House of Commons Hansard Debates for 6 Feb 1991

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imagination, we could not have put together a programme for management training, for a crash course for TECs to deal with skilled shortages, for improving the profile for national vocational qualifications? Any of these things could have been done, with foresight, imagination and a restored budget.

At a time of recession, investment in skills must be maintained and increased. Is that not the case that the Government take out to industry day after day? How can the Secretary of State expect industry to heed his call to keep up its training investment when the Government set a bad example by cutting their training investment, as we can see from the recently announced figures? Only a Tory Government could have allowed Britain, the one country with the unlooked-for bonus of North sea oil, the one country with the God-given means to invest in skills and training and to prepare for our future, to be the one country that, before the single European market takes effect, will cut training investment. That is why we condemn the Government.

The Government are not merely not investing in training ; they are incapable of understanding that training policy cannot be a response to the short-term changes in the labour market. The essence of any training policy is that it should plan for the long term. It is not simply that long-term planning is incompatible with the Government's dogmatic obsession with market forces : it is that it requires a different attitude of government, a different culture in industry, a different relationship between Government and industry.

The Government's failures in respect of training are not just those of policy, gross though they are ; they are fundamental failures of leadership on a vital issue for our industrial future. If the Secretary of State really meant what he said about supporting our idea for a training revolution, he would be a spectator, not an extra in the crowd. He would be leading that revolution, creating the partnership in industry necessary to achieve it, using the power of government to legislate for our young people, providing the incentive for employers to upgrade skills, extending his Department's training initiatives.

Other countries are not standing still. Between 1988 and 1990, when we have lost some £1,000 million from our training budget, French expenditure on training will rise by about 30 per cent. in real terms. In Italy it is also rising. We are not struggling to catch up with our competitors parked by the roadside. The distance that we have to travel is not between us and some fixed point. We have to catch up with a vehicle that is moving ahead fast, with the driver's foot on the accelerator. When we consider where we are and where we need to be, we can see that we are not even in the right business of getting our skills training right.

The activities of our competitors are the product not just of their national pride but of economic necessity, because they know that the world of work is changing. This is the age in which the person in the workplace will become the pivot upon which the success of the enterprise turns. It is not just that we face skill shortages at a time of rising unemployment ; it is not only that that is in the areas in which we most directly need to compete : it is in those very areas that the demand for skilled labour will grow.

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Any analysis of occupations in the future shows that it will be in the professional occupations, the skilled manual occupations, that employment will grow, and it is in the unskilled jobs that it will fall. Most other countries know that. They appreciate that the markets of the future will be high-value-added markets where the advanced technology is applied by the most skilled people. The technology revolution of the 1960s will give way to the people revolution of the 1990s. The products from Japan and Germany are increasingly customised, individualised, precision goods, leaving mass production to other, less- developed nations.

How long will it be before we have debates in the House where the adverse comparisons that we make are not with Germany, France and Japan but with Hong Kong, Taiwan, South Korea and Indonesia? That must not be allowed to happen, yet it is happening under this Government. It is because of that, because they have no answers to the recession or the problems that lie beneath it, because they have mismanaged the short term and failed the long term, that Britain needs a new start with new policies for the new challenges we face, one which combines commitment and a sense of urgency. The Government will never complete the task. That will be left to a Labour Government.

4.18 pm

The Secretary of State for Employment (Mr. Michael Howard) : I beg to move, to leave out from "House" to the end of the Question and to add instead thereof :

welcomes the Government's creation of a climate and strategic framework which is encouraging employers to improve their already substantial role in the national training effort, in which participation in training and the attainment of skills is rising, and which is set fair to meet the United Kingdom's skill needs in the 1990s and beyond.'.

We have had this afternoon from the hon. Member for Sedgefield (Mr. Blair) the usual litany of woe which he brings to our debates on this subject.

The Government's training policy is designed precisely to achieve the objectives that are set out in the Opposition's motion--the need to boost Britain's skills and to provide for our industrial future. We are addressing those objectives, we are succeeding in achieving them, and the hon. Gentleman's speeches would have a good deal more credibility if he were to recognise and give credit for the extent to which that is the case.

