AIR TRANSPORT AND TRAVEL (INDUSTRIAL TRAINING LEVY)

HC Deb 13 May 1971 vol 817 cc687-712

7.0 p.m.

Mr. Paul B. Rose (Manchester, Blackley)

I beg to move, That an humble Address be presented to Her Majesty praying that the Industrial Training Levy (Air Transport and Travel) Order 1970 (Amendment) Order 1971 (S.I., 1971, No. 496) dated 23rd March, 1971, a copy of which was laid before this House on 31st March, be annulled. There are a number of reasons why I believe that this debate should take place in a period when there is no little anxiety about the future of industrial training. It is unfortunate that the debate has fallen on the day of the borough elections, and that, as a result, the question is being ventilated to a House that is less full than one might expect.

First, there is increasing concern at the blanket opposition by mindless and self-interested individuals, unfortunately reflected in some of the sentiments that have been expressed in this House. Many of us have seen or received stickers entitled "Abolish industrial training boards. Parasitical and Inflationary". I hope that in dealing with some of the schemes and achievements in air travel the Minister will put paid to that sort of nonsense.

Secondly, industrial training has taken a back seat in the House recently, because industrial relations have been at the centre of the political stage. Thus, when the Government announced, on 5th April, their intention to wind up the Hairdressing and Allied Services Industrial Training Board they did so by means of a written reply, without any explanation.

Thirdly, this order deals with the grant levy system in two industries of growing importance. In the air transport industry the importance of a high level of attainment in training cannot be over-emphasised. Those of us who are laymen, with no technical knowledge, but who have read of a recent near-miss over Heathrow and of the complexity of flight deck operations when taking off from an airport like Heathrow, can be in no doubt of the importance of training in this industry. It is essential that an adequate supply of training vacancies is available to provide enough skilled workers for future needs.

One thing that emerges from the report of the industry is that the age structure of the industry is such that the need for these skills will increase, especially among younger personnel, while, at the same time, men who are capable of learning to do a job should not be permanently excluded from obtaining new skills merely because they happened to miss the opportunity at an early age. The type and quality of training arranged by the Board, and individual schemes which are not detailed in the annual report, will be of interest to the House. I hope that the Minister will say something about them. I also hope that he will be able to say something about the grant/levy set-off dealt with in the order.

Fourthly, it is proposed that travel agents and tour operators should pay a 1 per cent. and not a 2 per cent. levy, but the annual report made it clear that the inclusion of travel agents and tour operators within the scope of the board is an event of so recent occurrence that no real consideration of the training needs has yet been possible, although developments may well have taken place since then. Although establishments of a small type may be left out of many other industrial training schemes—and one appreciates the need for that in respect of other industrial training boards—I am not happy about the 1 per cent., or about the limit of £10,000 in emoluments laid down in the order.

If there is one set of establishments in which training is necessary, not only for the industry but for the protection of the public, it is in this industry, in respect of travel agents. It is an industry in which before dealing with the question of industrial training, I collected a whole dossier of complaints which I submitted to the Department of Trade and Industry. Certainly industrial training in the travel and tour business is the other end of the spectrum of consumer protection for the holidaymaker. I therefore ask the Minister why he considers that a figure of 1 per cent. should apply as against 2 per cent. for the air travel industry.

Nevertheless, it is encouraging that these problems are being considered in the context of paragraph 7 of the annual report which says that The Air Transport and Travel Industry Training Board enters a new decade with an improved capacity to assist the industries which it now serves to meet the training problems of the 1970s. That should encourage the Minister and the House to persevere in spite of the opposition of those who seem to see red at the very idea of industrial training.

The manpower planning survey demonstrates the need for increasing training facilities for the young, in particular because of the age structure of this industry. Having read the report, I am concerned why the amount of grant for training of fire and rescue staff appears to be so low. There may be an explanation.

I congratulate the board on the manner in which it was able to continue the training of the British Eagle apprentices. That was a great achievement by the board. A great deal can be learned from the international co-operation that has taken place in this respect. It is possible to learn a good deal from foreign experience.

The levy on payroll may well be an example for many other industrial training boards, as with the set-off of grant against levy due. These are two methods by which administrative expense and complexity can be cut down. My hon. Friends and I are as concerned as anybody to cut down administrative costs, but such costs cannot be made the pretext for an assault on the whole concept of industrial training. These two methods may be a key to cutting down the admini- strative costs of industrial training boards. Here again, I should appreciate an explanation from the Minister of the differential between the 3.8 per cent. for British air carriers and 2 per cent. for the remainder of the industry, while the order recommends the lower level of 1 per cent. for tour operators.

