Employment and Training Bill

HL Deb 15 July 1981 vol 422 cc1300-64

6.48 p.m.

The Earl of Gowrie

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Earl of Gowrie.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD AYLESTONE in the Chair.]

Clause 1 [Industrial training orders]:

Lord McCarthy moved Amendment No. 1: Page 2, line 17, leave out from ("fit") to end of line 19.

The noble Lord said: It is appropriate that we should begin this Committee stage on a somewhat low note. The amendment which stands in my name and which I now move is not seeking to reverse the general intention of Clause 1 of the Bill. That is to say, it accepts the situation in which the Secretary of State can in the future decide the fate of industrial training boards without the approval, or proposals, of the Manpower Services Commission. That is accepted in the amendment. The objective of the amendment is simply to seek to clarify the consultative process which is being proposed by the Government.

Under the previous measure, the 1964 to 1973 Act, as it were, the Manpower Services Commission was free to decide in effect whom it would consult. This Bill specifies that they should consult not those who are affected—which is what the previous situation was—but those whom they think are fit to consult. Therefore, as I see it, the Bill actually narrows the scope of the MSC's necessity to consult. Yet in addition to narrowing the scope of the MSC's jurisdiction in that way, it adds to the scope of the Secretary of State to suggest to them who they should consult, so that in two ways the MSC finds its role affected from the point of view of consultation.

The objective of the amendment is to delete those parts of Clause 1 which stipulate that the Minister may direct the MSC to consult such other organisations, associations or bodies as he thinks fit. One reason why I tabled the amendment is that it has not become clear—certainly it is not clear to me as a result of a careful reading of the debates in another place—precisely why the Secretary of State wants this power. The noble Earl has been good enough to provide us with explanatory notes, and I quote from those: The new subsection (4)(a) leaves it to the judgment of the Commission which organisations need to be consulted, and so makes it doubtful"— that is to say, the Bill itself makes it doubtful; it was not doubtful before— whether the Secretary of State could direct them to add particular organisations. Paragraph (b) of the new subsection therefore gives the Secretary of State express power to do this". I suggest he did not have the power before; but now he is to have express power to do it. The notes continue: This means that he could require the Commission to consult"— and this is the first indication we have of what is in mind— educational bodies or small trade unions or individual large employers, and the bodies consulted do not, as in paragraph (a), have to be representative of a substantial number of employers or employees". In other words, they need not represent anyone. That is a strange explanation, for two reasons. The first is that the whole problem has arisen because the Bill itself has narrowed the scope of those whom the MSC have to consult. In the previous situation they had to consult those who were affected, and I should have thought that that satisfied all reasonable considerations. Why the Government, having created the problem, then pass the problem to the Secretary of State has not been explained to us, and that is what I should like the noble Earl to explain tonight.

Secondly, it is a strange explanation because we are not told whom the Secretary of State thinks will be fit. We may be given some examples in the explanatory notes, but there is nothing in the Bill to tell us who the Secretary of State is likely to direct the MSC to consult and who the people are likely to be whom the MSC did not think fit to consult. Will they be educational bodies and small trade unions? If so, what small trade unions? What small trade unions are unrepre- sentative that the MSC do not consult? Are they to be large or small employers? Is it because the Secretary of State has in mind certain groups who might give the right answer? Is it because the Secretary of State has in mind that in cases where particular industrial training boards may be, as it were, up for the chop, everybody in the industry who can be found, whom the MSC think fit to consult and who are affected, in fact are against abolishing that industrial training board and therefore one must search about to find certain people—Conservative trade unionists, the Institute of Directors, various unrepresentative small traders' associations, perhaps those cultural rejects who circle round the ancient mulberry tree that stands in the garden of 2 Lord North Street? Are those the people whom the Secretary of State will ask the MSC to consult? We do not know, and therefore we ask, because we want to know.

6.57 p.m.

Lord Lyell

My Lords, the Committee will have listened with care to the explanation of the amendment by the noble Lord, Lord McCarthy, and I am sure we were grateful for his references to the explanatory notes. I am sure the noble Lord will accept that it will not be often that the Secretary of State, his Ministers or representatives of the department would expect in any way to direct the commission over any particular organisations or groups of organisations whom it should consult. We continue to believe that the commission should normally be left to undertake its own consultations as it sees fit.

However, I am sure the Committee will agree that the Secretary of State should have the ultimate power to respond to a particular request—for example, from a Member of your Lordships' House or of another place or indeed from other organisations—that those concerned should be included in any discussions or consultations with the commission. The noble Lord has stolen some of the reply I had for him in that he mentioned educational bodies, small or even large trade unions or individual large employers. As he pointed out, the bodies which would be consulted would not necessarily be representative of substantial numbers of employers or employees.

The noble Lord wanted an explanation of how, as he put it, the Government had narrowed the scope of consultations and how the Secretary of State or his representatives might widen that scope. The noble Lord will know that my right honourable friend is in touch with all sorts of organisations on a continuing basis on behalf of the MSC—indeed, the commission reports on a continuing basis to my right honourable friend—so the noble Lord is asking for half the moon, if not for the whole moon, when requesting precise details of all the groups of employers, unions and other organisations which might be consulted. The consultations continue. All we wish to do in the Bill is to give my right honourable friend the power to fill in any possible loopholes which might have become evident.

Lord McCarthy

I am sure the noble Lord, Lord Lyell, has done his best, but I do not find his explanations very convincing. Indeed, he seems to have two explanations, the first being that he will not do it very often—rather like the lady who was raped and was told it was all right because it would not happen very often. But the question is: is it necessary to do it at all'? I do not think that the noble Lord's second explanation indicated that it is necessary to have the power.

He said, in very general terms, that the Secretary of State surely should have the ultimate power to direct the Manpower Services Commission to consult. The answer to that is that he did not have the power in the 1964 Act, which was passed by a Conservative Government, and he did not have the power in the 1973 Act, which, too, was passed by a Conservative Government. No, he has the power at this time, at the very time when the general direction of the Bill is to pass power from the Manpower Services Commission to the Secretary of State.

Of course that makes it even more bizarre, because if the effective power is to pass from the Manpower Services Commission, as it is, to the Secretary of State, then of course the important person one wants to get to in this game is the Secretary of State. If the Secretary of State, who has the ultimate power of life or death over industrial training boards, feels that there is someone whom the MSC has not consulted, then he can consult that person himself. It is perfectly possible for the Secretary of State to consult people. He is entitled to do it under the Bill. He does not have to depend on the Manpower Services Commission. This is just one more attack upon the authority and the position of the MSC; and therefore, although I do not wish to press the amendment to a Division at this stage, I am not mindful to withdraw it.

On Question, amendment negatived.

7.1 p.m.

Lord Mottistone moved Amendment No. 2:

Page 2, line 34, at end insert— ("( ) Where an order is revoked under subsection 1(b) above, any requirements for employers or establishments in the industries concerned to respond to actions authorised under sections 2, 4, 4A, 4B, 6, 6A, or 7 of this Act shall cease to have effect.").

The noble Lord said: On Second Reading my noble friend Lord Gowrie, in answer to a question from me, stated, as reported at column 140 of the Official Report of 30th June: He asked me whether the Government were requiring a collective training organisation in all cases. The Government will not necessarily insist on collective training organisations in all cases". My noble friend then went on to other matters. We are therefore left with the picture that either there is the training board, or the training board may be revoked; and if it is revoked, industry will be able to have collective training organisations, or in certain circumstances as spelled out by my noble friend it may be possible to do without even that if there are large companies in a relatively small group forming a particular industry.

The point of the amendment is to establish beyond doubt that if there is not an industrial training board—that is, if the industrial training board's order has been revoked—companies, or groups of companies, will be spared the overseeing and the information collection involving the Manpower Services Commission. That will be not identical, but similar, to the sort of relaxation from bureaucratic control that is being given to enterprise zones in Clause 4, as amended—assuming that the Committee agree—by Government Amendments Nos. 15 and 16.

Members of the Committee may say, "Gosh! This is terrible!"—I am sure that this would be the view of several noble Lords opposite—"You are going to suggest that these companies should actually be allowed to be on their own without any bureaucratic interference, that they can be trusted to get on with their training and that they will do it properly. They will not need auntie Government or uncle Manpower Services Commission to hold their hand and tell them how to do it". I can see it all coming out.

However, as I said on Second Reading—and I shall touch on it again briefly—the fact of the matter is that in competitive industries there is the tremendous discipline of the market forces. Over the past 15 or 20 years people have learned that they cannot be efficient unless they undertake effective and good training. This message has got through to them, and it will be underpinned by the competition that will force them to keep up the training. The question of which particular type of training they undertake in detail, as seen by grand people at the centre with all their theories, is not even relevant to them. There has been much trouble with companies under the aegis of training boards from 1964 onwards.

Quite apart from the even greater overseeing provided by the Manpower Services Commission, which has so deadened the attitude to training at the top levels, under the training boards themselves—I know about this, having worked in one from the other end—one of the troubles is that when there is set out criteria to which companies are expected roughly to conform, they will find that all the things that are being suggested are not relevant to them. This is because not only is each industry different, but each company within each industry is different in terms of the particular systematic training that it requires to satisfy its own needs.

That is the problem, and much time is wasted in answering questions that are only partly relevant to one's own affairs and in complying with various forms of instruction. The instruction might be specific, in that it might be said, "You won't get a grant", or, "You won't be exempt from levy", or whatever, "unless you do this"; or there might be what could be termed a veiled instruction, which is guidance. One wastes a great deal of time. One wastes a lot of executive time, and therefore, in another way, one wastes a great deal of money. The money comes out of the training budget for the company, and that is at the expense of spending on proper training.

So what I am saying to the Committee is that if one does not have a training board, one should not be subjected to some kind of guidance, some form of information collecting from the central bodies which, sadly, are to remain with us. That is the point of my amendment. With the Committee's permission, in conjunction with this amendment I should like to take Amendment No. 13, which covers another aspect of the same matter. I beg to move.

Lord Lyell

I have listened, and I am sure that the Committee has listened, with care to my noble friend's detailed explanation of the amendment. Did I hear him aright when he said that he was speaking at the same time to Amendment No. 13?

Lord Mottistone

Yes, Amendment No. 13.

Lord Lyell

I am grateful, and I am sure that the Committee, too, will be grateful, to my noble friend for explaining both amendments at once. As my noble friend has stated, both amendments—certainly Amendment No. 2—concerns the situation where an industrial training board has come to an end and is abolished. I am sure that we would accept that logically that must mean the cessation of the operation of the board. It will mean that any obligations that only the board could have imposed will be extinguished. But in the event of winding up, or abolishing, the industrial training board, it is very important to ensure that, first, the affairs are discontinued and wound up in orderly manner, and, secondly, that there is a reasonable degree of equity between the contributors and the levy payers.

There are only two obligations that a board can impose on any employer. There is, first, the obligation to pay the levy, and then the obligation to provide information. Both obligations were very picturesquely described by my noble friend. I think that he spoke of "uncle MSC "and "auntie bureaucracy". Certainly my noble friend put the matter very clearly. If we take the first obligation—to pay—this, of course, derives from a levy order, which would be made by the Secretary of State; but the second obligation—to provide any information to the MSC—could be imposed only with the approval of the Secretary of State. Thus, my right honourable friend would be in a position to control the initiation of either of the obligations in any case. But in the continuing situation, once he has approved the statutory return or, indeed, made a levy order, then it will be up to the board to continue with any action that they need to take.

I would assure my noble friend that any powers that my right honourable friend the Secretary of State would want to take would be fairly wide and flexible, especially if he was winding up a board. If a winding-up order were needed, it would provide for some time between the making of the order and the final cessation of any legal existence of that board. May I give one example? The order could provide that the board should cease to issue statutory returns, or it could cease to require that employers should complete those returns. It could also amend or revoke any levy order, which I hope might please my noble friend, though this may or may not be desirable in the light of the board's financial circumstances. It would also be needed to ensure fairness and equity as between payers of the levy. Any discontinuation or winding up order would probably require a board to cease carrying out the functions except where this was necessary to wind up the affairs of the board.

I would assure my noble friend that we have very much in mind the problems which may possibly be involved in winding up any boards, and we shall take careful note of what my noble friend has said. But certainly we find that the amendments are, I am afraid, unnecessary; and we also find that they would remove some of the flexibility from the Manpower Services Commission which we see as desirable in order to achieve an orderly and equitable cessation of the affairs of the board when it is ceasing to be in existence.

Lord McCarthy

I wish to intervene only to say that I am afraid I could not agree with what the noble Lord, Lord Mottistone, was saying. It seems to me that he believes that the tremendous discipline of market forces produces training. I think that tremendous discipline just produces poaching. So far as concerns what the Government say is germaine to this, I understand the noble Lord, Lord Lyell, to say that the amendment is largely unimportant and irrelevant but that there are certain residual functions in clearing up the results of abolishing an ITB which the MSC might like to have. I should be in favour of their having something, and therefore I would be against this amendment.

Baroness Phillips

I should like to ask the noble Lord who moved the amendment whether he would not agree that the arguments he advanced would go back to the beginning of the training boards themselves. In other words, even if, as he suggests, large concerns—and I am sure this is true from my own knowledge—did have excellent training schemes, it unfortunately was not so true of certain other firms within industry, and therefore it was necessary to have training boards. So the reason for their beginning still remains; and I am afraid it is one of the unfortunate laws of life that those who are doing the right thing often have to set the example to those who are not quite so good at it. The information is something which is pooled and utilised; therefore I think that if you did not have the discipline of some kind of an overall control certain industries and certain firms within those industries would not have training schemes, market forces or no.

Lord Tordoff

If I may just follow that point made by the noble Baroness—

Lord Mottistone

Would it be relevant, or may I answer the noble Baroness first?

Lord Tordoff

May I put a slight gloss on what the noble Baroness and the noble Lord, Lord McCarthy, have said? It seems to me that the argument of the noble Lord, Lord Mottistone, is based on a slight fallacy in terms of market forces in this situation. It is not to say that trained manpower will not be available in those companies which are not doing the training. So they will still be technically capable of doing their job; they will still be capable of competing in the market-place; but they will not be contributing to the training process, and, as the noble Lord, Lord McCarthy, said, they are poaching. They will not be controlled by the market forces which operate on the day-to-day running of their businesses.

Lord Mottistone

I have another amendment on which I should be happy to debate the point that the noble Lord has just raised, but perhaps I could address my remarks briefly, if the Committee would allow me, to the noble Baroness, Lady Phillips. The fact of the matter is that I think the noble Baroness went back to assume that if things were changed back to pre-1964, the 1964 attitudes would apply today. Having been in the attitude-changing business in this very area for really quite a long time now, I think it is reasonable to suppose that the attitudes have changed. I think you will find that there are many more firms than there were in 1964 which, from the point of view of satisfying their own training needs to make themselves efficient businesses, are on a par with the best firms which existed in 1964, when there were really very few of them.

Your Lordships may say: What about the other ones? It is my experience, for what it is worth, that the other ones will probably never respond to the blandishments of a training board. It depends on the industry, but in the industry that I am in now about 90 per cent. of the firms have responded and have got themselves levy exemption; but that is one sort of industry. The industry whose training board I had many happy years serving, the distributive industry, presents quite a different picture, and always there will be about a quarter or so of the firms in the industry which, however hard you try, you will never convince. So that is a different picture, and it is a waste of time having a great bureaucratic system to try to work away at the edges of that quarter of the firms.

Furthermore, because they do not listen—because they do not want to listen, because they are stubborn, because they are splendidly British and independent; whatever you like to say—they are not efficient and, in fact, they are more likely to go to the wall in times of hardship. Indeed, there is evidence to show that that is so. I am sorry that that is not a Committee point, but I thought it important to take up the noble Baroness's point because it is fundamental to the whole of this issue.

To turn now to my amendment, as I understood it from my noble friend Lord Lyell he said that some of the proposed exclusions were unnecessary and some of them it would he necessary to retain in order to conduct the winding-up process. I wonder whether he could possibly write me a letter and say which fell into each category. It would be useful to know which he thought were unnecessary and which ones were required for that. If he feels he could do that, perhaps he could tell me before I finish my speech.

Lord Lyell

My memory is fairly fresh from what my noble friend had to say at the Committee stage of another Bill last night. I will save the time of the Committee and say I will gladly write to my noble friend and spell out in detail what I have in mind.

Lord Mottistone

I thank my noble friend very much, and with that 1 beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.19 p.m.

Lord Kilmarnock moved Amendment No. 3:

Page 2, line 38, at end insert— ("Provided that it is not intended to abolish an industrial training board actively concerned with the implementation of a unified vocational preparation scheme. (4) In the event of the Minister proposing the abolition of such a training board, he shall lay before Parliament the advice he has received with regard to the future of the said scheme together with any alternative arrangements which he proposes to make.").

The noble Lord said: This amendment is an expression in more concrete form of the disquiet which I and other noble Lords voiced at Second Reading at the fact that the Government should be seeking wide powers to dismantle existing arrangements before there is anything to put in their place. This disquiet has, if anything, been increased by newspaper reports that the Secretary of State is running into difficulties in the Cabinet over his proposals for the 16-year to 19-year age group. The amendments which follow mine seek much more all-embracing guarantees on the future of training in this country. We on this Bench sympathise with their spirit. But I simply want to concentrate on one curious contradiction in Government policy. As most Members of the Committee will know, the unified vocational preparation pilot schemes were first announced in 1976 and were subsequently assessed in the consultative document A Better Start in Working Life, which argued for their adoption on a wider scale.

The object was to make some dent in the appalling numbers of school-leavers in the United Kingdom who go directly into the workforce and get no significant further education or vocational training in their lives. According to Outlook on Training, the MSC's review of the Employment and Training Act, this amounted to 44 per cent. of all school-leavers on the last count. This is by far the highest percentage in any EEC country of young people dumped on the labour market without adequate preparation.

The original target group of the UVP scheme was in the region of 200,000 school-leavers per annum. The latest figures given by the Department of Education and Science in answer to a Written Question of my own show that of 2,393,000 young people aged 16, 17 and 18 in England and Wales in the academic year 1979–80 some 1,135,000—nearly half—were in full-time employment without part-time day education or training. Of those, 449,000 attended evening classes in their own time, leaving nearly 700,000 in the 16–19 age bracket without any further provision whatsoever after leaving school.