If hon. Members want to test the truth of what I have just said, all they need do is take as their text a speech made last week by the hon. Member for Sedgefield. In that speech, he set out the policy of the Labour party towards the training of young people. He said that training should be based on qualifications gained, not on time served. That is precisely our policy. It is a policy that we have put into effect. Since last spring, youth training has imposed no time limit on the training offered to young people and has been designed to ensure that those who complete it reach a minimum qualification. The hon. Gentleman also said that qualifications for young people undertaking training should be certified by the National Council for Vocational Qualifications. I agree. Great progress towards the achievement of a national vocational qualification for every young person in training is already being made. In fact, more than two thirds of those who complete youth training already gain a vocational qualification.

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The hon. Gentleman also called for closer integration of education and training. Almost 10 years ago, the Government launched the technical and vocational education initiative to achieve precisely the aim of bringing education and training closer together. We did so at a time when the right hon. Member for Islwyn (Mr. Kinnock), then his party spokesman on education--I am delighted that he is with us--was parading up and down the country denouncing vocational education as fit only for second-class citizens and appropriate--he has always had the gift for a phrase--only for

"hewers of wood and drawers of water".

That was the phrase used by the Leader of the Opposition about TVEI. But I am always delighted to welcome late converts to the truth, and I am glad that the right hon. Gentleman recognises the merits of what we are doing.

It would be difficult to gain the impression from the speech that we have just heard by the hon. Member for Sedgefield that most of the policies which he advocates on youth training are already in place. Yet that is the fact : we have given all 16 and 17-year-olds a right to training if they want it--the only country in Europe to do so. No such right existed under the last Labour Government.

The fact is that nine out of 10 of our 16-year-olds are today undertaking education or training--an improvement of a third since Labour was in power. We will have in place by the end of next year a system of vocational qualifications covering 80 per cent. of the occupations in Britain, which will offer every worker in those occupations a ladder of opportunity which they can climb rung by rung and which will make it possible for them to train towards a qualification.

Of course, the availability of a national system of job-related qualifications is relevant not only to our young people but to our adult population, employed and unemployed, and there is a mass of evidence that our people are taking full advantage of the opportunities available to them.

Mr. Ian Bruce : Before my right hon. and learned Friend leaves recent speeches by Labour Members and the speech of the hon. Member for Sedgefield (Mr. Blair), can he tell us whether there was any mention in that speech of the Labour party's decision to levy on every employer a large slice of turnover, to be given to bureaucracy, who would meddle yet again in training which ought to be done by employers?

Mr. Howard : I was astonished by the total failure of the hon. Member for Sedgefield to say a word in his speech about the training levy, which he announced just two days ago and of which our newspapers yesterday were full. The reason why he did not say anything about it today might be that the Leader of the Opposition was sitting on the Front Bench. On 4 April last year, the Leader of the Opposition dropped the levy from his party's policy. Two days ago, we heard that the hon. Member for Sedgefield was bringing it back. No doubt because the leader of his party was sitting next to him, he did not feel able to say a word about it today.

Employers are spending about £20 billion a year on training. The number of employees that they trained increased by about 70 per cent. between 1984 and 1989. The new training and enterprise councils are two years ahead of schedule, with 1,200 business people of the highest calibre engaged in an unprecedented partnership with Government.

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We launched a major new initiative, "investors in people", which will increase employer commitment to training still further in the years ahead, and which, I was happy to note, obtained the enthusiastic endorsement of the hon. Member for Sedgefield in his remarks on Monday.

Most encouraging of all, perhaps, the latest Confederation of British Industry quarterly trends survey indicated that, even in these difficult times, more than four times as many companies intend to maintain or increase their investment in training as intend to reduce it. If ever there was evidence that we are succeeding in revolutionising employers' attitudes to training, that survey proves it.

Mr. Andrew Mitchell : The Opposition's confusion over levies is mirrored--despite the remarks of the hon. Member for Sedgefield (Mr. Blair) in response to my earlier intervention in respect of training and enterprise councils. The hon. Gentleman denied that there was any lack of support for TECs among members of the Opposition Front Bench, but, on 30 December 1990, the hon. Member for Fife, Central (Mr. McLeish) said on BBC Radio Sheffield that TECs placed

"a completely false emphasis on the nation's needs."

Is it not the case that the same Opposition confusion exists in respect of TECs as it does in respect of levies?