There is no doubt that there is at least as much room for improvement in the training requirements of the travel agencies as compared with the airlines. The percentage should have been at least 2 per cent. in respect of the agents. I understand that that was the unanimous recommendation of the board to the Minister, and that the Minister overruled it. There is nothing in the footnote to the order to convey that impression; in fact, precisely the opposite impression is gained. The Explanatory Note says: This Order gives effect to proposals submitted by the Air Transport and Travel Industry Training Board". The Minister, intentionally or otherwise, has misled many of us into believing that this was the view of the board rather than his view. My information is that he overruled the unanimous view of the board.

If my information is correct, when we receive future orders of this kind—and not a few have already passed through my hands this session—I shall no longer be able to accept the Explanatory Note which says that the order gives effect to proposals made by the individual board. I may have to pray against further orders unless it is made clear whether the decision is that of the Minister or of the board.

The overruling of this recommendation by the Minister means that the board has lost its independence of action. It is expected to be a rubber stamp. The Government knew that the board had been overruled and yet they have not told the House. It is only because of information that has come into my possession recently that I am in a position to state with authority that the board was overruled in this way.

The small travel agent, above all, needs more trained personnel and higher standards. Looking at the travel industry, the lack of inspection of overseas hotels, for example, is something that causes a good deal of concern. I have personally run up against some bad experiences here. One meets couriers quite unable to cope with the problems facing them abroad because they have not been properly trained and are unaware even of the geography of the area they cover. We know of a quarter of a million holiday-makers last year whose travel arrangements had to be rearranged at short notice, a matter of concern for both tour operators and agencies. There is a lack of frankness in public relations on the part of the travel agency industry; there is an amateurish approach by many travel agents and an arbitrary attitude adopted by many operators.

One of the causes for complaint is over the lack of machinery for dealing with complaints—a multitude of them about travel agents and tour operators. I draw here from my own dossier for examples of this. There are many matters which are capable of improvement, quite apart from questions of registration and the rest, which can be helped by industrial training if it is taken seriously by the travel agents and if they will show a willingness to help themselves and their customers to a far greater extent than they have shown in other respects.

In the long term it might well be possible to work out a more equitable costing method to cover all the Board's operations. I do not believe in being dogmatic about these matters with regard to the amount of grant and levy. This is a matter for the board to work out. In the meantime, like members of the board, I see no reason for the differential. Certainly the trade unions concerned are strongly opposed to the growing pressure on the board to reduce and do away with levies even to the extent—and this is happening with regard to this and other boards—that arguments about reducing the cost to employers are beginning to take precedence over the real job of improving industrial training. The Government should recall once more the Prime Minister's speech immediately before the election at Ayr about industrial training.

They should also remember the Act which they set in motion and of which they have every right to be proud. This Act set certain tasks for the training boards and it was entirely endorsed on this side of the House. We want to see a continuing review of training methods and a cutting down of administrative costs. This is a very different matter from cutting levies merely to appease people in industry and in this case to appease the travel agents whose reputation and whose standing, certainly if my dossier is anything to go by, leaves a good deal to be desired. An enthusiastic response to industrial training by A.B.T.A., for example, would show a welcome change of heart in the industry.

The exemption of smaller firms is even less comprehensible than the question of the levy because whereas smaller firms may well rely on the larger firms to meet their labour requirements or, in the alternative, do their job inadequately, at least the larger travel companies tend, in their own interests, to do a good deal of training. I find the omission of the smaller firms together with the reduction to be two matters which cause me a great deal of concern.

As a consequence, there are thrown on to the airlines duties which are really the duties of the travel agent and for which the travel agent obtains commission. Yet again, the Minister has exempted precisely those groups which need to participate in industrial training, which need to train their employees. As a result of all this, the Minister's actions have denigrated those public-spirited men and women who devote time that they can ill afford to participate in the work of the industrial training boards.

I should like to know when the Minister will say something about the determination of training recommendations in the training industry. There is a serious danger, certainly with this Industrial Training Board, if not generally, of doing what the Government have done to the Commission on Industrial Relations, namely, to force the trade union side out because it will not act as a rubber stamp. How long can people go on trying to increase efficiency and to provide the requisite number of skilled operators for future needs if the Minister capitulates to the pressures of the philistines and of the self-interested?

Mr. Kenneth Lewis (Rutland and Stamford)

Dear me.

Mr. Rose

The hon. Member says, "Dear me". I can only suppose that he is among the philistines, those who produce documents of this kind which say that the industrial training boards should be abolished altogether. I hope that the Minister will not capitulate to that kind of pressure.

Mr. Kenneth Lewis

I could be at home tonight, but I am interested in industrial training. I was on the Committee on the original Bill. I am also here because I am interested in this business. For the hon. Gentleman to talk in terms of philistinism in relation to travel agents, and the association of British Travel Agents in particular, which is what he has been doing, is the most utter exaggeration. The work that has been done in this area by A.B.T.A. and the whole airline structure, private and national, is, as the hon. Member well knows, considerable.

