House of Commons Hansard Debates for 8 May 1991

Mr. Bob Cryer (Bradford, South) : The Minister is babbling on in a nonsensical way about training. Does he not realise that the compulsory training schemes were introduced by a Conservative Government, not by a Labour Government ? Employers' organisations by the score welcomed them. Without those compulsory levies, many employers bitterly criticised those who poached their apprentices and other trained people after they had taken the time and energy to train them. Those employees were simply sucked away. Does the Minister agree with such practices ?

Mr. Maude : I agree with those employers who warmly supported the ending of compulsory levies and the disbanding of the national bodies. In the past decade, the amount spent on worthwhile training for the enhancement of skills has increased dramatically.

Column 759

I am not just referring to public spending, although I point out in passing that, for every £100 spent on training at today's prices by the last Labour Government, £250 is spent now. I am not talking only about that huge two-and-a-half-times increase in public spending on training. What matters more is the money spent by the private sector. Skills for business are what make a difference to the economy. Sometimes, the Labour party talks as though all that was needed was investment in plant, no matter what the plant was. The same applies to training : it does not matter what the skills are. Labour Members think that all that can be stirred together to make a vibrant economy. Anyone who deals with these matters knows that that is not so.

Dr. Norman A. Godman (Greenock and Port Glasgow) : Was it not Mr. Robert Carr who introduced the Industrial Training Act 1964, which created the industrial training boards ? The Minister should not denigrate those industrial training boards. Some of them provided people, especially young people, with first-class training.

Mr. Maude : I am sure that some first-class training was provided. The complaint was that skills were not being enhanced under the old compulsory system of training. We now have a system of training delivery which is employer-led, based locally, not nationally, with the emphasis on training and enterprise councils, which have been a remarkable success. They were in operation well in advance of the proposed timetable, and will make a huge difference. The emphasis will be on what comes out at the end.

The training programmes will focus heavily on qualifications and employment training will focus heavily on getting people jobs. That must be the test of whether training is successful. Youth training should lead to qualifications, and employment training should lead to employment. The funding of training and enterprise councils is designed to fulfil that objective, with a quarter of the funding related to output quality--whether the trainee achieves a job or a qualification.

Dr. Godman : Will the Minister explain why, when we discuss training, hardly any mention is made of the training needs of employees and of our fellow citizens who suffer from physical and mental handicap? Why are they always at the end of the queue for employment training places?

Mr. Maude : I do not believe that to be the case. Ample provision for handicapped people is made within the £2.7 billion of public money which is spent each year on training and enterprise. I do not accept for a moment that they are at the end of the queue or that no thought is given to the trainees. The purpose of the measure we are discussing today is to give trainees an incentive to enhance their skills.

The amount of training being provided is increasing in a way that should win forthright and enthusiastic support across the Chamber. Each year, the private sector spends about £20 billion on training. That is excellent news. The training culture is improving hugely. There is no doubt that, in previous decades, many businesses considered training to be a low priority. We have paid a price for that in the past. There is no doubt that, in the recession in the

Column 760

early 1980s, spending on training by businesses fell. A good many businesses considered training to be dispensable. It is a source of considerable satisfaction that that does not appear to be happening in the current recession, although pressure on businesses' costs is intense.

The most recent economic situation report by the CBI, published last month, asked how much companies expected to spend on training and retraining in the next 12 months, and whether they expected to spend more, the same or less than they had spent in the past 12 months.

The outcome was most satisfactory and encouraging. At a time of recession, with intense pressure on costs, 26 per cent. expected to spend more, 49 per cent. expected to spend the same and only 18 per cent. expected to spend less. That means that the attitude toward training in the private sector has improved considerably. When the economy begins to move out of recession, businesses will be very much better placed to recover quickly, and their capacity to produce and to meet renewed demand will be greater than it was in the early 1980s. That bodes well for the future.

The Government have absolutely nothing to apologise for in their approach to training. Apart from the huge increase in public spending on training and enterprise, there has been an enormous improvement in the quality of training. We should be concerned about the output. What matters is not what the Government put in but what those who undergo the training get out of it. There is no doubt whatsoever about the quality of training.

I hope that the hon. Member for Newcastle upon Tyne, East will be big enough to accept that the quality of training in Britain is vastly better than it ever has been. With the introduction of the national system of vocational qualifications and the national network of locally based training and enterprise councils, with all their local links and local knowledge of what is needed and what can be provided, the quality of training is continually on the increase. I hope that, just for once, the hon. Gentleman will be big enough to accept that.

Mrs. Llin Golding (Newcastle-under-Lyme) : I have a letter from the Staffordshire training and enterprise council saying that "it would be failing in its responsibilities to the local community if it did not highlight the fact that its adult training budget is totally inadequate for the current needs of the County."