Though relatively small in scale—only about 4,000 were covered in the financial year 1980–81—UVP is the principal Government-backed scheme for the young employed as opposed to the young unemployed who are catered for by the Youth Opportunities Programme. It is financed and managed by the MSC and the education departments working together through an inter-departmental group and is a welcome instance of increasing collaboration between Government departments. In November 1980 the Secretary of State for Employment announced that the scheme would be expanded to cover some 20,000 young people by 1983–4. The programme was also referred to by the noble Earl in his opening speech at Second Reading on 30th June, in which he said (at col. 103 of Hansard): our plan is to try to provide links between education and training by a more systematic programme of vocational preparation based on our experience of the Youth Opportunities Programme and of the Unified Vocational Preparation Scheme".

So far so good. We must be thankful for small mercies. But here comes the rub: who got most of the current UVP schemes accepted by employers? Not unnaturally, it was the industrial training boards. In 1978–79 the Distributive Industry Board launched 90 schemes; rubber and plastics, 13; food and drink, four. Thirty-four schemes were launched by colleges of further education but the industrial training boards were undoubtedly the main agencies in selling the idea to employers. Furthermore, it was the considered opinion of the National Foundation for Educational Research in their evaluation of UVP published in November 1980 that: college organised schemes were more likely to experience problems in obtaining employer support for UVP than were the ITB-organised ones".

Finally, this view was supported by the Association of Principals of Colleges representing the heads of more than two-thirds of the major establishments of further education in the United Kingdom who themselves admitted quite openly in a recent statement that the UVP Scheme is largely dependent on the initiatives of the training boards—particularly the Distributive, Food, Drink and Tobacco and Rubber and Plastics Boards".

And they go on, Voluntary arrangements are unlikely to enable the Government to fulfil its expressed intentions to extend training opportunities to the majority of our people".

Well, leaving that general opinion on one side—which we on this Bench happen to share—let us look simply at the Government's expressed intentions in the UVP field. In paragraphs 54 and 55 of the New Training Initiative, which the noble Earl said on Second Reading that the Government backed, we read that, By 1983–4 the UVP programme will be expanded to cover 20,000 young people in employment, a six-fold increase … Our intention is to use it as a test bed for foundation training and further education for young people w employment who are not apprentices or trainees on other schemes". In other words, not only is the Secretary of State's undertaking of November 1980 reaffirmed but the UVP programme is to become an important strand in the New Training Initiative. In the next paragraph we read, the two programmes—the YOP and the UVP—will be planned and developed together in order to provide experience and a foundation on which provision for all young people in the age group can eventually be built".

Now this is all very laudable, but to abolish or take powers to abolish without further consultation the delivery mechanisms before you have secured the general agreement of employers to the principle of voluntarism seems unwise to say the least of it. I am not disputing the right of the Government to act according to their rights, but I am saying that Parliament and the country have an equal right to know on what grounds the Secretary of State bases his actions, most particularly if he acts in disregard of his experts and informed opinion in the field.

The MSC's sector by sector review must presumably by now be on the Secretary of State's desk or, if not, it will be very shortly. I am afraid that I was unable to be in the Chamber when the noble Lord, Lord Rochester, asked a Question earlier on, so I do not know whether anything emerged on that. If the Secretary of State is satisfied with the consultations that the MSC have carried out, he has no further obligation to consult. But, given his stated intention to expand the UVP scheme, which is very largely dependent on the ITBs scheme, it seems only right and proper that he should lay before Parliament the reasons for abolishing or changing the scope of any board on which he might have relied for assistance in implementing an expansion of the UVP scheme, and that he should tell us on whose advice he is relying in reaching his decision. Finally, he should set out the alternative lines on which he proposes to proceed. That is the purpose behind this relatively modest amendment. I beg to move.

7.27 p.m.

The Earl of Gowrie

Sometimes one asks the Committee to resist an amendment with which one has some sympathy. This is the case at the moment. My objection to the noble Lord's amendment is the inappropriateness of statute in this field rather than that I have any disagreement with him in his analysis of the poverty of real vocational training in this country. We have said that on many occasions, and my right honourable friend the Secretary of State has consistently compared—as have many of his colleagues —our own situation adversely, even for those in work, as the noble Lord, Lord Kilmarnock, reminded us, with the situation that obtains with some of our competitor countries. We shall give what the noble Lord has said great consideration, just as we shall give considerable weight to the report by the MSC as and when we start taking decisions about the future of boards.

This intention has been reinforced by the new training initiative document which the noble Lord mentioned and which I indeed commended to the House when we considered this Bill on Second Reading. There are other considerations as well as these and as well as the issue about whether a statutory law is the appropriate vehicle for achieving what we are all anxious to see done. For instance, we have to consider the ability of future training arrangements to provide wide opportunities for apprentices, to maintain up-to-date training standards and to counteract potential skill shortages, as well as to provide opportunities for adult training and other important training needs generally.

No one would dissent from that, but one gets into very difficult territory when one tries to write such considerations into statute law. I could not accept, either, that vocational preparation should be written into the law—as the noble Lord proposes—in isolation from all these other considerations that I have mentioned. If we go back to the 1964 Act, we find provision for any order abolishing, establishing or changing the scope of a board to be subject to the negative resolution procedure. There is thus a procedure for Parliament to debate such orders.

If any Member of this House or of another place wants to question the effect of any order being made or wants to draw attention to what he or she may feel to be an adverse effect, that seems to us to be the proper way of dealing with these matters, and to deal in parliamentary terms with a subject which is of continuing interest and capable of improvement but which, even if improved, will always be a matter of concern. But the unified vocational preparation programme, as it has existed up to now, is relatively small. As I said on Second Reading, we do want to provide much wider opportunities for vocational preparation and we are absolutely in line with the noble Lord, Lord Kilmarnock, there. At present the MSC is consulting how to do so, and in these circumstances it seems to me it would be quite wrong to tie our consideration of the role of boards just to the existing UVP scheme.

Certainly I acknowledge, with the noble Lord, Lord Kilmarnock, that some boards have played an important role in the scheme up to now, and I pay tribute to the work they have done, though equally some boards have chosen not to participate. But I see no reason why voluntary arrangements, under the eye of the Secretary of State with the very considerable enabling powers this Bill gives him, cannot be as effective, and in any case large numbers of young people whom we think need vocational preparation opportunities do happen to find themselves employed in sectors where there are no statutory boards. Therefore, acceptance of this amendment would create, to put it mildly, an extremely lopsided position in respect of very many young people.

So I hope that in asking the Committee to resist this amendment I shall not be considered pedantic or obscurantist or over-technical. I am passionately anxious to improve training, and a great part of my work in the department is on that. Nevertheless, I think that if we reverse the question posed by the noble Lord's amendment and say, "Suppose we accepted it, what would be the net results over the field and what would be the net obligations of Parliament, the Secretary of State and the Exchequer?" we would come to some rather confused answers. That is why I must ask the Committee to reject the amendment.

Baroness Seear

May I ask the noble Earl, accepting that he has the very great concern that we know he has, if we abolished training boards what mechanism is to be used to see, firm by firm, that in fact these schemes are operating? I cannot see how it is going to work on the ground. I do not believe that the noble Earl believes that if we just leave it all to the market the market forces will be making them do all the right things. The noble Earl is far too intelligent to believe that. But it does need some prodding mechanism and I cannot see, in the structure that will be left behind when the training boards have gone, where the prodding mechanism would be found.

The Earl of Gowrie

First of all, not all the training boards, by any means, are liable to go: in fact it is a very open question as to which of them will go at the moment. Secondly, we have in Government a Department of Employment and a Secretary of State for Employment. It seems to me to be somewhat in the area of political science fiction to suggest that any Secretary of State for Employment, however much I myself might disagree with some of his politics or whatever, would be uninterested in training issues. Thirdly, we have the Manpower Services Commission which, with its tripartite character, if I may use that jargon to save time, is unlikely not to be interested in training issues within its orbit. Fourthly, those people on the ITBs that remain—and they are liable to be the key ITBs—are not likely (and on this I think the noble Lord, Lord Scanlon, might agree with me) to be uninterested in general training across the field.

Fifthly, we have an educational sector which does not do enough for my taste, and perhaps not enough for that of the noble Baroness, but certainly does consider its interface, to use some more jargon, with the world of work. Sixthly, we have the careers service, which is not known for its reticence about the transition of school-to-work activities. Really it seems to me that we have goads galore in this issue, and I do not think the noble Baroness need be too worried.

Lord McCarthy

Without attempting to follow the noble Earl into that issue, I do not think that the noble Baroness was saying that these people or bodies are uninterested. Of course, they are all interested. What she was asking was what would be the mechanism, and why at this point the Government want to dismantle in effect, in the areas where they do dismantle it, the only effective mechanism we have. I think we are going to take that up in subsequent debates and so I will now return to this particular amendment. Many of the things the noble Earl said one must have sympathy with. This amendment takes one individual, small area where, as he rightly said, the industrial training hoards have done a very great deal. It is a very important and vital area where the Government, as he rightly said, wish to see a six-fold increase, and it is saying surely in this area you would be prepared to say in a statute that you are going to take the question of what happens to unified vocational preparation schemes specifically into account when deciding whether or not to get rid of a particular training board.

The reply of the noble Earl, as I understand it, is that it is very narrow and there are many other things which a training board would be required to do and which presumably the Secretary of State would take into account before deciding whether or not to abolish an industrial training board. If he carries on with that line of argument, since he knows there are further amendments on the Marshalled List which take a much wider view—indeed there is the next amendment—one might expect him to go for a rather more favourable wind to a general amendment which does not select a narrow area, though a most important one of unified vocational preparation schemes; except that, towards the end of what he says, he seems to be saying that he does not believe in specifying criteria in statutes at all. That would be a fine doctrine, if it were a general one, I might say. But he does not believe in specifying criteria in this statute and he believes in fact that a debate on an order in this Chamber or in another place would be a substitute.

I do not think it would be a substitute because we want some measure against which to debate what it is that the Secretary of State is doing, and we want some indication from the Secretary of State that he really means what he and the noble Earl have said on many occasions that they do not want to undermine the total volume of training in this country and in particular, in the case of this amendment, unified vocational preparation schemes.

The Earl of Gowrie

May I just say to the noble Lord, Lord McCarthy, that I congratulate him on skilfully driving in the slipstream of the noble Lord, Lord Kilmarnock, in order presumably to try to overtake him a little later on. I did notice that this was what he was doing.

Lord Kilmarnock

I am most grateful to the noble Earl for his reply. He has, of course, shown his customary concern for the whole problem of the 16-to-19 year old age group, for which he has a well-established reputation and which we do not dispute in any way at all.

He criticised me for introducing the question of unified vocational preparation in isolation. He said it was too narrow a front; but I should just like to say that it was deliberately intended to be narrow, on the grounds underlined by the noble Baroness, Lady Seear, that I was striving to get at the mechanism the noble Earl had in mind for the continuation of these schemes once he has possibly knocked away some of the underpinning which is provided at the moment by the industrial training boards.

I must confess that I am still not entirely sure what mechanisms are in mind. However, as the noble Earl will have detected, this was to a large extent a probing amendment. We know that there is at the moment a lot of thought in the air about this whole field and there are also, as the noble Lord, Lord McCarthy, pointed out, some more all-embracing amendments to come forward which would, on the whole, take care of my narrower sector of concern. So on those grounds I am prepared to beg leave to withdraw this amendment, but I shall certainly want to read the report of the debate very carefully before deciding what to do at Report stage. It rather depends on how further amendments fare, and also on whether any further clarification of the Government's proposed mechanisms for the continuation of these schemes emerges in the course of the debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.41 p.m.

Lord McCarthy moved Amendment No. 4:

Page 2, line 38, at end insert— ("(4) The Minister may not amend or revoke an existing industrial training order unless he is satisfied that such action is unlikely to reduce the quality and quantity of training being undertaken in the industry covered by any training boards concerned.").

The noble Lord said: In moving this amendment, I have to say that, of course, this is asking for general criteria. Therefore, the first part of the noble Earl's set of objections to the previous amendment does not stand in this case. The object is to inject certain criteria into the Bill, so that we have some idea of what factors will be taken into account by the Secretary of State in deciding whether or not to abolish a particular industrial training board. I am trying to use the kind of criteria which I think ought to be most acceptable to the Government, because the statement that the Government should not abolish an industrial training board unless it is unlikely to reduce the quality and quantity of training in the area covered by the industrial training board, is, in broad terms, what we have been told time and time again by Government spokesmen, here and in another place, in regard to what they consider will happen.

In the Official Report, at column 105 of 30th June, the noble Earl said: We feel that in many sectors of industry adequate training arrangements can continue without the straitjacket of a statutory framework". Indeed, the noble Earl has already said the same thing in reply to amendments tonight. Again, at column 106 he said: … statutory boards will be kept where they are needed to meet essential objectives". Again, also at column 106: We do not want to be left with inadequate training arrangements". Following doubts which were expressed on Second Reading by myself, by the noble Baroness, Lady Seear, by my noble friend Lord Scanlon and by my noble friend Lord Allen, the noble Earl said, at column 137: … we shall not get rid of statutory training boards in those key sectors where we believe that essential training objectives will not be met without them". Again, at column 138: I am not convinced … that industry is not capable in very many cases of responding without levy to its training needs". And, most particularly, in reply to the noble Baroness, Lady Seear, he said at column 139: … we are not going to get rid of statutory training boards where these seem to be necessary"— that is to say, to meet the country's training needs.

The Government have never denied—the noble Earl did not deny it himself in his Second Reading speech when he referred to the New Training Initiative—that they agree with that part of the New Training Initiative which says that we undoubtedly need an extension in the quality and quantity of training. Therefore the aim of this amendment is quite simple. It is that the Government shall be prepared to say specifically, in the Bill itself, that the main factor which they will take into account is their belief that the quality and quantity of training will be maintained. If they say this, and if it can be shown subsequently that the quality and quantity of training is not being undertaken, then we shall have to say something on it and we shall have some bench-mark or some criteria. But unless it is in the Bill, unless the Government are prepared to make that statement, we shall know what their promises are worth. I beg to move.

Lord Rochester

I have little of substance to add to what the noble Lord, Lord McCarthy, has said. I should like to take this opportunity to give an indication of how we on these Benches support the principle inherent in the amendment which he has just moved. We should much prefer, as my noble friend Lady Seear made plain at Second Reading, that industrial training boards were preserved, not necessarily in their existing form but as the well-tested and broad foundation of sound training on which we should continue to build. Certainly, before we allow them to disappear, let us make sure that standards of training are not going to suffer in terms of their quality or their quantity.

The Earl of Gowrie

I am reluctant to repeat myself and, as the noble Lord, Lord McCarthy, very fairly implied, there is some overlap between his amendment and the previous amendment, though, of course, his is more general and less targeted than the amendment of the noble Lord, Lord Kilmarnock. Just as I had considerable sympathy with the motives behind the amendment of the noble Lord, Lord Kilmarnock, so I am able to extend that sympathy to the present one. We have made it clear that we wish to be sure that essential training needs will be met before any ITBs are abolished. We shall want to be quite sure of the adequacy of any voluntary arrangements to meet such needs. When my right honourable friend first asked the MSC to review future training arrangements, he spelled out quite specifically the criteria on which his formal decisions would need to be based. These included the likelihood of shortages of trained manpower, and we should hope to see economic improvement, an upturn, and such shortages as an indication of upturn. Indeed, even at the present time there are, in key sectors, considerable skill shortages.

He also needed to consider the emerging demand for trained manpower in new technologies, the need for adequate quality of training, including agreed standards—and we had some debate about standards rather than time-serving at Second Reading—opportunities for vocational preparation for young people, which takes us back to the previous amendment, and wide opportunities for craft apprentices and for adult training. The MSCs report will, I am sure, have examined the proposals for voluntary arrangements against these tests. We have made clear that we will not abolish statutory boards where we think that the tests and these essential training objectives will not be met. It would be quite right, therefore, for Parliament to try to hold the Government to these intentions and to insist that necessary training should not be damaged in the process of reviewing the training boards. This is a big economic affair, a big social affair, and it is of understandable national concern.

Our argument is simply that it is not right to accept this amendment, really for a narrow reason and for a broad reason. The narrow reason is that the amendment is inappropriate in requiring that no change should ever be made, if it is expected that the effect will he to reduce the quality or quantity of training. There are instances when you might wish to reduce training of the highest quality. If you came to the conclusion that your economy was—I must be careful what example I use, so as not to excite anybody—more or less being wiped out in confectionery, you might wish to reduce the quality of training in the confectionery industry, because you could not compete in that area any more. Happily for any party with an interest in the confectionery industry, that would not be the case, and I use it only as an example. But under this amendment the Secretary of State would be bound to continue training splendid apprentices manufacturing Smarties when the Smarties market had totally collapsed. The more general objection is that which I made earlier, about statute. Very often a suspicious Opposition—and rightly, because one is paid to be suspicious in Opposition—

Several noble Lords: No!

The Earl of Gowrie

Well, in fact, some are paid and some are not. But very often a suspicious Opposition will say, "We will try to get this on the statute because it will tie the Government's hands". However worthy that motive may be, it does have the uncomfortable effect of involving the proper concern that Parliament has with the intricacies, delays and expense of litigation. The likelihood of the quantity or quality of training being maintained seems to us to be a matter more appropriately debated in Parliament than in the law courts. Orders changing the scope of a training board and orders abolishing a training board are subject to a negative resolution of both Houses, so any Member can pray against such orders and any Member can initiate a debate. I believe that that is entirely right. If my right honourable friend moves any orders following the present review, I have no doubt that in practice they will be prayed against and debated. We do not want to see this kind of issue hung out in the courts and subjected to lengthy and contentious legislation. For those two reasons, I would ask your Lordships' Committee to reject the noble Lord's amendment,

Lord McCarthy

In reply, I am very disappointed with what the noble Earl has said. He has a narrow reason and he has a wide reason. It seems to me that between his two reasons one cannot get anything through; that there is no way through. The narrow reason is better than the wide reason. It is quite true that one could have the case in which one wanted to run a particular industry down, and, if the noble Earl had said he wanted to take this aspect away and think about it and perhaps suggest a change of wording, that would have been different. But no. It is the wide reason that is the crucial reason; the noble Earl does not want anything on the statute which specifies what the criteria shall be.

