Employment and Training Bill

HC Deb 09 February 1981 vol 998 cc614-89

Order for Second Reading read.

4.7 pm

The Secretary of State for Employment (Mr. James Prior)

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

I apologise to the House for the erratum concerning the explanatory and financial memorandum, in which line 3 was left out by mistake. It is now being reprinted and will be put right before the weekend. I apologise to the House for that important omission.

I believe that it will be convenient for the House if I take the two main purposes of the Bill—the powers they confer, and the changes they make—and then discuss them in terms of the nation's training needs. Dealing with the Bill in that way may enable the House to understand why the Government believe that the change in powers is necessary and will no doubt assist the House in giving me its views on an immensely important and difficult subject. I also hope that my speech will show that this is not as controversial a Bill as some hon. Members are prepared to think.

The amendments introduced by clause 1 are particularly important because they will allow greater flexibility in taking decisions than the current law would allow. It is right that decisions about the future pattern of industrial training boards should rest with me, because I am the Minister accountable to Parliament. Clause 1 therefore proposes that the Secretary of State should have power to create, abolish or change the scope of an industrial training board in consultation with the Manpower Services Commission and not, as at present, only in accordance with a recommendation of the commission. The commission's views will continue to carry great authority, but it is important that I should not be restricted in the range of options open in determining the future structure of the training system. As I shall seek to show, diverse views may be put to the Manpower Services Commission which will make it impossible for it to make recommendations. It would be unsatisfactory if I could not act, if I had to wait until the review was over before putting any proposals to Parliament.

The current review of industrial training arrangements by the commission will be the first comprehensive review of its kind. The existing legal requirements envisage consultation with interested parties only on specific propositions and are not apt for the purpose of such a wide-ranging review as now envisaged. Clause 1 therefore provides for a more flexible consultation procedure in future, and will enable me to act on the outcome of the review being undertaken.

Clause 2 will enable all expenses of an industrial training board, including operating and administrative expenses, to be met from money raised by a levy on employers, as was the position before the coming into force of the Employment and Training Act 1973. Clause 2 will also enable boards to use to defray their operating expenses money derived from levies imposed before the enactment of the Bill.

These provisions are necessary as a result of the Government's decision to withdraw Exchequer funding of boards' operating costs. I should like to remind the House that when industrial training boards were first established under the 1964 Act their operating costs were charged to their industries. However, when firms became entitled to exemption from levy if they trained to meet their own needs, it meant that relatively few firms might remain liable to pay levy. Obviously they could not be expected to pay all the operating expenses. Provision was therefore made in the 1973 Act accordingly, and since then the Government have met the cost of the operating expenses. In many respects, this has not worked well. It has led to an increase in bureaucracy and inefficiency and many complications about the pay and conditions of staff.

The MSC review body recommended therefore that boards' operating costs should once again become a charge on their industries but, as one would expect, with some dissenting voices. The CBI commissionerss did not feel able to support the recommendation while the TUC commissioners were prepared for the transfer to be phased over three years. I think this reiterates the point that at the end of the day it is necessary for the Minister to have power to act.

After careful consideration we decided that all the boards' operating costs which since 1974 have been met from public funds should be transferred to industry within a relatively short time scale. Basically we consider it right in principle that where a board continues on a statutory basis the running costs of that board should be met by the employers concerned. Secondly, we agree with the MSC review body that it is an important way of increasing the boards' accountability to their own industries.

However, I recognise the difficulties. It is not our wish to impose on industry additional burdens at this difficult time. The extent of the future costs will not emerge until the review has been completed, and it is clear which boards are to remain, and what is to be their scope. The Government will therefore be prepared to consider the timing of the end of Exchequer support in the light of the outcome of the review. The provisions of clause 2 are therefore to be brought into force by a commencement order. When clause 2 is in force it will of course be for the industries concerned to ensure that their boards keep down their administrative costs.

Before leaving the subject of boards' powers to raise levies I would draw the House's attention to an important change recommended by the review body which we have decided not to implement. The review body considered that boards had been unduly restricted by the need to apply for an affirmative resolution of both Houses if they wanted to raise a levy which represents more than 1 per cent unit of the money employers had spent on wages and salaries in any one year. This recommendation was heavily criticised in the comments received during the consultation period.

I have examined these criticisms carefully and concluded that it would not be right, particularly at a time when boards may be raising levies to meet their own operating costs, to remove this important control mechanism. In my view, a levy of more than 1 per cent. should remain subject to affirmative resolution, of the House.

Mr. Frank Hooley (Sheffield, Heeley)

If there is still to be a statutory limitation on the levy but the boards have to carry operating costs as well as other costs, does that not mean that they will have fewer resources to devote to training as such?

Mr. Prior

Not necessarily, because some boards have levies of less than 1 per cent., so there is some room there. If they feel that their operating costs cannot be met from a levy of 1 per cent., it will be up to them to decide whether they wish to come to the House for an affirmative resolution to permit them to go above 1 per cent. Alternatively, a number of chairmen of boards have told me that they believe that they can keep their operating costs down a good deal more than they are at present. That is one purpose on which I am very keen.

One of the main points constantly put to me by chairmen of boards is that the growth of bureaucracy in dealing with the Manpower Services Commission and in turn with the Department of Employment and in turn with the Civil Service Department has added considerably both to the time spent and to the costs of running the boards. I do not think that what the hon. Gentleman has said need happen, but we can examine it in greater detail as the debate goes on.

These are the main issues covered by the Bill. My hon. Friend will of course be prepared to deal with the other clauses and other points which hon. Members wish to raise, but I wanted to give the House the logic behind what the Government seek to do. I should now like to amplify it by looking at these proposals in the context of training policy generally.

In doing so, I should like to remind the House that in my speech in the debate on the Loyal Address on 26 November last year I set out the Government's broad objectives on training. I also announced then that as one element in our overall policy we would be reviewing the system of industrial training boards.

I believe it is right, therefore, to view the Bill principally as an enabling measure. The Bill does not prescribe this or that particular reform. Its purpose instead is to enable reforms to be made in the operation and structure of ITBs. It is preparing the ground so that the necessary changes can be made following the outcome of the present review, which is due to finish in the summer.

I want the House to be clear about the context of the review and of the Bill within the Government's overaJl policy on training. I think that there would be agreement on all sides that over the years our training and retraining have not been conspicuously successful. Of course, there has been some progress. But even so, time and again we have seen economic growth choked off by skill shortages in key sectors of the economy. The cases are legion where a firm's inability to recruit skilled staff has led to a loss of an order. In turn, this has led to fewer jobs for the semiskilled and the unskilled.

I do not believe, therefore, that there is any serious disagreement in the House that our training system needs to be made more effective. The differences emerge on the best means to achieve that end. This immediately leads to questions about appropriate levels of spending and suitable types of structure.

This brings me to the two central arguments which I am sure will feature strongly in today's debate and over the coming months. The first is the argument about the level of spending. There can be no doubt that over the past 10 or 15 years vast sums of money have been spent on training, both by Government and by industry. The overall amount is probably incalculable. Yet, as I said earlier, none of us is satisfied with the result. Therefore, the key issue on which the debate should focus is how we can make sure that the large sums that we will continue to spend can be made much more effective. We could all think of dozens of ways to spend more money on training—on one scheme or another. But at the end of the day what counts is how effective the spending has been. It is this consideration—of getting a much better return on the money spent—which will be the underlying principle of the Government's approach.

The same thinking should guide our approach on the structures which we need to develop. As with the debate on spending, it is all too easy for the argument to polarise; some will say that we need to scrap every existing institution, others that if the present structures are inadequate we must need more and more of them. But the key issue here on which I believe the debate should focus is what reforms should be introduced so that we can see that we are meeting the objectives which the institutions, or structures, were presumably meant to achieve. The outcome of the current review of industrial training boards will put us in the right position to make these judgments. The Bill will enable us to act on those decisions and help to secure a more effective training structure.

I want to emphasise one other key principle which I believe should guide our thinking and shape our discussions. It is one which none of us can dodge, and which we should face up to fairly and squarely, namely, the impact of the sheer pace of change. The economic and social history of the past 30 years has been one of rapid change. Britain's story during that period has been one of failing to keep up. We have been slow, inflexible and unresponsive. Sadly, our training system has been no exception. Indeed, its failure to adapt quickly enough lies at the root of its ineffectiveness.

But far from slowing down, change is crowding in on us faster than ever before. We have entered a new industrial revolution—the microtechnology revolution, or the telematics revolution, whatever one prefers to call it. That economic revolution is unique. As Daniel Bell pointed out in his introduction to the Nora report on telematics and the computerisation of society which was commissioned by President Giscard d'Estaing: We can self-consciously witness a large-scale social transformation. Whereas very few people realised the import of the Industrial Revolution when it was taking place, there is now a much greater awareness of the significance of the changes taking place around us.

With that awareness, it would be a terrible folly if we continued to be unresponsive to change and remained inflexible and hide bound by traditional thinking. Training and retraining are areas where it is absolutely vital to introduce a much greater sense of flexibility and responsiveness. There will be new demands, new pressures and new opportunities. Our duty, therefore, must be to devise a system which can adapt and respond to them, and which can thus enable us not only to keep up with the pace of change, but also to make the most of the opportunities which lie ahead.

That is why it is vital today that we view the Bill in its proper perspective. It is one element in the Government's overall policy on training. It is not the central element, nor the predominant one. It should be viewed as one essential part in a package of measures designed to establish an effective and systematic approach.

The Government's key objective is to change industrial training so that it better meets the needs of industry, first, by providing a solid foundation training for all, and, secondly, by reducing restrictions on the provision and use of trained workers, both young people and adults. We intend to publish our proposals for a new training initiative shortly. We hope to be able to do so in conjunction with the MSC.

I want briefly to outline the key components which will shape our new training initiative. First, there is considerable scope for improving the vocational preparation of young people. The vast bulk of young people who go into work at 16 or 17 years of age receive little or no training in even the most basic skills. We lag far behind other countries such as West Germany or France in that regard. As I have already made clear to the House on previous occasions, the Government are committed, as resources permit, to work towards the point where every school leaver will undertake a programme of vocational preparation. We are expanding the current pilot scheme, and in time we should look to the development of the youth opportunities programme in that direction.

There has also only been slow progress in modernising current arrangements for training for skill within industry. Their effectiveness varies considerably, but in some traditional craft apprenticeships there is a need to remove age restrictions and to place much greater weight on the attainment of recognised standards of performance. Tests of trainee performance after particular phases of training are already applied in certain schemes, but we need to build on such developments and make them more general. Jobs entailing the exercise of skill and responsibility should, as far as possible, be open to all who can do them, and not be artificially restricted. Ernest Bevin, whose centenary of birth we celebrate next month, once said that Britain was a remarkable country because it was possible for him, a docker, to become Foreign Secretary. Yet if he had wished to change his occupation from a docker to a skilled engineer, he would not have been able to do so after the age of 19.1 think that the House will agree, despite the difficulties, that there is a need for a change of this nature.

Mr. Jim Craigen (Glasgow, Maryhill)

Does the Secretary of State envisage introducing legislation to remove the age restriction in an area which, until now, has been left to voluntary agreement between employers and trade unions?

Mr. Prior

No, I do not envisage legislation. It must be done carefully. The maximum co-operation is required. I hope that my remarks in that regard will receive a fair wind from the House, which could have an important bearing on the attitudes of both employers and unions.

However, training for skill needs to be seen in much broader terms than just craft apprenticeships. Systematic and flexible training needs to be developed for a wide range of other occupations at both higher and lower levels of skill, such as in the computer field, where at present the Manpower Services Commission is assisting a significant number of training places through the TOPS courses, which were referred to very favourably in The Observer yesterday. The number of people completing courses has increased from slightly over 2,000 in 1978–79 to 3,196 last year, and more than 4,000 this year. That is one example of what I mean by getting our priorities right.

Perhaps the most pressing issue of all is the need to improve provision for the training, retraining and upgrading of adults. The pace of change in the structure of employment and skills required by new technology means that many workers will need to be retrained, not only once but perhaps two or three times during their working lives. Only through the relatively rapid training and retraining of adults are we likely to be able to meet changes in the future demand for existing skills. The TOPS scheme is a great help, but resources are limited. The main need is for more systematic provision for such training within industry. Industrial training boards have had some success in opening up training in certain occupations to adults, but overall they have found it difficult to make much real progress.

In the expansion of adult training I see an important role for utilising the new technological systems which are now becoming available. At my request, the MSC is currently examining the possibility of promoting "open" or "distance" learning for what might broadly be described as technical and supervisory levels. Any such "open tech" programme would be developed and implemented in close collaboration with existing educational and training resources. It would make the most of locally available facilities and experience. The aim would be to give people access to courses of study to training programmes which they could pursue without giving up full-time employment or the search for work if they were unemployed. That could be a very valuable way of using modern methods and approaches to help individuals to equip themselves with the skills they need.

We shall make little progress towards achieving any of the objectives which I have mentioned without closer co-operation and understanding between those responsible for training and those responsible for vocational education. In certain industries and localities there is a record of successful co-ordination of education and training interests. But throughout the country as a whole there is still considerable room for improvement. We are urgently studying ways of improving links between training and education at the present time.

I want to set today's debate in the context of the Government's general approach and our proposals for a new training initiative. I have set out the areas in which I believe we need to improve industrial training because these will largely determine our choice of the most appropriate institutional framework for the future. Industrial training boards have formed the basis of the industrial training system for half the economy for the last 16 years. I think that most people would agree that a review is probably overdue.

It is not the Government's intention to pull everything up by the roots, just for the sake of doing so. As a farmer—as my right hon. Friend the Chief Whip will know—I do not think that it is very good practice to pull everything up by the roots to see how it is growing and then put it buck again. But we now need a proper review. We shall wait until this review is over before we make up our minds.

Mr. John Evans (Newton)

I am rather puzzled by the right hon. Gentleman's speech. He has already told the House, as he told the House in November, that there is to be a review by the MSC of the workings of industrial training boards. He has announced that he wants to set up a new framework for industrial training. Would it not have been better to have this debate before he promoted the Bill, which will give him extraordinary powers to abolish training boards. Would it not have been better to have the MSC review and then a debate on the findings of the MSC review before bringing legislation before the House?

Mr. Prior

I do not think so—I thought that I had made that clear in my opening remarks—for the simple reason that, again, this would introduce a whole further series of delays in taking any action. It is bound to do so. Already a year has gone by during which we had the review of the Employment and Training Act. That has now led to the Bill and to what I said during the debate on the Queen's Speech. The review of individual training boards is now going on. If at the end of all that I have to wait for another Session of Parliament before taking any action, it would be a further year before any results could come out of that review.

I do not believe, on an issue which I do not think is very controversial—[Interruption.] I know that the Opposition, for their own purposes, may try to make it controversial. For one thing, they have put on a three-line Whip for this evening, which seems an extraordinary thing to do. But I do not believe that this matter need be controversial. I believe that we need to get on with it. One of the things that we cannot afford to have is a constant state of uncertainty in this sphere. [Interruption.] If the Opposition want simply to continue exactly the same system as we have now, they had better say so. I do not believe that that is the requirement for training in the 1980s. I want to make that clear. But nor do I believe that it would be in any way right to continue a period of uncertainty, which there is bound to be as a result of the review—any review will create a period of uncertainty—for any longer than is really necessary.

Therefore, I think that Opposition Members would be doing themselves a favour, and would be doing the training boards and training a favour, if they accepted that this review ought to be carried out and that we ought to have the legislation available to the Secretary of State so that he can act as a result of the review as soon as it is completed.

Dr. Keith Hampson (Ripon)

Many Conservative Members understand the need for urgency. However, will my right hon. Friend reassure us that the MSC will not jump the gun on this matter? There is a rumour that it is already planning an increase of over 800 in its staff. Many of us feel that it would be wrong to replace industrial training board advisers with a new monitoring bureaucracy in the MSC.

Mr. Prior

I can give that assurance, because that is not what the MSC is telling me. Under difficult circumstances, I am making very considerable cuts in the MSC. Over four years—and I am perfectly proud and happy to say so—I am making a cut of over 20 per cent. in the numbers employed in the MSC, with the exception that because of the increase that] announced in the employment measures before Christmas there will be an additional 900 people, approximately, employed for the YOP and the community enterprise programme. But, generally, the MSC is having to accept a cut. I think that I am right in saying that it is 21.4 per cent. of its total manpower. I am determined that we should spend the money on training and not on bureaucracy. That is why I want to get on with this as quickly as possible.

Mr. Ron Leighton (Newham, North-East)

Will the right hon. Gentleman give way?

Mr. Prior

I have really stirred things up now. I wanted to keep it quiet. I do not want all this bother.

Mr. Leighton

I am grateful to the right hon. Gentleman for giving way. Will he explain what will happen to the £50 million Exchequer support that he is removing? Will this mean that less is to be spent on training?

Mr. Prior

No, not necessarily. It means that if all the training boards were kept and if all the operating costs were transferred at one time to the industry, most of the £50 million which is at present being provided by the Government would then be paid for by the industry. When I say "most", that would be if all the training boards were kept. I say "most" because I believe that in those circumstances the training boards would find that their operating costs came down very considerably. There is no doubt at present that it is the increased supervision and accountability which requires training boards at all times to consult the MSC, which in turn must consult the Department of Employment, which in turn must consult the Civil Service Department. It does not end. All this is adding to the operating costs very considerably. Therefore, it would not involve all of that £50 million. There would be a saving even if we kept the statutory requirement for all training boards.

It is far too early as yet, before the review has even taken place, for anyone to know how much of the operating costs will be transferred, and when they will be transferred, from the Government to the industries concerned, and whether or not there are other arrangements that we can make for boards instead of having statutory boards.

Mr. David Ennals (Norwich, North)

Before we leave the question of financing, may I ask the right hon. Gentleman whether the timing of the Bill is not entirely in order to save money now? Is not the argument that he has used, that he wants to complete his review, and so on, simply a cover-up for a cuts exercise? What view does he take of the CBI's opinion that it should be for the Government to give assistance rather than imposing another burden on industry?

Mr. Prior

I have already tried to deal with the latter point. The CBI is certainly not saying that it should be for the Government to give assistance. Very largely, the CBI's view is that only a number of statutory boards need remain and, therefore, that the operating costs of boards would not fall on anyone because the boards would be done away with. As for the right hon. Gentleman's other point, if there are financial savings to be made and if this review is long overdue, what is the point of waiting? Why do we have to spend money that we do not need to spend? Let us get on with it and save as much of it as we can as quickly as we can. What we on the Conservative Benches are concerned about is getting the training done, not necessarily spending the money.

Mr. Richard Needham (Chippenham)

I accept the need for this review. However, will my right hon. Friend confirm that it will be extremely difficult for many employers, when confronted by this review by the MSC and feeling that they may have the cost transferred on to them and away from the Treasury, perhaps to give quite as objective a view of ITBs as they might otherwise do? Will he confirm that that factor will be taken into account when it comes to determining the results of the review?

Mr. Prior

I generally consult my hon. Friend before making my speeches, but on this occasion, if he will have patience for a minute or two, I shall come to that problem in what I have to say, so I now return to my speech.

Any assessment of the value of industrial training boards must be based on the recognition that, ultimately, responsibility for training rests with individual employers. They must gauge their future needs for particular types of skill. They must decide how to meet those needs, and what part training should play. Industrial training boards were established primarily to influence the quality and quantity of training which employers provide. In carrying out this task they can use levy exemption and payment of board grants as incentives to encourage employers to follow their recommendations but in the end everything depends on their skills of persuasion.

Over the 16 years since the first boards were established the system has grown to a point where there are now 24 separate boards, each with its own staff and most with levy, levy exemption and grant schemes. In a recent survey, a sample of firms with industrial training boards were asked whether they would have done as much training without their boards. Over two-thirds of them agreed that they would have done. Reseach into the impact of levy exemption schemes which included inquiries to boards themselves suggested that levy exemption had helped to improve the quality of employers' training but produced little evidence that it had increased the quantity of training.

These findings are, of course, only part of the whole picture. The research to which I have just referred also indicated that firms in boards were more likely to have planned training for all grades of staff, and to have increased their training in the last five years, than firms not in boards.

Clearly—as one would expect—many boards have had a significant impact on employers' awareness of their training needs. Nevertheless, this evidence is consistent with the conclusion that several of these boards may now have outlived their usefulness. This conclusion is reinforced by the judgment of the MSC review body in "Outlook on Training" that, on the whole, boards have not been effective in meeting the special needs of small firms, or of cross-sector skill shortages or the skill shortages which are confined to local labour markets. These are areas where Britain's performance has remained weak. The main thrust of the employers' comment—and this is where I come to the point made by my hon. Friend the Member for Chippenham (Mr. Needham)—during the period of consultation on the MSC review body's recommendations was against the continuation of statutory boards. I shall read to the House a passage from the comments of one employers' association which illustrates the arguments used. [HON. MEMBERS: "Which association?"] I am not saying which association because I shall quote one association and members of the same association who have a different view.

The employers' association said: The Association recommends that the training boards, (having achieved their primary objective, and having consolidated it over recent years), should be phased out. No further improvement in training will be achieved by their continuation. Nor does the Association believe that the quality or quantity of company training would decline were the boards to disappear … The phasing out of training boards on the grounds that they have met their fundamental objectives, and no longer have an existence that can be justified, would not only release resources within companies which are being diverted from the main priority of imparting skills, knowledge, enthusiasm and commitment. It would also allow board staff to be redeployed out of negative bureaucratic activity into jobs where they could make a positive and immediate contribution to improving national resources either directly within industry or within other Government agencies seeking to improve the relevant capabilities of the population". That was the view against the continuation of training boards. By contrast, some employers wrote strongly supporting their board and pleading for its continuation. I quote: I speak from enlightened self-interest and would consider it a grave mistake if the board to which my company is in scope were to be totally dismantled. We have received from them considerable assistance towards a high professional standard here. Against this background of conflicting views, it will be difficult to decide what changes should be made to the current system. Nevertheless, I am sure that it is right that we should now examine carefully how far we can move away from past preoccupations with structures and towards a greater scope for voluntary training arrangements. I believe that many firms which now recognise the value of planned training will continue to have adequate training programmes even if the incentives of levy exemption and board grants have been removed. Equally, I concede that this may not hold good universally, and in some sectors it may be necessary to retain statutory boards.

The important thing is to reach the right solution for each sector and not to try to devise one formula for the whole of industry. The MSC review body was rightly concerned to make a general review of the industrial training system. But it did not investigate in detail the future training needs of each sector. I therefore strongly supported the review body's recommendation that there should now be a separate review, in full consultation with industry, of the future training arrangements for each sector, including those sectors which already rely on voluntary training arrangements. It is, of course, on the basis of this review that the Government will take decisions on the future of industrial training boards this summer.

At a time of grave unemployment but with the promise of the upturn to come, it is appropriate for us to look at the manner in which we shall provide the skills of tomorrow. The Bill has limited objectives, but it should be seen as part of a much greater training initiative. In that light, I commend it to the House.

4.46 pm

Mr. Harold Walker (Doncaster)

One of the advantages and compensations of being in opposition is that one has the chance to watch television on a Saturday night instead of toiling over red dispatch boxes. Recently I have learnt what is meant by a "snow job", as depicted in television serials. That is what we have had this afternoon. The Secretary of State made a deliberate attempt to play down a highly controversial issue. If it is so innocuous and uncontroversial, why have hon. Members been deluged with representations? Why has such concern been expressed?

It would have helped the House, our debate would have been enhanced, and hon. Members would have been better placed to make a judgment, if we had been able to share the information contained in the MSC's corporate plan. The plan has been prepared. I understand that it has been with the Secretary of State for some weeks. I tried hard to obtain a copy. I understand that as a result of my representations last week a single copy has been placed in the Library, and that the commission was waiting for the Secretary of State's views before it released the plan.

Last year the Select Committee on Employment recommended that the plan be published and made available to Parliament before it was approved by the Secretary of State. The commission said that it accepted that recommendation. Why is that plan not available to all hon. Members?

Mr. Prior

The Select Committee said last year that it should examine the plan before it was approved by me. It did so this year. It made certain recommendations, which I received the week before last, on a Friday. It is right that I should take into account the recommendations before I write to the commission saying whether I approve it.

Mr. Walker

I do not challenge that. That is not the point. What the Select Committee said is on record. It said that the report should be published and made available to Parliament before the Secretary of State approved it. The commission accepted that recommendation without qualification. The report has not been made available to hon. Members, although it is of crucial importance to our understanding of the Bill. It is also important because the Secretary of State has had access to information that has been denied to hon. Members.

The commission is the authoritative voice of both sides-of industry and of local authorities as regards national manpower policy. Indeed, until now, it had been assumed that it was also responsible for the generation and implementation of that policy. That assumption is in the process of being demolished, no doubt to the delight of some Conservative Members. It is important that the plan should be made available to hon. Members, at least—should the Bill be given a Second Reading—before any discussion in Committee. The summary has been published in the Employment Gazette. As a result, we know that the commission and the Government are in clear and open conflict. That is what clause 1 is all about.