I had a meeting with some of the trainees, who are halfway through their training programme and are now going to lose their places and be unable to take part in the vocational training that the Minister is so fond of quoting. What will he do for the people of Staffordshire who are losing out on his training schemes?

Mr. Maude : The hon. Lady refers to particular circumstances and budgets. I cannot comment on the circumstances of one particular training and enterprise council.

Mrs. Golding : Why? Is it too trivial?

Mr. Maude : No. It is not trivial at all, it is a matter of considerable concern, but every organisation paying for training in the public sector is subject to a budget. That is the case under this Government, just as it was under previous Governments.

It is worth making the point again that the budgets for training are substantially larger than they were under the

Column 761

last Labour Government. For every £100 that the last Labour Government spent on training, we spend £250. I am delighted if many people are seeking training in Staffordshire ; those people are very much better placed today than they would have been under the last labour Government.

Mrs. Golding : The supervisors who have been supervising trainees for many years are losing their jobs in Staffordshire because there is no room for them. Eventually the Staffordshire training and enterprise council will have to spend money on training new supervisors. It is a nonsensical programme and a waste of money.

Mr. Maude : No doubt the hon. Lady can raise that with the local training and enterprise council.

Mrs. Goulding : I have.

Mr. Maude : It is a matter for the TEC how it arranges its affairs locally, and no doubt it will do so.

Mr. Alex Carlile (Montgomery) : We should start by putting the debate into the context of the United Kingdom's appalling failure to train our young people compared with training in other countries. The Department of Education and Science statistical bulletin issued in January 1990 revealed that the United Kingdom has 35 per cent. of its 16 to 18-year-olds in full-time education or training compared with, at the top of the range, 79 per cent. in the United States of America. At the middle of the range France trains nearly twice as many 16 to 18-year-olds. Those statistics show what a long way we have to go to provide a reasonable level of training in Britain. The Minister referred to the quality of training provided through the training and enterprise councils. I would be the first to agree with him that some of the training provided by the TECs is of a higher quality than before, and that is certainly to be commended. I should like to make a particular point about training in rural areas and the way in which TECs are coping with the requirements placed on them. I have a letter which has been sent out to trainers by the chief executive of Powys TEC, which is based in my constituency. That TEC started with a bang and is already doing good work. One of the problems in rural areas is that many trainees must travel great distances to their traineeships. The public transport--or rather the absence of it--in those areas is such that many trainees cannot take part in such schemes unless they take lodgings during the week.

6 pm

A case was brought to my attention last week of a young 16-year-old girl who had taken a training place with a veterinary surgery in a small town in my constituency. She has been working there successfully for five or six months and has been enjoying her training. Last week, she was told by the training agency that managed the scheme that her training would have to finish within seven days because it was no longer possible to meet the cost of her lodging in eastern Montgomeryshire, where she lodged during the week. She could not travel to work every day because her training place was 45 miles from her family home. No public transport was available and she was too young to drive, so there was no way in which the scheme could continue if the training agency kept to its decision.

Column 762

Through the intervention of the chief executive of Powys TEC, that training agency was forced--I use that word advisedly--to change its mind and the girl was allowed to continue her training. That happened because her mother contacted me on the day the decision was made known and I contacted the chief executive on the same day. Action was then taken which many trainees would not have the initiative to take themselves.

There must be many trainees around the country, particularly in more heavily populated areas, who are losing their training places halfway through. As a result of that case and another which I shall mention in a moment, steps are being taken by Powys TEC to avert such problems in the future. However, just a few weeks ago, training for a number of ladies and, I believe, one man to provide a day nursery in Machynlleth was brought to an end at a stoke--almost without notice. It was summarily terminated after the expenditure of a large sum of money to provide the equipment and decorate the premises where the day nursery was to be situated. This was a much more difficult problem to handle because the training organisation concerned was losing money on the scheme.

The reaction of the chief executive of Powys TEC, Claire Coates, has been commendable. She has contacted every trainer and urged them to absorb travel and lodging costs where necessary. However, in a letter to them she had to say :

"In the meantime, travel costs have been included in your contract price which will mean that you are likely to make a loss on some trainees' travel costs and gain on others".

If any group of people understands the market and the balance sheet, it is the Government. What proportion of businesses are willing to make a loss on contractual arrangements? Most businesses, particularly small and medium- size trainers, will pull the plug on contractual arrangements on which they are losing money.

In this instance, it is not merely a matter of a decision not to supply widgets because an organisation cannot make a profit on them or to bring a bus service to an end despite the difficulties that that causes in rural areas. These decisions bring misery into people's lives. I therefore make a plea, on behalf of a rural area, to the Minister to look into the problem and to ask his right hon. and hon. Friends to ensure that training costs in rural areas are fully covered so that we do not run into the problems that were suffered by the young girl whom I mentioned.

