§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]9.36 am
§ The Under-Secretary of State for Industry (Mr. Michael Marshall)
I very much welcome the opportunity today to talk about the Finniston report. Indeed, the fact that the Government have made time available for this debate is indicative of the importance which they attach to the subject. It is fair to say that the subject brings together a number of those who have taken a keen interest in this matter. I respect the origins of this study, stemming as it does from the suggestion of the right hon. Member for Chesterfield (Mr. Varley), and I know of the work which the hon. Member for Bristol, North-East (Mr. Palmer) has done. I also see here my hon. Friend the Member for Ripon (Dr. Hampson), who raised this question in a debate on 18 April. The subject has also been debated in another place.
As is well known, the Government have been engaged in a period of consultation which, in effect, has taken place in two parts. The first affects my own Department and concerns those matters that particularly affect industry. The second stage, for which my hon. Friend the Under-Secretary of State for Education and Science has responsibility, covers the educational aspects and relates to matters upon which my hon. Friend will comment when he replies to the debate.
I believe that this is an apposite time to debate this important subject. It is five months since the Finniston report was published. During that time, many lively views have been expressed. Indeed, many of the submissions put to the Government have been published and there has been a good deal of comment and speculation. The Government have listened carefully to that debate and have also canvassed views from the main interest groups concerned. They are now about to reach conclusions, and it was felt appropriate that at this stage hon. Members should, as it were, have the last word before those conclusions were reached, at least with regard to my own 986 Department. As I have emphasised, my hon. Friend the Under-Secretary of State for Education and Science will listen with great interest to what is said in relation to the consultation process as it affects his Department.
It may be helpful if I briefly recap on a number of the more significant findings of the Finniston committee's report. It is a massive report. In a sense, it cannot be overstated that the report is a significant contribution to the whole future of the industry in this country. I again pay tribute to Sir Monty Finniston and his committee colleagues, who have rendered a signal service in this report. It is clear that the interest that has been aroused reflects the concern of all those who are thinking about the future of British industry.
The remit of the committee was to look at the supply, education and training of engineers. It was charged to look at the professional regulation of engineers for manufacturing industry in the light of national economic needs. In emphasising that part of its brief, the committee considered topics that many had hitherto regarded as somewhat esoteric. They demonstrated their relevance within the national concern to improve the competitiveness and efficiency of our industries.
Moreover, Finniston showed that they are not topics that can be viewed in isolation. The concern expressed over many years about the relatively low standing and rewards for engineers in Britain, especially when compared with their overseas counterparts, was of importance. The effects of that on the numbers and the calibre of the recruits to engineering must be seen as reflecting a more general feature in our society, namely, that we too readily dismiss as inferior pursuits the development and application of useful knowledge for economic ends, reserving the glittering prizes for those engaged in the purist pursuit and extension of new knowledge.
That undervaluation of what the Germans call "Technik" has pervaded our educational system, our industrial enterprises, and our social institutions. If one agrees with Finniston's analysis, as many clearly do, that undervaluation has hindered our capacity as an industrial economy, to respond rapidly and flexibly to changes in an economic environment in 987 which technological factors are fast becoming predominant. That is the context in which the Government will consider their response to Finniston's recommendations.
Finniston has done a great service in illustrating the importance of the engineering dimension to industrial enterprise. But the Government believe, and those who made submissions to us argued strongly, that that must be regarded as one of the many things that are required for success in world markets. There are many other facets that cannot be ruled out when discussing those matters—for example, the fight against inflation, the encouragement of entrepreneurship, improving labour relations, marketing, management training. There is a whole range of issues. Some of those who argued that Finniston had ignored them were not being realistic, because Finniston never sought to argue that other factors should not be brought into play. Certainly the Government take that view. A strong engineering dimension is not a sufficient condition for success, but it is none the less a necessary one.
The problem is one of degree, not of absolutes. Despite the adverse features mentioned, Britain has produced many generations of internationally respected engineers, and continues to do so.
During the past few days I have had the opportunity to travel around the country with a Chinese Government delegation. It was interesting to find that in our shipyards they were quick to point out many of the initiatives that Britain had created in the shipbuilding industry. They recalled that the first railway in China had been built by British engineers. For those who travel around the world the tradition, heritage and skills of British engineers are evident for all to see. The irony is that the major engineering advances first made in Britain include many developments that are now being exploited by our competitors. None the less, we have many strengths on which to build. We need the marginal improvement that would restore our place in world markets.
The report has a massive, almost daunting, list of 80 recommendations for action, which the committee believed would engender an enhanced national engineering capability. The proposal that has attracted the most attention, and the one upon which so many others ride, is that which 988 calls for the creation of a new engineering authority. I shall return to that matter later.
It would be wrong to suppose that the acceptance or implementation of the report rests solely, or even primarily, on whether the Government decide to establish a new authority. Out of the 80 recommendations, 18 are directed to the employers of engineers, and many others, including the suggestion for an engineering authority, depend on a positive response from employers. Without that response, such an authority would have little meaning. The committee was unequivocal in saying that the key to improvement in the quality and quantity of recruits into engineering, and to improving the effectiveness of the contribution made by engineers, rests primarily with employers. They determine the attractions or otherwise of an engineering career. They determine the organisation of activities within companies and the role of engineers in them. They are the only ones who can tell those who educate future and practising engineers about the skills and attributes that are needed.
The underlying aim of most of the proposals is to cause more employers to recognise that onus upon them, and to build bridges between employers and the many other agencies working to supply their needs within the engineering dimension. The Government recognise that there are a number of companies that can fairly point to successful work in that area. Some would argue that if all companies behaved in the same way the problem would disappear. Finniston has shown that there are not enough companies that can show that that is true of their position.
