HC Deb 13 March 1973 vol 852 cc1133-242

Order for Second Reading read.

4.18 p.m.

The Secretary of State for Employment (Mr. Maurice Macmillan)

I beg to move, That the Bill be now read a Second time.

The object of this legislation is to reform arrangements for promoting and to promote a more efficient working of the labour market, with fuller opportunities for individuals to develop and use their own capabilities. It includes the legislative requirement for the changes we have already proposed in the organisation of training.

The main purpose of the legislation is to set up a Manpower Services Commission to run the employment and training services at present provided directly by my Department, and the proposal is that it should do so through two agencies—the Employment Service Agency, which is already set up within the Department, and a Training Services Agency, which we are now in the process of setting up.

The origin of these two concepts is contained in the two publications put out by my predecessor, my right hon. Friend the present Home Secretary, entitled "People and Jobs" and "Training for the Future". The policies which this Bill is designed to promote stem from the ideas which those publications contain, although they have, as the House will know, been very much modified by the extensive consultations which have been taking place with those most closely concerned with these matters. I believe that the House will generally welcome these proposals.

As regards the Employment Service Agency, it has been working within the Department for some time and the new system has proved a considerable success. As far as the Training Services Agency is concerned, I made a statement to the House on 8th August last announcing the changes we proposed to make in the organisation of training following the very extensive consultations we have had on the consultative document. At that time I referred to the concern that had been expressed by the TUC, the CBI and others about the separation of any new training agency from the new Employment Service Agency. At that time I undertook to have further consultations about the ultimate form of the new organisations and about methods of involving employers and employees in them.

As a result of those consultations I was able to make a further statement to the House on 22nd November last in which I outlined our proposals for a Manpower Services Commission to achieve the co-ordination which the TUC and the CBI wanted and which the Government, too, felt was right and necessary. Again I explained to the House that there were still some very important matters which needed further discussion and that we were carrying out urgent consultations with those concerned. I also explained to the House that legislation would be required to give effect to the proposals.

The Bill and the policies which it puts forward have had what one might call a long period of gestation, and in detail are the result of much hard work by the many organisations and individuals whom the Government consulted in their various consultative processes. I should like to take this opportunity of paying tribute to those concerned on the training boards, the TUC, the CBI, and others who materially added to the success of the ideas put forward in the Bill.

I propose to deal first with training. The main proposals in the Bill about the industrial training board system are contained in Schedule 2 which amends the Industrial Training Act 1964 in order to make the necessary changes. I think the House will recognise that the industrial training boards have had a major impact on training over the last eight years and that there is some evidence that as a consequence the amount of training has been increased. I have no doubt that the boards have secured a considerable improvement in the quality and efficiency of training. Perhaps most important of all, because of their influence on management I think that industry today has a greater awareness of what training means and the need for good training.

Nevertheless, I think it has been generally agreed that some changes in the 1964 framework are necessary. Experience has shown that the complications of the levy / grant system make it difficult to work simply and equitably and have the effect of making all concerned think rather too much in terms of money and not enough in terms of the type of training carried out.

I think that small firms in particular have found the system extremely burdensome. The Bolton Committee concluded that the levy/grant system could do more harm than good to small firms, but for employers who believe in good training and practice it became clear that the levy/ grant was becoming more and more irrelevant. There was a great deal of paper work and expense, and not much benefit to be got in return.

As a result of the discussions which have taken place—and much of what I am saying is in amplification and repetition of the discussions that we have had following the statement to the House—we are making three major changes. First, the levy will be subject to an upper limit of 1 per cent. of payroll. The Bill provides that any levy orders going beyond 1 per cent. will be subject to affirmative resolution, so that no order can be made without having been debated and approved by the House.

There are some who think that 1 per cent. is too low. I do not agree. Most of the boards' levies are already below the 1 per cent. level. On the other hand, there are equally those who feel that there should be an absolute ban in the Bill on levies above 1 per cent. Both views have been expressed, and I must make it plain that in normal circumstances I should not consider making a levy order of above 1 per cent. I hope that no one will seek to encourage boards to try to work on a regular basis of going higher, because experience of the most effective boards has shown that 1 per cent. is enough. But the unexpected does happen, and so I felt it necessary for the Secretary of State to be able to come to the House and ask for approval of a levy order beyond 1 per cent. if quite unexpected circumstances seem to make it necessary.

Mr. Reg Prentice (East Ham, North)

Does the right hon. Gentleman expect the Engineering Training Board, which is the largest in the country to move straight down to a levy of 1 per cent. when the Bill becomes an Act?

Mr. Macmillan

No, Sir. There are provisions for an additional period which we can discuss at a later stage in the legislation.

I hope that I shall not be asked to give way too often. I have a long speech to make, for which I apologise to the House, but I was asked to explain what we were trying to do, and there is a lot in the Bill.

On small firms, the schedule specifically provides that levy proposals must include provision for exempting small employers, and we are consulting individual boards concerned about what the exemption level should be in each industry. I think it will be clear to the House that it will not necessarily be the same right across the board.

Thirdly, the Bill provides that where a board judges an employer's training requirements to be adequate the board must give a levy exemption certificate, so that employers with adequate training arrangements will be relieved of the whole complications of the levy/grant system. The criteria for judging "adequacy" will be laid down by each board and will have to be approved by the Manpower Services Commission and the Secretary of State for Employment.

These changes will not weaken the power of the boards to get adequate training. There is no point in giving grants to employers for their own training if it is going well enough already. And if it is not being properly done, then firms will still pay the levy. However, since many firms which are doing proper training will no longer be paying any levy at all, the new arrangements provide that the board's administrative expenses will be met by the Manpower Services Commission out of its grant in aid.

There will be additional financial help to the boards from the commission. We mean to provide funds of up to £35 million in a full year, not only to meet the boards' expenses, but also to enable them to encourage key training methods in their industries and to enable the Training Services Agency to promote adequate training in sectors of employment not covered by the boards.

The original idea which we put forward in the context of this reform was for the initial grant to be for sums in the range of £25 million to £40 million a year, but that bracket was given on the assumption, set out in the original document, that there would be no levy at all following the abolition of the levy/ grant system. Now the proposed £35 million a year from the commission, and provided by public money, will be in addition to the yield from any levy that is maintained by the boards in the process of keeping up the standards of training and providing the stimulus to improvement.

In addition, there will be the commission itself, a body of people drawn from both sides of industry, from local authorities and from education, with the task of co-ordinating the work of training boards and using as its executive arm the Training Services Agency. I want to make it clear to the House that in this context co-ordination does not mean dictation. If it did, the legislation would have to do away with the boards because there would be no point in having them. There would be no role for them.

But it will be up to the training boards to identify the training needs and priorities of their own industries and in the light of that to develop methods which will promote adequate training. The commission and the Training Services Agency will be able to back them up by supplying the resources where they are most needed, and I should like to emphasise that we still need first-class people to lead the training boards. We shall now, I hope, be able to give them more effective support than before.

The commission and the Training Services Agency will be able to take a national view of training needs, which no industrial training board can do, will be able to give boards help in taking account of their needs as well as acting themselves, and will be able to promote training in sectors which are not covered by training boards, which is about one-third of the working population. The commission and the agency will be able to give a lead to joint efforts to promote training in occupations covered by more than one board.

I repeat the emphasis that I have given in the past to the good work which has been done by group training schemes. It will be able to provide a focus for research and manpower planning activities. That will be of increasing importance in future if we are to put our training effort to the best effect, and train not only for the present but, as far as possible, and as far as research can develop it, for the future as well.

The second element of training is in those activities which come broadly under the Training Opportunities Scheme. We have already embarked on a large expansion for men and women who wish to acquire new skills. Already there are many and wider opportunities. In 1971, under the old Vocational Training Scheme, we trained fewer than 20,000 people. This year the Training Opportunities Scheme aims to train 40,000 men and women. By 1975 we expect to be training between 60,000 and 70,000. The success of the way in which the scheme has been applied is shown by the fact that we are now placing well over 90 per cent. of the trainees from the scheme in the trades for which they trained. That is a reasonably high take-up level.

We are also widening the range of courses available. In the past they were mainly courses at craft level carried out in Government training centres or in the residential training colleges for the disabled. Training is now becoming more available in employment establishments and increasingly in colleges of further education. The courses range from semiskilled to technician and management levels. Expansion in the number of places and in the range of courses is creating new opportunities for individuals.

I am glad to say that we are training more women. We would like to train women in every course under the scheme, and training is available for them in every course. However, we find that most women want clerical and secretarial skills. Therefore, we have increased the number of those courses. There are now about 5,000 women under training in the scheme compared with about 500 at the end of 1970.

There is a considerable increase in the number of disabled people training under the scheme. The Manpower Services Commission will take over, through the Training Services Agency, the operation of the Training Opportunities Scheme, together with the plans for its expansion. There are now some 52 Government training centres with 19 annexes providing about 12,000 places. The plans which have been started provide that there will be 63 centres, about 30 annexes and about 18,000 places by 1975.

We are trying to concentrate on trades where demand is high. For example, there were 2,800 places for construction in January 1972, and by May of this year we shall increase the number to 4,000 places.

The commission and the Training Services Agency will continue with the close co-operation which my Department has always had. I pay tribute to the fine work that is done in training severely disabled people. However, even at the new higher level, the Training Opportunities Scheme is not intended to be and cannot be the main source of skilled manpower for the economy. The main sources of skilled manpower for the economy must be and are the young people coming into the labour force, men and women who are trained by employers to meet their special needs.

The Training Opportunities Scheme has a valuable contribution to make in fulfilling the needs of individuals, as well as making a significant contribution towards the requirements for skilled manpower. The most important social role of the scheme is to give a second chance to those who started work as late developers and to those who have not developed their potential capacity to the full. We must pay great attention to developing the abilities of people in such positions.

The second major change which requires legislation under the Bill is in the Youth Employment Service. At present the service looks after young people under the age of 18 or those still at school. It is provided mainly by local education authorities. The Employment Department provides services in a few areas where local education authorities have decided not to do so. The proposals in the Bill embody the proposal set out in "People and Jobs", which left out whether the Youth Employment Service was to be mandatory on local authorities. The hon. Member for Wolverhampton, North-East (Mrs. Renee Short) knows this well. The hon. Lady was a member of the committee which thought that that should be so.

After full consultation with the local education authorities and with others we decided that it would be right to impose on the authorities the burden of a man- datory service. Therefore, the Youth Employment Service will be carried out by local education authorities. That accords with the Expenditure Committee's recommendation which was published in its report last week on youth employment services generally. I hope that it will be welcomed by all concerned. It replaces what has been rather a patchwork of services, some being provided by local authorities and some by the Employment Department, with a general pattern of careers services provided by the education authorities.

There is another power in the Bill which has given rise—and wrongly, in my opinion—to some anxiety. That is the power that enables education authorities to make arrangements with the commission for the commission to perform some or all of their mandatory functions. If the commission does so, it must charge the authority for the services provided, unless it is specifically authorised by the Secretary of State for Employment not to do so. It seems that there has been some misunderstanding of the purpose of including this power in the Bill. It is not to enable local education authorities to opt out of providing a service which is mandatory upon them or to hand over their responsibility to the commission. It is provided mainly for transitional purposes.

The House will note that local authorities which do not now provide the service may find it difficult to recruit and train staff which will be needed to provide the full service from the day on which the local government reorganisation starts to operate. Therefore, arrangements can be made with my Department or the Manpower Services Commission, after it has taken over, to continue to provide the service during the transitional period so that there can be an orderly transition to an authority which has been building up the capacity to take over from the Department or the commission.

An additional valid point is that some local authorities may have a need to concentrate on some special aspect of the services which they provide, such as giving a priority to careers guidance in schools or helping disadvantaged young people, and may wish to work in partnership with the commission in other aspects of that nature, or to use the commission as an agent for some particular or perhaps short-term purpose so as to husband its own staff resources and to maintain a degree of flexibility. Provided that the Secretary of State of the day makes certain that the local education authorities cannot escape the main duty which the Bill imposes on them to run a youth employment service, such a partnership is to be encouraged. It is in the interests of the young people concerned to keep a close link between the local authority careers services and the general employment services of the commission.

Otherwise, the Bill simply reflects decisions which have already been announced, but there is one further point on which I should comment. That is that under this legislation we get away from the present rigid demarcation between the Youth Employment Service and the general employment services, including what one might call the "age barrier" of 18. The proposals now are that the education authorities will have the duty to make arrangements for providing vocational guidance services to people attending educational institutions, not merely schools, and an employment service for people leaving them.

This does not apply to universities, although local education authorities are required to make their services available to individual university students who wish to use them. They also have power to provide a careers service for those young people who have left education.

None of this, of course, affects the commission's duty to provide a comprehensive employment service. As to the division between the two, one would normally expect that people who have taken their first job will turn to the general employment service for help and guidance. But if they wish to return to the careers service provided by the local education authority, they will be free to do so.

The Expenditure Committee's report recommended the age of 21 as the point of division between the local authority service and the general employment service. I agree that, if one has to have a specific age gap, 21 is probably more suitable than 18. The report pointed particularly to the difficulties of coloured voting people, the handicapped and the disadvantaged young school leavers and to the need for young people with these difficulties to continue contact with their careers officers. I entirely agree, but there is nothing in our proposals to prevent that. Indeed, having an age limit, even at 21, could operate the other way round and could in itself provide a difficulty of continued contact for these young people.

An age barrier even at 21 is unrealistic, when so many young people are continuing into higher education. It is unrealistic also to deny to all workers under 21 access to the services which will be provided by the commission. Many of these young people, men and women alike, will have been at work for some four years or so and they will rightly and naturally expect to be able to use the placing and guidance services which are available to adults generally.

I hope that the House will agree that, in making these changes, we have been right to view the moment of change as one which will make it possible to meet the particular needs of the particular young person concerned.

There is, of course, the theoretical danger, which the Expenditure Committee mentioned, that this could lead to confusion. I do not think that young people will be confused by having a choice between the local education careers service and the general employment service. Even now, they have a choice of a sort—whether to use the Youth Employment Service or not to use it at all.

There is a danger that some young people would not want to go to the youth service at all, and I would not wish them to be cut off, because of their age, from any guidance whatever. We are offering young people, once they have entered the labour market, the opportunity to use whatever service best suits their needs. I do not think that employers will he confused, but we must of course have efficient arrangements for the circulation of vacancies between the two services.

In general, we are well ahead with our plans for reorganising the employment services as a whole, and the changes are beginning to show on the ground. We are giving a service which I believe to offer much more than in the past both to those seeking jobs and to employers. We are also beginning to discharge more effectively the social responsibility to help those who have a difficulty in getting and keeping jobs. There is a great deal going on. which will be continued after the change over by the Employment Service Agency, now operating within my Department, and which, if the House give the Bill a Second Reading, will then operate under the Manpower Services Commission.

The internal operation of the Employment Service Agency is not directly concerned with this legislation, but I should say that I believe that special services will be better developed under the new system. The special services which have to be improved provide advice and guidance about jobs and careers to men and women who are not clear what they want to do or about what opportunities are open to them.

In the last few years, we have developed the occupational guidance service for this purpose, and also a system of giving advice to people through the Employment Service Agency about training and training opportunities. In future, we shall need to do more than this work, and I believe that the link between training services and the employment services through the Manpower Services Commission will enable it to be done more effectively.

There are, of course, other special roles of the employment services in helping those who, for one reason or another, have special problems in getting or keeping employment. For many years, we have rightly put substantial resources into helping disabled people to find jobs. Under the new set-up, the commission will have the power to provide employment and training services for the disabled. It will be responsible, within the general policy framework agreed with the Secretary of State for Employment, for running the specialist resettlement service, including industrial rehabilitation, and in providing training for disabled people.

The National Advisory Council on the employment of the disabled will continue to advise me on all these matters. The Bill will not affect the Secretary of State's responsibility for wider employment for severely disabled people, or for the quota scheme, or for the register, although the commission will act as the Secretary of State's agent in operating the scheme and maintaining the register.

The general improvement in employment and training services will benefit disabled people by itself, but I still think that we have to improve the specialist and training services provided for the disabled. My Department has recently made a comprehensive review, and we are now engaged on a consultative programme with the National Advisory Council and others on how best to make improvements. As soon as it is established, the commission will be associated with these consultations.

I have described the two changes of policy—the organisation of training boards and the reorganisation of the youth service—which require legislation. The other changes which have been carried out within this framework do not in themselves involve legislation.

I turn now to what might be called the headquarters organisation—the Manpower Services Commission itself. It is a new concept, a new kind of organisation.

First, it shows the importance that the Government and others have attached to the involvement of those most concerned, management and unions, in providing these management and employment services for industry. The Government attach great importance to what has become known as the tripartite approach —that is not quite an accurate description in this instance—as is shown by the proposed membership. We propose that there should be 10 members in all with a full-time chairman, the other members being part-time. Three members will be appointed after consultation with the TUC, three after consultation with the CBI, two after consultation with the local authority associations—one for England and Wales and one for Scotland—and one after consultation with professional and educational interests.

Secondly, this is a new kind of organisation in that it is both representative and operational. There are plenty of other committees and boards representative of different interests which advise Ministers but do not operate any particular organisation. They are purely advisory. There are also committees and boards which run important activities on which industrialists and trade unionists sit, but in a purely personal capacity. We are hoping that members of the commission will remain responsible to those bodies which proposed them. I am not suggesting that they are mandated or delegates who must refer back on every major point, but they must carry the confidence of the organisations which helped them to be appointed in carrying out their own daily functions. So, in forming judgments about what policy to follow, the members of the commission must keep in mind the general views and interests of those who helped to put them there.

In this way the CBI, the TUC, and the local authorities, all of which are interested in the successful operation of manpower services, will have an indirect joint responsibility through their members on the commission for developing those services and seeing that they meet the real needs of the people who use them.

I think that, combined with the ability of the training boards on their side to see and meet the needs of industry—the training boards have similar representation: the TUC, employers, and education —the Manpower Services Commission, in its wider sphere of both employment and training and the co-ordination of the two, will be able to bring to bear the experience and knowledge to deal competently and successfully with one of its major concerns—forward planning and thinking. It will act in general as the main board of a large organisation with the two agencies operating like operational subsidiaries. The actual running of the organisation will be carried out by these two statutory agencies—the Employment Service Agency and the Training Services Agency. This will enable the commission to concentrate on major issues, particularly on the forward programme of work and budgets, which will have to be prepared for my approval each year and for which I shall be responsible to Parliament.

Mr. Ronald Brown (Shoreditch and Finsbury)

Do I understand that the agencies are executive within themselves and will have powers over the industrial training boards and that the boards will not be able to go above them to the commission itself?

Mr. Macmillan

The precise form in which these agencies will operate will have to be worked out to some extent when the commission and the agencies are operative. The agencies will be the executive agents in charge and will be responsible to the commission for the money they spend, the Commission will be responsible to me, and I shall be responsible to Parliament. That is roughly the chain of command that will be developed.

The commission will have to work closely with my Department. Nearly all the money to finance its activities will come from the departmental Vote. Therefore, the Secretary of State must retain general responsibility for manpower policies, and the work of the commission must clearly fit into these. The Secretary of State will continue to be responsible to Parliament for general manpower policies and for the amount of resources allocated to the commission. I hope that the House will agree that it is essential to the new establishment that the Secretary of State should not be continually intervening on matters of detail within the Commission's responsibility.

Mr. Tom King (Bridgwater)

My right hon. Friend described the make-up of the commission as not being exactly tripartite. What is missing from the commission at the moment is the element of Government. He has explained that the other bodies will be well represented by members, if not exactly delegated, very much representative of the bodies from whence they came. My right hon. Friend now says that the Secretary of State must not interfere in the detail of the commission's activities. How will the Government's views be transmitted into the commission's policy?

Mr. Macmillan

I hope that will become clear to my hon. Friend. The Secretary of State and the Government will be responsible to Parliament for the money spent. The commission will be responsible indirectly through its accounting officer to the Public Accounts Committee and will be examinable by the Public Expenditure Committee.

I turn now to budgeting. The programmes will have to be costed in detail for the year immediately ahead. Obviously there will have to be room for adjustment within the total to meet unexpected changes in the labour market. There will also have to be a rolling five-year programme—the first two or three years in greater detail and firmer than the last two years. This is where the ultimate responsibility and control of the Government can be applied. The Government, through the Secretary of State of the day, will be wholly responsible to Parliament for the allocation of these resources and, through the ordinary methods of accountability, for seeing that they are spent in the way that was intended.

There is no greater problem of my Department and the Minister in charge of it retaining this vital responsibility than there is now when we have a Training Services Agency of an executive nature and are changing the Employment Service into an executive agency, too. It puts a certain extra requirement on the agencies in their form of budgeting and methods of management, but I hope that will lead to a more effective use of resources by the use of a more manageable type of accounting. This is an internal matter which in no way lessens the Government's obligations or capacity, through their control of funds, to influence the major policies of the agencies and therefore of the Commission. The Commission will have very close contact with my Department and I hope will be able to help as an adviser on the general responsibilities of my Department's work.

