We couldn’t get any more in, no? There’s a regulation about it with I think 1,000 people wanting to come. So welcome here to Mini. Just a couple of months ago – actually at end of March – we celebrated 100 years of producing cars in Oxford, so it was a big celebration here in this same facility. And in the next few weeks, to be precise on the 18th of November, we are going to have the worldwide launch of the next generation of Mini. We will have journalists coming from around the world to be witnessing this very, very exciting moment for us.
Today, you are our guests here and I am really welcoming you to this great location. I think Mini is a British motoring icon which really is now successful around the world. In over 120 countries around the world, we are selling Mini successfully.
And, of course, we are very ambitious company so we don’t want to stop here. We want to continue to grow. We want to continue to have a lot of success with this brand, and for this we need a lot of talented young people. We need them here in Oxford and we need them all over the UK and around the world. BMW group currently employs around 4,000 apprentices around the world, several hundred of them here in the UK. In the way you are all really our future, you are the ones who are taking our brand, and the other companies of course as well, to the next level.
I think for a company like BMW Group the key to success is what we are are able to attract and to develop the most talented young people around the world. This is what guarantees us our success and we are also keen to show you all what fascinating opportunities we offer in the area of technology, engineering and manufacturing.
We therefore strongly support the Government and industry initiatives to bring students a little bit closer – not only students, teachers and career advisers – a little bit closer to what we can offer and the opportunities you can have here in our industry. We also support all measures that ensure apprenticeships are recognised as a gold standard for motivated young people. I think this is key for the economical success of a company, but probably also of a country, to have skilled, motivated people. This is how we can compete with more cost-oriented countries around the world.
BMW Group is also supporting the See Inside Manufacturing initiative. We really give a lot of people the possibility to come closer and see how fascinating it is to produce high tech cars like a Mini in the Oxford area. We are particularly concentrating this year on females, despite the fact that we have the double percentage of females in our company. We still think it’s far too low so we launched a special programme to attract female engineers or people who would like to work here in the manufacturing site.
It’s a pleasure for us to host this important event today and, of course, it’s a great honour to welcome our special guest the Prime Minister. And Mr Cameron your presence, I think, is evidence enough to show how important this is also for the Government, so thank you very much for being here and looking forward to hearing what you have to say. Thank you very much.
Well, thank you very much and thank you for that welcome.
I’ve never seen so many apprentices in one room, I don’t know what the collective noun is, is it a swarm, is it a – I think it’s a brilliance of apprentices. So welcome today. And today we have quite some quite good news. We have good news in the car industry. Here we are in Mini, one of the companies here in Britain, contributing to the fact that Britain has become again a net exporter of cars. Right across our country we can see a manufacturing and motor vehicle revival. Here at Mini, but obviously we’d see the same thing at Nissan, we’d see the same thing at Honda, at Toyota and, of course, Jaguar Land Rover which is expanding massively in the West Midlands.
So that’s a good news story for our economy. And there’s also been some good news recently on unemployment. We’ve seen unemployment falling, we’ve got more people in work in our country than ever in our history - compared with three years ago there are a million more people in work. And although a lot of people said you’ll never make up for the cuts in the public sector with more private sector jobs, that is what’s happened. Yes, of course, the public sector has got smaller, it had to. We were spending too much, we were borrowing too much, but the expansion of private sector businesses like this has meant 1.4 million more people employed in the private sector and overall, as I said, a million more people in work.
And we’ve seen some good news on apprenticeships. Under this government we’ve had 1.5 million people starting apprenticeships. The run rate of new people coming on and trying an apprenticeship is now double what we inherited. So I think that is good news.
But here’s the challenge. Here I think is the real problem and the challenge we need to address. We live in a highly competitive world, a world where businesses can decide their make – make their products wherever they want. They can locate in different countries. We’ve got the rise of all these new countries, the Chinas, the Indias, the Malaysias, and we’ve got to compete with them. And the concern I have is as we get this economy recovering, as we get our economy moving, we’ve got to make sure it’s a recovery for everybody. For everyone in our country, whether that’s North or South, whether it’s people who did well in the past or were left out, it’s got to be for everyone.
And that’s why apprenticeships and what we’re announcing today matter so much. Because it’s absolutely vital that we train school leavers so that they’re in a position to be able to take the jobs that are going to be available in our economy. There’s no point having a recovery if people can’t join in, if people can’t take part. And at the moment there are too many school leavers that don’t have the qualifications to enable them to get a good job. And that’s where apprenticeships can really help and also traineeships, giving people some work experience – some experience of work – and some extra tuition in things like English and maths can really make a difference.