I turn to the Government's response. These are not problems that the Government can resolve—certainly not alone. The remedies lie essentially with employers and with those in the educational and professional sectors. In so far as the Government have a part to play, their role is one of encouraging and, where necessary, facilitating the efforts of those groups to work together. It is essential that the Government are informed about the reactions and intentions of those groups in the light of the report before they decide on their response. We have spent the past six months ensuring that that process takes place.
989 Many of the recommendations for Government action concern the pattern and content of the initial formation of engineers and of their subsequent training and post-experience development in employment. As my hon. Friend the Under-Secretary told the House on 18 April, those topics are to be the subject of a two-day national conference to be held in October. The organising committee for that conference has consulted widely on reactions to the Finniston proposals as an input to that debate. That, in a sense, is the "part 2" phase of the consultations that I described earlier, part 1 being the consultations that have been undertaken by the Department of Industry.
Recommendations upon which attention has been concentrated in the meantime concern the engineering authority and the functions envisaged for it by Finniston. As I told the House on 24 March, in reply to a parliamentary question, the Department of Industry has sought views from about 370 institutions, companies and other organisations on those questions. Other Departments have canvassed opinion among the bodies in their respective areas. Many unsolicited views were received from individuals, organisations, and hon. Members. In addition, my right hon. Friend the Secretary of State and I have met many of the key bodies, and we shall continue to do so.
That adds up to a comprehensive consultation exercise within the time scale that we set, originally for 1 April. I was grateful to all those who endeavoured to meet that time scale, because it was a relatively short one. We had to balance the argument between those who wanted the momentum maintained and those who required time for consultation. Because of the nature of some organisations, some found that, with widespread constituency interests, the process took longer than they had hoped. We allowed some leeway after 1 April to those involved in that process, such as the Confederation of British Industry and the Engineering Employers Federation. We also received some revised or amended views from a number of those who wrote to us by 1 April.
I turn to the responses themselves. Finniston has clearly stimulated intense 990 debate, not only within professional institutions and academic circles but, more significantly, within industrial companies, among employers, and trade union organisations. The report has won strong general welcome. Despite fundamental reservations from some about specific aspects of the prescriptions, there is widespread agreement about much of the diagnosis. Certainly the Committee's diagnosis of the engineering dimension has been widely endorsed. Attitudes to the broad objectives for change identified in the report have similarly been positive for the most part, and one can discern a clear enthusiasm for seeking improvements on those lines and a willingness, above all, to be involved in that task.
It is at the level of specific actions that opinions have been much more divided. Views differ, for example, on whether the changes to be sought need to be as radical as Finniston suggests or whether it would be just as fruitful and, some would argue, less disruptive to rely on the strengths of the current framework to extend the positive trends that Finniston recognises. No one would deny that such strength exists and that there are a number of encouraging trends—for example, in industry-academic collaboration. On the other hand, the problems identified by the report have dogged us for many years, and persist, despite a number of initiatives to redress them over the past century. Therefore, it is fair to ask whether something more is required.
That something more, in the view of the Finniston committee, should take the form of a new engineering authority, which should be a focus for the efforts of other groups to improve the standards and relevance of engineering formation and practice and should generally agitate for improvements in the engineering dimension. Without in any way denigrating the valuable efforts of the many people who have been working to these ends in companies, professional institutions, academic engineering departments and other bodies, Finniston argues that their activities would be more effective if they were better related together within a national framework with a commonly agreed set of priorities.
This broad conclusion has been supported by the majority of respondents to the report, although with scepticism on 991 the part of some. Although the tenor of many responses has been that a new body would face formidable problems and would by no means be assured of success, the general view is that without some institutional focus of this kind the good will and momentum for change that has been generated is likely to be dissipated, and may be difficult to recover.
Within this broad view we have received a plethora of conflicting detailed proposals for the constitution of a new authority. Finniston proposed a body of between 15 and 20 people selected by the Secretary of State to reflect the balance of interests among employers, educationists and the profession, with funds voted—initially at least—by Parliament. Most respondents agreed that this was an appropriate size for the body and that its members should serve in an independent capacity, but clearly many had reservations about the appointments being made by Ministers and proposed instead that the Privy Council should take on this role. That would be a novel departure for the Privy Council, but it will be among the options being explored by the Government. Yet again, others believe that existing institutions would be able to create the necessary body. Opinions vary considerably about the appropriate balance of reprsentation on a new authority.
§ Mr. Arthur Palmer (Bristol, North-East)
On the suggestion that the Privy Council should make these appointments, is not the Lord President of the Council a member of the Government?
§ Mr, Marshall
That is true. The precise way in which this would operate in practice has to be considered with great care. The hon. Gentleman is quick to sense that there is widespread misunderstanding about the executive functions of the Privy Council.
Finniston proposed an equal balance between the employer and the academic and professional interests, with an industrialist as chairman. Others have proposed that a majority of seats should be reserved to nominees of employers' organisations, professional institutions, educational groups or, indeed, the Fellowship of Engineering. The balance of these suggestions has depended on which institution or group has put forward the proposal. For example, the Council of Engineering Institutions, which we all 992 recognise would be much affected under the Finniston propsals, has argued for three new bodies based on what it sees as the three sets of functions proposed by Finniston—accreditation and registration, professional affairs, and what is described as an "engine of change ". But it is right to point out that most others appear to favour a single body to oversee the whole effort.
It is now for the Government to consider their conclusions on those issues falling to them—notably the question of an engineering authority. Our intention is that these conclusions will be reached and announced as soon as possible. In this process I take seriously the views that many hon. Members have put to us, which we have had the opportunity of considering. However, I welcome the fact that in providing time today the Government have opened up the debate for a final word from the House before reaching their conclusions on phase 1.