Mr. Rose

I appreciate the hon. Member's speech but I think he has misunderstood me. If I gave the impression that capitulation to the philistines meant capitulation to A.B.T.A. then I gave the wrong impression. What I was referring to were the people who are putting out this sort of leaflet which I have here, and which is an example of the pressure on the Government to abolish industrial training boards altogether. I am not suggesting that those who participate in this set-up are doing that, and I hope that the hon. Gentleman will accept from me that if that was the impression I conveyed, it was not the impression intended.

I draw a sharp distinction between those who, perhaps out of self-interest, wish to cut down the levy they pay—they are perhaps the self-interested—and those to whom I referred as the philistines, who do not accept the need for industrial training. If the hon. Gentleman's intervention has helped me to clarify that, I am grateful to him.

When does the Minister intend to publish the training recommendations? Is he willing to take the risk—and it is a risk—of destroying a board like this by forcing out trade union representatives who cannot accept decisions taken in their name by the Minister? I know there is a strong feeling that they may well take drastic steps if they are treated as a rubber stamp and have no channel through which to express their feelings as to that ultimate decision about the grant and levy system. I hope that the Minister will consider this carefully. Is he willing to take such a risk? One of the positive features of the 1964 Act was the new rôle of the unions in the shaping of training policy and administration. This pressure on employers can be valuable in creating a consciousness of the need for training. There are many employers who see the need for training and one can cite the report of the Engineering Industry Training Board and many similar examples. In regard to the air transport industry, the Minister is putting the corporations at risk.

There are many general matters which could be discused, but I would not wish to stray beyond the terms of the Order. The Government appear reticent over this matter. They have not yet announced a date for a debate on the whole question of the future of industrial training boards, although I asked for such information in a business question some three weeks ago.

It will be the policy of the Opposition, in selective cases, to pray against Orders such as this, as we have done in regard to orders on the Vehicle and Road Haulage Industry Training Board and the Hairdressing and Allied Trades Industry Training Board. We shall pray against such orders when we feel that they raise legitimate matters of concern. This matter is of concern not only to members of the board and of the industry, but also to the House and to the general public.

I hope that the Minister in reply will deal in some detail with the points which I have raised and will say why he thinks it necessary to over-rule the unanimous view of the board on the levy and exemptions.

7.22 p.m.

Mr. Robert Taylor (Croydon, North-West)

Since I arrived in this House in June last year, I have watched with interest and care all aspects of Government involvement in industrial training. The smear that is levelled against those of us who oppose Government industrial training that we are against industrial training does not stand up to the test. I have been for 12 years a director of a company whose standard of industrial training has been exemplary and has been so regarded in the particular industry concerned. Therefore, the frequent attacks on those of us who are involved in industrial training that we have no interest in training should be refuted.

I am surprised to find that this Prayer is on the Order Paper, because the Statutory Instrument to which it refers is one of the least offensive of those Orders on industrial training which have been before the House. I am even more surprised that the Prayer should have been tabled by the right hon. Lady the Member for Blackburn (Mrs. Castle) and the hon. Member for Manchester, Black-ley (Mr. Rose), both of whom I consider to be united by a dogmatic zeal to foist on every industry training for the sake of training, irrespective of whether that training is useful, necessary or even helpful.

I have been interested during the past week to contemplate their reasons for wishing to put down this Prayer. Now we know. What has upset hon. Members opposite—

Mr. Cranley Onslow (Working)

There is only one there!

Mr. Taylor

Yes, there is only one present. What has upset the Opposition is that the levy has been halved from 2 to 1 per cent., and secondly, that the cut-off figure has been left at £10,000. In other words, they believe the higher the levy the better the training. Similarly, with their philosophy that the higher the taxes the better the country, they believe that the most efficient training methods are those which seek to catch the smallest possible fish in their net. It is interesting to note that the report quoted by the hon. Member for Blackley of the particular training board which is the subject of this Order states that it wrote off £1,000 of levy in the first levy period as not being worth the cost of collection, yet at this time the board was dealing only with civil air transport and was levying 263 companies.

The hon. Gentleman appeared to want the same board to be responsible for levying all the small travel agents. First, the board would have to sort them out, then find them, and would then have to levy them. At the proposed rate of levy in the Order, the maximum amount such a firm would have to pay would be £99. If such a sum were levied at the rate required by the hon. Gentleman, the maximum amount would be £198. Then there would be ail the paraphernalia involved in filling in forms and claiming back the grant. This would be bureaucracy gone mad.

The Board which is the subject of the Order was formerly the Civil Air Transport Industry Training Board. As such, it must be admitted, it did very useful work, and I agreed with the hon. Gentleman when he cited the example of the British Eagle apprentices, which was an excellent result of the board's efforts. The Civil Air Transport Industry Training Board enjoyed the good will of the firms which it was levying, but suddenly on 11th March last year the previous Administration, in a moment of supreme folly decided that travel agents were inefficient and that what was needed was an industry training board to put them in order. What more natural for that Government than to link travel with aeroplanes! Therefore, the name of the training board was changed to the Air Transport and Travel Industry Training Board. As a result a highly successful and technical training board then had to sit down and fathom out a way in which to tell the efficient industry how to become more efficient.