Mr. Howard : My hon. Friend is right. Confusion runs through all Labour party training policies, and I shall comment later on the remarks made by the hon. Member for Fife, Central (Mr. McLeish).

Dr. Kim Howells : Is the right hon. and learned Gentleman completely satisfied with the nation's training? If so, is that the cause of the complacency that has led to his decision to cut the money available for that activity?

Mr. Howard : I confess to some disappointment, because I had hoped that the hon. Member for Pontypridd (Dr. Howells) was about to clear up the confusion surrounding the Opposition's policies. Of course there is more to be done with training, and of course we are in the middle of a revolution that is not yet complete. Of course we must do more to transform the attitudes of employers and individuals. Nevertheless, we ought to acknowledge that progress has already been made, and that the right policies are in place to continue and to complete that progress.

Mr. Blair : Does the Secretary of State agree with his predecessor's comment : "We have a mountain to climb"? If so, why is he cutting training expenditure?

Mr. Howard : If the hon. Gentleman will contain himself for a moment, I will address that point.

Of course the Government also have a crucial part to play. Expenditure by my Department--as my hon. Friend the Member for Teignbridge (Mr. Nicholls) pointed out--has risen from the £377 million a year spent by Labour when in office to £2.6 billion a year today--six times more in cash terms, and two and a half times more in real terms. That is why we increased the planned spending on youth training for the coming year. That is why we welcome with enthusiasm the undoubted improvement in the quality of training that has occurred.

Mr. Matthew Taylor (Truro) : Much of the criticism so far has centred on the Government's failure to spend enough on training. Will the right hon. and learned

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Gentleman comment on reports that criticised the administrative procedures used by some TECs, whose consequences included mispayments? That is an important matter, whatever the overall issue. Can the Secretary of State give the average cost for each non- vocational qualification course, to level 3 or equivalent? Some very high figures have been circulated.

Mr. Howard : On the first of the hon. Gentleman's questions, he will appreciate that the deficiencies to which he referred were identified by the audit arrangements, which were instituted by my Department. The information which became available a few days ago is evidence of the effectiveness of those audit arrangements. They will continue to remain in place, and those weaknesses will be remedied, because the TECs will improve their administrative arrangements to ensure that those difficulties do not recur. That is already happening.

Mr. Matthew Taylor : I am sure that that is what the Minister wants to happen. One of the worries about TECs is that, once one is in place, there are precious few ways in which Ministers can regain control of the organisation if it is badly managed. That is partly because, in effect, it is a self-perpetuating organisation. How does the Minister intend to exert control on TECs which are making the sort of mistakes--deliberate or otherwise--which appear to have been revealed by the Government's audit?

Mr. Howard : The audit arrangements will continue, and TECs will continue to have to operate in accordance with the contracts that they signed with me. A considerable range of monitoring arrangements exist to ensure that they continue to provide the high-quality training that we intend them to provide.

As my hon. Friend the Member for Teignbridge said in his intervention, each and every initiative which has led to the improvements in training in this country in recent years has been opposed by the Opposition. They opposed the technical and vocational education initiative when it was launched. They opposed employment training at their 1988 party conference, and called on their local authorities to boycott it, which 13 Labour-controlled local authorities did. Now the Opposition admit that they were wrong and they seek to pose as the defenders of employment training. The Opposition opposed training and enterprise councils when they were announced by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), who is in the Chamber today. Now they admit that they were wrong and they support them--at least, the hon. Member for Sedgefield says they support them. In a moment, we shall consider the extent to which the Opposition speak with one voice on training and enterprise councils.

Time and time again, the Opposition have simply copied our policies, after a respectable period of time has elapsed, and ditched their own. This week the hon. Member for Sedgefield placed our "investors in people" initiative at the centre of his latest proposals. The hon. Member spoke at length about the alterations in training funding that we should be making from next April. Not surprisingly for him, he did not refer once to the significant increase that we shall be making in planned spending on youth training. He did not refer to the transfer of responsibility and money for work-related further

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education to the training and enterprise councils, and he left out altogether any reference to the important additional flexibilities that will be given to TECs to increase the value for the taxpayer of the investment that we are making in training.

