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With your Lordships' permission, I should like to touch briefly on recent history. Members in another place and Ministers and other office holders accepted a freeze on their salaries in 1993 following the introduction of public sector pay restraint. In doing so, they forwent their entitlement at that time under the links that, up to then, had applied with the Civil Service, and indeed, had applied since 1987.
When the linkage was re-established last year for the 1994 salary review, it was agreed that the basic increase would be paid in two stages: the first stage was to be of 2.7 per cent. payable from 1st January 1994; and the second stage, also of 2.7 per cent., on 1st January 1995. Last year's Ministerial and other Salaries Order gave effect to the first stage. The second stage is included in the order that is before your Lordships today.
In addition, it was announced last year, as part of those arrangements, that the 1995 uprating would reflect the increases in the salary received by middle ranking civil servants during 1994--by "middle ranking civil servants" I mean Grades 5 to 7. Those civil servants received a settlement worth 2 per cent. with effect from 1st August 1994. The same 2 per cent. will be paid to Ministers and other office holders in respect of their 1995 settlement with effect from 1st January 1995, if this order is approved. This is also included in the figures appended to the order.
So far I have spoken in terms of the basic ministerial salaries under the principles which were established last year, principles whereby Ministers and others covered by the Ministerial and other Salaries Order can normally expect to receive the same percentage increases as Members of Parliament. Your Lordships will be aware that the salaries of Members of Parliament are in turn linked to the pay settlements in the Civil Service. However, I should remind noble Lords of one other feature of the arrangements which is of particular relevance to Ministers, the Leader of the Opposition and the Opposition Chief Whip in this House. Since Ministers and office holders in this House do not receive the reduced parliamentary salaries payable to Ministers in another place, the procedure is that they should receive the same cash increase as their counterparts in the other place, taking account of their combined ministerial and reduced parliamentary salaries.
Finally, I should stress that the overall increases of 4.7 per cent. for most Ministers and the cash equivalent for Ministers in your Lordships' House, which is worth more in absolute percentage terms, are not out of line with other settlements or indeed with economic conditions generally. Perhaps I may suggest to your Lordships that it would be worth bearing in mind that more than half of the increase is a deferred payment and that that deferred payment is part of last year's settlement, not part of the new settlement. As a result of that deferment, Ministers and other office holders have lost considerable sums in comparison with the salaries that would have been paid if the link with the Civil Service salaries had been maintained throughout. These
I hope that that will be a sufficient and--I hope your Lordships will agree--severely factual explanation of the circumstances that lie behind the order. I believe that the draft Ministerial and other Salaries Order provides for a realistic settlement in accordance with agreed arrangements for Ministers and for Opposition office holders in both Houses of Parliament. I commend the order to the House.
The proposals before your Lordships this afternoon seek authority for the Construction Industry Training Board and the Engineering Construction Industry Training Board to impose a levy on the employers in their industries to finance the operating costs of the boards and to fund their range of training initiatives, including grants schemes.
Provision for this is contained in the Industrial Training Act 1982 and the orders before your Lordships would give effect to proposals submitted by the two boards. Both proposals include provision to raise a levy in excess of 1 per cent. of an employer's payroll. The Industrial Training Act 1982 requires that in such cases the proposals must be approved by affirmative resolution of both Houses.
In each case the proposals are exactly the same as those approved by your Lordships last year. As in previous orders they are based on employers' payrolls and their use of sub-contract labour. Both have special provision for excluding small firms from paying levy.
For the CITB the rates are 0.25 per cent. of payroll and 2 per cent. of net expenditure by employers to labour-only sub-contracting. Employers with a combined payroll and labour-only payments of less than £61,000 a year are exempt from paying levy.
The ECITB treats its head offices and construction sites as separate establishments and applies different levy rates which reflect the costs and the different arrangements for training particular workers. For head offices the rates are 0.4 per cent. of payroll and 0.5 per cent. of net expenditure by employers on labour-only sub-contracting. Firms employing 40 or fewer employees are exempt. The rates for sites are 1.5 per
In each case the proposals have the support of the employers in the industry, as required by the Industrial Training Act, and have the full support of the respective boards, which consist of senior employers, trade unionists and educationalists.
Your Lordships will know that the CITB and the ECITB are the only two statutory industry training boards. Most other sectors of industry are covered by independent, non-statutory arrangements. In those two industries employers and their representative organisations have remained firm in their support for a statutory levy system.
Both boards have recently undergone major reviews of the need for their continuance. Following those reviews, we reconstituted each of them for a further term of office up to 1998. In doing so, we recognise the strong feelings of the employers and the performance and achievements of the boards.
The draft orders before the House will enable the two boards to carry out their training responsibilities in 1995 and I believe it is right that the House should agree to approve them. I commend them to the House. I beg to move.
Baroness Turner of Camden: My Lords, I thank the Minister for his explanation of the two orders. As he rightly said, they are very similar to the orders that were discussed in this House last year. We approve and support them on this side of the House.
However, I am concerned that there is still a terminal date, so to speak, of 1998 in respect of the continuance of those training boards. It would be very much better, since both boards do an excellent job of work and are acknowledged by everyone in the industry to do an excellent job of work, if they had a little more assurance of continuity than a term point of 1998 put upon their future existence. We raised the matter earlier. In fact, I raised it last year when I said that it was necessary for continuity and a feeling of security among staff, who do a very good job working for the boards. I still feel that it is a pity that 1998, although some time in the future, should be put as a term when the boards may face discontinuance. They are both very necessary.
The other point that I should like to make, which I also raised last year, concerns the small firms exemption clause. I know that it has been agreed, but it has always seemed to me necessary for small firms to have trained personnel. It is perhaps an even greater necessity for small firms than for larger ones which may have in-house training schemes anyway. In the construction industry in particular, as everyone knows, there are inherent dangers; a high rate of industrial accidents and so forth. No matter what is done it is likely to remain an inherently hazardous industry. It is all the more necessary therefore that small firms should have trained staff capable of coping with safety provision. In that
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