If anybody doubts that this action by the Labour Government was precipitate or was a case of instant government—of which we were warned we should have a great deal—or if anybody doubts that this was a case of acting first and thinking afterwards, I would quote exactly the same paragraph as did the hon. Gentleman from the current report and accounts of the board, paragraph 6 says: The inclusion of travel agents and tour operators within the scope of the Board is an event of so recent occurrence that no real consideration of the training needs has yet been possible. Much work of an administrative nature will have to be undertaken initially in connection with this extension of scope and concurrently the training position and needs will be surveyed and evaluated. If that means anything, it means that no survey and no evaluation of whether this industry needed Government interference by way of training took place before that Order was forced on to the industry.

If this levy is approved tonight, at either 2 per cent. or 1 per cent., it will place an immediate obligation on the board to provide training for travel agents and tour operators. Although we have heard from the hon. Gentleman that in his opinion many travel agents are inefficient, we have not been told what form of training the board should give to make them efficient. It is suggested there should be more inspection of hotels abroad. Nobody could doubt that—but is a training board in this country the way to organise it? What help a training board of this nature could give to a service such as travel agents is to make sure that they run their business with the maximum efficiency at minimum cost and so increase their profits. This is one of the objects of all training boards.

In the case of travel agents, nobody would suggest that a technical skill, such as that in the engineering industry training board is involved. If this is what the training board will set out to do, it will presumably follow the previous pattern of other boards and appoint its own officers to help individual firms. The duty of these training officers must be to bring the most up-to-date methods to each of those establishments to every firm that pays the levy. If the training officer goes to one firm which is extremely efficient and well-managed, he will discover the way in which efficiency has been attained. If he is to do his duty to the other establishments he visits, he must teach them this efficiency. This will be wrong because it would penalise the efficient firm. In a week in which we have heard my right hon. Friend the Prime Minister say that there is cause for alarm about the leakage of confidential information, it would not be right to approve a situation which envisages more officers going into more businesses to get more information.

I wish to put two questions to my hon. Friend the Minister of State. It is well known that in Carlisle the State pubs do not pay any levy to the Hotel and Catering Industry Training Board. I am not sure why. Presumably, it was that the previous Government thought that if the State ran them they were run to the maximum efficiency. Will this procedure be continued under this Order with the State travel agents, such as Thomas Cook? Should they not be treated in the same way as other travel agents? If the answer is that Cook's will pay, what is the logic of State travel agents having to pay when State nubs do not? Secondly, in taking the figure of £10,000 as the cut-off figure, beneath which firms do not have obligation to pay levy, I would ask whether there is included in that figure the salaries of directors of limited companies. If the answer is "No", should we include the salaries of directors of unlimited companies and also the salaries of partners? This is very important, since there has been trouble in other training boards about the compilation of that figure.

I am very glad that the hon. Member for Blackley, who alone remains on the benches opposite, is unlikely to divide the House on this Prayer, because I should find it very difficult to support this Statutory Instrument. It is wrong that travel agents should have this levy inflicted upon them. The board represents an area of industrial training which the Government are jumping into and which they could have escaped, since the board has not really commenced operations. In addition, the board itself would be much happier to be left looking after the civil air transport industry.

Mr. Rose

Then will the hon. Gentleman explain why a member of the board has said that the board unanimously opposed the reduction or exemption of travel agents from the levy but that this was overridden by the Minister? The board does not seem very happy at all.

Mr. Taylor

In my view, the fact that it had such great difficulty in dealing with small firms when it was dealing with only 267 must substantiate that it would have a much more difficult exercise in dealing with the many thousands of small travel firms up and down the country.

7.38 p.m.

Mr. Cranley Onslow (Woking)

I shall be very brief, mainly because I cannot bear the sight of the solitary figure of the hon. Member for Manchester, Blackley (Mr. Rose) sitting on the belches opposite in ignominious isolation.

Mr. Rose

I am quite happy.

Mr. Onslow

That may be, but it does not look so good to see the hon. Gentleman as the sole adornment of the benches opposite.

The hon. Gentleman warned us against mindless opposition to training boards. Perhaps I might warn him against mindless support for them. If he thinks that he has picked the best possible grounds on which to support training boards, he is wrong. If he thinks that the instance that he gave us about the value of training in civil aviation justify the existence of this board, he is wrong again.