Of course the noble Earl the Minister has sympathy. When the noble Earl expresses sympathy, he reminds me of the Walrus: I weep for you,' the Walrus said: 'I deeply sympathise'. With sobs and tears he sorted out Those of the largest size, Holding his pocket-handkerchief Before his streaming eyes". The noble Earl sympathises but he does nothing.

7.53 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 42; Not-Contents, 47.

CONTENTS
Airedale, L.	Hooson, L.
Amherst, E.	Houghton of Sowerby, L.
Beaumont of Whitley, L.	Jeger, B.
Bishopston, L.	John-Mackie, L.
Blease, L.	Kilmarnock, L.
Boston of Faversham, L.	Kirkhill, L.
Bowden, L.	McCarthy, L.
Chitnis, L.	Mackie of Benshie, L.
Cledwyn of Penrhos, L.	MacLeod of Fuinary, L.
Collison, L.	McNair, L.
David, B. [Teller.]	Mayhew, L.
Galpern, L.	Northfield, L.
Hampton, L.	Oram, L.
Hanworth, V.	Pitt of Hampstead, L.
Hatch of Lusby, L. [Teller.]	Ponsonby of Shulbrede, L.

Rochester, L.	Stewart of Fulham, L.
Ross of Marnock, L.	Taylor of Blackburn, L.
Scanlon, L.	Taylor of Gryfe, L.
Seear, B.	Tordoff, L.
Simon, V.	Underhill, L.
Stewart of Alvechurch, B.	Wilson of Langside, L.

NOT-CONTENTS
Avon, E. [Teller.]	Kinross, L.
Baker, L.	Lawrence, L.
Balerno, L.	Long, V.
Belstead, L.	Loudoun, C.
Brabazon of Tara, L.	Lucas of Chilworth, L.
Bridgeman, V.	Lyell, L.
Cathcart, E.	Mackay of Clashfern, L.
Colville of Culross, V.	Margadale, L.
Cork and Orrery, E.	Mottistone, L.
Cullen of Ashbourne, L.	Mountevans, L.
De La Warr, E.	Newall, L.
Drumalbyn, L.	Norfolk, D.
Dundee, E.	Northesk, E.
Elles, B.	O'Hagan, L.
Elton, L.	Reigate, L.
Gardner of Parkes, B.	Rochdale, V.
Gisborough, L.	Sandys, L. [Teller.]
Gowrie, E.	Skelmersdale, L.
Greenway, L.	Stodart of Leaston, L.
Gridley, L.	Strathclyde, L.
Haig, E.	Swinfen, L.
Henley, L.	Trefgarne, L.
Inglewood, L.	Trenchard, V.
Kinloss, Ly.

Resolved in the- negative, and amendment disagreed to accordingly.

8.1. p.m.

On Question, Whether Clause 1 shall stand part of the Bill?

Lord McCarthy

We must oppose clause stand part because this is the heart of the Bill. The object of this part of the Bill is to change the position so that the Manpower Services Commission no longer proposes what happens to industrial training boards and the Secretary of State disposes, a relationship which was established under the previous Acts. We have to say why the 1973 relationship was the correct one and why it is that the Government have still failed to explain their reasons for change.

A previous Conservative Government established the Manpower Services Commission which was charged with developing the overall national training policy, with setting the priorities for an overall training policy, and with doing this on a tripartite basis. Indeed, a tripartite basis for planning and introducing training is the only possible effective basis. If one is to provide the money one must have the employers, because the employers must agree that what one wants to do with the money is sensible, reasonable and what is required for the industry as a whole. If one wants to get the acceptance and co-operation of the work force, one must have the unions because in the end only the unions will be able to give their agreement to the kind of changes—for example, in the apprenticeship system—which we want to see. And of course one must have educationalists and one must have the Government.

The whole foundation of the Manpower Services Commission was a very worth-while expression at that time of the commitment of the Conservative Govern- ment of that time to the principle of co-operation and, in this context, of tripartism. Therefore, going back upon that context and upon the role of the Manpower Services Commission and writing down that role in a whole series of ways—which this Bill does, not simply in Clause 1 but in other clauses to which we shall come later tonight—is not simply putting training at risk. It is moving away from a system of co-operation and consultation which used to be, and which we hope will again be, the only way in which this country can move forward.

The Government have given us some reasons, but they are not satisfactory reasons. The Secretary of State said in another place that in the Government's view the question of the future of the industrial training boards could not be decided upon the basis of the Manpower Services Commission's report, Outlook on Training. After all, the Manpower Services Commission was asked to look at the future of industrial training boards. By and large, the Manpower Services Commisison said that the existing system should continue, but the Secretary of State said in another place: In the Government's view, that question"— that is to say, the future of the boards in general— can be decided only on a sector by sector basis, having regard to the future training needs of particular industries". Then the Manpower Services Commission was given the job of looking at particular industrial training boards on a sector by sector basis. But we have not waited for the conclusion of the Manpower Services Commission's review so we do not know what the commission will say.

We have asked the Government on many occasions, and I ask them again tonight, what the attitude of the Government will be to the sector by sector review which is eagerly awaited by all of us. Will the Government in general say that if the Manpower Services Commission's sector by sector review says that a particular training board should survive, they will go along with this? Or have the Government some other set of criteria which they will not put into the Bill and which they will not tell us about tonight? Which means that that which the Manpower Services Commission's tripartite body says should be the future of a particular industrial training board shall not be the case, because the Secretary of State will decide—and then the noble Earl says that we can pray against him in the House. So the Government have done this and have not waited for the sector by sector report.

In so far as one can find a general explanation for this, I suppose it came out once again tonight in the noble Earl's commitment to voluntarism: voluntarism is best. That indeed was said by the Parliamentary Under-Secretary in another place when asked a similar kind of question at the Committee stage. Voluntarism, he said, is best, in much the same way as they used to say that beer is best. The question, however, is not whether voluntarism is best but whether voluntarism will reach those parts that the statutory system reaches but which voluntarism is unlikely to be able to reach.

We have made the point several times in this House. The noble Earl, Lord Gowrie, said at Second Reading that we must not take this Bill too seriously. It was, he said, a flexible, modest enabling Bill. Yet nobody will tell us what are the criteria which are going to flow through this flexible, modest enabling Bill. Indeed, the only people who have really come forward (apart from merely saying that one believes generally in voluntarism, which does not get us very far) and made a thorough, general argument in favour of the kind of powers which are being taken in Clause 1 of the Bill are the writers Elliott and Mendel in the infamous Centre for Policy Studies' pamphlet from which it all began. They were the first people to set out to destroy the industrial training hoards and they gave a general argument. But since they are a priori economists their general argument had nothing to do with the facts. It was based upon general principles: taxes are bad; intervention is wrong; tripartism is evil. If you set off on that kind of Quango hunt to save public expenditure, you will come to the conclusion that you need a Bill of this kind. You will not wait for the sector by sector review and you will not tell people what are the criteria which you are going to use.

A short while ago I believe I said to this House that I thought the Government's economic policy was a bit like the Hunting of the Snark, searching for the mysterious M3. But the Government have now decided, as we all knew, that M3 was a boojum, you see, so it is no good looking for M3. So now we are attacking the supply side of the economy. Now we are making the labour market work.

One part of our policy is anti-union legislation and another part of our policy is to shoot institutions: bang, bang, bang—any institution in sight. This might make the labour market work. So it is not the Hunting of the Snark which is a comic poem. It is the Rime of The Ancient Mariner. It is a tragic affair. The ancient mariner, noble Lords will remember, shot the albatross because he thought it was a bird of ill-omen. But it was a bird of good omen. The albatross was trying to help. So the Government go around shooting 57 Quangos, the National Enterprise Board, the Clegg Commission and now we do not know how many industrial training boards.

We oppose this Bill and in particular we oppose this clause because we believe that in the true sense—not in the commonly accepted sense—the ITBs are in fact albatrosses; they are birds of good omen; they are trying to deal with the job. As the noble Baroness, Lady Seear, said, no mechanism is being suggested to replace them, and we do not believe that those who say that they are concerned with training and with the volume of training and the quality of training would really like to shoot all these birds. Maybe they will not shoot as many as we think (I certainly hope not) but they are in the grip—or someone somewhere behind them is in the grip—of a profoundly authoritarian dogmatic ideology: shoot, shoot, all the Quangos including the ITBs.

Lord Hatch of Lusby

Like my noble friend Lord McCarthy, I think it is obvious that Clause 1 is the core of the whole Bill. I must apologise to the noble Earl and to the Committee for not being able to speak at Second Reading, the reason being that I was abroad at the time. Nevertheless the noble Earl may recall that he had another Bill last year, the Employment Bill, and in some ways this resembles that Bill, in the sense that, while the Employment Bill created no employment, this Bill creates neither employment nor training and, as my noble friend Lord McCarthy said at Second Reading, the title of the Bill seems to have no relation to its content.

The noble Earl may also recall that he and I had a slight brush at the time of the debate on the Employment Bill about the reduction in the budget of the Manpower Services Commission, and at that time I was able to quote to him a press statement made by his own department immediately after the last election, to the effect that that budget was to be cut.

I can assure noble Lords that I have read the Second Reading debate and I find myself as puzzled by the reason for the production of this Bill at this time as many noble Lords and noble Baronesses did during that Second Reading debate. I am forced to come to the same conclusion as did my noble friend Lord McCarthy on that occasion and as he has repeated tonight—that the central object of this Bill is a tiny, peripheral part of the Government's economic policy which is, as he has said, to cut expenditure at all costs.

This seems to be madness. I am sure that the noble Earl is absolutely sincere when he tells us that he does not wish to cut the training programmes of this country; that he does not wish to see this country fall further and further below our competitors in the training of our work force. But he is having to do so. He is the agent of the Government that he represents in doing so, or attempting to do so. Are we not living in an era in which it is now, I should have thought, virtually universally accepted that at least one of the root causes of the economic decline of this country goes way back into the last century, when this country failed to match the training facilities in the wealth-producing sectors of the economy that our major competitors, particularly in Germany and America, provided. Are we not certainly doing precisely the same tonight?

The noble Earl recommended to us in the Second Reading debate—and this comes directly in relation to Clause 1—the document produced by the Manpower Services Commission, A New Training Initiative. This also puzzles me somewhat. Look at paragraph 40 of that document. You will see that in paragraph 40 the Manpower Services Commission suggests that there is unlikely to be a need for a substantial increase in spending on training. Yet we know that this week alone the Secretary of State for Employment is fighting a battle within the Cabinet to get £1 billion or £1,000 million—in order to ensure what? In order to ensure that by 1983, in two years' time, all school-leavers will be able to get jobs.

But beyond that, to take the words of the Manpower Services Commission itself, having said that it does not think there is likely to be any substantial need for an increase in expenditure, it is now saying that in this year alone it requires £93 million extra in its budget in order to include another 100,000 within the Youth Opportunities Programme. That is this year. Is this not a contradiction, and is the noble Earl able to unravel this contradiction?

The Earl of Gowrie

Yes.

Lord Hatch of Lusby

Then again, according to the Manpower Services Commission, only 40 per cent. of the labour force under the age of 18 will be in employment at the end of 1983 if present—

Lord Mottistone

Will the noble Lord allow me?

Lord Hatch of Lusby

If I may just finish this sentence, then by all means the noble Lord may intervene. Only 40 per cent. of the labour force under the age of 18 will be in employment at the end of 1983 if present trends continue.

Lord Mottistone

I know it is very unfortunate that the noble Lord was not here for Second Reading but does he not think it would be better if he did not inflict this Committee with a Second Reading speech and instead spoke strictly to the Question, That Clause 1 stand part? He has made passing reference to it, but the whole of the last few minutes of his speech have been on Second Reading and have had nothing to do with Clause 1.

Lord Hatch of Lusby

In my submission, t am speaking to Clause 1, because everything after Clause 1 stems from Clause 1, and we are talking about Clause 1 standing part of the Bill.

Lord Mottistone

But we have already had these sorts of speeches which we have had an opportunity to give at Second Reading. The noble Lord apologised—and it was good of him to do so—for not being here, but I really suggest that it is stretching the bounds of order in this House to make a long and involved speech about general subjects when one really is supposed to be speaking about the clause. It may have all sorts of implications but those are dealt with at Second Reading and not carried on through the Committee stage. I do not know whether my noble friend on the Front Bench would agree with me?

The Earl of Gowrie

I have to say that I do rather share that view, speaking in a personal capacity. Of course I do not in any way wish to gag the noble Lord, Lord Hatch of Lusby, who is as concerned about these issues as I am, but perhaps he could beam his general argument on to the principle of the clause and we should get on rather faster.

Lord Hatch of Lusby

What I am trying to do is to draw from the Minister who is to reply, the noble Earl, an explanation of why he is introducing this clause, giving the Secretary of State and the Government the power to reduce at this time the institutions which have been set up to promote training within industry. All that is contained in Clause 1. I am trying to probe the mind of the Government as to why these powers, all of which are contained in Clause 1, are now being taken to reduce the training and the institutions to promote training as the noble Baroness, Lady Seear, put it, to prod the employers into further training—just at a time when more and more training is needed in this country and when the economic future of this country depends on increasing rather than decreasing training.

I will make one final point on this subject, and it is just as directly related to Clause 1 as everything else I have said. May I just finish the point I was making when I gave way to the noble Lord, Lord Mottistone. I was pointing out that the Manpower Services Commission itself was forecasting that by the end of 1983 only 40 per cent. of the labour force under the age of 18 would be in employment. At the end of last year 70 per cent. of that same generation within the labour force were in employment. What are you going to do with this difference, the 30 per cent.? Are you going to leave them to rot? Are you going to provoke them into the kind of behaviour that we have seen over the last few years, or are you going to train them?

Let me ask the noble Earl directly. Do the Government have sufficient faith in their economic policy to train the labour force which they claim will be needed when their economic policies have had another year or two to run? Because that is the nub of Clause 1. All the actions that are being taken by this Government, through Clause 1 of this Bill, through the attitude that they are taking towards those universities like Salford and Bradford and Aston where technological training is being done, appear to suggest that they do not have faith that they will need the trained labour force which they claim their economic policies will require when they become successful. Perhaps I should declare an interest, as an honorary Fellow of Bradford University, and as having taught in a number of business schools in various overseas countries.

How can the Government argue that this is the time to undermine these institutions which their Conservative predecessors and their Labour party predecessors set up in order to try to redress the gross imbalance in the training facilities for wealth production in this country as compared with those of our major competitors? It seems to me that this is truly destroying the seed corn of the economic future of this country, destroying that seed corn in the very year when business failures are at a record level and when, surely, it would be agreed on all sides of this House that what this country needs more than anything else, if this record of failure is to be ended and reversed, is a new generation trained in the modern methods of industry, given the opportunity of specialising in building up new British industries. Clause 1 of this Bill, to my mind, denies all the vision and hope which can come from such an attitude.

8.24 p.m.

The Earl of Gowrie

I think I can clear up some of the noble Lord's difficulties quite quickly, or rather the specific difficulty that he says he finds in the Government's professed desire to improve training and the Bill, which enables the Secretary of State to wind up ITB's, if necessary, after taking the advice of the Manpower Services Commission and subject to the procedures of Parliament which I itemised earlier. The noble Lord, Lord Hatch, and the noble Lord, Lord McCarthy, are both falling into what I would judge to be a common fallacy in the Labour party, which is to identify an issue too closely with the institutions that exist to serve it. That is a marked difference of view between us. Again I do not wish to take a contentious example, but it might be that there would be a situation where an institution existed to serve the blind—indeed, many such institutions exist and an excellent job most of them do—but the aim of people within the institution, or even Parliament, to reform a particular institution should not be looked upon as an attack on the blind. It is no such thing. It might be that a particular institution had outlived its usefulness, was not cost-effective or the rest.

This is a very pervasive and a very dangerous attitude, it seems to me, because it is quite clear that in almost every social field in this country there are large numbers of people—and I am not referring to ITB's at the moment or the Manpower Services Commission, or to any given body, but making a general principle—in forms of employment which exist in some way to look after other people with some problem or some interest or some issue. As such they are vocal and persuasive in defence of their own interests and rights. That is one of the reasons why we find in this country that we have, in our view, a public sector which is disproportionate, not to some absolute ideal or dogma or doctrine, but disproportionate to the amount of wealth being generated to serve it. It is, therefore, very central to this Government and to its overall policies to try to get the public sector more into line with what the economic activities in this country are actually able to supply.

That does not mean that we simply look at a quango, if you like, and, in the colourful phrases of the noble Lord, Lord McCarthy, with his interests in late 19th century poetry, take a pot shot at it wherever or whenever we can. There may be instances in which a public body is doing an admirable task. But we think that the onus at least is on the public body and Parliament to judge whether one is essential. We do not see why these organisations should be self-perpetuating and inviolate and enshrined in statute. That is the nub of Clause 1.

The Secretary of State wants to spread—and I am now leaving the general principle and going to the principles of training—the areas of reliance on voluntary arrangements as far as possible. But he may not be able to spread them as far as he might like at any given point, because the essential criteria which I outlined in the debate on the previous amendment might not be met. Parliament has a perfectly good method—as I have said—of bringing it to the Secretary of State's attention that he or she is not meeting these particular criteria and so have boundless other organisations in our economy.

Let me turn to the connection between this Bill and the Youth Opportunities Programme (YOP) and some of the work of the Manpower Services Commission. The part of the Bill which we are discussing is fundamentally about industrial training boards. We have gone over their role and function and we have said on many occasions that they are liable to continue that role and function in many important cases. The work of the MSC is different, although, of course, the MSC does supply a great deal of training. Where a given industry either by a voluntary method or by some form of Government, statutory or public organisation, like an industrial training board, is not supplying training, the MSC with Government money tries to come in and top up, as well as acting as a strong disciplinary force on Governments and on businesses to try and do better and to provide more training or to foresee the need for more training.

But in the case of the Youth Opportunities Programme the money which the Government give to the MSC is there to fulfil a particular acute, social and economic need which is that although there are very large numbers of jobs in this economy—larger numbers in fact than in any other comparable European country except Denmark—we do not have the numbers of new jobs, regrettably, to meet the number of young people who are seeking them. We are facing a very grave demographic or population explosion which will not go on indefinitely—it will ease, come one policy or another, in the mid-eighties—and we have the misfortune of seeing the sixties baby bulge (to which I must confess I contributed) hitting the labour market in a recession all over the world, and something must be done to try and service their needs.