If there were no conflict, clause 1 would be superfluous and redundant. The Secretary of State mentioned the MSC review body's report entitled "Outlook on Training". I invite the House to look at the document. It is available in the Vote Office and was published by the commission in July 1980. The Secretary of State repeatedly referred to the review that he has asked the commisssion to undertake. The House should be aware that a review has already been carried out. Early in 1979 the commission, under its chairman, Sir Richard O'Brien, set up a powerful body to review the workings of the Employment and Training Act 1973.

One hesitates to accuse a Minister of deliberately misleading Parliament, but the right hon. Gentleman did not—by a long way—fairly reflect the views of the review body that are set out in the report. Contrary to what the right hon. Gentleman said, it came down heavily in favour of the present industrial training board structure. It said: The existing basic statutory framework for influencing training within industry has a number of important strengths which are relevant to all of our priority objectives for training in the 1980s …. The right approach for the future is to build upon them and not to cast them aside. I invite the House to obtain a copy of the document from the Vote Office. In paragragh 8, it argues in detail in favour of statutory industrial training boards. In paragraph 8.7, the report concluded: Radical changes in the existing structure would cause massive disruption. … Alternative structures would have to have clear advantages indeed to justify risking a major hiatus in training effort in a decade in which training will be of great importance. We have not been convinced of the reality of those advantages; nor, it is clear, have the great majority of those who submitted evidence to us. In the light of such strong and unequivocal views, the statement made this afternoon, and that which the right hon. Gentleman made on 26 November 1980, seem incredible. The right hon. Gentleman seems to have disregarded everything that the review body said. Four months after the publication of its report, the Secretary of State declared his aim. That aim is on record, and was repeated by the Earl of Gowrie in the other place on 10 December. He wished to ensure that there was no misunderstanding and to indicate that the words had been carefully thought out. The Secretary of State said: The Government's aim will be to extend the area of reliance on voluntary arrangements as far as possible, and to keep statutory industrial training boards in a few key sectors". —[Official Report, 26 November 1980; Vol. 994, c. 688.] The right hon. Gentleman did not repeat those words today. He wanted to obfuscate them, it seemed. In other words, this Bill seeks to make radical changes of the kind that the commission's report said would cause "massive disruption." The Bill is to be the instrument of those radical changes. I fear that it will have the consequences that the report forecast. During the past few weeks, when every hon. Member has been receiving representations from those professionally involved in training and from those who might be affected, word has come to me again and again to the effect that the Government intend to retain only four of the existing 24 boards.

Whatever the figure may be, the Government have not adduced any arguments or evidence to justify the wholesale abolition of statutory industrial training boards. Nor has the Secretary of State—either today or on any other occasion—given any evaluation of the effect of doing so on the quantity and quality of training. There is no evidence to show that such a drastic and dramatic change of policy has been preceded by consultations with the MSC, with the boards, with the TUC, the CBI, or anyone else. There has been no attempt to encourage public discussion.

Until this afternoon we had had only the bold statement that was made on 26 November, and which was echoed in the other place on 10 December. So far, we have had no indication of which might be the "few key sectors" for which statutory boards might be retained. In addition, no light has been cast on the nature of those wider training objectives that the Secretary of State says, might justify the retention of those boards.

What a slap in the face for those industries that are not on the chosen list. Perhaps for the first time, they will shortly learn that the Government do not regard them as key sectors. Are civil aviation, steel, potteries, the glass industry, wool textiles, cotton textiles, and the man-made fibre industry, to be told that they are not key sectors? Perhaps the Secretary of State or the Minister will tell us. In Committee, we shall continue to press until the Government give some indication of what those key sectors are.

The Secretary of State says that the question of which boards are to survive will depend on the outcome of the review that he has asked the MSC to carry out. As I pointed out, and as the right hon. Gentleman has acknowledged, we have already had a MSC review, namely, "Outlook on Training". It demolishes the whole purpose of clause 1. One of the explicit purposes of clause 1 is to enable the Secretary of State to override and disregard the views of the MSC.

Mr. Needham

The right hon. Gentleman has been kind enough to ask us to read "Outlook on Training". I am sure that he will accept that in paragraphs 9.7 and 9.8 the commission comes up with matters of major concern about the relationship between the MSC and the training boards, and the methods of funding. Those paragraphs show that the existing relationship needs to be altered. With respect to the right hon. Gentleman, he cannot say that everything in the garden is fine and rosy and that there are no fundamental criticisms in "Outlook on Training".

Mr. Walker

With respect to the hon. Gentleman, I do not think that I have said anything that would suggest that everything in the garden is rosy and lovely and that a case cannot be made for a touch on the tiller, and an adjustment here or a variation of scope there. I readily acknowledge that such adjustments have gone on since the 1964 Act came into being. The Secretary of State already has powers to vary the scope of a board or to terminate its existence. However, the Government should have regard to the recommendations of a body that was established by the Conservative Party in 1973. The MSC was established as the authoritative voice.

The Secretary of State seeks powers to disregard, overrule and override that commission. The powers already exist but are subject to proper constraints. Furthermore, the Secretary of State has pre-empted any such review by saying in advance that he will, as far as possible, get rid of the boards. He will not wait for the outcome of the review. The right hon. Gentleman said that there is to be reliance on voluntary arrangements.

Lord Scanlon, chairman of the engineering industry training board—who has a lifetime's experience in such matters—said: The main drawback of voluntarism is that inevitably there are too few volunteers. History has proved that voluntarism does not work, and moreover, it has worked nowhere in Western Europe."—[Official Report, House of Lords, 10 December 1980; Vol. 415 c. 730.] Lord Scanlon is right. History and evidence are overwhelmingly on his side. If the voluntary system had worked, there would never have been any need for the 1964 Act. His view has had many echoes in the great volume of representations that we have received in the past few weeks.

For example, the Road Transport Industry Training Board—one of the biggest training boards—says: Following the end of the second world war, a number of voluntary systems were tried and it was the total failure of these, embodied in the creation of the Industrial Training Council, itself the logical outcome of the hopes for the voluntary principle over the previous 15 years, which led inexorably to the move towards public involvement represented by the Conservative Government's Industrial Training Act 1964. Most other Western industrialised countries are pursuing greater, rather than lesser, public involvement in industrial training and both current evidence and historical experience suggest that without industrial training boards, many company training departments and training officers in this country would disappear. That is not an isolated view. It is apparently shared by all the boards. The House should be told—it would have been much better if the House had been told by the Secretary of State rather than by me—that on 21 January the chairmen of 23 out of the 24 boards signed a letter to the Secretary of State in which they said: A substantial majority of Chairmen expressed surprise and disappointment"— Of course, the right hon. Gentleman knows the content of the letter, but perhaps he will be sufficiently polite to allow me to tell hon. Members what is in the letter because they will be interested.

The chairmen, in their letter, said: A substantial majority of Chairmen expressed surprise and disappointment that the key recommendations of the Review Body… will not be fully implemented and that some or even most of the industries concerned will have to rely on voluntarism with regard to their future training needs. With one exception, it is the unanimous conviction of ITB Chairmen that this will be a retrogade step and place their industries in the unfortunate positions they were prior to the 1964 Act. Whilst many reputable firms will continue training, many others will make no such effort and resort to the previous practice of 'poaching' their trained requirements from the more responsible firms. We strongly urge you to reconsider your proposal for voluntarism.". If the right hon. Gentleman were being fair and straightforward with the House, he would have told us that this afternoon instead of leaving it to me. This is not the pleading of well-paid executives anxious to preserve their security. It is the collective view of men with an enormous wealth of industrial experience, many of them former employers, company directors or senior executives from both sides of industry, all of whom give time to their boards out of all proportion to any remuneration that they might receive, all of them doing difficult and demanding jobs primarily because they are concerned about industry's training and manpower needs.

I understand that the one exception, the odd chairman out of the 24, who did not sign, declined to do so only because the letter was not sufficiently strongly worded.

The Secretary of State seems completely unmoved by the fears of people who know something about training, are directly involved and have experience. They are not farmers, barristers and solicitors; they are men who have worked in industry throughout their working lives. Yet the Secretary of State treats their views with the same contempt as he apparently has for the views of the Manpower Services Commission.

To whom does the Secretary of State listen? Whose advice is he prepared to accept? Or does he think that he knows best? This afternoon the right hon. Gentleman talked about uncertainty. Who caused this uncertainty throughout industry? Who caused uncertainty in the minds of all those concerned with training, whose jobs are in jeopardy and who do not know what the future holds until the Secretary of State has decided where his axe will fall? How dare the right hon. Gentleman talk about uncertainty in these matters?

During the past 20 years or so, the wide range of matters for which the Secretary of State has responsibility has generated much legislation—some of it as controversial as any that has ever come before the House. Yet, from time to time his Department has put before us a measure which has commanded support from both sides of the House and has been welcomed by both sides of industry and commerce as necessary and long overdue. My hon. Friend the Member for Newton (Mr. Evans) reminded us that never was that more true than with the Industrial Training Act 1964. Probably few Acts had a longer gestation since, during the preceding post-war period, every voluntary alternative was tried and found wanting.

I shall not weary the House with any account of those repeated but totally abortive attempts to solve our manpower problems by reliance on marget forces. For those who are interested, they are well described in detail by Dr. P. J. C. Perry in his work "The Evolution of British Manpower Policy." But the mood that led to the 1964 Act was well summed up in the White Paper that preceded it. Under the heading "The Case for Action", it said: A serious weakness in our present arrangements is that the amount and quality of training are left to the unco-ordinated decisions of a large number of individual firms. These may lack the necessary economic incentive to invest in training people who, once trained, may leave them for other jobs. While the benefits of training are shared by all, the cost is borne only by those firms which decide to undertake training for themselves." The Conservative Minister responsible for that White Paper, whom I have quoted in the House in other respects and for whose wisdom the House should have regard, was John Hare, now Lord Blakenham. In the month preceding the Second Reading of the 1964 Bill, as it was, he said: We must all realise the extent to which sound economic growth depends upon the use of our most valuable natural assets—manpower. Yet the truth is that far too many employers give little thought to the question of developing the potential of those they employ. Many provide no training at all; many provide training only of a most perfunctory kind; and many forget the important part which further education can—and should—play in the training of young people … We can only guess how much the country as a whole has suffered because men and women at all levels in industry and commerce are not properly trained. The then right hon. Gentleman went on to say: ."few industries have developed any means of ensuring that they get the number of trained people that they need; there is no way of ensuring that all employers play their part; there has been little control of the quality of training; and there have been few attempts to examine in a criticial but constructive way methods and customs of training which have been in operation for several generations. Those words are a thumbnail sketch of the scene that made the 1964 Act necessary—a scene that the Secretary of State seems determined to recreate. They are a description of the voluntarism which we turned our backs on 16 years ago and which has been increasingly rejected by most other Western European countries in recent years but which the Secretary of State and his colleagues apparently now espouse. They want to revert to what Lord Scanlon in the House of Lords called "a chaotic state of affairs" such as existed before 1964.

I readily concede that some of the high hopes and ambitions of 1964—some of them perhaps unrealistically high—remain unfulfilled; but there is no doubt whatsoever that the Act has had a wholly beneficial influence. It has created and produced widespread improvements in training, it has created better standards and it has led to the development of a professional training expertise throughout industry.

It was Lord Carr who, when Secretary of State for Employment, speaking about the ITBs, said: The boards have great achievements to their credit in changing the attitudes of industry to training".—[Official Report, 1 February 1972; Vol. 830, c. 250.] Not the least of the benefits is that boards, by bringing both sides of industry into a forum where there is a feeling of community of interest rather than of conflict, make a positive contribution to improved industrial relations.

I suspect that if there is a weakness in the present arrangements, perhaps the fault lies not so much with the Act as with the way in which we have applied it over the years.

The essential principle of the 1964 Act was that of stick and carrot. The levy was the stick, and those who failed to carry out their training obligations were penalised by forfeiture of their levy payment. The carrot was the grant that was to be paid to those employers who did their duty and trained. Perhaps the carrot should have been slightly larger and perhaps the stick should have been applied rather more firmly. Unfortunately, any chance of doing that was frustrated by the 1973 Act, which led us in the opposite direction and diluted the spirit of the 1964 Act with its ceiling on levy, its exemption provisions and the wider exemptions that it provided for small businesses.

In so far as it will be relevant after the right hon. Gentleman has finished butchering the boards, clause 2 represents a further weakening of the role of the ITBs. The Department of Employment press notice that covers the Bill suggests that clause 2 is to enable an industrial training board to finance its operating expenses by a levy on employers". It is a statement that is coy in the extreme about the fact that the Government are retaining the 1 per cent. ceiling on levy. That is not mentioned in the press release. The upper limit that was introduced by the 1973 Act, to the dismay of the boards that had previously required a higher levy to fulfil their wider purposes, was offset by the Government's undertaking to pay the boards' operating costs. However, the Government are now clawing back the cash that was allocated to meet the boards' administrative costs—the £50 million has been referred to—and they have reneged on their commitment. Furthermore, the Government will deny, at least to some of the boards, the authority to recoup those losses.

I refer to the Engineering Industry Training Board as an example. I have not discussed the issue with it, and I do not know what its position will be. Presumably, it will be a prime candidate for survival when the right hon. Gentleman wields his axe. If it is not, I do not know which of the boards will come into that category.

Prior to the 1973 Act the EITB had a levy in excess of 1 per cent. When the Bill was before the House its levy was 2 per cent., and I believe that it had been historically higher. On the assumption that the board's activities have remained constant and that a levy of 2 per cent. would still be relevant, to peg the levy to 1 per cent. would be to cut the board's activities by a half. That will be the position unless the right hon. Gentleman has already assured the board's chairman, Lord Scanlon, of his willingness to bring a 2 per cent. levy order before the House. If he is not prepared to do so, the Bill will have a crippling effect on the board and on all the training that it seeks to carry out. Doubtless, it will have an equally crippling effect on the other boards.

Mr. John Evans

There is a deafening silence at the moment.

Mr. Walker

Indeed. I have no objection to the Government cutting their obligation to fund the boards' operating costs. I thought that it was a foolish undertaking in the first place, and I have seen since the problems that it caused, not least those to which the right hon. Gentleman referred fleetingly—namely, the friction between the staffs of the boards and their employers. The logic of severing the link and withdrawing the funding of the cost of the boards is to restore to the boards their former freedom for levy orders. That logic was recognised by the MSC's review body, which recommended that the funding of operating costs should be returned to industry and that the boards should no longer have to obtain Government approval of the terms and conditions of employment of their staffs. However, it recommended that there should be no statutory limit on the size of the levy.

The right hon. Gentleman cannot pluck out of a package of proposals that hangs together those pieces that suit his purpose and reject the others. We opposed the introduction of the ceiling on levy in 1973. If we felt justified in doing so then, we shall be doubly justified in opposing its retention now.

Despite having said that we shall not oppose the return to industry of the funding of the boards' operating costs, I must make it clear to the right hon. Gentleman that we are totally hostile to the idea that the Government should pocket the savings. I want to encourage the House to share that belief with me. The money should continue to be available to support the work of the boards but without the strings imposed by the 1973 Act. To do otherwise would be for the Government to impose yet another substantial cut in public support for training.

The full extent of the cuts cannot be quantified in the absence of the MSC's corporate plan. However, they are sufficient for the chairman of the commission, Sir Richard O'Brien, publicly to express the fear that even the present level of support is insufficient to sustain apprentice intakes at an adequate level in future.

However, we know from this month's Employment Gazette that Government spending on training is to suffer yet another cut of £77.5 million over the next five years. That will include a further cut of £35 million in the money allocated to the training opportunities programme. During the general election campaign the right hon. Gentleman pledged over and over again—it was almost interminable—his party's support for industrial training. He said repeatedly that it was the Conservative Party's approach to retrain those whose skills are no longer needed. In 1977–78 nearly 100,000 completed TOP courses. The figures in the Employment Gazette published this month suggest that by 1984 the Secretary of State will have managed to cut that figure to about 55,000. He will have reduced the number retraining by about a half. How does he reconcile that with his party's commitment to retrain those whose skills are no longer needed? He has talked this afternoon about people having to retrain and retrain. He has spoken of not one skill, not two skills but three skills in one lifetime. However, at the same time he is busily depriving people of the opportunity to do so.

On 16 March 1979 the right hon. Gentleman said: People must be trained in a spirit of optimism, secure in the knowledge that they are gaining the right skills and being educated to participation in the changes, not to be overwhelmed by them. That was good heady stuff in the atmosphere at the hustings. What has happened? At that time, the number of apprenticeships supported by Government funds was only 37,000. Within a year of taking office, he had managed to reduce it to less than 21,000. Last year total apprentice recruitment fell by about 10,000. It was reduced by about 10 per cent. of industry's recent annual apprentice intake.

I use as an example the engineering industry and the firms within the scope of the EITB. The apprentice intake fell from 22,900 in 1979 to 20,700 in 1980. Other manufacturing industries all reported reduced intakes and some were substantial. The reduction in furnishing and timber was 50 per cent. It was cut by half in printing and publication. It was reduced by 25 per cent. in food, drink and tobacco. As the TUC observed in its economic review, at the same time the skill level of our workforce is being diluted as redundant workers take any job that they can get. It is hardly surprising that the MSC admits in its corporate plan to being "exceedingly uneasy" about the policies being imposed upon it by the Secretary of State. That was its view before the Bill was published.

Of course training costs money. However, in the long run, it will cost us very much more if we have not trained. How can we inprove our productivity if we do not invest in the skills and techniques that are needed to match the challenges that are before us?

The Bill is a part of the Government's continuing retreat from the manpower policies that are essential if we are to give hope and opportunity to our people, especially our young people, and win through against the challenges of international competition and advanced technology.

The Government should accept the wise advice they have been offered by the MSC's review body. The right approach is not to cast aside the present arrangements, but to build on them. Instead the Secretary of State has chosen to reject that advice and to acquiesce to the demands of the Tory Party's Centre for Policy Studies. To whom is the Secretary of State listening? Where does he go to get his advice?

The most categorical statement on the subject has been made by the Prime Minister's poodle at 32 Smith Square, the Tory Party's Centre for Policy Studies. That is the true origin of the Bill. The Department of Employment and the Manpower Services Commission are the hapless fall guys. In short, the Bill has been dropped on industry straight out of the bowels of the Conservative Party. I shall ask by right hon. and hon. Friends to pull the chain on it.

5.20 pm

Mr. Jim Lester (Beeston)

The right hon. Member for Doncaster (Mr. Walker) gave the wrong address for the Centre for Policy Studies and he got the whole intention of the Bill equally wrong. He spoke about the uncertainty of the training boards, but the review that has been taking place for the past two years was set up by him. It is right that those who work in training boards should have their future settled as soon as possible. That is what my right hon. Friend is trying to do.

My right hon. Friend spoke seriously about the importance of training. There is no disagreement in the House about that. Equally we all share the frustration arising from the efforts made so far in this country to match our competitors in the search for improvements and matching training needs to industrial needs. I also share the feeling of Lord Scanlon who said in another place that we do not have unlimited time to get the matter right. He suggested, in his maiden speech, that we have 10 to 15 years to get our training linked to industrial performance if we are to achieve the sort of results that this country needs. The time has never been better or the need greater. That the need has never been greater has been reinforced in many areas because of the level of unemployment, particularly among the young.

Lack of skill is one of the major factors to those young people who seek employment. Secondly, there have been changes within our industrial structure, and family men, who, having worked in one area and gained one skill, find, perhaps for the first time, that it is no longer required. As the recession ends we shall have demands from industry for a skilled work force.

The time has never been better, because over the past two years there has been an enormous amount of research, and many reports, into this whole subject. They include the review of the Employment and Training Act report, the result of which we are debating, the Finniston Report, on which we have made progress, "A Better Start to Working Life", which has resulted in the Macfarlane report and farsighted suggestions for the potential for 16 to 19-year-olds and their education, the Government's decision to expand the unified vocational preparation in which industrial training boards have been closely involved, the TOPS and the achievement of TOPS and the review of skillcentres to put them on a more sensible regional basis. There is also my right hon. Friend's interest in distance learning and the open tech principle and their urgent development. But, perhaps more than anything, there is the development and growth of the youth opportunities programme in the past two years and the resources devoted to that.

The aim of all that is accepted throughout the House. Everyone entering the labour market should receive realistic help on his occupation or vocation. We should develop all possible means of doing that. Secondly, during people's working lives the chance must be given—the ladder must be there—for them to increase their skills or change their knowledge at any stage and by whatever means. The range of methods of doing that needs developing.

One essential key to those objectives must be developed. We need a widespread system of certification related to skills and standards rather than to occupation or time. Training boards have played, and will need to play in the future, a vital role in that.

We should not judge the Bill as a negative quango hunt. The stakes are far too high. Nor should it be seen in isolation. Few people inside or outside the House, see it in the Machiavellian light in which the right hon. Member for Doncaster sees it.

There is a danger that the review—particularly concerning the transfer of costs—is taking place at a most difficult time in industry. It is a time of falling profits, higher charges and the transfer scheme for sick pay. I know that my right hon. Friend the Secretary of State recognises that it is important that we should understand the position of industry over the transfer of costs. It would be tragic if a proper review were jaundiced by that element and if it were thought that, if it costs anything, we do not want it.

Of course it is right to transfer the administrative costs and to ensure that Government money is expended on the training element and expanding that with industry. There is no question but that the transfer of costs is essential. It is unfortunate that the position of training boards relative to their industries has declined since the Government took over the costs of administration. The boards have increasingly been seen as an arm of government and the Manpower Services Commission as an integral part of their own industries. I can support the view that the time and energy which has been spent by the Government, the Civil Service Department and the chairmen and staff of ITBs in trying to reconcile the irreconcilable over staff and salary costs and in trying to link them in to Government as extra-Government bodies has been a complete waste of time.

There is no doubt that the costs of the boards should be returned to their industries. However, I have sympathy over the time scale. I am grateful for my right hon. Friend's suggestion that he wants to achieve the change by a commencement order. It would be helpful for the purposes of the review if that could be clarified more and if my right hon. Friend could tell us that the commencement order would mean that the costs would be transferred over a period of one or two years, or three years as the TUC has suggested. If that element could be cleared away we should have a calmer atmosphere in which the review could achieve its work.

A sectoral review will achieve much. There is great scope for change over the 24 boards. There is scope for amalgamation, federation and for some boards to go voluntary. There is also scope for extension of statutory responsibility, perhaps, in the areas of telematics and computers. It is essential to maintain a network of sectoral training but to free it from the narrow confines of the past. As a result of the review, it is important that the costs of training should continue to be fairly shared.

When my hon. Friend replies, I hope that he will confirm to the House that the review will be seen with an open mind, that the pattern that emerges from the review has not been pre-decided and that it is not known by the House. We are anxious that it should be right. It is right that the Bill should be passed and that we should be prepared to take action. But there will be no great hurry after that. I hope that any proposed changes will be genuine, practical, long-sighted and on grounds that can be justified. One should remember that within the ITBs the staff have a great deal of industrial expertise in working with schools, in unified vocational preparation, in industry, careers and further education. If we can have an assurance that it is a genuine review and that there is no preset formula for the end of it, we shall await the outcome with interest.

In parallel with the review, I should like my right hon. Friend to liaise with the Secretary of State for Education and Science. Much good work has already been done between the Departments. It is essential that the Department of Employment should work with the Department of Education and Science to link the disparate strands of education, work preparation and training. Much good work has been done and I recommend to those who read the reports that emanate from the hard work of various hon. Members the Macfarlane report on education for 16 to 19-year-olds. Paragraph 63, which covers the training agencies, provides a basis for working together with the Department of Education.

I wish to make one other suggestion for consideration. The principal problem with training boards is that they have been sectoral and vertical while the labour market is increasingly regional and horizontal. Mobility in this country is a deep-seated problem, for a variety of reasons that we all understand, and it is likely to get worse. Natural labour markets are much more identifiable in small areas.

Almost by accident, good things happen and, because of the pressure of unemployment among young people, the MSC has developed the special programmes division. As part of that, it has developed area boards which are flexible and which involve employers, trade unionists, educationists and local authorities.

Originally, their purpose was social and they have been working to make sure that young people get some vocational training and, particularly, work experience as an alternative to unemployment. However, as the numbers have increased, the training element has increased and that should be continued. The CBI recognises that that is in its interests. It set up a committee to get additional places for work experience within the YOP.

I should like my right hon. Friend the Secretary of State to consider amalgamating the training services division with the special programmes division to cover the whole area, involving, even before the end of the review, the industrial training boards that are most relevant to local areas. As I have seen in my travels throughout the country, the boards could be a great help to the YOP and the development of unified vocational preparation. They have great knowledge of modules, links with industry and assessments of young people.

It was interesting for me to see in training workshops throughout the country the number of young people being trained under the YOP to use sewing machines. The knitwear training board has developed a system of assessing the aptitude of young people. Within half an hour it is possible to tell whether a young person is likely to get a job after training. Those schemes have not been put together and that is a simple example of the sort of help that industrial training boards could provide.

