Commons Sitting of 14 June 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  SOUTHERN WATER AUTHORITY BILL
  Order for Third reading read.
  Queen's consent signified.
  Read the Third time, and passed.

  FELTHAM STATION AREA REDEVELOPMENT (LONGFORD RIVER) BILL
  Considered; to be read the Third time.
Oral Answers to Questions
  INDUSTRY

    Enterprise Agencies (Tax Relief)
    Mr. Lennox-Boydasked the Secretary of State for Industry upon what conditions enterprise agencies will be granted approval for contributions made to them to be eligible for tax relief.
    Mr. Stanbrookasked the Secretary of State for Industry what arrangements he is making for the registration of local enterprise agencies for the purpose of tax relief for which his Department is responsible; and what is the starting date for agencies to apply.
    The Under-Secretary of State for Industry (Mr. John MacGregor): My Department welcomes the fact that contributions to local enterprise agencies will now be eligible for tax relief. The conditions for approval are set out in clause 42 of the Finance Bill 1982. The arrangements for giving approval by my Department will be as simple and straightforward as possible. Whilst approval cannot be granted until the Finance Bill is enacted, any agency trust or other form of organisation is welcome to notify my Department before then, and we shall process the applications speedily thereafter.
    Mr. Lennox-Boyd: Is my hon. Friend aware that in many parts of the country, including the Morecambe and Lancaster area, companies are getting together to have discussions to decide whether to form a local enterprise trust? I appreciate that approval of such trusts cannot be given until the Finance Bill becomes law, but can my hon. Friend give some further indication of the means by which those organisations would get the approval for donations given to them to be eligible for tax relief, as that would give a helpful stimulus to the discussions that are now taking place?
    Mr. MacGregor: I am very much aware of the large number of firms, local authorities, chambers of
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    commerce, and others that are getting together in enterprise agencies. There are now about 100 giving substantial help and advice to small businesses. I know of the agency in my hon. Friend's constituency. The tax relief gives them a further fillip, and I hope that it will encourage many more to join into enterprise agencies. With regard to further details, we have produced a fact sheet on tax relief which is available through the Library, through small firm centres and through the regional offices. Any company interested in getting tax relief should get a copy of that fact sheet.
    Mr. Stanbrook: Is my hon. Friend aware that we in Orpington are also eagerly awaiting the introduction of the scheme? Meanwhile, will he prevail on our right hon. and learned Friend the Chancellor of the Exchequer to ensure that the Inland Revenue relaxes the stringency of its normal conditions for this type of enterprise?
    Mr. MacGregor: In this case the Department of Industry will be giving approval to the enterprise agencies, which will then automatically qualify for tax relief. Provided that the aims are met, which are fundamentally to assist enterprises, and especially small businesses, I very much hope that those in that category will qualify.
    Mr. McNally: As the scheme moves to fruition, will the Minister not lose sight of the word "simplicity"? The success of the schemes has been that they have cut through red tape. This scheme will be successful if it is simple for companies to give money to such operations. I urge him please not to lose sight of the need for simplicity.
    Mr. MacGregor: I entirely agree with the hon. Gentleman and I assure him that we shall endeavour not to do so. The objectives are simply stated. In the first instance the requirements about the constitution and accounts of the enterprise agencies will be quite simple. Thereafter they will have only to submit annually an audited statement of accounts.
    Sir William Clark: Will my hon. Friend comfirm that if approval is given and subsequently revoked there will be no retrospective: disallowance of the expenditure made by a company to the enterprise?
    Mr. MacGregor: Revocation will occur only where an approved organisation fails to comply with the conditions of approval. If that happens, the reclaiming of tax relief must be a matter for the Inland Revenue.