We had programmes which were fundamentally cosmetic or fundamentally to give young people things to do, but we are now trying to improve the training quality in these programmes. This is rather a different field from the, as it were, professional training that we are talking about being done by the ITBs and which necessarily may deal in the future with a slightly older age group.

Therefore, this seems to me to be a perfectly coherent policy and a policy designed to try in the particular case I have just given to meet an acute social problem, and none of us in the Government underestimates how acute it is. Our only analysis is that this problem will be with us come one Government or another for some years yet. In fact, as the noble Lord, Lord McCarthy, well knows, the work of the Manpower Services Commission has been commended by the previous Administration as well as by ourselves, who initially set it up, and we would see a continuing role for it, not least in the field of training. However, I think that otherwise noble Lords have been far too wide-ranging—and I apologise, therefore, for having to be wide-ranging back—about the general underlying principles. It would be better, it seems to me, for us to revert away from a second slice at Second Reading and to go back to the particular efforts which Members on all sides of the Committee are making to improve the Bill.

Lord McCarthy

The Committee would not expect me to agree with what the noble Earl has just said. He has not cleared up my difficulties and I doubt whether he has cleared up the difficulties of my noble friend Lord Hatch of Lusby. I must say that I do not like disagreeing with what the noble Lord, Lord Mottistone, says, but I do not think that my noble friend Lord Hatch went too wide. I believe that this clause is the heart and the centre and the pulse of this Bill. What we are saying is that this Bill is designed to change the fundamental way of running industrial training in this country. The point at which to make that as sharp as we can is at this point in this debate on a Motion, That the clause stand part of the Bill?

The noble Earl says that we in the Labour Party, in particular in relation to this clause, are making one of our common fallacies: we are identifying aims with institutions—not at all. If the Government had come forward with an alternative set of institutions—as the noble Baroness, Lady Seear, said—if they had come forward with a set of mechanisms and if they had not simply said that they will tell us what will happen after it happens and that in the meantime we should have faith, then we would not be arguing as we are now. It is not a confusion of institutions with aims; it is the fact that the Government in this clause more than in any other part of the Bill are going back on the conclusion which all parties came to first in 1964, and then reiterated in 1973, that, even although this country had gone through a long period of economic upswing, voluntarism would not solve the industrial training problems of this country. This clause is going back on that and no institutions to provide an alternative way of carrying out these aims are being put forward.

The noble Earl has referred to an analogy with the blind. It seems to me that when he and his colleagues are discussing this matter the blind are leading the blind. It is quite true: I do prefer 19th century poetry to 18th century economics. This is laissez-faire run mad and that is why we shall divide the House.

8.38 p.m.

On Question, Whether Clause I shall stand part of the Bill?

Their Lordships divided: Contents, 49; Not-Contents, 36.

CONTENTS
Avon, E. [Teller.]	Loudoun, C.
Baker, L.	Lucas of Chilworth, L.
Balerno, L.	Lyell, L.
Belstead, L.	Mackay of Clashfern, L.
Brabazon of Tara, L.	Margadale, L.
Bridgeman, V.	Mottistone, L.
Cathcart, E.	Mountevans, L.
Cork and Orrery, E.	Mowbray and Stourton, L.
Cullen of Ashbourne, L.	Newall, L.
De La Warr, E.	Norfolk, D.
Denham, L.	Northchurch, B.
Drumalbyn, L.	Northesk, E.
Dundee, E.	O'Hagan, L.
Elles, B.	Reigate, L.
Elton, L.	Rochdale, V.
Ferrers, E.	Sandford, L.
Gardner of Parkes, B.	Sandys, L. [Teller.]
Gisborough, L.	Skelmersdale, L.
Gowrie, E.	Soames, L.
Greenway, L.	Strathclyde, L.
Gridley, L.	Swinfen, L.
Haig, E.	Trefgarne, L.
Henley, L.	Trenchard, V.
Inglewood, L.	Vivian, L.
Long, V.

NOT-CONTENTS
Airedale, L.	McCarthy, L.
Amherst, E.	McNair, L.
Beaumont of Whitley, L.	Peart, L.
Birk, B.	Pitt of Hampstead, L.
Bishopston, L. [Teller.]	Ponsonby of Shulbrede, L. [Teller.]
Boston of Faversham, L.
Bowden, L.	Rochester, L.
Cledwyn of Penrhos, L.	Ross of Marnock, L.
Collison, L.	Seear, B.
David, B.	Simon, V.
Hampton, L.	Stewart of Alvechurch, B.
Hanworth, V.	Stewart of Fulham, L.
Hatch of Lusby, L.	Stone, L.
Jeger, B.	Strabolgi, L.
John-Mackie, L.	Taylor of Gryfe, L.
Kilmarnock, L.	Tordoff, L.
Kirkhill, L.	Underhill, L.
Lee of Newton, L.	Wilson of Langside, L.
Llewelyn-Davies of Hastoe, B.

Resolved in the affirmative, and Clause 1 agreed to accordingly.

8.46 p.m.

Lord McCarthy moved Amendment No. 5: After Clause 1, insert the following new clause:

("Employers' levy

. (1) Notwithstanding any provisions of section 4 of the Industrial Training Act 1964, for the purpose of ensuring adequate training in industry and in the cases referred to in subsection (2) below, the Minister may, with the approval of the Commission, by order impose a levy on employers in industry, and an order giving effect to this section may make different provision in relation to different classes or descriptions of employer.

(2) The cases referred to in subsection (1) are:—

1. (a) where it appears to the Minister and to the Commission that training provided within an industry is of a kind that is beneficial or essential to the manpower needs of another industry, or other industries, and where it appears equitable, or expedient in order to ensure the adequacy of such training, to require employers in such other industry or industries to contribute to the costs of such training, or
2. (b) where, in order to ensure that sufficient persons are undergoing training to meet the needs of industry, the Minister and the Commission consider it expedient to award grants to such persons as they consider suitable for such training notwithstanding that such persons may not be in the employ of the persons or company providing the training, or
3. (c) where it appears appropriate to the Minister and the Commission to make grants to persons under the age of 19 years to enable them to undertake courses of training which will enable them to enhance their career prospects, or
4. (d) where it appears appropriate and expedient to the Minister and the Commission to do so in the interests of ensuring an adequate supply of skilled labour to meet national manpower needs.

(3) No order shall be made under this section unless a draft of the order has been approved by a resolution of each House of Parliament.").

The noble Lord said: This is a long amendment, but I do not intend to spend a long time on it. It is, in fact, our reply to the questions contained in paragraph 34 of A New Training Initiative. As I said on Second Reading, paragraph 34 of A New Training Initiative directs questions at employers, unions and educationalists, but does not direct any questions at the Government. We are directing this question at the Government. We are saying that, if it be the case, as A New Training Initiative says, that there is a whole range of training requirements which, quite reasonably, could be said to be not properly within the purview of or not sufficiently correctly carried out by the industrial training boards, obviously we need another mechanism.

Far from being identified with a particular mechanism, as the noble Earl has said this evening, we are suggesting another mechanism, a similar mechanism—a general levy. This general levy, as subsection (2) of the amendment says, would enable the Secretary of State to deploy provision for four broad purposes: for across-industry training subsidy; for across-employment subsidy; for grants to the under-19 year olds and, in particular, to create a properly balanced national skilled labour force. Those are the kind of things which one might reasonably say that industrial training boards find difficult to do.

There are many associations—not simply associations of trade unions but also employers' associations—which would favour a move of this kind—something outside the general purview of the industrial training boards, but particularly and specifically related to those areas of training need set out in A New Training Initiative. I beg to move.

Lord Mottistone

Do I gather from this that the noble Lord, Lord McCarthy, is suggesting that there should be a levy on all employers in industry to satisfy certain needs which might be narrow, dealing with specific areas regardless of whether that has any relation to the efficiency, effectiveness or training capability of the particular employers' companies? Or will this be sufficiently narrow for the employers and their companies to benefit? Can the noble Lord explain that?

Lord McCarthy

The answer is, yes and no. Yes, of course I am proposing that there should be a power for a general levy. Yes, of course, the deployment of that general levy, or the training which would be financed by that general levy, might not benefit particular employers. That is the case with the industrial training board system as it at present exists. So, yes, that is true. However, I would not regard that as narrow; I would regard that as extremely broad and very necessary.

The Earl of Gowrie

I have always thought that the noble Lord, Lord McCarthy, was one of the most sensible members of the Labour Party, in the sense that he has a close knowledge in practical terms of what industry is like and he does not base his work outside this House for industry, and inside this House talking about industry, on any fictional sense of their needs; or even, referring back to the last amendment, to any poetic sense of their needs. Yet now he wants to superimpose yet new central Government powers on top of the existing system of industrial training bodies.

The purpose of his new clause would be to give the Government powers and obligations to decide the scale of levy and to decide which employers to levy; to decide on, and presumably administer, the expenditure of the extra levy, whether on training grants or facilities or other courses. When we are talking about the noble Lord's levy we must remind ourselves that the levy proposed here is additional to the levies already fixed by training boards, and so there would be an extra burden on industry. It seems to me that the noble Lord is far too experienced about industry to think that it needs that kind of help from him at this, of all times.

The new clause also runs counter to the principle enunciated by the MSC review body that central prescription is just not the answer to national training needs, and that industry is in fact the best place to judge its needs and to mobilise resources to meet them. This might have been more relevant to the previous debate we had on whether the clause shall stand part, but it seems to me also to be fairly relevant here. An earnest of this is the enormous number of exemptions from levy that the administrative system is forced to decide, simply because in so many cases industry is taking the necessary steps to train for the future and indeed—because let us not pretend that no poaching, as it is sometimes called, or no movement takes place within industries—to take care of general social needs and economic needs for more trained personnel.

The noble Lord has also argued, if I followed him, that this new clause would provide a means of funding vocational preparation of the kind looked forward to in the new training initiative document. I acknowledge that the MSC have said that ultimately more resources will be needed to be devoted for training, and within overall resource constraints and the usual cautions of Ministers I would certainly agree with that view. But it is quite clear that both the resource question and the question of any need for supplementary legislation are subjects for consultation, as the document indicates. On funding, the question is really how any additional resources should be shared. At Second Reading I said that in my view everyone would have to take part of the cost: industry would; Government would (our total provision for training is up through the training elements in the special programmes and the like); and also the trainees themselves, even if their contribution was in the form of lower allowances, or lower wages, during the training part of their lives. This seems to me to be reasonable. But here in this new clause not only is the noble Lord adding to the statutory impositions which, for the reasons I have already given in earlier debates, the Government of course cannot accept, but he is actually loading industry with additional costs to those which presently obtain. On a point of principle, and also on a point of economic common sense, I suggest that the Committee rejects the new clause.

Lord McCarthy

In view of the fact that the amendment which follows is also an important amendment, and indeed in some ways a more important one, I do not intend to press this amendment. The noble Earl has not convinced me. When he says nice things about me, they are always followed by nasty things. I suppose it is the same on this side. The main point is that we are not satisfied with voluntarism. But I am prepared to withdraw this amendment.

Amendment, by leave, withdrawn.

Lord Rochester moved Amendment No. 6: After Clause 1, insert the following new clause:

("Revocation

. Before exercising his powers under section 9(1) of the Industrial Training Act 1964 (as amended) to make, amend or revoke an Industrial Training Order for any sector or sub-sector, the Minister shall—

1. (i) publish criteria to define the aims or outputs for acceptable training arrangements in that sector or sub-sector;
2. (ii) consult with employers and trade associations, employee and trade union representatives, and educational bodies closely concerned with the sector or sub-sector, with the Manpower Services Commission and where appropriate the Departments of Trade and Industry, to ensure that the training arrangements, whether statutory or voluntary, within each sector or sub-sector are capable of—
1. (a) being the agent to oversee the collection and maintenance of manpower information relevant to training;
1329
2. (b) identifying incipient skill shortages and other learning needs, and encouraging training of the quality required to meet those needs;
3. (c) promoting training relevant to organisational change and new technology;
4. (d) promoting vocational preparation and training schemes for young people in conjunction with appropriate educational and other bodies;
5. (e) facilitating the reform of apprentice and other training arrangements;
6. (f) developing the training of managers, professional and commercial staff, and employee representatives;
7. (g) acting as an agency for channelling Government funds for meeting national training objectives;
3. (iii) ensure that the sector or sub-sector should have the means of achieving outputs by—
1. (a) having continuing access to sufficient finance and qualified staff with appropriate administrative support;
2. (b) reviewing progress towards the agreed training objectives;
3. (c) having sufficient field training staff to discuss with employers the means of achieving the agreed training objectives;
4. (d) undertaking regular consultation between employers and representatives of employees and education;
5. (e) providing or procuring any training advice, consultancy or direct training services requested;
6. (f) maintaining adequate local, national and cross sectoral links;
4. (iv) ensure that every major sector of the economy, including the public services, is provided with training arrangements as set out in sub-section 2 above;
5. (v) publish an Industrial Training Order, as provided for in section 1(1) of the Industrial Training Act 1964, to cover the agreed industrial training arrangements for each sector or sub-sector;

and where the Minister in the national interest, sanctions the use of these training arrangements in pursuit of objectives that go beyond the needs of the sector or sub-sector to which the arrangements apply, he shall accept responsibility for funding the training or related activities that he causes to take place.").

The noble Lord said: It is plain that the Government wish to see voluntary training introduced wherever possible, and this amendment recognises that position. The purpose of the amendment is to ensure that all major sectors of the economy, including the public services which are not now catered for, are provided not necessarily with a specific organisation or institution—and here perhaps I am able to go a little way towards meeting one of the points that the noble Lord, Lord Mottistone, made at an earlier stage—but with training arrangements which may apply either to statutory bodies where they remain or, on the other hand, operate on a voluntary basis under conditions appropriate to the particular industry or service.

These arrangements would have to conform to certain criteria in the form of aims or outputs, and the intention is to encourage an approach to training which is not simply mechanistic or structural but is of an organic, problem-solving kind that focuses on objectives and achievements. These aims or outputs are set out in sub-paragraphs (a) to (g) in paragraph (ii) of the proposed new clause. Their introduction would have to be preceded by consultation between the Government and representatives of employers, trade unions, employees, educational and other relevant interests. I shall not read them all out, for I hope that they will speak for themselves. Suffice it for the moment to say that they are based on practical experience that has been gained in the last 17 years, and I hope that they will be thought by the Committee to be both comprehensive and reasonable.

So much for the ends that the amendment seeks to achieve. As for the means, these are contained in paragraph (iii) of the new clause. Again, I will not go through them all now. They depend, as do the present statutory arrangements, on consultation between representatives of employers, employees, and education, but at the same time they are designed to avoid the imposition of impracticable obligations by what might be regarded as an unnecessarily inquisitorial bureaucracy. I think that the only point about them that I would particularly stress now is the recognition of the need to maintain adequate local and cross-sectoral links because, as the Manpower Services Commission acknowledged in their review of the 1973 Employment and Training Act, and as employers up and down the country will testify, in the real world training needs are related more closely to the local labour market and they apply across sectors rather than being indentifiable on the basis of individual industries.

Lastly, in relation to the content of the new clause, duties are laid on the Secretary of State to ensure, first, that throughout the economy training arrangements are made which meet the prescribed criteria and, secondly, that, where in the national interest training is sanctioned in pursuit of objectives that go beyond the needs of the sector concerned, it is for the Government to finance the training for which they have thus assumed responsibility. Above all, these provisions are designed to be flexible, and they thus permit the redrawing of sectoral boundaries that are entrenched in the present training board system. They place responsibility for funding on the relevant beneficiaries and they allow, without forcing, sectoral training to be led by some group representing those bearing prime responsibility for it.

In framing the amendment, I have been greatly helped by a number of highly qualified people who together are, in my view, able to speak for many large and small employers, for trade unions—although those are bodies on which the noble Lord, Lord McCarthy, is better qualified to speak than I—and for a number of training boards. Many noble Lords on this side of the Committee, as has already been made abundantly plain, would have much preferred, like the MSC in their review of the 1973 Act, to have built on the foundations already laid by existing training boards. There are others who will feel that in future people should simply be left alone to do whatever training they think fit without regard to any statutory criteria, and for them this amendment will have no attraction.

But I hope the majority of the Committee will think the amendment is realistic for two main reasons. The first is that it does not set out to oblige the Government to depart from the basic position they have taken up. In particular, I do not think it can reasonably be claimed that, if the amendment were passed, it would be impossible for the Secretary of State to decide to wind up a particular training board; there is nothing in the clause to stop him doing that if he chooses. The second is that the amendment seeks to ensure that, where training is in future carried out under statutory bodies or voluntary arrangements, we avoid going back to the period before 1964, when I should have thought it will be generally agreed that training was altogether inadequate.

The heart of the amendment is the desire to get as near as possible to a consensus in a matter that, in these troubled times, we must all recognise is vital for our future and which simply cries out, it seems to me, at least for a measure of agreement among us. That is how the amendment has come to be sponsored not only by Liberals but by a Labour Peer and a Conservative Peer, and perhaps I may take this opportunity to apologise for the absence—he asked me to do this—of the noble Lord, Lord Strathcona and Mount Royal, who, because of the lateness of the time at which we come to this amendment, is prevented from being present. It is also why I do not doubt from what the noble Lord, Lord Kilmarnock, has already told us that it will have the support of Social Democrats and, I very much hope, of any Cross-Benchers who may be listening.

If there are any flaws in the drafting of the amendment—if it is thought to be incomplete or over-elaborate or if there are any other ways in which it could be tidied up—I am sure that that could be attended to easily enough on Report. I trust the noble Earl will sympathise at least with the purpose of the amendment—I think he has already made that plain—but I rather fear from some of the remarks he has made that he may not much like the idea of these criteria being written into the statute. I am, however, greatly concerned about the point raised earlier by my noble friend Lady Seear about the need for some satisfactory framework—that was the word she chose—where statutory boards are abolished, and I hope the noble Earl will find it possible to say a little more about the alternative he may have in mind over and above what he has already told us about those elements in society and those programmes which have a bearing on this subject.

I realise that it may have been rather generous of him in response to the amendment moved earlier by the noble Lord, Lord Kilmarnock, not to have said more at that stage because, as was generally acknowledged, not least by Lord Kilmarnock himself, his amendment was only on a somewhat narrow, albeit important, point. What matters now is not alone the view of the noble Earl but, as I am sure he would agree, that of the Committee as a whole, and I hope the underlying principles and broad content at any rate of the new clause will be accepted by the Committee. I beg to move.

