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recent report in relation to Germany showed that it may have as many as 10 million more qualified people than Britain.

What can we see from those reports? We see, first, that we suffer major skill shortages in Britain and, secondly, that they are in the very areas where Britain's balance of payments problem is at its most acute. There could be no more established link than between the failure to invest in training and the failure of our overall economic performance.

There may be signs of change in the attitude of employers. We are pleased that the latest CBI survey shows that employers are not cutting training investment. There may be signs of improvement in the attitude of individuals, showing a greater awareness of the benefits of training. But the question is whether the Government are prepared to make that commitment to training and skills.

Even before the autumn statement, Government programmes were in major difficulties. There were cuts often of 15 to 20 per cent. in youth training programmes, and that happened right across industry. Hon. Members have received representations about national bodies cutting training places and making trainers redundant in youth training. In that sector, there is already a serious crisis. In recent weeks, the Industrial Society has published a report saying that, four years after the National Council for Vocational Qualifications was set up, 58 per cent. of personnel managers had not heard of the new national vocational qualification system, let alone taking part in it.

As for the industry training bodies, the sectoral bodies vital for Britain's future, a report published by the Department showed that only just over half of them were fully effective in their sectors. Yet the former Secretary of State correctly said, when setting the targets for the upgrading of skills, that all those sectoral bodies should be fully effective by the end of 1992.

The Select Committee on Employment said in its May report in relation to training for the unemployed that nobody even knew the number of employment trainees who got proper qualifications, and that there should be an increase in spending per trainee. So before coming to the autumn statement and considering the response of the Government, we see that Britain has a low level of skills, that it is experiencing major skill shortages, that that is an absolute phenomenon compared with competitor countries, and that, although individuals and employers are showing additional commitment, the Government are already experiencing difficulties with their programmes.

That is the background against which we review the autumn statement. What is the Government's response to the skills crisis? In the coming two years, they will cut training in Britian by £500 million. It is scarcely conceivable to imagine anything less responsible or less in the future interest of the country ; £300 million, 10 per cent. of the budget, will be cut in the next year alone. Altogether, from 1987 to 1992, we estimate that £1.6 billion, or one third of the entire budget, will have been cut. Taking account of inflation this year, not even the Department's budget will stand still compared with last year's plans. Even worse, the cuts will be targeted on the long-term unemployed, the most vulnerable in society.

The Secretary of State says that he simply wishes to change the shape of the employment training programme, but the criticism of employment training was that it was not overfunded but underfunded. Employment training

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was set up not because people did not believe training to be essential for the unemployed but because they thought training was critical to enable them to get back to work.

A recent OECD report called for an increase in the training budget devoted to the long-term unemployed. To replace employment training with a better scheme would be one thing ; to cut employment training and put nothing in its place is a cruel betrayal of the most vulnerable in society.

Those cuts will be profoundly damaging to training. Even if they were justified in the programmes, as the Minister said, and we could save resources in existing systems, surely any sensible Government would not use that as an excuse to take that money out of the training budget, but would use it in the training budget to upgrade the skills of people in this country.

Let us think of the uses to which, with a little imagination, we could have put that additional £500 million. We could have had a new initiative to improve the quality of training and the system of national qualifications, and a programme to target women returners and extend child care facilities. We could have revitalised the sectoral training organisations that are not effective at present. We could have had a proper, in-depth analysis of skill shortages, and a crash programme to deal with them, a system of incentives to upgrade the training of those already in work, an initiative to improve management training, one of the core skills that we so desperately need to improve in this country.

Those are some of the missed opportunities of the autumn statement. The stark hypocrisy of the Government's position is surely shown by the fact that the very advice they tender to industry--"When in a recession, don't cut your training budgets"--is advice that the Government have ignored.