    Manufacturing Industry
    Mr. Gwilym Robertsasked the Secretary of State for Industry what are the latest figures for the output of British manufacturing industry; and how this compares with three years before.
    The Minister of State, Department of Industry (Mr. Norman Lamont): In the first quarter of 1982 the index of production for manufacturing was 89·8 compared with 103·0 in the first quarter of 1979.
    Mr. Roberts: Does the Minister accept that when North Sea oil is no longer available the British ecomomy will depend on the output of British industry? Is the hon. Gentleman as frightened as I am about the appalling figures of output, which is at its lowest level for about 13 or 14 years?
    Mr. Lamont: The hon. Gentleman has asked me to look a long way ahead, because North Sea oil is destined

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    to last for about 20 to 25 years. The hon. Gentleman knows that industrial output in almost all countries has fallen during the recession. Over the past year British manufacturing output, when compared with the previous year, has risen faster than that of France, the United States or the OECD average. Is it any wonder that an independent survey in the United States has stated that Britain is one of the first countries to lead the way out of the recession?
    Mr. Stokes: Does my hon. Friend agree that all the industries supporting the task force in the South Atlantic are setting a marvellous example for the rest of British industry and are showing that if Britain has sufficient determinination there is nothing that it cannot do?
    Mr. Lamont: My hon. Friend is right. There have been some remarkable achievements by British industry, not least in the shipbuilding industry, in getting ships ready very much to time and to cost. One wishes that the achievements in defence supplying industries, which have been so obvious during the past few weeks, could be secured in normal times as well.
    Mr. Geoffrey Robinson: Rather than fobbing off the House with meaningless prospectuses for manufacturing industry, will the hon. Gentleman confirm that manufacturing output is now lower than it was during the period of the three-day working week? Will he give a meaningful statistic to the House by telling it precisely when he thinks manufacturing output will rise to the level that the Government inherited?
    Mr. Lamont: In many countries manufacturing output is lower now than it was in 1979. There has been a world recession. Over the two halves of last year manufacturing output rose, company profits increased by 25 per cent., business confidence, according to CBI surveys, increased, short-time working fell and the rise in unemployment moderated. By any standard a gradual recovery is under way. The Budget forecast is that manufacturing output this year will rise by about 3 per cent. We believe that a gradual recovery will take place.
    Mr. Forman: Will my hon. Friend confirm that within the somewhat disappointing aggregate figures there are some rays of hope if the figures are considered sector by sector?
    Mr. Lamont: My hon. Friend is right. Private house building figures and electrical engineering output are at higher levels now than in 1979. According to CBI and departmental surveys, there are good prospects for the chemical sectors, the food and drink industries, mechanical engineering, pottery, timber, paper and printing. There are sectors where the outlook is less promising, but it is idle to pretend that there are not sectors where recovery is imminent.
    Mr. Orme: Where are the signs of revival that were heralded by the Government at the beginning of the year? We have stagnation and the Government are pursuing a monetarist policy. What action did they advocate at the recent meeting of the seven nations at Versailles? Did they make any positive proposals?
    Mr. Lamont: Does the right hon. Gentleman not think that there is some evidence of recovery in the fact that manufacturing output is 2 per cent. above the level at which it stood during the spring of last year? Company profits have increased and short-term working has fallen.
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    As I have said, the rise in unemployment is moderating. These are definite signs of recovery, and that cannot be denied.