§ Mr. Les Huckfield (Nuneaton)
The Opposition welcome the opportunity to have this debate. It is appropriate that hon. Members on both sides of the House should have time to make their comments.
We welcome the inquiry report from Sir Monty Finniston and its significant recommendations. It is only fitting and proper that tribute should be paid to Sir Monty Finniston and his committee of inquiry for producing what must be regarded by hon. Members on both sides of the House as one of the most significant reports on manufacturing industry that we have seen this century.
Having welcomed the time that the Government have provided for the debate, I must say that many Opposition Members would have preferred the Secretary of State to be here this morning. I recognise that the Under-Secretary of State is a competent reader of briefs and that he must talk to his right hon. Friend from time to time, but the maintenance of the momentum described by the hon. Gentleman will require a great deal of interest, enthusiasm and pressure from the Secretary of State. This matter cannot be left to an Under-Secretary of State. It has to be taken up as a cause by the Department of Industry and the Department of Educaton and Science—in fact, by all Departments.
993 The Under-Secretary touched on several recommendations in the report. I wish that he had touched a little more on some of the symptoms of what we consider to be the disease. The hon. Gentleman glossed lightly over some of the problems that led the previous Labour Government to set up the Finniston inquiry in July 1977. He also glossed over the symptoms that led many institutions to press for some kind of inquiry. Indeed, some institutions, such as the Institution of Electrical Engineers, made no secret of the fact that they wanted an inquiry because they were concerned about the situation in engineering. The Institution of Electrical Engineers was one of the foremost campaigners in pressing for the inquiry to be set up.
Therefore, without dwelling on the matter for too long, we must look at the symptoms and the problem. I put it in the Bank of England's words, which are quoted in the report :The relative industrial decline of this country is now widely seen as a matter of grave concern. If allowed to continue it would seem only too likely to lead to growing impoverishment and unemployment in years to come.I do not always agree with the Governor of the Bank of England, but I think that the Bank has put its finger on what many of us regard as the key symptom.
The TUC has elaborated that slightly by saying :For many years Britain's performance as a manufacturing and trading nation has been in relative decline with her major competitors. Many reasons can be identified as to why this is so, but a central cause of our decline must be our failure to unlock the full contribution of those working in manufacturing industry—or to attract into manufacturing those with a contribution to make.That is perhaps a contemporary interpretation, but I believe that the problem is more deep-seated than that. I believe that it is more deep-seated than merely being a post-war or twentieth century problem. I believe that if we go back to the Industrial Revolution we can find some of the first causes of this relative decline.
There has always been a myth in this country that in the past we have been the great workshop of the world, but the Industrial Revolution was a low-level technological revolution. It was not an advanced industrial revolution. It dealt 994 with concepts and machinery at a low level of technology. Even at the turn of the century, much of the equipment and engineering skills that were used, for example, to build the London Underground system were not English. They were German or American. So, even at the turn of the century, other countries had already overtaken us in advances in engineering concepts.
If we look at the great Victorian educational tradition, we see that there was not very much emphasis on training and education. That was a post-war development. Throughout the English classical education system, the emphasis—
§ Mr. Huckfield
British. I am sorry to have offended my hon. Friend so early in the debate. I had hoped to carry him with me on much of what I have to say.
If we look at the British classical engineering tradition, we find that the great emphasis in the Victorian education system was on anything but engineering.
§ Mr. Tam Dalyell (West Lothian)
My hon. Friend is speaking on a very sensitive morning. On the BBC we repeatedly hear about "British" misbehaviour. When the Scots are involved—Celtic, Rangers and Scotland—we always refer to "the Scots ". When English football suporters behave badly, they are referred to as "the British ". Let us get the terminology right.
§ Mr. Huckfield
I am glad that my hon. Friend gets up early enough in the morning to hear the BBC news. I recognise that he, like me, must be concerned about what took place in Turin last night. I also realise, Mr. Deputy Speaker, that if I try to proceed on that subject I shall be ruled out of order. I congratulate my hon. Friend on getting away with his intervention.
We are talking about a deep-seated malaise where, as the Under-Secretary of State rightly said, we have been good on ideas but bad on translating those ideas into profitable manufacturing production of the right quality and at the right price and time. We have had a cascade of good ideas—Concorde, the advanced passenger train, the Rolls-Royce RB-211—but we have fallen down on translating 995 those ideas into manufacturing production. That is where our engineering faults come to the surface.
There is a popular myth that we do not need to worry about that because North Sea oil will somehow get us through. The Opposition do not accept that. The Finniston report says significantly :There is no prospect that the contributions from natural resources (including North Sea oil gas or coal) or growth in other sectors of the economy can generate wealth on the scale which can be earned by manufacturing industry; for example the contribution of North Sea oil to GDP in 1978 was £2.3 billion, equivalent to 8 per cent. of the contribution made by manufacturing to total national value-added.That is the size of the manufacturing contribution and the size of the problem that we are discussing this morning. Even if we bring it down to individual firms and to the microeconomic level and look at the problems of firms such as British Leyland, British Aerospace Rolls-Royce and British Airways, we find that over and over again there is a critical shortage of skilled engineers. If we look at the problems of British Leyland in the development of new models, and at the reasons for the slowing down of some of the advanced techniques in British Aerospace, we find that a critical shortage of skilled engineers is holding those companies back. Both on a macro—and a microeconomic level, and in historical perspective, we cannot escape the fact that this emphasis on engineering qualification, education and training and the realisation of the importance of engineering in manufacturing is belated. Something must be done about it.
