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Next Labour government will introduce Apprenticeship Guarantee - Ed Miliband speech

Labour is today publishing A Better Plan for Britain’s Prosperity: a modern industrial strategy for businesses and working families to succeed together.

In a speech at Jaguar Land Rover in the West Midlands, Ed Miliband will declare that Labour’s plan for creating wealth does not rely on just a few at the very top but on boosting productivity in every business and sector of the British economy. 

After a fortnight in which politics has been dominated by questions over who can tackle tax avoidance, Mr Miliband will say that Britain needs a better plan for prosperity than the Government’s failing plan which relies on allowing the most powerful and wealthy to do whatever they want. 

And he explains why this modern industrial strategy is a different approach for Labour than in the past because it seeks to support working families not simply through tax-and-spend redistribution but by building a more inclusive prosperity. 

He will say nothing more symbolises the Government’s failing plan than seeing the tax gap widen while the number of apprenticeships for young people fell in the last year. 

Mr Miliband will announce the next Labour government will introduce an Apprenticeship Guarantee by which every school leaver who gets the grades will be able to begin a high-quality apprenticeship. 

In a key step towards achieving Labour’s goal of ensuring as many school leavers begin apprenticeships as go to university, the next government will by the end of the Parliament create at least 80,000 more of such high-quality training opportunities for young people every year.  

This will be achieved by: 

Making it standard practice for employers in the private and public sector to offer apprenticeships. 

This will create tens of thousands new apprenticeships with measures which: 

  • Require large firms hiring skilled workers from outside the EU or bidding for government contracts to offer apprenticeships;
  • Introduce a high-prestige, high quality fast stream in the Civil Service;
  • Give employers more control over how the government spends the near £1bn-a-year apprenticeship budget, in return for guaranteeing more high quality training places in their sectors and supply chains. 

Funding the additional places by reversing the Tories’ rebadging of in-work training schemes for existing employees and creating more apprenticeships as part of Labour’s Young Person’s Job Guarantee. 

Strengthening Britain’s training infrastructure by introducing a universal gold standard for apprenticeships and ring-fencing the FE budget to support reform of colleges into new Institutes of Technical Education. 

Mr Miliband is expected to say: 

“There is a choice of two plans at this election. A failing plan under which we would carry on as we are with a government claiming the economy is a success when it only works for a handful of people at the top. Or a new plan, a better plan, that says this economy must succeed for working families if Britain as a whole is going to succeed. 

“Our plan is based on the idea that it is only when Britain’s working families succeed that Britain succeeds. Not the old idea that it is only from the top down that wealth flows. And it is only our plan that recognises that every person in every sector of the economy is a wealth creator. 

“And that means we need a plan which nurtures the talents of every young person, supports every business, allows every family to share prosperity, and expects each and every one of us to contribute. 

“Here is our better plan: a modern industrial strategy for Britain’s businesses and Britain’s working families to succeed together; a plan for every sector, every firm, everybody to raise productivity, make bigger profits and create the inclusive prosperity for a new era; a route map for turning the fortunes of working people and of our country around.” 

He will announce Labour’s Apprenticeship Guarantee, contrasting this positive policy to address long term problems in the economy with the Tory failure to tackle tax avoidance

“There has been lots of debate about tax avoidance in the last few weeks. And nothing more symbolises their failing plan than seeing the tax gap - between what should be paid and the revenue received - widening while the number of apprenticeships available for young people fell in the last year. 

“We need a better plan to replace an economy where tens of billions are lost in tax avoidance, with an economy where tens of thousands more of our young people are doing apprenticeships and we help more businesses grow, succeed and create wealth. 

“For too long this country has believed we can succeed with just some people having access to world-class education, training and skills. So our plan begins with a revolution in vocational education: A new gold standard vocational baccalaureate in our schools; new technical degrees at our universities; and real high-quality apprenticeships as well. 

“At the moment just one in 10 employers in England offers an apprenticeship. Six times fewer high quality apprenticeships than Germany. 

“We can do better, and with our plan we will: the public sector playing its part with thousands of apprenticeships; every firm that wins a major government contract required to deliver apprenticeships; every firm recruiting from outside the EU required to do the same; with businesses having more control over the funding. 

“It is time to match the aspirations of our young people with the high quality apprenticeships they deserve. So under the next Labour government, if you get the grades at 18 you will be guaranteed an apprenticeship. That is what I mean by a better plan for working people, a better plan for Britain.” 

A Better Plan for Britain’s Prosperity will be unveiled by Mr Miliband, along with Ed Balls, the Shadow Chancellor, Chuka Umunna, the Shadow Business Secretary, and Caroline Flint, the Shadow Energy and Climate Change Secretary. 