Nevertheless, it is fair to give a measure of welcome to a proposal that encourages training. The Minister will expect me, as a Liberal Democrat from a long Liberal tradition, to welcome a measure that places the initiative in the hands of the trainee and lets the individual say, "I am going to better my prospects by choosing my own training scheme." That is an excellent idea.

It is also a good idea that, under the simple scheme that is proposed, tax relief at source will be provided. However, it is extremely disappointing-- as has been emphasised by the hon. Member for Newcastle upon Tyne, East, (Mr. Brown)--that tax relief will not become available until 1992. Will the Minister investigate whether tax relief could at least be provided in the current financial year on new courses in which new machinery and new office procedures are being set up anyway? Why cannot tax relief be provided at source to new trainees? Surely the Inland Revenue can cope with those administrative arrangements. A Government machine capable of introducing a 2.5 per cent. increase in VAT across the board in just a few

Column 763

weeks should be able to manage the administrative procedure to introduce this new change--at least in part--in less than 14 months. Will the Minister explain why the proposal is limited? Why does not it include national vocational qualifications and Scottish vocational qualifications at the highest level? Why does it discriminate against professional qualifications? Will it include relief for distance learning qualifications, such as those provided by the Open university and elsewhere? It should do so but does not.

The Government's measure may be wise but it is not generous. The cost of relief will be nil in 1991-92--the scheme is not yet effective--and will cost £20 million in 1992-93, including a public expenditure element of £5 million in respect of non-taxpayers. When the NVQs and SVQs are fully developed, the cost is expected to rise to £40 million, including a public expenditure element of £10 million. What is £10 million? How many yards of motorway can be unrolled for £10 million? It can probably be measured in hundreds of yards, but certainly not in miles. Surely the Government can find more than a mile or two of motorway to support training for national vocational qualifications. The Government should be funding training much more generously and considering a far more extensive scheme. There is nothing wrong with requiring companies to provide a small proportion of their payroll to train people between the ages of 16 and 19. We believe that, probably on the basis of asking too few or the wrong people, the Government have grossly overestimated industry's reaction.

The Government are particularly failing to support training for the unemployed to any reasonable extent, either in this proposal or elsewhere. Unemployment is increasing at an alarming rate. In the past three years, year on year, redundancies have increased. Today, we heard the shocking news that 3,000 people are to be made redundant from the aircraft division of Rolls-Royce. That is but one example of what is happening.

There is a catalogue of companies that are currently making people redundant. It includes Marks and Spencer and Rolls-Royce, which are at the top of the class in British industry. As an hon. Member from the Labour party said--

Mr. Ian McCartney (Makerfield) : The hon. Member for Makerfield.

Mr. Carlile : Yes, the hon. Member for Makerfield may have his credit. The hon. Gentleman made a good point when he said that those companies are also major trainers.

Mr. McCartney : I always do.

Mr. Carlile : I will not accept that every point that the hon. Gentleman makes is good.

Major trainers are now making people redundant. This highlights the need for much greater support for training, particularly for those who become unemployed as a result of the Government's economic policies and their failure to introduce a real strategy for manufacturing industry. Last month's trade figures showed beyond doubt that imports are rising relative to exports. That tells its own story.

In the past, the quality of training schemes provided for the unemployed has not been good, as the poor attendance rates demonstrate. One cannot blame the trainees. If the training programmes were good enough, the trainees would turn up for them in much greater numbers. When

Column 764

unemployment fell and resources were freed, resources could have been used to increase the quality of training ; but the Government simply cut the training budget in 1991-92 by £350 million. Now that unemployment has begun to rocket again, the Government still continue to make insufficient provision. The recent announcement by the Secretary of State for Employment of another £120 million for the main training schemes operated by the training and enterprise councils not only failed to restore the cuts of last summer and preceding years but failed to allow for the size of the increases in unemployment. That funding failure is especially regrettable when TECs are attempting to establish themselves in the face of many functional difficulties, such as those I mentioned at the beginning of my speech.

We believe that extra resources should be devoted to starting the transformation of Government training schemes into quality programmes, which would be well regarded by participants and employers alike. The Minister referred to payroll requirements. Employers would not complain if they thought they were getting "value for money"--I believe that the Government understand that phrase. I support schemes that give value for money, as do, I believe, all responsible companies in this country. Many of those schemes could be provided by companies in-house, provided they met the requisite standard. That is the sort of philosophy that should be guiding the financing and devising of training schemes. I fear that, as yet, that philosophy has not led the Government's thinking.