In its conclusion, the Finniston report states :Britain's survival as an advanced industrial nation depends critically upon her manufacturing companies moving up-market into the production of high quality, high value-added goods, utilising the best of current knowledge and technology, and directed towards areas where world demand is growing or can be generated most rapidly and where competition from newly-industrialised countries is initially least severe.That points to higher engineering s tandards.
The Finniston report also states :While engineering excellence is not the only determinant of manufacturing prosperity, the example of the most successful companies 996 shows that it is essential to continuing competitiveness.So, manufacturing is important, and if we are to get into the sort of manufacturing industry that will enable us to survive industrially, engineering is a key provision.
Having stressed the deep-seated and long-standing nature of the problem, we say, in response to Finniston and in response to the Government, that there is a need to act quickly. There cannot be a continuing series of deliberations and consultations. We need to act now. Time is not on our side. If we are to train engineers to the high level that Finniston envisages, it will take between five and a half and six years. Even if we start to act now, it will be 10 years before some of the newly-qualified engineers are able to take their place in the manufacturing sector. There is a long gestation period. Faced with the present critical situation in many of our key manufacturing industries, it could be too late in 10 years' time. The Government must act now, and they must act positively.
I was a little worried when I heard the Minister say that the emphasis in some quarters could be left to others. It is because successive Governments have left the emphasis to others that nothing has happened. We believe that there is a positive role to be played by the Government. As the Under-Secretary rightly said, and as Finniston rightly says, the key recommendation is the creation of the engineering authority. The report states :The engineering authority would provide both a focus and an impetus for improvements in all the diverse aspects of the engineering dimension, at national and company level, considered in this report.I hope that the Government will not try to get away from the central importance of the engineering authority. I stress that if the onus and responsibility are to be transferred to the existing institutions and to the employers, not very much will happen. It is because the buck has been passed to the employers, the institutions and to the Council of Engineering Institutions over successive generations of manufacturing industry that nothing very much has happened. We believe that there is a need for the authority, and a need for the Government to act positively. The TUC, the CBI, the Engineering Employers Federation and other major institutions, including the 997 Institution of Electrical Engineers, attach great importance to the idea of the engineering authority.
We need a central body that can promote the engineering dimension. We cannot leave that to the institutions. We cannot leave it to the employers. The Government should recognise that there is a need for a body in this country to promote the engineering dimension and to speak for engineering. People in the media say that one of their problems is that when they want to find somebody to speak for engineering, they cannot immediately think of anybody who does that. Even at the presentational level there is a need to present the engineering dimension.
We believe that there is a need to take a major step forward in registration and licensing. There are complications—I do not want to develop them this morning—in regard to the need for licensing, but we believe that from many aspects the concept of self-regulation appears to have failed.
It is interesting in this connection to look at the historical precedents that have been set in other countries that already have some State-endorsed registration and licensing system. They have been able to make more advances than we have, simply because they have such a system.
In the case of large civil or mechanical engineering projects requiring large injections of public money, we believe that the Government have a responsibility to see that those working on the project are properly qualified, properly registered, and perhaps licensed. The concept of self-regulation—so often vaunted in this country—has, we believe, been tested and found wanting.
I endorse what the Institution of Electrical Engineers says in this connection. It believes that engineers on projects up and down the country in manufacturing industries must be indentifiable. That does not automatically happen at the moment. The institution also believes that there should be accountability. We should be able to know who are the engineers on projects, how they got their qualifications and what they are able to do. It would be reassuring to the public to be able to know that engineers involved in manufacturing industry, and particularly on large projects in the public sector, were being 998 supervised by properly qualified engineers. We do not have that kind of assurance at the moment.
We also feel—and again I endorse what the IEE has said on the subject—that if there were a system of registration leading to licensing, that would enable pressure to be put on many of the educational institutions from which a response is required. It is not just a matter of leaving it to the authority. It is a matter of what the authority would be able to do via the mechanism of registration and licensing, to get other bodies to play their part as well. That is why we say to the Government that it cannot be left to the existing bodies. A stimulus is required, and the best stimulus could come from the authority.
I should like to mention what the Finniston report says about the interface between industry and education, because the educational side is just as important as the other side. I welcome this morning the participation of the Under-Secretary of State for Education and Science in our debate. I am sure that he will have found—as I did when I was covering this area in the Department of Industry—that there is not merely a little gulf or gap between education and industry; in many parts of the country there is a great roaring chasm between them. Industry feels that the educational process is not producing the kind of people that it would like to see. Educational institutions, in their turn, feel that industry is not making the best use of their products. When I was at the Department of Industry I was involved in several activities designed to bring industry and education a little closer together. I therefore welcome the involvement of the two Departments in the debate this morning.
In the summary of recommendations. No. 18 states :Every effort should be made in schools to ensure that as many young people as possible retain the option to enter engineering and that they are properly informed about the attractions of an engineering career.I am reminded of the story of the schoolteacher who was taking a party of her pupils round a drop-forging factory in Darlaston. When she came out she said "If you do not behave yourselves, that is where you will end up". If we have that kind of concept of industry, obviously children will tend to go into 999 banks, building societies and local government. We want to turn them back to engineering and manufacturing and to enable them to understand the critical role of manufacturing in our economy and, indeed, in our society.
I hope that the Government will realise—as the previous Labour Government realised in setting up the inquiry—that a major initiative is necessary. It is not the kind of thing that can be left to others. The Government have to be involved. Had the existing organisations, such as the Council of Engineering Institutions, and many of the individual institutions, been doing their job properly in terms of self-regulation, there would have been no need for the inquiry.
It is interesting to note the opposition that came from some of the institutions, such as the mining engineers, the production engineers, the mechanical engineers and the civil engineers, all of which set their face against the inquiry. It would seem that by so doing they recognised that an inquiry would recommend some significant changes.