I come now to the timing. I am glad to say that the TUC and the CBI have welcomed the idea of a commission and assured me of their willingness to cooperate in its work. I believe that this co-operation of employers, unions and other interests in taking responsibility for the services they need is a step forward. If Parliament gives assent to the Bill I propose to press ahead with the commission as quickly as possible, to bring prospective members into consultation on an informal basis as soon as we can, and to bring the commission into existence at the beginning of 1974.

It will be a little longer before we shall be ready to hand over to it the two executive agencies. I hope that the Training Services Agency will be ready in the spring of 1974. With the Employment Service Agency, on the other hand, it is obviously essential first of all to separate the administration of unemployment benefit. That means that probably the transfer will not take place before late 1974. We should have a fully operational commission with both agencies in action by the beginning of 1975.

The ideas underlying the changes made by the Bill and the organisations set up under it—this particularly applies to the concept of the Manpower Services Commission—represent a new initiative in tackling some of the major economic and social problems we face. There are obvious implications for manpower planning intelligence and regional policy. I believe that it will help in the difficult task of improving the operation of the labour market and of creating an efficient employment service able to help employers and individuals seeking jobs. I think it will help in the hardest task of all, that of trying to anticipate, and as far as possible eliminate, shortages of skilled manpower which hold un the economic progress and sometimes effectively prevent a fall in unemployment simply because of the scarcity of special skills at the right place at the right time. It will help our efforts to give individuals the training opportunities they need to improve their prospects of making full use of their skill.

In doing so I hope that we shall continue our improved help to the disabled and the disadvantaged and, very important, operate flexible and effective arrangements enabling young people to obtain help and advice when entering employment. This Bill and the concepts which go with it provide a real opportunity to make the manpower services in all their aspects more efficient and responsive to the needs of those who use them. It is as such that I commend it to the House.

5.3 p.m.

Mr. Reg Prentice (East Ham, North)

This is an important Bill with implications for the future of all people in this country on a scale much larger than some items on our agenda which attract greater publicity because of their day-to-day sensationalism. The Opposition welcome the Bill, on balance. By that I mean that we have a number of criticisms of it, some of which I shall develop and others of which will be developed by my hon. Friends, but we see the Bill as containing a great deal that is useful.

In particular we welcome the central proposal to establish a Manpower Services Commission. We believe that such a commission in the hands of a Labour Government would make a substantial contribution to solving our manpower problems. In the hands of a Conservative Government we are bound to say that it would provide no substitute at all for the dynamic policies currently lacking in employment and training.

If I had to make one major criticism of the Secretary of State's speech, it would be that he did not acknowledge the serious manpower problems facing us. Above all he made no mention of the fact that we still have 750,000 unemployed. We cannot have an intelligent discussion of these measures without asking whether they will be useful in fighting this appalling total of unemployment. In passing, may I say that a year ago, when unemployment was of the order of 1 million or just under, Ministers were at least acknowledging that the unemployment level was unacceptable. They said so frequently.

What worries me about recent statements by Ministers is that they either ignore the problem or else content themselves with a lot of self-congratulation about the fact that unemployment has fallen. Of course it has come down and we welcome that fact. Let us recognise as a House that a figure of 750,000 unemployed is totally unacceptable and that further drastic steps are needed to deal with it.

The first question therefore is whether the Bill will be helpful in seeking to return to full employment. I believe that it can be, but this will depend on other policies.

Mr. Ronald Brown

It helped the Government to bring the unemployment figures down by changing the basis on which they were calculated.

Mr. Prentice

Yes. The figures have not come down by quite as much as Ministers would have us believe, because they have left out the number of those temporarily stopped. Nevertheless they have come down and we welcome that. The main point is that a figure of 750,000 is unacceptable.

Let me deal now with some of the things in the Bill with which we agree. We agree with the proposal to establish a Manpower Services Commission. The Secretary of State will forgive me if I remind him that this was Labour Party policy long before it was Conservative Party policy. We agree that the administration of employment services and the co-ordination of training should come under the same authority and should be planned and co-ordinated together. We agree too that the Manpower Services Commission should include representatives of the TUC, the CBI, the local authorities and educational interests. We want to see educational interests being brought into contact with industrial problems more frequently. The more this happens the better it is for both. Both have much to learn from each other and can help one another.

I agreed with the last part of the Secretary of State's speech in which he described his relationship with the commission. In some ways the Government are undertaking something which is new. They are going in for what is in some senses a small constitutional experiment. This seems to be absolutely right. We need not think of units of administration as being either completely in the Civil Service or hived off in such a way that there is no direction from the Minister. In many areas we may need to develop something in between in which some body is able to pursue day-by-day policies without interference but is subject to certain strategic directives from the Minister.

I understand that that will be possible in this case. It seems to be correct in this case. It is correct for a reason which the Secretary of State did not, perhaps, bring out: that the Government of the day cannot hive off ultimate responsibility for these matters. The Government of the day will be held responsibe for the level of unemployment and, in broad terms, for the degree of training and the adequacy or otherwise of the employment services. They will be held responsible for that by Parliament and the country. Therefore, the Secretary of State must keep in his hands sufficient powers to be able to discharge that responsibility in an ultimate sense. From what he has just said and the terms of the Bill, I believe that he has done this. This seems to be right.

I turn straight away to the major omission in the White Paper. There is hardly any reference to the central problem of manpower planning. Indeed, there is a curious reference in paragraph 25 of the White Paper, in which it is said that the Secretary of State will remain responsible for manpower studies. In other words, they will not be transferred to the commission. That seems curious. I should have thought that if the Manpower Services Commission is to do the job which the Secretary of State has described, it ought to be in charge of manpower studies and he ought to develop them on a very big scale.

We are told later, in paragraph 47, that the commission can conduct or support research. I am glad of that. What I am really asking for, however, is that a major part of this work should be to take charge of a continuing exercise of manpower planning and forecasting.

The Secretary of State said that he thought the commission could help to produce a situation in which we had people with the right skill in the right place at the right time. But if we are to achieve that vital objective in a period when technology is moving forward faster and faster all the time, in which the whole pace of change becomes faster all the time, we need at the centre of affairs a really sophisticated research and forecasting operation by which the picture can be worked out not just in general terms but by industries and by regions. We want to be able to know as far as possible what are the likely areas of redundancy and of shortage of skill throughout the country in order that the necessary plans can be made.

A full employment policy at this stage of the twentieth century is surely incomplete without some operation of that kind. Are we not seeing, not simply in Britain but in countries throughout the world, and countries at different stages of development, that the traditional techniques for a full employment policy are no longer producing the results expected of them or the results that they would have produced perhaps even 10 years ago, and that new and more sophisticated techniques are needed in order to have a successful full employment policy?

Similarly with regional policy, which is almost but not quite the same question, surely the missing factor in the policies of successive Governments has been that we have not had sufficient manpower intelligence to tell us about the local pattern which will emerge if things are not changed and about the likely effect of certain changes on the regions of this country.

I add another point which is not sufficiently discussed. A successful prices and incomes policy cannot be pursued without some understanding of the manpower effects of that policy. This is not a matter to develop this afternoon, perhaps, at any length. But one thing that the Government are doing through their prices and incomes policy is to lessen ordinary market forces. An employer cannot put up the wages of people whom he wants to retain on his books. Therefore, in that situation many changes are taking place that ought to be monitored and understood by a unit studying manpower trends in this country.

Mr. Christopher Woodhouse (Oxford)

I entirely agree with the desirability of what the right hon. Gentleman is describing, but he will recall that during the period of office of the Government of which he was a member a manpower research unit, as I think it was called, was operated by the Department of Employment and Productivity. It was found extremely difficult to overcome the problems of manpower forecasting. It is only fair to recognise that this is an extremely intractable problem.

Mr. Prentice

I was about to say that I recognise that this cannot be an exact science. I realise that attempts have been made and that the results have not always come up to expectations. When I led the British delegation to a UNESCO conference in 1968, we had some international discussion on this theme. We were told that many countries had tried operations of this kind and had found them in some degree disappointing. But it is too easy to conclude from that the operation should not be attempted on a big scale. I believe that it should.

The essential point is that thousands of decisions about manpower are made every week. They are made by employers, by those running Government training centres, by technical colleges and universities, by careers teachers trying to advise children on what to go in for and by all kinds of people. All these decisions have to be made on certain assumptions. We have to try to create a framework in which the decisions can be made more intelligently and with more data on what is likely to happen.

Although a forecasting unit of that kind would sometimes get the answer wrong—experience suggests that that would happen quite often—nevertheless it is better to make the attempt than not to make it, because if we do not make the attempt more of the decisions will be wrong. People will be wasting time in doing certain things and studying the wrong things. Resources will be wasted, as they are now, on an enormous scale. We need to develop this unit as a matter of urgency.

I should like briefly to look a little further ahead, to ride off on a sort of magic carpet into the future. What we want to see is the availability of manpower advice to the Government in relation to all kinds of decisions that have to be made by the Government from time to time. Last week the Chancellor of the Exchequer, in presenting his Budget, said that the Government's objective was to have a 5 per cent. growth rate. This was a previous objective which the Chancellor reiterated last week. Let us suppose, however, that he had said 6 per cent. instead or had gone down to 4 per cent. What would have been the effect of plus or minus 1 per cent. on employment in Merseyside or in South Wales? Does anyone know? Does anyone try to work this out? If not, should not someone be trying to work it out? Should not advice of that sort be available to the Government in making major economic decisions or decisions on education planning? How far do the Government of the day have available to them advice on the manpower implications of what they are doing?

Let us take, for example, the raising of the school leaving age to 16. My view is that it should have been raised to 16 a long time ago. The postponement of the raising of the school leaving age by the Labour Government was a bad mistake, even in the economic context in which it was done. I say that partly because I believe that the kind of unemployment problems which will be faced in the future by young people who are at school now will be such that they will be badly handicapped if they have not been in full-time education until at least the age of 16. I should like to see that belief tested by some kind of forward projection of employment and manpower trends, so that a decision of that kind is made in relation to the future manpower needs of the country. The same thing applies to decisions on the number of students in full-time higher education in 1980. That sort of decision should be made with manpower intelligence available.

In making a whole range of decisions the Cabinet of the day ought to have available from the Secretary of State for Employment manpower advice which it would take just as seriously as, or more seriously than, the financial advice it receives from the Chancellor of the Exchequer.

This is not merely a question of Government decisions. There ought to be available to people in industry, the universities, polytechnics and other institutions of education bulletins of manpower information which would enable their decisions to relate more closely to what was likely to happen in the years ahead.

I turn to some other aspects of the Bill. On the future of the employment exchanges, the Secretary of State said that provision had already been made for the changes of policy and that not much of this Bill related directly to the exchanges except in the sense that the agencies' relationship to the Commission is spelt out. I say in passing that I am sure we all want to see the fastest possible progress towards the objectives set out in "People in Jobs" and the later document "Into Action". A new look in our employment exchanges was long overdue and the country owes a great debt to successive Secretaries of State, especially my right hon. Friend the Member for Blackburn (Mrs. Castle), for the work done to initiate the changes in the employment exchange system which are now coming into effect.

The aspect that I stress is the occupational guidance service. I understand that it is now available in about 44 different cities and towns and is due to be extended. This should be regarded as the most important growth point in the employment exchange service. Our objective should be to translate the service from a job placement service more into a counselling service from which a man or woman or young person of any age with any kind of employment problem should be able to get sophisticated advice from a trained person about the opportunities available.

On youth employment we welcome the statutory obligation on local education authorities to provide this service. Clearly the split between the local education authorities and the Department is unsatisfactory and a change is overdue.

In some ways we are afraid that the Bill does not go far enough, and it is fortunate that the House and the Committee have the benefit of the Report of the Public Expenditure Committee. My hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) was Chairman of the Sub-Committee which produced this report. If my hon. Friend succeeds in catching the eye of Mr. Deputy Speaker, I am sure that she will have something to say about it.

I underline one point. The Secretary of State spoke about the benefit to a young person in being able to choose whether to obtain advice from the careers service of the local authority or from the employment exchange. As I read the Bill the option is given not only to the young person but to the local authority. As I read the Bill the statutory duty is to provide a service for those in an institution of education and for the obtaining of their first jobs and not necessarily to continue to provide that service up to any specified age. My hon. Friends and I will argue in Committee that there should be a complete statutory duty to provide a service up to the age of 18, 21 or whatever is the appropriate age. A first job could last a very short time. It might only last a week. For a young person after a week at work having just left school, one would want to have available the same sort of service that he had a week previously. That is an important point, and there are others on which my hon. Friends and I will seek assurances in Committee.

It is essential that we see that aspect of the problem in this context. For many years the country has made relatively generous provisions for those who stay in full-time higher education after leaving school and up to their early 20s. This has been right. But in comparison we have made very poor provision for those young people who leave school at the statutory school leaving age or shortly afterwards. This is a big gap in our society and it has many aspects, some of which are outside our debate, such as the provision of playing fields and the like. A young 18-year-old at work has as much need of opportunities for sport as a student of the same age in an institution of full-time education.

Looking at the content of the Bill, I suggest that we want to see what I would describe as a charter for the non-student teenager. I emphasise five points especially. The first is the absolute necessity for the provision of more jobs for young people in areas of heavy local employment. The second need is to make a real success of the final year at school and to make it a year which will be a relevant experience from the point of view not only of those planning these matters but of those undergoing the experience.

The third need is the expansion of further education for those who have left school up to the age of 18 and in certain circumstances beyond it, but recognising that the provision of day and block release, although it has been expanded in recent years, is totally inadequate for boys and disgracefully inadequate for girls. Part of what we are thinking about should involve the expansion of further education for young people.

The fourth need is a greatly improved careers advice service. It is right to acknowledge that there is already an excellent service in some areas. We are concerned primarily with spreading the high standards which exist in some areas over the country as a whole.

The fifth need is for an improvement in occupational training. When we think about training, we think too readily and obviously in terms of industries such as engineering, construction and those with traditional craft apprenticeships, whereas perhaps we should be thinking more often of the training opportunities for young people in offices, shops, working on farms and in many other categories of employment where training hitherto has been on a much poorer scale.

That brings me to a brief reference to the part of the Bill dealing with training which from the Opposition's point of view is the least satisfactory part. It is not as bad as it might have been. It is not as bad as it would have been if the Government had persisted in the policy set out in the consultative document issued early last year. The House will remember that the proposals in that document included one to abolish the levy/ grant system by the financial year 1972–73. However, the Bill involves a weakening of the impact of the levy/ grant system and this is disturbing.

There are many other aspects of this new machinery for training which we shall want to discuss in Committee. One is the extent to which the industrial training boards will retain important powers. The Secretary of State said something about that and pointed out that the role of the commission as he saw it would be one of co-ordination and not dictation. I was glad to hear that, as I was to hear the right hon. Gentleman speak of the need for high-powered people to remain on the industrial training boards. This is of great importance.

The industrial training boards have been a very important if not a revolutionary development in industrial relations. They have been unique in a sense that employers' leaders and trade union leaders have sat down together not simply to consult each other as they do in many other different forums but to make joint decisions affecting their industries. The people who make those joint decisions have to go away from board meetings and implement those decisions. That is very important not only for training but for what it is hoped will be a better atmosphere in industrial relations in the future. This will work out only if the top people on the employers' and trade union sides are willing to give their time to the job, and they will do that only if the powers left to them are worth while. It is very important to bear this in mind.

Another aspect that we shall want to explore is the financial one. It is left very vague. Clearly the money raised by the levy is likely to be reduced. We are told that a sum of up to £35 million will be available for key training activities. How that £35 million relates to what is likely to be lost by the reductions in levy, who has done the sum and what it is are questions which need to be explored in our debates in Committee.

On the levy and the grant, the Government have reached an unhappy com- promise. Quite rightly they rejected their original proposal in the consultative document to abolish the levy system. But the choice should then have been made to keep the existing system which, I suggest, has been the main reason why since 1964 the industrial training boards have on the whole succeeded in improving the quantity and quality of training.

The system is to be weakened in four ways. The Secretary of State said three ways but I think there are four. It is to be weakened first by the exclusion of small firms, that being an expression which still has not been properly defined. We need a definition. If it means the exclusion of very many firms, in some industries it can mean excluding the employers of most of the work force and it will have an extremely damaging effect on group training schemes because the involvement of small firms in paying the levy and their wish to qualify for rebate has been one of the motive forces, though not the only one, behind the healthy growth of group training schemes among small firms in the past few years. It would be very serious if this trend were reversed.

Then there is the other limit proposed for the levy of 1 per cent. We are told that it will be a normal upper limit, and we are told in the White Paper that it can be exceeded only in quite exceptional circumstances. This is a very grave mistake. The training costs of industries vary enormously. The Secretary of State has said that most training boards make do with a levy of 1 per cent. or less. But in an industry with heavy training costs surely a training board should be able to propose, as has happened in recent years, a levy agreed by the members of the board in the light of their knowledge of the industry. The Secretary of State will still have his powers to approve or to decline to approve an order. If he thinks that a proposal is excessive he can send it back, as he has done in the past.

Why do we need to have the doctrinaire insistence that only in quite exceptional circumstances will the levy be more than 1 per cent.? When the Secretary of State was speaking, I interrupted to ask him about the Engineering Industry Training Board. It is the largest training board and it has had a great success story. Since 1964 the improvements that it has initiated have played a vital part in the country's economy. That has been done on the basis of a levy which has varied over the years but which consistently has been much higher than the 1 per cent. limit. It would have a very serious, possibly disastrous, effect on training in the engineering industry if it were forced down to a 1 per cent. levy.

I also have doubts about two other aspects. The first is the proposal that large numbers of firms should be exempted from paying the levy by means of an exemption system. The second concerns a provision which was not mentioned by the Secretary of State that in future industrial training boards will not have the duty to impose a levy. I object to those two provisions because it seems to me that the payment of the levy itself is the important motive power in training. The provision of grants from the commission or whoever proposes them can be an incentive but not nearly such a powerful one. The levy has to be paid on certain dates. It is there in the balance sheet. It has to be brought to the attention of the board of the company, which cannot shuffle it off on to someone lower down in the hierarchy. The board of the company must be aware of it. It must be aware of the origin of the need to train on a scale and at a level which qualifies for rebate.

In moving away from that concept we enter a more permissive society in training. We encourage procrastination and the sort of situation in which it may be said at a board meeting "Mr. X will not be going for new training schemes, but Mr. Y has other ideas. Therefore we shall postpone both matters for further study." This would remove the urgency which is imported into the situation by the fact that the levy must be paid on a certain date, that training must reach a certain standard and that the compensating finance must be obtained by the board. The old carrot-and-stick argument behind the 1964 Act was valid and remains valid today. Training will suffer if there is any movement to reduce the impact of that Act.

We are today dealing with a subject which is of vital importance. It is a cliché but nevertheless it is profoundly true to say that manpower is the most precious resource possessed by this country. If we fail in our manpower policies, we fail in a number of senses. We fail because people's working lives will be less satisfying to them and less rewarding than they might have been, and we fail in the sense that in any loss of productivity society as a whole loses the essential economic growth which we ought to achieve.

We are failing at the moment. We are failing in the sense that we have 750,000 people unemployed. We are failing in the sense that too many people are in dead-end jobs. We are failing in the sense that too many people are working at less than their capacity and in the sense that our policies are reacting too slowly to rapid changes in a technological society. Whether we can succeed today or in the future will depend partly on the machinery that is provided in the Bill and by those who are appointed to the commission and to the agencies. It will depend much more on the Government of the day pursuing dynamic policies in employment, training and education—and much more dynamic policies than we have seen or are likely to see from the present Government.

5.40 p.m.

Sir Paul Bryan (Howden)

I congratulate my right hon. Friend the Secretary of State for Employment both on the Bill and on his speech. I am sure that he will join me in welcoming the interesting and well-informed speech—at least as to most of it—made by the right hon. Member for East Ham, North (Mr. Prentice).

The Manpower Services Commission is an objective towards which some of us have been working for many years, and this applies to hon. Members on both sides of the House. Progress has been slow, not to say laborious. Now suddenly, with a belated spurt, it seems to be with us.

When I was at the Department of Employment I understood that there was nothing to prevent the establishment of a training agency or an employment agency but that a manpower commission would have to wait until such time as the Department of Health and Social Security took over the payment of benefit. However, the Secretary of State seems to have overcome this hurdle by first setting up the commission and the training agency leaving the employment agency to join them once unemployment and benefit payments are separated. This process is already under way.