Reading ministerial comments, one might think that our competitors were ahead but that we were catching up. That is a fundamental error. Our competitors are not standing still. Italy is increasing its spending on training this year. Germany has conducted a review of its dual system of apprenticeships to see how it can be made more flexible, major changes are being made with the active consent of unions and employers, and standards are being set even higher than before. The French intend to increase spending on training in the next two years by more than 35 per cent., and are launching new initiatives for people in work and young people.

Mr. John Butcher (Coventry, South-West) : Will the hon. Gentleman give way?

Mr. Blair : I am sorry, but I must get on.

We must be the only country in the EC that will be cutting investment in training in the very year before the single European market. In Japan, the face of training is undergoing another transformation. The technology revolution is being replaced by the people revolution, in which the development of the individual at the workplace, of which his or her learning is merely a part, becomes the pivot on which each enterprise turns.

To inculcate that new culture in Britain requires a new approach, a revolution in attitude. We believe that it must have at its heart two principles. First, it will require the

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active involvement of Government, in partnership with industry. Training and enterprise councils cannot become a means of passing responsibility from Government to industry but should be a means of sharing that responsibility within a national training policy. Secondly, it cannot be achieved by a Government dogmatically wedded to a purely voluntary approach. Tory Ministers will exhort, but not oblige. They are cheerleaders, but not players.

Every year, 100,000 or more young people leave school and go into work without any training. In France or Germany, that would be unthinkable, if not unlawful. What is good enough for France or Germany should be good enough for Britain.

Mr. Butcher rose --

Mr. Blair : Our belief is that training cannot be left to market forces. On the contrary, the failure to train has been a failure of the market, and that failure needs urgent action not complacency. Less than a year ago, the previous Secretary of State described Britain's skills crisis as a mountain to climb, but such language has gone. Instead, we are told by the new Secretary of State that we face "a golden decade". I confess that when I first heard the Secretary of State say that on the "Today" programme, I thought it was a mere passing eccentricity, a piece of early morning exuberance, but he repeats it every time he speaks.

Presumably a golden decade starts with a golden year, which presumably starts with a golden month. Let us look at the autumn statement this month : falling investment, falling output, rising unemployment and a cut in the Department's budget. What a way to start a golden decade. That sort of hyperbole is the final refuge of a failed Government who have lost the will to tackle our problems and who fall back on denying their existence. A golden decade cannot be begun by a party which, as we saw earlier in the speech by the former deputy Prime Minister, is fundamentally and irrevocably split on the issues of the day. This is no longer just a party of competing personalities ; it is a party of warring factions locked into internal conflict, while the interests of the country go unattended. If it were merely that the Prime Minister was isolated from her party, the solution for the nation would be clear : remove the Prime Minister. But when the Prime Minister is seen as the leader of a wing of a party divided and isolated from the country, then the only solution is to remove that party from government. That is why I say that this Government in all their policies--not only in education and training, but in the health service, rising interest rates, inflation, the balance of payments and rising unemployment--have created no social cohesion and no economic prosperity. They are no longer fit to govern the country. They are out of step abroad and out of touch at home, and the sooner they are out of office the better for the country.

9.40 pm

The Secretary of State for Employment (Mr. Michael Howard) : I begin by congratulating the hon. Members for Knowsley, South (Mr. O'Hara) and for Eastbourne (Mr. Bellotti) on their excellent maiden speeches. All hon. Members will want to associate themselves with the tributes that they paid to their predecessors, Ian Gow and

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Sean Hughes. We miss them both deeply and they will continue to be missed for as long as there are Members in this place who remember them.

It is always sensible to consider the charges and counter-charges that we hear in debates such as this in context and proper perspective. My right hon. and learned Friend the Secretary of State for Education and Science outlined at the start of the debate the great strides forward that we have already made in education and the foundations that we have laid for further radical improvements in the near future. Most speeches in the debate were directed to education, and my right hon. and learned Friend will want to give them careful consideration.