We believe that the matter cannot be left to the institutions alone or to the CEI. It cannot be left simply to the employers and the manufacturers. The Government will have to do something, and it is our belief that the engineering authority is a key part of the Finniston recommendations. This does not mean that the institutions will disappear. They could have a valuable role in helping the authority with accreditation and with the promotion of new ideas.
I do not want to see the institutions disappear—many of them have played a very valuable role—but they may need some reorganisation and regrouping. I pay tribute to the role that many of them have played. We want to build on what many of them have achieved already, but this will require another body, with the sort of initiative that the authority can provide.
We welcome the fact that there is to be a national conference in October on the education and training side, but I have not time to say more about that this morning.
I suggest to the Government—particularly remembering their all-pervading passion for reducing public expenditure—that it will not cost a great deal of 1000 money to set up an engineering authority. Initially, it need not be a very big body. The sum of £10 million has been mentioned. I do not want to make any comparisons with what the Government are spending money on elsewhere, but to spend £10 million on setting up an engineering authority would probably be a good deal more useful than spending the money on nuclear submarines. I could go on to make other comparisons.
It is to be hoped that the Government are serious about our survival as a manufacturing nation and about the need to maintain momentum. Indeed, it was the Minister who said that the momentum had to be maintained. He has recognised that already. The Finniston report has created a momentum. It has created renewed interest in engineering. It has centred much attention on the problems involved. We hope that the Government will now take up the challenge provided by the Finniston report. We look forward to the setting up of the authority at an early date. I emphasise again that this is not a discussion in which the Government can stand on the sidelines. They must be involved actively, and as soon as possible.
§ Dr. Keith Hampson (Ripon)
I am pleased that the Government have chosen to debate this subject. Hon. Members say that the Finniston report is important. It is. However, a few Fridays ago I had a debate on the Finniston report. Again, hon. Members said that the report was important. Only three hon. Members were present at that debate. I see that we have done better today. However, there are still only 10 or 12 hon. Members in the Chamber. The absence of hon. Members may be a reflection of the problem. We must engender greater enthusiasm. A fundamental problem must be recognised.
Yesterday I was in the Chamber when my right hon. Friend the Member for Taunton (Mr. du Cann) made a telling contribution. He spoke about the development of our economy over a reasonable period of time. He said :It seems to me that we continually give too high a priority to consumption and too little to wealth creation."—[Official Report, 12 June 1980; Vol. 986, c. 906.]I fully endorse that sentiment. He went on to itemise the increasing cost of 1001 administration and of bureaucracy, and pointed out that wages and salaries have spiralled. He emphasised that investment in capital projects had diminished proportionately. However, we do not only need Government support for projects such as those of the construction industry. We must also invest in skills, techniques and the abilities of those who will be our future managers and engineers. It is they who will create the wealth.
Whatever quality of life we may seek, and whatever improvements we may desire in hospitals, schools and facilities for the sick and elderly, we must first create wealth. The Finniston report brilliantly points out that, compared to our rivals, this country has been progressively sliding backwards in its ability to create such wealth. That consideration must be borne in mind whenever the Finniston report is debated.
The report covers a wide range of interests and many pressures are involved. If one listens to all the pressure groups and all the suggestions, one finds that one is left with nothing. No part of the report would be worth implementing. The pressures would trade off and the report could be pulled to bits. The hon. Member for Nuneaton (Mr. Huckfield) pointed out that the interests that represent professional engineers have been pulling in different directions. The question of how to retain and improve high standards is central to the report's terms of reference. How can the profession ensure the right type of professional discipline and conduct? That is important.
The report makes several recommendations. The quality of training is linked to professional discipline and conduct. The professional engineering institutions argue that they have been responsible for maintaining standards and training for many years and that they should be responsible for the conduct of their members and for the standards of the profession. They do not want the Government to play a part. That is why a compromise solution has been reached and why the Privy Council—rather than the Government—has been chosen to nominate the body. However, at the end of the day the Government would appoint the members. It is nonsense to bring in the 1002 Privy Council. If we set up such a body and believe that it is important—either because we wish to do something about the professional standards of engineers, or about our industrial climate and investment—that body should be made accountable to Parliament. It should not be strictly accountable to the Privy Council, and only indirectly accountable to government.
§ Mr. John Silkin (Deptford)
The hon. Gentleman has made an important point. I have great sympathy with it. Two points can be made about the Privy Council. The hon. Gentleman has disposed of the political argument. The point about the Lord President of the Council has already been made. However, I am worried about the diffusion of interests. Two Ministers are in the Chamber, representing two different Departments. It may be feared that the authority would be responsible to several Ministers, not one.
§ Dr. Hampson
With respect, the right hon. Gentleman has touched on an important point : I have worked on this subject for a long time. Several years ago I set up a committee that made an analysis similar to that of the Finniston report. However, its suggestions were slightly different. I feel that an authority is needed. As a diffusion of accountability and responsibility is likely to cause drift, a new catalyst must be built into the system.
The institutions have a powerful voice. That voice must be ignored, because there are more important considerations. Until now, the institutions did a good job. However, one must look round the world. In almost every other major industrial country Governments have played a part in ensuring that the standards are right and that they continue to improve. One cannot say that about the record of the CEI. Standards have improved, but they have done so slowly. The council was set up because the profession was so fragmented. Although members of the smaller institutions complained about the recommendations, they have not been happy about the way that standards have improved under the CEI. There should be more drive behind accreditation and registration. The CEI does not have the breadth of vision to do that. A Government, or quasi-Government, body should be involved.
1003 The Finniston report points out that there are many important areas of engineering. For example, major national investment is being made in power plants, and the chemical industry is responsible for large construction works. It is possible to argue that, at least, consultants should be licensed. Unless consultants can demonstrate that they have reached an appropriate level of qualification and can show that they have sufficient ability to take on responsibility, they should not be allowed to operate in particular areas or to take on Government work.