That formula would help us to develop a non-bureaucratic and locally inspired and motivated total coverage of the training package. It would cover the young unemployed and the young employed and the training of adults in and out of work. It would use all the means at the disposal of a local area, whether group training schemes, colleges of further education, employers' premises, skillcentres or whatever.

I am sure that local industrialists and trade unionists, who have already contributed a great deal to the area boards in relation to their social responsibilities, would see them in a different light if they were also responsible for training needs and bringing together schools, facilities and people in terms of employment as well as unemployment. It may be a radical suggestion, but I am sure that it would work within the 10-year time scale that we all believe is essential.

I am what is known as a "One-Nation" Tory. On training we have many common objectives. We have a bridge and a common interest with the trade union movement, which gave evidence packed with common sense to the review of the Employment and Training Act—RETA—and employers who have a vested interest in the proper utilisation of the skills of the nation in developing our future.

I beg my right hon. Friend the Secretary of State and the Under Secretaries who have been pitched into handling the Bill and who, I am sure, have the qualities necessary to deal with it, to see the bridge not as something which should, as Labour Members suggest, be made to smoulder and burn but as something which we can widen to provide real prospects for the future.

5.35 pm

Mr. Ken Eastham (Manchester, Blackley)

The Secretary of State made an unconvincing case which was thin in content and conviction. The Conservatives are a party of many contradictions. They tell us that we must export more, but at the same time the Government are taking away some of the tools that would allow us to do the job.

We may not be rich in raw materials, but we could be rich in expertise and high skills, and it is with those skills and high technology, rather than with our raw materials, that we will win the day. If we are to be successful, it is essential that we have the tools to do the job, and those tools include investment in the people who will carry out the necessary work to enable us to sell on foreign markets.

Various countries in Europe assess the value of training in different ways. The Secretary of State made a brief reference to the Federal Republic of Germany. An EEC information sheet published in April 1980 said that Germany has probably the most comprehensive training system. It added: Vocational training is concentrated on maintaining an adequate supply of places for people who wish to train for skilled occupations. Overall training picture bright. In 1978–79 the supply of training places was around 660,000. For the first time since 1974 training places were in surplus in 1979–80. That is an indication of the importance that one of our biggest competitors attaches to training.

There have already been references to the fact that our work force must be prepared to retrain perhaps two or three times in a working lifetime. It is dangerous to leave that work to some form of voluntarism.

I am especially concerned about some multinational companies which come here to invest money and use some of our skills. I am not optimistic that they are prepared to spend money on training. They will come and go as they wish, but we have greater responsibilities. Some multinational companies do not show as much loyalty to this nation as they do to international high finance.

Before the training boards were introduced there was virtually no training in some industries. Training was almost unknown in the catering industry. The building industry, a most unstable industry, has consistently made poor provision for skills. As a consequence, at times a boom, firms poached from one another and the industry got into a terrible mess.

In times of slump, there is virtually no training. It is only at times of great need that a shout goes up from industrialists and from Governments that something has to be done. By that time, of course, it is too late. Training should not simply begin when people are out of a job. It should be continuous. It should be concentrated directly in the areas where the nation knows it has specific needs.

Another area of serious consideration is the partnership with education authorities. The authorities need to make their provision in advance. They need to make staffing appointments. This cannot be done at the drop of a cap. The organisation of staffing within further education colleges is essential. The colleges need to know positively what will be the situation in order to make their training arrangements. The same consideration applies to ordering equipment. Those undertaking specialist courses of training need certain equipment. This must be ordered in advance.

A meeting of principals of some of the further education colleges took place recently in Manchester. Some of the possible consequences of the Bill were discussed. I should like to refer to a letter sent to me only last week. The principals make the point that it would be wrong to leave everything to the initiative of individual firms. The letter states: This is particularly so because many of the smaller ones lack the resources of staff and expertise to mount proper training schemes, while many of the very large companies are now run on a multi-national basis and really do not give priority to our own national needs. The result, therefore, is that many people find themselves working for firms who do not have the right priorities or attitude for training, which is why the levy grant system is a valuable way of ensuring proper training. Other points included doubts about the responsibility for initiating proper training schemes if ITBs are abolished. The principals make a strong plea that if the Government intend to withdraw their financial support for ITBs they should recognise that the Further Education Colleges will need more and therefore the Rate Support Grant to authorities which are responsible for them must reflect that". The point the principals make is that it would be wrong to assume that all Government financial support can be withdrawn from the ITBs without the need to increase public spending on education. Those are some of the observations of professional people involved in education and training.

Everyone can agree that we are in a serious state of industrial decline. The Bill will have a serious effect particularly on the inner areas of major cities where there is high unemployment. It is essential that we prepare and train our people for the jobs of the future. Money spent in this direction is not a financial drain. It is a positive investment. It is better than money in the bank.

If the Bill is given a Second Reading tonight, it will be yet another nail in the coffin of British industry. In spite of the Secretary of State's remarks about new training initiatives, I do not believe that the right hon. Gentleman has said anything new. I get the distinct feeling that this is something old. Indeed, it is very old. It is so old that it is beginning to smell.

5.45 pm

Mr. Nicholas Scott (Chelsea)

Until he came to his conclusion, I thought that the hon. Member for Manchester, Blackley (Mr. Eastham) had made a number of points in a sober and responsible manner about industrial training. The real contrast so far in this debate has been the well-informed, knowledgeable contribution of my hon. Friend the Member for Beeston (Mr. Lester), who has made such a notable contribution to work in this field over the past 20 months, and the hysterical denunciation of the Bill by the right hon. Member for Doncaster (Mr. Walker) who made no positive proposals and did little good to anyone except possibly to raise his own blood pressure. I wish to do my best to find some common ground in industrial training, as did my hon. Friend the Member for Beeston, to see whether we can find a sensible road forward.

We are surely agreed that training is essential to our economic future and important to the individuals who benefit from it. We can also agree that it is a practice that is much under valued in this country by too many employers and too many people involved in industry. We have done too little compared with our international competitors. This has led to skill shortages and has contributed to our poor position in the league of industrial achievement. We can also agree that training is essentially a long-term investment. It will not produce results tomorrow. One is sowing the seed corn that will bring forward results some time in the future.

It is worth mentioning a special problem that exists at the moment with a very high level of unemployment that is hitting disproportionately, as unemployment always does, the least skilled members of our work force. They find themselves increasingly without job opportunities. Yet we know that when the upturn in the economy comes—although increase in employment may be delayed beyond other indicators of economic upturn—we shall need new skills. Every time that the upturn has come before, we have run into bottlenecks and skill shortages. There is no reason why that should be different today. Indeed, with the rapid change in technology, it is likely to be worse this time than on previous occasions.

We therefore need a great investment in training. That is one of the reasons why it is right that the review should be taking place. As my hon. Friend the Member for Beeston said, the review was instigated under the previous Labour Government and is now hopefully to be carried to a swift conclusion by the MSC so that my right hon. Friend can consider what action he needs to take upon it.

There are some pluses and minuses in the present situation. On the plus side, it is true that industrial training boards have built up considerable banks of knowledge about training over a wide area. They have good access to companies at a high level. That is important. They have improved the structure of training in a number of important areas. In the engineering industry, the modular training scheme is a notable example of the improvements that have been made.

I should like to emphasise one other point made by my hon. Friend the Member for Beeston—the fact that the training structures are an important addition to our tripartite machinery. Anything that brings together the Government, industry and the trade unions to talk about specific problems, rather than, as so often, to exchange insults, is an important contribution to our economic life.

On the minus side, there is no doubt that many of the boards have built up bureaucratic structures whose impact has been made worse by the need to refer too many decisions to the Manpower Services Commission, then to the Department of Employment and then to the Civil Service Department. We have heard of decisions taking 18 months to return to the originator. That must be wrong.

Mr. John Evans

The hon. Gentleman has raised an important point. Does he lay the blame on the bureaucracy of the industrial training boards, of the Manpower Services Commission or of Whitehall?

Mr. Scott

The blame probably does not lie exclusively with any of them. We have too complicated a system, and that fact alone justifies a review of the bureaucratic procedures and my right hon. Friend's proposal to streamline them.

One of the greatest failings in industrial training—this is not exclusively due to the industrial training boards—is that we are still largely stuck with an outdated system of craft training. The Select Committee on Employment was given evidence of an uneven quality of work as between the different boards, and perhaps a degree of inflexibility about some of them.

There was recently drawn to my attention the experience of the British Agricultural and Garden Machinery Association. One would expect it to come under the Agricultural Training Board, but it comes under the Road Transport Industry Training Board, whose experience has nothing to do with the training necessary for those who work with agricultural and garden machinery and whose numbers are tiny compared with the total under the scope of that board. Their work is not compatible with that of the motor trade. They go out in all weathers, in appalling conditions, to work on farms, smallholdings and market gardens repairing machinery. They are not working in motor transport work shops or other workshops. That section of the industry has always run its own system of training its own employees. The board has manifestly failed to show any concern for its special needs.

That is an example of the sort of group that could be taken out of a board's scope and allowed to make its own voluntary arrangements. Such a case—there are others—reinforces the need for the review. But I hope that when the Government conduct a review and make up their mind they will not lose the baby with the bathwater. There is a great danger in too widespread and too quick a spread of voluntarism. We do not know whether any voluntary arrangements would continue to have statutory standards applied to them. Some of the existing boards that continue will clearly go on having statutory obligations. Will the voluntary arrangements that might replace some of them also have to achieve those standards? If not, who is to monitor them to see that they achieve the necessary standards?

I hope that my right hon. Friend will acknowledge that there is a danger and see that it is dealt with. I hope that he will also deal with the danger of a too rapid transfer to industry, particularly in the present economic climate, of the burden of the cost of industrial training.

We know what our targets are. They are to reduce bureaucracy, improve standards, build upon the best experience that we have, ensure a training system that is flexible enough to cope with a rapidly changing future, and give the taxpayer and industry value for money. I am sure that there will be savings as a result of the review, but it must be clear to all that, with unemployment likely to face the country for a considerable time, they will not be absolute; the money will have to be spent elsewhere on manpower programmes, particularly to protect the weakest in our society from the present intolerable level of unemployment.

My right hon. Friend outlined a number of aims that we should be concentrating on as we reform our system of industrial training. The first was vocational preparation for the young, where, as he rightly said, we are way behind the performance of our main competitors. In West Germany about 90 per cent. of young people go on to some form of education or training when they finish full-time education. In France the figure is about 80 per cent. Here we are lucky if it is 10 per cent. We have a long way to go. The experience of the youth opportunities programme and of the unified vocational programme has shown what can be achieved when we set our minds to it. The vast majority of young people who have gone through those programmes have gone into full-time work at the end of them. If we are determined to list our targets, they can be hit.

I welcome my right hon. Friend's statement that the eventual target should be to see that every school leaver has an opportunity under one or other of the schemes. But since, if we are to go on working on the present basis we need the widespread and increased co-operation of employers, I question whether a widespread and quick return to voluntarism will necessarily meet the need for expansion in this area.

My right hon. Friend also mentioned the question of apprenticeships, which is perhaps the greatest failure of our present system of industrial training. The late and much missed Mr. Reginald Maudling used to describe living in this country as being like living on a planet with an excessively high gravitational pull, because to change anything required a disproportionate effort. The experience of trying to change the system of apprenticeships is a good example of that phenomenon. Our present system is failing both the youngsters and our economic base. It is increasingly inappropriate to the newly developing and highly technological industries upon which so much of our future prosperity depends.

We all now accept the premise that we need to train to standards rather than simply to train by the effluxion of time. But again I have to give my right hon. Friend a warning. Today's economic pressures on employers have led to cuts in apprenticeship training and in the training of youngsters generally. Therefore, any widespread dependence upon employers to increase training in this area will have to wait until the economic climate has altered.

The third priority that my right hon. Friend outlined was adult training and retraining. The structural change that we are experiencing, and are likely to experience for a long time, will mean that less and less can the majority look forward to acquiring one skill that will last them throughout their adult life. People will have two or three careers. In training people for new careers, in training managers and technicians, we run a long way behind our major industrial competitors.

Much of the work will have to be done within industry. I welcome what my right hon. Friend said about new techniques, what are now called open learning techniques. I know that the technical term means the use of new techniques of micro technology, and so on, to make learning available to more and more people. But I hope that in their other sense the words "open learning" will mean that more and more people who perhaps feel themselves locked within a straitjacket of opportunity at present will be able to improve their life chances and provide themselves and their famlilies with more prosperity.

I support the Bill. I know the commitment of my right hon. Friend and of my hon. Friend the Under-Secretary, whom I welcome to his new responsibilities. We need a better trained and more flexible work force, not just because our country should prosper as we all want, which is important enough, but because the individual, if he is provided with more opportunities, will be able to realise his potential. That will lead to a more cohesive, more satisfied and more prosperous country. Like my hon. Friend, I shall watch the review with great care and great interest in the light of the future industrial training needs of the country.

6.00 pm

Mr. Cyril Smith (Rochdale)

First, I express the hope that if, by tradition, Governments take little notice of points made by Opposition parties, they might at least take note of comments from their Back Benchers. I particularly hope that they will take notice of the speech of the hon. Member for Chelsea, (Mr. Scott). If some Members believed that his views were the views of the Government Front Bench, some of us might be a little less apprehensive about the Bill.

As I listened to the Minister, I wondered why he was presenting the Bill at all. He said that it was innocuous and kind, and that there was no need for worry. At one stage he indicated that he had stirred matters up, and he said that he had not wanted to do so.

Many hon. Members are concerned, not so much about the proposals in the Bill but about its consequences. I am concerned about some parts of the Bill, particularly clause 4. We believe that the consequence will be one of two things, and possibly both. First, a number of industrial training boards will be abolished without anything necessarily to replace them. Secondly, the Bill will transfer from the Government to industry more of the expense for training than is now borne by industry. I suggest that on either count the Bill is ill-conceived and certainly ill-timed. We are in a position where industry is struggling to survive, and yet the Bill will clobber it yet again. It will have to find finance over and above that which it is expected to find at present.

That is strange. The Government say that they believe in free enterprise, and at the last general election they made great promises to small companies. I recall the trips to Bournemouth and the speeches that the now Minister of State, Department of Industry, made to the Council of Small Firms. He said that everything would be all right for small businesses if the Conservatives were elected. But in practice, business has been clobbered and clobbered again by this Government. Local authorities have put up rates to astronomical heights as a result of Government policy. National insurance surcharges have been levied on companies, and they are now to be asked to pay sickness benefit for their employees. This Government, who are so keen on encouraging industry and small businesses, are now adding a further burden by transferring to them the cost of financing training programmes. That is a strange way for the Government to behave, and a strange time at which to embark on such proposals.

Mr. Needham

Does not the hon. Gentleman accept that small employers are exempt from the levy and, therefore, that the very small companies would not suffer?

Mr. Smith

First, there is the argument about what is small, and, secondly, the matter is under review. We have no guarantee that small companies will continue to be exempt. If we are moving towards voluntary organisation rather than statutory organisation we shall have to rely on boards to exempt small industries. Small companies were not exempt prior to 1973. On more than one occasion I signed cheques for levies, and I received them also. Small companies were not exempt prior to the change in circumstances, and there is no guarantee that they will be exempt in the future.

I do not deny—indeed, I subscribe to the view—that some industrial training boards are grossly over-administered and that some have provided jobs for the boys in glorious fashion. Some have built up sizeable assets and resources and some have as members people who have not been close to industry, in a practical sense, for years. That demonstrates a need for review, and not a need for abolition, which many hon. Members believe will be the consequence of the Bill.

Equally, many training boards have an excellent record. Before this Government came into office my constituency was largely a textile constituency. Therefore, no one will be surprised if I take that industry as an illustration of my point. The Cotton and Allied Textiles Board has, to my certain knowledge, been of great help to many companies, including many small companies. To destroy organisations such as that—it appears that textile boards are likely to get the chop—would be one more retrograde step and a public demonstration of the view that many people hold that the Government have written off the textile industry.

I said that the Bill was ill-conceived and ill-timed. We are a nation in which the Labour Government put 1½ million people on the dole. A further 1 million have now been added by this Government. It is obvious that the Government are striving desperately to equal the record of the Labour Government and thereby ensure that by the end of the year there are about 3 million people on the dole. The net consequence of mass unemployment should indicate a necessity for more training and retraining, rather than less. Whatever one's view about the way in which unemployment has arisen, because it exists this should be a time for training and more training. What are the Government doing about that? I thought that the speech of the right hon. Member for Doncaster (Mr. Walker) was superb and extremely well-researched. He indicated where the Government had reduced the facilities and opportunities for training.

In my constituency, where unemployment is now officially running at almost 14 per cent. but where we know that, unofficially, the figure is between 16 per cent. and 18 per cent.—and I am not including married women; I have in mind mills where closures have been announced but where redundancies have not yet taken place and are therefore not included in the figure—we have a Government skillcentre. But what have the Government done to encourage such companies as remain in Rochdale to send their employees to the skillcentre this year? They have increased by substantial amounts the fees that those companies have to pay to send people for retraining.

I must be fair to the Under-Secretary of State, the hon. Member for City of Chester (Mr. Morrison). He has written to me in the past seven days saying that he is considering this matter and the representations that I have made to him. I hope very much that he will arrive at a conclusion that is favourable to my constituency, so I must say nothing likely to prejudice him in doing so.

Skillcentres in areas of high unemployment should be encouraged to do more training. Companies that are going through periods of deep recession and serious economic problems are not encouraged to send people to attend skillcentres if the fees are increased. That encouragement will come about either by cancelling the fees altogether or by retaining them at their present level.

In terms of training and retraining, on top of all that we have a changing economy and a changing future. I refer to the microchip and all the other technological advances that are being made at present. I have said many times, and I make no apology for saying again, that sooner or later some Government will have to have the moral courage to say that we need to restructure the pattern of life as between employment, vacation and leisure. The time is coming when unemployment will have to cease being a party political football and we shall all have to accept that our labour force, if it works 40 hours a week for as many weeks a year as it does at present, until men are 65 and women are 60, is greater than our economic requirement as a nation.

The consequences of saying that are many. I have in mind the gradual reduction of the retiring age for men and the restructuring of our training facilities and opportunities. I subscribe very strongly to the view expressed by the Secretary of State about the need to get away from the idea that a person becomes skilled only if he is under the age of 20. We ought to have standards capable of being achieved at any age; anyone who acquires them is a skilled man, because he has done exactly the same training as people between 16 and 20 are now doing. A change in the age of training and the opportunity to train and retrain later in life are two essentials. We also need shorter working weeks. These are all consequences of accepting that we have a labour force surplus to requirements.

I hope that the day is not far off when some Government will have the courage to say "That is the position. Now let us sit down and work out the consequences of it." One of the consequences of it must be training and retraining. That is why at this stage it is idiotic to start proceeding along lines that will reduce the existing number of industrial training boards.

I turn finally to the clause to which, in passing, I referred earlier. Clause 4 gives exemption to companies in enterprise zones. In my view, that clause in itself is sufficient to warrant voting against the Bill. It is a disgraceful provision, and I am staggered that any Government should have the impudence to include it in a Bill of this description. The clause is saying to people who employ apprentices, including my own company, "You do the training, and let companies in enterprise zones take them over and use them." That was the position before we had compulsory industrial training, and that position is being encouraged by clause 4 yet again.

First, let us consider what is to go into the enterprise zones. I suspect that many right hon. and hon. Members have no idea what is likely to be included in enterprise zones. Great supermarkets are qualified, as are architects' offices, engineers' offices, solicitors' offices and commercial organisations. All are qualified to go into enterprise zones.

Mr. Clement Freud (Isle of Ely)

Betting shops.

Mr. Smith

As my hon. Friend says, even betting shops will be permitted. All of them can go into enterprise zones and get the benefits of them. However, that is water under the bridge. The Government have decided that such bodies may go in and, although many of us believe that that is not the spirit in which enterprise zones were envisaged, it has happened, and that is it.

Under clause 4, however, all those organisations, be they shops, offices, manufacturing industries or anything else, will now be exempt from any levies for training and from any requirement even to provide statistics about the training that they are doing. In future we shall not be in a position to question or discover what is going on. We shall not be able to say that the law on this matter needs changing. All companies in enterprise zones are to be exempted under the clause.

A company competes in the same market as a second company across the way, which is in an enterprise zone. The company across the road, because it is in the enterprise zone, will get tax and rate concessions, planning reliefs and Governmant grant. On top of all that, when, as a consequence of the Bill, some industries, including the one on this side of the street, have an additional levy put on them for training, the company across the road in the enterprise zone is required to pay no levy at all. The clause is a scandal, and it itself merits a vote against the Second Reading of the Bill.

I believe that the Bill is ill-timed. I do not believe that it is innocuous, as the Secretary of State would have right hon. and hon. Members think. It is ill-conceived. I agree that there is a need to review the training boards, their function and their administration, and generally to see what can be done to streamline them so that they can prepare for the next decade. In the end, the country needs more training and retraining, and not less. If this Bill is given a Second Reading, the consequence is likely to be less training and retraining, and not more. For all those reasons, my colleagues and I will vote against the Second Reading.

6.20 pm

Mr. Robert Taylor (Croydon, North-West)

It is a pleasure to follow the robust contributions of the hon. Member for Rochdale (Mr. Smith), who speaks from a depth of personal experience in industry. I share his reservation about clause 4, as I do not believe that it is right that those within enterprise zones should be released from the payment of levies that are paid by other companies. However, that does not merit our voting against the Bill tonight.

I do not agree with other remarks made by the hon. Member, particularly his argument that all training boards should be sacrosanct and that none should be closed down. Nor do I believe that, as a result of the Bill, there is likely to be less training in the future.

I have always believed that any party that has been in office continuously for 10 years or more must run out of ideas. It tends to grope around in order to find legislation to produce before the House. The Industrial Training Act 1964 was such an Act, coming at the end of 13 years of Tory Administration. It was meant to help industry, but it was ill-thought-out, and it placed an administrative and financial burden on industry, and particularly on small firms.

When I first entered the House after the 1970 election, I joined my hon. Friend the Member for Shipley (Mr. Fox) and my right hon. Friend the Member for Gloucester (Mrs. Oppenheim) in starting a campaign to change the levy grant principle as it was then operated. We tabled prayers against the training levies and questions to the Minister, and kept up a barrage of activity on the subject. As a result of that activity, we played a small part in the birth of the Employment and Training Act 1973. That Act was a typical example of compromise, which was the hallmark of successive Governments over the 1960s and 1970s.

Because part of that Act retained the levy grant system, I concluded my speech on Second Reading on 13 March 1973 by expressing grave reservations. The Government of 1973 took a step backwards from the plan for discussion that was produced in 1972, when my hon. Friend the Member for Howden (Sir P. Bryan) was the Minister responsible at the Department. Page 55 of the discussion document said: A policy by a firm of maximising its grant return can therefore lead to distortion of the training that it really needs to undertake. I accepted that part of the document. I do not believe that the hon. Member for Rochdale would dissent.

I repeatedly tried to put that point of view in Committee on the 1973 measure, but I did not receive much support. However, as long ago as 1966–67 the Estimates Committee, under the chairmanship of Mr. Hamling, the late Member for Woolwich, West, who was a respected educationist, came to a similar conclusion following evidence from a substantial company that it had changed its trading policy in order to maximise its grant but not in a manner in which the board had complete confidence. In 1966–67 the Estimates Committee forecast the abandonment of the levy grant system. The Bill takes us one step nearer, but it again falls short of the objective that I should like to see.

That objective would be the handing over of the industrial training boards to the industries that they try to support, complete with the assets that they have built up and to which the hon. Member for Rochdale referred but without the statutory right to levy. They would, however, have the right to charge fees for the services that they provide.

I do not know why my right hon. Friend the Secretary of State has moved in the direction that I should like to see. Perhaps it was because, about two months ago, the Daily Mail produced a substantial article showing that the director of the Road Transport Industry Training Board had an inflation-proof salary which was already over £28,000. If such cases do not encourage right hon. and hon. Members on the Opposition Benches to the view that an overhaul of training boards is distinctly necessary I do not know what will.

Whatever the reasons, opposition will be mounted against the Government's proposals. At the beginning of his speech the right hon. Member for Doncaster (Mr. Walker) lifted up a pile of papers that he had received protesting about those proposals. It would be extraordinary if, after 16 years of the existence of the training boards, hon. Members were not bombarded by those who wanted to preserve the status quo. It would be extraordinary if after 16 years, arguments could not be put forward to justify the retention of the present situation. However, in the main those choruses come from those who are employed by or connected with the industrial training boards.

The right hon Member for Doncaster implored my right hon. Friend the Secretary of State to take notice of those protests that had come from those who were "professionally concerned" with the existence of the training boards. He went on to implore the Secretary of State to listen, not to those who are barristers, professional men or farmers but to those who speak for industry. I suggest that those who speak for industry do not support the continuation of the boards as they are now organised.

One argument that is frequently put forward—my hon. Friend the Member for Chelsea (Mr. Scott) mentioned it tonight—is that we must be ready for the upturn in the economy when it comes. Of course we must. The engineering industry is a case in point.