Today's debate will attract no great headlines in tomorrow's newspapers. Nevertheless the setting up of the Manpower Services Commission is a momentous event in our social, industrial and educational history. I do not agree with the right hon. Member for East Ham, North that it is a small constitutional experiment. I should like to have seen its birth marked with rather more panache and certainly with a more explanatory White Paper.

I thought that the description given by my right hon. Friend the Secretary of State of the objectives of the Manpower Services Commission and the thought behind it was the sort of thing which we should have seen in the White Paper. The title Manpower Services Commission conveys absolutely nothing to 99 industrialists out of 100. Indeed I doubt whether the majority of trade unionists would know what its objectives were. Yet the White Paper does not give an explanation of what the commission is trying to achieve. There are many paragraphs describing its functions, composition and so on, but nothing is said to justify the radical transformation of the present arrangements. This is a pity because the objectives are worthy objectives. The concept of representatives of industry in the form of a commission being made responsible for industry's own training and employment services is exciting and, as far as I know, unique.

The closer linking—indeed, interdependence—of the training and employment services through the commission may not be unique but is certainly an advance on present practice. I have always thought that the third leg of a manpower commission consisted of manpower planning and long-term forecasting. This whole element has been understated. It is not absolutely clear to me where the responsibility lies. I do not sail away as high on the magic carpet as does the right hon. Member for East Ham, North, who reached a very high castle in the air. I tend to agree with my hon. Friend the Member for Oxford (Mr. Woodhouse) who saw some limitations in this operation. Nevertheless, these matters are very much in people's minds with the advent of so many unexpected redundancies—I emphasise the word "unexpected"—and the public expect to see forward planning of manpower.

These objectives should have been highlighted. I understand that the White Paper has been introduced on this rather "piano" note to prevent excessive expectations. My fear is in the other direction, that it will not appear important enough to attract big men to the commission. The composition planned for the board looks right, but it will be ineffective unless the men who fill those 10 places have the stamp of authority and are well known and respected personalities. On this brief I do not believe that we will get them.

I agree entirely on the inclusion of an educational member of the commission. In my time at the Department I always thought that the co-operation between the Department of Employment and the Department of Education and Science was never as close as it should have been, although we depended on each other in so many ways. There was, for example, the training opportunities scheme which depended for its expansion on the help given by the technical colleges, as indeed it still does.

I should like to discuss the relationship between the commission and the two agencies and training boards. The explanatory memorandum of the Bill states that The Commission will thus be responsible for planning, developing and operating employment and training services other than those provided by local authorities and for coordinating the work of industrial training boards. Its executive functions will be carried out by the two Agencies. This is an accurate definition of the commission's relation to the Employment Service Agency but not of its relation to the Training Services Agency. Once policies and programmes have been agreed, the commission presumably will let the Employment Service Agency get on with the job. In the case of the Training Services Agency the same will apply with regard to the training opportunities scheme and the Government training centres but apparently not in relation to the industrial training boards.

Paragraph 11 of the White Paper states that the agency will co-ordinate the work of the boards subject to the directions of the commission, which itself will have only a very small staff. But according to paragraph 63 of the White Paper and subsequent paragraphs, it seems that the commission will deal direct with the boards over the head of the agency in many important matters. It is the commission that will direct the boards to submit levy proposals. The commission will provide grant-in-aid for administrative expenses and for the key training activities. Although paragraph 11 tells us that the agency is to co-ordinate the work of the industrial training boards, paragraph 68 states that The Commission will have a co-ordinating role… The boards will discuss and agree their forward plans and budgets with the Commission. We then see in paragraph 69 of the White Paper that It will be for the Commission to approve boards' proposals under section 2 of the 1964 Act, e.g. proposals or grant schemes and training recommendations. We see in paragraph 71 that The Commission will have the right to appoint assessors to attend meetings of boards and board committees … Paragraph 72 says that A board will submit to the Commission, and not to the Secretary of State, proposals to delegate functions formally to a committee of its own — And we see in paragraph 73 that The Commission will be able to give directions to a board in respect of the use of the funds which it makes available to it. That may be understandable to us in this House, but I have found that the training boards conclude from those statements that, whatever paragraph 11 may say, they will normally be dealing with the commission direct and not with the training agency. This is a matter of great interest to the boards and I hope that my hon. Friend the Minister of State will be able to clarify this matter in his reply.

I shall not be sorry if the conclusions of the boards are correct, or correct to a certain extent, and I shall explain why. There has always been in Britain an astonishingly large number of high-grade men and women willing to do certain work for little or nothing provided that they are convinced of the real value of that work. The ITBs comprise many such people. I was constantly impressed by the calibre of members of the boards, whether they were trade unionists employers or educationists. There was also a high proportion of excellent chairmen, many of whom had retired early from posts of great responsibility in industry.

The quality of these largely voluntary boards has given them a status and they expect to be listened to. When they functioned under the Department of Employment, there was an obvious channel of communication—when necessary, direct to the Minister. This access to the Minister stemmed naturally from the appointment of board members by the Minister. If they were to be completely under the agency, however good that agency may be, with little direct contact with the commission or the Minister, the boards would tend to feel downgraded. The past two years of uncertainty has already put a heavy load not only on the boards but on their staffs. Anything we can do to maintain their status and their morale should be done.

I wish to ask my right hon. Friend the Secretary of State for some information about training on employers' premises, a subject on which he touched in his speech. We started that idea when I was at the Ministry but it got off to a disappointing start. It seemed a hopeful proposition 18 months ago when there was spare capacity in industry and it was thought that employers would welcome the idea and that it would not cost them much, but, as I have said, we did not get very far. I should like my right hon. Friend to say to what extent that scheme has prospered.

I conclude by wishing the commission well. It has a task which is inspiring and difficult but perfectly feasible. It has the positive support of the trade unions, the CBI and hon. Members on both sides of the House. The climate for its success is favourable. In the short term one sees a shortage of skilled management and skilled labour which must increase interest in the improved employment and training services. In the longer term the commission will benefit from the philosophy which is increasingly being accepted that an individual has a right to training and retraining and that he should be helped, and generously helped, to exercise that right.

The modern employee in industry is better educated, better informed better travelled, is more choosy about his job and will be looking for the more sophisticated employment service and guidance envisaged in the Bill. The massive redundancies which new technology has brought to such industries as steel and the docks have stimulated a public demand for better manpower planning, and the need for the commission is clear. The Bill brings real hope that that need will be met.

5.50 p.m.

Mrs. Renée Short (Wolverhampton, North-East)

Unlike the hon. Member for Howden (Sir P. Bryan) I intend to concentrate on one part of the Bill and one part of the White Paper which came out at the same time, namely that concerning the Youth Employment Service. It is 25 years since we had legislation of this sort and it is interesting that we should now have an opportunity to discuss many aspects of the whole question of manpower planning and training, and the redeployment of workers in industry.

By great good fortune my Expenditure Committee has been looking at all employment services since a year last February. Last Thursday we published our report on the Youth Employment Service and in a fortnight's time we shall be publishing our second report in the series which will deal with women's career opportunities and training. This will come out in time for the Committee stage. We are aiming to produce by Easter the remainder of the report which will deal with the whole sphere of the Minister's responsibilities for Government training centres, the training of the disabled and their employment, and so on. It appears that the Expenditure Committee has managed to time the production of its reports to good purpose.

As the Secretary of State indicated, since 1944 the majority of local education authorities-132 out of 163 in England and Wales and 11 out of 35 in Scotland—have urged that the Youth Employment Service needs strengthening and that it should be the mandatory responsibility of the local education authorities. The Scots are apparently a little more bashful about running these services, but I hope that they will mend their ways from now on.

I am very glad that the Secretary of State has come into line with our proposal, but the White Paper is confusing about the point that he mentioned, and I am glad he clarified it. The White Paper says that it should be a mandatory service on local education authorities, but paragraph 56 indicates that local authorities can make arrangements with the Manpower Commission for the commission to perform some or all of their mandatory functions. It says, in practice, that this will he only from the transitional period and that such arrangements with the commission will be confined to a small number of authorities. But that is not necessarily what the Minister said. I am glad he said that this would be for a transitional period only and did not mean that a small number of authorities might escape their mandatory functions under the Bill. I am glad that, ultimately, all education authorities will carry out this service.

The Youth Employment Service, ideally must be part of a strong team, the other part being the careers teachers in our secondary schools. This means that they will back up the correct guidance given in schools about the courses and options open to young people. This needs to stem from the broadest possible curriculum allowing a choice to be made as late as possible in the school career. At the beginning of the debate the Under-Secretary of State for Education and Science was with us. I am sorry that he has now left, because much that is in the Bill, and much that will stem from it, depends on the Secretary of State for Education and Science.

The Secretary of State will, of course, be responsible for the careers teachers, their training, their career structure, and so on. I hope that in his concluding speech the Minister will tell us what discussions he intends having with the right hon. Lady, and what progress they hope to see. If career choice is not to be jeopardised there must be expert guidance, and it must come early in the school career. It is too late at the age of 14 or 15, after choices have been made which are largely dependent upon inadequate advice or inadequate staffing in schools.

Our committee recommends that there should be much more career guidance for girls to turn their eyes and ambitions to jobs and careers that are not now normally followed by girls. There is an enormous need for good counselling services throughout the school system, but especially for girls. One can ask where are the girls who become engineers and eventually go on to become bridge designers? Where are the girls who go in for electrical engineering? Where are the girls who become airline pilots, or heads of mixed comprehensive schools? All these are thin on the ground. It is extraordinary that we waste so much potential, that so much talent is lost to the nation, and that so much ability is not developed.

We were disturbed to find that career guidance in schools is a haphazard affair. We were alarmed at how little the Department of Education and Science knew about its provision. For example, there are no accurate figures of the number of career teachers in schools, and ILEA, which is a very advanced education authority on matters of career guidance generally, told us that over 20 per cent. of its secondary schools had no career posts. There is no guarantee that teachers who are doing careers work in our secondary schools have had the necessary training. We heard evidence from one group of witnesses that a headmaster summoned a teacher into his study one day and said, "You have a bit of spare time, so you are doing careers from now on." That is not the way to get a fully comprehensive, well-based careers service which will eliminate all the waste of talent and ability which occurs right through the education system up to university.

We are very concerned about this matter. We learned that the inspectorate has been running short courses on careers guidance since 1967 but that only 100 careers teachers and 20 heads have received such training to date. We therefore recommend a rapid expansion of training for careers teachers, that there should be a careers teacher for every secondary school, and that a proper careers structure should be developed by the Department.

The local education authority's careers work, which has been carried out so successfully, is based on many years' experience, and it is professional. The Secretary of State does not understand the difference between what is provided by the Youth Employment Service now and what the Department will provide for young people under the Bill, as explained in the White Paper. The Secretary of State says that a young person who leaves school at the age of 16, after his first job, will go to the Department for further guidance, counsel and placement. I do not know whether he understands that this could be very soon after the young person leaves school—it could be a matter of weeks or months.

As the right hon. Gentleman has indicated, at that age and at that stage of experience a young person needs precisely the same guidance as he or she had on leaving school. The whole point is that there is not that resource of experience and training in his Department and in the employment exchanges that now exist in the youth education careers service, whether it is dealing with a handicapped young person, a disadvantaged youngster, a disturbed youngster or young coloured people—who were indicated to us as groups who need most attention, often needing many weeks of counselling and being sent for many interviews with employers before placement is achieved. The difference is not just one of placing young people in jobs. Many young people need a great deal of attention and very skilled care from the careers officers in youth employment offices. I do not believe that the officers in the Secretary of State's Department can supply this expertise and experience. Their whole experience in the past, and the orientation to their job, has been different.

I remember in my own constituency, for example, when we were at the height of our problems with unemployed youngsters and had about 1,000 young people unable to get jobs, the Youth Employment Service provided daily work which was based on the youth centres throughout the area. I do not believe that this could have been done with officers attending every day and with counselling being carried on in the youth centres and activities being provided to keep the young persons off the streets by the Secretary of State's Department, but it was done by the local education authority.

Looking at the enormous number of changes of jobs that have occurred with young people from the age of 15—as the school leaving age then was—one finds, for example, that 94 per cent. of boys of 15, about 82 per cent. of boys of 16 and about 80 per cent. of boys of 17 had had up to 10 jobs after leaving school. The figures for girls are comparable. This requires an enormous amount of attention, care and counselling from the Youth Employment Service.

Mr. John Page (Harrow, West)

I have been listening to the hon. Lady's account of her study over many years, and I am delighted to say that I agree—but can she tell us over how long a period these 10 jobs were held? Was it between the ages of 15 and 17, or up to 20?

Mrs. Short

The figure of 94 per cent. having had up to 10 jobs was for boys up to 15-plus—before their 16th birthday—and the percentage just over 80 was at 16. We got the same figure right through for girls as well. Almost 11 per cent. of the boys between 16 and 17 had had up to 15 jobs since leaving school. The general public do not realise what an immense turnover there is and how much experimentation goes on in job finding. Of course, a certain amount of this movement is necessary; young people need to look around to see what jobs are on offer. But I am absolutely certain that with the more concentrated counselling service that the Youth Employment Service could provide much of this could be cut out. There is the same turnover in numbers with girls. Far to many girls regard jobs as filling the gap between leaving school and getting married, and take a job without being greatly concerned about it. Only 10 per cent. of girls get day release, against 40 per cent. of boys.

One of our recommendations was that day release should be compulsory for all school leavers, boys and girls. I wonder what the Minister will have to say about that? It is part of his scheme. Does he intend to do it?—because until it is done there will certainly be serious discrepancies and inadequacies between boys and girls. Too few girls go into full-time further education—the figure was only about 23 per cent. in 1969. Again, this stems directly from career guidance in the schools. In 1970 only 7 per cent. were apprenticed to a skilled craft, and three-quarters of those were in hairdressing, while 42 per cent. went into clerical work. There is a deadly pattern of the same old thing, decade after decade, with an enormous waste of potential which indicates that a proper full-time trained career service is absolutely essential.

At university level the same thing happens. A number of students drop out completely from their courses, change courses after the first two terms or the first year and qualify in other subjects, or leave without qualifying at all. This provides further proof of poor careers guidance at school and the errors of early specialisation which arise from this. There is an enormous amount of very constructive work to be done. As the Minister has indicated, the present age of separation between the Youth Employment Service and the adult employment service is 18, but we believe the age of 21 is better, because then we have continuity right through from school leaving age to 21, when one can assume the end of apprenticeship, or the end of the first degree if young people go to polytechnic or university. Thus, one service is providing for all young people up to the age of 21.

We also felt that the paying out of money should be done at the same centre as the job counselling work, and that young people should not go to the employment exchange to collect money if they are unemployed. We felt that there is no point in dividing this work and creating difficulties of access. It could all be done at one centre.

Finally, the financial recommendation is far from clear. I understand from what the Minister said that this service is to be financed from funds provided by his Department. We were concerned that the continuity of the work should remain with the present arrangement, whereby 75 per cent. of the approved expenditure on the service is paid to the local authorities directly. We believe it is essential for this to continue, and our witnesses felt the same, otherwise this service is likely to be rather lost sight of. We feel that money channelled to this service for that purpose, because of its great importance to the careers and opportunities of young people, should be by way of a specific grant, and that this should continue. I hope the Minister will be able to answer these points when he replies to the debate.

6.9 p.m.

Mr. Robert Redmond (Bolton, West)

I am most grateful for the opportunity to follow the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) because for the first time since I came into the House I find myself in broad agreement with a great deal of what she has been saying, particularly on the question of careers guidance. This country suffers from a lack of training of careers masters and mistresses in schools. Not many years ago, when I was in the engineering industry, I had a letter from a mother asking me to give an apprenticeship in the firm's drawing office to her little Johnnie. She said "He is top in art and his careers master said he should be in a drawing office". That story is quite true, and it shows just how much knowledge that careers master had of what is needed in a draughtsman.

Today people are going to university for the sake of going there; they do not know why they go. They obtain the requisite number of A levels and then seek a university course. If they fail to obtain it, they seek a technical college course, or something like that, if only to put off the evil day when they must choose a career.

I particularly want to speak about the training aspects of the Bill, because I have done a great deal of homework on the subject in the last few months. When the booklet "Training for the Future" was published Members on the Government side of the House accepted that it was a discussion booklet. I have a feeling that in the country and on the Opposition benches it was looked upon as a policy document, which it was not. I received some representations from younger members of the engineering union who seemed to think, because there was a suggestion that small firms could be exempted from the levy, that those firms would stop training. I was able to show that when the engineering industry talks about a small firm it is referring to what is often quite a large firm in the context of the whole of industry.

As a result of the discussions that have gone on we seem to have come fairly close to a consensus. The right hon. Member for East Ham, North (Mr. Prentice) missed a rather important point on the question of levy. There is already a hidden levy, in the size of the apprentice's pay packet. It is no longer possible for the employer to think of using a can lad, because he cannot afford it. He takes on apprentices and must offer them first-year training off the job to the point where they will quickly become useful to him, otherwise it is not an economic proposition to employ them at all.

The present level of apprentices' wages is itself a levy, and a stick towards training. That factor has become increasingly important in the minds of the people I have consulted in the last six or eight months. A great deal of opposition to the withdrawal of levy from people who ran the engineering small firms training groups has disappeared on that ground alone.

The Government must make it understood that when they say they are issuing a consultative document they mean it. We have had a number of Green Papers which seem to be regarded as White Papers. I have received many letters from people in the Women's Lib organisation about family allowances, and even now demonstrations are going on although my right hon. Friend the Chancellor of the Exchequer has said that he has accepted the representations.

There has been a genuine misunderstanding in the engineering industry about what is meant by small firms. Last summer one branch of the engineering union wrote asking me to oppose the Government's policy on training. I replied that I could not oppose a policy if I did not know what it was, but that it could help by making representations to me. It did, and I find some of its views interesting.

My right hon. Friend the Secretary of State thanked the training boards and others for the time they had given to consultations. I want to thank the people in my constituency and other parts of Lancashire for the trouble they took during the Summer Recess in giving me their valuable advice, which I passed on to my hon. Friend the Minister of State. I hope that he has taken it on board. I see some of it appearing in the Bill.

An interesting suggestion was put to me by a training group of small firms, none of which employs more than 10 people. The group—the West Pennine Training Group, connected with the Distributive Industry Training Board—asked to be exempted. Its members said, "Take us right away from the board. We shall look after the training. We can be exempted completely, on the condition that the group employs a training officer". The group is now making a levy upon the firms of £2 a head per employee per year. That was a very interesting reaction to "Training for the Future" from the distributive industry.

From discussions last weekend I found that the people to whom I talked last summer are very glad to see the levy/ grant exemption arrangements and are happy, as I am, that a Manpower Services Commission is to be established. But I am a little concerned about something that my right hon. Friend said today. I hope that we are not setting up a new nationalised board. I hope that there was nothing in his speech—as I thought there was—to suggest that we shall not be able to ask him questions about the detailed operation of the commission and training boards. It would be a disaster if we were not allowed to interfere in the day-to-day running of the commission.

We on the Government benches do not expect the commission to work miracles, but I hope that it will iron out the bumps. That was the main point I kept putting to the Government during the consultative process—that we have bumps, leads and lags. There are areas of both high unemployment and shortages of particular types of labour. I hope that the commission can do a great deal to discover what training is needed and to some extent to carry out the suggestion of the right hon. Member for East Ham, North.

My right hon. Friend said something about the training and retraining of women. May we know at some time exactly what is happening about their retraining? There are already shortages of female labour in the weaving industry in Lancashire textiles, in an area of high unemployment. My right hon. Friend and my hon. Friends at the Department know the interest that I have shown in what is called the "female activity rate"—the statistics kept in the Department of Em- ployment. I know what they are, but I have not found out what they are for. I hope that we can use them to show that the retraining of women for new jobs is going ahead. I have asked many questions about that matter.

I was glad to learn recently that my right hon. Friend is winding-up superfluous training boards. It was crazy to have training boards for the electricity and gas supply industries, because with virtually one concern in each industry each could be its own training board. The banks do not have a training board, but they are doing some remarkably good training.

What about training people to be self-employed? It may be principally a matter for the Department of Trade and Industry but the raw material for the self-employed comes to the Department of Employment—the redundant executive, the redundant anybody, who says that he wants a job. Should not the Department sow in that man's mind the seed of the idea that he might work for himself? I am very keen to see more people self-employed, starting small business. Great oaks come from little acorns. But many people fail in their self-employment.

Mr. James Hamilton (Bothwell)

The hon. Gentleman has raised an important point, and to some extent I agree with him. But where is the capital to come from?

Mr. Redmond

It is a matter more for the Department of Trade and Industry than for the Department of Employment. My point is that to sow the seed in someone's mind may start him thinking on the right lines.

