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Mr. Haynes : No, I shall not withdraw that, because it is true. With my own eyes I saw the Financial Secretary gas-bagging instead of listening to the serious points being made. I am pleased that he is listening to me when I am trying to be serious because we are discussing a serious subject.
The Financial Secretary was lucky enough to have a bit of training in finance--at least, that is the impression I get when I listen to him speak from the Dispatch Box. Nevertheless, he has a lot to learn. I said the same thing last night, but from a sedentary position. The young Minister has a lot to learn--he has not lived yet. I was in industry for many years and I am now 64, so the Minister can understand the point of what I am saying. I have seen good industry and good training within industry. Indeed, I participated in that training.
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The Government ducked their responsibilities when they took over in 1979. Come the next election, we shall change all that. The sooner the Prime Minister calls the election, the better off will be those people who need proper training--without the incentives and the corn that the Government are chucking down to employers.Several Hon. Members rose -- The Chairman of Ways and Means (Mr. Harold Walker) : The debate is now getting wide, and although I haveallowed a wide debate, I shall obviously have to have regard to the extent to which we have debated the general matters relating to the clause when we come to debate clause stand part. I call Mr. Martlew.
Mr. Haynes : On a point of order, Mr. Walker. I promised earlier not to raise any points of order, but you have forced me to my feet. I hope that on Thursday when we debate the Employment Bill you will not say that I have gone wide of the scope of the debate.
Mr. Walker : Thursday is a long way off. I call Mr. Martlew.
Mr. Eric Martlew (Carlisle) : I shall try to stick to the scope of our amendments and the need for them. Eleven years of this Government have reduced us from a skilled to a semi-skilled nation. I am afraid that, if the Conservative party won another election, we would be reduced to being an unskilled nation.
If one wants to consider the decline in training in this country, one most go back to the legislation that destroyed the training boards. A Labour Government in the 1960s put in place a system that did not give incentives to employers, but approached training from the other direction. A levy was imposed on employers who had to provide training of a certain standard to receive a rebate. That immediately created the position of training officer. I was one for quite a while. Originally, the function of a training officer was to recoup the amount of the levy, but they soon went beyond that and started to look at companies' training needs. We found that very little training had been done between 1951, when the Conservatives took over, and 1964. Therefore, there was a need for Government intervention and the training boards were set up.
I was involved with the food, drink and tobacco training board, which began as a bureaucratic organisation, but which created a high standard of skills in many of the companies involved. Unfortunately, that training board was destroyed. I recently served on the Committee considering the Food Safety Bill, a major proposal of which was that training in the food industry should be dramatically increased because the lack of training has contributed to the food poisoning epidemic in this country. That lack of training in the industry was caused by the Government allowing the industry to stop training. At one time, we used to have the right number of skilled people to match the number of jobs, but in the many years since, the Government have decimated our apprenticeships. Industry thought in the short term ; because it was expensive to train an apprentice--it could amount to about £20,000 per year--firms decided to recruit direct from the labour market. Those industries
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are paying for that now, because there is a skills shortage and people with skills are rightly selling them to the highest bidder. The Chancellor of the Exchequer stands at the Dispatch Box complaining about the high level of wage increases, but one reason is that the Government themselves have created a skills shortage, by destroying our training systems, which in turn means that those with the skills are demanding the highest price for them.Mrs. Mahon : Does my hon. Friend agree that it is ironic that the Government, who are attempting to privatise training with the formation of the TECs, have put in charge of the TECs the very people who failed to provide the training in the first place?
Mr. Martlew : I could not agree more with my hon. Friend. I was discussing this matter about a year ago with one of the senior managers of a Carlisle company, who asked me what I thought about TECs. I said that I was concerned that those in charge would be the very people who had neglected training in their own companies over many years. Fortunately, one or two of the individuals on the board of the Cumbrian TEC are of a high calibre, and hopefully they will be able to carry on the job. However, one of their worries, which I share, is that they will not be given the tools and money to carry out the job. In addition, they will not have the support of the work force for TECs, because there are no workers' representatives on the TECs boards, which is another mistake, and is based on dogma, not common sense.