§ Mr. Gwilym Roberts (Cannock)
Is the hon. Gentleman saying that they would have to be on the register? A problem may arise because there is a close link between certain types of mathematicians and engineers. Mathematicians may not be on the register, but they are the ideal people to do certain engineering jobs.
§ Dr. Hampson
I accept the hon. Gentleman's point. I do not wish to be too rigid. However, some types of work are so important that we must ensure that at least engineering consultants—possibly one could extend that category—are appropriately qualified. We must ask whether disasters such as Flixborough were necessary. One does not wish to say that anyone with an engineering degree must get various qualifications, and that unless he has such qualifications he will be denied work in certain areas.
We can easily get into far too rigid and detailed a provision. However, there is a stage into which we should move. The problem with the authority, as it stands in the Finniston report, is whether it has enough teeth. Sir Monty argues that if the key 100 companies were converted there would be a "wash-over" effect throughout industry. He believes that we must work on those companies and that there will be a osmosis effect on a body that has an educative role.
Is that good enough? If we are talking about making a radical switch, taking a dramatic step and putting some pace behind it, will that do the trick? Is there not a case for saying that if we are to have such a body, it will need some teeth in it? Should we provide that people will not be able to operate in certain areas unless they go through the pattern of training and education that is proposed 1004 and unless they obtain the qualifications that have been established? I think that there is quite a strong case for making that condition without extending the areas infinitely throughout the entire system.
The professional aspect seems to be in danger of screwing up the entire concept of the Finniston report and defeating the central purpose. As I have said, that aspect is, in my view, secondary. If necessary, some of the considerations in that area will have to be thrown aside if we are to get to the centre of this important area.
We cannot deal with engineers and the standard of engineers in isolation. It is an issue that involves the entire industrial infrastructure. It is as important, in terms of the investment that the nation makes, as the nation's investment in capital projects in general. Hence, there is a fundamental role for the Government. The Finniston report considers briefly the growth of technology and the role of education in that growth in its introduction. The history is most disturbing. I am sure that the House will not believe me if I say that I constantly read pieces of literature of the 1870s. However, in my former career I had cause to study in depth the reports of the boards of education of the 1870s. All the issues that we are now discussing emerged in those reports in many different ways.
In the 1870s there was a strong debate about how Germany and France were running ahead of Britain and it was said that Britain was not technological enough. It was argued that the new universities, such as Manchester, had to be geared to vocational levels. It was contended that it was necessary to get the business community in Manchester to put in money, and that Oxford and Cambridge were out on a track by themselves and denying the country the type of person that it needed to match the competition from abroad.
We have been through this argument time and time again. There are a number of major problems. It seems that the pressures are too strong and that not enough is ever done. Of course, something is done. Manchester was founded, but not enough is done to hold what has been done. It is not merely a matter of doing something but of holding whatever is done in the role for which it was established.
1005 Manchester and the other provincial universities started drifting into the Oxford pattern. It is now argued in parts of the education world that the polytechnics are likewise drifting. They were founded because the traditional university pattern was not sufficiently responsive to social, economic and industrial needs. It was felt that we had to have establishments that would provide technicians and non-traditional degree-type courses. It is now said that the polytechnics have drifted from that role. Some of the arguments are exaggerated, but there is a kernel of truth in them.
There has to be a policy that is sufficient and coherent. There is no point in tinkering with part of the system. There has to be a co-ordinated approach. There has to be something that holds the function that has been established. This cannot be left in the hands of the professional institutions and the professionals. It cannot be left in the present institutional framework. We desperately need some dramatic, positive and quick action on this front. The action must be as quick as possible. The lead time is immense. We are falling rapidly behind many of our major competitors, especially those in the Far East.
This year I had the opportunity to visit Japan and Hong Kong. Both countries are seen by many hon. Members and certainly by many of my hon. Friends as the exemplars of the successful entrepreneurial economy. It is a system in which the Government stand back as against the extent to which Government have been involved in industry in Britain. However, it is telling that the Governments of Japan and Hong Kong believe that they have a critical part to play in ensuring that the industrial infrastructure is correct. There is more effort made in Japan in that direction than in Britain. From 1975 the growth rate of the polytechnic of Japan has been phenomenal.
In 1977 the Governor of Hong Kong set up a committee on the diversification of the economy. It was concerned, for example, with the problems of the textile trade. The Financial Secretary in Hong Kong is not noted for his belief in public expenditure. He has strong views on the report. However, he fully endorses that part of the report that is concerned with the education infrastructure and gearing 1006 that to the needs of industry in Hong Kong, especially the development of the watch industry and new technologies.
In Japan the council on science and technology is chaired by the Prime Minister. All the key Ministers of industry, the economy and education have a place on the committee. Why is that? It is because the Japanese believe that it is fundamental to get the right people of the right skills, background and training into industry. That is the Japanese approach, but in this country it is said "If there are problems about producing engineers of sufficient quality, industry has a part to play."
Both Front Bench spokesmen gave me the impression that we are talking about the initiative starting with industry. The implication is that there is a duty on industry. It is equally valid to break into the chicken-and-egg argument from the other side. If we can convince industry that we believe engineering to be fundamental and if we can demonstrate to it that we are producing people in the education system with the right skills, attitudes and attributes that it can use, I believe that it will respond and start hiring and using appropriately the engineers and those trained in the new technologies. It is hard to convince industry at present that that is happening, bearing in mind the sort of person who emerges from the engineering departments and the courses that they have pursued. Industry does not believe that they are of the right calibre or have taken the right course.