9.10 p.m.

Lord McCarthy

I support the amendment because it is absolutely true, as the noble Lord, Lord Rochester, said, that this is the closest we can get, and it is very close, to a consensus alternative mechanism. It is not a mechanism which is as radical and far-reaching as the previous one, which I did not press, but it is a consensus mechanism and a very good mechanism too.

The basic idea is that before the Secretary of State exercises his powers under the new Bill he must do a number of things. He must publish criteria for the training arrangements in the area affected. He must consult those affected, in order to meet particular requirements. He must ensure that there are sufficient resources to meet those requirements; and there are certain other specified aims and objectives—six in all.

It seems to me that this is a perfectly moderate and reasonable attempt to get the Government to do two things. The first is to make some attempt to provide an alternative mechanism for a return to voluntarism. The fact is that there is a widespread belief on both sides of industry, and in all parties, that the situation in this country in respect of training has not changed so widely that we can expect to return to the 1964 situation and voluntarism will solve the problem. Therefore, first, the Government should go some way to agree some mechanism to replace voluntarism in areas where they wish to return to voluntarism by abolishing an industrial training board. That is the first objective.

Secondly, the Government are asked to sign up to certain training objectives, which are spelled out in the amendment. But those training objectives come from the New Training Initiative, the MSC document. There is nothing new, nothing radical, about those objectives. They are there because of the widespread fear that voluntarism will not be enough; and a fear that is placed in the context of the fact that in other clauses of the Bill that we have yet to reach the Government are committed to reducing the money which they themselves will spend on training, because it is no longer to be responsible for the administration of the ITBs. The fear also comes in the context of the announced cuts in the Manpower Services Commission budget by 1984. It is in that context, in the fact that the Government themselves are setting new wider objectives for industry but destroying many of the established mechanisms for achieving those objectives, that we ask the Government to look favourably on the amendment.

Lord Mottistone

I should like to add a few remarks. The noble Lord, Lord Rochester, told us that paragraphs (ii) and (iii) contained good basic principles. With that I would absolutely agree. But he did not speak about paragraph (i), and I am afraid that where I see a flaw in this exposition of very good principles, with which I think we should all agree, is that it is centralism by the back door. My whole experience in this field has been that criteria published by as remote a figure as the Minister are extremely difficult to apply at the working end. Good training must be carried out effectively on the ground with the people concerned. The closer the criteria is related to the needs of the company and the people within the company at the working level, the more effective it is. So if the Minister, sitting at the top of his ivory tower in Whitehall, produces the criteria, he is almost bound to produce either criteria so frightfully broad that they do not mean very much, or criteria, if narrower, that are irrelevant to the needs of the individual company and the individual people within it.

So it is a conundrum, and I feel that this is really the flaw not only of this amendment but of the entire concept. I have been very disillusioned by all the efforts that have been made. Where they have been effective is where they have been well applied at the base level, and, quite honestly, the various pieces of advice that come from bodies such as the Manpower Services Commission and its predecessors have on the whole been varied in their usefulness in inverse proportion to the distance of the body from the working end. It works like that.

Baroness Seear

I hope that the noble Earl the Minister will consider the amendment very seriously indeed. I feel sure that he is to say that it is quite unnecessary to have these criteria spelt out and embodied in the Bill because (he has said this already twice this evening) the Secretary of State will produce a negative resolution—a negative resolution, mark you!, not even an affirmative resolution—and we can then all pray. Well, I am all for praying, but I do not believe that on this occasion prayer will be very much good. As the noble Earl the Minister knows perfectly well, the resolution cannot be amended. Either we have to accept what the Secretary of State says, or reject the proposal completely. Therefore it is very unlikely that we would be able to bring about any alteration at all. It really is not quite up to the Minister's standard to pretend that that is any kind of defence or any adequate substitute for having criteria built into the legislation. That is the first reason why we cannot really accept the idea that there is no need to have criteria built into the legislation itself.

I suspect the real reason is that the Minister is devoted, or has to say that he is devoted—I am not so sure that that is not the real reason—to complete voluntarism and to the idea that complete voluntarism is going to work. In this amendment we have gone a long way down the voluntarist line, but we are trying to build safeguards to ensure that voluntarism really will operate. If it operates we on these Benches will be very content because we are not committed to any particular institution. We do not love institutions. Other noble Lords may love institutions, but we do not. We are known for not loving institutions. But we do love results; and we believe that you need to have criteria built in.

How can we challenge the Secretary of State, even if we did get round to praying at the right moment of time for the negative resolution, if there is nothing built into the Bill? He can listen to what we say and then go away and do exactly what he likes. If you have criteria built into the legislation, then at least he has to conform with that criteria; and when we pray we can pray to specific elements already embodied in the legislation. So we want to have a mechanism for challenging the Secretary of State when he brings his schemes forward. But it is this (I am bound to say) simple-minded belief in voluntarism that I find extremely surprising, much as I prefer a voluntary system if we can get one.

The Minister and other people have said, "Look, you do not need to do anything. Look at all the people who have got exemptions". We have got an exemption against a situation in which, if they let their training get slack, they can lose their exemption. If you remove the training board there is no mechanism for seeing that people keep to the standards under which they were granted exemption. This is a totally different thing from saying that they will keep those standards when there is nothing to stop them from letting them lapse.

Then, of course, as the noble Lord, Lord Mottistone, knows perfectly well, what is happening at the present time is that a lot of companies are saying, "Of course, we love training; we have it at home, so to speak. We think it is a frightfully good thing—but we just cannot afford it; it is terribly sad; and we are cutting it out". I can quote your Lordships organisation after organisation which at this very moment of time, even before we have got rid of the training boards, are saying, "We cannot wait any longer; we are cutting down our training budget". This is a common experience throughout industry.

With the noble Lord, Lord Mottistone, I hate the idea of the Secretary of State telling firms what they ought to do in detail. I entirely agree with him in saying that the best training is done when it is organised at local level and with very close understanding of what the needs of the company are. But we have not asked for that. We have asked the Secretary of State to consult with the employers and all the rest of them, and to make sure that there are training arrangements within each sector which are capable of doing these things—and "capable of "does not mean that they have got to do all of them. At local level it will be decided that this is a very useful check-list built into the legislation, that these are the things that they have to do, but in no sense are they a list of things in respect of which the Secretary of State is saying to every company, "You have got to get on and do them". So the criticism that it is centralist really does not stand up.

Lord Mottistone

I thank the noble Baroness very much for letting me intervene. The thing I was criticising was not the detail of paragraphs (ii) and (iii). It is paragraph (i)—that the Minister is going to produce criteria. That is what I do not like.

Lord Rochester

May I be allowed to respond to that point? I do not really think the noble Lord, Lord Mottistone, can have it both ways. That is to say, on the one hand, as I understand it, he is talking about "Auntie MSC" and all that, and that he does not like direction from the centre, but when we come along with criteria which are essentially flexible and which permit a wide area of discretion, which allow for local arrangements, which allow for large and small firms and all the rest of it, he does not like that, either. I do not think he can have it both ways.

Baroness Seear

If I may finish before my noble friend or anybody else interrupts me, we do need to have criteria of this kind. May I make one further point as to why we need to have it spelled out in detail to be operated at local level? I am really back to the point I made earlier this evening about the need for mechanisms to make sure that the system is working. Everything that has been said by the noble Lord up till now has, it seems to me, a static note about it; that you get a report from the MSC and on the basis of this you decide what is going to be done. It is the essence of the training problem that it is in a continuous state of change, and you need to have a mechanism close to the ground which can be in very close touch with what are the changing needs and feed that knowledge of changing requirements into training requirements.

I remind the Committee—because I think I have reported this before—that discussing this once with the Swedish labour market board they made the point that they needed to check with companies three times a year to keep their plans up-to-date. You cannot have a plan which is based on a report that you had years ago, or even months ago. You must have a mechanism which is working closely with the companies. I see nothing in existing institutions. The Minister gave us a long list of worthy bodies in this field. In none of them do I see one that has that close contact with the companies so that they can really know what is going on and keep the constant movement, the change that is needed, if one is to be up-to-date and ahead of requirements, so that training has been carried out and so that one is ready with the trained people as they are needed. That is why we need this criteria and we need to have people at local level in the institutions who can follow through to see that the work is being done.

Lord Bowden

May we pause for a moment to remember what I believe to have been the best system of this kind that this country has ever had, because I think that we can learn a great deal from its achievements and from its tragic decline. I am referring to the extremely elaborate system of training at all levels, from the craftsman to the university graduate, which used to be at Trafford Park at Metropolitan Vickers. Until about 1956 or so it was true to say that almost all the best engineers in England—those, for example, who graduated at Lord Baker's school in Cambridge—went, if they could, to serve their time as apprentices at Trafford Park. They were the topmost echelon. We used to have a saying that all the best engineers could be divided into two categories; those who worked at Metropolitan Vickers, and those who used to work there.

The training they received was extraordinarily good. They went right through the shops, learning all about the organisation of that vast company. There was a general belief that no man could become a professional engineer unless he had been frightened out of his wits at least twice. The experiences that they had cannot be rivalled, for example, in any of the engineering graduate schools which have been built up to try to provide a rather pale reflection of the training that the graduate apprentices used to have. Beneath them were apprentices of all kinds, starting from lads who left school and were learning the ordinary trades of a skilled mechanical operator, a lathe operator or something of that kind. The whole spectrum was there and it was wonderful. It produced most of the really great engineers in this country for at least three decades. Members of the Committee will remember that it was founded originally by George Westinghouse in 1903 and it collapsed in about 1955. It was unrivalled for a very long time.

The reason I am telling the Committee this—and many Members will remember it as well as I do—is that it collapsed because for a long time it was reckoned that they could not expect to keep more than about 40 per cent. of the men who had been through the apprenticeship school. The rest went to man British industry as a whole. The accountants got at the system very much for that reason. They maintained that it was uneconomic for one single firm to be producing the engineers for British industry as a whole. They may have been right; but certainly the accountants got at the system and it collapsed and disappeared almost completely.

The reason I am saying this is to make the point that, whatever system we have, it is extremely important that it be adequately financed and that the total responsibility should not be left to one individual firm. It is equally important that the responsibility for the nature of training that goes on should be accepted as part of the burden of running a large manufacturing organisation. I include in that, for example, Rolls-Royce. I would also include some of the more important of the nationalised industries. For instance, the Government dockyards have provided a most magnificent series of apprenticeships in their time and the details have always been left to the people on the shop floor in the factory, or in the laboratory or where-ever it might be.

For a long time people seriously believed that it was an economic proposition for a company to contrive to finance these things but no longer will accountants accept that, for reasons best known to themselves. It is certainly true at this time that the Government must be prepared to take the initiative and to accept the reponsibilities which are laid down in this amendment, much as I regret it in many ways.

Lord Auckland

I have first to apologise to the Committee because I was not in my place when the debate started because of an important engagement with the Commonwealth Parliamentary Association. But I have listened to most of the Second Reading debate on this Bill and also to the amendment the noble Lord, Lord Rochester, has posed. In addition, I have had experience of management consultancy and of running consultancy courses. I do hope that the Government will take note of at least some of the points contained in the rather lengthy amendment which the noble Lord, Lord Rochester, and his noble friends have put forward.

Obviously in times of financial constraint the maintenance of training boards, as a purely cosmetic exercise, must be questioned; but as a member of the all-party parliamentary chemical industry group, I particularly feel that in that industry this amendment has much relevance. I would particularly mention paragraph (ii)(f)— developing the training of managers, professional and commercial staff, and employee representatives". The chemical and pharmaceutical industry is a much developing industry in technology, new products and other things, and it is absolutely essential that young people, whether they be graduates or from elsewhere, coming into the industry have a proper training. I speak with some diffidence here because, unlike the noble Lord, Lord Rochester, and others, I have not spent a lifetime in these particular industries; my own particular forte has been the insurance industry. However, I have visited enough of these establishments to talk to people at all levels who have stressed the need for some kind of training to continue to take place. I would therefore hope, particularly in the field of research, where we need to have a continuing process, that the training boards are given as much incentive as possible. In the development of new products, whether pharmaceutical, agricultural or any other products of that kind, it is essential that we in this country lead the world. In my view, this can be done only through the aegis of some practical type of training.

So while I have some reservations about the implications of the whole amendment which the noble Lord, Lord Rochester, has moved, I think there is much in the substance of it which the Government should consider, and I urge my noble friend, who is always very sympathetic to these causes, to give this very careful thought.

The Earl of Gowrie

I certainly agree with my noble friend Lord Auckland that there is much in this amendment which the Government should attend to. It in no way downgrades the amendment, or the very clear way in which it has been moved, if I say that very much of what is in it, and very much of what has been said, has already been considered by the Government and, where issues of principle are concerned, has indeed been accepted by the Government.

The nub of our difficulty—at the risk of wearying the Committee—is the problem that I mentioned earlier. We do not think it right to try to set out in statutory law a system of tests of the adequacy of the training arrangements specified. But we are convinced of the need for such training arrangements, and I have tried already to indicate, not only this evening but on Second Reading, our commitment to the principles involved.

The noble Baroness, Lady Seear, was much less than fair to us when she talked about complete voluntarism. We are not after complete voluntarism. We are after a mixed and plural system. We have made it clear that we would wish to be sure that essential training needs were met before abolishing any industrial training boards. We have also made it clear on a number of occasions that this is not a Bill which abolishes the industrial training boards system. It simply is a Bill which enables the Secretary of State to do so, subject to the parliamentary procedures which seem to me to be both conventional and reasonable, but on which the noble Baroness seemed to pour a certain amount of scorn. In another place, in the remit to the Manpower Services Commission, the Secretary of State has already spelled out very clearly the criteria which he would expect to have to bear in mind before he made any such decision.

I am very glad that the noble Baroness, Lady Seear, made the remarks that she did about the philosophy of institutions. I am aware that the noble Lord, Lord McCarthy, and I have probably, some time back, despaired of each other in this regard. But I wanted to ask the noble Baroness, and indeed her noble friend Lord Rochester, what nice Liberals were doing with an amendment like this, because it seemed at variance with Liberal philosophy that one should generalise from industry to industry, or produce a straitjacket to which all industries would have to conform; we certainly would not wish that.

But there is a fairly wide issue of principle here, even if the difference of opinion between those in the Committee who have spoken so far and myself is rather narrow. There is an important issue at stake. It is a growing tendency in our society to believe that, if a Government do not make a law about some issue, they are in some way indifferent to that issue, that they do not care about the issue, or that they will not take any steps to see that the issue is pursued. I believe that that is a general principle which has grown up over the past 10 or 20 years and which has tended to clutter the statute hook, to raise false expectations and to create a great deal of difficulty for the courts.

In this particular case we are not talking about relatively professional or technical issues such as those which might be dealt with by an industrial tribunal. We are talking about the full panoply of the High Court and the judicial system. We do not consider it right that questions about the adequacy of training arrangements should be subject to review in the courts, which would be the net result of accepting this amendment.

We acknowledge, of course, that Parliament should take a close interest in these questions and should debate them if necessary. But it would seem to me to be almost too obvious to be worth repeating that, so long as Governments drawn from all parties decide to run a Ministry of Labour and to have a Secretary of State for Employment, it is hardly likely that that Ministry and the tripartite body sired by it—the Manpower Services Commission—will in some way become indifferent to training issues or will not be able to raise a considerable stink should the training system fall down in some way.

I believe that your Lordships' Committee will have to accept that on all the issues of principle and intent there is very little that divides us. The principle of enshrining points in statute in this way so as to give the courts difficulties is a major difference and one which, perhaps, we might need to vote upon. But even if that difference is accepted it should not be thought that as a result of this legislation, should it go through both Houses, the Secretary of State will go on some wild rampage, shooting down industrial training boards. That is not his purpose. His purpose is to spell out criteria, to examine the review by the operating body in the whole field (the MSC), and to decide simply where voluntary arrangements are working —and where, therefore, they should no longer be subject to institutional strait-jacketing. I should like to say how much I agree with the remarks made by my noble friend Lord Mottistone in that context. I hope that the Committee will take his remarks to heart and that, in view of what I have said, the noble Lord Lord Rochester, will not seek to press the amendment.

9.39 p.m.

Lord McCarthy

I do not want to misrepresent the noble Lord the Minister and I do not believe that the Liberal Party want to misrepresent him. We are not saying that because the Minister does not want a board he does not want to do anything. There are all kinds of things the Minister wants to do by laws. He wants to do something about strikes, which I do not want to do anything about—but that does not mean that I do not want to do anything about strikes in a different sense.

This is a question of priorities. It is a question of emphasis. We do not say—and the noble Baroness can speak for herself—that the noble Lord the Minister wants pure voluntarism. What we say is that he wants more voluntarism. Is that not right? The Minister wants more voluntarism even if it means less training. That is what the noble Lord the Minister has to tell us, does he not?

The Earl of Gowrie

I simply do not accept that interpretation. It seems to me to be semantic; it may be a fair debating point because I may not have made myself sufficiently clear or I may have used the wrong words. A way of reinforcing what I said by using slightly different language is to draw attention to the fact that the noble Lord said we were returning to a pre-1964 position. One or two noble Lords have suggested that that would be pure reliance upon voluntary arrangements and that as a result training would become inadequate. However, we have made it very clear—and I am happy to use this chance to repeat it—that we are not going to get rid of statutory training boards in those key sectors where we believe that essential training objectives—we have already debated how these are defined—could not be met without them.

The other point—it is one which I have not made before and therefore it may be more persuasive—is that in the many years of their existence, bearing in mind the very good work which in the main they have done, the training boards have secured significant changes. Many of these changes can now be expected to be permanent in many industries. It would seem to us that the statutory levy and grant are therefore no longer essential incentives for companies to train in all industries, but of course we shall retain them where the voluntary arrangements are not satisfactory.

In any case, right outside the purlieus of this Bill we have the whole panoply of the special programmes and the intervention at the margin which we do through the Manpower Services Commission. So it is useful that we should have a debate about whether in this rapidly changing industrial society we are going for the right kind of sectoral training or whether our training is fast-footed enough to keep up with new developments. All these things, the subject of no satisfaction, could be debated. However, I remain to be convinced that we do not have adequate institutions, adequate safeguards and adequate powers to do the job. What we now want to do is to get on with the job and worry slightly less about the liturgy involved in performing it.