    Information Technology
    Mr. Beaumont-Darkasked the Secretary of State for Industry how much money has so far been committed by the Government to the information technology industries.
    The Secretary of State for Industry (Mr. Patrick Jenkin): The sum was £70 million in 1980–81 and £91 million in 1981–82. This includes support for microelectronics development and application projects, development of IT products and processes and space research and development. Cash allocations for the next three years stand at £134 million for 1982–83, £165 million for 1983–84 and £168 million for 1984–85. In addition to projects already mentioned, the money will go on new schemes for fibre optics, computer-aided design manufacture and test, robotics, flexible manufacturing systems and office automation, as well as micros for general practitioners, the micros in schools scheme, IT centres and the small engineering firms investment scheme. I am arranging for a short table summarising the breakdown to be published in the Official Report.
    Mr. Beaumont-Dark: There is no doubt that those are interesting statistics. Is my right hon. Friend certain that the Department is doing enough to put over the message that the real hopes of expansion for industry, security of jobs and obtaining new contracts lie with the greater use of the facilities that the Department has made available instead of the fears that many have that modern technology works them out of jobs?
    Mr. Jenkin: My hon. Friend has put his finger on an important point. By 1983–84 we shall be spending twice as much on these programmes as had been planned by our predecessors. We are spending substantial sums on various awareness and information programmes to try to persuade people that more jobs are likely to be lost by failing to keep up with new technology than by introducing it. That is a fundamental truth which, increasingly, industry is beginning to understand.
    Mr. Christopher Price: Is the right hon. Gentleman aware that we shall not properly develop our information technology industries unless we have data protection laws that are acceptable to other countries, especially those in Europe, and make it possible to share information between countries? How is he getting on with his battle with the Home Office to introduce a Bill next year to deal with these issues?
    Mr. Jenkin: It will be for my right hon. Friend the Home Secretary to decide whether a Bill should be introduced next year. If the hon. Gentleman is really interested in data protection he may be able, with his Friends, to give my right hon. Friend an assurance that they will not keep the House up for all hours of the day and night on freedom of information, which is a completely different subject—
    Mr. Christopher Price: It is exactly the same subject.
    Mr. Jenkin: With respect, it is not. If the hon. Gentleman is really concerned about data protection for the information technology industries, he will give the assurance for which I have asked.
    Mr. Freud: Is the right hon. Gentleman happy about the fact that the level of our investment compares favourably with that of other EEC countries? Will he consider publishing a league table?
    Mr. Jenkin: We can take some comfort from the schemes that are being promoted by my Department to assist advanced technology, which are having some effect. The hon. Gentleman will be aware of the recent statistic that twice as many robot machine tools are in use in British industry as there were a year ago.
    Mr. Kenneth Carlisle: As some of the money will be spent on information technology centres, and as it is clear that good training is needed if we are to make the best use of technologies, when will the next round of information technology centres be announced, and will Lincoln be included? My right hon. Friend will know that nearly all sections of society within Lincoln believe that such a centre would do a great deal of good for high technology in the city.
    Mr. Jenkin: I am well aware of the immense value of the ITeCs both for the spread of knowledge of technologies and the opportunities that they give to young people who are able to work at them. I cannot give my hon. Friend a date, but we are pressing ahead with the target of 100

    Department of Industry Support for IT

    £million (to nearest whole figure)