It is much to the credit of the board that it was able to come to the rescue of the British Eagle apprentices. However, if he reads the board's report, he will find that the board was able to do it only by accident and quite without planning. It set aside money for group training for which there turned out to be no demand. As a result, it had some £40,000 in the kitty which it had levied and did not require. When British Eagle found itself in difficulty, the board was able to rescue its apprentices with the aid of that money.

When the hon. Gentleman says that it is vital to have a training board for this industry because it is important to have training standards, does he suppose that the importance of training in the civil air transport industry was recognised only when the board was created? Does he suppose that the expenditure on training in the industry has been maximised as a result of the board's creation and that, before it, it was less than the sum levied by the board? He knows that that is not so, and that this is an industry where training is essential to survival. It is one in which innovation is constant. Operators have to keep themselves and their staffs abreast of techniques if they are to survive.

Does the hon. Gentleman suppose that, if it were not for the board, there would not be training over a wide range of specific occupational areas including clerical staff, airline flying instructors, student professional pilots, air traffic control staff, aircraft tradesmen, fire and rescue staff, managers and supervisors, training instructors and air cabin crew, and all the others set out in the Employment and Productivity Gazette for June, 1970? If the hon. Gentleman imagines that these are new areas for systematic training and development schemes, he has wasted our time.

If the board were to move altogether out of the business of civil aviation training and levying, its departure would not be regretted by any of those who at present are obliged to contribute to this body from their scarce resources, especially when one remembers that the board passes its levies back to refund some of the expense of training which is already undertaken. If any operator is getting less than he pays, it is merely because he has inefficient clerical staff working for him.

Turning to the Order, I want to ask my hon. Friend one or two questions. First, will the sums levied be spent exclusively in the areas in which they are levied? I should hate to think that there was any cross-expenditure going on, because that would be quite wrong. The House might like to know what the estimated yield of a 1 per cent. levy on the air travel industry is expected to be. I do not think that we have been told. I am not sure whether the hon. Member for Blackley asked, but the House might like to know. As it is evident that the board does not know how it will use a sum of money which we ourselves do not know, perhaps my hon. Friend can give us some idea of the board's thinking.

It may seem to the users of the industry, the people who book through travel agents and who look forward to this period in the year as the highlight of their experience, that their chances of getting value for money are more likely to be advanced by sticks rather than by carrots. I believe that the Trade Descriptions Act has probably done more to improve value for money in this business than the board is likely to. The bonding scheme amongst travel agents is more likely to provide security than is this board. We are deluding ourselves if we think that the board will make a significant contribution in that direction. This is a highly competitive industry. It may be one in which there is greater need for consumer protection. It may be one in which inefficient operators can find themselves in great financial difficulty. But I do not think it is sufficient to say that if only they had better clerks, telephonists, or whatever it may be, working for them, we should find the prospects of members of the public enjoying their holidays on the Costa Brava substantially improved.

This Order will not get to the root of the problem, and I do not think that there will be a great sigh of lamentation in the land if this board is swept away.

7.45 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

When I look at the benches opposite, I hope, though it is a hope which may not be shared, that everyone has not gone off on a package tour. The absence of hon. Members opposite shows that training has had some effect. Presumably many of our colleagues are out working at the borough elections.

Listening to the hon. Member for Manchester, Blackley (Mr. Rose), I found myself agreeing with a large part of his speech. However, I disagreed violently with some of his more turbulent and exaggerated language, which I thought that he uttered to make the tabloid Press tomorrow.

Mr. Rose

Will the hon. Gentleman accept that nothing of this debate will appear in the tabloid Press tomorrow, because of the outstanding Labour gains which will be the main subject of the headlines?

Mr. Lewis

We shall see that when it comes.

Mr. Onslow

On the funny pages.

Mr. Lewis

The hon. Gentleman's party has a great deal of ground to make up to regain what it lost the last time that it went to the country in the borough elections.

I enjoyed the speech of my hon. Friend the Member for Croydon, North-West (Mr. Robert Taylor), though I did not agree with his conclusions. If the Government accept the principle of training boards—and, after all, we introduced the Act—they must be in some difficulty in dealing with this training board. No one suggests that we should abolish existing boards. However, we should ask ourselves whether certain people should be allowed not to opt into training. If we have an aviation training board, should it be extended down the line, or confined simply to aviation? I think that, if travel agents were allowed to escape from this training board, the results would be that the one part of the industry which is growing would be outside its scope.

I have to express an interest in this matter. As hon. Members know, I have a travel agency and, in a voluntary capacity, I serve as chairman of one of the British Travel Association committees. We do not suggest that travel agents should be allowed to opt out. We have met the training board and have expressed the view that we should go in. We were enthusiastic about going in. We even accepted that the small man should go in.