There is then the need for training, not in the trade concerned but in administration. Admittedly, a man starting a business needs some capital, but the principal thing is to make him think about what he can do. I know many small businesses that started with virtually no capital and have become quite successful. Such ventures often fail because the man who started them does not realise the snags he will meet. A man who sets up in business as a window cleaner does not necessarily fail because he is a bad window cleaner; he probably fails because he does not have the necessary training in cash flow, credit control, depreciation and marketing. I am not suggesting that to start off in business as a window cleaner a man should be sent to a business school for three months or go to Harvard, but it should be possible, within the purview of retraining, training opportunities, and so on, to give a man some instruction on how to keep a cash book and how to make reserves for depreciation: something short and sharp and interesting. The Department of Trade and Industry may well be catering for this through the small firm centres, but I urge all my hon. Friends in the Department of Employment to think in terms of sowing the seed and then offering the right form of training and the right advice as to where to go for capital. That is a very important point, and I hope it can be borne in mind.

6.21 p.m.

Mr. Frank Tomney (Hammersmith, North)

I followed the amusing and interrogative speech of the hon. Member for Bolton, West (Mr. Redmond) with interest. One reason is that I happen to be a Boltonian.

I was rather interested in something the hon. Member said at the beginning of his speech concerning universities and university training. When I was first asked to lecture at Berkeley University in California I was a bit afraid of the assignment, but when I got there I found that I need not have been. The place was crowded to the doors by literally thousands of students. Nobody was teaching anything to anybody or listening to anybody else. This proved conclusively to me that once one departs from making university education a privilege and makes it a right, one runs into trouble. When one departs from absolute selectivity on academic achievement, one encounters trouble. We are running into that sort of trouble a great deal in this country, but I do not intend to deal with that tonight.

I shall not go into great detail because I do not think there is anything seriously to quarrel about in the Bill; it is a framework or structure and is to be welcomed as such because it deals with a problem which will grow daily more intractable.

I speak as one who has been on the receiving end both of unemployment and of a training centre. There is nothing on earth more demeaning or demoralising than being willing to work but denied the opportunity; nothing creates such a sense of sheer hopelessness. I speak as one who was thrown out at 18 because of the collapse of an industry. I was training as a textile engineer, and new opportunities and new jobs were simply not available. What was available was the humping of vacuum cleaners up and down Lancashire, throughout Manchester and Wythenshawe, trying to find people who had electricity and, when one found them, trying to sell them a vacuum cleaner. When one does that, and it is raining and snowing as it can only in Lancashire, one realises how hard the world can be, especially when one is aged 18 or 19.

It was through that experience that I drifted to a training centre and learned a new trade. From that, by a series of stages, I eventually landed in this place and began to learn another trade—but in this place one never gets the right answers because one is mixing with people who change policies every day, like chameleons changing their colour. Sometimes one gets different speeches on the same subject from the same person cm the same day, but one has to reckon with these things.

We must welcome the Bill. It is not perfect, but we are dealing with a subject that is not perfect. Economic man is not in charge of his own destiny, either in this country or anywhere else. I stated in a debate on economics about two years ago that I believed that by the end of the present century this country would be overpopulated by 20 million people in comparison with our resources. I see no reason to change that philosophy or statement now. Twenty million is a lot of people; it means a lot of jobs, a lot of frustration and a lot of lost opportunities.

One has to look at the way in which industry is drifting. That is why the Bill can at best be only a palliative. But we cannot afford to be without it, because the problem with which it has to grapple is an increasing one, whether it concerns the youth employment or careers service or merely providing job opportunities. I am not concerned with how the service is financed or where the finance comes from. I am concerned to see it in being and given every opportunity to operate and to grow, because the situation cannot be resolved entirely within these shores. We are dependent to a large degree on the economic climate, which can be generated against us at any moment in European or world politics, with the position of our currency and its value as against other currencies.

We have witnessed recently the almighty dollar being thrown into a turmoil with the deutschemark supreme. Germany was defeated, and look what that has led to. It led first to a streamlining of trade unions in Germany—one of the finest jobs that Ernest Bevin, as Foreign Secretary, ever did. From that grew a long period of industrial peace and the resurgence of Germany's capital industries.

What happened here? In the last century and at the beginning of the present century our capital industries appeared to be supreme, but how much capital industry have we got left today? We do not have a lot. We have much highly specialised technical industry. That is why the Government, confronted with the situation a few months ago, had to nationalise Rolls-Royce. Fifty-one per cent. of the technical and scientific skill of England was concentrated in that industry, but when the chips were down it had to be nationalised and rescued.

This is what we have got. We have fewer skilled job opportunities today in the ordinary terms of fitters and turners than we ever had before. The position has changed completely into electronics, computers and mechanisation. Alongside that there has been another change in the capital structure of industry—amalgamations, conglomerations, international companies, all of whose future is based on the sacred doctrine of the balance sheet and the profit and loss account. This is efficiency. No man who has attended a business school can deny that it is the way that industry should operate. But in doing so one operates against the possibilities of a nation suffering from over-population and with job opportunities declining.

In this situation, what can we do? What can we be expected to do? We now have a Manpower Services Commission. We have heard arguments ad- vanced on both sides of the House as to advantages and disadvantages and forecasting what it eventually hopes to achieve. But it cannot achieve anything unless it is planned differently. I shall refer to one aspect of this. When the war started we in this country found ourselves entirely without scientific glassblowers. We had been buying consistently from Germany for 60 years and not training our own people. There was an upsurge of the training of young glass-blowers, of whom I was one, to be scientific glass-blowers.

How do we make a survey of where industry is going, what manpower it may need and in what volume? One cannot do it, for the simple reason that company formations, Stock Exchange flotations and amalgamations, must by the very nature of their operations be conducted in such secrecy that no manpower board can be informed. What is really required is an investigation commission working alongside and in conjunction with the manpower commission.

North Sea gas is a tremendous capital industry for which we never thought we would have to provide. All the valuable contracts went to the United States, but we managed to make provision for the piping of North Sea gas. We trained hundreds of pipe-fitters in a very short time and let them loose on the British public. There has been a hell of a row in some cases about the quality of workmanship, but we had to let them loose in order to capitalise on the discovery of North Sea oil and gas.

Here is a case in point where we have to look at the capital structure of industry, at its market prospects and at the prospects of its competitors, world-wide and otherwise. We have to look at its manpower commitment, and on all these factors advice should be given by an investment board. If I were asked how this would be created I should have to answer frankly that I do not know. Such is the operation that I could not say how it would work.

We saw the amalgamation of GEC, English Electric and AEI. Everybody thought that that operation should have been done the other way around, but such was the genius of Mr. Weinstock that, with a small company, and small resources, he swallowed the other two. When one looks at the operation that he is performing, with a daily stocktaking commitment, one realises that he is operating on much the same basis as Marks and Spencer. It is necessary to know at the end of the day what has been sold, the stock position and what next week's commitments are. This is marketing par excellence.

If Mr. Weinstock can carry out that kind of operation, we should be able to do it with manpower and investment planning. That is the kind of operation that is required but, as I said earlier, we are not in charge of our own economic destiny. We are living not on borrowed time, but on industrial time which has been loaned to us, and I want for a few moments to deal with job opportunities and political philosophies.

I think that in the few minutes I have been speaking I have proved how serious the position is with regard to the provision of jobs. I take the view that we should lose few opportunities, wherever they arise, to take any order of any volume or quality which benefits British industry. I see that just a month ago, for strategic considerations—whether international or otherwise I do not know—we turned down a huge order from China for the remarkable vertical take-off jet aircraft that has been developed by the Royal Air Force. Because of the thousands of miles which separate us from China I can see no strategic threat to Great Britain, but I can see a market of perhaps £200 million going begging. But not so the French. They have supplied markets all over the world. In my view, when one is talking about highly complex capital-intensive industries one has to take orders where one can find them.

I know that the pacifists will object, but to my mind job opportunities, job consolidation, capital consolidation and build-up are paramount. I see no reason to change my philosophy about the position of Great Britain by the end of this century. It is a frightening prospect, and unless and until we get concentric thinking and political themes which match up with each other we shall be in difficulty.

For better or for worse, for ill or for good, we have in this country a high percentage of capital-intensive industry. We were reared on that. We have a large number of diminishing middle status concerns. Firms which in the past employed 20,000 people have either amalgamated or disappeared. We have a new race of entrepreneurial financiers who take over shell companies with vicious greed and shut them down regardless of the job structure involved. The whole of this complex should be looked at, shell companies included. The shutting down of factories in areas of high unemployment must be looked at.

Those are some of the things which I should like the Manpower Services Commission to take into consideration in its higher strategic thinking. The quality of the men recruited to the commission will be vital. If they take the view that we still have a wonderful industrial contribution to offer to world trade, the whole aspect of development will have to be taken into consideration. Invention after invention has gone from this country to the United States because finance has not been immediately available for its development, because the research and development programme ran for too long and investigators could not see the dividend reward quickly enough. That kind of nonsense has to cease completely if the engineering industry is to survive.

I welcome the structure of the Bill. It is not perfect, it is not intended to be, but it can be a powerful palliative. If it brings hope to the people who cannot get jobs or who have lost their jobs, it will achieve its purpose.

6.38 p.m.

Mr. Christopher Woodhouse (Oxford)

It is always a pleasure to listen to the common sense of the hon. Member for Hammersmith (Mr. Tomney). If there had been training boards in his youth he might never have come to the House. At any rate, I find myself in agreement with a great deal of what he said, and I particularly welcome the atmosphere that he has brought to this debate, if I may so put it, straight from the shop floor—something which not everyone is able to do.

With one small exception I also agree with what was said by the hon. Member for Wolverhampton, North-East (Mrs. Renee Short), particularly about the importance of training for girls. A fact of which we should never lose sight, paradoxical though it may seem, is that by far the largest untapped source of skilled manpower today is women. It is shaming to my mind that, for example, even Turkey, which is not a country which we look upon as highly developed, has a higher proportion of women engineers in training than we have.

One danger of a debate of this kind is that of agreeing too much with what everybody says, and I shall therefore follow the right hon. Member for East Ham, North (Mr. Prentice) in expressing some qualifications of my welcome to the Bill, though not the same qualifications, and perhaps not such severe ones, as those listed by the right hon. Gentleman. It is certainly a much more workmanlike and acceptable Bill, just as the White Paper associated with it is more workmanlike and acceptable than seemed likely from the consultative document that we debated last year.

In particular, I think that my right hon. Friend was right to preserve the two essential principles of the 1964 Act—first, that each industry should be responsible for its own training, and, secondly, that a system of "stick and carrot" should be established through the levy grant system to encourage industries to carry their training out. On the other hand, it is also right to run down the scale of the levy grant part of the apparatus, which was in danger of becoming elephantine and cumbersome, and distracted attention from the main purpose of promoting good training.

I knew of a number of firms which were spending far too much of their time thinking about how to increase their grants instead of about whether the so-called training they were doing was any good for their industry. I think it right to provide for exemptions, instead of extracting levy from a firm and paying back an almost identical amount of administrative costs to the same firm. In taking this course my right hon. Friend is really only giving legislative backing to a practice which was already being pursued by the more progressive and enlightened industrial training boards.

I very much welcome the provision in Clause 12 which gives certain preferential treatment to the disabled, and I hope that attention will be paid by the commission and its agencies to the needs of the disabled.

While welcoming the Bill, I still have one or two questions and criticisms to voice. Before doing so, I declare my interest in that I am a member of one of the regional councils of the CBI, but I do not think that anyone would accuse me of being hostile to training, especially as I made my living out of it for some years.

First, perhaps my hon. Friend can clarify one or two of the financial implications. Paragraph 14 of the White Paper says that the commission will be responsible for expenditure in excess of £100 million, and this is made more specific in the Explanatory and Financial Memorandum, which states that the cost to public funds is estimated at about £155 million in a full year, of which about £120 million would have been expended under existing legislation. The difference of £35 million between these two figures is accounted for by items in paragraph 65 of the White Paper. But how is the rest made up? Am I right, for example, in assuming that the £120 million includes the cost of Government training centres? There is one reference to Government training centres in the White Paper—in paragraph 12—but it is concerned only with the possibility of the transfer of ownership of the centres, and it is not clear who will control and administer them, wherever the ownership may lie.

The Minister of State, Department of Employment (Mr. R. Chichester-Clark)

The difference includes a figure of £30 million in respect of vocational training in general, including the Government training centres.

Mr. Woodhouse

I thank my hon. Friend. He has been very forthcoming in that reply. I hope he will be equally forthcoming in answering my other questions.

It is obvious that the figures do not include the yield of levies from the industrial training boards, even though the commission is to co-ordinate them. I say that it is obvious because the present aggregate of expenditure of the industrial training boards of itself greatly exceeds £120 million a year. I think that the right hon. Member for East Ham, North was putting essentially the same question. At what point does my hon. Friend expect the future levels of industrial training board levies to become matched?

I have one or two relevant figures which I have obtained from the CBI relating to this topic, and I should be grateful for my hon. Friend's comments on them. The CBI estimate, which is only a rough approximation—it can be no other—is that the present total of industrial training board levies aggregates about £215 million a year and that a levy of 1 per cent., which is intended to be the normal maximum in future, would yield in the aggregate about £150 million a year. Allowing for many exemptions, and because there is no reason to suppose that most of the training boards will go for the maximum, the actual yield of the boards' levies should be under half that last figure, according to the CBI estimate.

In other words, the CBI would expect the total yield of levies in the aggregate not to exceed £60 million or £70 million a year. These are only approximations, but it would be interesting to know whether they accord with my hon. Friend's estimates. If he finds it too difficult a question to answer tonight, perhaps he will invite me to put down some Questions.

I come now to the question how the commission will work, and how it will reach its decisions. As my right hon. Friend explained, it will inherit some advisory functions, chiefly from the Central Training Council, and some executive functions, especially for the two agencies, together with some powers of co-ordination over the industrial training boards. Its structure will be roughly similar to that of the training boards themselves and of the Central Training Council, in the sense that it will necessarily include representatives of the trade unions, employers' organisations, educational interests and independents.

The divisions are loosely drawn and will no doubt be flexibly operated with the common sense which has always characterised the whole system since 1964. But no doubt there will also emerge, quite naturally, within the commission a recognisable trade union interest and a recognisable employers' interest, with the other members of the commission holding a kind of balance between them. Paragraph 3 of the White Paper says that the members will not be delegates, but nothing can stop three trade union members from getting together and three employers' members from getting together to consider the agenda before the meeting and to work out a common line in their respective interests. The fact that paragraph 3 envisages the senior staff of the organisations also being involved will tend to promote that trend, as it has done in the Central Training Council.

But there is a big difference. The Central Training Council does not take executive decisions; it merely advises the Secretary of State. Its advice never involves large sums of money, and on the rare occasions when it takes a vote the final decision still rests with the Secretary of State, who would ignore the minority view at his peril. Therefore, the balance of power in the council matters very little. But in a body with executive powers it could matter a great deal, especially when it comes to financial policy.

In this respect, the commission will resemble the industrial training boards rather than the Central Training Council, and it will be responsible for large sums of money. Experience in the existing system has shown that, on the whole, educationists and independents tend to the side of the trade unions against the employers. There are obvious and natural reasons for that which I well understand and will not elaborate, but it follows that there needs to be introduced some safeguard in the procedures of the commission, at least in regard to financial policy.

A particularly important example arises from the provision which empowers my right hon. Friend, in certain circumstances, to require an industrial training board to raise a levy exceeding 1 per cent. of the payroll of its industry. It is only fair that before examining this point I should stress that this provision breaches an express undertaking given by my right hon. Friend explicitly in his statement on 8th August last year, when he said: Other firms above the exemption limit may be required to pay a levy which will not, however, exceed 1 per cent. of the payroll."—[OFFICIAL REPORT, 8th August 1972; Vol. 842, c. 1502.] That was not an extempore reply to a supplementary question; it was a formal ministerial statement. I do not wish to argue that it is wrong in principle to exceed a 1 per cent. levy. I say that it is wrong in principle to secure the assent of the employers' organisations to the underlying plan of the White Paper and the Bill on the basis of an undertaking which is breached in the Bill as presented to the House. To say the least, it seems that the Secretary of State is open to severe criticism for misleading the employers on this point.

Mr. Chichester-Clark

We all know the dangers of interrupting my hon. Friend, but I will take the risk once again. He will have noticed that when introducing the Bill, my right hon. Friend made it clear that if there was a question of raising the levy above 1 per cent. the affirmative resolution of both Houses would be needed. That makes a considerable difference, in the context of what my hon. Friend says.

Mr. Woodhouse

It makes no difference at all. The Secretary of State made a specific and categoric undertaking, in his discussions with the CBI in preparation for the Bill, that there would not be provision for a levy exceeding 1 per cent. That undertaking was unqualified in the statement which I have read and was unqualified in the discussions which followed, between officials of the Department of Employment and the CBI.

I am not saying that it is wrong to exceed a 1 per cent. levy; I am saying that it is wrong to breach an undertaking which was fundamental to the acquiescence and co-operation of the employers' organisations in the consultations leading to the Bill. My right hon. Friend gave no reason for breaking his undertaking, nor did he explain in what circumstances he would want to exceed a 1 per cent. maximum. The proper course would be to withdraw this provision and revert to the original undertaking. If he feels that he cannot withdraw the provision, he must at least provide safeguards against the pressures which are bound to occur to abuse the power which he is taking for himself.

What should be the safeguards? The new clause which is being written into the 1964 Act is not entirely clear in describing how my right hon. Friend would reach a decision to exceed a 1 per cent. levy. For example, it is unclear whether the relevant words in paragraph (2A)(c) in lines 42 and 44 on page 34 are or are not governed by the words "approved by the Commission" which appear twice earlier in the new clause. In any case, it is hard to imagine that my right hon. Friend would ever make such an order without consulting the commission. Here we confront in the accutest form the crucial question: how will the commission reach its own conclusions?

To expect the commission to be unanimous would probably be unrealistic. There is bound to be a vote, or something like that. It seems that the procedure should at least be bound by two definite rules. First, evidence should be required showing that the levy is desired by a consensus, or a substantial number of the persons engaged in the industry. There is a precedent for that in the Industrial Organisation and Development Act 1947, which I commend to my hon. Friend's attention. Moreover, precisely the same suggestion was put forward by my right hon. Friend in paragraph 89 of "Training for the Future" in connection with the suggestion that there might be voluntary but not compulsory levies. The suggestion has a respectable history.

The second rule, which I suggest is the same rule that is imposed on industrial training boards by paragraph 5 of the schedule to the 1964 Act, provides that only the employer and trade union member may vote on any matter relating to the imposition of a levy. These safeguards seem to be the minimum requirements, in view of the Secretary of State's breach of his undertaking. Even if he accepts these safeguards he cannot be entirely acquitted of having misled the employers' organisations.

I now turn to the clauses which lie on the border between training and education. Again, I have some questions and one criticism. First, what is to be the future status of further education in relation to the Industrial Training Act? Hitherto, although boards have not been empowered to provide finance for further education courses, they have been required by Section 2 of the 1964 Act to consider the further education associated with training when assessing grants to firms. I observe that in Schedule 2, page 32, line 17, the relevant subsection of the 1964 Act is to undergo a significant amendment. The word "may" is to be substituted for "shall" in the provision concerning further education. In other words, a mandatory provision is being turned into a discretionary provision. If I were a professional educationist I should be suspicious of the significance of that change, in the absence of any explanation.

I should be at least bewildered if not suspicious by the provision in Clause 8(1) which states that persons attending universities are excluded from the arrangements for vocational guidance. Fifteen lines later the Bill says that they can be included if they wish. I know that the White Paper attempts to explain that nonsense. I know that the Secretary of State made another attempt to explain it this afternoon. However, it remains plain nonsense. The only logical meaning that could be attributed to the provision is that for all students other than university students—from secondary education to polytechnics—it is to be compulsory to attend the vocational guidance service. Only for university students is it to be voluntary. I suspect that the Secretary of State has merely committed a halfhearted surrender to the prejudices of the university appointments officers. I shall not pursue that matter further.

I now deal with the most difficult question of all relating to vocational guidance, which was mentioned by my right hon. Friend the Secretary of State, the right hon. Member for East Ham, North and the hon. Member for Wolverhampton, North-East—namely, the division of the Youth Employment Service between a large sector administered by local educational authorities and a much smaller sector administered by the Department of Employment. That, as many hon. Members know, has represented a most intractable problem for a long time. It is clearly undesirable to perpetuate the division of the service in that way, but which part of it should be transferred to the other?

The Secretary of State has decided to place a duty on all local education authorities and to disband his Department's sector of the Youth Employment Service. I think that he has made the wrong choice. He has taken the line of least resistance. It is clearly harder to force a larger sector to join a smaller one. It is easier to transfer civil servants to other duties than to compel employees of local education authorities to become civil servants.