6.15 pm

Mr. Tim Smith (Beaconsfield) : I welcome clause 31, which introduces new tax relief for vocational training. It recognises that it is not just the Government and employers who have responsibility for training, but individuals, and that it is right to give individuals some incentive to better themselves. The new tax relief, modest though it may be, is most welcome. I believe that, in future, it may cost more than the Treasury has estimated because there will be a wide take-up as people seek to take advantage of the new relief.

When I looked at amendment No. 14 I had some sympathy with the suggestion that the relief should be introduced immediately. After all, if it makes sense to introduce a new tax relief, we should make it available to taxpayers and others at the earliest opportunity. However, I understand that if we are to adopt the approach chosen by the Treasury, of allowing people to deduct the tax from payments that they make, it will not be practical to introduce such a change until the beginning of the next tax year. My hon. Friend the Financial Secretary to the Treasury said that adopting that approach would allow non-taxpayers as well as taxpayers to take advantage of the relief. That is welcome and I was interested to hear the hon. and learned Member for Montgomery (Mr. Carlile) say that that part of the proposal will cost £5 million, which is a lot of money. After all, we are talking of£5 million of relief, so that means £20 million of expenditure by individuals with no taxable income. That seems quite a lot of money, and if the Treasury is right, I welcome the fact that people without a taxable income will

Column 765

spend on training at that rate to improve their chances of acquiring taxable income--that is what the proposal is all about. Another advantage to the approach adopted by my hon. Friend the Financial Secretary is that relief is available immediately, both to taxpayers and non-taxpayers. It is not necessary for them to pay the fees and then wait for a considerable period before receiving tax relief. The alternative would be simply to make the relief an allowable expense, so that there would either have to be an adjustment to people's PAYE codes, which would be difficult, or people would have to wait until the end of the tax year before they could claim back the money. The Treasury have adopted the right approach, and I note that it has adopted the same one in relation to a number of new tax reliefs. I accept that it means that we cannot introduce the relief until 1992 because we must set in place the necessary arrangements, introduce regulations and ensure that the people to whom the money is being paid are able to get the tax back from the Treasury.

The hon. Member for Newcastle upon Tyne, East (Mr. Brown) said that we should ask whether training should be a priority for public spending. Earlier this week, I received a leaflet from Battersea Labour party, which stated that the priorities for a Labour Government would be a massive increase in spending on education and training, and on public transport. Leaving aside the question of where the money will come from and other such issues--although it is important to recognise that both those proposals, however commendable, have long lead times in terms of improving the country's economic performance--it is nonsense to say that we can make an investment on day one and achieve economic growth on day two.

I recall saying in a debate in the House late last year that one reason why the performance of British management had improved during the 1980s was the expansion of university education in the 1960s. There are long lead times on investment in education and training. The Labour party is misleading the country if it is suggesting that the increased investment in education and training will, overnight, lead to an improvement in our economic performance. I am afraid that life is not like that. The hon. Member for Derby, South (Mrs. Beckett) must answer the question : "How does she square that circle?" I think that she and the right hon. and learned Member for Monklands, East (Mr. Smith) have both said on many occasions that their first priorities for public spending would be to increase pensions and child benefit and that all other increases in public expenditure would have to wait until we had improved our economic performance. They tell us that in one breath and then, in the next one, they say that, in order to improve our economic performance, we must have a massive increase in investment in education and training, transport infrastructure and all sorts of other things. Whom are we to believe? Perhaps we shall have a better idea when we have had a chance to read the text of the speech that the Leader of the Opposition is making on this subject today.

Apparently the right hon. Gentleman will tell us that, under Labour, there would be no tax reductions for five years. He assumes--I hope that hon. Members will note this--that, come what may, we shall have economic growth of 2.5 per cent. per year. Clearly, he has decided in advance how the extra £20 billion of tax revenue generated by the economic growth would be spent.

Column 766

People are naturally very suspicious of the Labour party when it comes to questions of taxation. Indeed, they would do well not to listen to the Opposition. On that score, of course, there is cause for considerable concern, as the Labour party has already told us that it would increase the burden on many taxpayers. But people would do even better to look at the performance of all past Labour Governments, who increased the burden not only on higher-rate taxpayers, but on all taxpayers. In the end, there is only one way in which the extra £20 billion of expenditure to which the Opposition are committed could be funded, and that is by putting an extra burden on every taxpayer.

Mr. Nicholas Brown : On the question of increasing the tax burden on ordinary citizens, can the hon. Gentleman confirm that the Conservative Government, throughout their time in office, have done exactly that?

Mr. Smith : What I can confirm is that over the past 12 years the Conservative Government have managed to reduce the standard rate of tax from 33 to 25 per cent. and, at the same time, achieve substantial growth in public spending. That is a very remarkable achievement. At the next election, people will judge the various promises according to past performance.