A common-sense Government who were concerned about improving training and getting the TECs off the ground would have gone for a consensus approach, but the word "consensus" has been struck out of the dictionaries of Conservative Members. I think that the Prime Minister struck out the word, but I think that the Government will rue the day.
The Opposition have said many harsh words about youth training schemes over the years, some of which have been justified. I used to be what was called a managing agent for a youth training scheme, and I used to take great pride in helping youngsters who came to my company through that initial period from school to work.
I was not a great believer in the idea that the YTS was an ideal way to train youths, but it was better than the dole. There was no doubt that it made youngsters aware of the work ethic--it got them up in the morning, coming to work and used to working with other people. Given a reasonable level of resources and a company that did not want to make a profit out of YTS kids, the scheme just about managed to give them a decent, reasonable level of training. The company that I worked for did so ; many of the youngsters continued to work for that company, and some got apprenticeships afterwards.
To start to reduce in real terms the amount of money put into YTS schemes is an insult to those youngsters who have been unable to find employment but do not want to opt out. Many youngsters decide that they do not want to be exploited by youth training schemes and do not become involved. The youngsters who will be penalised are those who have decided to get up in the morning and do something. The Government are saying to them that they will get second-rate training, in a scheme that was not ideal to start with. The reason for reducing the amount of
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money will be lost. I hope that the Minister will tell us why he proposes a reduction in the amount of money spent on YTS youngsters. We should have been building on the resources already there, and putting in more. Most of our youngsters not going on to higher education should be going into training schemes, highly geared to giving us the skilled work force required for the 1990s. This country does not have the natural resources of many of its competitors. North sea oil will run out before long. How will we adjust our balance of payments problems if we do not have a skilled work force? Are we to become screwdriver workers in screwdriver factories for the Japanese? Why are we not opening car factories in Japan? The reason is that the Government have got the training wrong. We have not got the skills, either managerial or further down. Unless the Government start to apply themselves seriously to where the country is going and what sort of work force it will need in future, we shall become an unskilled work force, depending on Japanese, Germans and Swedes, to provide not only the factories, but the quality training. That is what we have lost.5.45 pm
I do not believe the TECs will work. We must be more
interventionist than that. We must say to employers that they must make a contribution--not a voluntary one, but a levy that they will receive back when they reach the standard required. The free market will fail this country every time in training, because it takes the short view ; training needs a long view, because it is a long-term investment. The Government give us no encouragement to believe that they have grasped that lesson. TECs are the best we have and that is why we have tabled an amendment to improve them and give them more money.
When the Labour party returns to power, which we hope will not be too long, we shall hve to provide radical solutions to revive the skills. The Conservative Government left a mess over training for us to deal with the last time we came to power. We must support TECs, which are being short- changed. I am sure that the managers and directors who came forward to help the Government feel that they have been kicked in the teeth. They were the better managers from the more progressive companies.
The ones who do not give a damn will never be caught sitting on the boards. They might be seen at the Rotary club, or somewhere like that, complaining about the standard of education that their children are getting, but they will not be among the school managers or on the TEC boards. Those people who have come forward have been kicked in the teeth and not been given the necessary money. They know that, and the Government know it. This provision provides a stop-gap solution to a long-term problem, and I hope that hon. Members will support the amendment.
Mr. Lilley : Perhaps with your compliance, Mr. Deputy Speaker, I may wind up this debate by treating it as a discussion on the amendments and the clause stand part combined, by summarising the background to TECs and responding to some of the arguments that have been raised since I previously detained the House with my thoughts. TECs are a major new initiative designed to promote local participation in training and enterprise activities.
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They are private companies with boards consisting mainly of local business, and will work under contract to the Department of Employment's Training Agency. The first TECs signed contracts in April 1990. Much of the TECs' activity will cover existing Government training programmes, such as youth training, but there will also be a discretionary local initiative fund that TECs can spend on projects of their own choice to promote training or local enterprise activities.The first 12 TECs signed contracts in April 1990, and a further 70 are at various stages of development. It is expected that over the next year, a national network of TECs will be established. TECs will work in conjunction with local enterprise agencies, where those already exist.