I doubt whether this is the best decision, either for the young people who will use the services or for the vocational guidance service as a career. I believe it is much better that the young people should be advised on their choice of employment by people in closer contact with the world of work and industry than professional educationists. Whether those educationists are teachers or administrators they tend to adopt an inward-looking and unduly protective attitude towards young people. They also tend to lack experience of the world outside the education system.

I know that a good deal is going on to try to correct this weakness. I have taken part in some of the experiments but at the same time I recognise that progress is very slow and on a small scale. Without taking up the time of the House to excess, I put it like this. If one thinks of the vocational guidance service as a kind of bridge between the world of education and the world of employment, it seems to be a mistake to have both ends of the bridge manned by the educational profession. The far end of it ought to be manned by people more in touch with the world of employment.

I have disagreed with the hon. Member for Wolverhampton, North-East on this point but I entirely agree with her that the age limit ought to be raised from 18 to 21. I also think, and I am perhaps alone here, that it ought to be a national rather than a local service because the national service can provide more varied, flexible and satisfying careers for those working in it and also because it would be better able to accumulate experience and information for the benefit of young people on a nation-wide basis instead of on a purely local basis.

Nor is there necessarily any reason why, in bringing the two parts of the service together within the purview of the Department of Employment rather than the education service, employees of the service need necessarily become civil servants which I know most of the youth employment officers under the local education authorities would abhor. The service could easily be made a third executive agency under the commission alongside the Employment Service Agency and the Training Services Agency. I hope it is not too late to ask the Secretary of State to think of a modification along these lines.

I do not intend to quarrel with him over the general intention underlying the Bill and the general principles it embodies. He has done well to plan it as a Bill to amend and improve the 1964 Act rather than planning, as the consultative document seemed to imply, to emasculate and virtually repeal what I have always regarded as one of the most useful measures ever introduced by a Conservative Government.

7.4 p.m.

Mr. Edwin Wainwright (Dearne Valley)

I shall not enter into debate with the hon. Member for Oxford (Mr. Woodhouse), who has made an excellent speech. He made one or two points with which I differ but on the whole I agree with him. I noted that my hon. Friend the Member for Hammersmith, North (Mr. Tomney) brought a note of genuine fear into the debate. There is much in what he said. There is a great danger that finance houses may take over and prevent the creation of new jobs. There are also multinational corporations, not responsible to any Government, which must be taken into account.

The Bill is full of good intentions. What matters is the application of this measure. I welcome the setting up of the Manpower Services Commission. We will watch it keenly to make certain that it carries out its duties and responsibilities and investigates future job possibilities. It is the employment of individuals that matters. The commission has an important job.

I welcome the suggestions for the kind of representatives who will serve on the commission. I am a little worried, however, about the agencies because we do not know who will serve on them. I hope that they will be people with experience of industry and not exclusively civil servants. I am not criticising civil servants hut it is essential that we have on these agencies men who have industrial and commercial experience. The present boards have done well. Can they do as well in the future? They have developed some authority and have brought forward new ideas. We must always be looking to the future and planning the creation of new jobs.

I welcome the important links between the education authorities and the boards. These are essential. It was said that the 1964 Act was meant to bring our vocational training policies up to the requirements of our European competitors. What examination has been made of EEC training methods? Are we fashioning our methods upon theirs or are we looking at things differently? I understand that France and Germany are introducing a levy/grant system. Over a number of years these countries have overtaken us in productivity per man. This is no doubt due to the training methods they have adopted which appear to be superior to ours.

When the commission and the agencies look at these problems they will need to think deeply about the man aged between 45 and 55. In many instances when redundancies occur it is people like this who are placed on the shelf. Retraining is not easy for them. Even if they are skilled men, their skills relate to a different area. It is essential to have a training system broadly based so that such persons can be more easily retrained. This has been the policy of many of the existing training boards. Here I pay tribute to what they have done and express the hope that they will continue the good work in the future. They have been trying to keep abreast in this ever-changing technological and commercial world.

Will the Bill be strong enough and firm enough to compel the smaller industrialists to train their incoming work force? We know why the 1964 Act came into operation. I shall probably differ on this point from the hon. Member for Oxford. Some small and some large firms are and always have been very good at training. However, other employers have been only too willing to poach trained men from other industries or employers.

Mr. Woodhouse

I do not intend to disagree with the hon. Gentleman. He might be interested to know that under the operation of the Industrial Training Act the proportion of small firms—those with fewer than 200 employees—which received back more in grant than they paid out in levy was on the whole much higher than in the case of large firms.

Mr. Wainwright

It may be that because they have to pay the levy they are more interested in training than in the past. When they failed to train personnel they were harming the country as a whole. Because small firm often poached trained employees, the good firms were more careful about the people they trained and this had repercussions throughout industry.

The levy has brought about a wonderful change in the attitude of management. I do not think that 1 per cent. is high enough. However, if the levy were to be discontinued and we were to go back to the lethargic methods of the past, there would be a great danger to the maintenance of our skilled work force. I hope that from time to time there will be further examination of the whole problem to ensure that we have a successful, trained work force.

I refer now to young people, especially those who are unemployed. It is no use training people unless there are jobs for them. There is a high rate of unemployment in my constituency. We have an advance factory which has been untenanted since June last year. There are many applications by young men and boys for training, but there are not sufficient jobs available and there is no hope for them. I do not think that the Bill will provide any hope for these young people, even though all hon. Members wish it success.

What will happen to the school leavers who will be coming on to the market soon? Not enough is being done for the non-student. We seem to forget about that category of young person. There is a great deal of dissatisfaction among students today and we shall have to consider their problems. The non-student, the boy or girl who often goes into a dead-end job, should be trained. We should have a broadly-based education system tied to future training. It is better to educate young people to the age of 18 than to allow them to leave school at 15 or 16 when there are no jobs for them. America has a tremendous advantage over Britain. Whether we like it or not, America has a better education system for young people.

Mr. James Hamilton


Mr. Wainwright

My hon. Friend disagrees. The facts are evident. Whether we dispute them is another matter. I am suggesting, not that we should adopt the American system but that we should look more deeply into the problem.

We should look more closely at sandwich and day release courses. There is a wide gap between them. There is room for a system between them which would enable young people to get training as well as education. I think that university students should work in industry for a time to make them realise what it is like. I hope that the Manpower Services Commission will go into the problem. I hope we can convince students that they have a part to play in industry and that they can obtain their education and qualifications at the same time. We should make sandwich courses more attractive. We must get industry keenly interested. It is a disgrace that the sandwich courses are so limited compared with other courses of education. It is a pity that industrialists are not concerned about educating their work forces, especially the young people; but there it is.

Education should be broadly based and the system of training at different levels of qualification should take account of the kind of industry and society that is likely to exist when we have trained people. I mentioned earlier that the Manpower Services Commission should look into this important problem. It is surprising that in some parts of the country we are short of trained people, whereas in other regions trained, skilled people are unemployed.

Right hon. and hon. Gentlemen on the Government side have not shown much interest in the effect that the "lump" has had on trained personnel in the building industry. The self-employed man is not interested in training our future bricklayers, joiners, carpenters and other skilled people. Therefore trained personnel in the building industry are in short supply. I realise that many people think that in the not-too-distant future we shall probably be going in for the kind of house that arrives on two tractors and is put up in a couple of hours. However, there is a tremendous demand for ordinary brick-built houses. We should consider why we allow the lump to operate. It is not only that the self-employed person has no apprentice with him; there are other motives behind it, of which the Government are fully aware. I suggest that this problem should be examined closely.

The Secretary of State will have great control over the Manpower Services Commission. According to the Bill the commission must report to the Secretary of State, and that will give him considerable power, but the right hon. Gentleman said that he did not want to interfere too much with the commission. He has the power but I hope he will not use it. I hope he will give the commission more freedom and that the commission will give the agencies freedom to work as they should without feeling that they are being overridden.

The Secretary of State said several times that he must consult the Treasury. I am afraid of the dead hand of the Treasury falling on anything of this importance. When a firm becomes less viable, training facilities are the first things to be attacked. If the country becomes less profitable, if we do not get 5 per cent. growth or even 3 per cent., I fear that the Treasury might interfere with the Secretary of State.

I welcome the Bill. I am sorry that it interferes with the levy system. That is a move which will have to be closely watched. I pay tribute to the training boards. I have met members of several of them and have been delighted with their efficiency. They might have some fear themselves that the small firms have had too big an influence on the Government. We shall have to wait and see. We might try to improve the Bill in Committee.

The country has to depend more and more on its highly-skilled people. The better our training system and the higher our productivity, the more viable the country will be. This country should pull its socks up. It is time that we started thinking about production more than we have done in the past. We have been so often surpassed by other nations that one becomes disturbed. When the Bill have been improved by the Opposition, I hope that it will be a big success and will benefit the nation.

7.22 p.m.

Mr. Michael Grylls (Chertsey)

I have listened with great interest to what the hon. Member for Dearne Valley (Mr. Edwin Wainwright) has said about the Manpower Services Commission. I was glad that he made a particular point of the younger unemployed, because they are a particular worry. What he said on that subject was very thoughtful. He will probably recognise that the changes proposed in the Bill to the entire employment services will benefit the young as well, because the better the image of those services the more likely they are to be used. This is not perfect, but it is a step in the right direction.

The right hon. Member for East Ham, North (Mr. Prentice), who is not here at the moment, unfortunately, took us off on a flying carpet in imagining what the commission would do in the years ahead. That was fascinating, and gave more dimension to the debate. I am sure that the right hon. Gentleman is right. From reading the Bill, one gets the feeling that the commission, important as it will be in the short term, is ahead of its time in the work that it will do.

I am sure that the manpower needs of a country and the increased leisure, we hope, of all our people in the years ahead, will be one of the central problems. This may be a strange thing for the commission to consider, but it is not a bad idea. I hope that its work will develop over the years. I suspect that what we are seeing born today will be only the tip of the iceberg of what we will see in five, eight or 10 years growing up behind it. I do not disapprove of that. It is a fairly healthy development, and I hope that it will become more and more sophisticated and will be able to make accurate forecasts of the nation's needs.

I want to concentrate on the youth employment side of this measure. I enthusiastically support the expansion of the youth employment services. The Bill undoubtedly ends a long period of uncertainty in these services—both the LEA-based ones and the Department-based ones—which has not helped over the last few years. I am glad to see that uncertainty ending. It has gone on too long.

Until 1970 I was a member of the National Youth Employment Council—on which body we considered many times whether the future structure should be education-based or Department-based. I make no apology to my hon. Friend the Member for Oxford (Mr. Woodhouse) for violently disagreeing with him. I have believed all along that it should be education-based. Unlike my hon. Friend, I think that the Government have made absolutely the right decision in this direction.

It is right to record that the National Youth Employment Council has all along been divided on this, although each time it had to come to a decision there was a considerable majority in favour of the service remaining LEA-based. I am glad that the Government have recognised the pioneering work, over the last 20 years, of the education authorities in providing careers advice. It is a progressive step to make this service mandatory on local authorities and it will be much clearer to people who are going to receive advice.

In many education authorities, certainly the larger ones, careers advice has been an integral part of the school curriculum. It is as much a part of school activities as are arithmetic and languages, and it would be impossible to try to make a division. As well as shaping his future, the education that a person receives is profoundly affected by his knowledge of careers prospects. Such knowledge is vital, and widens his whole perspective of life. School work cannot proceed properly without it.

But advice on possible careers comes from team work by the careers master and the careers officer. The more one studies the matter and sees this going on in schools the more one appreciates that education and careers advice are inextricably interwoven, and cannot be severed. If there had been an attempt to sever them or to drag them, reluctantly—it would have been reluctantly—from the education authorities, there would have been an almighty row.

This was not just a question of taking the easier decision, as my hon. Friend suggested; the alternative would have been a bad decision, not so much for those involved in this service as for the present and future pupils

The restriction that the education-based service has suffered over the past is that it has been limited to the age of 18. Thus, until now, students in higher and further education have not had the opportunity of careers advice. This has been a very bad gap in the service.

The hon. Member for Wolverhampton, North-East (Mrs. Renee Short) said that the school careers advice system was a little patchy. In the hon. Lady's absence perhaps I may say that in the higher education sector it is not a question of its being a little patchy; it has not existed at all. So the removal of this limitation is something about which we ought to be very pleased. My right hon. Friend the Secretary of State for Education and Science, having announced her plans for the expansion of student numbers between now and 1981, expected that by that date half of the students—about 350,000—would be in polytechnics. If this had not been done, none of those students would have had careers advice. That would be absurd and deplorable. I am delighted that the Bill rectifies that situation.

When the Bill becomes law, I hope that all those authorities which have the opportunity of establishing a careers advisory service, particularly in higher education, will do that as quickly as possible. Any one who has been concerned with higher and further education feels that a gap has existed, which has meant that students have not had the necessary advice at CNAA courses in polytechnics or other colleges. I am glad that we are remedying the situation.

I notice that there is to be a cut-off, as it were, at 5 p.m., and that people attending evening classes will be unable to have the benefit of careers advice. Many people will say that if one is doing basketwork or painting one does not need advice on a career. But many of these non-vocational courses are vocationally oriented. If you felt so inclined, Mr. Deputy Speaker, you could do a course on the "Cutty Sark" on navigation, and you might feel that you wanted to join the merchant navy. Why should you not have that advice from a careers officer? If the 5 p.m. cut-off is to be maintained and anyone staying after that time is not allowed to seek advice from careers officers, it will be a pretty rum situation, to continue the naval metaphor. The careers officers involved in the college where those studies are being undertaken will not refuse to give the advice. They will advise such a person. It is a very unnatural division. I hope that my hon. Friend the Under-Secretary will give some help in that direction.

I am also worried about Clause 8(6)(b), which states that some part-time students shall be disregarded. I hope that that does not mean that the careers service will be prevented from helping students on part-time or day release courses. That is very important. In the more progressive authorities a great deal of very valuable work is done in helping students to continue with their employment. Very often the young get restless, or uncertain, and many employers find that the advice given is particularly helpful.

One aspect of the Bill which I find a little strange is that there is no provision for the training of careers officers. I should have thought that this was vital. It is one thing to say that we have a service provided by 90 per cent. of education authorities, and that now it will be mandatory everywhere, but there is not a mention of training. Something should be done about that—perhaps in Committee. It could be done, perhaps, by adding to Clause 8, for example, a provision that it should be the duty of local education authorities to appoint careers officers trained to the standards of the Central Youth Employment Executive or those of the careers officers in the Youth Employment Service Training Board, which has these things laid down. Those two bodies put out a joint circular in 1970 advising local authorities to concentrate on the training of careers officers. Yet in the Bill there is no mention of such training. That is a crucial omission.

Mr. Edwin Wainwright

It is true that careers officers have not been trained as they have been in the past. At grammar schools and comprehensive schools it has been left to the teachers to do the job, and they have done it very well, but without being trained as careers officers. It is time the Government did something about it.

Mr. Grylls

I agree. As the hon. Gentleman will know, there have been one or two useful steps in this training. For instance, the Hatfield Polytechnic brought in the Youth Employment Service option as part of the ordinary CNAA degree course in social studies. That is very good. That is the sort of thing that people could do. If the careers service is to get going, as we hope it will, it must become a fully professional service. That is crucial to its improvement and growth. I hope that my hon. Friend the Under-Secretary will give the House an assurance on that point.

A further point about training is that until now the Central Youth Employment Executive has played a major part in setting out this policy. The executive will no longer exist under the Bill, but it did a useful job in propagating information on careers to careers officers and careers teachers in schools. It is important that someone is able to assist these people in learning more about careers work. As the CYEE is to disappear, who will do the job of training and, most important, of keeping up to date? My hon. Friend the Member for Oxford implied that careers officers did not know anything about the outside world. That impression is out of date. They spend a great deal of time with industry, learning about it so that they can pass on their information to pupils whom they are trying to help. I hope that my hon. Friend the Under-Secretary will give sonic assurance that that is exactly what will happen.

Finally, I come to a small but important administrative point—although it is perhaps more suitable for committee. Under the reorganisation, there is a separation between the employment work and the benefit work. The Bill complicates rather than simplifies the situation, in that people are to have to visit two offices. They go first to careers officers, but if they want unemployment benefit they have to go to a different office. That is a retrograde step. I hope that something can be done to alter what is contained in paragraph 54 of the White Paper, which states that this work is to be taken away and given to departmental branches. It is not a good thing for people to have to visit two offices. Why can they not register for employment and claim unemployment benefit at either the careers office or the departmental office, but not both? This is an unsatisfactory situation.

As hon. Members representing London constituencies will know, there have been experiments in Brixton under which people can now go to the local careers office, from which information about their unemployment benefit or other benefits is passed to the social security office and computerised. The benefits are paid by Giro. The person concerned has to make only one visit.

In talking about the previous division of the service, my right hon. Friend the Secretary of State rightly said that he wanted to get away from the previous rigid demarcation. In a small administrative way we are recreating a demarcation in saying that people may go to careers officers for advice but must go down the road to get their benefits.

I hope that my somewhat criticial questions—hon. Members are here to be critical—will in no way detract from the genuine enthusiasm with which I welcome the Bill. Hon. Members on both sides of the House have raised various questions, but have generally welcomed the Bill, believing it to be a really progressive measure which will be helpful to all our people.

7.40 p.m.

Mr. James Hamilton (Bothwell)

As one who comes from the engineering industry, I have always taken a very keen interest in industrial training. Before being elected to this House I was responsible in my factory for the operation of a day release scheme. It operates to this day.

Unfortunately the Minister of State is no longer present. Recently he visited my constituency and saw the training centre on the industrial estate there. It does a magnificent job. An annex is to be opened in the very near future, and it will be recognised from this that in Lanarkshire there is a great need for industrial training. However, the end product is a job and unfortunately, for one reason or another, many people being trained in industrial training centres find it very difficult to obtain the necessary employment afterwards.

At my "surgery" last Saturday I saw a lad who had been training at an industrial training centre to become an electrician. A Lanarkshire company was prepared to employ him. But because many craftsmen in electrical work are unemployed the union would not allow him to begin work. There is an agreement between managements and unions about the employment of these people, but with an unemployment situation such as we have in Scotland we must ask ourselves why we are training people. If we do not have the necessary jobs, to all intents and purposes training may become abortive.

Having said that, however, it is fair to point out that 60 per cent. of the people trained at the Bellshill training centre obtain new jobs, and this is a move in the right direction. It is very important that people should be retrained. With the technological advances being made and the many changes taking place in industry, workers must themselves be prepared to enter training centres and to retrain for new jobs.

I wish to concentrate mainly on young people. Recently I put a Question to the Secretary of State for Employment and I was sad to discover that from 1969 to the latest available date there had been a decided decrease in the number of young people entering apprenticeships. My hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) pointed out that in the construction industry, as a result of the large-scale practice of labour-only sub-contracting, very few apprentices were employed, thus doing a great disservice to industry as a whole and to the very many people employed in the construction industry.

I recognise that in introducing the Bill the Government are taking an important step forward, and I congratulate them. Nevertheless I have certain reservations about the Bill. We find, for example, that because the school leaving age has been raised to 16 education authorities are not properly geared to deal with it. That is no criticism of local authorities, because my own Government postponed the raising of the school leaving age and that too made me very sad. But we must ask whether in their final year at school our youngsters are being trained to prepare themselves for industry in a way that suits their individual aptitudes and talents.

Once again I must refer to my own constituency where we have a prevocational school training young people from the age of 16 upwards. These youngsters are all available for employment. Many leave after a few months and are able to get their first jobs. But there is no one in the establishment with the expertise needed to give them the necessary guidance. The first job is by no means finality. It is only the first step in a career in commerce or industry.

Any youngster going to the prevocational school can do so for three days, then sign on for two days for employment and be entitled to supplementary benefit. Anyone doing the full five days at the school gets no benefit. It means that there is no incentive to take a full course at the school. I believe that in the Bill the Government ought to give the situation very serious consideration.

Another anomaly, which is not the Government's fault, concerns an agreement between employers and unions in the engineering industry. Under the terms of the agreement employers must pay an apprentice a wage commensurate with his age. It means that youngsters of 17 and 18 attempting to enter the engineering industry find that, because employers have to pay them the wage for the age, only boys of 16 are wanted. Between the ages of 17 and 18 the opportunities are not as great as the opportunities afforded to those who are 16 years old.

Earlier in the debate an hon. Member referred to the distributive industry. I remember when I was a local councillor that a course was started at one of our technical colleges to train people for the distributive industry. The course failed for two reasons. First there was a lack of desire on the part of employers in the distributive industry to allow young people a day off work so that they could attend the college. The second reason was that in many cases the young people concerned had not been properly advised about and their minds were not conditioned to further education, with the result that they did not want to go to college. The course had to be abandoned. This was quite unacceptable to those of us who were concerned with further education.