But even if we can get more school leavers into work, we’ve still got the challenge of are the jobs we’re creating. Are they skilled enough? Are they good enough? Have they got enough training involved in them so that they will last? Because we don’t want to just create some jobs and then see actually other countries overtake us, because they’re more productive, they’re more skilled and they’re better trained.
So it’s not just the number of apprenticeships that matter, it’s the quality. And that’s what we’re announcing today, two things really. First is to make sure that the apprenticeships that you do are amongst the best in the world. That the quality of training involved, that the need to keep on with qualifications like English and Maths and that the time spent away from the workplace that actually doing training as well is right. I think that really matters.
Obviously there’s a big scandal at the moment about whether or not someone has been listening to Mrs Merkel’s telephone. Well I’ll tell you what we have been listening to and that is the German record on apprentices. They’ve always been good at investing in apprenticeships and investing in training. And I want the British Government, the British country to be just as good as the German’s in that regard.
The second thing we’re announcing today is that we’ve persuaded companies to come forward with 100,000 extra training opportunities. And those could be traineeships, they could be work experience and they could be apprenticeships. Companies all over the country have joined into this to make it a real nationwide effort to give our young people the chance of joining in with the growth in the economy that we’re seeing.
So that’s what I wanted to say today, how much I value apprenticeships. I think this is a key part of our economic plan for growth, for recovery but, crucially, to make sure that everyone can benefit in this recovery. I don’t want another recovery like the last one, where the bankers did very well at the top and we had a welfare system that paid people to be idle rather than work. I want a recovery that everyone can share in, and apprenticeships are an absolutely vital part of making sure that happens.
So, thank you for coming. That’s all from me in terms of speeches, but now an opportunity for your questions and my answers. And in case I can’t answer them, I’ve got the Skills Minister Matt Hancock here, who’s designing the new apprenticeships with business, and Esther McVey, our Welfare Minister as well. So, you’ve got a panel of experts.
Who wants to go first with a question? Put up your hand and a microphone will come to you.
What do you think you can do to get schools to encourage people to apply for apprenticeships rather than going to university, because that seems to be the thing that’s really pushed nowadays?
I think this is an absolutely vital question, because I think the pathway to university has always been quite clear. You know, you do your GCSE’s, you do your A Levels, you fill out your UCAS form, you go to university. The teachers at school - most of them have been to university - and taken that path in life. So, I think you’ve got a very good explanation.
Frankly, I don’t think we’ve been nearly as good at explaining to young people what is available in terms of apprenticeships, and I want that to change. I want there to be, what I call, the new norm, which is that you – as you leave school you think either, ‘I’m going to take the university path,’ or, ‘I’m going to take the vocational skills, the apprenticeship, path.’ What we’re doing is having a centrally funded national careers service that can contract with schools around the country, so that schools can provide proper information about what is available in terms of apprenticeships. And we need to get businesses into schools to talk about this, so that there’s someone else, as well as teachers, talking to young people about what is available.
I’ve lost count, going round the country and talking to young people, of the number of people who’ve gone off from school, gone to university, started a degree, or sometimes finished a degree, and then thought, ‘Actually, that’s not quite what I want to do. I want to earn and learn at the same time,’ and then have started an apprenticeship. Be much better if we gave people the better information right at the start, and allowed them to choose which path.
One last point on this: also people forget that, of course, doing an apprenticeship can be a way of going on and doing a degree. There are some great companies in this country, companies like Rolls Royce, for instance – also involved in this manufacturing and technology renaissance we’re seeing in Britain – where many of the people on the board of that company started as apprenticeships – as apprentices, and went on and did degrees. So, better information in school, better choices, and business playing a bigger role at getting into our schools, and telling young people what’s available.
At Hinckley Point, is there going to be any guarantee of local apprentices?
