HC Deb 22 November 1972 vol 846 cc1293-9
The Secretary of State for Employment (Mr. Maurice Macmillan)

With permission, Mr. Speaker, I wish to make a statement on my proposals for establishing a Manpower Services Commission.

In my statement on 8th August I said that I proposed to have further talks with the TUC and the CBI before coming to any final conclusion on the ultimate form of organisation of the employment and training services, with the purpose of coordinating these services and of involving employers and employees in both activities.

I must retain general responsibility for manpower policy, but I am proposing to set up a Manpower Services Commission representative of employers, trade unions and other interests which would have direct responsibility to me for the employment and training services. The TUC and CBI agree with this proposal.

The Commission would take over responsibility for the Employment Service Agency we have set up within my Department and the Training Services Agency we are setting up now. Its main functions would be: planning, developing and operating the public employment services; carrying out the broad range of functions set out for the proposed National Training Agency in "Training for the Future"; and advising me on manpower questions.

The Commission and the agencies would be a source of manpower intelligence and statistics and would join in Governmental discussion of manpower issues as appropriate. They would have close relations with the education Departments and the education service, and would consult with other interested Departments and bodies as necessary.

The Commission would operate within such broad policy objectives as were set out in the legislation and in any general guidance given to them by the Government from time to time. With the assistance of the agencies, the Commission would prepare a five-year rolling programme, and a detailed annual programme of work and budget, for submission to me. When these had been approved the Commission and the agencies would be responsible for operating within them.

They would be financed by grant-in-aid from my Department. I would remain responsible to Parliament for the general level of resources made available but the Commission would be responsible to me for their efficient use. I would retain power to direct the Commission to take action which the Government considered urgently necessary in the manpower field.

If the Commission is to assume effective responsibility—as I fully intend—it must be kept small. I think it should consist of no more than about 10 members, mostly part time. In appointing members I should wish to secure representation of local authority and education interests, though the majority would be drawn from the TUC and CBI. The TUC and CBI have welcomed the proposal for a Commission and have agreed to co-operate in it.

The implementation of these proposals as announced in the Gracious Speech. will require legislation.

This statement gives merely an outline of the new arrangements: many important questions will need further discussion—the Commission's relationships with the industrial training boards, relations with the education service, its part in providing services to disabled people, the position of the staff of the agencies, and many others. My colleagues and I will be conducting urgent consultations with all those concerned.

Mr. Prentice

The Secretary of State has made an important statement. Is he aware that it is likely to receive a general welcome throughout the House and outside? Will he note that this is an idea which has been put forward for many years by the Labour Party and the TUC? We are glad that he has caught up with our thinking. He has made it clear that this is an outline statement with a great deal of the detail still to be worked out and we shall clearly want to reserve our judgment on the details until we see them later. Can he give us an idea of the timetable? Can he say how long he expects the further consultations to last and when he will be in a position to present legislation?

Will he ensure that manpower planning will be a central part of the whole operation and that the new authority will have sufficient finance and personnel to be a powerful influence? Can he say anything about the future of the youth employment service? How far does he expect that service to come under the new Commission and how far under the local education authorities? Does this still remain to be worked out? Will he bear in mind the strong submissions he has received that the industrial training boards should be left with an important job to do and should be free from day-to-day interference from the new authority?

In the consideration that is to be given to these matters in the coming weeks will he take the opportunity to reconsider his ill-judged proposals to reduce the size and scope of the industrial training levies because although such reductions are less damaging than those put forward by his predecessor, they are still likely to damage the prospects of industrial training if carried forward in the way he proposed in his statement in August?

Mr. Macmillan

I am grateful to the right hon. Gentleman for his general welcome of these proposals. I hope that he is right and that they will be welcomed inside and outside of the House. This is an idea which has been discussed for some years by the Labour Party and others. It was very much part of the discussions within our party when we were in opposition. This is the first time that anyone has sought to act on those discussions. The object of bringing together the employment services and the training services under a Manpower Commission is to do two things. First it is to improve the use of one of our most important resources, namely manpower. Second, it is to improve the opportunities available to individuals, the fitting of square pegs into square holes, if I may put it that way. Since public money is being used, it is clearly necessary for the Secretary of State of the day to retain overall responsibility for long and medium-term manpower planning, using the Commission and the agencies to collect the necessary figures.

The important point here is that this is a new relationship. It is not a wholly hived-off body over which the Government have no control. It is a body for which the Department is responsible to Parliament. The industrial training boards will continue to play an important part in the set-up. Their relationship with the Manpower Services Commission and the Training Agency is one of the matters we shall have to discuss in some detail and which will develop with a changing situation.

I do not believe that the new set-up will do any harm to training, first because the levy is limited to 1 per cent. Quite a large number of boards at the moment find that a levy of 1 per cent. or less is a suitable stimulus to good training. The levy remains available for those firms or industries not carrying out training adequate for their needs, present and future.

I am considering changes in the organisation of the youth employment service on the lines proposed in "People in Jobs" and in the light of views expressed by interested parties. I hope to be in a position to announce a decision before too long.

