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Lord Dubs: My Lords, by any standard, the work of the Sheffield Development Corporation has been a success. Certainly the Members of Parliament for the local constituencies believe so and the Minister has
made clear what the successes have been. I should like to raise just one or two issues about what will happen next. Clearly the partnership that has been developed in Sheffield has been most beneficial. Sheffield City Council will, I am sure, wish to continue the benefits of the partnerships that the development corporation started.I wish to ask the Minister about the development corporation's assets. I understand that not all of them will go to Sheffield City Council. I wonder why not, and where else they will go when the Sheffield Development Corporation is wound up. The other question relates to the airport. A great deal has been said recently about the airport. I wonder who will now be responsible for it. Will it be Sheffield City Council or some other authority?
Clearly when there has been a successful period where the development corporation has achieved the regeneration of an area, everyone will agree that the benefits of that must not be allowed to fall away but should be continued and indeed enhanced. I am sure that Sheffield City Council will want to play its part. I am interested to know whether it will be given responsibility for most of the assets or whether they will be transferred to some other body.
Having said that, I wish all the organisations that have been involved in regenerating the lower Don Valley well, and I hope that area's success will continue well into the future.
Earl Ferrers: My Lords, I am grateful to the noble Lord for his welcome of the order and for what he said about it. Oddly enough, there is little unfinished business overall. The appropriate successors have been found where necessary. The city council and British Waterways are due to oversee the completion of the unfinished grant-aided schemes and development agreements. The Sheffield Development Corporation has provided cash to those bodies to pay for the work which has to be completed after its lifetime.
All the assets will be disposed of. All the development land is sold to owner-occupiers or developers. It is not expected that there will be any residual funds. The Sheffield Development Corporation has spending plans for all the available resources.
We would welcome a new regeneration agency. Having got this great impetus going, it would be excellent if it could be continued. Discussions have been held with Ministers, but essentially it is a matter for the city council and its partners to take forward.
A private developer funded the construction of Sheffield City Airport. There was a total package for Tinsley Park which delivered the airport and 50 acres of business park which was secured by funding from various sources: from the Sheffield Development Corporation, Europe, English Partnerships and the private sector. Discussions are under way with Sheffield City Council for the local authority to become the freeholder of the city airport site. The developer would hold a 999-year lease.
I hope that I have responded to most of the questions put by the noble Lord about this order. I would only reiterate what I said at the beginning, with which I think he agrees. This has been a great success story. Although he would not like to suggest that it is the Government who should take the credit for that, I would merely say that the work that has been done by the Sheffield Development Corporation, its members and staff, is work which the Government by their general policy were able to bring about. I am grateful to the noble Lord for his welcome for the order.
Lord Dubs: My Lords, before the Minister sits down, perhaps I may thank him for having given such a detailed answer to the various points put to him.
On Question, Motion agreed to.
Industrial Training Levy (Engineering Construction Board) Order 1997
5.48 p.m.
Lord Henley rose to move, That the draft order laid before the House on 14th January be approved [9th Report from the Joint Committee].
The noble Lord said: My Lords, it may be for the convenience of the House if I speak to this order and the following order together.
The proposals before your Lordships this evening 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 their training activities, and to fund the operating costs of the boards.
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.
The proposals from each board 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 almost exactly the same as those approved by this House and another place last year. As in previous orders they are based on employers' payrolls and their use of sub-contract labour.
As required by the Industrial Training Act, both boards have provided for the exemption of small firms from the levy. The level at which this exemption takes effect is unchanged from last year and aims to strike the right balance between helping small firms to grow and giving them unfair commercial advantage. However, all firms need a skilled, competent workforce if they are to be competitive and small, non-levy paying firms in these sectors are encouraged to take advantage of the services offered by the boards and to provide placement opportunities for trainees.
The CITB proposes to raise a two-part levy: 0.25 per cent. of payroll and 2 per cent. of net expenditure by employers on labour-only
sub-contracting. Employers with combined payroll and labour-only payments of less than £61,000 are exempt from paying the levy.The ECITB treats its head offices and construction sites as separate establishments and proposes to raise a four-part levy. 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. Those head offices employing 40 or fewer employees are exempt from paying the levy. The rates for sites are 1.5 per cent. of payroll and 2 per cent. of net expenditure by employers on labour-only sub-contracting. There is exemption for site employers with combined payroll and net labour-only payments of £75,000 or less.