Lord Kilmarnock

I do not wish to detain the Committee, but since the noble Lord, Lord Rochester, was good enough to mention my name I thought that I should confirm that I and my noble friends on this Bench are happy to support him in this amendment if he and his noble friends decide to carry it further. We did not put down our name to the amendment because there was "no more room at the inn"! There is one paragraph which attracts me in the amendment moved by the noble Lord, Lord Rochester. It is paragraph (ii)(d), which refers to promoting vocational preparation and training schemes for young people in conjunction with appropriate educational and other bodies". Surely that is exactly what the Government's plans to improve the Youth Opportunities Programme are about, and also the intentions which the Government have said that they will back in the new training initiative. We very much hope that they will get the employer response which the noble Earl relies on for putting these improved educational and training arrangements into effect. However, I should have thought that in (ii)(d) the noble Lord, Lord Rochester, was offering a useful and flexible instrument to the noble Earl.

I thought that it was rather unfair of the noble Earl to refer to the proposed new clause of the noble Lord, Lord Rochester, as a strait-jacket. It seems to me to have all the advantages of flexibility and some reserve powers in case employers do not fulfil the Government's expectations of them. On those grounds, both I and my noble friends will support the amendment moved by the noble Lord, Lord Rochester.

Lord Rochester

First I should apologise to the Committee and, indeed, ask leave to speak again because I was guilty of interrupting my noble friend Lady Seear and responding to the noble Lord, Lord Mottistone, in the heat of the moment when I had no business to. I am grateful to all noble Lords who have spoken, though I am somewhat sorry that the debate comes at this late hour. I am particularly grateful for the comments made by the noble Lord, Lord Auckland, from the other side and for the support given to the amendment by the noble Lord, Lord Kilmarnock. I endeavoured to respond earlier to the criticisms made by the noble Lord, Lord Mottistone, but perhaps I may add that the criteria about which he is concerned under paragraph (i) are not detailed matters spelled out from the centre. They are pretty open-ended and are themselves recorded, as I hoped I had made plain, in (ii)(a) to (g).

I am sorry about the response that the noble Earl, Lord Gowrie, has felt obliged to make. I do not doubt for a moment the sympathy which he and his right honourable friend the Secretary of State have for training, but we are very much concerned about what there is to be in the case of sectors of industry which are not now going to be covered by industrial training boards, other than by voluntarism.

I do not think I need respond to the criticism about the strait-jacket, because that has been done for me by the noble Lord, Lord Kilmarnock. However, there was reference to "nice Liberals" and I feel that I must have something to say about that. We hope we are nice, but really that is not to be thought of as being synonymous with a sort of "free for all": quite the reverse. This is a matter of balance, as the noble Earl was right to remind us. We have to strike a balance here as to whether there should be statutory criteria, as we feel, to safeguard the future of training or whether, for the reasons he gave, there should not be. Both he and the noble Lord, Lord Mottistone, felt that changes have been effected since 1964. They have indeed. The noble Earl and the noble Lord have rather more faith than have I, I am afraid, in those changes carrying on without any statutory support, even of this limited and certainly flexible kind.

I have said enough. Had the noble Earl given any indication in response to a suggestion made by the noble Lord, Lord Auckland, of being willing to consider this matter further I should happily have withdrawn this amendment. However, there is this fundamental difference between us, and given the wide sup- port that there has been for this amendment I must divide the Committee.

9.48 p.m.

On Question, Whether the said amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 36; Not-Contents, 40.

CONTENTS
Airedale, L.	Llewelyn-Davies of Hastoe, B.
Amherst, E.	McCarthy, L.
Auckland, L.	McNair, L.
Bishopston, L.	Peart, L.
Blease, L.	Pitt of Hampstead, L.
Boston of Faversham, L.	Ponsonby of Shulbrede, L. [Teller.]
Bowden, L.
Collison, L.	Rochester, L. [Teller.]
David, B.	Ross of Marnock, L.
George-Brown, L.	Seear, B.
Greenway, L.	Simon, V.
Hampton, L.	Stewart of Alvechurch, B.
Hanworth, V.	Stewart of Fulham, L.
Hatch of Lusby, L.	Stone, L.
Hooson, L.	Taylor of Gryfe, L.
Irving of Dartford, L.	Tordoff, L.
Jeger, B.	Underhill, L.
John-Mackie, L.	Wilson of Langside, L.
Kilmarnock, L.

NOT-CONTENTS
Airey of Abingdon, B.	Henley, L.
Avon, E.	Long, V.
Balerno, L.	Lyell, L. [Teller.]
Belstead, L.	Mackay of Clashfern, L.
Brabazon of Tara, L.	Margadale, L.
Bridgeman, V.	Mottistone, L.
Campbell of Alloway, L.	Mountevans, L.
Cathcart, E.	Newall, L.
Cork and Orrery, E.	Norfolk, D.
Cullen of Ashbourne, L.	Northchurch, B.
De La Warr, E.	Northesk, E.
Drumalbyn, L.	O'Hagan, L.
Dundee, E.	Rochdale, V.
Elles, B.	Sandford, L.
Elton, L.	Sandys, L. [Teller.]
Gainford, L.	Skelmersdale, L.
Gardner of Parkes, B.	Strathclyde, L.
Gisborough, L.	Trefgarne, L.
Gowrie, E.	Trenchard, V.
Haig, E.	Vivian, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 2 [Industrial training levies]:

9.55 p.m.

Lord McCarthy moved Amendment No. 7:

Page 2, line 44, at end insert— ("( ) Subsection (2A)(d) of section 4 of the said Act of 1964 shall cease to have effect").

The noble Lord said: I beg to move Amendment No. 7. The object of this amendment is to take out the section of the Bill which reimposes the levy limit of 1 per cent. What we want to do is to go back to a situation in which there is no limit on the levy. The fact is that the 1 per cent. levy limit was imposed at the time of the 1973 Act. It was, in fact, a reciprocal to the decision in the 1973 Act to take up the administrative and operating costs of the boards. There was never any doubt about this and, so far as this House is concerned, it was stated quite clearly by the noble Lord, Lord Drumalbyn, at column 243 on 7th June 1973. The noble Lord on that occasion said that although an affirmative resolution on the power to make a higher levy was possible, in normal circumstances the Government would not consider making such an order. The reason for that was, of course, that the Government were now taking up themselves the administrative and operating costs of the board. It, therefore, would seem to follow quite logically that if the Government are now handing back to the boards the administrative and operating costs, then they ought to release them from the constrictions of the limitations of a 1 per cent. levy.

Of course, during the greater part of the period since 1973, as may very well be said by the Government, we know that no, or very few—I think only one—industrial training boards actually applied and obtained a levy in excess of 1 per cent. Therefore, it has been asked in another place and in this debate generally: why do we need to lift this limit? The answer is quite simple—it is because we are now imposing administrative costs upon the boards. There are many industrial training boards which, if we take into account the size of their levy and the size of the operative and administrative subventions which they have in the past been receiving from the Government—for example, construction, furniture and engineering—have for most of their period of operation been operating at an overall expenditure of more than a 1 per cent. levy. So unless on present trends the Government wish to see a reduction in the money at the disposal of the industrial training boards being spent on training, we must expect to see a rise in the levy.

If the Government maintain the policy which the previous Government stated at the time of the 1973 Act and which I have quoted to the Committee, that in general terms, in normal circumstances, they would not consider making such an order, then, when we pass this clause and unless we vote for this amendment, this Committee will be consciously and deliberately deciding to spend less money on training. That is what is involved in this amendment.

The Manpower Services Commission in its review, Outlook on Training, considered the situation. It considered the problem and the Committee will know that there are many very good reasons why the administrative costs should be passed back to the industrial training boards in general terms. There may be problems about handing back administrative and operating costs to the ITBs in the present circumstances, and these are very much evident in the minds, of course, of the CBI, which has asked the Government to take time in passing back these administrative costs because we are in the middle of a depression and because they know, as we know—although the Government will not admit it tonight in the Committee—that the bottom is falling out of industrial training in this country. Therefore they are concerned that, if the administrative costs are passed back at this time, industry will find itself unable to maintain anything like the existing volume of training.

It was for that reason, considering all these problems, that the Manpower Services Commission, in Outlook on Training, said at paragraph 9.17: If the industrial training boards' operating costs are to become a charge on levy, some boards at least on their present expenditure levels will not easily be able to operate within a 1 per cent. limit. It would in our judgment be unreasonable to expect boards in this situation to have to secure each year an affirmative resolution". As I have said, in the past the whole tendency has been to consider affirmative resolutions most unusual things to grant in this context. The MSC went on to say why. First, this was because of the uncertainty which training boards would be in from year to year and, secondly, because of the delay it would cause for training boards to get levies in addition to 1 per cent. Indeed, if we are fair, we all know that it was never really intended under this legislation that training boards should run to the Secretary of State for levies of more than 1 per cent.—say, 2 per cent. They were to be extremely exceptional circumstances, and, indeed, that is how it has turned out to be.

That is why the CBI has shown the concern that it has. That is why we move this amendment. In conclusion, if the Government say—if they follow what they have done so far in this debate, they will—that they can do nothing for us, let them tell us tonight what their policy would be if any industrial training board came along and wanted a levy in excess of 1 per cent. Let them tell us—if they believe that most industrial training boards will, in fact, be forced to operate within a levy of 1 per cent.—where they think the additional money will come from to maintain the existing level of training. I beg to move.

Lord Mottistone

I remember well back in 1971 when my training board, which had a levy rate of 0.5 per cent., sought to increase it. We started with 0.5 per cent. in order not to be too much of a strain on the smaller companies in particular and, to a certain extent, the bigger ones—because they were getting good grant and were satisfied with that—because we wanted to sell ourselves to industry so as to make sure that they listened to us and got the training message. On the whole, that is the way in which we did it. In 1971 the employees representatives wanted us to put up our levy to 1 per cent. and the employers did not want us to put it up at all. In the end the Secretary of State had to arbitrate, and we ended up with a rate of 0.7 per cent.

However, the important point about this whole argument was that it did our credibility with, as I called them, our customer-companies—because the only way to play it was to treat them as customers for whom we were providing a service—harm at a time when we could least accept it. What is more, the fact that the engineering board had a levy of 2½ per cent., which was thought by many to be far too high—and in a sense it was—was one of the reasons that lead to the 1973 Act, with all that flowed from that, including the Government taking on the cost with which we are now landed and also the MSC, with which also we are now landed.

All these things came about because there was a loss of credibility of the training boards at that time, and the pressures from within industry, through Members of Parliament, were massive. I remember trying to pick out Members of Parliament to have a drink with me here in order to try to tame them. I did tame one or two, but I shall not mention names in this place.

The point about all this is that it is a very sensitive area and if you seek to go above 1 per cent. it will be counter-productive. As I see it there is a problem—and I am sure that my noble friend on the Front Bench will explain this so I shall do no more than touch on it. I entirely agree with the noble Lord, Lord McCarthy, that there will be a problem when this is pushed back on to industry. The Government have sought to do this by introducing this compulsory levy of 0.2 per cent. to bear the administrative costs. So what is left over will be what is available to pay grant to the good trainers.

Your Lordships may say that that is not enough; but I would say, from my own practical experience, that providing you pay something in the way of grant it is probably sufficient, because we had a disillusioning and difficult time of what I call "bribery grants". We were totally unsuccessful. We used to say to companies, "We will pay towards the costs of your young men in training, or in special areas, or whatever", and except in the areas where they had to do the training because the law said so, like the training of heavy goods vehicle drivers—where I always thought it was bogus for us to give encouragement anyhow, because they had to do it by different statute—we could never get them to take up the special grants to nearly the extent that we were prepared to give them.

Happily the training board that I had the honour to serve has lots of money, and it is not going to be worried about the sort of thing that the noble Lord, Lord McCarthy, told us about; but there are many other training boards that will be. I should like to leave your Lordships with the thought that it is dangerous to push the levy up higher than a certain level—and 1 per cent. seems to be the accepted norm—or it will be found to be counter-productive because it will not get the support, there will not be any extra training, and the Government have made other arrangements to cope with the situation.

10.7 p.m.

Lord Lyell

As I, and I am sure the Committee, have grown to learn, the noble Lord, Lord McCarthy, moved his amendment clearly, swiftly and succinctly, but bowled two very fast balls at the tail end of his amendment. I shall attempt to repel them at the end of my brief remarks. The recommendation of the Manpower Services Commission Review Body that boards should be free to raise levy amounting to more than 1 per cent. of the payroll without any affirmative resolution by Parliament was, of course, given careful consideration at an earlier stage by the Government. Indeed, my right honourable friend the Secretary of State said in another place at Second Reading that we have concluded that it would not be right to remove the important control that is given by the affirmative resolution over levies that might be higher than normal.

As we have learned, up until now the 1 per cent. levy limit has not proved a serious constraint on the activities of boards. That was borne out by the helpful remarks of my noble friend Lord Mottistone. That also was recognised by the review body of the Manpower Services Commission with the valuable little booklet that the noble Lord mentioned. Indeed, only one board in the recent past operated a levy above 1 per cent. of the payroll, and that was pointed out by the noble Lord; and even that limit was breached for only a small part of that over all industry. The majority of the boards have levies which are significantly below the level of 1 per cent. We are aware that some boards are worried about requiring a higher rate of levy because of the need to meet operating expenses, but we are not convinced that this will be a problem to any significant extent. We have already made some provision for operating costs, in that a board will be allowed to raise up to 0.2 per cent. levy on a non-exemptible basis without going through the consensus procedure. The figure of 0.2 per cent. was set mainly with the question of operating costs in mind.

Of course, boards could also set tighter exemption criteria using the new exemption provisions in Clause 3 of the Bill. But in any case many boards have sufficient leeway in their present levy rate to make whatever adjustments they may feel necessary without going over the 1 per cent. limit. It remains open to boards to seek the approval of both Houses of Parliament by affirmative resolution for a levy that is higher than 1 per cent. of their industry's payroll, and of course it is always a matter of judgment whether to make such a provision subject to affirmative or negative resolution; but in the view of the Government it is right in this case to allow Parliament the greater powers of scrutiny that the affirmative resolution procedure gives.

The review body of the MSC argued for removing the obligation to seek affirmative resolution for a higher levy on the grounds that boards would in practice be more vigorously controlled by their industries, and in that context the noble Lord, Lord McCarthy, quoted from paragraph 9.17 of the report; I was reading that while he was taking the Committee through it. It has been contended that employer members of the board would not allow proposals for a higher rate of levy with insufficient justification to go utterly unchallenged. Indeed, the CBI representatives on the body were unable to endorse that recommendation and the commission itself was not able to reach a firm decision on the matter. Both of those aspects give us no special confidence that adequate controls outside Parliament would exist, and the doubts expressed to the Government during the period of consultation following the recommendations of the review body reinforced our conclusion that we should retain the affirmative resolution procedure.

The noble Lord, Lord McCarthy, tempted me with the hypothesis—we could of course spend all night discussing hypotheses—of what would happen if the Government were approached by a training board which was seeking a levy above 1 per cent. That is tied up with the proposals in the Bill. The Government would he quite prepared in principle to propose to Parliament a levy above 1 per cent. if they considered that the board had a good case. All the board need do was come to the Government and persuade them that there was a reasonable and valid case, and then the Government would propose it to Parliament, and the rest would follow with an affirmative resolution.

Lord McCarthy

The version expressed by the noble Lord, Lord Mottistone, of what I call the poachers' revolt in 1973 is not my version. The 1973 Act was not introduced because there was a great rash of levies over 1 per cent. Even the levy he mentioned was of only 0.7 per cent. The 1964 Act did not become unpopular because the levies were too high—not by my version of the events. There was a poachers' revolt. From the point of view of many people the trouble with the 1963 Act was that in effect you could not get exemption; there was no way out. If you did not train they took the money away from you. That is what I liked about the 1964 Act. Once we got rid of the 1964 Act and replaced it with the 1973 Act we got into all the bureaucracy which arises from the need to ensure that exemption is not a fiddle. That is why we have now got to a position where some kind of case can be made out for passing it all back to the boards; and that is my reply to the noble Lord, Lord Mottistone.

To the noble Lord, Lord Lyell, I say that not only did he not answer my question but he did not work out the arithmetic. As was said by the noble Lord, Lord Mottistone, there is in this clause, it is true, a right for a 0.2 per cent. non-exemptible levy, but nobody has suggested that it makes £50 million, certainly not when industrial training boards are being abolished. The fact is that industrial training in this country will lose the money the Government put in when they were undertaking to operate and administer the boards at Treasury expense, and the non-exemptible levy is not going to cover it.

Finally, with respect, it is not true to say that the Manpower Services Commission in paragraph 9.17 was unable to come to a conclusion, or did not come to a clear conclusion. As the Manpower Services Commission is operating at the moment, under its present constitution the CBI representatives do not have to endorse every conclusion of the MSC in order for the MSC to come to a conclusion. Paragraph 9.17, as I quoted it, states quite clearly that if the operating costs are to become a charge upon the levy, some boards, at least on their present expenditure levels, will not easily be able to operate within the I per cent. limit. In that paragraph the Manpower Services Commission quite clearly recommended what I am putting before the Committee, and I see no reason to withdraw the amendment.

10.16 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 25; Not-Contents, 41.

CONTENTS
Airedale, L.	Llewelyn-Davies of Hastoe, B.
Amherst, E.	McCarthy, L.
Ardwick, L.	McNair, L.
Bishopston, L. [Teller.]	Peart, L.
Blease, L.	Ponsonby of Shulbrede, L. [Teller.]
Boston of Faversham, L.
Ewart-Biggs, B.	Rochester, L.
George-Brown, L.	Seear, B.
Hanworth, V.	Simon, V.
Hatch of Lusby, L.	Stone, L.
Hooson, L.	Tordoff, L.
Kilmarnock, L.	Underhill, L.
Lee of Newton, L.	Whaddon, L.

