EXEMPTION FROM LEVIES (Hansard, 9 June 1981)

§ Mr. Waddington
I beg to move amendment No. 4, in page 4, line 11, at end insert '; and the proposals may specify different criteria as respects arrangements made by different categories of employers'. The amendment will find ready support on both sides of the House. The 1964 Act specificially allows boards to make different provisions for different categories of employer in the case of levy proposals. There is no specific provision enabling the differential to be made in the case of proposals relating to exemption criteria. At present there is an implied power for boards to make different provisions in the case of exemption criteria, because the exemption criteria relate to the needs of the establishment. The Bill changes that so that the exemption criteria will relate to the needs of the industry. It is, therefore, desired to make a specific provision allowing for differentials between employers in the case of exemption criteria.

§ Mr. Barry Jones
The Minister seeks to ensure that boards continue to be able to make different proposals relating to exemption criteria in respect of different categories of employers. Although we agree with that, we 347 are a little suspicious. Can the Minister assure us that he is not subject to pressure and is not going back on the line that he took in Committee? One can envisage Ministers being concerned with matters other than the adequacy of training in firms or the industry as a whole when issuing guidance on criteria. They may be lobbied by firms anxious to avoid the levy and their responsibilities.

§ Mr. Waddington
I give that assurance. The amendment has been introduced because boards already have different exemption criteria for different classes of employers. The amendment ensures that the practice continues to be legal. I shall not take up time by giving examples of where that happens now. Without the amendment, what happens now would not remain legal.

§ Mr. Peter Morrison
I beg to move amendment No. 5, in page 5, line 20, leave out from first 'the' to second `of' in line 26 and insert 'relevant emoluments within the meaning'.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
With this it will be convenient to take Government amendments Nos. 6, 7 and 8.

§ Mr. Morrison
The amendment will enable a consensus to a non-exemptible levy above 0.2 per cent. to last for one additional levy order after that originally supported by the consensus, provided that the second order is made within two years of the first and provided also that the non-exemptible part of the levy is at a level no higher than that on which the consensus was originally obtained. The requirement that evidence of consensus must be provided is retained in the case of the first set of levy proposals.
Under the Bill as amended in Committee, an industrial training board can impose a non-exemptible levy of up to 0.2 per cent. of emoluments, without any special procedure, but either a consensus of employers or an affirmative resolution is required on each occasion in order to give effect to proposals for a non-exemptible levy of over 0.2 per cent.
In Committee an amendment was moved by my hon. Friend the Member for Fareham (Mr. Lloyd). It would have had the effect of the non-exemptible levy of up to 0.2 per cent. lasting for three years. We discussed the matter, and I hope that my hon. Friend now accepts that it should last for two years.

§ Mr. Barry Jones
Here again we have just the slightest suspicion that the Minister is abandoning his previous strong stance. He may wish to give assurances that he is not giving way to pressures. I may be right in thinking that what he is offering is a tiny increase in a board's power to carry forward a non-exemptible levy arrived at by consensus.
If that is the case, I suppose that we could call this a classic case of modified rapture. It is one small step in the right direction, at any rate for some of the boards. I would welcome assurances on the lines that I have suggested.

§ Mr. Morrison
I never expected to hear the hon. Member for Flint, East (Mr. Jones) talk about modified 348 rapture. I assure him that the steps that we are taking are those that he so articulately outlined. I do not think that he need have any fears on the matter.
Amendment agreed to.
Amendment made: No. 6, in page 5, line 30, leave out 'that aggregate' and insert 'the relevent emoluments within the meaning of section 4(2A) of this Act'.—[Mr. Morrison.]

§ Mr. Michael Shersby (Uxbridge)
I beg to move amendment No. 24, in page 5, leave out lines 31 and 32.

§ Mr. Deputy Speaker
With this it will be convenient to take the following amendments: No. 22, in page 5, line 40, leave out 'either—(i)'.
No. 23, in page 6, line 1, leave out paragraph (ii).