    1980–81

    1981–82

    1982–83

    1983–84

    1984–85

    Out Turn

    Allocation

    Microelectronics

    15

    17

    23

    30

    28

    Fibre Optics

    —

    —

    2

    8

    12

    Engineering IT

    —

    —

    17

    27

    26

    IT development and applications

    11

    15

    38

    39

    37

    Space

    44

    59

    54

    61

    65

    TOTAL

    70

    91

    134

    165

    168

    Mercury Communications Ltd.
    Mr. Michael Marshallasked the Secretary of State for Industry what role his Department is playing in the current negotiations between British Telecom and Mecury Communications Ltd.
    Mr. Richard Pageasked the Secretary of State for Industry whether he envisages the need to exercise his powers under the British Telecommunications Act 1981 in furthering the development of Project Mercury.
    Mr. Wallerasked the Secretary of State for Industry if he will make a statement about the progress of discussions with Mercury Communications Ltd. concerning the provision of new telecommunications facilities.
    The Minister for Industry and Information Technology (Mr. Kenneth Baker): The Government, British Telecom and Mercury have accepted the principle of connection between Mercury and the public switched telephone network and of Mercury's access to separate international circuits. Negotiations between BT and Mercury are now taking place to establish the appropriate terms, and the Government do not wish to prejudge or to influence the outcome of those negotiations, which concern commercial and technical details. The
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    ITeCs by the end of the year. If it appears possible to find the money and to get the backers to go further, we shall want to do so.
    Mr. John Garrett: Will these schemes have an effect on the £300 million annual deficit in trade in information technology equipment and services? Does the right hon. Gentleman agree that the greatest threat to our success in information technology is the constant cuts that are made by the Department of Education and Science in university and polytechnic computer science departments?
    Mr. Jenkin: Very much at the heart of our approach to these matters is the need to correct the balance of payments deficit in information technology goods and services and to stop it rising, as one estimate has it, to £1,000 million by 1990 if we were to do nothing. That is why we are attaching such importance to the schemes. I remind the hon. Gentleman that even after the cuts that have had to be made in the funding of universities there will be 2 per cent. more places in engineering. It is part of the Government's policy progressively to shift the emphasis of university courses to courses that involve science and technology and numeracy. It is those skills upon which industry will have increasingly to depend in the years ahead.
    Following is the table:
    Government would reconsider their position if it became evident that there was no possibility of agreement before the end of July, bat both sides are still negotiating.
    Mr. Marshall: I thank my hon. Friend for that reply, but is he not concerned about the delays that are inherent in this kind of triagular negotiation? Will he consider what might be more applicable in the future for further liberalisation measures? With regard to Mercury, will he confirm that orders for fibreoptics should be placed shortly, and will he give an estimate of when he hopes to see the alternative network in place? Will this not mean jobs, which critics such as the Post Office Engineering Union ought to take into account?
    Mr. Baker: The alternative network will certainly mean jobs in the United Kingdom. I understand that orders will be placed shortly, and that Mercury hopes to provide this service to the public in the second quarter of next year.
    Mr. Page: I am sorry to press my hon. Friend further on this point, as I am aware of his immense contribution to information technology, but in view of the speed of technological changes will he confirm to the House that British Telecom does not have the right of veto, either in part or in total, on Project Mercury?
    Mr. Baker: I can confirm that. Parliament has agreed that the monopoly of BT should be ended and that

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    competition should be allowed. The issue of the licence to Mercury is the direct result of that parliamentary decision. Clearly, the will of Parliament should not be frustrated.
    Mr. Waller: Is it correct that the limit of Mercury's market share is set at 5 per cent., but that in any case there is no possibility of that being reached before the figure is reviewed? Will my hon. Friend confirm that there is no threat to BT's position and that there is certainly no reason on that score for creating any delay, which, as my hon. Friend said, would frustrate the will of Parliament?
    Mr. Baker: It will take some time for Mercury to build up a reasonable level of business, because BT has been in business for the better part of 70 years. Some anxiety was expressed over this at the POEU conference last week. Some members of that union feel that the telecommunications network is their property. It is not. It is the property of the nation. I was glad to see that wiser counsels prevailed. Mercury could bring extra business to BT.
    Dr. John Cunningham: Is it not strange for the Minister to be, in effect, bringing pressure on BT to reach a conclusion by the end of July on what is essentially a commercial negotiation, given that the principle is accepted? Should he not make it clear to his hon. Friend the Member for Arundel (Mr. Marshall), and others, that the unions in the industry—the Post Office Engineering Union and the Union of Communication Workers—made it clear to him that they object in principle to the ending of monopoly, and, like the Labour Party, want to see that monopoly restored?
    Mr. Baker: I think that wiser counsel prevailed at the POEU conference last week, I am glad to say. As to pressure on BT, the principle was agreed early this year, just after Christmas. We said then that the commercial details should be agreed between the two by the end of July. That is a reasonable time for commercial negotiations. I do not think that undue pressure is being put on either party to conclude.
    Mr. Neale: Despite the determined efforts by my hon. Friend to liberalise BT's monopoly in this way, will he acknowledge that he is coming under increasing pressure to make BT still more accountable to the market place? Will he confirm that he will examine in detail any proposals to achieve that and offer greater freedom of choice, particularly in the supply, installation and maintenance of telephone attachments?
    Mr. Baker: There is a question about freedom of choice later on the Order Paper, to which one of my right hon. or hon. Friends will be replying, although I can confirm that we want it. Already the range of competition to which we have subjected BT has had some beneficial effects for the consumer. British Telecom reduced trunk and international rates by one-third. I do not believe that those reductions would have taken place if the Government had not issued a licence to Mercury.