Perhaps that is because the hon. Gentleman agrees with his five Front-Bench colleagues, who signed an early-day motion a few weeks ago, describing as "disasters" those flexibilities requested by training and enterprise councils--and warmly welcomed by TECs.

Mr. Bob Cryer (Bradford, South) : Could the Minister explain the flexibilities that he gave to skill centres when he handed over £14 million to his friends and to friends of the Tory party, which resulted in the flexibility to close down a fair proportion of the skill centres, to sell off the sites, because they were also handed over free and gratis, and to sell off the machinery, other training equipment and facilities? What benefit is that for skill training?

Mr. Howard : We transferred skill centres, which had been making a substantial loss for some time, to the private sector because we were convinced that that was the way in which they could provide more efficient training than they had previously made available. The evidence is that that is precisely what has happened.

The hon. Member for Sedgefield mentioned changes in funding of employment training. The fact of the matter is that he does not have a leg to stand on when it comes to discussing funding. We might be able to take what he says a little more seriously if he had succeeded in persuading the shadow Chief Secretary that training would be one of the areas on which Labour would immediately increase spending. He constantly tried to give the impression that that would be the case. However, we know that it is not the case : the hon. Member for Derby, South (Mrs. Beckett) keeps telling us that it is not the case ; the Leader of the Opposition keeps telling us that it is not the case. Training, they tell us, is something on which they hope to spend more as resources allow. I fear, Madam Deputy Speaker, that if a Labour Government ever returned to power and you were waiting for "resources to allow" you would have to be very patient.

Mr. Thomas Graham (Renfrew, West and Inverclyde) : Does the Secretary of State realise that, in Renfrewshire, our young folk were guaranteed a training place? That has never come about, however. The places cannot be filled. Does he also realise that the money to finance training for my constituents has been cut?

Mr. Howard : The hon. Gentleman is talking about the youth training guarantee. That guarantee applies and will continue to apply, and young people who cannot find jobs will continue to be guaranteed a training place. As I said earlier, this is the only country in Europe to guarantee two years' training for all 16 and 17-year-old school leavers who cannot find jobs.

We have explained many times the reasons behind our decision to alter the funding of employment training next year. I do not expect Opposition Members to understand, because to them the unemployed remain a mass of undifferentiated people to be lumped into a category, used for political purposes and treated as a lumpen proletariat. We take a different attitude. We believe that the unemployed deserve to be treated as individuals, and we want to give them individual help. That is why, for the first

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time, since January this year every person who signs on at an unemployment benefit office is interviewed for up to three-quarters of an hour, and receives an individual back-to-work plan tailored to his individual circumstances and showing him the best route back to work.

That is why we have taken heed of the detailed studies that we have conducted into the local labour markets in Bristol, London and the west midlands, which clearly showed that a significant proportion of the long- term unemployed already possessed the qualifications to match the vacancies in their areas. It has become very clear that, for many people, a lack of skills is not the prime obstacle to finding a job : for many, the main difficulty is lack of morale or lack of motivation. That is why we are determined to provide the unemployed with the widest possible range of help to assist them to return to work as quickly as possible.

Mr. John P. Smith (Vale of Glamorgan) : The Secretary of State has mentioned attitudes to the unemployed, and the way in which they are treated as a homogeneous mass. Will he explain why, in September 1982, the Government--for some inexplicable reason--stopped conducting an occupational analysis of the unemployed and keeping the statistics?

Mr. Howard : I must confess that my memory of these matters does not go back to September 1982. If the hon. Gentleman was listening to what I was saying, however, and understanding the information that a range of help was now available for people who had lost their jobs, he will know that that range is wider than it has ever been before. Because we want to ensure that we provide a wide range of help, we shall be increasing the number of places at job clubs, and in the job interview guarantee scheme, by up to 100,000 next year. Employment training, on which we shall still be spending £750 million next year, will have an important part to play. Training, however, is not the only, or always the best, way in which we can help people without jobs back into the world of work.

You would never guess, Madam Deputy Speaker, from the language of the Opposition, that those who lost their jobs when unemployment doubled under the last Labour Government had no access to employment training or a restart interview, no chance of a place in a job club, no prospect of assistance through the job interview guarantee scheme and no guarantee of an in-depth interview with a new client adviser as soon as they registered as unemployed. The present Government introduced this comprehensive package of assistance for the unemployed, and created the conditions for a record number of jobs--2 million more than existed in 1979. The present Government have presided over the creation of more jobs in recent years than any other European Community Government.