In my constituency a firm called Waddon Engineering has just introduced a new motor cycle. It was launched with substantial press coverage, during January. That firm has an apprenticeship scheme. Therefore, it does its own training to a certain extent. However, because of the upturn in its business it cannot find skilled staff at this stage.

After 16 years, when we are in a depression—as many people call it—is it not extraordinary that sufficient skilled men are not available? Does not that mean that there is something sadly wrong with the results of the training boards?

Many training boards have made representations to us. Most hon. Members will have received a pamphlet from the Distributive Industry Training Board. I should declare an interest at this stage, because my firm's annual contribution to that training board is over £3,000. In its annual report it states that it looks after the interests of 750,000 people in the distributive industry. However, the document, entitled "What's the Future?", claims that there are 100,000 trained instructors in distribution, looking after a work force of 750,000.

That is an odd claim for the board to make. It must be considered. What qualification is required for a person to be a trained instructor? How is that number reached? Do we want 100,000 trained instructors to look after 750,000, or has something gone drastically wrong with the training? As it is likely that the Distributive Industry Training Board will be abolished, it is worth recording that in the document the board states: It is the Board's view that in an industry as diverse as distribution—which includes retailing, wholesaling, mail order, credit trading, builders' and plumbers' merchants—no single voluntary body could be established to ensure that the industry's training standards are maintained and developed. Do hon. Members think that a statutory body can be responsible for training for such a multitude of purposes? I do not, and I believe that that board is suitable for the axe.

I have another reservation about the Bill besides the one mentioned by the hon. Member for Rochdale. It empowers the Secretary of State or any of his successors to establish boards without the approval of the House. That worries me. In Committee on the 1973 Act, the right hon. Member for Lewisham East (Mr. Moyle) made fun of that proposal, to such an extent that the then Minister assured him that there was no such intention.

I am happy to vote for the Bill because it moves in the right direction. If my right hon. Friend uses it as I hope he will. I think that we are signing something of a blank cheque, which goes very much against my principles, but we shall look for some assurances before Third Reading.

6.31 pm

Mr. Jim Craigen (Glasgow, Maryhill)

Until the hon. Member for Croydon, North-West (Mr. Taylor) ended his speech, I thought that he was a most unhappy man. He did not like the 1964 Act, he was unhappy about the 1973 legislation and he had misgivings, with which I agree, about the enterprise zone exemptions in this Bill—yet all three were introduced by Conservative Governments.

The Bill is designed to save the Exchequer £50 million. The irony is that the Budget forecast will be exceeded by about £500 million, because the average level of unemployment is considerably higher than last year's Treasury forecast. We should keep this matter in perspective. I doubt, moreover, whether the Treasury will be able to recoup the £50 million entirely, because, with the operation of corporation tax, the Treasury's net receipts may be considerably less. The training services side of the Manpower Services Commission activities will be at the sharpest end of the cuts. That was made clear recently to the Employment Select Committee when we interviewed the chairman of the MSC.

The reasons for this Bill is that it was realised that a number of things needed to be corrected in the 1973 legislation. I hope that there will not be false economies, since I believe this Bill to be premature. Neither the TUC nor the CBI has been able adequately to consult its members. They do not know what their members feel about the Government's proposals.

This is not a good time to make such fundamental changes in our system of industrial training, because the changes of attitude which are necessary will not be achieved from employers who face increasing costs, nor from employees when nearly 3 million people are out of work. One in 10 of the working population of Britain is out of work, and the ratio is one in six in areas such as Strathclyde, which includes my constituency.

The return to voluntarism is fraught with dangers, as a number of hon. Members have said. If it had worked, we would not have required the original 1964 Act. Industrial training in companies has an important role to play. In their frequent exhortations for greater productivity, Ministers point to the need for better training in British industry, and there is a need to develop employee opportunities. All too often, training is seen as an overhead and not an asset to the running of a company.

Reference has been made to skill shortages. They largely arise from the training weakness, both individually and collectively, of companies. The changes proposed in the Bill will not help to meet the needs which will arise with new technologies. I do not suggest that the present ITB system is perfect, but the whole thing might easily be swept away or eroded so that its effectiveness is severely crippled.

Before the Secretary of State makes proposals for merging or abolishing particular ITBs, he should give the House his reasons. I do not agree with everything that the hon. Member for Rochdale (Mr. Smith) said, but he made a valid point over his anxieties about the textile industry. If that is one of the boards which will be axed, there should be a debate in the House about the Secretary of State's reasons for thinking that it is dispensable.

Voluntary bodies do not report to the House of Commons. Nor will the firms within that industry be compelled to join the voluntary training arrangements which might be decided. One of the weaknesses of the 1964 legislation, which was implemented by a Labour Government, is that, although we can easily sort out the shop floor, it is more difficult to sort out the priorities within the board room.

Personnel management and training—I have had some brief experience of both—do not rank high in most boardrooms. They are not always regarded as important operational functions. That should change. In their dealings with executive and non-executive directors of companies, Members of Parliament sometimes find that their performance leaves much to be desired.

I agree that there is a need to correlate the duration of apprenticeships and the standards achieved. I speak from experience, because I served an apprenticeship in the printing industry. I took full advantage of the day release and evening class facilities. One should not overlook the contribution by ITBs recently to improving the standard of apprenticeships. Nor should we overlook the fact that one could easily reduce the training content for many professional qualifications. Before I came to the House I worked for the Scottish Business Education Council, which was involved with the educational qualifications of a variety of bodies, not all of which operate only in Scotland.

The Government may want to help late developers who are denied their chance at 16, but with rising youth unemployment it is not the late developer but the non-starter who will benefit most from any change in that direction—in other words, the youngster who is denied permanent employment altogether in his or her teens. With longer-term unemployment among youngsters rising, we must take hold of the suggestion put forward by the hon. Member for Beeston (Mr. Lester), that there should be some forging of links between the special programmes division and the training services division of the Manpower Services Commission. He referred to himself as a "One Nation" Tory. I suspect that he paid the price for that outlook. In my dealings with him, I found that he had a personal commitment to improving training.

Adult entry will have its price. I cannot imagine older men and women seeking to come into a craft area without expecting a higher rate of pay than that available to 16, 17 and 18-year-olds. Moreover, they may look for exemptions for certain aspects of training, despite the fact that in recent years the length of apprenticeships has been reduced, especially since the raising of the school leaving age in 1972. Adult entry may force the pace of State funding of the initial period of apprenticeships. Nobody gives a second thought—although the Government have their plans—to the funding of youngsters going to universities. The State is prepared to meet those costs. Adult entry will probably press the claim for greater State funding of the initial costs of training.

Adults will, I think, invariably work for the company. I can foresee a position where adult entry is seen more as a means of escalating the skills of those already employed by the company, rather than the company taking on some unskilled or semi-skilled persons. The tendency will be to give unskilled or semi-skilled employees the opportunity to upgrade their skills.

While the Government may wish to abolish industrial training boards, the very fact that they are moving in the direction of adult entry means that some form of apprenticeship board or authority will be required to oversee arrangements concerning recruitment, content, duration, and certification of craft apprenticeships.

A major management development problem exists in British industry. There is a considerable challenge in trying to maximise the potential of employees. Most firms do not fully utilise the potential of those whom they employ. That point was brought out vividly in the reports of the National Economic Development Council, produced some time ago, about skill shortages. The reports said that many of the craftsmen leaving engineering and other industries do so after redundancy because they see little or no long-term career prospects. In other words, there is a considerable wastage because people do not receive the satisfaction for which they are looking—and rightly so—in the jobs that they do. I hope that there will be some link forged between the "little" NEDC reports and the individual industry training boards. Too many of the sector working party reports that were painstakingly prepared hit the wastepaper basket rather quickly. There is a need to link up the tripartite input of many of the "little" NEDC working parties with the work of the industry training boards.

I turn briefly to the 16 to 19 age group. I read the Macfarlane report. I do not wish to be partisan, but, as with many other reports that we read as Members of Parliament, I did not think that it said anything fresh or radical about where we should go. It certainly did not proffer any additional resources to enable us to get there. There is no doubt that a sizeable section of the working population never achieves the advantage of initial employment training. It might be argued by some companies that they do not require any initial employment training. There is a danger that we might re-invent the wheel. Far too often, our secondary schools are engaged in doing remedial work that should have been done in our primary schools. Our further education colleges become involved in repair work that should have been done in the secondary schools. I hope that that will be taken on board when we consider the problems of linking what is done in our educational system with what is required in our industrial system. For example, the "open tech" sounds very imaginative. We have an Open University, but its students are up in arms because of the increasing costs of studying at it. It is fashionable to talk about distance learning. I spent six years in educational administration, and I am well aware of the Carnaby Street fashions in that line.

There are skillcentres. One of the problems that frequently comes before the Select Committees and other bodies is the reluctance of employers to recognise the output of the skillcentres, and a not unnatural diffidence by some trade unionists, in times of high unemployment, to accept the output of those from skillcentres.

Dr. Hampson

When Lord Crowther-Hunt put forward a similar idea to the "open tech", he received less support from the then Labour Government than this idea is receiving from this Government. We have accepted the principle. My right hon. and learned Friend the Secretary of State has done a great deal more than the previous Labour Government.

Mr. Craigen

I am not disputing that point. I am simply suggesting that the idea sounds good. I even read the pamphlet on the subject produced by the hon. Member for Bristol, North-West (Mr. Colvin). I have read a number of other articles on the "open tech", but it is all rather vague. We already have skillcentres. The problems in distance learning will crop up—make no mistake about that. Much ground work has still to be done. I am not closing my mind to it, I am simply sceptical about how far we can take that idea.

The industrial training boards must be more effective. The 1964 and 1973 legislation said what they could do. We must develop criteria for what they should do if, as is proposed in the legislation, the boards are replaced by voluntary bodies. One difficulty is the rising overheads of employing labour. I fear that too many employers will look for short cuts and ways to reduce their training costs at a time when they should be spending more on training.

This argument about training costs is particularly relevant when one is discussing the recruitment of young people. There are employers who will say that the cost of employing young people is too high because employers have to pay the training costs involved. Therefore, we shall have a situation in which more firms will try to subcontract work or to upgrade the employment skills of their employees as a means of saving labour.

This Bill is premature. It gives the Secretary of State for Employment authority, yet the House has had no clear indication how he proposes to use that authority. Therefore I regard the Bill not just as a bad Bill; in some ways it is a dangerous Bill. Both sides of industry have already made it clear to the Select Committee on Employment that they need more time to consult their members. We have the irony that the CBI does not want the employer to bear the cost of £50 million, but the TUC does want that—although the TUC recognises that a longer breathing space is required by way of transition.

I say to the Secretary of State: do not just think again about this Bill; think what it is likely to do to the future of industrial training. For that reason, I shall be opposing the Second Reading of the Bill, along with my colleagues.

6.51 pm

Mr. David Madel (Bedfordshire, South)

I agree with the hon. Member for Glasgow, Maryhill (Mr. Craigen) that a considerable amount of spadework must be done before the "open tech" can be made operational. I also agreed with him when he pointed out the place that skillcentres will have in bringing about the fulfilment of this concept. I happen to think that we have quite a bit of ground work to do on the way in which skillcentres are fitting into this country before we move on to an "open tech", although I do not in any way criticise the Government for the idea. From what the MSC has said, I am certain that a great deal of work is already being done.

The hon. Member for Maryhill reminded us that the Bill comes at a time of acute difficulty for the economy, especially for those who are seeking work. What we have now is an opportunity to improve our training substantially so that when there is a change in the economic circumstances, this time around, at least, we shall be ready for the upturn.

We should also remember, however, that at a time of recession, training must be seen as a cushion and a help for those who cannot find work, as well as an aid for industry. It is a two-pronged effort at present. We must never underestimate the help that training can give to people, if a suitable training course is available, if they are unfortunate enough to be out of work.

However, in the Bill and in the research that has been done, we are not just looking at training in the next two or three years. The decisions that we take now are bound to have a significant effect on the sort of economy and the sort of trained people that we shall have in the 1990s, some 10 years ahead. From the available research, we can see that there are three important factors that will dominate this country as this decade moves to its end and we move into a new one.

First, there is every sign that an increasing proportion of married women will be coming on to the labour market seeking suitable work. Secondly, an increasing proportion of the work force, as we reach the end of this decade, will be in their late twenties or early thirties—in other words, mature employees who will want more access to skill opportunities. Thirdly, by the end of this decade an increasing number of people coming on to the labour market will be British-born workers of overseas ethnic origin who will want access to jobs at all levels of the labour market.

Unless we think carefully about those three factors and their implications in what we devise in the next two or three years, there is every possibility that by the end of this decade we shall find that we shall be getting it wrong again. Those three factors point to a signal development in education, namely, that there will be a general demand for a raising of the general standards of education in the next 10 years, the like of which we have not seen before, and that if this happens, as surely it must, it must increase the potential for higher levels of training in technical skills, those higher levels of training being more important than the manual skills. In other words, the very thing that we hoped for over the last 15 years—that we should become as skilled a nation as our industrial competitors in Europe—will, I think, come about if we take into account those three factors and adjust education and training accordingly.

I want to comment on the whole question of skill shortages and how serious it is likely to be in the next two or three years. Mention has been made of the MSC pamphlet "The outlook on training" and the document reviewing the Employment and Training Act 1973. On page 13 of that report the MSC points to the fact that we are suffering from a shortage of computer skills and of many engineering craft technician and professional skills. The MSC adds to that survey done by the National Economic Development Council on the whole question of electronics, from which it was found that in South Yorkshire, Portsmouth and Reading, about 40 to 50 per cent. of firms which took part in the operation and completed the questionnaire thought that the training and skills that they were getting were not matching those which they required.

In other words, at a time when we are trying to be more competitive, we find that the people going into those very industries in which we have discovered skill shortages are not of a sufficient skill standard.

What we must ask the Government on the question of how much additional help is needed and how much the Government propose to do concerns paragrah 9.8 of the review of the 1973 Act, which states that the Manpower Services Commission feels that it should provide supplementary funds for action by industry training organisations in pursuance of national priority needs where it is necessary to reinforce (but not displace) industry's own training efforts. In other words, the industries in the survey that I have just mentioned will increasingly look to the MSC to supplement, not to displace, what is already being done. When we are considering not only this Bill but the whole question of training it is right to point that out to the Government and to ask whether they intend to push the MSC in that direction and to ensure that there are sufficient funds.

What has also come out in the debate is not only the question of national skill shortages but that of the way in which skill shortages occur on a geographical basis. Again, I should like to draw attention to chapter 5 of the MSC inquiry. Chapter 5, paragraph 20, states: If the labour force became more mobile, training to alleviate local skill shortages would be less necessary. It goes on to say that the increasing significance of married women in the labour force is bound to have an impact on whether the husband moves to seek a new job. The MSC doubts whether there will be substantial changes in the overall geographical mobility of labour in the next 10 to 15 years. In other words, we must solve this problem much more on a local basis and see whether we have the local arrangements correct rather than just look at it as a national problem.

That brings me to what was mentioned by the hon. Member for Maryhill on the question of the "open tech." My information is that already a number of colleges of education and a number of education organisations are ready with plans to help in this matter and have sent in what they consider to be useful recommendations to the Government as to how they would fit in with an "open tech." What one hopes is that when the MSC comes out, not only with the report of the sector working party into training, but with its own review of how the "open tech." will take off, it will find quite a lot of evidence that in many parts of the country people are now ready to help. We would like to know what action we are likely to see before this calendar year is our.

I draw attention to one final point in relation to the report. That is the note of reservation on what was otherwise a unanimous report on the question of "The outlook for training." There are three points that come out in this chapter. First, paragraph 4 states: It is generally accepted that most cross-sector skill shortages are essentially local and that they can be solved only by local action. Secondly, the reports states: local education authorities should receive specific grants from the Department of Education and Science in respect of the industrial training, vocational preparation and further education closely associated". Thirdly, the report states that the Manpower Services Commission's membership should be extended to give increased educational representation. That note of reservation underlines part of the Macfarlane report which called for much closer cooperation between school, industry and education departments and everybody involved in trying to increase opportunities for training and improve standards.

I turn to a detail of the Bill to which the hon. Member for Rochdale (Mr. Smith) referred in hostile terms. I refer to clause 4 which could be called the relief clause. The Government propose that an employer shall not pay the levy if he in an enterprise zone. I hope that the whole concept of whether levies shall be paid will be examined in detail in Committee. A major employer in a relatively new industry for an area is sometimes faced with sudden, unavoidable redundancies. That is especially so when there is a violent upset abroad and the export market is disrupted.

It is vital that such an employer does not diminish his training programme. We should examine clause 4 to see whether we can be more subtle and careful about levy exemptions. I am all for enterprise zones. I hope that they will be successful. However, in the last 18 months, especially in the relatively prosperous South-East, employers have encountered difficulties and have had to make people redundant. We must not do anything that will diminish such an employer's training effort.

If we are to maintain a strong manufacturing base—and that is the only way to make the country work and to keep it together—training should be regarded as a normal and useful interlude between jobs. It should not be regarded as a temporary expedient to get out of a difficulty. Training and retraining is as important for managers as it is for people on the factory floor. The next two years are supremely difficult and dangerous for the Government because of the level of unemployment.

The Government have two shields which they should not hesitate to use. The first shield is the youth opportunities programme. My hon. Friend the Member for Beeston (Mr. Lester) explained how we had extended that programme. The second shield is Government action on training. It is a question whether the Government bring everybody in and improve the co-operation between the Manpower Services Commission and the Department of Employment. The Government must get across to the people that if, perchance, they are out of work, they are ready, willing and able to provide imaginative training projects. Above all, that is what I wish to result from the Bill.

7.3 pm

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

I agree with many of the points made by the hon. Member for Bedfordshire, South (Mr. Madel). His analysis was extremely pertinent. I wish to follow the thoughts of my right hon. Friend the Member for Doncaster (Mr. Walker), who said that the Secretary of State had stated that he could not understand all the problems surrounding such an innocuous Bill. My right hon. Friend referred to the volume of interest outside the House.

I wondered how the Secretary of State would match his Bill with his statement in the debate on the Queen's Speech that his Department's objective was to improve industrial training in the long term. As usual, one must look elsewhere for the reason for what is happening. I looked around to see how the Bill had arisen. Not surprisingly, a working party is involved. I could not understand why anybody would want to break up the Inner London Education Authority. We had to examine a Conservative Party working group to discover why that was proposed. The same applies in this case. Everybody in industry is opposed to breaking up the industrial training boards. The MSC is opposed to the Bill. The only argument in favour of the Bill is contained in a document by the Centre for Policy Studies.

That document does not discuss industrial training boards and their values; it argues why they should be dismantled. The authors of the report had already made up their minds, and they proceeded to produce evidence to prove that they were right.

The authors are Clive Elliott and Stanley Mendham. Mr. Elliott is a director of a family publishing business, a former vice-chairman of the Young Conservatives, and Conservative parliamentary candidite for Tooting. That figures. He is also a member of the Selsdon group. Mr. Stanley Mendham runs a jewellery business. That adds up when discussing industrial training. He is supposed to be non-partisan and promotes free enterprise. That is good. They are just the chaps to do an in-depth examination of the need to get rid of industrial training boards.

Let us examine the reasons why they want to get rid of the boards. They are illuminating. Their analysis shows that, despite the cost involved in closing ITBs, a financial advantage is involved. They say The Government should concentrate on prudent general economic policies and try to even out the business cycle … The Government should take action (by close attention to the closed shop provisions) to reduce the powers of the trade unions … The Government should continue to reject incomes policies. They are good recommendations on which the Secretary of State can act. He has acted.

At one stage the Secretary of State quoted an association. When challenged by one of my hon. Friends to say whom he was quoting he refused to do so, because he wanted to quote a view from both sides. There is no problem, because he was quoting people on whom the recommendations are based—the British Multiple Retailers Association, which is hardly knowledgeable on training and industry. It was that organisation that used the words quoted by the Secretary of State about the negative bureaucratic activity into jobs where they could make a positive and immediate contribution". That is the sum total of the way in which the Bill has arrived. It is most extraordinary.

I am parliamentary adviser to the Furniture, Timber and Allied Trades Union. I have knowledge of the wood-using industry. About 50 per cent. of workers in the furniture trade are skilled. The industry uses woodworking machines that are particularly dangerous. It contains many small firms, the managements of which are involved in limited skills. The training record of the industry is exceptional. That is agreed by all sides of the industry. The number of craft apprentices has increased by nearly 20 per cent. The proportion of firms giving all-round training has increased sixfold. Nearly half the firms in the industry have been encouraged to provide some training for the first time.

Coincidental with a sustained programme of safety training, the number of reportable accidents in the industry, has declined twice as fast as the national average since 1973. It is now just over 60 per cent. of the 1973 figure. The industry is particularly prone to industrial accidents. Hundreds of managers of small firms have been helped to increase their range of skills, and that has been accompanied by a marked drop in the rate at which firms have gone out of business and an increase in the rate at which productivity and exports have risen.

As for the future, the board is already negotiating a scheme that will improve skill training. It is likely to meet all three of the objectives outlined by the Secretary of State on 29 November, namely, better vocational preparation, a modernised and flexible apprenticeship, and wider opportunitites for adult training. If this training board disappears it will be difficult to obtain agreement on any scheme of this type until a new body has built up the confidence now held by both sides of industry.

Even if a comparable scheme could be agreed by a voluntary body it is difficult to understand why most employers would pay any heed to it if no levy were at stake and if no one had a statutory duty to achieve results. I have given only one example of the extent to which the Secretary of State is mistaken in his belief that the national training effort can be sustained by voluntary means.

Statistics published by the Furniture and Timber Industrial Training Board clearly show that the one period in its history in which no progress was made towards improving training was from 1970 to 1972. At that time the board's existence was under threat. The right hon. Gentleman wishes to emulate that situation. A large number of firms take part in the training effort only because the payment of levy obliges them to take notice. In addition, visits are made by the board's staff, who point out the opportunities and needs for training.

In a recent study on the supply of skills, about two-thirds of employers told an industrial training board that if they had been left to themselves they would have met their skill requirements by means other than that of doing their fair share of training. Most employers would prefer to recruit workers who are already skilled, and who have been trained by other firms.

The conclusion is clear. Without a system of statutory responsibility, without a levy that can be statutorily enforced, and without an advisory service, there will be a swift return to the bad old days of the furniture industry, when the costs of an inadequate volume of training were borne by a few of the best firms on behalf of the rest. I have been speaking of the furniture industry, which I know well. I have no doubt that the situation is the same in other industries. I ask the Secretary of State to retain the system of industrial training boards that obliges employers and employees to sit down together, to accept a statutory duty, and to maintain and improve training.

I also ask the Secretary of State to continue to fund the operating costs of industrial training boards at the Exchequer's expense, and to do so at least until the state of the economy allows industry to take a share of the cost. For the sake of a small and illusory saving, the right hon. Gentleman is placing a whole system at risk—a system whose potential has been proved. He proposes to replace it with a system that has a track record that inspires no confidence.

We have already noticed the Government's intention to destroy the Furniture Development Council. The council is a statutory body, which was set up just prior to the war. Without any rhyme or reason the Department of Industry intends to destroy that council. The Minister was kind enough to see me. He could say only that there was no point in talking about it, because the decision had already been taken. Although one could ask the Minister why that decision had been taken, one would find no rhyme or reason for it. The Department sent out a questionnaire that had more loaded questions than one could conceive of.

One question asked "Do you want to pay a levy?" The Minister was delighted when he received the reply "No". He thinks that that is a good reason for getting rid of the Furniture Development Council. Other questions were put, such as "If we got rid of the council, would you pay voluntarily to have development done?" The respondents all said "Yes". They never paid for such development before the FDC was established. Anyway, it would be impossible to get the money from them.

It may be argued that we should get rid of the Furniture Development Council and the Furniture and Timber Industrial Training Board. However, history tells us that if that happens, nothing will be done in the development and protection of the furniture industry or in the training of furniture workers. We shall have to import furniture from other countries, because we shall be unskilled, inefficient, ineffective and unwilling to provide our own furniture.

7.16 pm

Dr. Keith Hampson (Ripon)

I hope that the House will forgive me if I rudely rush away to another function shortly after I have made my contribution.

It is worth reminding the House that this is only an enabling Bill. Some hon. Members are talking as if the Government would automatically abolish every board that they know anything about. The strategy for training is important. Everything is still up for grabs. This debate is valuable in so far as that strategy is discussed.

Hon. Members from both sides have discussed clause 4. The Government have no one to blame but themselves if people read into the Bill something other than a concern for the quality of training. If companies in enterprise zones are exempted—whatever the virtues of enterprise zones may be and whatever the need to stimulate enterprise zones may be and whatever the need to stimulate investment in those zones may be—that exemption will smack of something other than an insistence on training and improving standards.

Mr. Tony Speller (Devon, North)

Is my hon. Friend aware that, perhaps sadly, there is not a training requirement but only a training levy requirement. Hon. Members in all parties may have been mistaken about that.

Dr. Hampson

I shall refer to that later. There is a great deal of empirical evidence to suggest that in difficult times companies cannot be relied on to undertake the necessary training. That might be the case in enterprise zones.