    British Steel Corporation
    Mr. Chapmanasked the Secretary of State for Industry what is his latest estimate of the subsidy to be paid out of public funds to the British Steel Corporation in the present financial year.
    Mr. Norman Lamont: As announced last Friday, the Government have set BSC' s external financing limit for 1982–83 at £365 million.
    Mr. Chapman: Given that steel imports have substantially increased in recent months and that the United States looks set to institute anti-dumping measures against European steel, is it my hon. Friend's opinion that British Steel's 1982–83 corporate plan still does not need modifying, and that British Steel will break even by the end of this financial, if not calendar, year?
    Mr. Lamont: We are sticking to the targets in the corporate plan and the targets that have been announced to the House. Provided that there are no serious disruptions to the steel market, we regard these targets as realistic. Obviously, as my hon. Friend said, the actions taken in the courts in the United States are serious for British Steel's exports. We shall have to wait for developments to see how they work out. With regard to imports more generally, voluntary restraint agreements have now been negotiated between the EEC and the third countries.
    Mr. Campbell-Savours: Would not the subsidy be reduced if British Shipbuilders were in a position to increase its orders of steel from the British Steel Corporation? Has the Minister seen the reports in the media over the weekend that Cunard is about to buy a replacement for the "Atlantic Conveyor" from Japan, thus ensuring that jobs will not exist in British Shipbuilders that should exist in the future? Will the Minister intervene to prevent that contract from being made?
    Mr. Lamont: No, Sir, I shall not. Cunard's orders are a matter for the company. With regard to steel orders placed by British Shipbuilders, I agree with the hon. Gentleman. If British Shipbuilders could get more orders, it would be able to place more orders for steel. However, that depends on British Shipbuilders reaching a higher standard of competitiveness.
    Mr. Wrigglesworth: What contingency margin have the Government allowed in the external financing limit of the steel corporation, and on what basis has it been fixed? For instance, have the Government taken into account the difficulties that BSC faced during the winter? Have they taken into account, or will they take into account, the effect of the American decision?
    Mr. Lamont: A £79 million contingency is built into the EFL of £365 million. That is considerably less than the corporation asked of us.
    Sir Anthony Meyer: As it is clear that even the existing level of employment in the steel industry can now be maintained only by imposing heavy burdens on the rest of industry, is it not also clear that the time has come to switch the emphasis into providing new jobs in steel areas, rather than trying to maintain previous levels?
    Mr. Lamont: We must try to do both. It is important to replace jobs that are lost in the steel closure areas. My hon. Friend knows that that is what we are trying to do through the EEC measures for steel closure areas. At the same time, there is a future for bulk steel making in this country. The corporation has made great progress, thanks both to the work force and to Mr. MacGregor, in becoming much more competitive and reducing losses. In the past year, losses were £252 million before interest, compared with £479 million in the year before. That is a considerable achievement.
    Mr. Orme: Faced with the position in the United States and the failure of the EEC to do something about imports, is it not a fact that Mr. MacGregor will need more money, and has he not been saying so, because of the lack of demand? Will that money be forthcoming?
    Mr. Lamont: Imports in 1981 were less than in 1980 both in volume and percentage terms. Because of our anxiety about the possibility of increased imports from third countries, my right hon. Friend is writing to the Commission to emphasise that the mandatory quota regime should not be undermined by imports.
    I do not accept that the EEC has been ineffective in the controversy between ourselves and the United States. The Commission has taken a strong line. Of course the determination is disappointing, but we and the Commission are currently discussing the matter.