Yes there is. We have a guarantee that a huge percentage of the work is going to be sourced here in the UK: over 50%, which I think is very important. I think it’s going to be a very big investment for our country because we haven’t built a nuclear power station since Sizewell B which was finished, I think, in 1995. It is a big gap since we’ve built one of these things and I think it gives us an opportunity to get back into the construction of nuclear power stations. So, lots of local apprentices, lots of local content. It’s a £14-billion investment providing something like 25,000 jobs in the construction phase, and as well as providing those local jobs. I think it’ll also increase our skills in nuclear and in nuclear construction, so that when, as I hope we will, we start building other nuclear power stations – perhaps Anglesey, perhaps Oldbury in Gloucestershire – there’ll be more work for those people to do, and more skills. I think it’s an important area, which we’ve been out of for too long, we’re now getting back into.
And one thing: people say it’s a lot of money we’re spending, and, of course, it is money that we’re spending. But that what’s remarkable about this nuclear power station is that the taxpayer – all of you paying your taxes – the taxpayer is not bearing the construction risk. That’s being taken by the companies, and also the taxpayer is not taking the risk of decommissioning, of taking this thing apart at the end of its life, in 60 years’ time: that is also being paid for by the companies. So, I think it’s a good deal for the taxpayer. It gets us back into the nuclear industry, provides secure baseload power and is going to lead to a great skills revolution back in the nuclear industry.
I’m just wondering if you have any thought on how we’d be able to encourage STEM subjects in schools?
Well, I think the first thing is by not dumbing down. I think there was a mistake in the past of thinking we’ll get more people to study Science and Maths and Technology if we amalgamate the subjects, and make it easier and less challenging. It’s got to be challenging and I think studying single sciences, it’s right that we promote that.
But, frankly, there’s no one single answer. We’ve got to encourage the best graduates into teaching, and one of the ways we’re doing that with STEM graduates is to encourage them by paying off their student loans more quickly if they go into teaching. I think that’s a good scheme. We’ve got to make sure the university departments where they’re trained, stay open, and we’ve been doing that. We’ve got to make sure young people have more information about the choices that they make. When you think about it: when you’re a young person, you’re thinking, ‘What should I study at university or college?’ There’s not always very good information about what those studies can lead to, in terms of jobs.
We’ve been developing with others, Microsoft included, a programme where you can plug in, ‘Well, if I do this course, what sort of jobs am I likely to get?’ And the fact is, there’s a shortage of STEM graduates and as a country we need more people to go on to university and study these subjects. And I think we need to get that information, again, out into schools, so people can see if you’re good at Science or Maths. Sadly I wasn’t very good at science or Maths, but if you are good, then you should know actually studying those things give you. This gives you a lot of extra careers choices.
How do we ensure that apprenticeships are placed in regions which require economic growth?
I mean, this is a difficult one, because, of course, the supply of apprenticeships partly depends on businesses coming forward and wanting to train people. It’s not always easy to make sure the investment is directed to the right place.
I think there are some things we can do. First of all, we’ve got to get more small firms involved in apprenticeships. We’ve got a lot of big companies here: we’ve got JLR, we’ve got Toyota, we’ve got Telefonica, BMW and Nestlé. I’m reading the badges but small firms are needed. In the past apprenticeships were often very small businesses, two or three people in the business, taking on an apprentice. And so we provided what’s called the bounty, where if you’re a company that hasn’t taken on an apprentice for a while, you actually get a cash payment from the government, over £1000, to take on that apprentice. So, I think that’s one way of helping to make sure it is spread round the country.
Secondly, we’ve got a team of ministers who are getting out and about round the country, encouraging firms to look at taking on apprentices. We’re absolutely determined the recovery is North and South, and not just restricted to the South-East. That’s why we’ve been spending so much money on infrastructure: roads, railways, connections in our country, to make our country smaller. All of which can help.
But we need a bit of a revival of the whole sense of apprentices. And that’s why I think following the German model, where they’ve never stopped investing in apprenticeships, they always knew vocational education was important. We took a bit of a pause from that. We’re now getting right back into it, and we’ve got to make sure we do that across the country.
Do you not think that when every time you talk about degrees post-apprenticeship you undermine the value of the apprenticeship itself? Because most of us are doing those because we didn’t want to do a degree.
That’s a very good point, but I don’t think so. I think the truth about education and learning today is that it’s not something you do and then stop. It’s something that is going to go on throughout your career. Whether you’ve done an apprenticeship and then you’ve been employed, you’re still going to be thinking about what other qualification, what other traineeship, what other training can I do? And I think that’s the way of the world. As I said, if we want to stay ahead of our competitors, it’s going to be about continuously learning new skills and continuously adapting. I don’t think it does undermine people doing apprenticeships.