In training policy, too, despite the objections of the hon. Member for Sedgefield (Mr. Blair), we have made great progress in recent years. We are the only Government in the whole of Europe to guarantee a two-year training place to every young person who needs it. Investment in training by employers has risen to record levels. In recent years, employer contributions to youth training have increased fourfold and the number of employees receiving on-the-job training has risen by 70 per cent. in five years. A higher proportion of our young people have degrees than do those of France, Germany or Japan. We have attained a rate of productive growth over the past decade which outstrips that of every other major country except Japan, and we have achieved a record number of jobs--2 million more than in 1979.

Of course, none of this means that we can rest on our laurels. We have secured a sharp increase in the proportion of our youngsters who go into further education or training at the age of 16, but we need to do better still. So we shall introduce a world first next April--training vouchers. [Laughter.] Opposition Members laugh, but training vouchers for young school leavers are designed to achieve precisely what we were asked to consider by the hon. Member for Wolverhampton, South-East (Mr. Turner). They are designed precisely to enable 16 and 17-year-old school leavers to take advantage of the training opportunities that are available to them. In 11 pilot areas next year, school leavers will each be issued with a voucher that they can use to purchase training of their choice for the career of their choice. Each voucher will have a face value, typically of about £1,000, and the value of some will be considerably more than that. Those vouchers will entitle young people to training at further education colleges or with other training providers, at the workplace during the day or elsewhere during the evening.

As my hon. Friend the Member for Stamford and Spalding (Mr. Davies) appreciated, this voucher initiative will give young people the choice, the buying power and the incentive to train. I hope and expect that the 11 pilot projects will succeed, giving us an opportunity to consider expanding them to other parts of the country.

Mr. Turner : I should not like to be excommunicated from my beloved movement. Will the Secretary of State confirm that I never gave him any reason to believe that I support vouchers? No hon. Member could say that in my speech I said that I supported that part of the Government's policy. I hope that all hon. Members will note that.

Hon. Members : Withdraw.

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Mr. Howard : I did not accuse the hon. Gentleman of favouring vouchers. He did what his party always does. It identifies the problem but never identifies a solution. The hon. Gentleman waxed eloquent on the problem. We have a solution to that problem and we are implementing it. We shall deal with the important problem that the hon. Gentleman was entirely right to identify.

The amendment in the name of the Leader of the Opposition speaks of choice and opportunity. We are creating choice and opportunity of a kind and to an extent that young people in this country have never had before. The vouchers will be issued by training and enterprise councils. Right across the country, more than 1,200 top business leaders, all of them chairmen or chief executives of their own companies, have come together to form training and enterprise councils. Those TECs represent an unprecedented degree of co-operation between Government and employers who are dedicated to the cause of transforming attitudes towards training and enterprise in their areas.

The hon. Member for Wolverhampton, South-East was right when he said that 82 local training and enterprise councils do not represent a unified approach to training. We think that training should reflect local circumstances and that the way to tackle the problem is to give local training and enterprise councils the discretion that they need to meet circumstances in their own areas. My hon. Friend the Member for Stamford and Spalding was entirely right to emphasise the role of employers in this exercise.

Miss Emma Nicholson (Torridge and Devon, West) : Does my right hon. and learned Friend agree that one of the ways that young people will use these welcome vouchers will be for computer training? Does he further agree that the creation of information technology centres is one of those excellent training initiatives that the Labour party is determined to abolish?

Mr. Howard : My hon. Friend is right. The quality of training is steadily increasing and, as employer contributions to it steadily increase, the quality will improve even more.

All 82 training and enterprise councils in England and Wales have now entered at least the development phase, completing the national network a full two years ahead of schedule. Half of them are now fully operational. I pay tribute to my predecessor, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), who is in his place. This was his initiative, and we owe him a great deal for the striking progress that has been made.