It is, of course, the case that at the heart of our policy on training lie the training and enterprise councils. These councils provide a direct solution to the problem that has plagued Britain's training performance for the last two centuries--the difficulty of securing active employer involvement and commitment to training. The Labour party believes that it is possible to achieve employment commitment to training only by taxing employers, by penalising employers and by legislating against employers.

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At the very most, such negative policies could only secure grudging employer involvement, and would generate great resentment amongst them.

Mr. Blair indicated dissent.

Mr. Howard : The hon. Gentleman shakes his head. Is he abandoning the levy announcement that he made as recently as Monday? If not, what is the levy but a tax on employers?

Mr. Blair : What we are saying is that the "investors in people" standard can be made to work, and the target set out by the right hon. and learned Gentleman's predecessor met, only if those employers who do not meet it make some contribution to overall training, and those who do meet it do not make a contribution.

Mr. Howard : Of course it will be a tax. Or will it be a voluntary contribution? What on earth is a compulsory contribution except a tax? Policies of compulsion--perhaps "compulsory contributions" is the phrase that we should use--were tried in this country in the 1960s and the 1970s, and they failed. They led to a climate in which employers were forced into training by numbers and mindless form-filling in order to avoid levies.

The hon. Gentleman need not take my word for it. These are the words of the CBI just last month :

"The CBI members continue to reject the use of statutory measures as a means of increasing training activity. No legislative approaches have been devised that relate training to business needs." Coercing employers is not the way to secure the full-hearted and genuine commitment to training that we need if we are to secure the high levels of skills that will be very important in the years ahead.

Training and enterprise councils provide the solution. They engage employers because they are led by employers ; they have an impact with those working in the private sector because they are private sector bodies ; and they can deliver increased commitment to training from employers because they are led by employers with a demonstrated commitment to training themselves.

Mr. Rhodri Morgan (Cardiff, West) : The Secretary of State talks about getting a more active commitment from employers via the TEC mechanism. Would he care to comment on the case of the South Glamorgan TEC, which covers my constituency? The chairman of that body--Mr. Helliwell, of the building company William Cowlin and Sons--asked one of the civil servants who had been loaned to the TEC to shred the two tenders submitted in competition with that from his own firm to build the TEC's offices. The contract is worth about £450,000.

Is that what the Secretary of State means when he talks about getting more active involvement by employers in the affairs of the TECs? Can he tell us what the outcome of this case will be? I understand that his right hon. Friend the Secretary of State for Wales had to ring up Mr. Helliwell and tell him not only that his firm should not proceed with its now winning tender, the other two having been shredded by his civil servants-- reluctantly, obviously, but on instruction from the chairman of the TEC-- but that it should not take part in the re-tendering processes suggested by the Secretary of State for Wales in direct communication with Mr. Helliwell.

Mr. Howard : I have no detailed knowledge of the circumstances to which the hon. Gentleman refers. What

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is the purport of his question? Is he suggesting that that is a basis for opposing the development of TECs? Is he suggesting that opposing TECs should therefore be the policy of his party? If so, he should have a word with the hon. Member for Sedgefield.

Mr. Morgan : The point that I am making is that there are limits to the degree of freedom that employers may be given to run organisations that spend public money. If the Secretary of State's Department were to set up a more efficient monitoring organisation to watch what is happening in the TECs, we should be much happier about the expenditure of public money by private sector organisations, which he seems to think is the be-all and end -all of policy making in this field.

Mr. Howard : I can assure the hon. Gentleman that we have effective monitoring arrangements and that we shall make sure that TECs behave in accordance with the contract that they have signed and in accordance with the high standards that we expect of them.

Mr. Morgan : High standards?

Mr. Howard : Yes, high standards.

Already, training and enterprise councils have secured greater employer involvement in training at a senior level than has ever been achieved before in this country. More than 1,200 of the most important business people in the country have committed themselves to their local TECs. By last October every TEC had entered at least its development phase, completing the national network two years ahead of the schedule we set in 1988. In fact, 51 of the 82 across the country are already operational.