It happens to be true that many people do decide to go on and do either degrees or degree-level qualifications. I think we need to simplify that a bit; I think sometimes it’s a bit baffling with all the different initials and qualifications out there. But we should think of education and training as a process, not something you do and then stop, otherwise we’re going to fall behind.
I do a lot of work as an apprentice ambassador, and one of the things I often talk to parents about is an apprenticeship being a valid alternative to going to university. They don’t always understand the value of an apprenticeship against going to university. What can you do to change that perception?
Events like this, I hope, help. I think there are just a lot of people in our country who have an old-fashioned view of an apprenticeship as something that is intrinsically less worthwhile than a degree. I think we need to get out there and say, ‘Look at the evidence’ – right? ‘Look at the evidence for what a degree career can bring you; look at the evidence for what an apprentice career can bring you.’ Also, I think we need to explain that the earning plus learning part is hugely valuable. Many young people say to me, ‘You know, I’d rather do the apprenticeship than the degree because I want to earn and learn at the same time.’
So I think it’s partly about changing culture and it’s partly about giving young people and parents more information. I think a lot of it is about what happens in school, because I don’t think that is right at the moment. I think, as I said, you’re getting all that information about the degree, you’re not getting all the information and outcomes about the apprenticeship. So I think information culture and business really pushing this agenda. All of those things can help a huge amount.
I just wanted to ask what the government is doing to ensure that employers place enough value on apprenticeships and aren’t just taking apprentices as a form of cheaper labour?
Absolutely right. That is bang on and that is exactly what we’re talking about today. It was important to get the numbers of apprenticeships up, to get all businesses asking themselves, ‘What more can I do to train people to start apprenticeships?’ I think that’s been a real success, as I said: 1.5 million people starting since 2010.
But you’ve got to watch the quality as well as the quantity. So we asked Doug Richard to do a review into the quality of apprenticeships and he came up with a range of measures. Basically all of which we’re adapting and adopting today. And Matt Hancock will be saying some more about it with all of you later, saying things like, no apprenticeship should last for less than a year. All apprenticeships should be about a genuine event of a young person joining a business or someone who’s training for a new skill.
You can’t just rebadge existing training programmes and call them apprenticeships Making sure that an apprenticeship does involve ongoing work on English and Maths qualifications. I know I sound obsessive about this by always talking about it, but it’s true. Those are the two most important vocational skills. I challenge my children sometimes and say, ‘Look, try and think of a job that doesn’t involve English and Maths.’ And my son the other day said, ‘Well, what about being a football player?’ And I said, ‘Well, you’ve got to add up your money.’ You’ve got to have maths skills for that.
I think in terms of quality, in terms of length of apprenticeship – so it’s not rebadged training programmes - it’s a genuine effort to give people a better life chance. That’s our interest, because obviously we’re putting taxpayers’ money – we’re putting your money into these schemes, and we don’t just want more of them, we want them to be good. Because at the end of the day our country will only succeed if the training and the apprenticeship schemes you’re getting are as good as the ones you get in Germany or France or training in China or India or anywhere else. That’s the absolute key.
Just jumping back to the subject of building new nuclear sites, are you envisioning any knock-on effect for other companies in the nuclear industry such as Sellafield which deal with the waste from such plants?
I think Sellafield plays an important role in Britain’s nuclear industry and expanding and restarting the nuclear industry should be good for other parts of the nuclear supply chain including Sellafield. As I say, it’s been a long gap since the last nuclear power station. Now Hinckley Point is I think there’s a good opportunity to get Sizewell C going, to get Wylfa on Anglesey going, the Oldbury plant in Gloucestershire, and I hope this will now see a sort of drumbeat. Not immediate, because these things are very big, very expensive and take a lot of time to get right. But a drum beat of new nuclear announcements so that universities can see it’s worthwhile teaching nuclear expertise so that, you know, colleges start doing the training programmes, and so that Sellafield starts thinking about its place in the industry and working out new opportunities, rather than just managing its existing assets.
We say we see that the degree is very important these days, which is true in some, like, aspects. I personally left university after two years of studying economics of banking, to find that it really wasn’t for me. So the question I would like to ask today is: the degree aspect of everything – is it really – will there ever be an equivalent for us apprentices to…
Yes, absolutely there is. There’s the higher level apprenticeship, which is a degree level qualification. I think the number this year of higher level apprenticeships, Matt, is?