    British Leyland (Chairman)
    Sir William van Straubenzeeasked the Secretary of State for Industry when he expects to announce a successor to Sir Michael Edwardes as chairman of British Leyland.
    Mr. Patrick Jenkin: Sir Michael Edwardes has made it known that he will relinquish his position as chairman and chief executive of BL when his contract expires at the end of this year. The question of a successor is being considered.
    Sir William van Straubenzee: I am sure that my right hon. Friend appreciates how difficult it will be to replace Sir Michael, whose contribution to industry, and to his company in particular, has been massive. When considering the terms of appointment for a successor, will my right hon. Friend refrain from closing his mind to the idea of including permission to break down the messy unit of British Leyland? Will he examine other highly successful industrial enterprises such as Racal and learn from Sir Ernest Harrison, the foundation of whose management expertise rests on much smaller units?
    Mr. Jenkin: I entirely endorse what my hon. Friend has said about Sir Michael Edwardes' contribution to restoring British Leyland to viability. The nation stands in his debt. With regard to the future structure of BL, the succession of management and structure are linked. I assure my hon. Friend that all options are open and being considered. In due course I hope that it will be possible for me to make a statement about the matter.
    Mr. Park: Will the Minister say whether the successor to Sir Michael Edwardes will have the same terms of reference? Perhaps I may pose more bluntly what is implicit in the question of the hon. Member for Woking (Sir W. van Straubenzee). Will the terms of reference include the sale of other parts of British Leyland as they become profitable?
    Mr. Jenkin: Yes. It is the Government's policy that BL should be returned to the real public as soon as possible. That has been clear from the beginning and it remains firmly at the forefront of my policy.
    Mr. Freud: The real public?
    Mr. Jenkin: I am not surprised that Opposition Members do not recognise the phrase. They do not understand it. Companies should be floated off and owned
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    by real people, not by the State. That is our policy. We shall urge that policy on the successor to Sir Michael Edwardes, whoever he may be.
    Mr. Hal Miller: Has my right hon. Friend given any thought to the answer to a question that any prospective successor that he may interview is bound to ask: in 'what type of industrial climate can BL expect to operate during the next three years in view of the over-capacity in the motor industry throughout the world, the measures that have been taken within the EEC to increase steel prices there and the trading practices of Spain? All of these are bound to come to any successor's mind.
    Mr. Jenkin: Any successor will find that he has inherited a company with an increasing number of new models of cars that are demonstrating considerable prospects of success in the market. The effectiveness of BL's new model programme can be demonstrated by the fact that in the first quarter of this year sales were 6 per cent. higher than for the same period last year and exports increased by 23 per cent. as compared with 1981. The quality of the product and the cost of its manufacture will determine BL's success in the market. In that regard, Sir Michael and his team have made their contribution.
    Mr. Orme: I appreciate and welcome the fact that BL's share of the market has increased. Does the Secretary of State agree that breaking up BL, which is one of the smallest motor manufacturers in the world, would be disastrous? That is the basic reason for our opposition to the proposal. Are not taxpayers real people as well?
    Mr. Jenkin: The structure of the company is under review. I do not wish to go further into that matter now. With regard to private shareholders and the taxpayer—
    Mr. Orme: Real people.
    Mr. Jenkin: That is right. I doubt whether taxpayers feel that BL has been anything other than a substantial burden to them. I suspect that they would be very pleased if they knew that future capital investment in BL will be financed by the market rather than the Exchequer.