The higher rates on labour-only payments reflect the fact that employers using labour-only subcontractors do not, in the main, play any active part in the training of the pool of skilled labour from which they recruit.
Both sets of proposals involved levy rates in excess of 0.2 per cent. with no provision for exempting employers who make their own training arrangements. In such cases the Industrial Training Act 1982 requires boards to demonstrate that the proposals have the support of the employers in the industry. I am satisfied that each of the boards has obtained that support.
The House will be aware from previous debates that the CITB and the ECITB are the only two statutory industry training boards. They have been retained at the express wish of their industries and a crucial indicator of their effectiveness is the continuing level of support from employers.
I take this opportunity to inform the House that as non-departmental public bodies, both boards are subject to periodic review of both their role and performance. Each is presently constituted to March 1998 and policy reviews are about to begin. The reviews will include full consultation with industry and other interests, and a survey of employer views.
I expect a final report to be produced by the end of the year. That report will make recommendations about whether the boards should continue as statutory training boards or become national training organisations without levy-raising powers, as with other industry-level training organisations.
The draft orders before the House will enable the two boards to carry out their training responsibilities in 1997, and I believe it is right that the House should agree to approve them. I commend them to the House. I beg to move.
Moved, That the draft order laid before the House on 14th January be approved [9th Report from the Joint Committee].--(Lord Henley.)
5.52 p.m.
Lord McCarthy: My Lords, we agree to the Motion and support the continuation of the levies. It is normal practice to ask the Minister a number of questions. It is some years since I performed this particular task from this side of the House.
I am struck by the fact that the figures are precisely the same. Can the Minister say why that is? He referred to 0.25 per cent. of the payroll of the CITB, 2 per cent. of the net expenditure for labour-only sub-contractors, ECITB head office rates at 0.4 per cent. of the payroll and 0.5 per cent and 2 per cent. net expenditure on labour-only sub-contracting. That seems to me to have been going on forever.
How does it come about that every year the sum is exactly the same? It appears to be the same sum irrespective of the reserves, although several years ago Ministers referred to the fact that the reserves were large and gave the impression that if they became too large the effective rates would fall. However, they remained the same irrespective of the size of the labour force and the demand for the product. Will the figures ever change? Are they in some way set in aspic and, if so, why?
The Minister said that the continuation of the two ITBs is up for review after 1998 and that the review has begun. I am glad that he said that. What is the basis on which this Government at this time will decide whether or not the two ITBs will continue? The Minister appeared to say that the majority of firms still want the statutory boards. I do not have at my disposal up-to-date figures of the number of employers who want the boards to continue. If the Minister has them perhaps he will tell me.
In 1994, which are the latest figures I have, 51 per cent. of CITB employers said they wanted the board to continue. That is not a large majority. Furthermore, 55.7 per cent. of the ECITBs said that they wanted the board to continue. What will happen this year if those numbers fall away? Is it the Government's view that the moment they fall below the majority--say to 48 per cent. or 46 per cent.--bang goes the board? Is that the Government's policy, irrespective of what is happening to training in the industry, the demand for training or the strength of the desire to keep the board among the 48 per cent. or whatever? Can the Minister tell us what factors will decide whether the boards continue and how vital it will be for the survey to produce a majority of employers in favour of the boards?
My final question relates to training volumes and training levels. We know in general terms that the volume of government training and government expenditure on training has fallen significantly since 1987. Between 1987 and 1994 it fell by more than one-third. Since 1994 it has probably fallen even more. Do the Government still take the view that government expenditure on training can decline and that the volume of training in this and other industries will remain stable or will rise? In the Government's view, is there to be no relationship whatever between the amount of money spent by them and the amount of money spent by industry? I hope to receive an answer from the Minister tonight.
5.57 p.m.