As the Finniston report states, we must examine in detail the provision that we are making in our universities and the practical element that at present is not in the courses that students are undertaking. In both Hong Kong and Japan, and elsewhere in Europe, these matters are thought to be so important by Governments that they try to achieve a coordinated and coherent approach which, at the end of the day, will produce the people that industry wants. In Britain we are facing the criticism that we are in danger of producing too many engineers. It is said "If we follow this route, will they all get a job? We do not seem to be short of engineers now."
In Japan it is not only the technical people in industry who have a technological background. Managers, public 1007 relations men and those on the marketing side have had an engineering or techincal background. People do not sell these days because they are salesman but because they are technical people who understand the technical aspects of a problem. They do not launch products merely on the basis of an opinion research poll. Products are launched because those concerned have researched the market and found the appropriate gap in the new technological developments that are taking place. They find the niche, they work at it and they find the right product. It is very much a technical and technological process.
In Japan those engaged in business, in the Civil Service or in ministerial positions have nearly all been through some science or technological education. The prestige thing to do is to go into an engineering department. The bulk of young people leaving school and going to university go into engineering, and preferably to the University of Tokyo. That climate must be contrasted with the climate in Britain. I do not want to be thought to be knocking our universities, our system and our engineers. However, when our system is put in the balance and a contrast is made, it seems that it is not moving, and has not done so for a long time, in the way that it should and at the pace that is required.
§ Mr. Frank Hooley (Sheffield, Heeley)
The hon. Gentleman makes an extremely good point, but the problem is even more fundamental. In this country there is a functional conflict with the engineering area of manufacturing industries and the financial institutions in the City—the people who manipulate the cash. Unfortunately, this Government are more interested in manoeuvring the cash then getting on with the business of strengthening our manufacturing industry. Although they may have been imperfect instruments, the previous Government created such organisations as the Manpower Services Commission in the sphere of training and the National Enterprise Board in the sphere of investment. Instead of strengthening and backing up those instruments, which are vitally important for manufacturing industry, this Government are setting about destroying them.
§ Dr. Hampson
The hon. Gentleman would not expect me to agree entirely. 1008 No industrial strategy that the previous Government adopted could work because it never got on top of the problem of the money supply and inflation, except in the brief period following the intervention of the IMF. Unless the financial aspect is under control, a Government will never be able to do anything else. I agree that that is not the only element. Monetary policy alone will not create wealth. We need an industrial strategy, which is what I am arguing for, and which is what my right hon. Friend the Member for Taunton argued for yesterday.
Industrial strategy must ensure the appropriate levels of capital investment and national investment in education to train people of skill and talent, and get them moving in the right way with the right qualifications for industry. That comes back to Sir Monty Finniston's call for an engine of change. We need to build a catalyst into the system to keep the ideas flowing in and ensure that people are all the time conscious of the engineering dimension, which will pump-prime new developments.
We also need to knock the heads of Government together. There is a problem of diffusion between Departments. It affects the attitude to manufacturing and the creation of wealth right through from the schools. We need an organisation to stand back and take an overview, and then hammer away. It should have prestige, with a powerful chairman, and comprise powerful and important individuals. The majority should be key industrialists. It would then be listened to rather than ignored. The clout that it carried would be the essence of its success.
The engineering authority must be given the right range of powers and remit. It needs to be started with a certain amount of cash, but it could become self-financing. Those aspects are fundamental to its setting up.
Because of the clash of representations, the Government should not establish a group of important people that does not have the right remit for a proper job. They should not simply ask it to regenerate the economy and give a boost to engineering. That would be disastrous. In five years' time my colleagues could then argue that it is another quango, festering away. We must look at the proposal with great care.
1009 The one option that the Government do not have is to do nothing. After all the reports over all the generations we must now ensure that we provide in our educational training system the right people with the right thrust. We must have the numbers and the quality moving into industry. We must also ensure that industrialists hire these people and give them the right career structure. Whatever courses they start in university, they should have the opportunity, as technologies change with speed, to develop the new knowledge, which is so important. That is the process that Finniston outlines.
The report is of major importance to the success of the British economy. We expect the Government to make decisions shortly. I hope that they will establish an engineering authority.
§ Mr. Alan Williams (Swansea, West)
I have a few disjointed observations to make, and I shall try to keep them brief. I immediately declare an interest via the Institution of Plant Engineers. However, in view of my previous involvement in the Department of Industry I should in any case have wanted to participate in the debate.
I congratulate Sir Monty Finniston on the report. He has produced a workable formula, which the Government can, if necessary, modify.
The hon. Member for Ripon (Dr. Hampson) said that the Government should ignore all that is coming in from the institutions. It is probably true to say that a large part should be ignored. The Government must ignore that part directed simply towards the self-perpetuation of individual institutions for their own sake. However, they must not assume that none of the argument is a legitimate defence of specialist interest in the engineering field. The Government should pay attention to that area of special representation.
The need for change cannot be challenged. The committee was set up and Sir Monty Finniston was asked to produce the report, which is a recognition of that need. The report's existence means that it would be disastrous to do nothing. I am encouraged by the fact that the Under-Secretary of State indicated that the Government intend to take action, 1010 although they are still considering what action.
The hon. Member for Ripon referred to the contrast with Japanese industry. British industry is often accused of being too labour intensive compared with the capital intensity of Japanese industry. However, it is striking to notice the engineering intensity in the Japanese labour force. I have visited factories in Japan that have 50 per cent. of their work force with engineering qualifications. We must accept the need for a, perhaps elite, top structure of exceptionally well-trained engineers.
I find it hard to dissent from the proposition that we should introduce a licensing system. Where health and safety is concerned the public have a right to demand properly licensed engineers. I do not believe that there is a credible argument against licensing.