NOT-CONTENTS
Airey of Abingdon, B.	Henley, L.
Avon, E.	Long, V.
Balerno, L.	Lucas of Chilworth, L.
Belstead, L.	Lyell, L. [Teller.]
Brabazon of Tara, L.	Mackay of Clashfern, L.
Bridgeman, V.	Margadale, L.
Campbell of Alloway, L.	Mottistone, L.
Cathcart, E.	Mountevens, L.
Cork and Orrery, E.	Newall, L.
Cullen of Ashbourne, L.	Norfolk, D.
De La Warr, E.	Northchurch, B.
Drumalbyn, L.	Northesk, E.
Dundee, E.	O'Hagan, L.
Elles, B.	Sandford, L.
Elton, L.	Sandys, L. [Teller.]
Gainford, L.	Selkirk, E.
Gardner of Parkes, B.	Skelmersdale, L.
Gisborough, L.	Trefgarne, L.
Gowrie, E.	Trenchard, V.
Greenway, L.	Vivian, L.
Haig, E.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 2 agreed to.

Clause 3 [Exemption from levies]:

10.24 p.m.

Lord Mottistone moved Amendment No. 8: Page 3, line 19, after second ( "employed") insert ( "by them").

The noble Lord said: With the leave of the Committee, with Amendment No. 8 I should like to take Nos. 9, 10 and 11, because they all relate to the same subject. My noble friend earlier twitted the Liberals for falling into what might be called the socialist centralist trap over their last amendment. I should like to twit the Government for doing exactly the same thing in the amendment to the 1964 Act, and I am seeking to put them back to where they were before. The plan they seem to have—and I cannot think who has convinced them of this, because it could not be more contrary to what I understand to be my party's general philosophy—is to widen the coverage of the grounds for levy exemption to have companies train for their industry and not for their establishment's needs. I quote from the explanatory notes, paragraph 12, relating to this clause: Such criteria might, for example, include the requirement that there might be a given proportion of trainees to skilled men"—? that is not too bad— or they might require that the establishment should train beyond its own needs to a particular extent in order to gain exemption". It is hard to introduce this theme. I know Members of the Committee opposite think that it is good, the industry has a lot of money and can train anybody and we must be clear that it is the people who are out of employment who need training; therefore, let us make sure that industry does all that. However, that is a theme which does not stand up.

The Committee will know that I am employed by two trade associations which look after the interests of the manufacturers of biscuits, cakes and confectionery. We have studied very hard to see what activities we need on an across industry basis which might lend themselves to the argument which these things cover. It is only in the areas of computer programming and operating that there are sufficiently common skills within the companies which would merit their having some central arrangement for training. For everything else—including maintenance engineers—a company training of a fair degree of complexity is necessary before the people concerned can be of any use to our companies. Therefore, they have to train for their own needs.

In this one area of computer programming this is a national problem which is not peculiar to particular industries. The scope of the basic training in application to particular firms' needs goes far wider than a particular industry. I would have thought there was a lot to be said for having TOPS courses in that particular area. It could easily fit within the TOPS scheme. I know that TOPS tends to work at a lower level; I do not see any reason why it should not work at this level. After all, TOPS was training croupiers at one stage in its heyday. It would be more applicable to that area to have centralised training. To say that people need to look more widely within their own industry for the reasons that I have described is not relevant to the real life.

If you say, "It is going back to the poaching days", I do not see what is wrong about poaching. There was a great theory in 1964 that the small firms poached from the big; but when one looked into it and a training board was established it was found it was the big ones which poached from the small. The well-trained people tended to be in the smaller companies because they received more personal attention. When we looked into this it was about a 50–50 basis. If it is a 50–50 basis, what is wrong with it? I think the Government have been badly advised on the parts of the amendments to the original Act that they have put in, which I now seek to put back to where they were before. I beg to move.

The Earl of Gowrie

I am sorry that there is some difference of view between my noble friend and myself on this matter, even though it may have the effect of making the noble Lord, Lord McCarthy, and his friends feel that I am not in some way doctrinaire. Under the 1964 Act, as amended by the 1973 Act, levy exemption criteria may require compliance with national standards of training but the numbers to be trained must be related to the needs of a particular establishment.

Lord Mottistone

Hear, hear!

The Earl of Gowrie

The clause under discussion extends the possible—and I stress "possible"—criteria for exemption from levy to include the needs of the industry as a whole and not just those of the individual establishment. And that presumably is the bit to which my noble friend does not utter the words "Hear, hear!"

Paragraph 3 of Outlook on Training acknowledged that, because of this restriction, there are severe limitations on the capacity of the levy exemption system to secure an adequate quantity of training to meet the needs of a whole industry sectorally or the economy as a whole in transferable skills. Again, as paragraph 9 of the same document said, while significant benefits have been gained through the present exemption arrangements, there does arise the problem that in some industries which have a relatively high proportion of employees with transferable skills requiring rather lengthy training, it may not be possible for a board to ensure that sufficient people are trained if that board is required by statute to exempt employers wholly from the training levy.

So, in considering the form of any future training arrangements in these individual sectors, one of our key criteria will have to be the ability of whatever arrangements are proposed to deal satisfactorily with skill shortages in key occupations. Such shortages are most likely to arise in industries with a high level of transferable skills—computers have been mentioned. Clearly, if this is to be one of the grounds for retaining boards, then it is essential that the boards do have the necessary means at their disposal to deal with such a problem. If my noble friend's amendments were accepted, we could not be sure that this would be true.

Lastly, I would stress again—and I hope my noble friend will bear this very much in mind—that Clause 3(1) is an enabling provision. It does not mean that the boards are obliged to put forward proposals for exemption certificates based on these wider criteria. They can, if they consider it appropriate, still propose that their exemption criteria should go on being restricted to the needs of the individual establishment. I hope, that with that explanation and for the other reasons I have mentioned, my noble friend will not seek to press his amendments.

Lord Mottistone

Not at this stage. I am afraid that I have always found "transferable skills" a mythical phrase from the academic world which has not really rung true to me when trying to tackle this matter at the roots; and that is where it is all about. Also, my noble friend was good enough to say that, because this is an enabling Bill, it would not be necessary to put this into any orders or levy exemption criteria, or whatever. The fact is that it was not there before, either in the 1964 Act as originally phrased or as amended in the 1973 Act; so he cannot blame me for being suspicious that some busybody—no doubt from the Manpower Services Commission!—has fed it in at this stage. Therefore it is rather suspicious that somebody might use it, even though perhaps my noble friend, like me, might think it was a mistake. But I am mildly reassured and I shall read with great care exactly what my noble friend has said, and reserve the right to come back on Report with this, or something like it. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 9, 10 and 11 not moved.]

10.35 p.m.

Lord Lyell moved Amendment No. 12: Page 6, line 21, after ("(iii)") insert ("neither paragraph (i) nor (ii) above applies but").

The noble Lord said: I understand that there is a mild misprint in the amendment on the Marshalled List which is printed as follows: Page 6, line 21, after "(3)" insert "neither paragraph (1) nor (2) above applies but". The difference is that the figures in brackets should be Roman and not Arabic. I was taken to task on another Bill, when it was hoped that the members of the department for which I was speaking could both read and spell. The amendment is technical, but I think that the Committee will see that it is much more easily understood if it reads as I have suggested it should be read.

That said, perhaps I may explain the purpose of this technical amendment. Clause 3 provides for a training board to propose a non-exemptible levy, subject to certain qualifications. If the proposals are for a non-exemptible levy of no more than 0.2 per cent. of the payroll, then they are subject to the normal degree of ministerial and parliamentary control; that is to say, the proposals need to be approved by both the commission and the Secretary of State, and the levy order is subject to negative resolution of both Houses of Parliament. This proposal is primarily intended to enable boards to meet their operating expenses from levies. I stress the phrase "operating expenses" after our discussion on the last amendment with the noble Lord, Lord McCarthy, about operating expenses. This is a change to the existing law, which is primarily intended to enable boards to meet their operating expenses from levy, although it might leave some boards with a little money over for such things as training grants.

If the non-exemptible levy is over 0.2 per cent. of payroll, then we consider that more controls are needed. Our aim is that for such a levy there should be either a consensus of employers in the industry or an affirmative resolution of both Houses of Parliament. At present, the Bill does not clearly achieve this. It probably requires affirmative resolution, even if there is a consensus of employers in the industry. That is what the amendment seeks to achieve. I beg to move.

Lord McCarthy

I am quite sure that if I could follow the noble Lord I would agree that the amendment is technical. As it is, it is incomprehensible. Whether it be Roman or Arabic, it is gibberish. But let us pass it.

On Question, amendment agreed to.

[Amendment No. 13 not moved]:

Viscount Hanworth moved Amendment No. 14:

Page 7, line 7, at end insert— ("(6) In subsection (3) of section 9 of that Act (power to amend or revoke industrial training orders) for the words from "may provide" to "expenses of the winding-up" there shall be substituted the words "shall provide for any amount by which the assets of the industrial training board may be insufficient to meet its liabilities and the expenses of the winding-up to be defrayed out of moneys provided by Parliament"; and subsection (4) of that section shall be omitted.").

The noble Viscount said: This is a very simple amendment. The Government set up training boards, and when they are abolished considerable costs will be incurred owing to redundancy payments, insurances and so on. As things stand at the moment, the Government are proposing that the companies should pay for that. This seems extremely unfair. We must remember that companies will then be responsible for running their training schemes, and it is hardly a good start for them in doing so. Furthermore, we know the difficulties that industry is having at the moment and it seems wholly inequitable that the Government should have decided not to bear the whole of the costs of redundancy and anything else which are incurred when a training board is abolished. I beg to move.

Lord Rochester

I should like strongly to support this amendment. It may be a simple one, but it is a very important one. It is bad enough, as the noble Viscount has suggested, that industrial training hoards should in future have to pay all their operating costs, but it now appears that it is the Government's intention under the 1964 and 1973 Acts to require industry also to pay by means of a levy, from which there may be no exemption, all the costs of those boards which the Secretary of State decides to abolish. It is my understanding that those winding-up costs may be 1½ times the annual operating costs. The money is needed, as the noble Viscount, Lord Hanworth, has said, to finance generous severance payments and also inflation-protected pensions, which people in industry certainly do not enjoy for themselves.

In the case of the company for which I used to work it is my understanding that the cost of all this might amount to as much as £800,000 or £900,000. These are really crippling additional burdens for companies which are already very hard pressed in these difficult economic times. It was not they who set up these training boards in the first instance; it was not they who are to be responsible for the demolition of the boards which is now in prospect. If the Government can finance redundancies in our ailing steel and shipbuilding industries, for example, on what principle do the Government absolve themselves from responsibility for funding in this case?

The noble Earl the Minister has told us that the Government wish to move over to voluntary training wherever possible, but what inducement is there for firms to participate in the launching of voluntary training arrangements if they are faced with these winding-up costs? Surely it is only training itself which will suffer if this cost is applied, and I join the noble Viscount in imploring the Government to relieve industry of these additional costs by accepting this amendment.

Earl De La Warr

I should like to give my strong support to this amendment. I worked for many years in a large firm—not by many times as large as that in which the noble Lord, Lord Rochester, worked, but we had in common the fact that we did an enormous amount of our own training. I feel—although it might be slightly—subjective as the noble Lord, Lord Rochester, would feel in his own firm, that it would be quite intolerable if a training board that we did not ask for and did not want came to an end and the company had to pay the not inconsiderable costs of winding it up.

I agree entirely with what was said by the noble Lord, Lord Rochester, about the Government's ability to finance other big enterprises, and I see no reason why the Government should take a different view of this. I hope that my noble friend Lord Gowrie will bear in mind that the CBI have come out very strongly against this proposal; and I feel sure that on reflection my noble friend will come to the conclusion that he can do something, at any rate, to make those of us who feel very strongly about this matter happier than we are at the moment.

10.44 p.m.

Lord Mottistone

Perhaps I could just add two remarks. Surely a principle is invoked for companies which have never paid anything towards training boards. More recently they have been exempt. Earlier on they were getting substantially more in grant than they ever paid in levy. I would draw the attention of my noble friend to the concluding remarks of my Second Reading speech, at col. 132. That is my first point.

I have two questions which it may be my noble friend will be unable to answer immediately. First, it is not clear to me, having studied as hard as I can Schedule 1 to the Bill and the part of the Bill which we are now dealing with, what happens about superannuation for the employees of boards. What happens about redundancy money? What happens about any form of compensation? Is that covered? And if it is covered, who is going to pay it? That is what this is all about. The amendment talks about net negative assets which in the broadest sense could cover the disposal of premises—the lot. I understand from the CBI that their lawyers are a little worried that the question of redundancy payments and compensation is not covered by the Bill as it stands at the moment. I should be grateful if my noble friend could look into it.

The other point which occurs to us—because we are extremely fussed about industry having to pay for a winding-up, for the reasons which other noble Lords have advanced—is that they never asked for the boards; they never decided to close them down; they have never paid anything; so why should they start now? What happens if there is a surplus on a winding-up? Who gets that? Does that go back to the industry? Or do the Treasury put their grubby little paws on it? It would be useful to know the answer. Even if my noble friend cannot give me an answer now, perhaps he would write to me between now and Report, otherwise we shall have to come back to the point. In the meantime, I hope he can give us every reassurance, because it is the feeling on all sides of the Committee (perhaps not on the main Opposition Benches) that this is wrong in principle and needs to be looked at.

The Earl of Gowrie

I do like to create whatever happiness I can in this House: I am glad that my noble friend has suggested that my own hands are clean, even if he seems dubious about those of the Treasury. Nevertheless, I have to tell him, and the Committee, that the Government consider that they must have, in principle, the power to impose a terminal levy on employers. Of course we realise that many employers feel very strongly that there should be no terminal levies, and we shall take that into account when we come to take any decisions about the future of boards.

I would remind the Committee that we have been talking during this amendment as though boards were in principle going to be wound up. As I suggested earlier, in many cases that will not be so. There will be cases, I am sure—and the legislative possibility is there—where Exchequer funds can be provided to meet the net cost of winding up an industrial training board. Obviously I cannot give any commitment as to whether such funds would be available or in what cases they would be available, but there is nothing which precludes their being available. In many cases it will be possible to cover the winding-up costs of a board from its reserves. I cannot tell my noble friend Lord Mottistone off-hand whether the winding-up costs include the pension arrangements, whether indexed or otherwise (and in many cases they would be) of the board personnel. That would be easy enough for me to check on, so perhaps I could return to my noble friend, whether in writing or after receiving a note, on that point.

The substantial issue is not changed, which is that it would be possible to cover the winding-up costs of a board from existing reserves. But this would not be true in all cases; in many cases the reserves would not be sufficient to meet the winding-up costs. In those cases we feel that we need to retain the power to raise a terminal levy from employers.

This is not a new issue or a new and sinister power which the Government have. The power to impose a terminal levy has in fact been in the legislation unchanged since 1964. I do not accept that just because an industrial training board is created under statute it is inappropriate that employers should pay either its operating costs or its winding-up costs. In the case of most boards the net deficit on winding-up, as a percentage of the emoluments paid by employers in the industry, would be lower than the percentage of emoluments normally referred to in a levy order. So in less formal language most employers in that situation would be up on the deal. Nevertheless we will, of course, consider whether we can avoid terminal levies once we know which boards are to be abolished, but in my contention we need to retain the power in principle to raise the terminal levy if need be.

I now have a note about the winding-up costs. The situation is that so long as a board has a legal existence my department can pay to the Manpower Services Commission, and the Manpower Services Commission can pay to the board, grants in respect of any legitimate expenditure by the board. The power of the commission to make grants to boards is in Section 5 of the 1964 Act and it is in fact quite unaffected by the Bill. Thus, if the Government were prepared to make the money available in a given case the commission could pass on to a board which was about to be abolished money which would enable it to pay any of its expenses, including grants to employers, or redundancy payments to staff or any other lawful expenses—and those, I assume, would also cover the pension point.

As I was saying to my noble friend, I am not seeking for any sinister new powers but to retain existing ones, and it seems to me to be essential that we should have the principal power to raise the terminal levy, although we would take employers' feelings into account on this issue and in notable cases where this levy obviously would not be fair it would be possible to make direct provision for the winding-up costs involved.

Lord McCarthy

I did not want to intervene in this debate but after listening to what the noble Earl has said I feel that I must. The noble Earl says that even if the darkest cloud is in the sky, you must not cry, you must not sigh: you spread a little happiness as he goes by. And what does he do? He turns down this modest little amendment. With great respect, it is not enough to say that it has been in a statute since 1964. It was not intended that Governments would go around winding up industrial training boards, but that is the intention of this Government and he cannot tell us that he will not wind up any of them. So one cannot go back to 1964.

Secondly, of course when it was done in 1964 it was not intended that we should be in the middle of a depression. But we are in the middle of a depression and a very large amount of money could fall upon firms for no reason whatever but that the Secretary of State decides to wind up an industrial training board. Quite frankly, the answer that the noble Earl has given to this very modest amendment is not worthy of him. It could have come from "Yes, Minister". This is the Sir Humphrey answer: we have always done it, we are always doing it, and we do not intend to give you any reasons. I do not see why the noble Viscount should put up with that.

Lord Mottistone

Before the noble Viscount decides what to do about this, I think I might say that, unlike the noble Lord, Lord McCarthy—with whom I find myself almost constantly in disagreement this evening—I found there were certain features of what my noble friend said which deserve study, and personally I should have preferred to come back to this matter on Report.

Viscount Hanworth

Before I decide what to do, I wonder whether the noble Earl can elaborate a little. When he says the Government have to have power to raise a terminal levy if need be, at whose discretion is it going to be? Is it going to be discussed with the Treasury, in which case I do not believe anything will ever happen? Under what circumstances do they want to raise it? I should like to know before deciding.

The Earl of Gowrie

The position is that this is an enabling Bill. We are not discussing the winding up of a particular training board, nor are we saying what board might be wound up or when. We are giving powers to the Secretary of State, subject to Parliament, to make these decisions in accordance with criteria which have been published and when he and, by proxy, Parliament think fit. In these somewhat "clouty"—as I am prepared to admit—circumstances, the Secretary of State, in our contention, should have the power in certain circumstances to impose a terminal levy on employers, but employers will not usually be shy about raising objections to this if they think it unfair, and those would be taken into account at the time.

I cannot say more than that to the noble Viscount. I think in instances where the levy was obviously unfair, where there had been no net benefit of any kind through the system to the industry involved, it would be extremely difficult, not least politically, for the Secretary of State to behave in an arbitrary manner about this, and I should have thought that he would get into considerable hot water, whichever side of the House he happened to be sitting on. What I am resisting tonight is the idea—and I think I can fairly side with Sir Humphrey on this —that an existing power to make a terminal levy should be withdrawn from the Government by statute when we do not know the particular circumstances in which one would be imposed. That is all I am saying in resistance to the noble Viscount.