They will present a 79-page document which shows how: 

Labour will back small businesses and new entrepreneurs who will provide the growth and jobs of the future by:

  • Cutting business rates;
  • Improving training and apprenticeships;
  • Promoting competition in energy and banking to ensure market efficiency, lower bills and better access to finance;
  • Handing more economic power to every part of the UK with £30 billion of devolved funding. 

Labour will back our biggest exporters which need certainty to invest by:

  • Staying in a reformed EU and not taking risks with our membership;
  • Building a strong economic foundation with a tough and balanced approach to cutting the deficit;
  • Making long-term investment by implementing the Armitt Review recommendation for a National Infrastructure Commission;
  • Guaranteeing Britain has the most competitive rate of corporation tax in the G7;
  • Promoting long-termism by changing the rules on takeovers. 

Labour will back our big employing sectors such as retail and social care by tackling undercutting, with firms coming together to raise productivity and standards by:

  • Industry-led bodies to raise productivity, like we have now in the car industry;
  • Banning exploitative zero hours contracts;
  • Raising the National Minimum Wage closer to average earnings - £8 an hour by 2020;
  • Offering tax breaks to employers who adopt the Living Wage;
  • Making it illegal to undercut by exploiting migrant workers. 

Labour will back every sector of the economy by ensuring the public sector plays an active part in driving up productivity by:

  • Recognising its role in supporting cutting-edge innovation and research;
  • Making strategic investment and procurement decisions.

 Policy detail on Labour’s Apprenticeship Guarantee 

Labour will guarantee every school leaver that gets the right grades an apprenticeship, just as people with good A levels have a de facto right to go to university. Doing that will require offering another 80,000 apprenticeships to school leavers with measures that include:

1. Making it standard practice for employers in the private and public sector to offer apprenticeships. 

  • In the UK it is not the norm in either the public or private sector to offer apprenticeships: countries such as Switzerland, Germany and Australia have more than six times more high quality apprenticeships for their population size.
  • Under the Tories it has got worse: apprenticeships for young people have fallen in the last year, while the proportion of apprenticeships made up by over 25-year olds has more than doubled since 2010.
  • Labour will require firms bidding for large government contracts to offer apprenticeships. This would see companies benefitting from the £100 billion planned infrastructure investments over the next Parliament, for example, being required to offer new apprenticeships. Based on estimates by the BIS Select Committee, ensuring that firms offer apprenticeships in exchange for this investment could create up to 100,000 new apprenticeships over the Parliament. Some estimates suggest the investment in HS2 could create 33,000 new apprenticeships alone by adopting this policy. We will also explore whether this should apply when the government underwrites large projects, creating thousands more.
  • Labour will require large firms recruiting from outside the EU to invest in apprenticeships in the UK – creating up to 100,000 new apprenticeships over the Parliament. It is right that firms are able to meet skills gaps by recruiting high skilled migrants from abroad, but we also need to ensure that these firms are training the next generation at home.
  • Labour will introduce a high-prestige, high quality Apprenticeship fast stream in the Civil Service, creating thousands of high quality places in the public sector This will include ensuring that every ministerial Private Office offers an apprenticeship.
  • Labour will give employers more control over skills funding and standards, and ask in return that they increase the number of high quality apprenticeships in their sectors and supply chains. We will also give them the powers they say they need to boost apprenticeships, such as the powers to set levies or licences to practice. This will see thousands of additional apprenticeships created. 

2. Funding the additional places by reversing the Tories’ rebadging of in-work training schemes for existing employees and creating more high quality places as part of Labour’s Young Person’s Job Guarantee. 

  • Since 2010, in-work training schemes for existing employees have been rebadged as apprenticeships by the Government. This has shifted their focus away from new entrants to the workforce and raised concerns that the apprenticeship ‘gold standard’ has been undermined. BIS research confirms that two-thirds of employers recruiting apprentices from existing staff do not consider their qualifications to be apprenticeships at all, and this number is increasing.
  • The proportion of apprenticeship starts made up by 16 to 24 year olds has fallen significantly from 82.3 per cent when the last Labour government left office, to 63.2 per cent last year. 93 per cent of apprentices over 25 years old already worked for their employer before starting their apprenticeship, this raises concerns that existing in-work training programmes have simply been rebadged as apprenticeships.
  • Under Labour’s plans half of the new apprenticeship places will come from reversing the trend away from young people doing apprenticeships. The remainder will be funded as part of the Young Person’s Job Guarantee. 

3. Strengthening Britain’s training infrastructure 

  • Labour will introduce a universal gold standard for apprenticeships: refocusing existing spending on low level apprenticeships for older people to work towards a system where all apprenticeships are level 3 qualifications or above, last at least 2 years and are focused on new job entrants.
  • Labour will transform FE colleges: because we will ring fence the 16-19 further education, sixth forms and apprenticeships budget – ensuring that it rises in line with inflation – we can support the reform of FE colleges into new Institutes of Technical Education with a core purpose to deliver Labour’s Technical Baccalaureate and apprenticeships.

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