Another factor which has been referred to by a number of hon. Members concerns day release. We have discovered from replies to parliamentary Questions that we have put to the Minister that at at present only 22 per cent. of our young people are getting day release or block release. A Bill of this kind should have made it mandatory on employers to grant either block or day release to their employees. This is very important. If we could get young people conditioned to accepting such a situation, we should go a long way towards meeting many of our requirements.

I notice that reference is made in the Bill to community interests. I am pleased that the Secretary of State is himself to take over the relevant powers. This is a very valuable service. It is being operated already by Glasgow Corporation. I have spoken to a number of young people who are doing community work. It is keeping them fully occupied and they have the satisfaction of knowing that they are earning their living.

I want to say a few words now about the Engineering Industry Training Board award scheme. Once again I have put Questions to the Minister. I have discovered that in Scotland not one of the boys who attended the course has been employed in a nationalised industry in Scotland. I think that the Government should be making the necessary representations and inquiries to discover the reason. After all, if we in this House are prepared to advance these schemes, at the same time preaching to our young people that at the end of the road they will be successful, in my view the nationalised industries have a responsibility to ensure that they play their part in making available the necessary employment.

We have heard mention of the attitude of American companies. I have many American firms in my constituency, every one of which without exception trains its own apprentices. The schemes in operation are first-class and can be compared with those of any other industry in the country. I speak with some experience because I have seen young people being trained in Sweden and Italy and, very early in my parliamentary career, in Germany. I do not subscribe to the view held by my hon. Friend the Member for Dearne Valley. We have proved that we can train the necessary skilled personnel to play their full part in industry. They can compete with the people of any other nation. If proof is needed of that, one has only to remember that our engineering products are the backbone of the fiscal policy of all Governments.

I want now to refer to paragraph 52 of the White Paper. We should ensure that the careers service is staffed by careers officers whose training is recognised by the Youth Employment Service Training Board. Unless we do that, authorities will be tempted to leave guidance to be carried out on a part-time basis by teachers or other unqualified people to the detriment of the young people seeking advice from them. I am the first to defend our teachers. They do a first-class job. However, I subscribe to the view "Every man to his own job". With respect to our teachers, very few of them are conversant with the ramifications of industry. It is very important that we have trained careers officers, and I align myself with the sentiments expressed by the hon. Member for Chertsey (Mr. Gulls) that provision should be made in the Bill to ensure that careers officers have certain standards and are trained by the proper people.

Paragraph 53 of the White Paper suggests that young people should have the opportunity to go to one or the other: young people other than school leavers should be able to choose whether to use the careers service or the Manpower Services Commission. It should be the careers service until they are 18, or thereafter if they wish. We must remember that careers officers have all the necessary expertise and the documents relating to the young people concerned. They are best able to give advice, because it is not the first or the second job that matters. As my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) said, it could easily be a third or a fourth job.

The Under-Secretary of State for Employment (Mr. Dudley Smith)

The hon. Gentleman will realise that we are introducing a degree of flexibility into the service and that a young person who has been under the aegis of the careers officer will go back again and be within the national employment service.

Mr. Hamilton

That is the very point I am making. I believe that it should be mandatory for a young person to come under that service. The service has all the necessary documents and information and is able to give the necessary advice based on expertise or knowledge of the person concerned.

In respect of paragraph 57 of the White Paper, there is a possibility that information obtained by an employer may be used to the detriment as well as to the benefit of a young person. Therefore, I hope that as the Bill progresses that matter will be carefully considered. I believe that there should be a fixed time limit for the transitional period. I believe that unless education authorities are set a time limit, there is a possibility that they will not introduce the services covered by the Bill for a very long time.

Much as I welcome the Bill and feel that it is a move in the right direction, my main criticism is that the figure of 1 per cent. levy is insufficient in financial terms. I hope that the Government will not only provide the necessary training and retraining but will provide jobs for those who are retrained.

7.58 p.m.

Mr. Ronald Bray (Rossendale)

I should like to add my congratulations to my right hon. Friend the Secretary of State for Employment for introducing the Bill. I support it for a number of reasons although I have minor reservations on points of detail.

One of the main reasons why I support the Bill is that it places responsibility for the overall use of manpower and training on one authority, the Manpower Services Commission—although I, like other hon. Members, am not entirely enamoured of the title. I hope that the commission will not become a partisan body and that it will be as impartial as possible in its decisions and process of delegation. This is a vast improvement on what has been a virtually non-existent policy in this respect.

It is a truism that all training costs money, but unemployment costs an immense amount in terms of human misery as well as in cash terms. It is the responsibility of every Government in every nation to ensure that manpower is put to the best possible use for the benefit both of the nation and of the individual.

I believe that I am one of the few Members of the House who have established a training department within industry—in my case in the engineering industry. It was profitable in terms of reduction in the turnover of labour, the loyalty of the individual and the general standard of workmanship which was achieved. It was a well worthwhile exercise and it shows what can be done in a medium or small firm.

The hon. Member for Bothwell (Mr. James Hamilton) referred to the firms from the United States which have established themselves in his constituency. I appreciate that the hon. Gentleman was referring to what goes on north of the border, but certainly in England there are many indigenous firms in many industries which undertake training at all levels from the shop floor to the highest executive level. I know of firms which have training facilities both inside and outside the company, and their executives are to be commended. The training boards have been of great assistance and many have been in existence for some time.

Within any industry there are people who are used to the methods in that industry and the speed at which the industry operates. There are people who know the situation from a practical rather than from a theoretical point of view, and this aspect must always be borne in mind. On the other hand, there are the blaggards or the baddies in training, and I share the concern which has been expressed about whether a 1 per cent. levy will be effective in certain industries or firms. I hope that the Minister in his reply will assure the House that he will not fail to use the levy as a weapon as and when appropriate. We cannot afford to have any back-sliders in training. That would not be in the interest of the country because we must put our manpower to the best possible use, whether from the point of view of training or of retraining.

There are some firms which will always pay over the odds to attract labour, and I suggest that such firms can afford to pay a slightly higher figure for the training of personnel.

Many hon. Members have mentioned the qualifications of members of the commission and the agencies, and this factor concerns me greatly. I hope that members appointed to these bodies will have sufficient expertise to be able to talk intelligently to those whom they meet in their respective duties and to whom they give advice. However, I am not advocating that hundreds of civil servants should be translated from Government service to one of these agencies and to operate it in a bureaucratic administrative sense.

A number of members of training boards have told me in confidence that they are now of a standard at which they can command a fee for their services. This surely is the acid test of whether the service which is offered is satisfactory. This point was particularly emphasised to me by the Distributive Industry Training Board. Its members were confident that they had the ability to make a mark on their own account. I am positive that the framework envisaged in the Bill will continue to benefit the system as a whole.

I wish to refer to the situation involving voluntary advice about courses of training, methods and so on. The members of the manpower commission must be completely au fait with what they are doing and in the advice they give at all levels. I envisage friction occurring between the various training boards unless their immediate superiors in the agencies are well versed in the matters covered by the Bill.

I should like to refer to a small point which relates to expenditure control, and I hope that this is within the Department's responsibility. I refer to the employment of public relations consultants to condition the minds of those who might be termed the opinion formers—including Members of Parliament—about the various boards, particularly when the views of those people might be at variance with a Government proposal or a consultative document. Surely a training board is large enough to stand on its own feet and to form its opinions without seeking to use professional mouthpieces to do the job for it.

I should also like to refer to research into employment and its surrounding circumstances and into unemployment and its causes, as well as research into projected long-term needs. Such research is a welcome step forward and I believe that the Department should have the ultimate responsibility and the final say on policy.

It is regrettable that in 1964 we did not fully see the writing on the wall in terms of the effect on the service industries. Unfortunately we did not heed evidence from the United States about what happened to employment in the service industries as against the manufacturing or production industries. As a result we saw a penal tax on the service industries in the form of selective employment tax. Service industries, through no fault of their own, have been penalised while that tax has existed, and that will be the situation until it is rectified at the end of this month. This policy was a regrettable error of judgment and one must conclude that it has caused appreciable unemployment in certain parts of the country.

Clause 6 of the Bill contains power to amalgamate the Agricultural Industrial Training Board with other boards. I suggest that other amalgamations could be effected. I refer particularly to the creation of a fashion industry training board which could be brought about by the amalgamation of the footwear, leather and allied trades with the clothing trade. These trades are complementary and such a move would have the effect of offering a composite training service to industry as a whole. Perhaps I could suggest as an aside that the now defunct Hairdressing Industry Training Board could be put in with them at the same time.

Within the framework of the Bill I should like to see greater emphasis placed on the executive training boards at the universities or specialist colleges. That is, to my mind, a weakness in the training system. We train too few people and do too much training in theory, and there is not enough of getting down to the nitty-gritty of fighting for an order and fighting to cut prices and for improved efficiency. That is a failure and I hope that when the agencies and the commission are established the remedying of these faults will be well to the fore.

My final point refers to the cut-off or the level at which firms are not liable for payment of levy. By and large there is a degree of agreement between the boards about roughly where it might come, but I fail to see the logic when one board, for example the Engineering Industry Training Board, sets a figure of, say, 120 employees with a wage bill of £150,000 a year, which gives potential turnover of the best part of £500,000. If a firm is of that size, it should not only pay the levy for training but it should also need training for its operatives—not 120 of them but a substantially lower number, perhaps 20. I know it is easy to say that such firms are too small to take trouble with and that it is impossible to do this or that, but experience has shown that the most critical size in firms, is when they reach 20 employees and later when they reach 100 or more. That is the point at which they want help and training for their staff as well as for their younger executives. This is a point on which we could slip up and I would ask the Department to instruct the agencies to consider this.

With these reservations I wish the Bill every success in its passage tonight and in Committee.

8.13 p.m.

Mr. William Hannan (Glasgow, Maryhill)

There is little that the hon. Member for Rossendale (Mr. Bray) said with which I would disagree. I welcomed his forthright denouncement of laggards and poachers in these valuable schemes and the Minister, in listening to speeches like that, should take courage in the fact that there is general agreement on the matter on both sides of the House.

At this stage in a debate points have slipped by and other points have already been made, and as a result there is a danger of repetition. I want generally to welcome the Bill and express a few criticisms by way of preliminary remarks. First, I wish to deal with the composition of the commission, particularly in regard to educational representatives. We heard excellent contributions tonight on the strength of the educational case as it applies to young people. It is a pity that in the composition there is only one representative from professional educational interests. It is true that the White Paper says that it is envisaged that at least one of the people appointed after consultation with local authority associations will have experience of education matters.

Mr. Dudley Smith

I take the point that the lion. Member for Glasgow, Mary-hill (Mr. William Hannan) is making. I am sure that he appreciates that one would often like to have all types of representatives on a body, but if it becomes too large it becomes less effective. If it is smaller it is more flexible and is better able to do its work. There has to he a reasonable figure—not too many not too few—and I believe that we have it about right.

Mr. Hannan

I take the Under-Secretary's point, and I would not want to take the shadow for the real substance. However, in view of the important contributions which have been made about the continuity of young people's records and the growing importance of educational standards, education should have an extra place in the composition as of right. This is a matter of honest difference of view.

I welcome the proposal in Clause 5 which gives the Secretary of State specific power to provide temporary employment in appropriate cases. Naturally, we should be much happier if the work could be of a permanent character, but in this respect it will at least enable the Minister to finance schemes such as Community Industry. I hope that it is his intention to assume responsibility for the administration of that scheme and that he will not leave it to the National Association of Youth Clubs, valuable as its work is and has been in the past.

Like other hon. Members, I warmly welcome Clauses 8, 9 and 10, dealing with careers services provided by local education authorities. I disagree with one aspect, and I hope that the Minister will consider it seriously. It was raised by my hon. Friend the Member for Bothwell (Mr. James Hamilton) and the hon. Member for Chertsey (Mr. Grylls). It concerns the proposal to allow young people under 18 to use the services of the Employment Service Agency, if they so choose, after they have entered their first employment. I take the same view as my hon. Friend and the hon. Member that they should be responsible to the new careers agency at least until the age of 18.

I doubt the training boards' ability to ensure that all the workers for whom they are responsible will be adequately trained in view of the continued exemption of small firms from the levy. I consider that the sum available to the commission is inadequate for administration expenses, key training activities and the promotion of training in areas of employment not covered by the boards.

Another aspect was mentioned by my right hon. Friend the Member for East Ham, North (Mr. Prentice) who referred to the technological pace of change that was taking place both actually and relatively in comparison with other features of our life. It reminded me of speeches which have been made in the past about the progress of technology and the application of science to industry, which will continue to mean an increasing quantity of goods and a decreasing labour force. The House will not need to be reminded of two examples. In the mines, for example, it now takes only half the number of miners to produce far more coal than was once the case. In agriculture, the same process is taking place. Unhappily, trends of this kind mean fewer opportunities for the type of girls and boys about whom we are concerned. It was in that context that my right hon. Friend the Leader of the Opposition in 1963–64, referring in a notable speech to men displaced, said it might mean an individual's changing his job not once, not twice but perhaps three times in his working like. I believe it was in this context that my right hon. Friend introduced his remarks today. Therefore, it is most important that we should have a Bill of this character, setting up the new organisation. But given the maintenance of the present material standard of living and its growth prospects, we should improve the quality and opportunities now coming to us by expanding the labour force in the service industries, both private and public, and in the social services themselves.

Reference has been made today to the relatively low numbers precisely in these types of industries who are attending day release or block release classes, or are undergoing other forms of training. I am grad, therefore, that in his opening speech the Minister referred to these possible changes. Some time ago the hon. Member for Aylesbury (Mr. Raison) put a very important question to the right hon. Gentleman the Prime Minister on precisely what changes were intended when, referring to the manpower requirements for the social services on 8th February 1972, he asked: whether, in view of the estimate in Social Trends No. 2 that the manpower requirements of the social services are likely to grow by over 300,000 between 1970 and 1975, he is satisfied that there is sufficient co-ordination between the various Departments responsible to ensure that suitably qualified manpower will be available."—[OFFICIAL REPORT, 8th February, 1972; Vol. 830, c. 1131.] The Prime Minister replied "Yes, Sir" but went on later to raise doubts in some of our minds as to whether such co-ordination was going on. I do not want to develop this point, as I had intended, in view of the admirable speech made earlier by my hon. Friend the Member for Hammersmith, North (Mr. Tomney), but the number of young people to be found waiting around youth employment offices these days is a depressing feature of our present day society, and girls who have left school looking for office jobs are finding that the vacancies are few and the competition very keen. Male school leavers, even when well qualified, often end up taking a job which is unlikely to stretch their ability to its greatest extent. But many of us have been most concerned with the boys and girls who are unqualified, because it is they who find the greatest difficulty and have to be prepared to take the most uninteresting and temporary work.

Mr. Ronald Brown

Does not my hon. Friend therefore agree, by reference to paragraph 8 (6a), that it seems absurd for the Minister in this Bill to exclude as part time any person who attends a school where the classes begin after 5 o'clock?

Mr. Hannan

My hon. Friend anticipates what I was going on to say. More than that, I was going to ask whether the Minister would not agree, or whether he has given consideration to the proposition which has been put, that in many respects even day release is now almost going out of fashion—that it is inadequate—and that evening classes are going out of fashion, too. My hon. Friend, to whom I am grateful for underlining my point, is quite right. Community interest projects, training boards and the rest are valuable but what is needed—and I do not want to go on to debate another subject altogether—is the assurance of a job when that training is completed.

For many years the careers service—formerly the Youth Employment Service —has been trying to prove its effectiveness. A greatly improved and dynamic service is vital if young people are to be assisted in reaching the best decisions for themselves over choice of career. This is one of the principal reasons why I welcome this Bill.

I will not delay the House much longer in view of what was, in my view, the admirable contribution of the hon. Member for Chertsey, who pointed out very effectively that it was a question of the youth careers service being able to advise young people; and whereas we spend £5,000 on the education of many young people at university we spend comparatively very little in advising young people where to go for jobs in their own best interests and to make the best use of their ability in the interest of the country. An hon. Member asked earlier about the staffs of the service itself. They have been left unhappy, not knowing whether they are coming or going. Let us consider the position in Scotland alone. Until now the careers service there has been run on dual lines, with 11 of our 55 education authorities, including Glasgow, Edinburgh and Lanarkshire, running their own service while in the remaining areas the service is run by the Department of Employment.

This Bill gives effect to changes which are welcome but, while it does that, it must be emphasised that more sophisticated arrangements in that respect will not create the new jobs which are vitally needed. It will, however, at least help many of those who at present have not a clue about what they want to do or how they are to go about it. Some careers officers in the front line of job placements are dismayed at what they see. I have already mentioned the lack of facilities and lack of money to help them to place young people in their proper jobs. They feel that the priorities are wrong and that it is about time that their talents were employed to their own advantage and that of the community. They take the view that all young people, whether or not they go to universities or further education colleges, are entitled to training but even more important, are entitled to have a job; and there is a quite disgraceful imbalance in that respect between area and area. In Scotland, for example, out of the total of unemployed boys, 34 per cent. are in the city of Glasgow alone; and of the total of unemployed girls in Scotland, 22.5 per cent. are in Glasgow. Others are attending further education courses. A number are receiving awards from industrial training boards or are on limited skills courses financed by Government Departments. But all of them would normally be registered for employment, and, valuable as those activities are, they are a form of hidden unemployment.

A study of percentages of school leavers entering their first employment in London and the South-East in clerical work alone shows a striking comparison with Scotland. Whereas in London and the South-East 13.2 per cent. of boys and 50 per cent. of girls enter clerical work in Scotland only 5 per cent. of the boys and 30 per cent. of the girls enter such work. There is vital work to be done there, and there is an urgent need for training at that level.

At the semi-skilled level, even with planned training for progress and promotion, the comparison is even more startling. In London, 25.4 per cent. of boys enter at the semi-skilled level while in Scotland only 4.17 per cent do so. That is the measure of the job before us.

I welcome the Bill, but I hope that the Minister will give the House some reassurances on the points I have made. I welcome the Bill particularly for the opportunities it gives to promote the careers service to a more important rôle and 10 give it a better image. It should also improve the morale of the careers officers.

It has been suggested that there is a danger in having in the careers service teachers and others concerned with education as compared with those with a knowledge of the industry. Does it need to be one or the other? The careers officer in Glasgow is a former miner who became a mining engineer, and went into industry, and by taking courses became established in a job. He replied to an open advertisement for the position of Youth Employment Officer in Glasgow, and was successful. That example could be followed, and is worthy of consideration. It is not necessarily true that careers officers should all be of one category or the other.

8.31 p.m.

Mr. Robert Taylor (Croydon, North-West)

There has been a degree of unanimity about the debate which is unusual when the Government are introducing a major Bill. The Opposition's welcome has been such that I have been looking through the Bill again to see whether it contained something I had missed, because I am always suspicious when there is such keen support from them.

I think that the answer lies in the opening words of the speech of my right hon. Friend the Secretary of State, when he confirmed that the Bill was the result of a long period of gestation. That period has produced a compromise which has been welcomed on both sides. I find much in the Bill that I like, and there are parts that I dislike, so I am in a situation similar to that of the right hon. Member for East Ham, North (Mr. Prentice), although the points that we like and dislike are probably reversed. There is undoubtedly an overall improvement in the Government's facilities for employment and training, so I welcome the Bill.

Policies must change as circumstances change. The average individual in employment today will change his job and the industry in which he works many more times than his father did 30 years ago. There is, therefore, much greater pressure on the employment services, and this tendency is likely to increase rather than decrease.

It makes sense that the agencies of the Manpower Services Commission should not be involved in the payment of unemployment benefit in any way, and I welcome the provision allowing for the payment of unemployment benefits to be made by the Department of Health and Social Security alongside other payments. However, I have one slight reservation about it. The staff of the Employment Service Agency will be the people who know whether an individual is genuinely seeking work or is one of the small minority who have no intention of taking employment. There will have to be a close channel of communication between the agency and the Department to make sure that there is no abuse.

It is probably appropriate to pay a tribute here to the staffs of the local employment exchanges, which have worked so hard—I speak with particular experience of my own in Croydon—to be fair but firm with those who come for advice and help.

If my interpretation of paragraph (d) of Clause 2(2) is correct, there is a welcome opportunity in the Bill for the Employment Service Agency to charge employers fees if it is successful in finding employees to fill vacancies. My first impression was that this was unfair because it introduced an element of competition with outside employment agencies, but on reflection I am sure that I am wrong about that because today the difference between the pay of manual workers and that of clerical workers is such that the employment agencies being set up by the Government must obviously cater for the whole working population. Therefore, it they are in competition with private agencies, they should charge a fee in the same way as the private agencies do.