I accept what the hon. Member for Manchester, Blackley says that it is the decision of the Government that the small man in this case should opt out. In general terms, it is the small man who has caused complications and created the bureaucracies in industrial training. All the difficulties which have been expressed about other training boards have been related to the small people. In this connection, perhaps I may quote from a report by the Small Businesses Association, which has been collecting views on training. It says: From the outset the Boards functioned for big firms, and the contribution from the small was simply to pay the piper. More recently, most Boards have seen this and have made efforts both to exempt small firms from levy and to allow realistic participation in training schemes. Clearly the Minister has a problem when he brings a new group into a board. He has to decide how far down he goes. He can always widen the scope of a board later if he feels that it is necessary.

In this case, on balance, I would come down in favour, although the Association of British Travel Agents does not altogether accept my view. There are powerful figures, such as the chairman and the ex-chairman, who have reservations about not bringing in the small man.

I think that it is right to ask my hon. Friend to press on with his inquiry into training boards as a whole and, if possible, to present his findings before the end of the summer. This report will be important to any new board which is advancing as this one is. The sooner that we get the views of the inquiry, the sooner boards will be able to set trends and to provide administration on the right lines. Therefore, I hope that this will be produced in time for the House to have a debate on it, and in time—say, by the autumn—for boards to take account of what the review has said, and to enable the Ministers and the chairmen of the boards together to decide on new patterns for the future.

The criticisms of training boards, made both in the House and by business outside are based on difficulties that undoubtedly exist. It is no good pretending that they do not. The only way in which we shall dissolve these criticisms is if, having got the review, the Minister and the boards take action to improve the situation.

Two questions are important in this connection. First, does the grant system give the necessary quantity and quality of training? This can be answered only when we have the results of the inquiry. Second, is the money going in the right proportion to the varying skills—management right down the line? I ask that question of all boards.

The question which arises on this Order is one of who trains—whether it should be just the big boys or the big and medium boys, or whether it is right that the Minister has chosen to miss out the smaller agencies. The big companies have always trained—for example, the airlines have to train because their business is vast and they need the skills. The small man also trains, because he trains on the job. In this business, as in others, the smaller man who trains one man alongside him probably gives him a better training than we would receive on one of the courses provided by whatever college or training board schemes are available to him.

The big operator trains, and the very small man trains. The man in the middle, running a modest, medium-sized business, is the man that probably misses out most of all, because he depends on his staff to train those below and the staff are not so interested as he is.

The Minister has chosen to miss out all who have a payroll of less than £10,000. It might be useful to look at this, because £10,000 is a comparatively small payroll. The Minister, it will be proved at the end of the day, will catch through the Order every town with about 100,000 population, because travel agencies in towns of about 100,000 population will have a staff that runs to a payroll of more than £10,000. There are the manager, three clerks, two typists and a bookkeeper; their wage bill is £10,000 or more. It all depends on whether the proprietor himself, who depends partly on salary and partly on profit, is included on the payroll. Even if he is not, it is clear that any modest-sized business is paying on that kind of payroll.

Below that amount—and the hon. Member for Croydon, North-West made the point which I had noted from the report—the administrative costs of collection are greater than the money collected. The point made in the training board's report was that a £1,000 collection is too small, and only £100 would be collected at lower level if all travel agencies are included.

I believe it is a good thing in the long run that there should be an extension of training in this field. I do not agree with the hon. Member for Blackley that the industry—and here I took down his words—is "arbitrary" in the way it deals with the public, and has a lack of machinery for complaints. There is a perfectly good machinery for complaints. Both the Association of Travel Agents, and almost all the big operators, have their own machinery for complaints. The business has provided the British public in recent years with opportunities to home holidays that were available only to the very rich, to millionaires, almost, before the war.

It has been a fast-growing industry. Of course, it has had its troubles. There have been difficulties for the public because of these troubles, but they have been infinitesimal in comparison with the happiness provided by the growth of travel. The good holidays are obviously greater in number than the bad ones. This business needs to provide the public with a good service. It is seeking to do so. It believes in training, provides ideas in training and has had courses for many years. I support the Order because I think it will bring about some measure of advance in training within the industry.

7.56 p.m.

The Minister of State, Department of Employment (Mr. Paul Bryan)

Before trying to answer the case put by the hon. Member for Manchester, Blackley (Mr. Rose), I should like to say something about the problem of the small firm in the training board system. Unless we understand the general problem it is impossible to get the position of the industry and its Board into perspective. That was clearly recognised by my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis).

A few weeks ago a decorator employing about half-a-dozen men complained to me that he was getting nothing from the Construction Industry Training Board in return for the levy he was paying. His staff consisted of half-a-dozen mature, well-trained men who had been with him for years. His labour turnover was negligible. He had a high reputation in the district for the quality of his work, and was never short of work. He had no need for the courses produced by the board, and anyway he could not spare a man to attend them. He had no time to fill in all the papers submitted to him by the board. He claimed that his own training system had clearly been proved adequate by the results, and that no elaborate records were required. That instance personifies one of the big problems the training boards are constantly up against.