Mr. Nicholas Brown : No doubt the hon. Gentleman is aware of the system of indirect taxation, which accounts for part of the tax burden on citizens of average and below-average means. Will he confirm that the Conservative party has increased, rather than decreased, the total tax burden borne by ordinary citizens?

Mr. Smith : What people will want to consider is net take-home pay. During the Conservative Government's period of office, a married man on average earnings and with two children has seen an increase of more than 30 per cent. in his net take-home pay. By contrast, the performance of the last Labour Government over a period of five years resulted in an increase of just 1 per cent. in the net take-home pay of such a person. What people are concerned about is net take-home pay. That is where the Conservative Government have scored, and where Labour Governments will never score. It is in that context that people will set the speech that, apparently, the Leader of the Opposition is to make today. People have not forgotten what life was like 15 years ago under a Labour Government. It was a very unpleasant experience, and not one which people will want to repeat. The present Government have cut tax and have increased spending.

Investment in training is another priority for the Labour party, but anyone reading the Labour party document that was published a couple of weeks ago will find that it is full of priorities. There is an endless list of priorities, together with an endless list of new Government bodies to spend the money that implementing them will require. Every priority will involve additional public expenditure, and there will be a new quango to do the spending. On the question of training, it is entirely wrong to assume that quantity is in itself a virtue. The quality of investment is equally, if not more, important. That is a matter upon which this debate ought to focus.

A better means of securing increased investment in training is to improve the profitability of British industry. Whether we are concerned about fixed investment, about investment in research and development, or about

Column 767

investment in training, the way to achieve increased investment is to increase the profitability of British industry. Over the past 10 years, we have seen a huge increase in industrial profitability and, as a result, a huge increase in retained profits. That is why there has been a better performance in terms of investment in training. The CBI forecast figures that have just been given by the Financial Secretary are very encouraging. It is remarkable that, in the middle of a recession, so many companies should contemplate increasing their expenditure on training or, at least, not reducing it. Clearly, when profitability improves next year--as it will--there will be an increase in training budgets. Employer-led training is so much better. The key is to ensure that training is of the kind that employers want, the kind that makes trainees employable. The hon. Member for Greenock and Port Glasgow (Dr. Godman) has talked about the training of disabled people. I agree that that should be no less a priority than is the training of able-bodied people. Indeed, it is a very important aspect of the whole matter.

Dr. Godman : I cannot speak about the situation in England and Wales, but I can tell the hon. Gentleman that, in Scotland, the numbers and percentages of people with a mental or physical handicap who underwent employment training in each of the past two years were dismally low. Indeed, that was conceded in a recent answer by the Scottish Office Minister who is responsible for industry.

The Second Deputy Chairman : Interesting as these exchanges are, I must point out that the Committee is dealing with a very specific date, which is mentioned in the amendment. I should like hon. Members to return to that, rather than engage in a general debate on training matters.

Mr. Smith : I have to accept what you say, Miss Boothroyd, although the debate has ranged very widely. I fully accept that we are discussing a specific tax relief, which involves public expenditure, but hon. Members have been putting that item of public expenditure in the context of the resources committed to training, whether by the Government, by way of taxpayers' money, or by the private sector. Of course, every tax relief has a public expenditure cost. I intended to refer to a particular example of the training of disabled people, but I shall abide by your ruling, Miss Boothroyd, and return to the amendment. Let me say simply that this new tax relief to encourage individuals to better themselves and to enable them to choose training is very welcome, and when it comes into force in 1992 it will be very popular.

Dr. Godman : I support the amendment, as I believe that it would improve a modest measure. It is surprising that, in relation to training bodies, the Minister should have been so dismissive. I have always regarded the Act that established those bodies as being one of the finest pieces of legislation passed, under the stewardship of Mr. Robert Carr, by the then Conservative Government. It made training provision for very many people. The legislation was passed many years before you, Miss Boothroyd, became a Member of Parliament, and a few years before I came here.

I do not want to incur your wrath today--or, for that matter, any day--but I have to say that, like the hon. and

Column 768

learned Member for Montgomery (Mr. Carlile), who spoke on behalf of the Liberals, I have reservations arising from the Government's failure to make provision for distance learning. This is particularly regrettable in respect of information technology training, which can be provided by, among various institutions, the Open university. Distance learning programmes are very important for would-be trainees in many parts of Scotland, particularly the highlands and islands and the Shetlands. I think that I am right in saying that the Open university has in the Shetland islands alone several hundred students who undoubtedly benefit from its unparalleled teaching. 6.30 pm

Can the Minister tell us why Scottish vocational qualifications at the highest level are being excluded? It means that the Scottish higher national diploma is being excluded. I know trainees who are studying for such qualifications. If the amendment were passed, others could benefit.