I am the first to welcome expressions of support for Government policy from the Opposition, so I am delighted that the hon. Member for Sedgefield has gone on record repeatedly in support of training and enterprise councils. But it is a pity that his enthusiasm is not always shared by his own Front- Bench team. No sooner had the hon. Member told the "Today" programme on Radio 4 that TECs were important because of the extent of employer commitment to them than his Front-Bench colleague, the hon. Member for Fife, Central, launched what will no doubt go down in the history of these matters as his Sheffield initiative.

On 13 December the hon. Gentleman went to Sheffield. His first call was at a trade union meeting organised by those in the Department of Employment who were understandably concerned about the consequences for their jobs of the changes that we are making in the way in which training is organised.

We all know that the first rule of Labour party politics is that, when a Labour spokesman is addressing a trade union audience, he tells them what they want to hear. The hon. Member for Fife, Central behaved like a model Labour party spokesman when he went to Sheffield on 13 December. He told the trade union meeting that he regarded TECs as "new and unproven", and he urged the Government to "ease up" on the speed of their introduction. He said that the Labour party was opposed to the reductions in the size of the national administrative staff--reductions that are, of course, an inevitable consequence of a move to a locally based system. He supported the criticisms of the new financial flexibilities

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granted by the Government to training and enterprise councils at their request, made by some 60 Labour Members of Parliament, including five Front-Bench spokesmen, in an early-day motion in November last year.

The hon. Gentleman's second call was at BBC Radio Sheffield. By the time he got there, his blood was up. He said that the Government were moving far too quickly in establishing TECs, which he considered to be

"a completely false emphasis on the nation's needs."

I do not know how significant it is that the hon. Member for Sedgefield was out of the country on 13 December. I do not know how much this episode really was a case of "when the cat's away, the mouse will play", but I do think that the House and the country are entitled to a clear explanation of who it is that speaks for the Labour party on these matters. Which is the authentic voice of the Opposition? Is it the hon. Member for Sedgefield, the pro-TEC Dr. Jekyll? Or is it the hon. Member for Fife, Central, the anti-TEC Mr. Hyde? Or is it simply that the party is in favour of TECs when the hon. Member for Sedgefield is in the country but against them whenever he goes abroad?

I have already outlined the progress that we have made in providing training opportunities for our young people.

Mr. Blair : Perhaps the Minister would like to say whether he agrees with this comment in The Economist a couple of weeks ago : "Almost two years after its launch, to the sound of grandiloquent claims from Tory Ministers and loud cheers from businessmen, the Department of Employment's market-led training policy is in danger of falling apart."

Mr. Howard : I do not agree with that comment in The Economist, but the person who wrote the article does not sit beside me on the Front Bench. The hon. Gentleman might expect rather more sympathy and support from his colleagues who sit beside him.

In less than three months, we shall be launching training vouchers in 11 pilot areas. In those areas every school leaver will be issued with a voucher, worth an average of £1,500, with which they will be able to purchase any approved training course of their choice. They will be able to use their voucher with an employer, at a further education college or at any other local training provider approved by the relevant training and enterprise council.

Training vouchers directly address the issue of increasing the proportion of our young people who receive training. They define very clearly the difference between the Government and the Labour party. We want to encourage young people by giving them choice and by giving them control over resources. We will give them the very best advice and guidance available, but we will then leave it up to them to make their own decisions.

The Labour party, on the other hand, wants to force young people to fit into the pattern that it would design for them. It would close down opportunities to those young people who wish to pursue careers which do not require training from the very beginning, and it has no interest at all in transferring control of resources from the national to the local level, let alone into the hands of young people themselves.

Mr. Ron Leighton (Newham, North-East) : The Secretary of State has made a welcome announcement. To give real freedom of choice, will he also pay an allowance

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to youngsters staying on at school after 16? It is important that many youngsters stay on at school, and we should not just pay them money and bribe them to leave school.

Mr. Howard : It is important that young people should stay at school and, as the hon. Gentleman will know, they are doing so in increasing numbers. The voucher is designed to pay for training and not for anything else, so the hon. Gentleman's comparison is inappropriate.

I have already referred to the astonishing omission from the hon. Member for Sedgefield's speech of his proposal, repeated earlier this week, for a training levy. If we look at the history of total confusion on this issue, we shall understand why he decided that it would be prudent to remain silent.