The establishment of an engineering authority is important. Although its intentions were good, I regret that the CEI has not been successful and created the dynamism hoped for. We urgently need an effective authority. How can its existence be reconciled with the institutions, so that they identify and work with it, instead of developing a hostility and antipathy from the outset? I believe that that can be done without prejudicing the gains that the report offers.
If all the institutions were represented on the authority, it would be condemned to death from the outset. It would become a talking shop. That would be especially so if interests other than the specific interests of the engineering industry were also represented, as they should be.
A possible way out of this would be to keep one of the successes of the CEI, the Engineers' Registration Board, on which the institutions are represented. The ERB should be kept within the authority so that the latter has overall control. The ERB would provide a channel for the institutions, and from within the ERB a proportion of the authority's membership could be selected. In that way the institutions would not have representation as this or that institution, but would nevertheless, have a feeling of involvement. I am not even suggesting what proportion of members the ERB should have within the authority; I merely put the proposal before the Government for 1011 consideration. It may well be that that would be impractical, but it offers advantages in that it gives a continuing specialist role for the institutions and it keeps the ERB, which has been one of the reasonably successful new creations within the engineering industry.
Because the ERB covers the technicians—and these were not within the remit of the Finniston inquiry—there would be time after the Government had made their decision for the authority to consider how to deal with the difficult problem of the technicians.
§ Mr. Palmer
I have been listening very closely to what my right hon. Friend has been saying about the future role of the institutions. He suggests that they could help to look after the register, but I believe that the proper role of the institutions in the future, as in the past, is to act as learned societies.
§ Mr. Williams
I would not dissent from that proposition. It is a valid and major role for them to fulfil. That is why most of the institutions themselves have welcomed the proposition within Finniston that the authority should have the role of encouraging joint activity between the institutions.
There has been surprising opposition to the other perfectly reasonable proposition in Finniston that the authority should also have the role of promoting mergers. Looking from outside at the institutions, we would all say that there has been a proliferation of them and that the fragmentation is difficult to understand. Some of the institutions that are opposed to the proposition of promoting mergers have misunderstood what that means in legislative terms.
Promotion can be persuasive or coercive. If it were coercive—if certain rights or grants were denied to those who refused to merge—I could understand the opposition to such a proposition, but my reading of the report—and I hope that the Minister will confirm it—is that the role of the authority would be actively to encourage, to remove obstacles where they need removing and to produce desirable mergers that were wanted by both parties. Many people are getting themselves in an unnecessary furore over this issue, and rather than full mergers it may well be that federations will provide a suitable formula. This will give 1012 the capability of joint activity and at the same time preserve individual identity.
§ Mr. Michael Marshall
The right hon. Gentleman is making a thoughtful and constructive speech. My answer to the question that he posed is that these matters of detail must be looked at. From their detailed consultations with the institutions, the Government recognise that there is a great deal of initiative and voluntary help available within the institutions. One would wish to maintain that and see the degree to which it could supplement and work with whatever proposals might come from the engineering authority.
§ Mr. Williams
That is very encouraging. I should have thought that it would be difficult for anyone within the institutions to dissent from the Under-Secretary's remarks.
I turn briefly to the more general and fundamental point for the economy—the problem of the inadequate role of the engineer within British industry. A major responsibility here—and I do not think that this is fully covered in the report—rests with those who design education courses. That is why I was delighted to see the Under-Secretary of State, for Education and Science, in the Chamber today.
It is essential that, in designing the courses, we maintain, or even enhance, the excellence and quality of specialist training. When one looks at top management, one asks why, when the engineer can have such an important functional role in industry, he so rarely has a role at the top level in industry? Why are engineers running departments, rather than running firms? There is a difference here between us and some of our competitor countries. If more engineers made it to the top in industry, that would be the greatest possible inducement to young people in universities, colleges and sixth forms to pursue an engineering career.
As a non-engineer—as an economist—I have tried to puzzle out why people with specialist know-how still fail to make the impact at the top level. I have come to the conclusion—superficial though it may be—that it is a communication incapability on the part of many people who are immersed within their own specialty. They can articulate with others who share that specialty, but they 1013 fail to communicate to the non-technical—the people with whom they would be working if they were members of the board.
My hon. Friend the Member for Nuneaton (Mr. Huckfield) said that one of the problems in this country was that although we had ideas, we did not turn them into marketable projects. That is true. We have the innovation, but the innovator—the engineer—has failed in the necessary role of communicating his innovation to his entrepreneurial colleague who must make the investment decision. Therefore, I suggest that alongside training in their initial degree in their own specialty, engineers should learn the language of industry—of boardrooms and management. They need to understand the language of management accounting, and they need to be trained in business administration as well as in the problems of engineering.
If it were possible to build this mind-widening capability into more of our engineering courses, ultimately it would mean that more engineers would take their places on boards. By the very nature of a board's activities, a relatively small proportion of the decisions taken are directly related to engineers. Therefore, the tendency of a board is to draw on the engineer as a specialist to advise, as and when needed. Thus, the engineer must adapt himself so that he is a valuable member of a board, not just in his engineering capacity, but in the sense that he can talk fully, freely and appropriately on the whole area of activity.
§ Mr. William Waldegrave (Bristol, West)
After the presentation of Sir Monty's report, one of the things I have noticed has been the high level and high quality of the many submissions that have been made to the Government and to individual hon. Members. There is now, if anything, too much of a consensus on and too wide an understanding of all these problems. There is practically no company and no institution in the country that cannot produce a good paper on the subject.
The problem, as we have already been told, since—
§ It being Eleven o'clock, Mr. Speaker interrupted proceedings, pursuant to Standing Order No. 5 (Friday sittings).