I want to turn now to the two parts of the Bill with which I am less than happy. The first is a fairly major point. I refer to the fact that the commission and the two agencies will be responsible to the Secretary of State but that their employees are not to be regarded as civil servants. I fully understand that they are not in the direct employment of the Crown. Nevertheless I am concerned—and I do not welcome this point as did the right hon. Member for East Ham, North—that there should be a tendency for the Government to transfer functions in which they are legitimately involved to outside bodies and then pay the salaries of the people employed by those bodies by way of grant, at the same time claiming a substantial reduction in the Civil Service. Indeed, the Bill itself states that as a result of these proposals there will be a reduction of 20,000 in the Civil Service. To my way of thinking this is sleight of hand, and it is not something of which I approve.

I come now to the second point, which gives me greater cause for concern. I refer of course to the reform of the training boards. My hon. Friend the Minister of State was kind enough to say to me in a letter this week that my views on the training boards had already been made known. However, I believe I am right to repeat them because I have been completely consistent in this attitude over a number of years. I have consistently believed that, however laudable were the objectives in setting up training boards, and however splendid have been the efforts of those who have been running the training boards, as long as the levy grant system is retained in any way the board's practicability becomes questionable and the boards can be shown on occasion actually to have harmed the objectives which they have sought to achieve. This can be substantiated from the document "Training for the Future" because paragraph 19 states that … the criteria for grants are designed to meet general priorities for an industry or an occupation as a whole which will not, given the variety of firms' activities and organisation, apply equally in each particular case. A policy by a firm of maximising its grant return can therefore lead to distortion of the training that it really needs to undertake. Hon. Members on the Opposition side have stated tonight that the levy principle is the carrot which is needed to continue training. In other words, they disagree categorically with the statement I have just read. Therefore, I think it right and proper that I should remind them that as long ago as 1966–67 the Ninth Report of the Estimates Committee, which, under the chairmanship of the hon. Member for Woolwich, West (Mr. Hamling), investigated the early days of these industrial training boards, came to substantially the same conclusion.

In paragraph 42 of its report, the Committee quoted the education and training officer of the G. A. Harvey group of companies—which, as we all know, is a substantial London group of companies —who, describing the future of the Act, said: I do not think it has made us do any more training than we would have done anyway. What it has done is possibly changed our priorities, and not necessarily, to our way of thinking, correctly. That led the Committee, as long ago as 1966–67, to forecast the eventual abandonment of the levy/grant system.

A long time has gone by since then. There have been complaints about the effect of the levy/grant system, and today we have before us a Bill which changes the system completely so that in future many firms will be excused from paying the levy, but they will have to prove that their system of training meets with the approval of the boards. In ether words, we are back to square one—as long as someone trains as the board thinks fit, he will be excused from paying a levy.

This system will not work, because no firm will admit that its training is not up to standard. The elaborate machinery which is being set up under the Bill for appeals by firms which have a levy charged to them will be used to a considerable extent. I cannot see any firm agreeing to pay a levy without going through the appeal procedure to show that its training facilities, although different from those approved by the relevant board, are perfectly adequate.

The boards will have to spend a considerable amount of money and time listening to appeals. That draws me to the point that in "Training for the Future" the table at Annex 3 shows that in 1970–71 the administrative expenses of the industrial training boards totalled £5,833,540, while the amount spent on training, advisory services and training facilities totalled £10,232,941. In other words, the total spent on training was more than 50 per cent. of the sum spent on the other activities to which I have referred. In my view, if the boards are to be subjected to appeals by every firm which is called upon to pay a levy the cost of administration will remain an equally high proportion.

The Construction Industry Training Board, in a Press statement handed out on 31st January this year, made that very point. It said that there is a genuine fear that the Board's job in deciding which firms should be charged the levy and which should be exempted would necessitate more complex grant/levy operations, lead to more paper work, many more staff, bad relationships with firms and would prove to be impractical to operate. One final point arises concerning the cut-off for small firms. Hon. Gentlemen opposite have said that they are concerned about this. They believe that small firms should pay the levy, just as large firms should. Under a statutory instrument which is awaiting the approval of the House, and against which I have put down a Prayer, the Construction Industry Training Board seeks to charge a levy on every establishment in its industry with a payroll starting at £6,000. That means that a builder and decorator in a small village who employs perhaps two men and a secretary will be subject to levy. He will also be subjected to all the paper work that that involves. The paper work for a small firm is the same as for a large one, and there is considerable opposition to the proposal.

I hope that no hon. Gentleman opposite will try to justify a levy on any firm which today has a payroll of £6,000, because the situation is absolutely ludicrous. In most instances in the construction industry one is referring to a small firm of plumbers and decorators who have many years' experience. There is no changeover in labour in a firm of that size, and I very much regret that my right hon. Friend should have seen fit to approve that statutory instrument.

I have grave reservations about the Bill. I am not happy to see any levy remaining in it. I hope that it will be improved during its passage through the House.

8.45 p.m.

Mr. John Mackie (Enfield, East)

I want to direct my remarks specifically to agricultural training and the changes which the Bill makes to the present set-up. Generally speaking, the industry welcomes these changes. Certainly, the present training board does, if for no other reason than it will cease to be known as the Agricultural, Horticultural and Forestry Industry Training Board and will simply be known as the Agricultural Training Board. The National Union of Agricultural Workers, the National Farmers' Union and the Country Landowners' Association all welcome the changes.

The scope of the board's work has rightly been widened to include storage, preparation and marketing. This will be a very important aspect of agriculture in the European Economic Community. Training for storage, preparation and marketing is most important and I am glad that it now comes under agricultural training generally.

The responsibility will move to the agricultural Ministers in the United Kingdom. They are getting a lot under their hats. We have given agricultural research to the Ministers of Agriculture and now we are giving them training responsibility. I hope that they are capable of handling it all. However, it is right that training should be under the egis of the Ministeries of Agriculture because agriculture is quite different from other industries. For example, the size of its units makes it a special case, and there is the very wide spectrum of skills involved—a factor which is not sufficiently appreciated.

The days when a farm worker had only to know how to plough, sow and reap are passed. I could detain the House for a long time explaining all the techniques of the farmworkers today and the technologies they have to acquire. It is these factors which have given us the great rise in productivity.

The hon. Member for Croydon, North-West (Mr. Robert Taylor) referred to small firms. There is a strong case for small firms doing what we do in agriculture—combining to use training officers. There has been a lot of talk about small firms being at a disadvantage. I do not see why they should be and they need not be if they use the same methods as agriculture.

We in agriculture are glad that administration and key training activities are to be paid for by the Treasury, as is the case with other training boards, and that any extra functions mentioned in the Bill will be dealt with in the price review. However, this will raise difficulties, because the price review and subsidies for production are being phased out—indeed, three items have been phased out during the last month. The money will have to come off the direct grant. At present, there is a rather rough-and-ready take-off through the price review, but some farmers may not be producing things which come under the price review, so that if the money involved is to come off the direct grant the situation could be even More unfair. This is an aspect we must consider further during the passage of the Bill through the House.

There will be considerable scope for argument between the Minister of Agriculture, Fisheries and Food and the commission about what is a key activity and what is an extra function. I shall be interested to hear the Minister's reply tonight. The matter can be considered in Committee.

The Minister is given power to direct a board to carry out fresh functions. I hope that the Minister will be farseeing and will realise that many fresh functions can be considered, for which there is real need. Paragraph 2(1) of Schedule 2 says: For the purpose of encouraging adequate training of persons employed or intending to be employed in the industry … The hon. Member for Bolton, West (Mr. Redmond) gave an example of a mother suggesting that as her small boy did well in a drawing class he should be trained for architecture. A retired gentleman of 61 wrote to me recently asking about training opportunities in agriculture. Those are the two ends of the scale. I am not sure what advice I shall give to the retired gentleman.

The new functions now apply to the self-employed. That is an excellent provision. It is difficult to find them in the Bill, but I am told that they are to be found in Schedule 2 at page 45, lines 13 to 16, which say: 'employment means employment under a contract of service or aprenticeship or a contract for services or otherwise than under a contract and employed ' shall be construed accordingly. I am told that means self-employed. I feel that it could have been put in a simpler form. It is excellent that it has been put in the Bill, however difficult it is to find, because many self-employed people in agriculture—usually small farmers—could benefit greatly from training. The Bill should provide for a close working relationship between the Ministry of Agriculture and the training boards for the promotion of training.

In my constituency many factories have been closed down. Men have had to find other jobs. There is no lack of work in London, but many men between the ages of 40 and 50 have had to look for other work. One factory closed down in my constituency and 720 men lost their jobs. I asked for a breakdown of these people from the management and was kindly supplied with the information. It appears that nearly 200 men—some skilled and some semi-skilled —will have to find what will probably be less remunerative jobs. I am looking round the House to see how many hon. Members fall between the ages of 40 and 50.

It is not easy for people of that age to be retrained. Just as there is a special case for the training of the disabled, so there is a special case for these people. They are a valuable section of our labour force. It is difficult for them to readjust to new jobs without some help. Their difficulty is probably more psychological than anything else.

It is no good assessing manpower by computer or in any other way and claiming that the country needs, for example, another 20,000 engineers in Birmingham and London, and training facilities for the unemployed in the east of Scotland. There is such a shortage of housing in practically every town that there is no mobility of labour. It is difficult to assess national needs in such circumstances. I give a general welcome to the Bill because training is important. We have neglected it for a long time, and I am glad that there is a considerable degree of agreement on both sides about this. It is something to which we must give our attention because it will make all the difference in the world to standards in this country.

8.56 p.m.

Mr. Ronald Brown (Shoreditch and Finsbury)

I wish to take up the last point mentioned by my hon. Friend the Member for Enfield, East (Mr. Mackie). I too welcome the setting up of a Manpower Services Commission. It is most important. For years we have been desperately asking and arguing for a commission which could foresee the use of the nation's human resources.

After looking at the Bill I went to the Library and took out that old faithful called the National Plan which came out in 1965. I remember that hon. Gentlemen on the Government side laughed and jeered at it and said it was no good. It is fascinating to re-read that document. There are the same words in the Bill as appeared in the National Plan. There is the same exhortation over training and retraining and the statements that there are too few skilled men and that there is need for training through industrial training boards.

The plan argued that if we had a 5 per cent. growth rate for five years we would be short of 200,000 men by the end of 1970. It cogently put together all the arguments which appear in the Bill. This is a late conversion by right hon. and hon. Gentlemen opposite but I commend them for their diligence and their realisation that the plan laid down an important framework for the use of our human resources.

I fail to see how the forecasting will be done under the Bill. How will needs be determined? Aspirations are all right but what the House wants to know is how this will be implemented. I hope that the Minister will be able to sketch some kind of plan of how he believes the Manpower Services Commission will produce the trends and forecasts and will say where they will come from.

The National Plan was not too bad. If we had got the 5 per cent. growth rate it would have been right. It was right in many other respects. In what way do the Government intend using the commission? Is it the same way as the National Plan was developed? Will we use the little "Neddies"? The House ought to understand this. I am not ask- ing for detailed answers but we ought to have a sketch plan of what is proposed.

I am still concerned about the two services despite the courteous reply given to me by the Secretary of State when I intervened in his speech. I am not sure that I understand the rôle of these agencies. Is the Training Services Agency to be in itself an executive body? Does it have power devolved on it from the Secretary of State through the Manpower Services Commission, and can it give instructions to the industrial training boards? Can it reject proposals from the boards? There are those outside the House who have suggested that their interpretation is that the boards still have the right of direct representation to the commission. They base that argument on the fact that the boards are appointed by the Secretary of State and therefore still have the right to go back to the commission.

Mr. Chichester-Clark

Perhaps I could help the hon. Gentleman. It may help to think of the agency in terms of being one of the executive arms of what is really a holding company, which is the Manpower Services Commission.

Mr. Brown

That has not quite sunk in. I am grateful to the Minister for his intervention. I am sure it was meant to be helpful. Will the industrial training boards still have the right to act as they so desire with a final appeal to the commission and no instruction from the Training Services Agency? Will they have complete freedom to deal directly with the commission? If so, I am not sure that I understand the point of having a Training Services Agency.

If the industrial training boards have to operate through this executive arm of the holding company, they will feel very sore. The whole success of the industrial training boards—I believe that they have been a success since 1964—has depended upon high-level industrialists and trade unionists being prepared to spend time on them. If it had not been worth while, if we had had people of lesser standing, the industrial training boards would have been a failure.

If the Training Services Agency is to be an executive between the commission and the industrial training boards and the boards must always work through the agency, I fear that high-level trade unionists and industrialists will not be prepared to spend their time working, as it were, as agents for the agency. I hope that this point will be clarified not only for my benefit but for the benefit of people outside the House who are extremely concerned about these matters.

The hon. Member for Croydon, North-West (Mr. Robert Taylor) referred to small firms. Since publication of the Bolton Report much has been said about small firms. We have never had this situation clarified. It depends on the industry, as the hon. Gentleman pointed out.

I am concerned with the furniture and timber industry. As the House knows, I am parliamentary adviser to the Furniture, Timber and Allied Trade Union. Therefore, my main concern in this connection has been with the Furniture and Timber Industry Training Board. The furniture industry comprises many small firms. I have a breakdown of the numbers involved. It is quite instructive. I suggest that the Minister must deal with this problem when he replies to the debate.

There are 4,283 firms registered in the furniture industry representing 212,297 employees. If we exclude firms employing up to 200 workers, we shall be left with only 199 firms within the scope of the scheme, representing only 87,688 employees. In other words, only 5 per cent. of firms in the furniture industry and only 41 per cent. of employees will be left in the training scheme. Clearly that is not what we are talking about. If it is, I am against the Bill and will vote against it.

Men in small firms have the same rights regarding industrial training as those in big firms. A cabinet maker working for a man who employs 15 or 20 workers is entitled to the same opportunities as the man working for a large company employing 3,000 people.

Mr. Robert Taylor

The point that I tried to make was that we should not have a levy at all, and then all firms could benefit from the training which was available. It is the principle of the levy to which I object. I should exclude all firms.

Mr. Brown

I do not wish to be diverted. The Government do not seem to realise, when they talk about excluding small firms, that it will be a meaningless exercise particularly in the furniture industry. Although the training board for the furniture industry has suggested that the exclusion should only be of firms with up to 15 employees, even that leaves one with only 53 per cent. of the firms and 93 per cent. of the employees. It would still cut off a large number of firms.

I thought that the Secretary of State said that he would deal with this matter industry by industry, so I am making my plea on behalf of the furniture industry. The exclusions will have to go far down the scale. It is no good talking about excluding firms having more than a limit of 15 employees.

The other issue which concerns me is the problem of group training schemes. I take the point that if one excludes the small firms, one excludes their chance to enter these group training schemes. There is a large number of these schemes in the furniture industry which give benefits to many small firms. At the moment there are about 44 group training schemes covering about 739 firms out of the total of nearly 5,000, involving 44,953 employees. Unless we can have a fairly quick answer about the size of firm to be excluded, it seems that many of these schemes will fall. I plead with the Minister of State to help me by giving an assurance that those 44 schemes will be able to continue their excellent work.

In an intervention I mentioned Clause 8(6)(a), which refers to the persons who would come under the education authorities. That paragraph excludes from these benefits part-time attendance where none of the relevant classes begins on any day before five o'clock in the evening". I take it that this means that a young person who, after a day's work, begins at five o'clock what is euphemistically called evening school will not be covered by that proposal. That would be wrong.

One understands the system of part-time day release and wants it to be made full-time, with far greater involvement of industry. If we can get young men and women to continue to go to school in this way to advance their careers, it will be wrong to exclude this practice from the privileges under Clause 8. If I do not have this matter in perspective, I hope that the Minister will say so.

There are many other points which time precludes me from raising. I hope that the Bill will be successful. It has a great deal of merit. Industry today is desperate for a lead in its training programmes. There are not large numbers of laggard employers. More and more they are recognising the need for training. They want to give as much as possible.

Now we have the chance to get the Manpower Services Commission working with the training boards to provide the best possible training for our people, recognising, as my right hon. Friend the Member for East Ham, North (Mr. Prentice) said, that with the new and changing technologies of the modern day it is becoming more and more important that men should be trained and retrained more easily. I hope, therefore, that we shall hear tonight how the Minister sees the final implementation of this scheme.

9.10 p.m.

Mr. Harold Walker (Doncaster)

We have had a very constructive and, so far at least, very agreeable debate. In opening the debate for the Opposition, my right hon. Friend the Member for East Ham, North (Mr. Prentice) gave a welcome to the Bill, albeit a qualified one. So do I. I particularly welcome the bringing together, for the first time, of the training functions for which the Department is responsible. That is probably one of the most constructive parts of the Bill and one which I have advocated for a long time.

Notwithstanding the speech of my hon. Friend the Member for Enfield, East (Mr. Mackie), by and large the debate has revolved around four principal issues. Although there are a number of other matters which we shall wish to discuss in more detail in Committee, in the main these are the four issues to which I shall confine my remarks—the Youth Employment Service, the training levy position, the responsibilities, powers and functions of the commission, and the question that has been raised on both sides of the House of what the Secretary of State chooses to call in his White Paper "manpower intelligence".

Doubts have been expressed on a number of issues and questions have been raised on which we shall expect some clarification and resolution when the Minister of State replies.

Notwithstanding what I have said about the principal issues, I express some surprise that Clause 5 has not been mentioned in the debate, as far as I recall. Although I have missed parts of the debate, I am sure that this would have been drawn to my attention, because I was so curious about the provisions of the clause. Will the Minister of State tell me whether the provision contained in the clause has been drafted with Community Industry and, possible, similar schemes in mind, or whether it goes behind that? I am glad that the Under-Secretary is nodding his head to confirm that it covers such schemes as Community Industry—a very valuable scheme. One would assume that it may go beyond that, but some clarification is required about the purpose and possible scope of Clause 5(1). If the Minister of State does not feel inclined to discuss it tonight, we can explore the matter further in Committee.

I was equally surprised that there was no reference to the provision of Clause 2(2)(d). I assume that these are the statutory provisions for the fee charging for the placing of professionals and executives on the professional and executive register. I am surprised that this provision has attracted no comment. We shall have to pursue this matter further in Committee. The only people who have a legitimate ground for rejoicing over this decision by the Government, in spite of their consistency with the philosophy that they have enunciated on so many other matters, are those who are at present privately and commercially engaged in placing people through their private employment agencies. What it means is that those firms for which the professional and executive register and the professional and executive office at present provide a service will in the future have all the more incentive to use the private sector. It may be that I am being over-suspicious. I am pleased that the Minister of State is shaking his head in disagreement. Perhaps we can explore this matter further. It deserves further explanation.

Before I turn to what I see to be the main issues I want to comment on the reference by the Secretary of State to the provisions dealing with disabled persons. I wish to put a small but important point to the Minister of State. The Secretary of State says that he will continue to be responsible for the quota scheme and that this is one part of the Department's present responsibilities for the disabled which will not be transferred to the commission. In my view that is quite wrong. After all, who is better placed to identify the areas where the disabled can he found suitable employment, and who better to put them into that employment, than those who are given the responsibility for placing—that is, the Employment Services Agency.

As the Secretary of State knows, growing disquiet is expressed about the plight of the unemployed disabled, their difficulty in finding suitable employment, and the failure of many firms to fulfil their quota obligations. I do not know the figures, but I recall that when we last discussed this subject in the House at Question Time it was revealed that an extraordinarily large number of firms failed to comply with their quota obligations and were—theoretically, I suppose—in breach of the law. In the light of the difficulties being experienced by the disabled, there is a strong argument for reconsidering the possibility of transferring the responsibility for placing the disabled and for ensuring that firms fulfil their quotas to the Employment Service Agency. It would be putting the responsibility with those who are engaged in the field and can identify the situation. In my view they should be given the power to act.

I have referred to these three points, two of which were not raised in the debate and one where I wanted to dissent from the view expressed by the Department. I turn now to the four main issues to which I have referred.

The first concerns the Youth Employment Service. The Secretary of State said—and it has been echoed again and again in the debate—that it will be a mandatory duty of local education authorities to provide a careers guidance service and that the proposed power to hive this off to the Manpower Services Commission will be purely transitional. I searched the Bill in vain for confirmation of that statement. It may be that the Minister of State can say precisely where provision is to be found in the Bill for this hiving-off to be purely transi- tional. I cannot find it. Nor does it reconcile itself with paragraph 56 of the White Paper, the final sentence of which reads: In practice it is expected that apart from a transitional period such arrangements with the Commission will be confined to a small number of cases. That seems to deny what the Secretary of State said. That is one matter which requires putting beyond doubt.