I am sorry that there is to be a delay in the introduction of a provision which could help many of my constituents. May I remind the Minister that, according to Government statistics, the unemployment rate in the Greenock travel to work area is 13.5 per cent., which is far above the levels of unemployment in constituencies represented by Conservative Members? It is certainly much higher than the national average.

When we talk about the training of young people, may I point out to the Committee that just yesterday Kvaerner-Kincaid of Greenock announced the redundancies of more than 100 employees, most of whom are highly skilled engineers, but who include 12 apprentices? When employers engage apprentices to undergo training, they have a moral obligation to ensure that the apprenticeships are completed. Kvaerner-Kincaid is acting irresponsibly, even immorally, in putting the apprenticeships under threat.

Nothing is worse for a young person of 17, 18 or 19 than to have an apprenticeship disrupted. Where can he go? I say "he" because I am talking about 12 young men who are deeply anxious about their future. What are their prospects if the Norwegian company has its disgraceful way and puts them into the dole queue? I told the chief executive, Mr. Hanna, yesterday that it was a disgraceful state of affairs. If the apprentices are put out of work, it will be nothing short of a scandal.

My constituency and other areas in the west of Scotland are suffering badly because of the lack of systematic training, particularly in electronics and in information technology. That is a matter for regret. If the Government were to accept the amendment, it would make a modest provision much more sensible for many of the people whom I represent north of the border.

Mr. Cryer : I want to comment on the Minister's reasons for rejecting our useful and modest attempt to improve the modest provisions of clause 31. The Minister said that there were administrative difficulties because regulations need to be drafted. I am surprised that the Government are admitting that they are introducing primary legislation without a thought for the regulations which will flow from it. According to the Minister, the Government have not troubled to look through the Bill to see what regulations will be needed.

Column 769

The Minister said that there would be enormous difficulties about consultation. The Government use consultation when they want to and dismiss it when they do not. The Minister is contemptuous of training boards. When the clothing industry training board was told that there would no longer be a compulsory levy to fund it, there was no consultation. The Government did not ask members of the board what they would do about providing training in an area where we have to be competitive. They simply said, without consultation, that there would be no levy. The Minister chose his arguments to suit himself. There was no question of consultation.

I must reiterate my concern about the machinery of government. We have a slapdash Government who do not know what they are doing from one week to the next. They are so dithering in their attitude that they have not gone through the Bill to check what regulations will be needed to enable tax concessions to be made. It is not a question of whether the Government will get the measure through the Committee. They have a majority of 150 so they know that they will get the legislation through.

The Minister said that regulations will need to be drafted. It would have been prudent for the Minister to ask his officials, when drafting the Bill, to consider what regulations would be needed. Will the regulations be made under the affirmative procedure or will they be less important in the Minister's eyes? Has he made a judgment? Has he decided just to dig out regulations at some time in the future, some to be made by affirmative resolution and some by negative resolution?

These are important questions, because most provisions are created not by primary legislation but by secondary legislation, through powers delegated to Ministers. Therefore, Ministers should regularly assess the regulations that will be necessary. It is not as though the Treasury is unaware of the need to produce regulations. Even when tax concessions concern other Departments, the regulations have to be drawn up with the consent of the Treasury.

The Government have rooms full of people dealing with regulations, yet the Minister tries to tell the House that they cannot draft regulations quickly. It is incredible. I will lay a bet with the Minister that there are five times as many people in Government Departments drafting regulations as there are in the emergency unit dealing with relief for the Bangladesh victims. There may even be 10 times more people involved in drafting regulations, because there are only about a dozen officials grappling with one of the biggest disasters that the planet has seen, in which perhaps as many as 500, 000 people have been killed.

The Minister's argument about regulations does not wash ; he has used it as an excuse. He could have accepted our amendment, brought forward regulations and introduced the provisions in this financial year. An element of retrospection might have been needed, but I have never been one of those who says that there should be a bar against retrospective legislation under any circumstances.

The Government want to induce people to enter into vocational education. That is necessary. We are not grudgingly accepting the notion, as the Minister tried to suggest. We are urging the Minister to ask his civil servants to get cracking on the regulations so that the legislation may be brought into operation in this financial year. What could be better? The Minister is getting support for a Bill

Column 770

which is mostly pretty awful, but at least the regulations would help people. We are supporting the Government, but the Minister says no, it is administratively impossible, because the Government have never introduced legislation in 24 hours, never introduced regulations, plonked them before Parliament and brought them into effect during the 40 days within which a prayer can be tabled. We know that that is not true. They have used administrative expediency when they wanted to and when there was the political will to do so. There is not the political will to encourage people to undertake vocational training.