Mr. Ian Taylor (Esher) : Has my hon. Friend noted that one of the TECs that has been given permission under this scheme is one covering my constituency and the region of Kingston and Elmbridge? The measure before us has been welcomed by businesses in that area because it should enable them to give additional help to the TEC's training programmes that are being set up.
Mr. Lilley : I am happy to recognise that, and I am sure that it reflects the interests of the local Member. I am also happy that Hertfordshire is another area in which TECs have been established, and there are a number of others that have already made good progress.
In the absence of the special relief that the clause introduces, some TECs might have sought charitable status so that businesses could obtain tax relief on donations under existing legislation. However, not all the TECs' activities would qualify as charitable. In general, training activities could be regarded as charitable, but certain enterprise activities would not, and TECs would need to divide their activities and functions to ensure that charitable status could be obtained for the relevant part of their work, which would involve increased administrative burdens on the TECs. Hence our decision to introduce the clause.
Overall, the Government are spending £2.5 billion a year on training programmes, and the value of tax relief on companies spending must be at least as much again. The main responsibility for training must lie with employers, who need to invest in their work force. That is a message which we cannot emphasise too much. It is employers, not Government, who are best placed to judge the skills needed in their business, and to organise training accordingly. Happily, the evidence proves that that is precisely what they are increasingly doing.
The 1989 labour force survey, published on 9 March, showed that the number of employees receiving training increased by more than 70 per cent. in the five years up to 1989. Employers in both private and public sectors have been investing £20 billion a year in training.
Mr. Martlew : How does the Minister get these statistics? Are they collected in forms that land on the desks of personnel managers, who then just fill them in? If so, his jubilation is misplaced.
Mr. Lilley : The figure that I gave--£20 billion--was based on a Department of Employment publication of last year, which in turn was based on a survey originally carried out in 1986-87. It estimated the total costs of training borne by public and private employers. It was a one-off survey and a fairly significant one, which is why it
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is not repeated every year. The estimate has been updated modestly to allow for a little inflation ; the actual sum could now be more than £20 billion.It is important to recognise that companies are now spending more--a fact which should be welcomed. Such spending is a duty of companies ; and it is in their interests--that is why they are spending more. They do not do it, by and large, out of altruism. However, they can spend the money because they are now profitable. There were a number of reasons that led to the inadequacies of private provision for training, one of which was that, for a long time, industries, profits were simply not sufficient. As profits have recovered, so has spending on training.
The hon. Member for Derby, South mentioned our frequent and pleasurable exchanges on the subject of spending. I must disappoint her by saying that I enjoy them so much that I intend them to continue. The fact is that she has advocated spending more, and her hon. Friends have done so even more emphatically. She referred to the debate on public expenditure earlier this year when she claimed that her spending bids were offset by her proposals for cuts. I read the debate afterwards because I was not quite sure whether I had missed something.
It seemed to me from the text of Hansard that most of the spending cuts that she was proposing were to do with the cost of achieving privatisations. I do not agree that those amount to cuts, because if the Government were not carrying out privatisations they would lose all the revenues--
Mrs. Beckett : It looks as if I had better read the debate too, but I did talk about the way in which the Government have wasted money, particularly on marketing privatisations. From memory, the sort of areas that I had in mind were, for example, what the Government call the 2 per cent. incentive on personal pensions and what we call the 2 per cent. bribe ; the granting of tax relief on health insurance ; and so on.
Mr. Lilley : Not much would have been gained from the hon. Lady's latter point. If she is proposing more spending in the current year, which can be accommodated in the current public expenditure round, she will have to go through the same painful processes as my right hon. Friend the Chief Secretary to the Treasury and propose more cuts. We look forward with interest to what she has to offer. Otherwise, I suppose that we can only assume that she is following the old dictum that more means less.