Training and enterprise councils will ensure that decisions about training policy are taken in the most responsive and effective way, because they will be taken at local level by employers who know the jobs that are available, those that will become available and the sort of skills that are needed to fill them. They are bringing into this sector the enthusiasm, the dynamism and the efficiency of the private sector. They will ensure that employer commitment to training continues to increase, that the training provided for young people and the unemployed leads directly into jobs, and that small and growing businesses receive the local support and advice they need as they get off the ground.

The hon. Members for Blackburn (Mr. Straw) and for Sedgefield referred to the CBI's target. Both of them were

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sadly out of date. Last month, the CBI published its consultative proposals on targets. It expressed the hope that the Government would welcome this initiative. Within days, I had issued my strategic guidance for the-- [Interruption.]

Mr. Speaker : Order. Will those hon. Members having private conversations please take them elsewhere?

Mr. Howard : In that guidance, I welcomed the CBI's initiative. I did what it suggested would be appropriate and I defined the responsibilities of all those who have a role in this

sector--Government, employers, the TECs, and training providers. The hon. Member for Sedgefield waxed indignant about the autumn statement. Let me put the record straight. Next year, the Government will be spending broadly as much on training, enterprise and vocational education as we are spending this year ; two and a half times as much, in real terms, on training as the last Labour Government and a considerably higher proportion of GDP on Government investment than the United States, Germany or Japan.

Mr. Rhodri Morgan (Cardiff, West) : Will the right hon. and learned Gentleman give way?

Mr. Howard : The hon. Member for Sedgefield did not give way once, I have given way twice, and I must get on.

We shall be increasing planned spending on youth training and the technical and vocational education initiative, and providing £18 million more for the areas piloting training vouchers for young people.

We have secured major increases in the financial flexibilities available to training and enterprise councils, reflecting the major priority of the TECs themselves, and ensuring that they will be able to secure significant increases in value for money for the taxpayer. They will, for example, be paid by results--by the number of people they train who get jobs or qualifications--for at least 25 per cent. of their youth training and employment training work.

There will no longer be any limits on the periods of training in ET or YT, and they will have a single flexible budget for encouraging enterprise in their local area.

We have also significantly increased the responsibilities of the TECs. They will take charge of our £105 million work-related further education programme. They will be able to bid for some additional resources to launch or extend education-business partnerships. TECs will have a powerful influence over the way in which the TVEI develops in our schools. This package reflects and protects the priorities that the training and enterprise councils wanted themselves.

We have also reviewed the provision of our services to the long-term unemployed. Recent detailed surveys show that up to half of the long-term unemployed already have qualifications, often matching those required to fill local vacancies. We have taken into account sharp falls in the level of long-term unemployment by 60 per cent. since 1986 and by 20 per cent. over the last year alone. Against that background, we have given fresh consideration to the ways in which we can best help the unemployed back to work. We are widening the range of services available to them. We are creating 100,000 new job opportunities to

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help people back into work. We have stressed that we will fully honour our guarantees under youth training and employment training. We have gone further, expanding the aim group to include for the first time unemployed people with disabilities.

The hon. Member for Sedgefield has been very agitated about these changes. So let me ask him this : is he saying that we should never review the ways in which we can best help the unemployed back to work? Is he saying that, if the results of that review show that we can help them more effectively at lower cost, we should not implement it? Is he saying that we should have ignored the clear evidence that training is not always the right means to help the long-term unemployed back into work? Should we encourage people to go on training courses that may not be appropriate for their needs, when other more effective programmes could be offered to help them? There are clear choices about training policy facing this country, and the Government's view is clear. If the Opposition are to carry any credibility, they must tell the House where they stand. For example, do they believe in a voluntary or a compulsory approach? For 20 years, we had a compulsory approach to training in this country. We had levies, we had training boards --we had all the panoply of coercion. It failed. Does the Labour party want to return to that? Labour Members appear to be incapable of making up their minds on the issue.