§ Mr. Shersby
In moving the amendment I declare an outside interest that is relevant to the remarks that I shall make. I am an unpaid member of the Food and Drink Industries Council and also director-general of the British Sugar Bureau, which is a member of that council.
The purpose of the amendments is to probe the Government's intentions in connection with levy money paid to training boards even if the levy payable by the employer will not exceed 0.2 per cent. of the payroll where the training standards laid down are met.
I say at the outset that I welcome, as does the Food and Drink Industries Council, the 0.2 per cent. limit placed upon the open-ended liability in the Bill as originally drafted. When the Bill was first published, employers whose own training arrangements were acceptable could be levied for the cost of training of persons employed or to be employed in the industry. It is therefore fair to ask my hon. Friend what it is intended should be done with the levy from those employers who are otherwise exempt. We should like to hear a little about that aspect of the matter.
I turn to the special problems of the food and drink industry, which comes under the Food, Drink and Tobacco Industry Training Board. As my hon. Friend knows, it is the general view of the Food and Drink Industries Council that that training board should be abolished. I entirely agree with that view, because the member associations of the council—the brewers, the bakers, the ice cream manufacturers, the sugar industry, to name but a few—consider that their own in-sector training arrangements are such that the Secretary of State would see no objection to their being removed from the scope of the board.
My right hon. Friend the Secretary of State has made it abundantly clear that unless satisfactory alternative arrangements exist he will not agree to the board being abolished. I hope that the facts of the matter will impress him. They are that 94 per cent. of all food and drink companies are already granted exemption from levy. That is a very substantial number of employees: 789,788 employees in the industry are in that category where full levy exemption is applied. Indeed, others are entitled to partial levy exemption.
Therefore, since the Food, Drink and Tobacco Industry Training Board covers not only tobacco but such businesses as florists and horticulture, over which an organisation such as the Food and Drink Industries Council has no possible influence, there could be some minor problems, because they do not come within the figures that I have quoted. Nevertheless, I am sure that my right hon. Friend will agree that the figures are truly impressive.
349 The concept that the Manpower Services Commission and the Minister can, at their discretion, act to the disadvantage of employers if they are of the opinion that it is necessary to do so, to encourage adequate training in the industry could be a real difficulty for the industry on whose behalf I speak this evening. Instances of this concept occur in clauses 3(4) and 3(5), and it is these that I suggest in my amendment should be deleted from the Bill. Surely the Bill, in providing for exemption from the levies, should do so on the basis that exemption certificates should be issued to exempt from levy employers in the industry who make arrangements for training or the training and further education associated with training of persons employed by them in the industry. I stress the words "by them".
Does my right hon. Friend agree that the best way to make industrial training boards work, and to secure the support of industry for a system of exemption from levies, is to make it crystal clear that good employers who make proper arrangements for training in their own firms are exempt from levies? Surely that should be the basis of getting the kind of co-operation from industry which industry is very willing to give.
I hope that my right hon. Friend will lend a sympathetic ear to the amendments. Not only will they provide for the exemption from levy of those firms that provide good training facilities; they will make it clear that the unnecessary burden of good firms having to pay for training in bad firms is removed.
There are other ways of persuading employers whose training facilities are inadequate to make them adequate than by loading good employers with the responsibility for this particular operation. I shall mention a few ideas which help to reinforce this view, because I can see Labour Members looking askance at the concept that I have advocated.
The first priority, certainly in relation to the food and drink industry, is the abolition of the present board, which spends money to very little purpose. If there are any problems attached to its abolition, I know that my right hon. Friend will wish to discuss them with the industry.
The worst position for the food and drink industry would be to continue with the present system. That does not mean that the food and drink industry, or any other industry for that matter, washes its hands of the need to improve the general level of training—the very matter that we have been discussing for some hours this evening.
I can best illustrate this commitment by quoting from a recent statement by the chairman of the Food and Drink Industries Council, Sir Adrian Cadbury. He said: No one could seriously suggest that our level of training in this country is other than a disgrace. To take one simple figure, in 1977, 55 per cent. of those leaving school here received neither further education nor recognised on-the-job training; the comparable figure in Germany was 5 per cent. We all know that when the upturn comes we will be short of technologists, technicians, craftsmen and even of the semi-skilled people, whose skills are relevant to the jobs we have to fill. The craft apprenticeship system is archaic and does not begin to meet the needs of our companies for multi-craft skills and flexibility. We are therefore faced, as a country and as an industry, with putting forward some ideas for improving the general level of training."
All hon. Members would agree that that statement illustrates only too clearly the responsible attitude taken by 350 senior industrialists to the need for better training, even where industrial training boards have been abolished because the industry is doing such a good job.
The Government have made it clear that they are prepared to consider the abolition of certain industrial training boards provided that the relevant industry is prepared to operate a voluntary system. Edition No. 83 of "Employment News", which is published by the Department of Employment, reports my hon. Friend the Under-Secretary of State as having said: It is our aim to extend as far as possible reliance on voluntary arrangements. Voluntary arrangements can be as effective as the statutory approach. I listened with interest to what the right hon. Member for Doncaster (Mr. Walker) had to say on this point. There can be little doubt of industry's willingness and ability to make satisfactory voluntary arrangements for the vocational preparation of young people, possible skill shortages in the economic upturn, training needs in the new technologies, the maintenance of training standards and opportunities for craft apprentices and for adult training and retraining.
What possible alternatives are there to the training boards? We could set up similar organisations with a greatly reduced number of employees—perhaps only one-tenth of the present number. That would represent a significant change in the character of training boards. There could be a reorganisation of training boards so that they were fewer in number but wider in scope. That would have the advantage of saving manpower. There is the possibility of setting up regional training boards which would cover manufacturing industries generally. That would have the advantage of recognising that most skill shortages and training problems differ considerably from region to region. Those boards could operate without statutory powers on the basis of a consultancy consisting of staff with relevant industry experience and funded by voluntary contributions from companies.
Those are but a few of the options that my right hon. Friend could discuss with industry where he wishes—after the Bill's enactment—to abolish industrial training boards. My message is that the Government should get on with the abolition of boards for industries which have shown that they are discharging to the full their responsibility for training. The Government should confine the obligation to pay for training to those firms that do not already provide proper training facilities. I ask my right hon. Friend not to request good firms to pay for training in bad firms. Instead, I ask him to encourage voluntary training schemes that are run by industry through the trade associations. That is the way to success, and that is the way to increase the important industrial training opportunities that our country so badly requires.