The hon. Member for Halifax (Mrs. Mahon) said that the chair, as she referred to him, of the Blackburn TEC had threatened to resign. I understand that there has been no threat of resignation. Blackburn TEC is still negotiating its first budget, and as it is its first budget it cannot yet have been cut.
I listened to the hon. Member for Ashfield (Mr. Haynes)--he is very much the Labour party's answer to my hon. Friend the Member for Eastbourne (Mr. Gow), and I listened to him with almost as much pleasure as I do to my hon. Friend--and found everything that he said beyond criticism, except in one respect : he described me as young. I regret that that is no longer so.
The hon. Member for Carlisle (Mr. Martlew) made an interesting speech in which he referred to the old apprenticeship scheme. There is a lot of regret about its
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disappearance over the years, but it is worth considering why it disappeared. One reason was the pressure on profitability, which was of two sorts--the overall lack of profitability of British industry, and the increasing insistence on adult wages for those undergoing training. That is in marked contrast to the experience in most continental countries in which there has been a far greater differential between the pay of those undergoing training and of those who are trained and on adult wages. So we were moving in the opposite direction, with the obvious consequences.Mr. Martlew : I would not disagree with what the Minister has said. The old apprenticeship scheme needed changing from a time-served basis to a skill basis. The fact that the wages of apprentices became nearer those of skilled workers was the fault of weak management in British industry at the time.
Mr. Lilley : I am quite prepared to agree with the hon. Gentleman. I hope that industry is listening and will respond to our consensus of wisdom. None the less, we have to replace what has passed, and that is what the Government have been doing in the major programmes that they have announced.
I commend the clause to the House. I believe that it provides a useful change to the legislation ; it will allow a relief for altruistic contributions to TEC and LECs. We understand the reasons for the amendment. We have no disagreement in principle or substance, but we believe that the amendment would prove onerous if it were agreed to, so I shall be asking my hon. Friends to oppose it, albeit in a fairly friendly spirit.
Question put, That the amendment be made :--
The Committee divided : Ayes 152, Noes 244.
Division No. 207] [5.56 pm
AYES
Abbott, Ms Diane
Allen, Graham
Anderson, Donald
Archer, Rt Hon Peter
Armstrong, Hilary
Ashdown, Rt Hon Paddy
Ashley, Rt Hon Jack
Barnes, Harry (Derbyshire NE)
Barnes, Mrs Rosie (Greenwich)
Barron, Kevin
Battle, John
Beckett, Margaret
Beith, A. J.
Bidwell, Sydney
Boateng, Paul
Boyes, Roland
Bradley, Keith
Brown, Gordon (D'mline E)
Brown, Nicholas (Newcastle E)
Buchan, Norman
Buckley, George J.
Callaghan, Jim
Campbell, Menzies (Fife NE)
Campbell, Ron (Blyth Valley)
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Cartwright, John
Clark, Dr David (S Shields)
Clarke, Tom (Monklands W)
Clelland, David
Cohen, Harry
Cook, Frank (Stockton N)
Corbyn, Jeremy
Cox, Tom
Cryer, Bob
Cunningham, Dr John
Dalyell, Tam
Darling, Alistair
Davies, Ron (Caerphilly)
Davis, Terry (B'ham Hodge H'l)
Dewar, Donald
Dixon, Don
Dobson, Frank
Doran, Frank
Dunwoody, Hon Mrs Gwyneth
Eadie, Alexander
Eastham, Ken
Ewing, Harry (Falkirk E)
Fearn, Ronald
Field, Frank (Birkenhead)
Fisher, Mark
Flannery, Martin
Foot, Rt Hon Michael
Foster, Derek
Foulkes, George
Fyfe, Maria
Garrett, John (Norwich South)
Garrett, Ted (Wallsend)
Golding, Mrs Llin
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Grocott, Bruce
Harman, Ms Harriet
Heal, Mrs Sylvia
Henderson, Doug
Hoey, Ms Kate (Vauxhall)
Hogg, N. (C'nauld & Kilsyth)
Home Robertson, John
Hood, Jimmy
Howells, Geraint
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