I reiterate what my right hon. Friend the Member for East Ham, North said earlier and what has been echoed by my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) and others. We believe that the obligation of local education authorities in this matter should be put beyond doubt and that any ambiguities and confusions in the Bill should be eradicated. We believe firmly that this should be a mandatory obligation on local authorities and that they should have responsibility not merely for—as the Secretary of State put it—the first placing but all subsequent placings, up to a certain age level. We can argue with my hon. Friend the Member for Wolverhampton, North-East and her Committee about whether the ideal cut-off-age should be 18 or 21, but the principle is beyond doubt.

The Secretary of State and his officials underrate or fail to understand the difficulty confronting a teenager seeking employment. It is a known fact that apprenticeships and most career occupations start with relatively low rates of pay. A young person freshly out of school obviously is tempted by the prospect of higher pay in employment which does not have future prospects in career terms. The careers guidance officer may exercise his proper responsibility in ensuring that the teenager leaving school finds appropriate employment. But here is a boy mixing with his mates in the coffee bar in the evening. His mates are earning several pounds a week more doing labouring jobs. He sees opportunities to obtain such employment himself, and the pressure is on him.

Our employment exchanges are working under constant pressure to keep down the unemployment figures. They see their overriding duty as keeping down the number of unemployed and filling every possible vacancy. That is very proper. But it is not the approach that we want for young people freshly out of school and perhaps susceptible to the influences and pressures that I have described. They need guidance so that they will pursue careers which are appropriate to their education and the talents that they possess. That is the primary reason why we want to see the responsibility not merely for the first placing but for subsequent placings of young people, up to a cut-off age, to be clearly that of local education authority careers guidance officers.

My right hon. Friend the Member for East Ham, North described what he called his five-point plan for non-student teenagers. Without repeating it, perhaps I may add to it and tell the Secretary of State that I very much regret that in his speech he did not take the opportunity to explain his decision to exclude those between the ages of 16 and 19 from the training opportunity scheme. I cannot recall, in any debate since the right hon. Gentleman put forward his original proposals, an adequate explanation being given and an opportunity to tell him how much we disagree with the decision.

When I hear mention of non-student teenagers, I remember the remarks of my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) concerning the unemployed non-student teenager. I am always struck by the contrast between the provision made by the State for a boy or girl who successfully passes the A level examination and the inadequate provision made for boys and girls who fall short of that standard and cannot find employment. It is right that we should provide student grants and facilities for those who pass the examinations, but we must consider why we do so little for the other young people who are unemployed.

I say this with some feeling because my constituency, the Doncaster travel-to-work area, probably has the most severe teenage unemployment problem in the country. I see this problem at first hand. I believe that we should be doing more about this situation than it being done in the Bill—and certainly more than has been suggested in the plethora of White Papers which have emanated from the Department—to help these young people. One way in which we can help them is to give them access to the TOPs scheme, the training opportunities scheme. I hope that the Secretary of State for employment will bear this point in mind.

I turn to the training levy. We have heard comments, particularly from my hon. Friends, that the imposition of a levy with a ceiling of 1 per cent. will be harmful. I regard it as a hangover from the Government's "lame duck" days. There is nothing to prevent a board's setting a levy level at less than 1 per cent. The Secretary of State pointed out that the majority of industries already had a level below 1 per cent. If that is the case, why was it thought necessary to introduce into the Bill the statutory ceiling of 1 per cent.? I appreciate that the Bill provides for the exception to be made, but the affirmative resolution procedure is a formidable obstacle and we shall seek to do something about the situation when the Bill reaches Committee.

Yesterday evening, in company with a number of my hon. Friends, I met some officials of the Engineering Industry Training Board who said that in that industry very little that was worth while in training terms, could be achieved without expenditure of something in the order of not 1 per cent., but 3 to 4 per cent. Indeed, the present average level in the engineering industry amounts to 2 per cent. or slightly less.

Mr. Albert Booth (Barrow-in-Furness)

Does my hon. Friend agree that the case against excluding from Government training centres young people of 16 to 19 years of age will be seriously diminished if there is a restriction of training levy and therefore less inducement for employers to provide training for those people?

Mr. Walker

My hon. Friend is quite right. The very next point in my notes refers to the future of the apprentice award scheme. I understand that the scheme has been applied by other boards, and I know that in the engineering industry it has made a distinct contribution to the welfare of young people who otherwise would have been denied the opportunity to take up apprenticeships.

Anxieties have been expressed about the effect in the engineering industry of reduced resources in terms of the apprentice award scheme. I hope that the Minister of State will give us the Department's assessment in the light of the discussions which have been held with the Engineering Industry Training Board about the continuation, development or reduction of the scheme and the importance of giving these young people access to the training opportunities scheme.

From the Opposition Front Bench I appeal to the Government to say something tonight about their view of the small firm. I do not ask that they should quantify a small firm exactly, or say that a small firm comprises 100 or 200 people. I am merely asking for an indication of their definition of a small firm. So far we have had no guidance. One can understand that there may be a need to treat the matter on an industry by industry basis, but each industry will be looking for an early indication of what the Government understand by a small firm.

I turn to the question of the Manpower Services Commission and its role and functions. I say, en passant, that I find it difficult to understand from the Bill whether the strength of the commission will be nine plus a chairman, or nine plus a chairman and deputy chairman, or nine members from which will be selected a chairman and deputy chairman. There seems to be an option of nine, 10 or 11 members.

The problem may arise from the fact that I cannot understand the relevant subsection of Clause 1. My difficulty may be in understanding lawyer's language, but perhaps the Minister of State will tell us about that when he replies. More significant is the importance that has been attached to ensuring that the people who comprise the commission will be of the highest calibre—people of the right kind of rating in industry who attach to the commission the importance it deserves and the authority that it requires. Perhaps the Minister of State will give some indication of the kind of salary range that will be offered, so that we can get some idea of the sort of people who might be attracted.

We heard very little from the Secretary of State about the functions of the Manpower Services Commission in co-ordinating the manpower requirements of different industries. That sparked off a number of questions, in particular the question twice posed by my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown), on which we deserve an answer. There is confusion and doubt about the relationship between the boards, the Training Services Agency and the commission. The Minister of State thought that he had cleared it up in an intervention when he described the Manpower Services Commission as being like a holding company and the Training Services Agency as being one of its subsidiaries, presumably of independent management, to which the training boards would be subordinate. This is the crucial question. Will they be subordinate to the Training Services Agency or answerable direct to the commission? The boards themselves require an answer to that question.

My hon. Friend posed the question whether there is to be inserted between the boards and the commission a tier of responsibility—the Training Services Agency—to which the boards shall be answerable. In his reply the Minister may be good enough to make the position clear, as it is confused particularly by the conflict between paragraphs 7 and 11 of the White Paper. Paragraph 7 contains the sentence The Commission will also co-odinate the work of the industrial training boards … and paragraph 11 says that the agencies will have the duty of running the employment and training services and co-ordination of the work of the industrial training boards. On one page two separate paragraphs allocate responsibilities first to the commission and then to the Training Services Agency. Perhaps we may have some clarification about that.

In conclusion, I emphasise what has been said about one of the most crucial omissions—the manpower intelligence requirement of the commission. I have made a note in which I describe the Employment Service Agency and Training Services Agency as two legs supporting the Manpower Services Commission. The hon. Member for Howden (Sir P. Bryan) suggested that a third leg was needed. That is precisely how I see it. This tripartite arrangement would be needed in order to provide a stable structure. We have more than sufficient evidence that this is one of the critical weaknesses in the present arrangements.

I am not saying, and I have not heard anyone else say, that what should be provided is precise statistical data. None of us believes that this is obtainable, but the Government should be seeking to establish machinery which identifies the trends, industry by industry and region by region, so that we can form a clearer picture than is available at present about the totality of existing and future supply and of excess or shortfall in manpower requirements.

I am under no illusion about the size and complexity of the task, nor am I unaware of the past attempts that have been made—for example, in the Manpower Research Unit set up by the last Government. Certainly, manpower forecasting is difficult, having regard to the rate of educational, technological and demographic change, the greater mobility of labour and the increasing interchange between industries. But I believe these are factors which already strengthen the case for trying to make some kind of forward assessments rather than throwing up our hands in despair at what seems to be a hopeless task. I would have thought that we already have, in the Office of Manpower Economics, an embryonic machine that might have been, and might yet be, brought more directly into the structure of things to help to provide this kind of service.

The Government may see the Bill as the fulfilment of their objectives in the provision of employment and training services. But what Opposition Members who are concerned with in these matters believe—and I am sure that I reflect the views of many people outside—is that this is but another phase of what must for a considerable time be a continuing process of expansion and development in this sector. Some of the weaknesses and inadequacies of the earlier recast schemes have been clearly exposed in the course of the debate, such as the need for a better deal for non-student teenagers, particularly the unemployed, the restriction on the levy facility of the boards, and the absence from the speech of the Secretary of State of a recognition that the elimination of discrimination against women in employment can be heavily influenced by training and employment-placing policy. Above all else, perhaps, is the fact that while the Government recognise the need for information about future manpower requirements they have not given any clear indication about the machinery and resources to be provided for that purpose.

None of us can be other than deeply disquieted by the situation that we see in the building industry, where, apparently—in some parts of the country at least—there is a desperate shortage of craftsmen seven or more years after the creation of the Construction Industry Training Board, and that at a time when we have 750,000 people registered as unemployed. Nor should we be other than concerned about the kind of situation that I have in my constituency, where highly skilled toolmakers are driven by redundancy to waste their talents and training on unskilled work. These anomalies are presumably being repeated throughout the country. They should not be endured. They should be ended, but I very much doubt whether this is the measure to end them.

For my part, I shall not feel the Government's obligations in the provision of manpower services to be satisfied until we have given every person who is able and willing to work the opportunity to do so. The ultimate goal towards which our efforts should be directed is that of having every employable person in one job, or preparing for another. By doing so we shall not only be serving the needs of the economy but—perhaps more important—giving millions of people an opportunity to live more satisfying and fulfilling lives.

9.38 p.m.

The Minister of State, Department of Employment (Mr. R. Chichester-Clark)

I had not realised just how wide-ranging a debate this could come to be. I have enough notes to paper the walls of the Chamber and I am perfectly certain that I shall not be able to get through all the points that have been raised this afternoon. The hon. Member for Doncaster (Mr. Harold Walker) was kind enough to say that many of the points which he raised would be better dealt with in Committee. I shall take him at his word in respect of most of them.

The debate has been notable for the welcome which has been accorded to the Bill. On the whole it has been warmly received even if a little chill seemed to creep into the air during the course of the last speech. I am sure that the warmth will come back when we confront each other in Committee. The Bill, however, has been welcomed on all sides.

There have been some powerful speeches on the subject of the Youth Employment Service, and my right hon. Friend the Secretary of State covered an enormous amount of the ground this afternoon. I do not propose to follow that too far except to refer to the powerful speech of the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renee Short) which will obviously deserve careful examination, as does the report of her Committee which was published only on Thursday last. Obviously, we shall have some interesting discussions in Committee on the differing views which have been expressed from both sides on this subject.

My hon. Friend the Member for Chertsey (Mr. Grylls) made some important points which I propose to answer in detail by letter. They concern, amongst other things, the question of training of careers officers. I pay tribute to careers officers in general. We can examine in Committee whether such training is necessary.

I come first to the question of the Manpower Services Commission. I want to clear up a point which the hon. Member for Doncaster raised about the numbers of the commission. Until the hon. Gentleman spoke I thought that this was one part of the Bill on which I was absolutely clear. In many ways the Bill seems complex, but close examination shows that it is not. It should be clear from Clause 1(2) that the commission will consist of 10 persons. If doubt is later cast upon that by magic of drafting, we can consider the matter in Committee.

One of the main objectives in setting up the commission is to make the manpower services more responsive to the need of all who use them and more alert to new developments. It will need the best possible manpower intelligence, with full powers to conduct or commission research in all matters falling within the services' responsibilities. They will not be acting alone, because the industrial training boards and the resources of the Department of Employment and other Departments will continue to be closely involved in manpower research, but the commission has a major role to play.

More than that—and here I join the right hon. Member for East Ham, North (Mr. Prentice) on his magic carpet—it will be up to the commission to form its own judgment of how the manpower services can be developed and of the priorities for action. That will be one of its most important activities, which is why we are asking employers, trade unions and other interests to take responsibility for the service. Instead of acting in an advisory capacity they can then tackle the job directly, making sure that the services provide them with what they need and want.

No doubt the commission, having formed its view, will want to voice it loudly and clearly, not least in its annual report to the Secretary of State, which is obligatory. That will be laid before Parliament. We are creating a new body which will have its own ideas about the manpower services, based on the direct experience of the organisations from which the commission's members will be drawn. They will be fully able to express ideas about the way in which the service should be developed, what the priorities should be, whether new initiatives are needed and so on.

The Secretary of State of the day may not always completely agree with the ideas of the commission. But we probably all agree that it is all to the good that such questions should be freely and openly discussed and thrashed out between all those concerned, with the best information that can be obtained.

The whole House will wish to join me in paying tribute to my hon. Friend the Member for Howden (Sir P. Bryan) for the work he did concerning the training boards when he was in office. He was a little disappointed that there had not been more of a fanfare for the commission. He feared, I hope wrongly, that that might affect the calibre of the people who will be willing to serve upon it. To judge by the enthusiasm with which the idea of the commission has been received by the TUC and the CBI, his fears may well prove to be unfounded.

Several hon. Members asked whether the commission would be dealing with the industrial training boards or would leave that to the Training Services Agency. I think that the answer is that overall responsibility for dealing with the industrial training boards will rest firmly with the commission. The White Paper makes it clear that the agencies will act as the commission's executive arm, subject to the commission's direction.

Clearly the commission will not itself be dealing with day-to-day matters which affect ITBs any more than the Secretary of State does today. That will be the job of the agencies and the commission itself will be concerned with the major questions—especially, for example, the plans and budgets which the boards draw up covering their future operations. I share my hon. Friend's views about the training boards. I have met all of them at one time or another and I think they are of a very high calibre indeed and that their work has been remarkably good. They will have many dealings with the commission. I make it perfectly clear once again, as my right hon. Friend has made it clear to them, that they will have access to the Secretary of State in the last resort. I am speaking here of the chairmen, of course.

My hon. Friend the Member for Bolton, West (Mr. Redmond) was interested in a matter concerning the Engineering Industry Training Board, to which I shall refer in due course He also expressed the hope that there would be no unnecessary training boards left lying about, as it were. It is true that a decision to wind up the Gas Industry Training Board has been announced, and this is because the industry itself has statutory responsibility for training and it seems right that it should be able to get on with it. Consultations are going on concerning the Electricity Supply Industry Training Board and it may well be that the same course will be followed in that case.

As regards water supply—I think that my hon. Friend mentioned it—there is a measure at present before the House involving the National Water Council. If that measure is passed by the House, I imagine that the water supply board will be wound un and its functions transferred to the National Water Council.

The hon. Member for Enfield, East (Mr. Mackie) approved, as did other hon. Members, the new arrangement regarding the Agricultural, Horticultural and Forestry ITB. That has always—or nearly always—been rather different from the other training boards. As the hon. Gentleman realised, it will in future be the responsibility of the Minister of Agriculture, Fisheries and Food and independent of the Manpower Services Commission.

The hon. Member for Dearne Valley (Mr. Edwin Wainwright) was anxious about the agencies and he asked particularly whether the staff would all be civil servants or ex-civil servants. The answer is that the appointment of the heads of the agencies will be made by the commission, which will also appoint two other members of each agency to form a governing board. With regard to the rest of the staff of the commission or agencies, I would draw the attention of the hon. Gentleman to paragraph 37 of the White Paper which makes it clear that the staff of both will be drawn largely from the Department of Employment—after all, we already have within the Department the two agencies—but they will be able to recruit staff on a short-term or long-term basis from industry, the education service and so on.

The hon. Gentleman was also concerned, as were one or two other hon. Members, about the question of young people and "in particular" apprentices. I shall content myself for the moment with saying that there was a big increase in apprenticeships in 1972, and that was welcome because it was the first time that it had happened since 1968.

The right hon. Member for East Ham, North dwelt for a good deal of his speech on the whole question of levy/grant, which is undoubtedly one of the more controversial aspects of the Bill, and I shall spend some time on that. I suppose that nowadays one ought to call them levy/grant exemptions because of the provisions of the Bill.

The right hon. Gentleman has one view. I know that there are others, and one of them was exemplified by my hon. Friend the Member for Croydon, North-West (Mr. Robert Taylor), as he has done on other occasions. My hon. Friend would have preferred the proposals in the original consultative document "Training for the future", which was devised—and I emphasise this—as an agenda for discussion. It was drawn up at a time when the boards were a good deal younger—after all, the oldest is only eight years or so old—and then they were less efficient and less well developed in their operations than they are now. That is not to suggest that they would claim that they have become perfect in their operations. I have already paid tribute to what they are doing, and I am glad to do so. I think that most of the House would echo that tribute, but our present proposals attempt to eliminate some of the difficulties which remain.

"Training for the future" proposed the end of levy/grant after 1972–73. As the House knows, we held extensive discussions—they really were exhaustive—with industries, with the training boards and with all those who had an interest in training who could reach us. We had thousands of letters about it and it was generally a massive exercise in consultation.

The basis for discussion was the premise that there had been a permanent shift in the attitude of industry to training. I must tell the House that in the consultations on the document the most marked impression that came through was that there had been a change of behaviour by industry—by implication because of the operation of levies—though not necessarily a change of attitude.

We could not with any honesty have claimed that the consultative processes which we had promised and carried out were genuine had we ignored the preponderance of that sort of view. There was genuine concern that without some continuing financial pressure for good training we risked a serious setback in training. Naturally, if somebody is asked whether he would rather not pay something which seems like a tax he will be inclined to say "Yes", and many people said just that.

However, it was noticeable that even many of the industrial organisations which said that the levy ought to be ended were at the same time and with the same voice expressing concern about the effects on training of doing just that and were pointing to a need for Exchequer money to counteract the effects of the removal of the levy. Paradoxically, some of those who wanted us to end the levy were the very people who, in other contexts, were crying out for cuts in public expenditure. By retaining the levy, albeit in a reduced way, we are eliminating the risk of sudden and much greater calls upon public expenditure.

We listened to those whom we consulted and decided that the balance lay with continuing the levy as a pressure for good training. Equally, as my right hon. Friend said, we thought it right to modify the system to make it simpler for everybody, to make it relevant to individual firms and operative in a way which eliminates bureaucracy, form-filling and time-wasting and, in particular, the burden upon firms which have been consistently concerned to carry out good training according to their needs, and there have been many of these.

We have been concerned also to exclude from the system many small firms upon which the burden has fallen particularly harshly and in many cases irrelevantly. Some firms have consistently carried out good training and it is true that they can, because of this, claim and receive grants. To do so, however, they have to prove in detail what they are doing. To do this in adequate detail is time-wasting and in some cases creates the wrong sort of relationship between industry and the boards. It also tends to make the employees of the boards spend more time thinking about money than about training.

I will not deal now, because of shortage of time, with the whole question of exemptions, but I point to the appeals system. There is already within the boards an appeals system but there will be a separate one, now under discussion, which will go beyond the scope of the boards.

My hon. Friend the Member for Croydon, North-West mentioned the Construction Industry Training Board's Press release. We recognise that the construction industry has very difficult problems because of the mobility of its manpower, with different firms having so many different sites and so on, and we are holding consultations with the industry about these problems.

My hon. Friend the Member for Oxford (Mr. Woodhouse) referred to the 1 per cent. levy provision and whether it should be included in the Bill. I reject at once any suggestion that my right hon. Friend has been guilty of a breach of faith in this matter. On 8th August he announced his policy and he adheres to it. He considers that any levy should not exceed 1 per cent., but that does not necessarily mean that it is desirable to write into the Bill a provision to ban a levy going above 1 per cent. It would be possible for the Bill to remain silent on this matter and for the Secretary of State to sign no order for a levy exceeding 1 per cent., but instead my right hon. Friend has decided on a provision whereby a levy exceeding 1 per cent. may be made but only after approval by both Houses of Parliament. That is a safeguard against levies reaching an unnecessarily high level in any industry. I hope that it will not be necessary to have a levy above 1 per cent. As my right hon. Friend has made clear, however, it will not be done unless it is justified by very exceptional circumstances.

My right hon. Friend was asked about the effect of the 1 per cent. on the Engineering Industry Training Board. The first levy to be subject to the limit will be the first levy under the new arrangements, which do not come into effect for the boards until August 1974. We shall be discussing with the engineering board its arrangements for the first and succeeding years. The preliminary indications are that it will be able to work effectively with a 1 per cent. levy, although a good deal has yet to be decided—for example, about criteria, exemptions, the firms which should be excluded on grounds of size and so on. The hon. Member for Doncaster suggested that the board could not manage with a levy of less than 3 to 4 per cent. but the existing levy is only about 2 per cent., so he is wrong there.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).