Matt Hancock, Minister of State for Skills and Enterprise
8,000. Double last year.
8,000 out of the total number. And if you look at the evidence of people who do those higher level apprenticeships, that adds something like £150,000 to your earning potential through your working life. I think that more and more figures will emerge for what are your chances of having a good job if you do an apprenticeship, if you do an advanced apprenticeship and if you do a degree and all the rest of it. I think we need more information.
What’s happening with the degrees is that because we’re asking students to make a bigger contribution in terms of fees and paying those back over their lives, I think quite rightly students are getting more fussy about what it is they’re putting themselves in for. And they’re actually saying, ‘Look, before I sign up to this degree, I want to know how many lectures I’m going to get, how many’ and ‘what sort of teaching I’m going to receive? How good is this degree to help me get a good job and a good career in the future?’ And I think that’s a very good thing.
Because, of course, there’s a benefit from going to university and doing a degree and the training it gives to your mind, as it were. That’s a great thing. But people should be thinking at the same time, well, where does this lead me in terms of a qualification that will help me to get work? And it’ll do something else that I think is important. For many years there was quite a lot of snobbery, I think, in this country about some degrees because they were called, you know, ‘music studies’ or ‘golf course management’. People thought there must be something wrong with these degrees.
Well, frankly we’re now going to find out which degrees really benefit people, because it’ll be young people choosing which ones to study and doing that increasingly on the basis of what does this do for my career? And so I think we’ll be able to get rid of that sort of snobbery that there are some degrees intrinsically better than others. We’ll have to see what the results are from the choices people make.
Going on from what you just said then, and also with the threat of a potential rise in tuition fees again, do you reckon we’ll actually be able to accommodate the potential boom in people applying for apprenticeships?
First of all, let’s look at what’s happening to people studying at university. The number has gone up. We’re now at a record level again of the number of people applying to university and I think, importantly, because we want to make sure that people from all backgrounds have the opportunity to go to university, the number of people from low income backgrounds going to university has also gone up. And I think the reason for this is we are asking young people over their lives, potentially, to pay back quite a lot of money for the tuition fees, but you don’t start paying back till you’re earning £21,000 and you don’t start paying back in full till you’re earning £35,000.
So if you sort of stand back and look at the big picture of our university funding system, you’ve really got a choice. You can either ask taxpayers to pay, or you can ask students to pay. And I think if you ask taxpayers to pay, you’re always going to struggle. Because governments are always going to prioritise the National Health Service or pensions over the funding of universities, and you’d see our universities getting squeezed, and as a result would lose out in terms of competing with other countries around the world. So what we decided is to ask students to pay. Not all students or any students, but students who go on and have successful earning careers. If you never earn over £21,000 you never pay back a penny.
So I think what we’re going to see – what I hope we’ll see – is a continuing expansion of university education. Not least because we’re actually able to afford it as a country because it’s the students paying rather than taxpayers, but also a far wider range and a far better range of apprenticeships and vocational education as well. As I say, I think in the modern world we should be thinking about a new norm for young people: as you leave school, you’re either on an apprenticeship path or you’re on a university path.
The idea of leaving school at 16 without proper qualifications, or without somewhere to go to work and train should be out of the question. And, frankly, the idea of leaving school at 18 without really knowing – is it university or is it an apprenticeship? I don’t think that is right for our modern world. If we’re going to be a successful country –and I profoundly believe that we can be – and look here – here we are, in a car plant that in the past was almost written off, and it’s having an incredible renaissance due to a combination of British design flair and German efficiency. It’s a great industrial success story here. So, we shouldn’t be downbeat about what we can achieve, but we should have real ambitions for more people to go to university, and more people to do apprenticeships, and fewer people – in fact, almost no people – doing neither.
A lot of what you’ve been saying has been based around apprenticeships for people leaving schools. So, how are you going to promote the vocational things, not only for people leaving schools in terms of combining it with a degree – because, I think that’s really good – but also for people who have had some life experience before, like myself?
That’s a very good point. Well, I think you’re a brilliant advert for what we want companies to do. I think we talk a lot about apprenticeships in terms of young people, because I think the government, and I think everyone in the country, wants to try and shift the dial so that people are thinking about university or apprenticeships.