The story begins in November 1986, when the Labour party's then employment spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott), committed his party to introducing a training levy of 1 per cent. on the turnover of all companies. Two days later, he was flatly contradicted by the then shadow Chancellor of the Exchequer, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who ruled out such a levy by saying :

"I can't imagine it's going to be the policy."

It was not long before the Leader of the Opposition tried to perform his usual act of reconciling the irreconcilable. On 20 March 1987 the right hon. Gentleman said

"A levy on turnover would not be appropriate in many industries." That was the "maybe a levy" stage in the evolution of the Labour party's policy. By the time we get to 1989, we find a different levy. In "Meet the Challenge-- Make the Change", we read that a major source of funding for the national training fund will be a contribution by all enterprises of 0.5 per cent. of payroll, to be known as the training investment contribution.

Just a few months later, on 6 February 1990, the hon. Members for Sedgefield and for Dunfermline, East (Mr. Brown) launched a new policy document covering technology which did not mention the levy at all. In March last year, in another document, "Investing in Britain's Future", there was again complete silence about the levy. On 22 March last year, in answer to my right hon. Friend the Member for Circencester and Tewkesbury (Mr. Ridley), the hon. Member for Dunfermline, East brought the levy back. He said that it was still a part of the Labour party's proposals. That was affirmed later that month by the hon. Member for Sedgefield in a debate on training. On 5 April last year, the Leader of the Opposition re-entered the fray. The Independent of that date said :

"Labour's plans to impose a £1.25 billion job tax on company payrolls to help finance the national training programme were quietly dropped yesterday. The unheralded climbdown was made by the Leader of the Opposition".

A month later the Labour party produced yet another document, which made a proposal for a different levy. It said :

"A purely voluntary approach will not work. We will therefore set employers an initial minimum of 0.5 per cent. of their payroll to invest in high quality training to clear and agreed standards." Yesterday there was yet a further version of a levy, this time tied up with investment in training.

Those dizzying changes of direction make the Labour party look ridiculous. The hon. Member for Sedgefield

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resembles nothing so much as a spinning top, and it is not surprising that he omitted all reference to the levy from his speech.

I want to make a serious offer to the Labour party, which is directly relevant to the question of skills shortages to which the hon. Member for Sedgefield referred. There is one thing that we need above all if we are to succeed in transforming the skills performance of our country in the decade ahead. We need to make sure that the attainment of relevant skills is suitably rewarded. That means recognising the importance of differentials in pay.

There is not a great deal that Government can do to help achieve that objective, but there is an enormous amount that the Government can do to hinder it. Nothing would hinder it more than the introduction of the minimum wage to which the Labour party is so devoted. On even modest assumptions about consequential effects on differentials, a minimum wage as proposed by the Labour party would lose 750,000 jobs. They can only deny the validity of that estimate by suggesting that no attempt would be made to maintain differentials after a minimum wage was introduced. If that were to happen, it would sound the death knell of our hopes for improving the skills of the British people. If the Labour party is serious about the need to improve skills, it will abandon its proposals for a minimum wage. The two objectives are utterly inconsistent.

There is a very clear choice on the issue of training lying before the House and the British people. It is a choice between a Government who set the pace on training and an Opposition who struggle to catch up. It is a choice between a Government committed to work in partnership with British employers and an Opposition pledged to work against them. It is a choice between a Government who have already delivered a massive increase in spending on training and an Opposition unable to comment on their spending plans.

It is a choice between a Government committed to expanding training choices and opportunities for our young people and an Opposition determined to conscript them into a rigid framework. It is a choice between a Government determined to deliver training on a local basis, matched to local needs, and an Opposition pledged to centralise, regulate and nationalise. Above all, it is a choice between a Government who have already delivered the most significant improvements in this nation's training performance in our history and who have put in place the policy for a dramatic leap forward in our national training performance in the 1990s--and an Opposition condemned by their own blinkered ignorance to a policy mish-mash of cheap imitation and impractical extremism.

Training is a serious business. It requires a serious Government, certain of the way forward and committed to work with every part of our society to deliver improvements in our training performance. There is only one party in the House and the nation able to form such a Government. That is why we shall stay on the Government Benches long after the next general election.

4.57 pm

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