As to the timing, clearly I should like to get the Commission set up as soon as possible—either late 1973 or during 1974. The whole process started with a consultative document and this situation has arisen by a genuine process of consultation based on that document. Therefore, I should not wish, so to speak, to commit myself on the timing as I am anxious that the process of consultation, which involves a large number of different people and interests, should be carried out in a way which is satisfactory not only to my Department, but to the interests concerned.

Mr. Redmond

Will my right hon. Friend bear in mind the many representations that I know have been made to him, particularly from the engineering industry, regarding the levy grant in the new training board set-up? What criteria will be adopted regarding small firms and what protection will he arrange to have given to training groups amongst small firms which form a tremendously important part of training in most industries, particularly in engineering?

Mr. Macmillan

I thank my hon. Friend for emphasising the importance of group training schemes and their continuance, particularly in industries where a significant proportion of the output arises from relatively small firms. How the board will apply the levy is a matter to be discussed separately with each industry. Circumstances are not the same in different industries. Therefore, it would not be right to have a simple across-the-board standard of what forms adequate training. This clearly varies from industry to industry. Indeed, one of the main purposes of the whole process of reform is to get a greater degree of flexibility.

Mr. Molloy

Does the right hon. Gentleman agree that there is a distinct relationship between the statement he made apropos the establishment of this Commission and the subject of unemployment which we were discussing a few minutes ago? It seems absurd that we should be regarding a manpower problem in one statement as though we have not enough workpeople in this country, whereas a few minutes ago we were talking about the problem of recording the numbers of unemployed.

Mr. Speaker

Order. I did not call the hon. Gentleman to put a supplementary on the Private Notice Question. He must not try to put in now the supplementary which he would have put earlier.

Mr. Molloy

My point, Mr. Speaker, is that while this Commission could be very useful, it will not be of much use if it is merely to come back and report to the House of Commons that it has no power to deal with unemployment. Therefore, if the Commission is to be a success, may I urge the right hon. Gentleman to influence his colleagues to change the course of Government economic policy, to cut down unemployment, and to make all this a reality?

Mr. Macmillan

Industrial development and related matters are the responsibility of my right hon. Friend the Secretary of State for Trade and Industry. Under successive Governments one of the obstacles to fuller employment has been bottlenecks caused by shorage of specialist skilled labour. I believe that my Department, with the Manpower Services Commission and the organisation I have proposed, will be able to deal with the problem more effectively.

Mr. Raison

Will my right hon. Friend go further on the relationship of the new body to Parliament? Will it still be pos- sible to ask detailed questions about the everyday running of the Commission?

Mr. Macmillan

This matter will have to be discussed. A body which has sufficient freedom of action to be really effective in this sphere should not necessarily be subject to day-to-day parliamentary Questions in detail, although in all its aspects it would be subject to the Select Committee on Expenditure and its subcommittees. On the division of responsibility and accountability to Parliament, I shall be responsible to Parliament for the proportion of resources devoted to it. I shall also be responsible to Parliament for the bodies which effectively use those resources. I hope that the changeover to the Expenditure Committee will provide a suitable parliamentary forum for discussing the implementation of some of the detailed programmes as it has in other respects, such as the nationalised industries.

Mr. Hugh Jenkins

Does the right hon. Gentleman intend to include in the forthcoming legislation a proposal to take powers to regulate the activities of fee-charging employment agencies? He will be aware that both sides of the House indicated their intention to carry out such regulations under the appropriate ILO Convention some years ago. Would this be a suitable opportunity to introduce such legislation?

Mr. Macmillan

I am still consulting the various interest involved. As the hon. Gentleman will be aware, some form of regulatory legislation is desired by the industry. I am trying, right across this sphere, to continue a proper process of full, not merely formal, consultation.

Mr. Marten

Is it envisaged that the Commission should collect the sort of information and make the sort of assessments which could usefully be fed into the Department of Education and Science so that expenditure on higher education could be better related to the needs of the nation? If so, will there be representatives of higher education on the Commission?

Mr. Macmillan

It is intended that the Commission should have educational representation, both direct and through local government representatives. The only limitation must be in numbers. If a Commission is to be an effective executive body, not merely advisory, the numbers must be kept down to a reasonable figure.

Mr. Atkinson

A little time ago the Minister said that, no matter how accurate the figures, he did not think the unemployment statistics were reliable economic indicators, and I noticed that the Prime Minister flipped his eyelid in agreement. Does that mean that the Government are saying that the level of unemployment can no longer influence wages?

Mr. Macmillan

I do not think I said that the unemployment figures are no longer reliable economic indicators.

Mr. Atkinson

That is what the right hon. Gentleman said.

Mr. Macmillan

I said that the changed form of the figures did not alter the fact that the most reliable economic indicator was the seasonally adjusted figure of wholly unemployed, excluding school leavers, adult students seeking vacation work and temporarily stopped. Confusion sometimes arises over the value of a series as an economic indicator compared with the value of single items in that series. Even figures which are subject to error can be and are used as an effective guide if taken in a series as a whole, but they can be misleading if one attempts to deduce more than can be deduced from one figure in that series.

I said that the relationship between the wholly unemployed seasonally adjusted and available vacancies is now different. There are various reasons for this which require to be analysed. It means that it is now becoming harder to assess on a national basis, largely because of regional distortions. It is extremely important that those who study these matters carefully should rely not only on the present but should look more carefully at the more detailed figures in the Department of Employment Gazette.