But you’re absolutely right. A huge number of apprenticeships are other people in their working life. What we’ve got to do there is make sure – as I said, it’s not re-badging existing training schemes and just slapping the label on so it looks like the numbers are going up. They should be real opportunities to re-train, re-skill, and do a different and better job. And, obviously, yours is that in spades, because you’re doing six years and a degree qualification.
We’re trying to encourage higher-level apprenticeships. As Matt said a moment ago, the number has, I think, doubled over the last year. But it’s still 8,000 out of Half a million. So, the ambitions should be to get the number of higher-level of apprenticeships right up. But that means working with companies, like yours, and encouraging more companies to think long term about their training and skills needs.
Will you be making sure that employer ownership with skills gets as much funding as possible?
Well in this job there’s never a shortage of requests for funding, but that’s a very good one. Look, I think the government has put its money where its mouth is on apprenticeships. The budget for apprenticeships has been going up - the one and a half million people involved, I think, demonstrates that. But the apprenticeships minister is right here, so you can bend his ear afterwards and have a go on the specifics of that one.
What’s the government’s long-term commitment to apprenticeship funding?
Long-term commitment to apprenticeship funding? Well, we want to see the numbers keep going up, so that means we’re going to keep spending money on it. I mean, we’re basically seeing now around half a million a year. We want to see that number keep high. We want to see more of the higher-level apprenticeships. So, therefore, we’ll have to put our money where our mouth is.
It also relies on business doing that as well. But, certainly, if you look at the Richard agenda of more quality, that is not going to mean that they become less expensive.
The benefit of an apprenticeship is ‘earn while you learn’, but last time I checked the minimum wage is £2.65 an hour. For some people, that won’t even cover their travel cost. So, is there any scope to change that?
Well, what we have in Britain is we have a minimum wage with the various levels for minimum wage people doing apprenticeships, minimum wage for people – younger people, older people – and it’s reviewed every year by the Low Pay Commission. It’s their job to come to us and to say, ‘Right, we think this level has got too low and it needs to be up-rated.’ And so, that’s why we up-rated the minimum wage recently.
And I think, actually, on the apprenticeship minimum wage – that went up…
Matt Hancock, Minister of State for Skills and Enterprise
It went from £2.65 to £2.68.
There was a recommendation of a freeze and we overruled it.
Right, that’s right. So, tiny increase, but every year this is not fixed by the Government; it’s fixed by the Low Pay Commission. They report to us. And we can either accept their recommendations or, sometimes, override. So, it is looked at every year.
Everyone wants to see wages so that people can actually start to feel the benefit of the economy getting stronger. But if we ignore the Low Pay Commission and just drive things up faster than they say, there will be a danger that might add to unemployment. But, certainly, it’s their job to report every year and our job to listen to them.
One area of growth, obviously, is health and social care. What’s the government doing to support the growth of apprenticeships, and health and social care?
Right. Well, the first thing the Government is doing in health and social care is trying to bring health and social care together, because, I think, for too long they’ve been much too separate. And I know in Oxfordshire you’re trying to do this, having pooled budgets, having pooled decisions about these budgets, because you’ve got far too many people who are stuck in hospital, unable to get the social care funding to get out of hospital and back into their home. Or in a care home, which is bad for them – they’re in the wrong place – but is also bad for the taxpayer, because hospital places are more expensive than looking after people at home. So, the more we can bring the two together, the better. What the government’s done on this front is take £2 billion of the health budget and put it into the social services budget, so the money is there for local councils to try and work together more.
I think it’s a very good idea to encourage apprenticeships in this area. I’m sure Oxfordshire county council are doing this, but you can work with all of your suppliers and encourage them – all the healthcare companies that are doing the home care visits and all those things – to look at apprenticeships as a way of trying to get people involved in this services, and to make sure they’re trained to a high level.
I think it’s certainly going to be a growth industry. We’re an ageing population, we all want to live longer, we all want to live longer at home rather than in a care home. And so, I think actually giving people the really relevant skills for this is a really important thing to do.
You said earlier when you first came out about privatisation and how it helps the economy grow, but thirty odd years ago you privatised all the energy suppliers and now all them prices go up. It seems like when British Gas set a rate the rest follow and then it costs everybody else more. And now it’s, like, coming out on other families where they can’t actually pay energy bills to actually supply their homes with.
