Answered in the Assembly Chamber on 21 November 2016. Extract from the Official Report (Hansard), including any supplementary questions:
Mr Hamilton
The apprenticeship levy will be introduced in April 2017. The collection of the levy is a reserved matter for the UK Government. It will impact on all employers with an annual pay bill in excess of £3 million. Her Majesty's Treasury announced on Monday 14 November 2016 the apportionments for the devolved Administrations. Northern Ireland will be allocated £76 million, £79 million and £82 million over the next three years. However, Her Majesty's Treasury has removed £52 million due to a reduction in funding for existing apprenticeships in England and a further £29 million reduction to the public-sector contribution to the levy, which will result in a £5 million pressure on the overall block grant. Importantly, approximately £80 million was spent by the Executive on work-related training for businesses, including apprenticeships, in 2015-16. Over the past four years, £86·5 million has been invested in apprenticeship training alone. It is important that employers have access to the appropriate skills training, particularly in the form of apprenticeships. I want to ensure that support for skills is based on a quality offering and value for money. I intend to consult employers and other interested stakeholders to seek their views on the implications of the introduction of the apprenticeship levy in Northern Ireland. That consultation will be designed to take the temperature of the business community and focus thoughts regarding the needs of businesses in terms of skills and apprenticeships.
Madam Principal Deputy Speaker
I call Steve Aiken. [Interruption.]
My apologies; I call Naomi Long.
Mrs Long
Thank you, Madam Principal Deputy Speaker. The Finance Minister and the Economy Minister have set out an approach that will, effectively, mean that businesses will pay the apprenticeship levy but there will be no additional investment in skills as a result. Is there any scope for the Minister to undertake to ring-fence money for additional spending on professional, technical and vocational skills, so that we do not end up with a disgruntled sector that feels that it is paying additional money as an apprenticeship levy but is not getting anything additional in return?
Madam Principal Deputy Speaker
I remind Members to keep their questions brief.
Mr Hamilton
I thought that the first answer was so comprehensive that it answered all the Member's questions. To be completely frank and honest, I think that the apprenticeship levy is a bad thing. It is called a "levy", but it is a pretty brutal and crude tax on businesses in Northern Ireland that, as the Member identified, already pay through other taxes for skills training provided by government and others. The Member is right to point out that, since taking office, I have been in very close contact with the Finance Minister in regard to this. What we receive back from Treasury through that levy/tax is incredibly important for the next steps and what we can provide for employers. As I mentioned in my original answer, whilst the Treasury, in typical Treasury style, tells us, "Here's £76 million that you're going to get next year", it is taking some £52 million off us with the other hand. When you take the public-sector contribution of £29 million out of that, we are in a net negative position of £5 million. One interpretation of that is that it is eating into the £80 million-odd that we pay annually for skills training for businesses. I am completely aware of the concerns of many employers. I have been very much in close contact with businesses about this since taking office. I want to take their temperature — that is the purpose of the consultation — and ask employers and other stakeholders what ideas they might have and what they think of the current skills training that we provide for businesses. It will then be a matter for the Finance Minister and me to discuss, particularly with regard to the Budget that will come to the House before the end of the year, what we might be able to do to ensure that skills training of the highest quality is still provided for businesses in Northern Ireland.
Mr Aiken
I thank the Minister for his comments so far. A lot of the questions have been answered, but one of the things that many of the companies that I have been talking to and that you have been talking to —
Madam Principal Deputy Speaker
Can the Member come to his question?
Mr Aiken
I am getting to the question.
Madam Principal Deputy Speaker
Can the Member come to his question?
Mr Aiken
Despite the considerable disquiet among Northern Ireland businesses about the shortfall in skills training — [Interruption.]
Wait for it. How does he envisage that our companies will not be penalised —
Madam Principal Deputy Speaker
Will the Member take his seat for a minute? I would like the Member to be able to make his point, and I ask him to ask his question.
Mr Stalford
Brevity is a skill.
Mr Aiken
Thank you very much indeed. This is the question: how will we ensure that many of the Northern Ireland companies that will pay this tax, particularly the ones that have the majority of their business in Great Britain, will not decide to move their headquarters and training there because they see this as very much a case of double taxation?
Mr Hamilton
I think that my bad influence is rubbing off on Members during my Question Time with the lack of brevity in some of the questions, never mind the answers that I provide. That is one of the concerns that I have always had with the levy, and it was also a concern for the previous Minister for Employment and Learning. At this stage, whilst I have concerns and there are employers who are in the space that the Member talks about, I have not yet heard from anybody specifically saying that that was their intention. As is often the case, it is much more sophisticated than that. Whilst they may feel that they are being double taxed, those employers are based in Northern Ireland for a range of reasons, particularly, in relevance to the question, reasons why they continue to provide training from bases here. As I said, I do not like this tax or levy. It is punitive and harmful. You can clearly see how harmful it is to Northern Ireland's public finances. I have a challenge on my hands to ensure that we continue, given the reductions, to maintain the level of spending on apprenticeships and other skills training for businesses. Be assured that, given the centrality of talent and a skilled workforce to Northern Ireland's proposition for inward investment and the growth of local businesses, I will be determined to do that in what will be a very difficult budgetary climate.
Mr Storey
I thank the Minister for his comments, particularly for placing on record our concerns on the apprenticeship levy. Will he outline to the House how much his Department invests annually in apprenticeships, given the important role that they play in the economy?
Mr Hamilton
My Department continues to invest a considerable amount in apprenticeships and in a reformed apprenticeship programme that seeks to have a higher quality of apprenticeship, learning lessons from places like Germany, Switzerland and Austria. I want to maintain that high quality, regardless of what the Government do on the levy and regardless of what they do, in my belief, in watering down what apprenticeships are in England. I am onside with Scotland and Wales in wanting to maintain very high-quality apprenticeships. We have been investing considerably over the last number of years. In the last financial year, just short of £20 million was invested in level 2 and level 3 apprenticeships, and, with higher-level apprenticeships, which are an incredibly important new part of the offer that we make in apprenticeships, some £1·1 million was invested at levels 4, 5 and 6. Over £20 million annually has been invested in apprenticeships alone. I visited Deloitte last week, and it has almost acted as a pioneer in taking forward higher-level apprenticeships. It shows that sectors that you would not ordinarily associate with apprenticeships are now getting involved and taking on apprentices at that higher level. If there is a good side to the apprenticeship levy, I hope that it is that it encourages many employers not traditionally involved in apprenticeships to look at the options, and there is, of course, government support for that.
Ms Archibald
Last week in his statement, along with the Minister of Finance, the Minister outlined that the apprenticeship levy was of no benefit to the North, and again today he said it was a bad thing. Will you make that case to the British Treasury?
Mr Hamilton
Yes. The case has been made, and I know that my colleague the Finance Minister has been dealing directly with the Treasury. I have raised similar concerns through the Department to the various Departments that have looked after the issue. It has now shifted back to the Department of Education. I am seeking a meeting with the Department of Education to discuss a range of issues, but I will, obviously, take the opportunity to raise concerns about this issue as well. It is something we have been lobbying on, and I know other devolved Administrations have been doing likewise. I know they feel very similarly to us about the damage they believe this is doing not only to public finances but possibly to skills training for businesses moving forward.
