticeship reforms, including the introduction of the levy, were good. However, the economic landscape is rapidly changing, both in the UK and globally. There is a need to listen, adapt and refine. The refinement is about more than making minor tweaks; it is about ensuring that our apprenticeship system remains relevant, responsive and effective. If we do that, people, whatever their background, can realise their ambitions and fulfil their potential, and the UK economy will be able to motor forward in fifth gear, not third.
Peter Aldous writes an article for the National Health Executive emphasizing the untapped potential of FE colleges in addressing the NHS workforce crisis.
Peter Aldous highlights concerns raised by the Suffolk Chamber of Commerce that anti-fraud measures implemented by HMRC have created an overly bureaucratic and time-consuming process for SMEs seeking to claim research and development tax credits which is causing delays and deterring businesses from investing in R&D.
Peter Aldous (Waveney) (Con)
Research and development tax credits have been remarkably successful in promoting investment by small and medium-sized enterprises. However, the Suffolk chamber of commerce has highlighted that the system has ground to a halt due to the sledgehammer approach of His Majesty’s Revenue and Customs to tackling fraud. Will my hon. Friend liaise with HMRC and the Treasury to ensure that a more pragmatic approach is adopted?
The Minister of State, Department for Science, Innovation and Technology (Andrew Griffith)
My hon. Friend is a champion of his constituency, and I am happy to speak to the Financial Secretary to the Treasury on that important matter on his behalf.