Why is it especially urgent for people to undertake training? It is urgent because some manufacturing industries are in difficulty, and people might need an additional inducement to encourage them to undertake training in view of the relatively dismal prospects for some of those manufacturing industries.

Let us take the example of engineering. New car registrations are down by about 20 per cent. The fall in registration in cars manufactured in this country has enormous repercussions. It means that component suppliers such as GKN have shed people and created redundancies because of the downturn caused by the Government's economic policies. The suppliers of steel and tyres and of cloth for the upholstery in cars and other vehicles are all affected by the downturn in demand, which has been created by the Government's blind and foolish ideological adherence to the use of interest rates alone to control the economy. As a result, more people have joined the dole queue. Therefore, there must be some inducements to encourage young people to go into the engineering industry, which is one of our most vital manufacturing industries.

The inducements should be on the premise that there might be an upturn--not under this Government, but after the next election. With a Labour Government and a decent attitude towards the economy, we shall create jobs, not destroy them. People will then have more confidence, but not at the moment. Therefore, inducements to enter an industry that faces difficulties will be a help.

The textile industry is important in Bradford. Fourteen thousand jobs depend directly on that industry. It is not an antique industry--it has invested and modernised--but it faces uncertainty, again because of the downturn in demand. There is much short-time working and a continuing trickle of redundancies. I predict that over the next few months mills will close in Yorkshire and the west riding because of the Government's economic policies and also because the textile industry in particular bore much of the burden of the perfectly legitimate sanctions against Iraq. The Gulf war meant that the market diminished in the middle east, which had been a fairly lucrative market for British textile manufacturers.

People might ask why they should go into the textile industry when it has been contracting for years, and over the past 10 years has lost at least 100,000 jobs in its woollen sector. Why should they go into an industry to learn a craft or a skill only to find that, at the end of the day, they are redundant and that the skill is not required ?

The tax concession is needed now to counteract the economic downturn--the recession or slump--which the Government's policies have introduced once again into our economy.

Column 771

6.45 pm

It makes more sense to give tax concessions now to encourage people to go on a training course than to spend the money on the dole queues. Although Ministers are shy about telling us the cost of the dole queues, they cost between £20,000 million and £25,000 million a year in unemployment payments, various other benefits and loss of tax revenue. The Minister can correct me and give an accurate Treasury figure, but it is far better to start this year with the modest tax concession outlined in the amendment to encourage people to go into training rather than for the Government to shrug their shoulders and say, "It is administratively impossible--we can't do it now," while the dole queues grow ever longer.

The Minister mentioned the cost of training in relation to Government expenditure. I should like to probe the figures a little further. He said that the Government were already spending that sort of money, so the amendment was not necessary. If the Government are so concerned about training, I wonder whether the figures that he gave for Government expenditure on training include expenditure on the skill centres. I presume that the tax concession would be available to an individual who decided that he wanted to go on a course at such a centre, but what has happened to the skill centres? The Minister may not be aware--as he is from the Treasury, he should be--that the centres were a nationwide network run by the Department of Employment to provide training, but what did the Government do? They advertised them for sale, saying that they were making a loss, that they were not effectively run--although the loss was not so big--and that something had to be done about them..

It was strange that the Government sold the centres--in fact, they did not sell them but gave them away--to the people who were already in charge of running them at a loss. I wonder whether that money is incorporated into the Government's figures. The Government gave the new concern not only about £100 million, but the freehold. The new concern--Astra Training Services, in the main--has been busy closing down the centres, sacking people and diminishing training opportunities. It has sacked about 500 people--the Minister can correct me if he has up-to-date figures. It has been one of the biggest rip-offs of the privatisation procedures, and they have all been rip-offs of the taxpayer to some extent.

As the Minister knows, the sale is being investigated by the Public Accounts Committee. I hope that its report will be produced pretty speedily, because we are dealing with a huge gift of money to Astra Training Services and with the three civil servants who got into the Minister's good books, pulled out a plum and said, "What a good boy am I." That is an Elizabethan poem based on the corruption of Government in that era. The amount of money that would be provided by the tax concession is peanuts compared to the amount of money that the Government squandered on Astra Training Services and on giving away the freehold of important training facilities and sites. I hope that the Minister has a few answers, that he will rise to the occasion and say that the Government have many facilities and lots of skilled draftsmen for regulations, that they will draw up plans and regulations, send round a circular and ensure that the minor tax concession is introduced in this financial year. The Minister has the opportunity to do that and to do a bit for people who want to take advantage of training. We

Column 772

encourage him in that, and I hope that he will accept the amendment. My guess is that he will not, but people who are looking for training will know where the real concern for training lies-- not with the Government, but with Labour. We want an early opportunity in government to put our plans into action.