Last year, the Opposition's policy review was clear and explicit on these matters. It stated that a Labour Government would introduce a jobs tax of 0.5 per cent. of payroll to be paid "by all enterprises". On 6 February, the Leader of the Opposition made a speech in which he said that the Labour party would listen to the views of business men in making up its mind about the jobs tax. The CBI then made its view of the jobs tax very clear. It said that it would be

"a nuisance and an irrelevance."

On 12 March, the hon. Members for Sedgefield and for Blackburn launched a policy document on training which did not mention the jobs tax. Two weeks later, on 26 March, the commitment returned. When I challenged the hon. Member for Sedgefield on it in the House, he even said that it would be a policy of "sanctions" against employers. Then the Leader of the Opposition made a speech which we were given to understand meant that the commitment to a levy had been dropped. The Labour party brings to this issue a huge amount of confusion. I hope that the hon. Member for Sedgefield will take every opportunity to explain to the House and the nation exactly where it stands on this issue.

I have already described to the House the initiative that we have taken in setting up training and enterprise councils throughout the country. The hon. Member for Sedgefield has said that he supports the TECs because--I quote his welcome words--

"there is one great advantage and that is that they have managed to generate an awful lot of enthusiasm among employers".

That, the hon. Gentleman says, is "essential".

The essence of the TECs, and the reason whey they have generated such enthusiasm among employers, is that they are employer-led bodies. That is because employers are best placed to identify the training and enterprise needs of their areas. Does the hon. Member for Sedgefield support this approach, or does he support the view which is set out in his policy document that these bodies should

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be representative? Does he support the view of the hon. Member for Makerfield (Mr. McCartney), who said that these bodies should be representative and that they should be packed with trade unionists, local authority delegates and others, to dilute the leading role of employers?

The hon. Member for Sedgefield cannot have it both ways. Will he commit himself to support TECs as they are now composed or does he intend to change their very nature? Will he tell us today where he stands?

The policy document of the hon. Member for Sedgefield states that TECs are to be the arms of a centralised training organisation called Skills UK, which the Opposition propose to set up. It is the essence of TECs, however, that they should be independent. Does the hon. Gentleman support this approach? Or does he support his party's policy document, in which it is stated that TECs should be the arms of Skills UK? Will he tell us today where he stands? Will he tell us now? I hope that he will disown his policy document. I hope that we can have consensus on this vital issue. These are crucial questions and we are entitled to have them answered.

The Labour party's record on training is a lamentable one. That applies to the record of Labour Governments and to the Labour party's record in opposition. The Opposition have opposed every training initiative that the Government have introduced. They opposed YTS, YT and ET.

A few days ago, I had a constructive encounter with the hon. Member for Blackburn. The hon. Gentleman came to see me because he was concerned about the funding of TVEI in his constituency. He was concerned that his constituents should not be deprived of the benefits of this excellent programme. Happily, I was able to set his fears at rest. But what happened when we introduced TVEI? The Labour party conference passed a resolution condemning it as

"a divisive new form of educational segregation".

The Opposition's shadow education spokesman of the time went throughout the country denouncing it because he said it was fit only "for hewers of wood and drawers of water".

That shadow spokesman is now the Leader of the Opposition. The Opposition amendment speaks of choice and opportunity. We have provided an unprecedented range of choice and opportunity. Each choice and each opportunity has been opposed by the Opposition-- Mr. Derek Foster (Bishop Auckland) rose in his place and claimed to move, That the Question be now put.

Question put and agreed to.

Question put accordingly, That the amendment be made :-- The House divided : Ayes 225, Noes 337.

Division No. 1] [ 10 pm

AYES

Abbott, Ms Diane

Allen, Graham

Alton, David

Anderson, Donald

Archer, Rt Hon Peter

Armstrong, Hilary

Ashley, Rt Hon Jack

Ashton, Joe

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barnes, Mrs Rosie (Greenwich)

Barron, Kevin

Battle, John

Beckett, Margaret

Beith, A. J.

