Minister assures business leaders in Peterborough that new levy will not be a 'money-spinner'

The Grantham and Stamford MP admitted to a gathering of about 80 executives from the engineering to horticulture sectors that the new levy was his own idea.

Under the levy, which is payable from April next year, firms with a payroll of more than £3 million will pay 0.5 per cent of the payroll to the apprentice training fund.

Companies will be able to access the fund to pay the costs of training apprentices.

Mr Boles told the gathering at Orton Hall Hotel, in Peterborough: “The Apprentice Levy was my idea.

“But we are not in the process of turning this into a money-spinner.

“This Government will not increase the 0.5 per cent charge.

“It is a new tax but we don’t usually link taxes with a specific purpose in this way.”

He said the UK had a long-standing productivity problem and the key to resolving it was the training of more apprentices to meet the specific needs of industry.

The levy will nearly double the amount that country spends on apprentice training from £1.5 billion to £2.5 billion.

Firms with apprentices have various ways of accessing the scheme but there is no access for companies that do not have any apprentices.

Mr Boles, who is tasked with ensuring the fund pays for three million apprenticeships by 2020, said it would be up to companies to vigorously demand that training providers offered the necessary high level training schemes.

He wants business to control an independent institute for apprentice training.

Mr Boles told the meeting organised by Roythornes solicitors and MorePeople recruitment: “We want companies to be concerned. We want you to be demanding customers and to work together to ensure the right training provision is being provided.”