Under clause 3(l)(a) exemption from levy will be granted if arrangements are made— for the training, or the training and further education associated with training, of persons employed or to be employed in the industry. We have heard many interesting and valuable contributions—particularly from my hon. Friend the Member for Beeston (Mr. Lester)—about the need to widen the scope of the boards and to involve them more at a local level—in cross-sector skill training and so on—and in non-direct training programmes such as the youth opportunities programme and provision for the 16 to 19-year-olds.

If we wish to maintain a system that has a sanction, we must bear in mind that levy is a sanction. The terms of the Bill should not be so specific and narrow. The power of exemption from levy should be used to encourage companies to do other things such as participating in the youth opportunities programme and in provisions to give work experience to 16 to 19-year-olds.

It is vital to bear in mind that one cannot turn training on and off. All hon. Members will agree that training is necessary and that the technological pace of change will require more training as the pool of unskilled jobs steadily diminishes. As has been said, training cannot be mucked around or pulled up by the roots. Stability is vital. However, training is not an end in itself. We are in danger of forgetting that. Training involves improving the performance of a particular industry or company.

We are in danger of assuming that the present system or any future system will take training away from employers. That is not the purpose. The purpose of the industrial training board system was not for the boards to do the training—to lift people out of industries—but to stimulate the companies to do the training and to ensure that the training programmes suited the needs of the companies and the industries of which they are part. In my experience, the better boards have developed useful ways of doing that not by penalising companies by imposing fines but by partnership arrangements with training advisers working out training schemes with the companies and constantly monitoring them to ensure that there is give and take and participation so that training is achieved. As a result, the companies have not had to pay any levy or penalty to the boards.

There are many boards and varieties of practices and the quality varies. But that is not an argument for knocking out the entire system. It is an argument for reviewing it, and that is what the Government are doing. It is an argument for rationalising the system. There is an argument for readjusting the system as time goes on. As some boards finish, others should be amalgamated. However, it is also an argument for looking at new sectors where there are increasing pressures on the need to acquire skills and to train the work force.

My hon. Friend the Member for Bedfordshire, South (Mr. Madel) referred to the computer industry. Information technology is an area in which there is a shortage of skilled people. It seems to me that that sector should have a new board created to fit it.

If we are not to go along with the ITBs, what are the alternatives? I would not object to a voluntary system if my right hon. and hon. Friends could convince me that they knew what a voluntary system would comprise, how it would operate, what sanctions it could conceivably operate under and whether it would do a better job than the albeit imperfect system that we now have. No one is arguing that the present ITB system is perfect. But what are the alternatives.?

I see one great danger. It is not just the lack of sanctions. As my hon. Friend the Member for Croydon, North-West (Mr. Taylor) suggested, the trade associaions have a vested interest. I do not trust some of them. There would be empire building. Some of them would be looking for an extra role. Therefore, we must have some form of statutory quality factor. We must lay down standards that they should be expected to meet. The danger to which I want to draw attention is that we shall develop a new and ever larger supervisory bureaucracy. The MSC numbers will increase as it attempts to keep a check on the voluntary system to make sure that it is doing its job.

If one wears an historical hat—which used to be my job before I came to this place—and looks at what happened under the voluntary system, one finds that it was woefully inadequate. That was why Conservative Governments passed two training Acts before this proposed measure.

I became interested in training because I spent most of my working life in education in schools and universities, and I specialised in it in the House. I looked into the system here and considered systems abroad. What struck me most was the inadequacy of the vocational side of British education. It is appalling. It has gone on like that. Reading reports of the nineteenth century, one finds that people were comparing us with Germany and pointing out that Germany was making a specific State-based effort not only to develop vocational training in young people but to develop technologies. We are still bemoaning that fact.

In Opposition, I launched a working party to look at the engineering industry. Before Finniston, we made our report on the engineering profession. Interestingly, it was called "The National Investment". Like all other reports, it identified the crying need in this country for more technically qualified people.

We cannot just wish for things to happen. We have been comparing ourselves with Germany and saying that we are not matching Germany's, Japan's or other countries' efforts. But it does not happen of its own accord. We must have a catalyst in the system.

As an education spokesman, I complain of lack of involvement in further education in schools. The school-industry relationship is one area on which all Governments have focused attention. However, it does not improve of its own accord. We must have a catalyst to bring the two sides together. We really have not got that catalyst.

I am not arguing that the ITBs fulfil that role. They have not been very good at it. They are improving, because of their involvement in the YOP, and they are helping, but they could help more in dealing with further education. The ITBs are an instrument which exists. Therefore, we should use, adjust and improve them, not wipe them out of existence to try to set up a new scheme which will have to go through all the agonising process and the difficulties that we have already experienced.

We need a catalyst to try to make things work. We need some organisation to check standards and to ensure that they improve. We need an organisation to advise business men, particularly small business men, and the education world. We need an organisation to act as a stimulus to schools, further education colleges or colleges of higher education to put on courses which are attuned to industry and meet the needs of local industry. We need a body which can stimulate new thinking about trade.

All those things need a body which is industry-based. There is mutual suspicion between the educational and industrial spheres. The point about the ITBs is that they are industry-based. Most of them have been trying to improve the quality of their training advisers by taking people from industry, not putting in anybody who comes along wanting a job and does not understand industry. The ITBs know their industries and know at close level the people in the firms with which they are dealing. The boards and the training advisers, not the MSC, are the key cutting edge.

The boards have demonstrated another need—the production of training materials. Such materials—films and packaged operations—will be needed if we are to move to distance learning. If my right hon. and hon. Friends want a test of the need for training and for bodies to assist firms to train properly, there is the proof of the pudding. They sell their wares, their training packages, in the market place to companies, because they are not available to companies elsewhere in our education and training system.

Let us rationalise the system, let us possibly reduce the number of boards, but let us also have new boards, where necessary, to cover sectors which have not so far been covered and which are becoming increasingly important. Let us have 10 or 11 boards, not three or four. Let us not, as it were, wipe out the system.

We cannot assume that employers will meet the nation's training requirements. In a recession, employers are hard pressed for cash, and training is an overhead that all too many want to cut. When times are good, there are skill blockages. The supply side of the economy is not as well provided with skills and talented people as it should be. We cannot leave it to the collective effort of employers to meet the nation's training interests. The nation's interests are at stake. Therefore, we have a duty to have some form of statutory system.

I hope that the strategy to which the Secretary of State will move will mean that not all the costs will be transferred to industry. Some statutory requirements will still need to be imposed, but I hope that at the end of the day we shall have a system which is genuinely a partnership. Whether or not the boards are called ITBs, we have the framework, so let us get on and improve it.

7.28 pm

Mr. Ray Powell (Ogmore)

I have listened to the whole of the debate. I heard the speech by the Secretary of State for Employment and the brilliant speeches by my right hon. Friend the Member for Doncaster (Mr. Walker) and my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen). Having listened to those three speeches in particular—speeches that analysed the Bill, and the extent to which the House should consider the industrial training boards in the light of the Bill, I should like to spend a little time raising and highlighting the objections.

The CBI declared in a letter sent to Members of Parliament on 6 February: This is absolutely the wrong time to propose to off-load £51 million a year on to industry for the operating costs of training boards (or alternatively their substantial winding-up costs). It will add to the problems of maintaining standards and volume of training. The CBI strongly supports Government efforts to reduce public expenditure, but adding now to the costs of the hard-pressed private sector is not the right way to achieve this. The CBI supports the sector-by-sector review of the ITBs and is encouraging employers' associations to provide clear views as to how, statutorily or voluntarily, training should be organised in their sector. What is the view and attitude of the TUC? It considers that the ITBs have done a good job in the face of difficulty. It prefers a levy-grant system, with all the employers being liable. It wants greater union involvement in training decisions at plant level and no abolition of boards. Indeed, it argues for additional boards. It sees no difficulty in reconciling social and economic goals and wants greater statutory control and public funds to ensure adequate levels of training in transferable skills.

My right hon. Friend the Member for Doncaster referred to the circulars, letters and statements of the chairmen of the 24 training boards and the observations that they sent to the Secretary of State.

It is worth referring to John Huxley's article that appeared in The Times on 24 January. He wrote: Government intentions to reorganise the system of industrial training have run into fresh opposition. The chairmen of all but one of the 24 training boards have told Mr. James Prior, Secretary of State for Employment, that a return to a voluntary system would be a retrograde step. They say that many companies would discontinue training and resort to the practice of poaching trained personnel from more reputable and responsible companies. I shall refer specifically to the Distributive Industry Training Board. Before doing so, I declare that I am sponsored by the Union of Shop, Allied and Distributive Workers, a union that received a great deal of publicity a few weeks ago on a Saturday at Wembley. The Distributive Industry Training Board issued a statement that reads: The Distributive Industry Training Board, at a special board meeting, expressed its concern at: the implications for the industry if the Board were to be abolished as part of the Government's restructuring of the country's Industrial Training Boards. The Board is issuing this statement to all sections of the distributive trades, to Government departments, and to MPs in order to give expression to this concern. It places on record some of the industry's training achievements since the Board was established as a statutory body in 1968, leading to a more efficient and profitable industry. Distribution is Britain's second largest industry. It employs one in ten of the working population. One in five of all school-leavers take their first job within the industry. There are more than 30 different trade sectors. More than 100 separate Trade Associations, many with direct training interests, cater for employers' needs. More than 100 Colleges of Further Education are involved in regular education/training of distributive students. The Board believes that a major factor in economic recovery is a well-trained work force. Without trained manpower there can be no effective use of the changing technology which affects the Distributive Trades as much as any other industrial sector. The bulk of the public's retail purchases are made from firms within the scope of the Board. The efficiency with the industry—retail and wholesale—runs its business directly affects the cost of goods and, therefore, the Retail Price Index. The board suggests that it has always exercised its statutory right to raise training levels in order to pump-prime and stimulate a variety of training operations to meet the industry's wider needs for trained labour. As a result of its policies: The number of trained instructors in distribution has risen from 10,000 to 100,000 … More than 100 voluntary training groups are serviced and assisted financially. £1.5 million has been given in direct aid to trade organisations and groups. £3.5 million in grants for the training and development of individuals have been awarded. £1 million worth of aids—publications, films and video programmes—not available commercially have been produced for the industry. In conclusion, the board talks about its future and states: It is the Board's unanimous view that only a continuation of its statutory role will ensure the development of training within the large numbers of voluntary organisations which look to it for training, advice and financial assistance. The Board believes that no system of voluntary organisations, without the statutory support of the Board, will ensure the maintenance of training standards amid the technological changes rapidly overtaking the industry. I ask the House to give those matters consideration before the Division.

7.38 pm

Mr. Alan Haselhurst (Saffron Walden)

I welcome the broad approach taken by my right hon. Friend the Secretary of State in introducing the Bill. My remarks will be in the same broad vein. I was interested to hear that the right hon. Member for Doncaster (Mr. Walker) is wary of radical change. By contrast I welcome it. Unless we have some dramatic new thinking on training we shall not keep pace with events.

First, I hope that we shall not determine the future pattern of training in terms of whether the industrial training boards should stay or go or whether the State or industry should finance them. The review seems to have sparked off recrimination between the boards and the Manpower Services Commission. The boards have not been sparing in their defence to judge from the paper that has been showered down on hon. Members on both sides of the House.

There is no judgment that suffices to describe the boards' performance. I do not want to get bogged down in the argument about which board has done well and which not so well. Surely this is the time to produce answers covering the whole spectrum of training—initial and continuing. I suspect that I shall be treading a path that has been established already by my hon. Friend the Member for Beeston (Mr. Lester), although there has been no collusion between us. We have been tinkering with training for years, doing a bit here and there. The results are plainly inadequate, as my right hon. Friend acknowledged.

My second point is that we should be doing more training. We do not do enough and what we do is a curious hotchpotch of apprenticeships, which have their roots in antiquity and which last for years, and, by contrast, work experience schemes which last for weeks or a few months. There are various types of special training within industry and other schemes to impart special skills which have begun in various ways, most recently by the Manpower Services Commission.

It is no good arguing, as we do time and again in the House, over who has caused the mounting unemployment. Instead, we should be thinking of how to deal with the problem. It will not be solved simply by pressing the economic accelerator and hoping that a vast number of job vacancies will be created. We shall have to live with a high degree of unemployment for a considerable time.

In a rather uncertain response to that, successive Governments have moved towards, or perhaps felt their way towards, universal coverage for the 16 to 19 age group with some form of training. We have not decided that that is what we want to achieve, although it is a sensible response to the manpower crisis that we face.

In the last analysis we must recognise that we shall get more training only by paying for it. What bothers many Conservative Members is that we have not had value for money so far. Perhaps we have not yet tapped all sources of funds which might be available to assist an expansion of the training programe. Not until the Government show their commitment will industry and others get down in earnest to making the best possible arrangements.

My third point is to try to suggest a new form of structure which might be considered. I wonder whether it is right to look at training, as we have tended to, on the basis of training by the industrial sector or as a quick and easy response to lengthening dole queues. Those are the two ways in which we have seen the greatest increase in the quantity of training in recent years. But the two have not been brought together. We lack flexibility, permanence of schemes and money. Would it not be better to think in terms of a geographical network of training, by having area or county committees? I should not like to be committed to how many special committees there should be throughout the country. The Manpower Services Commission has 28 area committees. I doubt whether that is enough, but I am not sure that we should want to go as far as having a committee in every county.

An area or county committee made up of local authority representatives, employers, trade unions and voluntary organisations acting as an advisory council, with an executive attached to it, might respond better to the local needs of that community or area. The conventional wisdom would say that the executive—those with the express responsibility for extending training and trying to ensure that people were given training opportunities—would come from the Manpower Services Commission. A more unconventional wisdom might suggest an element of privatisation. If we had incentives in the scheme whereby people were hired on the basis of results, we might achieve something dramatically better than we have had so far.

A geographically based network would be better able to assess what was needed in individual areas rather than training in a sectoral way. A county or area committee would discover whether there was a need for engineers, electricians, woodworkers or plumbers and would be able to ensure that school leavers and others were aware of the opportunities in that area and could be trained accordingly.

A local approach might have the additional advantage of attracting more co-operation from local employers. I, too, am sceptical about how far voluntarism can extend. But employers have been prepared to come in on special schemes to help local youngsters with work experience and training if they could see a benefit within the local community. We should try to harness that in a better way than we have so far.

I do not think that area committees need spell the demise of the sectoral industry training boards. The boards would still have a role. Like my hon. Friend the Member for Ripon (Dr. Hampson), I do not wish to be pinned down on the ideal number of boards resulting from the review, but I see their services being engaged by area training boards, so they would remain a major force in training.

An area-based training initiative would have a beneficial effect on the types of courses run at skillcentres. Hon. Members will be aware that there has been criticism of the types of courses on offer at skillcentres, and doubt has been expressed about whether they have been in keeping with the needs of the nation. That initiative might also affect courses run at colleges of further education.

There remains the question of how we finance training, no matter how it is organised. I have already said that one gets only what one is prepared to pay for. I am inclined to the view that some sort of national training contribution has to come. As my hon. Friend the Member for Chelsea (Mr. Scott) said, timing is of the essence when we come to putting further burdens on employers. Such a national training contribution may have to be introduced at a time when other levies on industry are being reduced. There may be a system of exemptions according to the contributions which employers make to training schemes within their area, not necessarily in cash, but in kind.

Other sources of funding might be more readily harnessed to an area structure. Local authorities and voluntary organisations might be persuaded to come in on certain schemes. We have already had examples throughout the country of initiatives that have been sparked off either by a voluntary organisation or by a local company. Money has been attracted from various trusts because a scheme has been felt to be useful to help local youngsters and the needs of industry in that area. We should pursue that further.

There would have to be a State contribution. However, the State is already making a sizeable contribution to training. If we are to ensure that training is most relevant to the needs of industry, it is inescapable that employers will have to play a major part in financing.

Finally, there is the problem of control. One would assume that the Manpower Services Commission would continue to have an audit function. Bearing in mind the arguments that are still taking place about the precise nature of the Manpower Services Commission's relationship with the industrial training boards. I hope that the hand of audit will be lighter in the future than it has tended to be.

Whether unemployment peaks at 2¾ million or any other figure, there is a massive job to do to make sense of our manpower situation. In all probability we must expect a smaller number of people at work in the future. All the indications are that their competence level will have to be higher in the face of the technology with which they will be dealing. It would be for the greater good of British industry if their contentment level were also higher.

The challenge is what to do sensibly at a price that we can afford—indeed, we must afford—with those who are preparing to enter the work force and how to maintain their most effective employability throughout their period in it. I hope that the Government will go beyond the possibilities raised by the Bill and will chart a new course for training which is truly in keeping with our national need.

7.50 pm

Mr. Derek Foster (Bishop Auckland)

I am pleased to follow the hon. Member for Saffron Walden (Mr. Haselhurst), whose views on these matters are always interesting.

It is the Opposition's duty to save the Secretary of State from himself. He has an unenviable brief. He stands at the Dispatch Box month after month condemned to defend the indefensible—an unprecedented avalanche of job destruction. He stands condemned to recycle the tired cliches of the Prime Minister, herself the mistress of the hunt with her pack of Treasury hounds—the unspeakable in pursuit of the immeasurable.

The Secretary of State for mass unemployment has one hope of avoiding pillory at the hands of historians. It is to initiate a great leap forward in the quantity and quality of training. Yet, in bringing forward the Bill, the right hon. Gentleman sits absent mindedly sawing through the branch on which he sits.

The Secretary of State, in his statement to the House on 20 November, said that British industry seriously lags behind its major international competitors in its attitude to training, that British industry devotes inadequate resources to training, that there is therefore an urgent need to extend and improve industrial training, that there are three areas requiring urgent attention—vocational preparation, the apprenticeship system and adult training and retraining—and that there is widespread recognition of the continued need for some sort of industrial training bodies.

Any rational person listening to that statement would have concluded that those ambitious objectives could be fulfilled only by increasing public involvement in training and by strengthening the training infrastructure, as recommended by the MSC's "Outlook for Training" and by the Think Tank's recent report. He might have gone on to reflect that tripartite discussions among the major partners—management, trade unions and the education service—at national and local level, such as occur in the ITBs, would be the best way of securing co-operation. Yet the Secretary of State, in his naive belief in voluntarism, which had failed miserably before 1964 and has not succeeded in any other European country, is about to dessicate the training boards.

Presumably the right hon. Gentleman believes that he is reducing public involvement by the Bill and reducing his budget by £50 million into the bargain. Let me warn him that when voluntarism results in a serious reduction in the quantity and quality of training, as it surely will, he will look to some public body, presumably the MSC, to help him achieve his ambitious objectives. The MSC will either have to recreate the industrial training boards or assume much greater central control. Without the buffer of the ITBs, industry will be subjected to much greater centralisation and bureaucratic control—a position far less acceptable than the present one.

It is widely agreed that at the root of our prolonged relative industrial decline is an inability to respond flexibly to increasing economic and technological change. It is further agreed that our work force needs to be much more flexible and adaptable and must be capable of being trained and retrained frequently during the course of their working lives. Yet the Secretary of State puts his faith in voluntarism.

It is widely recognised that national training need exceeds the sum of individual company needs. Yet the Secretary of State puts his faith in voluntarism. It is further recognised that investment in training fluctuates inappropriately with the trade cycle and is unduly susceptible to adverse cash flows. Yet the Secretary of State puts his faith in voluntarism.

It is universally acknowledged that there has been a marked reduction in apprenticeships. That is a serious problem in the North-East where pre-16 academic performance has been much more influenced by the spur of apprenticeship than by the prospect of higher education. Even more sadly, we know that apprentices in various stages of training are being sacked in large numbers. Yet the Secretary of State puts his faith in voluntarism.

It is hardly surprising that all the ITB chairmen wrote to the Secretary of State on 21 January about voluntarism. Their views have already been quoted, but I wish to quote them again: With one exception, it is the unanimous conviction of ITB Chairmen that this will be a retrograde step and place their industries in the unfortunate position they were in prior to the 1964 Act. Whilst many reputable firms will continue training, many others will make no such effort and resort to their previous practice of 'poaching' from more responsible firms. That is also the view of a private training group, the South-West Durham Engineering Training Association in my constituency, for the work of which I have the highest regard.

Of course the work of the ITBs has been patchy. There are problems of cross-sector skills, and the regional and local dimensions of training are weak. However, those problems are not insuperable. Indeed, they must, and can, be resolved within the existing framework. The Secretary of State cannot deny that since 1964, and again since 1973, there has been an increase in the quality and range of training.

The burden of proof that voluntarism can maintain the present position, let alone substantially improve it, must rest with the Secretary of State. But I warn him that the overwhelming view of those who know and care about training is that voluntarism will not and cannot work. The opposite view is held by the backwoodsmen on the Conservative Benches and by some in the boardrooms who have little experience but who are paranoic about Government involvement in business.

The Secretary of State has his ear to the ground, but it is stuck in the wrong patch. He is in danger of further abandoning our young people to the vagaries of market forces. Our work force is our most valuable resource. Tragically, 2½ million are without work. They are the responsibility of the Secretary of State and of us all. But so, too, are the remaining 23½ million who are seriously underutilised, undertrained and undervalued.

The Secretary of State says that he wants to help, but by this ill-considered Bill he is delivering those people into the hands of the most ill-informed, short-sighted and callous of the Tory paymasters. The Opposition must save them from the Secretary of State and must save the right hon. Gentleman from himself. I trust that those on the Government Benches who care about training and who care about the reputation of the right hon. Gentleman will join us in the Lobbies tonight.

8 pm

Mr. Tony Speller (Devon, North)

Perhaps it is time to bring in a worm's eye view of industrial training. We worms, while doing a useful job around the grass and on the ground, occasionally get stamped on by large and important feet for which we have no love and of which we have no knowledge. We pay the price. The essence of the training board principle is that the volunteer method will not work but that conscription will. I was a national service conscript. There is no one more adept at fiddling and fooling authority than the unwilling conscript.

I can speak with some expertise on the subject of training, not only because my own small company has recently received a DITB award, which we are proud and glad to have. I can say without fear of being called a nihilist or one of the strange backwoods creatures, that we worms, who secure the awards, have to tell the Opposition, once again, that training is not compulsory. We are charged a levy. We may pay the levy and forget it, or pay the levy and seek to get some of the money back by following the rules of the game. The argument is simple. If we take part in the course, we will get some benefit, perhaps a lot, and get back all or part of the levy. This means, inevitably, that the more firms that participate the more levy they will get back, and the higher the levy becomes the following year.

There is another side to the story. In our case, we had to carry out training in order to get our money back. We carried out training. Frankly, to our surprise, we found ourselves a better firm for that training. To the question whether we would have done useful training without compulsion, the answer is "Yes". To the question whether we would have done so much, the answer is "No". In the case of our own small business, which is more a cufflink than a chain of shops, we have benefited, on balance, from the DITB, but many firms in my constituency will be glad to see the back of that organisation. Without the particular interest of one or more management personnel in any firm, the results of work are negligible, although the grant brought back may be substantial, for reasons to which I shall turn.

In preparation for the debate I consulted widely in my constituency. The North Devon Manufacturers's Association tells me: The general feeling is that the Boards did a good job initially but that they have achieved their purpose even to the extent that their interference in the running of businesses is resented. They have outgrown their usefulness and should be terminated. Most businesses had organised their own in-company training schemes or used schemes within their own industry, as for example, the British Pharmaceutical Society and Chemical Industries Association". Similarly, a young group of business men in the sales and service industry have formed their own training group. They enjoyed training and being trained. I recently presented seven of them with DITB certificates. They make full use of the grants available.

Constant reference has been made, not always with true attribution, to the vast amount of work done by the Furniture and Timber Trade Board. I imagine that the board must have spent a great deal of money—its money or our money, but someone's money—to push its case to every hon. Member. I have counted five references or quotations relating to its work. I do not know whether it is the Government's position that an individual board has the right to use the money intended for training to propagate its own success story or, more importantly, to ensure its own survival. Interestingly, I have had strong praise from that board from one small company. A slightly larger company says: On balance, the Training Board is a luxury which industry cannot afford. Efficient and profitable companies will train staff effectively whether or not they receive financial assistance. The documents are usually produced by most companies just before a visit by the Training Board Officer or at the end of the company's annual claims period. The failing of the training board is that it does not actually train anyone and only by means of indirect blackmail does it attempt to encourage its members to do so … We have an excellent range of technical colleges throughout the country. I fear that technical colleges are barely used in training through the boards. A whole new industry has grown up through the training board levy, in the shape of seminars. My hon. Friend the Member for Ripon (Dr. Hampson) spoke about the success of firms selling equipment for these courses. That is not surprising. It is a self-perpetuating business. The courses lead to the purchase of equipment. The courses are funded by the levy. So it goes on. It may be good business, but I do not believe that it is good business for the country. A highly respected company in my area reports that during the course of the year he generally receives one short visit from a training board adviser and once every two years a visit from the training board examiner. These are the only effective contacts that occur.