The definition of a small firm varies from industry to industry. The problem presents itself in 27 different ways to the 27 different training boards. No general definition can apply generally. But the overall picture is that those grants and services that small firms can receive from the boards do not seem to offer a reasonable return on the levy paid. The boards are well aware of these problems, recognise how difficult they are to solve, and try very hard to solve them.

A number have introduced special grant schemes for small firms, providing services specially geared to their needs. Some have successfully encouraged the development of group training schemes where firms co-operate in organising their training with skilled advice. But even where training boards have been able to provide special services to small firms, many of them have recognised that they cannot offer enough to the very smallest. Even before we started our review many of them had already decided to exempt the smallest firms from levy. Sometimes now some of the small firms are given services without paying a levy at all. The Engineering Training Board does that. It finds it cheaper to do it that way rather than to spend a great deal of money collecting small levies, so expensive is it to collect levies from thousands of firms. Some boards allow exempted firms to opt into grant and training schemes on payment of a minimum levy. However, despite all the ingenuity shown by the boards to meet the problems of the small firm, the fact remains that, with encouragement from my Department, more and more boards are exempting more and more small firms from the scope of the levy.

Out of 27 boards, only six have no exemption provision for small firms. Three of them, gas, electricity and water, obviously have no small firms in their industries. In the last six months, four boards have decided to exempt small firms. The biggest of these are the construction and road transport boards. The Construction I.T.B. in its current levy proposals, wishes to exclude firms with payrolls below £6,000, but even at that low level this will take 23,000 firms out of levy, getting on for half the total; half the total of the firms but only 4 per cent. of employees covered by the board. The Road Transport Board is discussing with its industry a proposal to exclude firms with payrolls below £5,000. This would take out some 30,000 firms, or 60 per cent. of the total; but again, only 8 per cent. of the employees.

The conclusion that we draw from this is not that small firms have no training needs whatever. They clearly do, as does every firm. But the training boards' levy grant system has not proved an effective instrument for meeting small firms' problems. This is an interim conclusion based on the progress so far of our general review of training boards, and we shall be making our final recommendations on this question when we issue the results of our review as a basis for consultation. This will be in the autumn. In the meantime, some decisions have to be made. It would be folly to disregard the evidence that we have in making those decisions.

Mr. Rose

I wonder whether the hon. Gentleman would say how far his thinking is going along the lines that where smaller firms, particularly, attain certain standards, as has been referred to, in that sort of case an exemption can be made from the grant levy scheme altogether, and whether this is one factor in this thinking which may get over some of the problems of bureaucracy and cost in trying to bring in the levy and totally avoid the levy schemes?

Mr. Bryan

That is a point which I covered a couple of minutes ago. It is not for lack of effort on the part of the boards that the small firm is still a problem, despite the steps that they have taken.

I come to the hon. Gentleman's point. He asked me to account for the question of the Hairdressisng Board. We had already faced up to this question when we examined the first levy and grant proposals from the Hairdressing Board. Because of low rates of pay in the industry, the income from a levy of 1¼per cent. would have yielded enough income to provide only a very low rate of grants with practically no incentive effect. The board's operating costs, which were on a fairly modest scale, would have absorbed too large a portion of the levy income. But even this position was based on the board's proposition that no firms at all should be excluded from the levy. Hairdressing is an industry consisting very largely of small firms. The average firm employs only three or four people, and one-third of the employees are in firms which have a staff of three or fewer. We considered that some exemption of small firms would in any case be necessary on the grounds that I have already outlined, and it was clear that even a modest exemption, say, of firms with payrolls below £2,000 would have excluded so many firms as to make the board unviable. This led us to the decision to wind up the board.

It was with these considerations fairly foremost in our minds that we examined the Air Transport and Travel Board's first levy and grant proposals for the travel sector when they were submitted for my right hon. Friend's approval in February. They provided for a 1 per cent. levy with no exemption, and a grant scheme which made special provision for firms with payrolls of £10,000 or less. These small firms were to be able to receive back in grant half the levy if they completed a relatively simple training plan, and the other half if they joined a group training scheme. Alternatively, they could receive grants for off-the-job training. Our general approach pointed to excluding the small firms but we considered carefully whether an exception was justified for this industry.

Although the proposed grants scheme for small firms was simple, it still required a formalised approach to training which some small firms would find diffi- cult, particularly as the board would not be making the services of their advisory staff available to these firms. It would be sanguine to expect all small firms to join a group training scheme at once. For small firms to release staff to go on courses is always difficult, and even in the off-season it was doubtful whether the limit on the grant available would make it worth the firm's while. There was also some evidence that, although the main employers' organisations supported the board's proposals, some small firms themselves would not endorse this support.