Mr. Peter Hain (Neath) : The Financial Secretary sought to deflect criticism of the Government's measure by saying that it was not all that the Government were doing on training. That is a statement of the obvious. But the proposed £20 million in tax relief on training costs is a drop in the ocean compared with the £245 million that has been cut from employment training and youth training this year. It is a tiny droplet compared with the £1.5 billion cut from public spending on training during the five years from 1987 to 1992. The Government's proposal does not even begin to address the skills gap in Britain. In particular, it does not address the dilemma and the problems faced by women trainees. Women should be a prime target for any training scheme, especially in view of demographic trends which are causing a shortage of adult men and making it necessary to bring more women into the labour market. Many women do not have the qualifications to take advantage of the jobs that companies need to fill. Others who would like to return to the labour market after a period of caring for dependants but need to top up their skills to take advantage of opportunities are unable to do so. The measure does not even begin to address that problem.

Under the clause, there will be a deduction on the basic rate of tax, so those who pay a higher rate of tax will receive much greater relief. As women represent a small proportion of those in the higher tax bands, almost no women will benefit. In addition, the tax deduction will be available to non-taxpayers only in the form of a reduction in the cost of their training place. Many women who are on low pay cannot afford the massive cost that is often levied for a place on a training scheme.

The main beneficiaries of the proposal will be people who are already in work. They will be mainly professional people. Not many will be women and few will be low-paid workers. That should be considered against the background of the overall impact of the proposal. It is a molehill of a measure compared with the mighty mountain of the skills crisis in industry and across the economy. At present, 60 per cent. of trainees emerge without any qualifications and two thirds of our work force have had no training in the past three years. Many have had no training in their entire working lives.

The Financial Secretary referred to the rosy picture painted by the Confederation of British Industry by drawing selectively on its forecasts. I invite him to come back into the real world. For example, in west Wales, training places have been halved through the measures taken by the Government in the past year. One example is at a successful company called Kenyons in the town of Pontadarwe in the Neath constituency, which has trebled its turnover in the past two years. It builds industrial refrigeration plants and provides building services. It is a skilled engineering company employing 500 people in that part of the world. It is just the sort of company that we should encourage. In the past few months, its youth

Column 773

training places have been cut from 90 to 70, despite the fact that the company had the places and people wished to fill them. The funding was cut by 20 places.

Only after the managing director created merry hell, as he described it, was the company able to win from the local training authority an additional 10 places. Similarly, employment training places in that company were cut from 30 to 18. Again, that opened up a skills gap even though the company had the opportunity and the desire to fill it. All that is in an area where we desperately need engineering skills in order to compete with foreign companies, which are rapidly taking over our markets. I have been approached by business men in Neath who want to provide places for computer training, which is desperately needed in our information technology society. The funding for those places is not available.

Several of my hon. Friends mentioned the lack of training opportunities for people with special needs. Training places for people with special needs have also been cut. All in all, the measure does not address the real world. The £20 million tax relief for training which is being provided one way or another should be compared to the £1.1 billion of tax subsidies for personal pensions last year and the incitement to contract out of the state earnings-related pension scheme in the form of a £6 billion tax subsidy. The £20 million does not even begin to measure up to the needs of our economy.

The £20 million can also be compared to the tax subsidies to encourage people to take more and more shares and invest more in equities ; yet in the past 10 years it has been highly profitable for individuals to invest in shares. People have received an annual gross return of 19 per cent. on their investments. Why is money spent in that direction when it should be spent on funding the training that we so desperately need?

The Financial Secretary complained that the Labour party's policy was one of compulsion. That is not the case. The Government have abandoned their responsibilities for training and their duty to fund and provide the training opportunities so desperately needed in the economy. The Government have washed their hands of those responsibilities. The Labour party says that the Government should fulfil their responsibilities and duties to people who want to train to fill the skills gaps that are appearing everywhere. The Financial Secretary appeared to suggest that he would leave it all to the private sector. But almost universally the private sector is not filling the skills gap. I would ask why the directors of large companies pay themselves 22.7 per cent. increases in their remuneration when they are not providing the funding for training places that we need?

The hon. Member for Beaconsfield (Mr. Smith) childishly suggested that we claimed that we could accomplish overnight the training revolution that is needed in Britain. No one claims that. The Labour party has never maintained that that would be the case, but we are saying that the Government are paying lip service to addressing the skills desert in society. People see, even if Ministers do not, that the Conservative party is a party of quick buck predators devouring our skills base as they asset- strip the economy. Labour is the party of enterprise and industry which is prepared to invest in skills for a strong economy.

Next Section

Home Page