Lord Rochester: My Lords, I too thank the noble Lord, Lord Henley, for the clear explanation of the
orders. There are differing views as to the merits of the grant and levy system, but industrial training boards have the virtue of enabling employers, trade union representatives and educationists to discuss together what is best for the industry concerned before government take decisions.In the case of the construction industry, the greater use of contract labour, short-term working and the fluidity of the workforce provides special reasons for concentrating training under the two boards. I agree with what the Minister in another place said about the reported practice of some employers passing on the CITB levy to their sub-contractors. I welcome the board's decision to issue guidance, making it clear that responsibility for payment of the levy rests with employers. I welcome also the undertaking that, in reviewing the future of both boards, there is to be full consultation with interested parties before conclusions are reached.
In another place, the Minister said that he had already received several representations. He added that the report which he would eventually receive might conceivably recommend that the boards continue as statutory training boards but that their scope might be changed so that some peripheral sectors of their industries moved in or out of scope. That being so, can the Minister add to what he has said about the likely outcome of the review?
In conclusion, from these Benches I welcome the orders and am happy to approve them.
6 p.m.
Lord Henley: My Lords, I thank both noble Lords for their general welcome of the two orders. I welcome the noble Lord, Lord McCarthy, back to this debate. I believe that this is the third time in four years that I have taken these orders through your Lordships' House. They are taken on an annual basis, although I understand that the legislation provides that they should be dealt with only from time to time. However, for some reason they are dealt with on an annual basis and I believe that there is no harm in that.
The noble Lord, Lord McCarthy, asked me three questions, the middle one of which was echoed by the noble Lord, Lord Rochester. First, there is the noble Lord's rather deep suspicion as regards the fact that the figures seem to be the same each year. He asked why that is. The simple answer is that those are the figures which were deemed to be appropriate by the industry. That is what the industry thought right and that is what it thought was needed to perform the training which it needs to conduct. Obviously if Parliament decided that the figures were excessive, it would be open to it to reject the two orders, but it has not done so. Certainly the debate on this matter in the other place, which was a veritable record for its brevity, seems to indicate that there was general support from both sides.
Secondly, perhaps I may touch on the question of the review which I mentioned. I hope that I have not made noble Lords suspicious by the mere fact that I mentioned that these are subject to review. Noble
Lords will be aware that it is our policy that all non-departmental public bodies must be reviewed on a five-yearly basis, and in this case, it is now time for that review. We shall look very carefully at this matter and I am grateful to the noble Lord, Lord Rochester, for underlining that. There will be considerable consultation.So far, the employers have consistently made a very strong case for the retention of both boards. I give an assurance to the noble Lord, Lord McCarthy, that we have no plans to close down the boards on an arbitrary basis if a certain percentage of employers were no longer in favour. However, if there were little or no support for such a system, obviously the case for their retention would be much weaker. These sorts of levy arrangements seem to work well only when they are supported by the industries concerned.
The noble Lord's final point was in relation to training levels and the amount of funding provided by the Government for training. I start by making the first and most important point because I believe that in the end, the major contributors to training should be the employers themselves. They are in the lead. The most recent years for which I have figures show that something in the order of £10 billion was spent on training by employers in 1993. The Government will continue to make a substantial contribution to training. As the noble Lord will be aware, there has been a substantial commitment to TECs, which was reaffirmed with continuing investment of more than £1.4 billion each year to the TEC-delivered programmes. The noble Lord will know of the success of our modern apprenticeships, and in 1996-97 we shall see about 57,000 young people who are forecast to start on such a scheme; by 1999-2000 there is provision for 67,000 to start, with well over 140,000 in training.
I could talk about a number of other schemes. However, the noble Lord should really look at the unemployment figures in this country. On a day when we have seen the unemployment figures in Germany rise by something like 0.5 million, it is gratifying to remember that, as a result of our policies, we have seen unemployment fall and fall steadily for some 36 months. Unemployment has now fallen by well over 1 million since the recovery began. It is now below 2 million and there has been that steady decline for 36 months or more. That is a tribute to the success of the Government's policies and the effort that we make in encouraging employers and others to train their workers.
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