I have benefited from training. If we are to talk about industrial training boards we should also talk critically about the MSC itself. A minnow that cost £250,000 seven or eight years ago now costs £15 million or £16 million, with clearly more to come. The MSC role is different from the industrial training role. It is largely a social role. The youth opportunities programme does not create work. It is an aspirin against the pain of unemployment. It is not a cure. Work experience is another "funny" as seen by we who are the worms. Work experience is the easiest way of getting cheap labour. It is the cheapest possible, because it is free. I wonder how many people would be in genuine employment if firms were not able to get a work experienced youngster for a few months for nothing. This is the problem. Every good idea tends to distort. The work experience programme has distorted our retail trade economy.

The functions are different. The training board is designed to produce a highly skilled work force and highly skilled management. The MSC does not at present have that function. There is a sinister sentence in the explanatory memorandum to the Bill which leaves ajar the door to greater cost. It reads: Changes in the number or scope of training boards would lead to changes in the staffing requirements in the Manpower Services Commission, but this cannot be quantified at this stage. Many hon. Members recall how this game of incremental musical chairs has been played over the last decade in the reorganisation of local government, the National Health Service, and the water industry. All these interesting reforms were carried out with the best intentions in the world. Nevertheless, at the end of the day, when a number of the ITBs are shut down and their functions transferred to a bigger body that does not possess the technical expertise, more staff will be needed. Before my right hon. Friend makes up his mind in consultation with the MSC, I have one suggestion. Should we ask those who pay the levies and those who get the benefits how they feel about the industries?

I am aware that there is a vast piece of paper, which is hard to read and difficult to fill in. I speak as an expert on these forms. I can complete VAT forms, no less. The latest form is another example of that wodge of statistics that goes on producing nothing except more statistics. I ask my hon. Friend, when he carries through the Bill, as he will, to look carefully and cannily at all forms of training and to ask individual firms how they would like to see matters proceed, not with a 15-page statistical memorandum, of which eight pages are instructions on how to fill in the forms.

To let the MSC take over the advisory function is not unakin to inviting the spider to consider—in a judicial fashion, of course—whether the fly should be inside its web. Some of our ITBs are very good and must be preserved. Some may well have outlived their usefulness, and can be closed down or merged. But I should very much regret it if, for the sake of a doctrinaire approach, we built one big body in substitution for one large and several small bodies. I suspect that quite often—as we always say on the Conservative Benches—small is beautiful. In my knowledge it is normally more efficient.

8.10 pm

Mr. John Evans (Newton)

The backdrop to the debate is nearly 3 million people out of work and hundreds of thousands of boys and girls who cannot obtain the apprenticeships that they desperately require and that their fathers and mothers wish them to receive. As many of my hon. Friends said, the background to the debate is also the Secretary of State's words in the debate on unemployment on 26 November: I want to make it clear that the Government's aim will be to extend the area of reliance on voluntary arrangements as far as possible, and to keep statutory industrial training boards in a few key sectors".—[Official Report, 26 November 1980; Vol. 994, c. 688.] Following from that, clause 1 will give the right hon. Gentleman the power to abolish industrial training boards.

Every intelligent person accepts that there should be a continuing review of all the work of all the boards. No one has suggested that the board should be fixed for all time, or that they should never review their work. No one would suggest that the House should never review their work or the working of the legislation. In an intervention, I asked the Secretary of State to justify introducing the Bill at this stage, when the correct method would have been to await the report of the Manpower Services Commission and then to have a full-scale debate, in which the views of all those in industrial training could be taken into account. Then we could have had legislation that was non-political and non-partisan.

Party politics should not come into the consideration of the need for industrial training. Yet, despite the Secretary of State's honeyed words, the Government have introduced a Bill that is contentious, political and controversial. It will be bitterly contested in Committee. That is not how to proceed with legislation on a matter that has been non-controversial for many years.

The Second Reading of the Bill that became the Industrial Training Act 1964 was agreed without a Division in November 1963. All sides of the House welcomed it. Then, and for many years since, all sides paid lip service to the necessity for training. Tonight we are considering a Bill that can only set industrial training back.

It is too much for the Secretary of State to suggest that it is other people who are creating uncertainty. It was his words that created a great deal of uncertainty among the first-class men and women who man the boards. It is morally wrong for him to introduce legislation that puts in jeopardy those who have given so much to industrial training. Even at this late stage the right hon. Gentleman should reconsider the need for the Bill.

The main purpose of the 1964 Act was to improve the supply and the quality of the country's skilled manpower. The background was the general recognition that there was a grave shortage of skilled manpower and womanpower, and that industry was not training the quality or the quantity required.

It goes without saying that many firms—the best firms—always had excellent training schemes and spent a great deal on training boys and girls that they would require in the future, but it is incontestable that many other firms, particularly small firms, were not training anyone and were happy to poach the supply of skilled labour when the boys and girls finished their apprenticeships.

I am one of the few hon. Members who have served a skilled apprenticeship. Mine, which I did in the shipbuilding industry, was not as good as the apprentices have received since the 1964 Act. One can only assume that the Government are prepared to go back to 1964. That is in line with much of the regressive legislation that they have introduced throughout their unfortunate two years in office.

Each board was charged with two main functions: first, to ensure that the amount of training in an industry was sufficient; secondly, to publish recommendations with regard to the nature and length of training for different occupations and the further education that should be associated with it. Most fair-minded people would agree that the majority of boards have done those jobs.

It would be nonsense to suggest that the boards have solved the problem. In certain areas and in certain crafts, particularly in the engineering and electrical crafts, there is still a considerable shortage of skilled people. But there is no overall shortage in the country.

The present Government have played havoc with the employment transfer scheme, which allowed skilled people to move from one part of the country to another to obtain employment. The changes that they have made have had a detrimental effect on skilled workers travelling from one part of the country to another. When Conservative Members continually speak of the shortage of skilled labour, I hope that they will take into account what their own Government have done since May 1979.

Those who would criticise certain boards have a duty to name the boards concerned and to tell the House where they have fallen down. It is not enough to say that there are good, bad and indifferent boards, and on that basis to introduce this legislation. We should be told which are the bad and the indifferent boards. The Secretary of State has not offered a shred of evidence to suggest which are the bad boards.

What the right hon. Gentleman has made clear is that he is interested in saving £50 million. I doubt whether he will save that sum. I suspect that the matter has more to do with the Government's public sector borrowing requirement or the various fairy tales that they tell us about it than with the realities of the situation.

The Government must agree that if we go back to the voluntary arrangements we shall simply be going back to the period before 1964, when the good employers trained and the bad employers did not. In that respect, because of the tremendous decline in British industry since the Tory Government came into office, employers have cut dramatically the taking-on of young people. It is easy for employers quickly to cut back in that area.

Many firms and many hon. Members can report cases where, during the past two years, employers have cut down substantially on the number of young people being taken on. We all know the end-product of that. I do not wish to raise the spectre of vandalism, or how much it costs in terms of keeping people unemployed. However, it is generally accepted that the cost to the nation of keeping 3 million people unemployed is about £10 billion. When we talk about saving £50 million—a highly doubtful £50 million—we should put that figure beside the £10 billion that unemployment is costing the country at present.

If, as seems likely, some boards will be abolished after the Bill is enacted and after the review has been carried out, there will be heavy pressure on Members of Parliament for other boards to be abolished. It is not sufficient for the Secretary of State to imply that he is a reasonable man and that he will act in a reasonable manner. We have no guarantee that the Secretary of State for Employment will continuously occupy his present position, and I shudder to think what certain Ministers and Back Benchers would do with this legislation. We have heard only one speech in outright opposition to industrial training boards—from the hon. Member for Croydon, North-West (Mr. Taylor)—but we know that other Conservative Members think similarly. This will be an extremely fascinating Committee on which to serve, because Conservative Members will be in difficulty if they oppose our amendments. We shall ensure that their names and their votes are well and truly recorded.

I am aware that time is short and that other hon. Members wish to speak, but I wish to emphasise one point. It has been said repeatedly that training and retraining are essential, yet the Government are introducing a Bill that can only set back industrial training. In that respect, we wonder about the mentality of the Government. The Bill is unnecessary, and I sincerely hope that if we cannot defeat it on Second Reading we shall maul it in Committee. In Committee we shall produce a Bill that will do something for industrial training. This Bill will have only a controversial effect on training.

8.23 pm

Mr. Warren Hawksley (The Wrekin)

I have a constituency interest in this proposed legislation, particularly with regard to training establishments. At High Ercall in my constituency we have the MOTEC training centre, which is run by the Road Transport Industry Training Board. It is an interesting centre and I have visited it on many occasions. My comments will centre mainly on that board, but they will also cover points that are equally applicable to other training boards.

There is general agreement that something should be done about training. We must improve and extend our training. Our argument today has been about how much should be done. At a time of recession, it is essential that training be given added emphasis. In my constituency I have the highest level of unemployment within the West Midlands. Only last week there was an announcement that there would be a further 1,000 redundancies at GKN-Sankey. Now, about 9,000 of my constituents are out of work, and, although we are a new town area, the new town corporation has had to advertise for certain skilled workers, not only throughout Britain but also in Rhodesia and South Africa. When it happens at a time of very high unemployment, it suggests that something is wrong. It is important that more emphasis is given to training. When the economy moves forward, as I am sure it will, the need will be even greater than it is today.

If we accept the current need and the even greater future need for trained workers, we must turn to the existing training boards to see whether they make the best use of the available resources and also see whether the Bill helps or endangers, as some hon. Members suggest, the future of training.

We hear of the suggested extravagances and the over-provisions made by certain boards. That may be so. However, in the case of which I have knowledge it is not so. The Road Transport Industry Training Board has recently rationalised its training methods. That has resulted in craft training being moved to Scotland and in management training being concentrated at High Ercall. This is a response to the present situation.

If all boards are not being as responsive to the current economic situation as that, what can be done to make them do so? The Bill allows for the financing of the boards to move away from the Government, supported by the levy, to financing by the industries themselves. This I support wholeheartedly. If an industry is paying, it will make sure that any extravagances which are there today are cut out and that training is offered in a more appropriate way to that industry.

Industry is a much better judge than politicians on either side and the Government of any political party of what is needed. The industry, not the Government, will decide the pay of its employees. We have had suggestions that certain employees either are paid excessively or are getting very good conditions and pensions. If that is the case, and the industry has to pay, I suggest that it will put that part of its house in order very quickly.

That brings me to clause 1 and the powers which the Secretary of State is taking to abolish and to amend training boards. I am fearful at this time of economic recession of the practical result of moving a board from statutory to voluntary status, however appealing that argument may be in theory. The hon. Member for Rochdale (Mr. Smith) drew attention to the disappearance of apprenticeships in the present economic position. We have to accept that that is happening, and it is very likely that, in the short term, industry will not be prepared to put in the necessary money on a voluntary basis. Therefore, it is worrying that the power is in the form that it is in at the moment.

I hope that the Government, possibly as the Bill proceeds, will consider changing the wording slightly in order to allow at least an affirmative order in both Houses before either changing or abolishing one of the boards. Then we shall have an opportunity of debating a board's merits or faults in deciding what we feel should happen to it.

The argument for bringing in this Bill before we knew what the Manpower Services Commission would recommend concerned the delay that would be occasioned by so doing. I suggest that an affirmative order of both Houses would not delay the implementation of policies very much.

I question whether the MSC is the body to give too strong advice to the Secretary of State. I say that because of the problem which has arisen in my constituency concerning skillcentres. The commission has closed a skillcentre in a locality with the highest level of unemployment in the area. At the same time, it has expressed a wish to open a new skillcentre down the road in Redditch. This seemed to be folly. It appeared to be politics, with a small "p", at work in the MSC. I am worried about the fact that the same body should be making recommendations to the Secretary of State on which decisions will be taken.

I hope that the Minister will not only be able possibly to offer some safeguards and some opportunity for the House to debate these decisions on future once the MSC's recommendations are received, but that he will also consider letting us know what other consultations there will be and whether he will consider producing a consultative document to allow us all—not just hon. Members but people in industry and in the unions—to put forward what they think about individual boards. This seems desirable to make sure that, in looking at every board, we decide which are the right ones to alter.

8.30 pm

Mr. Stan Crowther (Rotherham)

One of the most interesting features of the debate has been the remarkable number of Conservative Members who have expressed views greatly at variance with those of the Secretary of State.

Those views can be fairly summed up by two remarks in particular. One was made by the hon. Member for Chelsea (Mr. Scott), who was worried about the concept of the baby being thrown out with the bath water. The other was made by the hon. Member for Ripon (Dr. Hampson), who said that, although there was a case for reviewing the system—no one disagrees with that—that was not a reason for knocking out the whole system. I do not know how people with such views can conscientiously vote for the Bill, because clause 1 is specifically about throwing out the baby with the bath water. That is what it is there for. The Secretary of State made it clear that, when he gets those powers, he will knock out the whole system with the exception of what he calls a few key sectors. Therefore, I do not know how those Conservative Members can support the Bill after expressing those views.

The Secretary of State has not been so kind as to tell us what are the few key sectors which will be saved from being knocked out. He said that they would be sectors in which it would be considered essential to retain the industrial training boards in order to achieve certain wider training objectives. He did not even tell us what training objectives he hoped to achieve, although he gave us some wordy, but woolly, objectives in the second half of his speech. Possibly those are the ones he was talking about.

It is unclear whether the right hon. Gentleman means that all the other industries which are not key sectors are not worth bothering about in relation to those wider objectives or whether they need the objectives but can achieve them without ITBs. It would have been kind of the Secretary of State to tell us what he meant by that sentence. It would be nice of him to tell people working in industry. As my right hon. Friend the Member for Doncaster (Mr. Walker) said, people in industry would be interested to find out which industries are not considered by the Government to be of any great importance. There may be some interesting reactions when they find out.

I am worried about the way in which the Government are once again—as so often before—taking powers to act in an arbitrary and dictatorial way. That feature comes out particularly in employment matters. I wonder why Ministers feel that they are always bound to be right, whatever everyone else may say. Whatever advice may be given by people who are experienced and skilled in these matters, the Government must be right. The unshakable conviction that everyone else is out of step causes much concern to many people both inside and outside the House. I wish that from time to time Ministers would show enough modesty to accept that people who have worked in industry all their lives and who have been involved in industrial relations and industrial training have something to say which they ought to listen to. That is not the way in which the Government behave nowadays.

Instead of contemplating the abolition of ITBs, the Government ought to be working out ways of increasing their effectiveness and expanding their scope, possibly by giving them new roles in various areas, such as promotion and publicity. There is a need to persuade young people that it is in their interest to achieve skills to enter skilled employment. Employers should be persuaded of the need to increase the number of apprenticeships available, even during a recession or a slump. The Secretary of State expessed his concern about that matter today, as well as previously on 26 November. Surely the ITBs themselves could be doing a useful job here.

When I was a member of the youth employment committee in Rotherham in the 1950s, during one of the periodic credit squeezes that we used to get then, we were very concerned about a severe shortage of apprenticeships for boys and girls. We found that it was by no means a local problem: it was a national one. The Government of the day set up a departmental committee under the chairmanship of the then Mr. Robert Carr, now Lord Carr, which produced the Carr report, which drew attention to this serious matter.

That warning was totally justified a generation later by a serious shortage of skilled people. Now we shall build up exactly the same problem for the next generation. We must give a great deal of attention to this matter and I am pleased that many hon. Members have commented on it today.

One of the most disastrous consequences of the appalling unemployment among young people today is the fact that we are pouring down the drain a great potential of skill without which the country will not survive in the twentieth century. These youngsters, who should now be acquiring the skills that the country will need in the next 10, 20 or 30 years, will be driven into a hopeless and despairing backwater of idleness instead of gathering the training and the skill that the country, never mind the youngsters themselves, will desperately need.

We need a sophisticated planning system to assess properly the manpower requirements of each industry, to take account of technological change and its effect on manpower requirements, to assess its effect on the appropriate length of the working week and the proper age for retirement and to guarantee proper training at all levels, in apprenticeships, in university courses and in the polytechnics. Without such a policy, we shall not solve this problem.

I am afraid that the Bill will drive us back rather than forward. The most precious of any country's natural resources are its people. A country that wastes its people by keeping them unemployed when there is work which needs to be done, and which keeps them unskilled when skills are needed, is heading for disaster.

8.37 pm

Mr. Richard Needham (Chippenham)

I shrink from bandying words with the right hon. Member for Doncaster (Mr. Walker) when he is in such good form as he was today, but he did not do the cause of training much good. He largely exaggerated the effects of the Bill and of what my right hon. Friend is trying to do.

On 27 November, the general secretary of the TUC said: With determination and the provision of adequate resources, the various interests can bring about the fundamental change of attitudes that a programme of this kind entails. But it will need careful handling, and a basis of mutual trust and confidence is critical. I believe on reflection, that the right hon. Gentleman will realise that he did not help that cause today.

I asked the right hon. Gentleman whether he did not accept that there were severe problems in our training arrangements, described in "Outlook on Training", the CPRS review and many other reports. It cannot be denied that everything is not a bed of roses. He replied that a touch on the tiller was all that was required.

Does the right hon. Gentleman really say that that is sufficient to put right our out-dated apprenticeship system? Is he prepared to say that a touch on the tiller is as far as we should go for the 35 per cent. of young people who have no systematic training after they leave school? Is he happy about the fact that all YOP and YOP-related courses are offering, besides some basic work experience, any adequate level of training? Is he content with the provision for education in the last year at school?

The right hon. Gentleman said that the 100,000 TOPs courses would be reduced to 55,000. Is he convinced that they provide adequate courses for those who need training? Is he saying that skillcentres are providing the qualifications that industrialists are prepared to rely on when they employ people? Those matters are extremely worrying. They need more than a touch on the tiller.

Mr. Harold Walker

I do not want the hon. Gentleman to misunderstand me. Our exchange of words a few hours ago was about the Bill, the MSC's report "Outlook on Training" and the structure of the industrial training boards. I said that everything was not right with the industrial training boards' structure but that the Secretary of State was exaggerating what was wrong and using that as a justification for butchering the boards. We were not talking about whether I was satisfied with the apprenticeship and training systems. There may be a great deal wrong with those systems, but that is another matter. Perhaps we could debate the same in Committee.

Mr. Needham

I am grateful for that explanation. But my right hon. Friend the Secretary of State made it perfectly clear in his statement on 16 November that he is as much committed as anyone else to a reform of the present training system. I am glad to say that I have rather more confidence in my right hon. Friend's judgment and determination than have Opposition Members.

I turn to the record of the industrial training boards. It is clear that of the 24 training boards some will be better than others. We must be careful when listening to the firms which criticise them. Such firms can usually be put into two categories—those which carry out adequate training and, inevitably resent having to pay a levy which they then claim back because of the administrative costs of making the claims, and those which do not carry out adequate training or do not provide any training at all and resent having to pay a levy. But there is a third sort—those which benefit from industrial training boards, want them to continue, and want to support them.

I take slight issue with my hon. Friend the Member for Devon, North (Mr. Speller), who complained that the Furniture and Timber Trade Board had explained to hon. Members how well it was doing. That is a perfectly legitimate action because the board is trying to get across to hon. Members that it is providing a worth-while service. My hon. Friend the Member for Watford (Mr. Garel Jones) and I have received many letters from people supporting the retail industry training board. If real criticism is to be made, it could be of the lack of definition of the role of training boards, which has never been clearly understood.

There is some need for reorganisation. As time passes, each training board needs to consider its relationship within its industry. It may be better to spread them sectorally, regionally or nationally, rather than industrially. Of course, they have difficulties in their relationships with the MSC. That has come out clearly in all the reviews that have been undertaken.

The Government must have an overall strategy, which they must publish. There must be a role for the industrial training boards within that strategy. I shall be blunt about the fact that I do not believe that voluntarism will work, The boards should set the standards. Perhaps they should work with the MSC on a contract basis. If they are not statutory, they will die. We should then have two classes of trained workers—those who come under statutory industrial training boards and will have received reasonable training, and those who do not. the Government must carefully consider the question of voluntarism.

It is of crucial importance that industry takes control of funding. But that cannot be done at a time when industry is suffering as much as it is now. The Secretary of State must look very carefully at the way he phases in the funding and over what time scale he does it.

Perhaps the Government have allowed themselves to be abused by the right hon. Member for Doncaster and slightly set their own trap. This is a wide-named Bill. It is a broad and expansive phrase. Looking at its contents reminds me rather of going into an exclusive French restaurant and ordering oeufs sur le plat Brecy, which turns out to be fried eggs, chipolatas and tomato ketchup on the top.

I feel that the peroration of my right hon. Friend the Secretary of State has not been clearly got across today. But this is a Bill which can go forward and which will form part of the Government's overall strategy. However, the powers in the Bill should not be used, certainly until the overall strategy has been seen and discussed. There has been much talk about babies and the bathwater. At the moment we have seen the baby but we have not seen the bath or the bathwater.

8.45 pm

Mr. Frank Hooley (Sheffield, Heeley)

I have come to the conclusion that this debate has been staged as a crafty scheme by the Secretary of State to convince the Cabinet that there is no support for what is proposed in the Bill. I have yet to hear any support for the Bill—although I must offer apologies, because there was one Conservative Back Bencher who expressed some serious reservations. Practically every other speaker on the Government side has expressed alarm and despondency at the prospect that what is proposed in the Bill will be carried out.

The shadow which overhangs this debate is the demographic pattern of youth coming on to the labour market in the present years and in the years which lie ahead. By a grotesque twist of circumstance, we have a peak of outflow of school leavers in the current years—I think that that peak is reached in 1982 or 1983—with hundreds of thousands of boys and girls flooding on to the labour market at a time when we have a Government pursuing an economic policy that is destroying the economy and destroying jobs. In any circumstances, it might have been difficult to have accommodated with useful work and training the flood of school leavers that has come in the past two or three years and will continue for a couple of years more. Given the Government's present policies, the situation has got completely out of hand.

In a few years' time, towards the end of this decade, we shall have an exactly reverse position. When the drastic fall in the birthrate that occurred in the mid-1970s results in fewer boys and girls coming on to the labour market towards the end of this decade and the beginning of the 1990s, we shall have a totally reverse situation. There will then be a serious shortage of manpower and womanpower in Britain for some considerable time—probably till the end of the century.

What, therefore, is likely to happen unless we are very careful with our training programmes now? It is that we shall neglect a five-year cohort of boys and girls, without giving them adequate training or adequate jobs; and once neglected there is a serious danger that they will not subsequently in their adult life acquire the skills necessary both to them individually and to the nation as a whole.

That is the most desperate and formidable problem which the country faces now in terms of the use of its human resources. If we allow these boys and girls to drift not only without jobs but without training or skill as well, we shall pay a very heavy penalty seven or eight years hence when the situation demographically, as I have explained, will go into complete reversal. Therefore, the debate on training is fundamental and very important for the economic future of Britain.

The Secretary of State talked about a review this year. A review has taken place already and it was published last July in "Outlook on Training". The review made one or two important points. It referred to the importance of training for the unemployed and vulnerable groups. By vulnerable groups, I assume that it meant handicapped and immigrant groups. Pushing the burden of training on to employers will do nothing for such people. Employers will not provide training for the unemployed. They will not do much for the handicapped or the ethnic minorities. In that sense the Bill is misconceived.

The review talked about promoting training at times of recession. Heaven knows, we have a recession and the Government are doing their best to make it worse. At such a time it is important to put the emphasis on training. However, the last people in time of recession to provide that training are the employers. I do not dispute that some of the more enlightened employers have the inclination, but at such a time they either do not have the resources or are not inclined to employ them. It is lunacy to propose that we should improve the training system by imposing another £50 million on employers who already bitterly complain about all the other charges that the Government keep loading on to them.

Nevertheless, the "Outlook on Training" review was right to say that at a time of economic depression more effort should be spent on training and that we desperately need to build up our skilled manpower. The way suggested in the Bill is not the right way.

Another suggestion in the review was that more effort should be made to provide training for expanding and new occupations. The infant industries will hardly take that on board. That takes a definite and vigorous effort by the Central Government and the community at large. Such a scheme must be funded by the taxpayer. The notion that sufficient training will occur in new and expanding industries by shifting costs away from the Exchequer to industry is nonsense. The review also said that there should be no statutory limit on the levy. The Government have ignored that proposition.

The training of women has not received much attention. It is important in the engineering industries where for many years the training of women has been neglected. Women provide an important source of skill. We should use it and encourage women to move into the engineering industries.

I share hon. Members' distaste for the exemption of firms in enterprise zones. I have made no secret of my views about enterprise zones. The defects of that gimmick are emphasised in the Bill.

It is hard to understand why the Secretary of State believes that he is advancing the cause of training by producing this Bill. I am driven to the conclusion that he wants to demonstrate to the Cabinet that some of his colleagues' bright ideas for reducing public expenditure will not work.

8.54 pm

Mr. Michael Colvin (Bristol, North-West)

I hope that the hon. Member for Sheffield, Heeley (Mr. Hooley) will forgive me if I do not take up some of the points that he made. I thank the hon. Gentleman and other hon. Members for having kept their remarks short. As a result, you have, Mr. Deputy Speaker, managed to squeeze me into the debate.