§ Mr. Waddington
My hon. Friend the Member for Uxbridge (Mr. Shersby) has raised some fundamental matters which go further than the considerations to be borne in mind when dealing with the amendments. The amendments deal with a situation in which some boards, at least, have continued in existence. However, I assure my hon. Friend that his remarks about the industry in which he has taken a close interest will be borne in mind, as will his penetrating remarks on general training needs.
The effect of amendment No. 24 is to prevent a levy of more than 0.2 per cent. from ever being imposed on a non-exemptible basis, even if a consensus of employers in 351 the industry are in favour of such a levy. The amendment has that effect, because under the legislation all levy proposals must be approved by the Manpower Services Commission before they can be implemented by the Secretary of State. Amendment No. 24 forbids the commission to approve proposals for a non-exemptible levy of more than 0.2 per cent.
9.45 pm
It would not be right completely to remove the possibility of a non-exemptible levy of more than 0.2 per cent. if the employers' organisations in the industry supported such a levy, as they have in the construction industry. For that reason, I advise the House to reject amendment No. 24.
Amendments Nos. 22 and 23 would have the effect that there could not be a non-exemptible levy of more than 0.2 per cent. of emoluments unless a consensus of employers was in favour of such a levy. The Bill allows for a levy over 0.2 per cent. when there is a consensus or when the affirmative procedure is used. The effect of the amendments would be to deprive the board of the opportunity to use the affirmative procedure in the House to raise a non-exemptible levy of more than 0.2 per cent.
It would not be right to fetter the board in that way. Our reasons for coming to that conclusion are the reasons that were discussed at length in "Outlook on Training". Those hon. Members who served on the Committee know the passages so well that I do not need to bore the House by repeating them. Although my hon. Friend has raised some interesting matters, there is no justification at this stage to fetter the discretion of the boards in the way that the amendments, if carried, would fetter them.

§ Mr. Barry Jones
We know that if the Under-Secretary went into the details he would bore the House rather than confuse it. In summing up a complicated set of amendments, may I say that the Opposition are in agreement with the Government.

§ Mr. Shersby
I thank my hon. Friend the Under-Secretary for the assurance that he has given that what I have said will be borne in mind. In the many letters that pass between the food and drink industry and Departments of State it is comforting to know that what we have to say is being borne in mind. That is one of the most frequent assurances we receive, but it does not always lead to the action that we desire. Knowing my hon. Friend as I do, I am sure that he will carefully consider the problems that face the food and drink industry. I hope that what I have said will act as an additional spur to my right hon. Friend to lay the necessary order when the time comes. On the basis of that assurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 7, in page 5, line 45, at end insert—

'(ii) the order will be made less than two years after the making of another levy order ("the former order") giving effect to proposals made by the board in respect of which he was satisfied as mentioned in subparagraph (i) of this paragraph and either—

(a) the proposals to which the former order gave effect were that no exemption certificates should be issued or that the exemption certificates to be issued should not exempt employers from any of the levy, or
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(b) the proposals to which the former order gave effect were that exemption certificates should not exempt employers from a portion of the levy and the percentage of the relevant emoluments from which under the current proposals the exemption certificates will not exempt any person will not exceed the percentage of relevant emoluments from which he was not exempted under the former order, or'

No. 8, in page 6, line 3, leave out 'and in this paragraph' and insert—

'(b) in sub-paragraph (i) of paragraph (d) of that subsection for the words from "the aggregate" to the end of the subparagraph there shall be substituted the words "the relevant emoluments, or";

(c) after subsection (2A) there shall be inserted

"(2B) in subsection (2A) above—

'the relevant emoluments' means the aggregate of the emoluments and payments intended to be disbursed as emoluments which are paid and payable by the person in question to or in respect of persons employed in the industry in respect of the period specified in the proposals as the period which is relevant for the purposes of that subsection, and".'.—[Mr. Peter Morrison.]