Given that our review was going on and that this was a very first scheme, we thought that it would be extremely annoying for the small travel agents to be included this year, only to find that they were taken out next year. It seemed far better for the board to start with a smaller number of larger firms and to look again at the question of the very small firms when it had more experience of its scheme and when we had the final conclusions of our review. We therefore referred the travel proposals back to the board, explaining that, in accordance with our general policy, we wished it to provide for some exclusion of small firms. I confirm what the hon. Gentleman said, that this was a unanimous decision by the board.

The board submitted revised proposals excluding firms with payrolls of £10,000 or less, and these revised proposals are embodied in the levy Order which we are debating. They take the form of an amending Order because the board's main levy Order, which was made in May last year, covers the two years which started in April, 1970, and which ended in March, 1972. The original Order exempted the travel sector from levy for the first year up to March, 1971, and the amending Order puts into the main Order the correct rate of levy, with the exemption of the small firms, for the current year.

I now answer some questions put to me, and first those put by the hon. Member for Blackley. He asked why there should be a 1 per cent. levy for travel instead of a 2 per cent. levy for the other sectors of transport. This rate was proposed by the board, and it was regarded as appropriate because training costs are very much lower for the travel sector, since highly technical skills are not involved. He also asked why the figure is 3.8 Der cent. for British Air Carriers compared with 2 per cent. for the other air transport activities, for example, airports, engineering servicing and so on. Again, the answer is that the high rates reflects the much higher costs of training for those highly specialised skills.

My hon. Friend the Member for Woking (Mr. Onslow) asked whether sums raised by different rates of levy were spent in the same area, in other words, whether there was cross-subsidisation. There is not. He asked what the yield of 1 per cent. levy on the travel sector would be. It is £145,000.

My hon. Friend the Member for Croydon, North-West (Mr. Robert Taylor) asked about the State nubs at Carlisle—which is a strange subject to wander into the debate, but I will give the answer. State nubs were not leviable because the Crown is not covered by the Act. On the other hand, Thomas Cook is a limited company; but, although Crown-owned, it is not Crown employment. In fact, there is a member of Thomas Cook's on this particular board.

The hon. Member for Blackley spoiled his speech by saying that we were capitulating to our back-benchers—philistines he considers them to be. At least my hon. Friend the Member for Croydon, North-West is well informed and he attends debates, a comment which does not apply to hon. Members opposite. As regards capitulating, the hon. Gentleman surely must agree that when we came to power it was sensible for us to review the progress of an Act which had been passed by a Conservative Government, which had been working for six years and which had been developing at enormous speed, with no fewer than 27 boards in different stages of development. This was nothing to do with any pressure from any source.

Mr. Rose

Is the hon. Gentleman aware that the review was started by the Labour Government and was merely continued by his Government?

Mr. Bryan

Yes. We are now carrying out that review. The reason it will not be published in consultative form until the autumn is that we are making a much wider-ranging review. The whole field of manpower is being covered—Government training centres, employment services, and so on. This is a serious exercise and has nothing to do with pressure from any quarter.

As to the Secretary of State's power to approve a levy, we certainly agreed when the Bill was originally passed that the board should have the maximum autonomy; but I believe, especially in the light of experience, that the very least that the Secretary of State should be able to do is to approve a levy. This is not a question of rubber-stamping. If the hon. Gentleman argues that a levy must always be approved, it is ridiculous. The Minister's power would be non-existent. This is one of the ways in which the Minister puts across his policy. It is a load of tripe to say that by not rubber stamping every application for levy the Secretary of State is denigrating members of the board—and I hope that the trade union members whose services we greatly value will not think along those lines.

Mr. Kenneth Lewis

If the Secretary of State had nothing to do with the levy, presumably there would be no need for an order to come before the House and there would be no parliamentary control.

Mr. Bryan

That is well put. The attempt by the hon. Member for Blackley to put in doubt the zeal of my party for training is pathetic. The amount of effective interest there is in training in the two parties can be judged by looking at the numbers on each side of the House tonight, my hon. Friends heavily outnumbering hon. Members opposite.

I accept that the coincidence of my right hon. Friend's setting out his interim guidance on this question just when the board had submitted its prepared proposals placed the board in a difficulty. However, the board received some forewarning from the Government's assessor about the position of small firms and it has considered at length whether to exempt them. Although the board's conclusion that such firms should not be exempted had the support of the major trade organisations, it must be accepted as an essential feature of the training board system that decisions on whether to approve the board's proposals rest under the Act with my right hon. Friend, who has to be satisfied that they conform with his general policy.

I think that I have answered all the questions put to me. I assure the House that the interesting points which have been raised will be noted. I ask the House not to accept the Prayer.

Question put and negatived.

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1. RURAL WATER SUPPLIES AND SEWERAGE BILL 53 words
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4. POOL COMPETITIONS [MONEY] 78 words
5. WAYS AND MEANS
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1. POOL COMPETITIONS 43 words