Viscount Hanworth

I thank the noble Earl for trying so hard to put the case across on this. In the absence of complete support from his Back Benches, I think the sensible thing would be to withdraw the amendment and think about it before Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3, as amended, agreed to.

Clause 4 [Enterprise zones]:

10.58 p.m.

The Earl of Gowrie moved Amendments Nos. 15 and 16:

Page 7, line 8, leave out subsection (1) and insert— ("(1) No employer shall be liable to any levy imposed by an order made under section 4 or section 9(1)(b) of the Industrial Training Act 1964 in respect of any establishment situated wholly or mainly within an area designated as an enterprise zone under Schedule 32 to the Local Government, Planning and Land Act 1980; and for the purposes of any order made under the said section 4 such an establishment shall be treated as if it were not carrying on business. (1A) No such levy as is mentioned in subsection (1) above shall be imposed by reference to emoluments paid or payable to an employee whose employment is carried on at or from such an establishment as is mentioned in that subsection.").

Page 7, line 19, leave out subsection (2) and insert— ("(2) An employer shall not be obliged to comply with a requirement imposed under section 6 of the said Act of 1964 (returns, information and records) in respect of an establishment or employee if—

1. (a) at the time the requirement is imposed the establishment is situated as mentioned in subsection (1) above or, as the case may be, the employee's employment is carried on at or from such an establishment, or
2. (b) the requirement relates to a period during which the establishment was so situated or, as the case may be, the employee's employment was so carried on.").

The noble Earl said: We now come to the exciting area of enterprise zones. These amendments are intended to remedy a number of technical defects in Clause 4 concerning relief from ITB levy and form-filling for establishments in enterprise zones. At this late hour I am not going to justify or argue the concept of enterprise zones. They are wholly experimental and the idea is that they should be treated as laboratories. But obviously it does not make any sense to have an enterprise zone and to have a laboratory experiment on relieving certain very limited and defined parts of our country from the system which normally obtains elsewhere, unless the freedoms given are fairly considerable. Relieving companies from ITB levy and form-filling is a small but nevertheless an important part of the package of aids and incentives in respect of the enterprises zone experiment.

The main defect that the amendments are intended to put right concerns the way ITB levy is calculated. As it stands in the Bill at present Clause 4(1) has the effect that no levy is payable in respect of a period when an employee is working in an enterprise zone. However, the only workable system is that the levy is calculated by reference to a past period. If the ITBs stick to that system they might levy an employer for an employee who was in the zone in the levy period but who was at another of the employer's establishments in the period when the levy was calculated, and that obviously would not do. I beg to move.

On Question, amendments agreed to.

On Question, Whether Clause 4, as amended, shall stand part of the Bill?

11.2 p.m.

Lord McCarthy

The noble Earl said that we were entering, I think, the "exciting" area of enterprise zones. I would have preferred what he said earlier on terminal levies—namely, the somewhat "clouty" "situation of enterprise zones. We have to debate for a moment or two the issue of enterprise zones so that we can see why it should be the case that industrial training legislation should not apply to enterprise zones. It may be small, it may be petty, but we have to debate for a moment what is the theory of enterprise zones.

Enterprise zones are, of course, an interference in free competition. They are unfair competition. They are an extension of the principle of unfair competition. They relieve employers of common responsibilities, common obligations: the obligation to pay rates, the obligation to observe health and safety provisions, the obligation to observe certain planning arrangements and restrictions, and so on. They are at one with those clauses in the Employment Act which set out to allow people to dismiss people unfairly. They are, in fact, ways of relieving people of their responsibilities.

The pure milk of the doctrine of free competition would have none of this, because it is unfair; it is unfair on those who are not excluded. Good old Hayek would have a fit. The ghost of Marshall is talking about consumer surplus. Adam Smith—if you ever read the entire book—would be against it. So why have we got it today and why have we got it for our industrial training boards? We have got it because we have a kind of punk laissez-faire, because people are prepared not really to be consistent about the principles which they observe.

I am not against restrictions on free competition. I do not take this pure view about free competition. But if you are going to have restrictions, if you are going to have what laissez-faire economists would call "unfair competition", do not pick on the weak; do not take away people's responsibilities: do it by regional employment premia or something of that kind. Do not say that people cannot have rights which they have in other areas, and do not say that people, if they are going to be put into these bucket shop enterprise zones, in addition to all the other rights they are not going to have, are not going to have the right to be properly trained. Therefore, I oppose this clause.

The Earl of Gowrie

The noble Lord must not get away with the notion that health and safety regulations do not apply in enterprise zones. Of course they do, as do most protections which pertain to individuals. I do not mind a bit of teasing about the pure milk, or whatever it was, of free competition. I have always looked upon myself as belonging to the Gaullist rather than the 19th century Liberal wing of the Conservative Party. I prefer to think of enterprise zones as help for the disabled. That is a principle to which all Governments have tended to subscribe. We have no intention in this Year of the Disabled of withdrawing our aid from them. Indeed, we have managed to keep it up.

I think that the simple answer to enterprise zones is that there are areas in this economy which successive Governments, successive plans, successive regulations and, above all, successive huge injections of cash have simply and utterly failed to benefit. Therefore, we are trying something out. The approach is experimental and the result is uncertain, but it seems to be more sensible to try something than nothing at all. It is foolish to try even a limited, narrowly-defined experiment unless you carry it through to some of its logical conclusions.

Relief from training levies and requirements to give statistics to training boards are only part of the privileges to establishments in enterprise zones, but they are surely a worthwhile part of the package. They give us a laboratory test, if you like, as to the working of the system in microcosm. I should have thought that the noble Lord, who has been critical of the system that we are trying to draw up, might welcome that chance to make, as it were, a laboratory test. Our original proposal was to take the establishments in enterprise zones out of the scope of training boards, but following a recommendation from the MSC we decided instead to keep such establishments within the scope of the 1964 Act, but to provide relief from the requirements on levy and statistics, so that the boards could still offer them training grants and advice.

In short, we are trying to see that enterprise zones have their cake and eat it, and this is really the point of the whole experiment. I think that the noble Lord, who is well aware of the acute difficulties—not least in employment terms—of the areas in which the enterprise zones are sited, should welcome the experiment rather than grouse about it.

Clause 4, as amended, agreed to.

Clauses 5, 6 and 7 agreed to.

Clause 8 [The Industrial Training Boards combined pension fund]:

[Amendment No. 17 not moved.]

Clause 8 agreed to.

Clauses 9 and 10 agreed to.

Clause 11 [Short title, repeals, commencement and extent]:

[Amendments Nos. 18 and 19 not moved.]

Clause 11 agreed to.

Schedule 1 [Miscellaneous amendments to Industrial Training Act 1964]:

Lord Mottistone moved Amendment No. 20:

Page 12, line 28, at end insert— (".—(1) For paragraph 3 of the Schedule to that Act there shall be substituted—

"3.—(1) An industrial training board shall consist of chairman and such other members appointed by the Minister in accordance with sub-paragraph (2) below.

(2) Before appointing the members of the board the Minister shall—

1. (a) as to the Chairman and as to one half of them consult such organisations or associations of organisations representative of employers engaging in the industry as he considers appropriate;
2. (b) as to one quarter of them consult such organisations or associations of organisations representative of persons employed in the industry as he considers appropriate; and
3. (c) as to the remainder, consult the Secretary of State for Education and Science.

(2) In paragraph 5 of that Schedule for the words "paragraph 3(b)" there shall be substituted the words "paragraph 3(2)(c)".").

The noble Lord said: Very briefly, if the Government decide to retain an ITB—we have been talking about the winding-up aspect but, as my noble friend has said, several are obviously going to be kept and these will create conditions in which industry has to pay net costs; for example, the provision of up to 0.2 per cent. of emoluments in Clause 3, which we spoke about earlier—what has been suggested (and my advisers in this case are the Engineering Employers' Federation) is that the balance of board membership should be adjusted to give employers' representatives a casting vote. As the Committee will know, at the moment and under the terms of the existing Act there is an even balance between employers' representatives and the employees' representatives, with no casting vote for the chairman and with no vote at all for the educational members. The object of this amendment is to give a casting vote to the employers. This will avoid an impasse being created and it will also put the final decision in the hands of those that are having to put up the money. I beg to move.

The Earl of Gowrie

I tend to believe with my noble friend in the good John Hampden principle of no taxation without representation. Therefore, when I was examining this amendment I had to be satisfied by my officials that employers should have a significant say in the disbursement of funds which they had provided. But my noble friend wants to go a little further than that. We have given careful consideration to the possibility of giving employers an outright majority on training boards but in our view that goes a bit too far in giving employers dominance on boards at the expense of employee and education interests, because my noble friend's amendment would give employers control over all aspects of boards' work and that could be used to frustrate training objectives.

We have said that we aim to retain boards in key sectors where essential national training objectives must be paramount, and it could be that in such sectors employers would not be motivated or organised to do adequate training without the intervention of a statutory board. Boards would therefore have to impose unpopular decisions on employers to secure adequate training. If they were completely dominated by employers, they might be unwilling to do so, leaving the burden of securing adequate training on Government and taxpayer.

We would also not accept that employee representatives on boards should have their position so diminished as this amendment would require, because employee organisations have a clear and keen interest in the work of boards. We would not want to risk any lessening in their support for the work of boards, and we would be worried that this amendment might also have that effect. I can say that employers now do have more of a say on boards than they did, and I would hope that that would be a sufficient earnest of our attachment to the principle of no taxation without representation, and that, in the light of that, my noble friend would not seek to press his amendment.

Lord Mottistone

I am reassured by what my noble friend has to say, but I do not quite understand when he says that employers have more say. Can he elucidate that? I think paragraph 5 of the explanatory memorandum talks about the present equal balance of employers' and employees' representatives, which is the normal way of deciding it, after consultation with the organisation of employers only. That does not give them any more power, because the relevant part of the 1964 Act still has an even balance between employers and employees. Though I think perhaps my amendment goes further than I would have thought, and I shall come back to it at another time, so long as you have an equal balance, the employers really have no more power on money matters than they have had hitherto.

The Earl of Gowrie

The point I was referring to was that, if you are going to have a levy in an ITB, there now needs to be a majority of employer members on the board in favour to get that levy. That seems a significant improvement in the employer position.

Lord Mottistone

I shall have pleasure in reading my noble friend's speech with great care, but I may come back to this on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Miscellaneous amendments to Industrial Training Act 1964]:

11.15 p.m.

Lord McCarthy moved Amendment No. 21: Page 12, line 29, leave out paragraph 5.

The noble Lord said: If this amendment is defeated, the noble Lord, Lord Mottistone, will have been crying before being hurt because paragraph 5 of Schedule 1 does what the noble Earl just said; it makes it clear that in any issue involving a levy, a matter shall not be decided except in accordance with the votes of the majority of the members who were appointed as mentioned in paragraph 3(a) … after consultation with organisations or associations of organisations representative of employers". In other words, employers, and employers alone, will, if the Bill becomes law, decide whether there will be any money at all to run an industrial training board. The trade unionists can discuss, but they cannot raise levies. That, as I understand it, is the present state of the Bill, and that is what we want to change.

The prior situation was that trade unionists had as much right to vote as employers. Those who did not have a right to vote were the educationalists. The trade unionists were on the boards as people having a right to influence the raising of money. That is part of tripartism. Trade unionists were there because it was thought they would be the people who would be able to persuade the unions to accept the changes which would be involved in the training programmes. And the employers were there because, frankly, the training was to benefit them; the industrial training boards were to benefit employers by increasing training in industry as a whole and therefore they had a vote, but not an exclusive vote because they shared it with others who had a vote as well.

In Committee in another place the Member for Fareham moved an amendment which resulted in the situation we are discussing. He said that, although the Bill had transferred the cost of training to industry, if industry were to acquiesce in it, it must have the right to cast a veto. Without that right, he said, it might be involved in paying too much money and therefore it would be apprehensive and resentful. So paragraph 5 is one of the ways in which the Bill will reduce the amount of training because it will give the employers a veto, and they want it because they are afraid that otherwise it may cost them too much.

That is why, as people who come before your Lordships in favour of maintaining the existing volume of training, and if possible to increase its quality and volume, we are proposing this amendment. We think that, without it, the situation would be dangerous. We believe that in conjunction with all the other provisions, and with the fact that the intention at the heart of the Bill, as I argued on Clause 1, is to give the Secretary of State the opportunity to close down industrial training boards in circumstances where he would not have been able to close them down without the Bill—and, if that is not the objective, I do not know what those provisions are there for—that what is proposed by the Government here is the extra bit on top that will finally result in the collapse of training in this country.

That is the first main reason why we have tabled the amendment, but there is another reason, which I put forward cautiously, because I do not want to be thought to be suggesting that the noble Earl consciously and deliberately sees this as a reason himself. I said at the beginning that this Bill was an attack on tripartism, and that is what it is. It is being suggested that trade unionists will continue to serve on industrial training boards and give of their time and expertise and persuade their members to agree to all kinds of changes which industrial training boards are seeking to introduce—for example, changes in the modular system of apprenticeship training, and so on—and that they will do all that in a position of monetary eunuchs, where they cannot in any way influence the disposition and the raising of the funds, so that they will be second-class citizens.

I stress that I do not say that the noble Earl does this because he thinks that the trade unionists will not be subject to these conditions; and I certainly do not argue that they should not be subject to these conditions. On the contrary, so far as I had any influence over them I should argue that they should, in the interests of industrial training in this country. Nevertheless, it is a very dangerous and scurvy thing to do, and that is why we propose the amendment. I beg to move.

Lord Mottistone

I should like to interject because I do not honestly believe that the noble Lord need have any fears, and that my aims are not achieved. The paragraph states: … no such matter shall be decided except in accordance with the votes of the majority of the members who were appointed as mentioned in paragraph 3(a) …". Paragraph 3(a) states: an equal number of persons appointed after consultation with employers' representatives and employees' representatives. If it is a majority, and there are (as was the case with my late board) nine employers' representatives and nine employees' representatives (18 people)—and they are the only people mentioned in paragraph 3(a)—and all the employers vote one way and all the trade unionists vote another way, which is what happened on two or three different occasions, there is no casting vote. The chairman does not have a vote, and there is nothing in paragraph 5 to say that he should have one; and the educational members never have a vote on matters of levy—financial matters.

The noble Lord, Lord McCarthy, says that he does not know what I am worrying about. I am saying back to him that I do not know what he is worrying about, because the powers in this area of the employees' representatives are just as strong as they were previously, and like the noble Lord, Lord McCarthy, I hope that there will be no reason why they should not continue to serve on training boards, because I believe them to be the most important single element on those boards.

The Earl of Gowrie

The Bill is certainly not making an attack on tripartitism, but as I said in speaking to the fears expressed by my noble friend in the previous amendment, on good principles of no taxation without proper representation we are trying slightly to improve the employer position in one significant respect. It is an essential part of the Bill that the costs of training in an industry should be borne by the employers in that industry, whether there exists a statutory industrial training board, or whether there are voluntary arrangements; that is not different in either case.

Therefore, the effect of the Bill will be in due course to transfer all the costs of a board back to employers. Those are the operating costs, as well as the costs of providing training and paying grants; except of course any derived from Exchequer funds. On several occasions during the Committee stage the noble Lord, Lord McCarthy, has criticised us for transferring those operating costs from the Exchequer in the main to employers.

But if we do that, it is only right that the position of employer representatives on the boards should be strengthened, so that employer representatives on boards should not be forced against their will to go along with the key decisions of boards about raising money from employers. That is why under the Bill there needs to be a majority of employer members on a board to get the levy.

The tripartitism point is also not really relevant here where board decisions on levy are concerned, because education members, who are the other part of the trinity, do not at present vote on the levy. We do not propose to disfranchise union members. They can still vote and influence decisions, and employers cannot carry decisions if they are opposed by all union members.

So it is a matter of balance, as these constitutional things so often are. But, as I said, it is right that the position of employer representatives should be somewhat strengthened, though not to anything like the degree which the previous amendment in the name of my noble friend wished, so that they would not be forced against their will to go along with key decisions on money matters. In view of what I have said, I hope the noble Lord will not seek to press this amendment, and if he does I must ask the Committee to resist it.

Lord McCarthy

I am afraid I must press this amendment. The position is as described by the noble Earl. In effect, the employers have been given a veto where money is concerned. You need a positive decision to spend money, and you cannot get a positive decision to raise a levy unless you have a majority of the employers. That, as I take it, is what paragraph 5 means, and that, as I take it, is what the Minister thinks paragraph 5 means. The noble Lord thinks it means something else, but on the basis that it means what the Government say it means, I must divide the Committee.

11.26 p.m.

On Question, Whether the said amendment (No. 21) shall be agreed to?

Their Lordships divided: Contents, 16; Not-Contents, 35.

CONTENTS
Ardwick, L.	McCarthy, L.
Bishopston, L.	Peart, L.
Blease, L.	Pitt of Hampstead, L.
Boston of Faversham, L.	Ponsonby of Shulbrede, L. [Teller.]
Ewart-Biggs, B.
George-Brown, L.	Rochester, L.
Henderson, L.	Seear, B.
Llewelyn-Davies of Hastoe, B. [Teller.]	Stone, L.
	Underhill, L.

NOT-CONTENTS
Airey of Abingdon, B.	Gowrie, E.
Avon, E.	Haig, E.
Balerno, L.	Henley, L.
Belstead, L.	Long, V.
Brabazon of Tara, L.	Lyell, L. [Teller.]
Bridgeman, V.	Mackay of Clashfern, L.
Campbell of Alloway, L.	Mottistone, L.
Cathcart, E.	Mountevans, L.
Cork and Orrery, E.	Norfolk, D.
Cullen of Ashbourne, L.	Northesk, E.
De La Warr, E.	O'Hagan, L.
Drumalbyn, L.	Sandford, L.
Dundee, E.	Sandys, L. [Teller.]
Elles, B.	Selkirk, E.
Elton, L.	Skelmersdale, L.
Ferrers, E.	Soames, L.
Gainford, L.	Vivian, L.
Gisborough, L.

Resolved in the negative, and amendment disagreed to accordingly.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 [Repeals]:

[Amendment No. 22 not moved.]

Schedule 3 agreed to.

House resumed: Bill reported with the amendments.