I wish to comment in broad terms on our national training strategy—or, perhaps, the lack of it—and on other connected questions such as whether we have the best tools to ensure that our training objectives are met and where the money will come from to pay for them.

It is widely acknowledged that our national training provision is inadequate. In a speech made a couple of years ago, my right hon. Friend the Secretary of State said: I don't think we do anything like enough training. We're certainly not doing enough training for the jobs of tomorrow and the skills of tomorrow. Those are hardly the words of someone who does not believe passionately that we should improve our training effort. The Bill is designed to do that. Britain suffers from an unemployment rate of 2½ million side by side with an estimated 250,000 unfilled vacancies. There are many reasons for that, but the shortage of skilled workers must result from inadequate training provision. That in turn poses a major threat to our economic recovery.

The problem is exacerbated by a more dynamic labour market and by far greater worker mobility. The recession is causing a major shake-out in employment. There is already evidence that jobs that are on the increase—and there are many of them—are often, but not always, in high technology industries and require the most training. Conversely, jobs in older and more traditional industries are on the decrease and require the least amount of training.

Workers will not want to be tied to one job or to one skill for all their working lives. That is not in their interests or in those of the nation. The American Carnegie Institute estimated that the average worker in the United States of America would have eight jobs and three careers in his lifetime. In Britain, the average is two jobs and only one career. We need a far more flexible work force with a wider range of transferable skills. We also need facilities for regular up-dating. The present training system has failed to produce those results.

Not all hon. Members agree with everything that is said in the report of the Central Policy Review Staff. Nevertheless, it puts its finger on one of the main faults in the British training system when it described the system as far too rigid, conservative and slow to respond to changing industrial needs.

I suggest that this inflexibility may be caused, in part, by the way in which the 24 industrial training boards are organised. Each one looks after its own rather narrow industrial sector rather than taking a broader view. Certainly, the Bill would give the Secretary of State power not only to abolish industrial training boards but to create new ones. If there were fewer boards covering a wider sector—as the Engineering Industry Training Board does—they might solve the problem of inflexibility.

I appreciate that industrial training boards do not deliver training. Their role is to provide the keys that will open the doors. If they have failed to do so, the review of each board that is being undertaken by the MSC will identify those at fault. It is said that the prospect of execution concentrates the mind wonderfully. No doubt we can expect a flurry of verbal activity from the 24 industrial training boards in the next few months.

The right hon. Member for Doncaster (Mr. Walker) held up a great pile of papers that he had received from industrial training boards. Most of us have received the same sort of mail. However, I have yet to be inundated by correspondence, leaflets or briefings from the industrialists who provide the training or from the employees who receive it. The industrial training boards seem to be the only bodies with anything to say.

It is, of course, right that the Secretary of State should have the powers contained in the Bill. He is ultimately responsible for seeing that our training system contributes effectively towards meeting the manpower needs of the economy. But he cannot do this alone in the Department of Employment.

First, our training needs must be identified in detail. That will mean the closest co-operation with other Departments of State, NEDO and employers' and employees' organisations. Secondly, the Secretary of State should be able to open doors to the training facilities and resources that already abound—doors that are often closed, except to the privileged few.

Why should we always believe that more and better training provision necessarily requires more resources and, therefore, more expenditure?

I ask hon. Members to think of all the training resources that sit idle in their constituencies for half the day: libraries, technical colleges, polytechnics, school workshops—I do not understand why we lock up our schools so early in the day—universities, laboratories, Ministry of Defence establishments and, of course, industry.

If we were to identify the bodies responsible for these various training resources we would find that a large proportion of them—probably most of them—came within the general area of education—both private and State—secondary, higher and further education. Therefore, local education authorities have immediate responsibility for most of those establishments.

The Avon county council has already demonstrated how much can be done in training by co-operating with local industry and employers' organisations. Surely the Department of Education and Science is the Department most likely to succeed in gaining access to these various institutions, so that their valuable resources—usually paid for by the taxpayer—can be made available to those who need them for training purposes.

In particular, our 33 polytechnics should have a far greater role in co-ordinating training. We have already seen what 13 of them can do in running the regional centres dealing with management training. Could they not build on that experience and widen the scope of their training activities, perhaps using the distance teaching techniques perfected by the Open University to bring training courses within the reach of many workers currently denied them?

With respect to my hon. Friend the Under-Secretary of State for Employment—the hon. Member for City of Chester (Mr. Morrison), who will be winding-up the debate and whom I congratulate on his promotion to the Front Bench—I suggest that he is in the wrong Department. What we require is a department of education and training, with a Minister of State in charge of training to co-ordinate the training activities of the nation. If my hon. Friend could persuade the Government to think in such terms he might one day find himself in that Department as the Minister of State, and not only succeed in carrying out a major reform of training but get promotion at the same time.

Until we have a department of education and training I do not think that our training needs will be satisfactorily or economically met; nor will the dreadful divide between school and work be properly bridged.

I ask my right hon. Friend the Secretary of State to look upon his task in training not as a cost-cutting exercise but as one of a better deployment of resources and of encouragement to employers, even in these hard times of recession, to invest more in training. We have no detailed figures of what we spend on training. Estimates put the figure at about £300,000 million—about one-third of what we spend on education—and it is almost certainly less per head of the population than our main overseas competitors.

The Tories have always made the running on training reform. The 1964 and 1973 Acts were both Conservative measures. We do not yet have it right, but this is another opportunity to improve the system. I hope that the Bill will be one important part of the process of improvement and I commend it to the House.

9.5 pm

Mr. Tom McNally (Stockport, South)

The hon. Member for Bristol, North-West (Mr. Colvin) let the cat out of the bag when he asked the Secretary of State not to make the Bill a cost-cutting exercise. As has become abundantly clear, that is exactly the prospect that we are facing.

The right hon, Gentleman tried skilfully to keep the debate on a low key. It was the bland leading the bland. However, my right hon. Friend the Member for Doncaster (Mr. Walker) quickly tore away that mask; and from the Labour, Liberal and Conservative Benches we have had a succession of Members who have criticised the Bill, its timing and its content. I am sure that the Government Whips are perspiring as they ponder on how they will be able to put a Committee together that will live up to the speeches from Back Benchers and secure votes for the Government. I do not think that that will be possible unless many amendments are made.

We share some common interests. We recognise that Britain and its economy needs to go up market into the higher technology high value-added industries. If we are to do that, we need investment in not only equipment and new technologies but in people. In his remarkable speech my right hon. Friend the Member for Doncaster alleged that the main thrust of the Government's policies over the next few years will be to work against those aims. Although the Secretary of State has been able to make some boasts about increases in training programmes here and there, the catastrophic fall in apprenticeships—10,000 in the past year—is the real monument to his policies. It is that for which he has to answer.

As my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) said, over the next two or three years there will be many coming on to the labour market who will not be trained and who will probably never be trained. That is the opportunity that has been missed at a time when there is scope in the economy, given Government intervention, to work that out.

It is said that firms should realise the need, but we forget how many apprenticeships are provided by small firms. I quote from a letter that was written on behalf of a small electronics firm in my constituency to the local district secretary of the AUEW: We cannot continue to search for alternative employment indefinitely. It is quite clear that we will not have the resources to train four apprentices next year. As a result, four apprenticeships have become two apprenticeships. That is happening again and again at the small end of British industry. Four is becoming two and two is becoming none. This is not because the bosses are hard-hearted or do not have wide concepts of the needs of industry. The fact is that they have to cut to stay alive in the recession that the Government have created. That is the reality behind the rather bland performance of the Secretary of State.

When the right hon. Gentleman looked around for support he found that it came only from the Centre for Policy Studies, with its fine record for progressive thinking. That is the only group that gives the Bill credibility. Even the CBI has said that the Bill will add to the problem of maintaining standards and volume training. Apart from the right hon. Gentleman's brave attempt to keep the backwoodsmen from the best of the Government's training programme—the programme was one of the finest achievements of the previous Labour Government, and I pay tribute to the hon. Gentleman for fighting to maintain it—there has been retreat on all levels. That has happened at a time when we should have been searching for expansion. We are witnessing a catastrophic cutback in engineering apprenticeships and apprenticeships generally. Time and again it has been shown from the Conservative Benches and from everyone who has had practical experience of working in industry that the retreat back to voluntarism is a figleaf. Successive Governments have taken pride in the training programme. We are not saying that it is incapable of improvement, that it should be allowed to be frozen in aspic, but the challenge of productivity with existing equipment, the challenge of the new technology and the extra numbers coming on the work roll will not be met by the Bill. The debate has proved that if all hon. Members who have spoken had the courage of their convictions the Bill would proceed no further.

9.10 pm

Mr. Barry Jones (Flint, East)

We have had a thorough debate. Twenty-two right hon. and hon. Members have participated. I have heard most of the speeches. They have been very thoughtful.

I begin my remarks by sincerely congratulating the hon. Member for City of Chester (Mr. Morrison) on his appointment as Under-Secretary of State for Employment. Tonight he has made his first appearance at the Dispatch Box as a Minister. It is an unusual coincidence that he and I should wind up the debate. Our constituencies share the walls of Chester and the banks of the River Dee. Perhaps there will not be another such coincidence in the House for some time.

The Bill will, to varying degrees, dictate how Britain will fight back to a position of economic strength and industrial pre-eminence. The Bill, which is highly controversial, is presented against a depressing employment scene, as my hon. Friend the Member for Newton (Mr. Evans) was right to stress in his strong speech. There is a rapid deterioration in the labour market. The outlook for the next few years is appalling. The general consensus among economic forecasters is that unemployment will continue to rise throughout 1981 and well into 1982. Projections have shown that, without special employment programmes for the young, there will be more than 600,000 school leavers out of work in the summers of 1982 and 1983. The number of adults, who it is said, will be out of work for more than 12 months will rise from 400,000 in 1982 to 600,000 in 1983. It is easy to argue that all those estimates are far too low and that the actual figures will be much higher.

The Secretary of State highlighted the increase in the youth opportunities programme and the increases in staffing and expenditure on them, but he has not highlighted the unjust expenditure cuts in other areas of the Manpower Services Commission's budget at a time of growing mass unemployment. We think that the Bill is a mistake, but if we view it alongside the damage that the Government are doing to employment and training services division of the MSC it can be said to be a very serious mistake. There are likely to be heavy cuts in jobcentre staffs. There are likely to be disgraceful cuts in the services for the disabled, following the International Year of Disabled People. We know that the number of ancillary staff in skillcentres will be cut and that some employment offices may have to be closed.

My right hon. Friend the Member for Doncaster (Mr. Walker) referred to the MSC's strategy for the next five years. If the House will not accept my gloomy assessment let it consult the pages of the MSC's corporate plan. Fortuitously, after requests, a copy was placed in the Library last week. I wish to draw attention to the Manpower Services Commission's consideration of its strategy. The commission says that it has been dominated by a number of factors, one of which is that the MSC knows of the requirement to save 1,710 more staff by April 1984 and to make expenditure savings of £20 million, £30 million and £30 million over the next three years. The MSC states: This last factor has overshadowed our discussions, we are exceedingly uneasy at having to accept major reductions in the employment and training services whose main job is to help unemployed people back to work, and sustain an adequate skill base at a time when unemployment is rising sharply. We must make it clear what these reductions mean … Expenditure reductions will be gained from the saving of staff salaries of the 1,710 posts which are to go, but beyond this we see no practicable alternative but to make major expenditure savings by cutting resources available for training and rehabilitation. This of course means fewer people trained or rehabilitated. That point was made by my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) and the hon. Member for Rochdale (Mr. Smith), and it will depress at least the hon. Member for Bedfordshire, South (Mr. Madel). The MSC continues: Staff savings will hit the employment service disproportionately: this will mean a seriously reduced capacity to aid the operation of the labour market and assist unemployed people. While the Commission welcomes the Government's approval of its special programmes for unemployed people, the reductions in its employment and training services mean that the emphasis of its services to the labour market is now being altered substantially. The Secretary of State's speech is, in part, invalidated by what the MSC says.

My right hon. Friend the Member for Doncaster (Mr. Walker) pungently outlined the reasons for our dislike of the Bill. In clause 1 the Secretary of State is ruthlessly driving towards voluntarism and aiming for vastly increased powers for himself. As the hon. Member for Croydon, North-West (Mr. Taylor) said, in a blunt and independent speech, the Secretary of State wants a big blank cheque. No one in the Opposition disagrees with that assessment.

We ask the Under-Secretary to think hard about the decision not to allow the removal of the 1 per cent. ceiling on the levy. The cost of services and training arrangements for the 13 million people who come under the industrial training boards is £52 million a year. For all the blemishes of the ITBs they are still good value at £4 per person per year.

Does the Under-Secretary realise that there will be troublesome consequences for industry if the Government do not relent in their obstinate determination to offload on to industry the training boards' operating costs by 1982-83 at the latest? It appears to be a rather brutal decision. As the hon. Member for Rochdale said, the cut-off is far too sudden. We hope that the Under-Secretary will say that there will be a longer transitional period, as the TUC has suggested, to help industry during the terrible recession that is tightening its grip on our economy. We should look for a transitional period going up to, say, 1984–85. The Under-Secretary could do far worse than read the Employment Select Committee proceedings for last Wednesday when Lord Carr and the TUC came before the Committee. Lord Carr, a former Secretary of State for Employment, warned against adding to industry's costs in the immediate future. He emphasised strongly the damaging consequences to the financial standing of industry of the overvalued pound and the very high interest rates.

Some hon. Members have pointed out that clause 4 excludes the employer from liability to pay levy or to provide information to a board in the case of an establishment in an enterprise zone. Enterprise zones are recent. They are controversial. Why should they mean that workers cannot benefit from industrial training measures? This proposition could be described as mean and petty. It might be said to be reactionary. We fear that it is a germinal position that signposts the Government's regression eventually to the laissez-faire industrial approaches that existed before the 1964 legislation. We want to hear in detail from the Under-Secretary the thinking behind this reactionary clause.

There are considerable employment consequences if the boards are abolished and if the Exchequer costs are returned too speedily to industry. In the paper and paper products industry it is estimated that 80 to 150 training specialists might be lost within a year—that is up to one-third of its training corps, if what we fear with regard to the abolition of many of the boards takes place. ICI, in the last quarter of 1980, suffered a £10 million loss. Its estimated increase in levy might be projected at about £600,000 a year. To make good this contribution, it would need to discharge one-third of its industrial training officers or close a number of apprenticeship schools.

I wish to emphasise what I believe many hon. Members would say are the achievements of the industrial training boards. They have been the vehicle for tripartite approaches to training. They have become a unique system of access to companies. In many company boardrooms, training is now discussed seriously and consistently. The training boards have set standards in certain fields of training. They have become a repository of a mass of information and expertise in industrial training. Overall, they have not been proved inefficient. Overall, they are not bureaucratic. No tangible evidence about their supposed misdemeanours has been brought before the House in this debate. I believe the whole House would agree that the industrial training boards, under the sector by sector review, must expect to have to be much more flexible and to adjust to training demands in industry.

It is clear that the Secretary of State has pinned his colours during these last few months to a threefold objective. He wants vocational preparation for employed and unemployed 16 to 18-year-olds. He wants apprenticeship reform and adult training and retraining. If he subjects his policy to the vagaries of voluntarism he is taking a big risk with his cherished objectives. If the vocational training hopes of the Government are to be realised, even at the unambitious target level set, it will be necessary for many more employers to take on young people and to provide them with a training programme that will be considerably more ambitious than that contemplated by most employers hitherto. It was on those lines that the hon. Member for Beeston (Mr. Lester), in his well-informed speech, gave a rather generous hint to the right hon. Gentleman.

Amongst other things, the measures will require a considerable input of expertise in the development of training programmes. They will require assistance to companies and the monitoring of their performance. Is it realistic to believe that a purely voluntary system will develop the stimulus to employers to reverse the current tendency to reduce the employment of unqualified young people and to increase spending in this direction? It does not appear realistic to imagine that employers will devote resources to improve their capacity to implement quality training at this level. I do not think that it is realistic to rely on a voluntary monitoring of standards.

Apprenticeships are regarded as a vital area. Perhaps, before considering reform, we should try to ensure that minimum numbers of future craftsmen are being trained. Further, we should ask whether it is likely that voluntary arrangements will lead to an adequate supply. It does not seem so, because even now, with the Manpower Services Commission and the industrial training boards' pressures and inducements, numbers are falling.

Indeed, employers' apprentice recruitment has declined markedly, and apprentices in various stages of training are being sacked in large numbers. The hon. Member for Chelsea (Mr. Scott) made his points about that very effectively. He may agree with me that training, involving investment with a pay-off several years ahead, tends to be neglected, and that a voluntary system will surely do nothing to overcome this serious problem. That was one of the points made by my hon. Friend the Member for Blackley.

The subject of adult training and retraining ranges from operatives to management, and from marketing to safety. Now it is intended to open it up in an extended, more systematic and coherent way. Provisions such as the "open tech" are intended to facilitate this development. The industrial training boards' progress in this large area has been patchy in some places but it has had important successes, just as in other areas it has had its failures.

Does the Under-Secretary think that we can contemplate with any degree of confidence the ambitious objectives now set out by the Government if their realisation depends solely on the voluntary commitment of the majority of employers? Would such a system allow us to build a national organisation through which training, experience, knowledge and expertise could be exchanged, to mutual advantage? Many of my hon. Friends ask whether there is anything in our experience in the past few decades, or more recently, to give us reason to hope that a voluntary system will deliver any more than it has in the past.

With regard to apprenticeships, many people say that there is evidence that the Government are destroying the seedcorn. What worries me is that the past few months have seen an accelerating rush of sackings of young craftsmen and technicians in training, and that after a fall of more than 10 per cent. at the beginning of the training year compared with the previous year, this depleted source of the trained labour force of the future is now falling further to the scythe of redundancy. The investment in youngsters through one, two or even more years of training is being lost, because companies facing enormous pressures are frantically offloading their people, including many of their apprentices. In the immediate years ahead, all the signs point to a worse situation. Our experience of the decade before the 1964 Act demonstrated the futility of relying on that course, and finally persuaded the Tory Government of its futility. Another Tory Government in 1973 confirmed the necessity of statutory intervention.

It appears that the Government are sheltering behind the sector by sector review of industrial training boards. They say "Wait and see which boards will and which boards will not be axed." Today, the Secretary of State has sought to exploit the differences of approach between the employers and others. At least his options stay open. It is not to his disadvantage that the debate has sometimes dealt with money, when it might have dealt with training. The right hon. Gentleman has confirmed that he seeks extra powers to abolish boards without a recommendation from the MSC, and that he is doing so ahead of the review. He has effectively downgraded his 23 board chairmen—as he has downgraded his Manpower Services Commission—by ignoring their pleas against voluntary boards. He still ducks the advice of the CBI, the TUC, the board chairmen and the Opposition in terms of the timing of the transference of the operating costs of the boards to industry. Today we have had only a vague promise on timing. That promise is not good enough.

The Secretary of State is imperilling the success of his new training initiatives for the 16 to 18-year-olds by espousing the principle of voluntarism, rather than keeping to the principle of statutory provision. Some observers believe that his crucial clause 1 provision might involve a betrayal of a new generation of school leavers. In his drive towards voluntarism, the Secretary of State now runs counter to the determination of two previous Conservative Governments who decided to outlaw that concept. I remind him that the Prime Minister was the sponsor of the 1973 Bill.

In effect, we are seeing the break-up of the implied bipartisan political approach to industrial training—in basic principles at least—of the 1960s and the 1970s. Industrial training is clearly at the fulcrum of Britain's belated attempts to regenerate ts ailing economy, and now, in this crucial area of economic activity, with this reckless little Bill, the Government are embarking on bitterness and controversy. The Under-Secretary of State must answer a number of questions. The House is suspicious of the indecent haste with which the Bill has been introduced. The Government aim to push this measure through before the MSC's corporate plan comes fully into the spotlight of the House.

It is ironic that the Secretary of State, a celebrated wet, must come to the House with a £51 million public expenditure cut—as my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) called it—and the implied surrender of most of the statutory boards, while the greatest monetarist of all, the Secretary of State for Industry, keeps his National Enterprise Board and indulges in fortnightly rescue operations for BL and State and private steel.

We believe strongly that a voluntary system of training boards would imperil the economic revival of our country at a time when our EEC rivals and others in the West move forward in industrial training. This Government are planning to embrace an antediluvian and discredited method.

The Bill is the denial of the bright hopes of many of our young people. They are entitled to a better tomorrow, and some of these measures will not make that possible. We shall oppose the Bill vigorously.

9.35 pm

The Under-Secretary of State for Employment (Mr. Peter Morrison)

I thank the hon. Member for Flint, East (Mr. Jones) for his kind congratulations, and I offer my own to him. It must be unusual for two new boys, one a Minister and the other shadowing him, to have neighbouring constituencies and to be winding up a debate on the day that they are the new boys. The difference between the hon. Member for Flint, East and me is that he has had an illustrious ministerial career, and has appeared constantly at the Dispatch Box, whereas I. four and a half years ago, took the oath of a Trappist monk: I became a Whip and, subsequent to that, the Government pairing Whip—[HON. MEMBERS: "Hear, hear."] It is unusual for a Government pairing Whip to raise a cheer. I do not think that I would have done the same a few weeks ago. However, this is my first speech in the House for four and a half years. It may be that the House will think at the end of my speech—I might even think it myself—that it would be better if I went back to my former role as a Trappist monk.

It is ironical that as an apprentice in my new job I should be speaking about training. However, I have learned a great deal about training during the past five weeks, and I have listened carefully to all that right hon. and hon. Members have said. The backdrop to the debate has been how important training is. I think that there is no disagreement about that.

My hon. Friends the Members for Beeston (Mr. Lester) and for Chelsea (Mr. Scott) spoke about the youth opportunities programme, as did the right hon. Member for Doncaster (Mr. Walker) and the hon. Member for Flint, East. The issue of apprenticeships, to which the hon. Member for Flint, East referred, is another matter which has been concerning us all. It was argued that we should pursue a policy of training for adults. My right hon. Friend the Secretary of State referred to this, as did a number of other hon. Members. This is especially important since, because of the pace of change occurring in industry, it is no longer likely to be the case that a person joins a job and expects to be in that sort of job for the rest of his life.

Mr. John Evans

Certainly not under this Government.

Mr. Morrison

My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) asked whether we should not review completely the way in which training is done. He wanted to move away from the sector by sector basis to an area committee basis. I listened carefully to my hon. Friend. Although we shall look at the issue very carefully, the fact is that, if we had area committees superimposed on the present structure, they would represent yet one more board or association.

I am sorry that my right hon. and learned Friend the Secretary of State for Education and Science was not present when my hon. Friend the Member for Bristol, North-West (Mr. Colvin) spoke about the importance of the link between the Department of Employment and the Department of Education and Science. My right hon. and learned Friend is a very busy man. However, my hon. Friend the Member for Bristol, North-West promoted me to the job of Minister of State in my right hon. and learned Friend's Department, so perhaps he will have an opportunity to read the report of the debate in tomorrow's Hansard.

Turning to the aspects of the Bill which were discussed in the debate, I listened especially closely to what the right hon. Member for Doncaster said. The whole House appreciates that his knowledge of these matters is very deep and that his experience goes back over many years—and it is a many years. His knowledge and experience is very substantial and, therefore, I always pay an enormous amount of attention to what he says.

My hon. Friend the Member for Saffron Walden mentioned the following point. I got the impression that the right hon. Member for Doncaster was a little wary of change. Perhaps that is not right, but that was the impression he gave. As I said to him in answer to a parliamentary question, it is surprising that he should be wary of change as a Labour Front Bencher and that I as a Conservative Front Bencher should be promoting change. Perhaps I misunderstood him.

Last November, Len Murray said: The need now is to reach agreement on a framework of a training system for all in the future, to develop a system which meets the training needs of workers, employers and the nation during a period of economic difficulty and rapid technological change". Therefore, Mr. Murray is in agreement with my right hon. Friend and myself, and is disagreeing to a certain extent with the hon. Member for Newton (Mr. Evans), who suggested that we were going too fast, as did other Opposition Members.

Mr. Murray realises how important it is to settle this matter, because we need the structure for the future. Opposition Members appear to say that it is not important to settle the matter. Therefore, they are continuing to promote uncertainty.

Mr. John Evans

Surely the Minister has recognised our arguments that the Government should wait until the MSC has conducted its review, that the House should have a debate on the review and that, after that debate, legislation could be brought to the House which would be uncontroversial and accepted by both sides of the House?

Mr. Morrison

I shall come to that point later in my speech. I am not fobbing off the question.

I gather that the interesting thing is—admittedly the right hon. Member for Doncaster mentioned it—that the Opposition, the TUC and the Conservatives are all agreed that, at the end of the day, industry should pay for its training. The TUC said that at the Employment Select Committee last week, the right hon. Gentleman said it and we are saying it now. I accept that there is some contention as to when that should come.