Bell, Stuart

Bellotti, David

Benn, Rt Hon Tony

Bennett, A. F. (D'nt'n & R'dish)

Benton, Joseph

Bermingham, Gerald

Bidwell, Sydney

Blair, Tony

Blunkett, David

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Column 544

Boateng, Paul

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (D'mline E)

Brown, Nicholas (Newcastle E)

Buckley, George J.

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell-Savours, D. N.

Canavan, Dennis

Carlile, Alex (Mont'g)

Cartwright, John

Clark, Dr David (S Shields)

Clay, Bob

Clelland, David

Clwyd, Mrs Ann

Cohen, Harry

Coleman, Donald

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Cox, Tom

Crowther, Stan

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Dr John

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham Hodge H'l)

Dixon, Don

Dobson, Frank

Doran, Frank

Douglas, Dick

Duffy, A. E. P.

Dunnachie, Jimmy

Eadie, Alexander

Eastham, Ken

Evans, John (St Helens N)

Ewing, Harry (Falkirk E)

Fatchett, Derek

Fearn, Ronald

Field, Frank (Birkenhead)

Fields, Terry (L'pool B G'n)

Fisher, Mark

Flannery, Martin

Flynn, Paul

Foot, Rt Hon Michael

Foster, Derek

Foulkes, George

Fraser, John

Fyfe, Maria

Galloway, George

Garrett, John (Norwich South)

George, Bruce

Gilbert, Rt Hon Dr John

Gordon, Mildred

Gould, Bryan

Graham, Thomas

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Hardy, Peter

Harman, Ms Harriet

Haynes, Frank

Heal, Mrs Sylvia

Healey, Rt Hon Denis

Henderson, Doug

Hinchliffe, David

Hoey, Ms Kate (Vauxhall)

Hogg, N. (C'nauld & Kilsyth)

Home Robertson, John

Hood, Jimmy

Howarth, George (Knowsley N)

Howell, Rt Hon D. (S'heath)

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, John (Coventry NE)

Hughes, Robert (Aberdeen N)

Hughes, Roy (Newport E)

Illsley, Eric

Ingram, Adam

Janner, Greville

Johnston, Sir Russell

Jones, Barry (Alyn & Deeside)

Jones, Ieuan (Ynys Mo n)

Jones, Martyn (Clwyd S W)

Kaufman, Rt Hon Gerald

Kennedy, Charles

Kinnock, Rt Hon Neil

Kirkwood, Archy

Lambie, David

Lamond, James

Leadbitter, Ted

Leighton, Ron

Lestor, Joan (Eccles)

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Livsey, Richard

Lloyd, Tony (Stretford)

Lofthouse, Geoffrey

Loyden, Eddie

McAllion, John

McAvoy, Thomas

McCartney, Ian

Macdonald, Calum A.

McKelvey, William

McLeish, Henry

Maclennan, Robert

McNamara, Kevin

McWilliam, John

Madden, Max

Mahon, Mrs Alice

Marek, Dr John

Marshall, David (Shettleston)

Marshall, Jim (Leicester S)

Martin, Michael J. (Springburn)

Martlew, Eric

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Mitchell, Austin (G't Grimsby)

Moonie, Dr Lewis

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon A. (W'shawe)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mullin, Chris

Murphy, Paul

Nellist, Dave

Oakes, Rt Hon Gordon

O'Brien, William

O'Hara, Edward

O'Neill, Martin

Orme, Rt Hon Stanley

Paisley, Rev Ian

Parry, Robert

Patchett, Terry

Pendry, Tom

Pike, Peter L.

Powell, Ray (Ogmore)

Prescott, John

Primarolo, Dawn

Quin, Ms Joyce

Radice, Giles

Randall, Stuart

Rees, Rt Hon Merlyn

Reid, Dr John

Richardson, Jo

Robinson, Geoffrey

Rogers, Allan

Rooney, Terence

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