Okay. Well, if you look at the history of nationalising these businesses it didn’t actually mean that prices were held down. Because when they were nationalised they tend to be monopolies, they didn’t have any competition, and every now and again a government would intervene and try and hold the prices down for a bit. But, because they were inefficient, because they didn’t have any competition, as soon as that stopped the prices went shooting up again.
And so, you can actually see over the history of nationalisation it wasn’t good at protecting job, it wasn’t at investing, and it wasn’t good at holding down prices either. I would say, if you look across areas like telecommunications when I first started off in politics there was only one telecoms company; it was British Telecom. Then there was Mercury and there were two companies. And now we’ve got a whole range of companies trying to sell you services, sell you equipment, keeping prices down.
And I think competition is the best answer in all of these areas – same in energy. Look, I’m frustrated about the ‘big six’, because I want to see the big 60. I want to see many more energy companies. And since we came to office, we’ve seen eight new companies come in and start up, in terms of selling electricity and gas to people. And that is healthy competition.
Now, you don’t get competition through nationalisation; you get competition through privatisation, and proper regulation, and making is possible for companies to come into that market. That’s what’s happening in energy, that’s what happened in telecoms, and it’s the right answer.
I was just wondering, what can be done to promote the economic and personal benefits of a traineeship – if you look at those who argue against traineeships, saying that they’re basically free labour and will only benefit the employer?
I think traineeships are necessary and I’ll tell you very directly why. I’m afraid the problem is, today, there are some people leaving our schools who don’t have basic qualifications in things like English and Maths, and who aren’t in any way ready for the workforce. And the tragedy is that a lot of companies – when you’re trying to be an apprentice for one of those companies, they have, quite understandably, some qualifications you need to have.
I mean, here we are at Mini in Oxford. To be an apprentice here you’ve got to have four GCSEs between A and C, and you need to have English and Maths.
And I was at Mercedes the other day, and they said they do 5,000 apprenticeships a year. And I thought, ‘That’s fantastic. How many people apply?’ And they said 30,000. I said, ‘Wow! How do you decide who to take?’ And they said, ‘Do you know what? We struggle to fill the 5,000 places, because so many of the 30,000 don’t have the basic qualifications necessary to even start an apprenticeship.’ So, traineeships are about helping people to get those basic qualifications and helping to make people work-ready.
Now, you’re always going to be accused with these things of putting people into the workplace and you’re not paying them properly and I think that’s nonsense. All these people on traineeships, they don’t lose their benefits by doing a traineeship, but they’re getting relevant experience of working in an office or in a factory, helping to understand what it involves, what it means to have a job, timekeeping and those things that matter. And so I think it’s a really good scheme. So, I will take on anyone who wants to say this is somehow unfair.
It’s like work experience. You know, we’ve done work experience programmes under this government which have got a fantastic record of getting people into work. And there was a row a year or so ago about isn’t this unpaid labour and unfair? And all the rest of it, and the lady who didn’t want to work at Poundland – if you remember all of that.
Getting people into a workplace and giving them an experience of work, and timekeeping, and all the things it means to have a job is a really good way to help get people started. It’s a cruel fact, but it’s true. That the best way to get a job is to have one already. The people who get excluded are the people outside the workforce.
And, as I said right at the beginning of this, the danger for countries like Britain is, yes, you see the economy recover. Yes, you see jobs coming, but you leave behind people who haven’t got the right qualifications from school. I don’t want that to happen in our country.
People also talk about the challenge of tackling immigration. Of course there’s a challenge of tackling immigration, but here’s how I see it: immigration, welfare, and education are totally linked. You can go round factories in our country where half the people in the factory have come from Poland, or Lithuania, or Latvia. And you can’t blame them - they want to work hard. They see the jobs, they come over and they do them.
But, as a country, what we ought to be saying is, ‘No’. Let’s get our education system right so we’re producing young people out of our schools and colleges who are fully capable of doing those jobs that are being made available. Second, let’s reform the welfare system so that it doesn’t pay you to be out of work - it pays you to be in work. And third, then let’s have the sensible controls on immigration, particularly from outside the EU where we put a cap on the number of people coming.
But crack those three problems together and we’ll create an economy that really generates wealth for all our people. And that’s what this should be about: a recovery for all. No one excluded from a growing economy here in Britain.
It’s been lovely coming and answering your questions, and talking to you today. Good luck with your careers. I think you’ve made great choices by becoming apprentices at all these brilliant businesses represented around the room, and it’s a real pleasure to see so many of you here today.
Thank you very much indeed.