The right hon. Member for Norwich, North (Mr. Ennals) raised the theme of whether employers can afford to pay. I believe that we should consider it in this way. At the moment, 47 per cent. of employees are not covered by training boards. After the review by the Manpower Services Commission and any decision which my right hon. Friend may make, that figure may increase. If it is increased, those companies that are left within the statutory boards will have to pay for the operating costs, whereas those within the voluntary system will have to pay for something—because there will be some things on a voluntary basis—but they will not have to pay the costs as determined by the industrial training board of that sector. Therefore, the voluntary and the statutory sectors are being put at odds with each other.

I agree with my hon. Friend the Member for The Wrekin (Mr. Hawksley) that it is likely that, where there is a voluntary board or a voluntary association, because the same form filling and bureaucracy will not exist, the operating costs are likely to be less. However, in relation to transfer costs and the points made by my hon. Friend the Member for Beeston and the right hon. Member for Doncaster, my right hon. Friend the Secretary of State and I have accepted that things will be difficult for industries during the present recession. My right hon. Friend said that he was prepared to be reasonably flexible. It would therefore be unjust and wrong to say that we have not taken account of this matter.

Many hon. Members have asked what role the training boards have played over the last 16 or 17 years. The right hon. Member for Doncaster rightly talked at some length about the Acts of 1964 and 1973. He called in evidence my noble Friend Lord Blakenham, and said that he would disagree with what we are doing. However, I think that it would be fair to say that what pertained in 1963–64 does not necessarily pertain in 1981–82. I accept what the right hon. Gentleman also said, that his noble Friend Lord Scanlon said that the training boards had played an important role.

I accept that, as a result of the boards, some sectors have woken up to what was going on and taken remedial action, but that does not necessarily mean that they should continue for ever and a day. However, they played an important role and I echo the thanks expressed by the Secretary of State to all those involved in their work. They have done a marvellous job over the years.

I understand that the TUC wants the boards to continue for evermore and I accept that employers are divided. Sitting at my desk, I receive many letters—not as many as the hon. Member for Hackeney, South and Shoreditch (Mr. Brown) suggested but certainly quite a few—arguing both sides of the case. Some employers want them to go on because they regard them as of great assistance. Others want them to stop because they regard them as bureaucratic, expensive and time-consuming.

I should not let pass the point made in the letter from the chairmen of the training boards. I should be amazed if any group whose organisation was being threatened did not write to say "We do not believe that you should get rid of us." I should be staggered if that were not so. But the chairmen are responsible to their public, to their industries, as we politicians are responsible to our electors. So we must listen not just to them but to the employers in the industries concerned. That is the reason for the review.

I felt rather lost at one point in the speech of the right hon. Member for Doncaster. He seemed at first to be on land and then to divert to the sea. He said that everything in the garden was not rosy with training—

Mr. Harold Walker

indicated dissent.

Mr. Morrison

That is what he said. Then he said that a touch on the tiller might be helpful. I must confess that I was a little at sea about his meaning.

It is wrong to suggest that we are making a pre-emptive strike. We have open minds. My hon. Friend the Member for Beeston asked for an undertaking that we do not have a doctrinaire approach. I can certainly give that undertaking.

The right hon. Member for Doncaster suggested that the Government are in conflict with the MSC. I am not aware of such a conflict. I am sure that he will agree that the MSC has not come forward with any recommendations for the sector-by-sector review of whether the boards should continue. I find it surprising that he is taking that line when in Committee on 12 April 1973 he argued the opposite. I could quote what he said then, but I do not wish to bore the House. He argued that it was important that the House had powers over the MSC to take action without its recommendations. Now, eight years later, he is arguing the opposite.

Mr. Harold Walker

Will the Minister please quote that passage so that the House knows what I said?

Mr. Morrison

I shall do so. The right hon. Gentleman said: One of the fundamental issues of the Bill is the extent to which the powers of Members of Parliament have been eroded and will be eroded in the future. It is our duty to ensure that power remains ultimately with Ministers and the vote of Parliament and subject to the pressures of Parliament. It may be that, under pressure, Parliament is compelled to make the wrong decisions, but, if they are wrong decisions as the result of democratic pressures, they are right decisions in terms of parliamentary democracy. This is the system we have developed and I am concerned that we should not hand over to agencies the kind of powers that the Minister is proposing that they should have."— [Official Report, Standing Committee A, 12 April 1973; c. 344.] That is the argument that I am putting forward tonight.

Mr. Harold Walker

With respect, that is not what the Bill is saying. I argued then, and have argued since—I have never resiled from the argument—that the MSC or any other extra-governmental agency should be accountable to the Minister, and through the Minister to the House. The power ultimately should rest with the House. The Secretary of State is now taking power to override and dismiss the views of the MSC. That is what the Bill is about. If the position were otherwise, there would be no need for the Bill.

Mr. Morrrison

The right hon. Gentleman and I will not agree on that point. My right hon. Friend is taking powers to do exactly what the right hon. Gentleman wanted in 1973.

Mr. John Golding (Newcastle-under-Lyme)

I want to move slightly away from that point. Surely the bone of contention for Back Benchers is that both the CBI and the TUC have said that they cannot make a firm recommendation about the Bill until the MSC has completed its inquiry. They have said that they cannot hold meaningful discussions on the principles of the Bill until the review has taken place. In that sense, my right hon. Friend the Member for Doncaster (Mr. Walker) is right to say that the partners in the MSC believe that this is the wrong time to discuss the Bill, and that discussions should take place only when we are better informed.

Mr. Morrison

I am sure that the right hon. Member for Doncaster will be grateful to his hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) for getting away from the point. The TUC, the CBI and any interested body, are entitled to talk to the MSC before it makes its recommendations, and also to talk to my right hon. Friend, myself or any other Minister if they so desire. I do not think that the hon. Gentleman and I will agree on that point.

I turn to the question of the levy—that is, the non-clause which the right hon. Gentleman wanted included in the Bill. It is still possible, and it will remain possible, for a training board to bring a proposed increase of levy over 1 per cent. to my right hon. Friend, and it will then be subject to affirmative resolution. What the Opposition apparently want is for statutory training boards to have a blank cheque. I suggest that that, overall, is where taxpayers' money gets lost—when we give blank cheques to people.

I come to the final and most important point of all. It has been raised by many hon. Members on both sides of the House. The question is: can voluntarism work? I accept entirely that one cannot be utterly sure whether voluntarism can work, but, as a general rule, my right hon. and hon. Friends and I believe that the British people are far better at organising themselves than the Government are on their behalf.

But of course, in the event of the review and of recommendations made to him, my right hon. Friend will take into account, when he decides whether a training board should continue, whether he thinks that the particular industry can continue on a voluntary basis.

The point which hon. Members on both sides of the House are making is well registered, but overall, I think that Opposition Members simply cannot take on board the fact that voluntarism can work when, in fact, it works. I say to the right hon. Member for Doncaster that, as he well knows and knew well before me, the ITBs, when set up under the 1964 Act, were set up on the model of the Merchant Navy Training Board—I am assured that that is correct—which has always been a totally voluntary body. So in that case it has worked, and I do not see why it should not work in the future.

I turn finally to the hon. Member for Rochdale (Mr. Smith). He was kind enough to flatter me, because he wanted me to do something in his constituency, but then he proceeded to insult me.

Mr. Cyril Smith

Impossible.

Mr. Morrison

It seems to me that the hon. Gentleman wanted it both ways. First, he said that he wanted all small firms exempt. He said that it was monstrous that small firms were being mucked around by these training boards and that this was another of these desperate things that the Government were doing. One would have assumed from that point of view that the hon. Gentleman did not particularly like training boards. But then he said that we must keep the Cotton and Allied Textiles Training Board, which looks after a lot of small firms. So at that moment the hon. Gentleman was looking both ways.

I accept that there is no harm in a prominent member of the Liberal Party looking both ways, but the rest of us have to look the same way.

Mr. Cyril Smith

Will the Minister give way?

Mr. Morrison

No, I cannot give way. It is very near 10 o'clock.

The hon. Gentleman talked about the reduction in the retiring age for men, which was not particularly germane to this point. I draw his attention to the fact that the Government have the job release scheme, and with that scheme that is exactly what we have.

Mr. Cyril Smithrose—

Mr. Morrison

Finally, the hon. Gentleman attacked enterprise zones. We shall notice in future that the Liberal Party is opposed to enterprise and enterprise zones. We shall mark it down. That is the sort of party it is.

I ask my right hon. and hon. Friends to join me in the Lobby and vote for the Second Reading of the Bill.

Mr. Cyril Smith

I was trying to explain to the Minister—

The Parliamentary Secretary to the Treasury (Mr. Michael Jopling)rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House divided: Ayes 299, Noes 248.

Division No.65]	[10 pm
Alexander,Richard	Benyon,Thomas(A 'don)
Amery, Rt HonJulian	Benyon,W. (Buckingham)
Ancram,Michael	Berry, HonAnthony
Arnold,Tom	Best, Keith
Atkins, Robert(PrestonN)	Bevan, David Gilroy
Atkinson, David(B'm'th,E,)	Biffen,Rt Hon John
Baker,Kenneth(Sf. M'bone)	Biggs-Davison,John
Baker, Nicholas (NDorset)	Blackburn, John
Banks, Robert	Body, Richard
Beaumont-Dark,Anthony	Bonsor, SirNicholas
Bendall, Vivian	Boscawen, HonRobert
Bennett, SirFrederic(T'bay)	Bottomley, Peter(W'wichW)

Bowden, Andrew	Haselhurst, Alan
Boyson, DrRhodes	Hastings, Stephen
Braine, SirBemard	Havers, Rt Hon Sir Michael
Bright, Graham	Hawkins, Paul
Brinton, Tim	Hawksley, Warren
Brittan, Leon	Hayhoe, Barney
Brooke, Hon Peter	Heath, Rt Hon Edward
Brotherton, Michael	Heddle, John
Bruce-Gardyne, John	Henderson, Barry
Bryan, Sir Paul	Heseltine, Rt Hon Michael
Buck, Antony	Hicks, Robert
Budgen, Nick	Higgins, Rt Hon Terence L.
Bulmer, Esmond	Hill, James
Burden, SirFrederick	Hogg, Hon Douglas(Gr'th'm)
Butcher, John	Holland, Philip (Carlton)
Carlisle, John (LutonWest)	Hooson, Tom
Carlisle, Kenneth(Lincoln)	Hordern, Peter
Carlisle, Rt Hon M. (R'c'n)	Howe, Rt Hon Sir Geoffrey
Chalker, Mrs. Lynda	Howell, Rt Hon D. (G'ldf'd)
Channon, Rt. Hon. Paul	Howell, Ralph (NNorfolk)
Chapman, Sydney	Hunt, David (Wirral)
Churchill, W.S.	Hunt, John(Ravensbourne)
Clark, Hon A. (Plym'th,S'n)	Hurd, Hon Douglas
Clark, Sir W. (Croydon S)	Irving, Charles(Cheltenham)
Clarke, Kenneth(Rushcliffe)	Jenkin, Rt Hon Patrick
Clegg, Sir Walter	Jessel, Toby
Cockeram, Eric	Johnson Smith, Geoffrey
Colvin, Michael	Jopling, Rt Hon Michael
Cope, John	Joseph, Rt Hon Sir Keith
Cormack, Patrick	Kaberry, Sir Donald
Corrie, John	Kershaw, Anthony
Costain, Sir Albert	Kimball, Marcus
Cranborne, Viscount	King, Rt Hon Tom
Critchley, Julian	Kitson, Sir Timothy
Crouch, David	Knight, Mrs Jill
Dean, Paul (North Somerset)	Knox, David
Dorrell, Stephen	Lamont, Norman
Dover, Denshore	Lang, Ian
du Cann, Rt Hon Edward	Langford-Holt, Sir John
Dunn, Robert(Dartford)	Latham, Michael
Dykes, Hugh	Lawrence, Ivan
Eggar, Tim	Lawson, Rt Hon Nigel
Elliott, Sir William	Lee, John
Emery, Peter	LeMarchant, Spencer
Eyre, Reginald	Lennox-Boyd, HonMark
Fairbairn, Nicholas	Lester Jim (Beeston)
Fairgrieve, Russell	Lewis, Kenneth(Rutland)
Faith, Mrs Sheila	Lloyd, Ian (Havant & W'loo)
Farr, John	Loveridge, John
Fell, Anthony	Luce, Richard
Fenner, Mrs Peggy	Lyell, Nicholas
Finsberg, Geoffrey	McCrindle, Robert
Fisher, Sir Nigel	Macfarlane, Neil
Fletcher, A.(Ed'nb'gh N)	MacGregor, John
Fletcher-Cooke, Sir Charles	MacKay, John (Argyll)
Fookes, MissJanet	McNair-Wilson,M.(N'bury)
Forman, Nigel	McNair-Wilson, P.(New F'st)
Fowler, Rt Hon Norman	McQuarrie Albert
Fox, Marcus	Madel, David
Fraser, Peter (South Angus)	Major, John
Fry, Peter	Marland, Paul
Gardiner, George(Reigate)	Marlow, Tony
Gardner, Edward (S Fylde)	MarshallMichael(Arundel)
Garel-Jones, Tristan	Marten, Neil(Sanbury)
Gilmour, Rt Hon Sir Ian	Mates, Michael
Glyn, Dr Alan	Mather, Carol
Goodhart, Philip	Maude, Rt Hon Sir Angus
Gorst, John	Mawby, Ray
Grant, Anthony (HarrowC)	Mawhinney, Dr Brian
Gray, Hamish	Maxwell-Hyslop, Robin
Greenway, Harry	Mayhew, Patrick
Griffiths, E.(B'ySt. Edm'ds)	Mellor, David
Griffiths, Peter Portsm'thN)	Meyer, Sir Anthony
Grist, Ian	Miller, Hal(B'grove)
Grylls, Michael	Mi I Is, lain (Meriden)
Gummer, JohnSelwyn	Mills, Peter (West Devon)
Hamilton, Hon A.	Miscampbell, Norman
Hamilton, Michael(Salisbury)	Moate, Roger
Hampson, Dr Keith	Monro, Hector
Hannam, John	Montgomery, Fergus

Moore, John	Smith, Dudley
Morgan, Geraint	Speller, Tony
Morris, M. (N'hamptonS)	Spence, John
Morrison, Hon C. (Devizes)	Spicer, Jim (West Dorset)
Morrison, Hon P.(Chester)	Spicer, Michael(S Worcs)
Mudd, David	Sproat, Ian
Murphy, Christopher	Squire, Robin
Myles, David	Stainton, Keith
Needham, Richard	Stanbrook, Ivor
Nelson, Anthony	Stanley, John
Neubert, Michael	Steen, Anthony
Newton, Tony	Stevens, Martin
Nott, Rt Hon John	Stewart, Ian (Hitchin)
Onslow, Cranley	Stewart, A. (ERenfrewshire)
Oppenheim, Rt Hon Mrs S.	Stokes, John
Osborn, John	Stradling Thomas, J.
Page, John (Harrow, West)	Tapsell, Peter
Page, Rt Hon Sir G. (Crosby)	Taylor, Robert(Croydon NW)
Page, Richard (SW Herts)	Taylor, Teddy (S'end E)
Parris, Matthew	Tebbit, Norman
Patten, Christopher(Bath)	Temple-Morris, Peter
Patten, John(Oxford)	Thomas, Rt Hon Peter
Pattie, Geoffrey	Thompson, Donald
Pawsey, James	Thorne, Neil(Ilford South)
Percival, Sirlan	Thornton, Malcolm
Peyton, Rt Hon John	Townend, John(Bridlington)
Pink, R. Bonner	Townsend, Cyril D, (B'heath)
Pollock, Alexander	Trippier, David
Porter, Barry	Trotter, Neville
Prentice, Rt Hon Reg	van Straubenzee, W. R.
Price, Sir David (Eastleigh)	Vaughan, Dr Gerard
Prior, Rt Hon James	Viggers, Peter
Proctor, K. Harvey	Waddington, David
Pym, Rt Hon Francis	Wakeham, John
Raison, Timothy	Waldegrave, Hon William
Rathbone, Tim	Walker, B. (Perth)
Rees, Peter (Dover and Deal)	Walker-Smith, Rt Hon Sir D.
Rees-Davies, W. R.	Wall, Patrick
Renton, Tim	Waller, Gary
Rhodes James, Robert	Walters, Dennis
Rhys Williams, Sir Brandon	Ward, John
Ridley, Hon Nicholas	Warren, Kenneth
Rippon, Rt Hon Geoffrey	Watson, John
Roberts, M. (Cardiff NW)	Wells, John(Maidstone)
Roberts, Wyn(Conway)	Wells, Bowen
Rossi, Hugh	Wheeler, John
Rost, Peter	Whitelaw, Rt Hon William
Sainsbury, Hon Timothy	Whitney, Raymond
St. John-Stevas, Rt Hon N.	Wickenden, Keith
Scott, Nicholas	Wiggin, Jerry
Shaw, Giles (Pudsey)	Wilkinson, John
Shaw, Michael (Scarborough)	Williams, D.(Montgomery)
Shelton, William(Streatham)	Winterton, Nicholas
Shepherd, Colin (Hereford)	Wolfson, Mark
Shepherd, Richard	Young, Sir George(Acton)
Shersby, Michael
Silvester, Fred	Tellers for the Ayes:
Sims, Roger	Lord James Douglas-Hamilton
Skeet, T. H. H.	and Mr. Alastair Goodlad.
NOES
Abse, Leo	Brown, Hugh D. (Provan)
Adams, Allen	Brown, R. C. (N'castle W)
Allaun, Frank	Brown, Ron(E'burgh, Leith)
Alton, David	Brown, Ronald W. (H'ckn'y S)
Anderson, Donald	Buchan, Norman
Archer, Rt Hon Peter	Callaghan, Jim(Midd't'n&P)
Ashley, Rt Hon Jack	Campbell, Ian
Ashton, Joe	Campbell-Savours, Dale
Atkinson, N.(H'gey,)	Canavan, Dennis
Bagier, Gordon A.T.	Cant, R. B.
Barnett, Guy(Greenwich)	Carmichael, Neil
Barnett, Rt Hon Joel(H'wd)	Carter-Jones, Lewis
Benn, Rt Hon A. Wedgwood	Cartwright, John
Bennett, Andrew(St'kp'tN)	Clark, Dr David (S Shields)
Bidwell, Sydney	Cocks, Rt Hon M. (B'stol S)
Booth, Rt Hon Albert	Cohen, Stanley
Boothroyd, Miss Betty	Coleman, Donald
Bradley, Tom	Concannon, Rt Hon J. D.
Bray, Dr Jeremy	Conlan, Bernard

Cowans, Harry	Johnson, James (Hull West)
Cox, T.(W'dsw'th, Toot'g)	Johnson, Walter(Derby S)
Craigen, J. M.	Jones, Rt Hon Alec (Rh'dda)
Crowther, J. S.	Jones, Barry (East Flint)
Cunliffe, Lawrence	Jones, Dan (Burnley)
Cunningham, G.(Islington S)	Kaufman, Rt Hon Gerald
Cunningham, Dr J.(W'h'n)	Kerr, Russell
Dalyell, Tam	Kilroy-Silk, Robert
Davies, Rt Hon Denzil (L'lli)	Kinnock, Neil
Davis, Clinton (Hackney C)	Lambie, David
Davis, T.(B'ham, Stechf'd)	Lamborn, Harry
Deakins, Eric	Lamond, James
Dean, Joseph (Leeds West)	Leadbitter, Ted
Dewar, Donald	Lewis, Arthur (N'ham NW)
Dixon, Donald	Lewis, Ron(Carlisle)
Dobson, Frank	Litherland, Robert
Dormand, Jack	Lofthouse, Geoffrey
Douglas, Dick	Lyon, Alexander (York)
Douglas-Mann, Bruce	Lyons, Edward (Bradf'dW)
Dubs, Alfred	Mabon, Rt Hon Dr J. Dickson
Duffy, A. E. P.	McDonald, DrOonagh
Dunn, James A.	McGuire, Michael(Ince)
Dunnett, Jack	McKay, Allen(Penistone)
Dunwoody, Hon Mrs G.	MacKay, John(Argyll)
Eastham, Ken	McKelvey, William
Edwards, R. (W'hampt'n S E)	MacKenzie, Rt Hon Gregor
Ellis, R. (NE D'bysh're)	Maclennan, Robert
Ellis, Tom (Wrexham)	McMahon, Andrew
English, Michael	McNally, Thomas
Ennals, Rt Hon David	McTaggart, Robert
Evans, loan (Aberdare)	McWilliam, John
Evans, John (Newton)	Magee, Bryan
Ewing, Harry	Marks, Kenneth
Field, Frank	Marshall, D (G'gowS'ton)
Fitch, Alan	Marshall, Dr Edmund(Goole)
Flannery, Martin	Mason, Rt Hon Roy
Fletcher, Raymond (Ilkeston)	Maxton, John
Fletcher, Ted (Darlington)	Maynard, Miss Joan
Foot, Rt Hon Michael	Meacher, Michael
Ford, Ben	Mellish, Rt Hon Robert
Forrester, John	Millan, Rt Hon Bruce
Foster, Derek	Miller, Dr M. S. (E Kilbride)
Foulkes, George	Mitchell, Austin(Grimsby)
Fraser, J. (Lamb'th, N'w'd)	Mitchell, R.C. (Soton Itchen)
Freeson, Rt Hon Reginald	Morris, Rt Hon A. (W'shawe)
Freud, Clement	Morris, Rt Hon C. (O'shaw)
Garrett, John (Norwich S)	Morris, Rt Hon J. (Aberavon)
Garrett, W. E. (Wallsend)	Morton, George
George, Bruce	Moyle, Rt Hon Roland
Gilbert, Rt Hon Dr John	Mulley, Rt Hon Frederick
Ginsburg, David	Newens, Stanley
Golding, John	Oakes, Rt Hon Gordon
Gourlay, Harry	Ogden, Eric
Graham, Ted	O'Neill, Martin
Grant, George(Morpeth)	Orme, Rt Hon Stanley
Grant, John (Islington C)	Park, George
Hamilton, James(Bothwell)	Parker, John
Hamilton, W. W. (C'tral Fife)	Parry, Robert
Hardy, Peter	Pavitt, Laurie
Harrison, Rt Hon Walter	Pendry, Tom
Hart, Rt Hon Dame Judith	Penhaligon, David
Hattersley, Rt Hon Roy	Powell, Raymond(Ogmore)
Haynes, Frank	Prescott, John
Healey, Rt Hon Denis	Price, C. (Lewisham W)
Heffer, Eric S.	Race, Reg
Hogg, N. (EDunb't'nshire)	Radice, Giles
Holland, S.(L'b'th, Vauxh'll)	Rees, Rt Hon M (Leeds S)
Home Robertson, John	Richardson, Jo
Homewood, William	Roberts, Albert (Normanton)
Hooley, Frank	Roberts, Allan(Bootle)
Horam, John	Roberts, Ernest (Hackney N)
Howell, Rt Hon D.	Roberts, Gwilym(Cannock)
Huckfield, Les	Robertson, George
Hudson Davies, Gwilym E.	Robinson, G. (Coventry NW)
Hughes, Mark(Durham)	Rodgers, Rt Hon William
Hughes, Robert (Aberdeen N)	Rooker, J. W.
Hughes, Roy (Newport)	Roper, John
Janner, Hon Greville	Ross, Ernest (Dundee West)
Jay, Rt Hon Douglas	Ross, Stephen (Isle of Wight)
John, Brynmor	Rowlands, Ted

Ryman, John	Steel, Rt Hon David
Sandelson, Neville	Stoddart, David
Sever, John	Stott, Roger
Sheerman, Barry	Strang, Gavin
Sheldon, Rt Hon R.	Straw, Jack
Shore, Rt Hon Peter	Summerskill, Hon Dr Shirley
Short, Mrs Renée	Taylor, Mrs Ann (Bolton W)
Silkin, Rt Hon J. (Deptford)	Thomas, Dafydd (Merioneth)
Silkin, Rt Hon S. C. (Dulwich)	Thomas, Jeffery (Abertillery)
Silverman, Julius	Thomas, Mike (Newcastle E)
Skinner, Dennis	Thomas, Dr R. (Carmarthen)
Smith, Cyril (Rochdale)	Thorne, Stan (Preston South)
Smith, Rt Hon J. (N Lanark)	Tilley, John
Snape, Peter	Tinn, James
Soley, Clive	Torney, Tom
Spriggs, Leslie	Varley, Rt Hon Eric G.
Stallard, A. W.	Wainwright, E(Dearne V)

Walker, Rt Hon H.(D'caster)	Wilson, Gordon (Dundee E)
Watkins, David	Wilson, Rt Hon Sir H(H'ton)
Weetch, Ken	Wilson, William (C'trySE)
Welsh, Michael	Winnick, David
White, Frank R.	Wrigglesworth, Ian
White, J. (G'gow Pollok)	Young, David (Bolton E)
Whitehead, Phillip
Whitlock, William	Tellers for the Noes:
Wigley, Dafydd	Mr. Hugh McCartney and
Williams, Rt Hon A.(S'sea W)	Mr. Ron Leighton.
Williams, Sir T.(W'ton)

Question accordingly agreed to.

Bill read a Second time.

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