    Small Engineering Firms
    Lord James Douglas-Hamiltonasked the Secretary of State for Industry how many small firms will benefit from the small engineering firms investment scheme.
    Mr. Iain Millsasked the Secretary of State for Industry if he will make a statement on the level of the take-up under the small engineering scheme in the West Midlands.
    Mr. MacGregor: By the time of the scheme's closure on 28 May 1982, some 1,750 firms had applied for assistance, of which 337 are in the West Midlands. All eligible applicants will, I hope, receive an offer in due course. Because o f the overwhelming response, my right hon. Friend increased the allocation to the scheme by 50 per cent. from the original £20 million to £30 million in total, through a real location of funding priorities within the Department.
    Lord James Douglas-Hamilton: In view of the considerable success of the scheme, will my hon. Friend consider reopening it as soon as is practicable?
    Mr. MacGregor: I am grateful to my hon. Friend for his comment about the success of the scheme. It is not at the moment possible to allocate more than £30 million to the scheme—we have already increased the amount by 50 per cent. We need to analyse in greater depth than has so far been possible, because of the overwhelming response, what the scheme has achieved and whether it has properly met all of its objectives and used taxpayers' money cost-effectively. I am going to Birmingham to visit the West Midlands regional office tomorrow to have a long discussion of matters with those who are handling the scheme.
    Mr. Mills: Is my hon. Friend aware that I welcome the fact that he is going to Birmingham tomorrow as the first stage in the re-evaluation of the future of the scheme? Does he accept that it has helped small engineering companies in the West Midlands considerably? Will he elaborate on the high technology aspects of the scheme? Is it a way in which he anticipates continuing badly needed help for non-robotic equipment for small engineering factories in areas such as the West Midlands, to regenerate industrial activity in such depressed regions?
    Mr. MacGregor: The fact that the response to the scheme has been faster than ever before means that it has achieved its objective of accelerating investment by small engineering firms in the advanced equipment that my hon. Friend rightly stressed. The initial assessment shows that small firms have gone up-market in obtaining more advanced equipment. That is vital. Moreover, they have brought forward investment. That, too, is vital. In that respect, the scheme is already achieving its objective and the good effects will continue to work throughout the year.
    Mr. John Garrett: Does the Minister agree that the Department cut off the scheme because the Treasury got wind of how much money was going to companies that would have invested irrespective of the scheme's existence?
    Mr. MacGregor: That is complete nonsense. The scheme was stopped because we quickly used the money that was allocated to it. We have increased it by 50 per cent. Many people in the engineering industry did not expect the scheme to be so successful so quickly. The scheme closed because the money was used up.
    Mr. Colvin: What percentage of investment under the scheme has been spent on British equipment?
    Mr. MacGregor: I am delighted to say that the analysis so far shows that up to 60 per cent. of the equipment that will be purchased under the scheme is British. That is considerably more than has recently been the case. I was anxious that the scheme should not be a "Buy British" one, as that would conflict with our international obligations. Nevertheless, I was keen to market the scheme to British manufacturers as much as possible to encourage them to take it up. They have done so well.
    Mr. Ioan Evans: How many small engineering firms have gone out of existence under this Government, thus contributing substantially to the total of 3 million unemployed? Does the Minister agree that a radical change in the Government's economic and industrial policy is needed if British industry is to be revived? Does he agree also that the scheme does not match the size of the problem?
    Mr. MacGregor: The difficulty faced by many small engineering firms has been, first, the world recession and secondly, that many of their major customers, such as the motor industry, have become increasingly uncompetitive in recent years. A further difficulty was that a number of them had not invested sufficiently in modern, advanced equipment. I believe that the scheme deals with their real problems and will help them to become more competitive.

    Small Firms (Nursery Units)
    Mr. Greenwayasked the Secretary of State for Industry whether he is satisfied with the provision of small nursery units for small firms.
    Mr. MacGregor: The report of the study carried out by the Department of Industry and published on 27 May indicates that the annual rate of supply of small workshops has probably tripled since the 100 per cent. industrial building allowance for small industrial premises was introduced in 1980. There remains a shortage generally of the very small units—broadly, units of under 1,250 sq. ft.
    Mr. Greenway: In view of the potential growth of jobs in this area, I warmly welcome the tripling of the rate of supply announced by my right hon. Friend. Does he feel that local authorities are doing enough in rate relief and other assistance that they could give?
    Mr. Jenkin: The interesting aspect is that the scheme shows that when incentives are given the private sector responds. The study showed that the vast majority of new premises were coming from private investment by local investors. That is an interesting indication of the way in which incentives can achieve the required result.
    Many local authorities are now concentrating far more, as is the English Industrial Estates Corporation, on the provision of small workshop units. Local authorities, however, must always balance the problem of expenditure to encourage small firms and hence jobs against costs through higher rates and thus loss of jobs. On the whole, therefore, I think that the direction that we have taken in encouraging the private sector to do this is very attractive.
    Mr. Carter-Jones: Is this not an ideal area for the use of advanced technology and information technology in equipment to allow disabled people to acquire education and to find employment at home? Will the Minister discuss this with his hon. Friend the Minister for Industry and Information Technology? Is he aware that the development of information technology can bring great joy and pleasure to the disabled who cannot work and to the elderly—
    Mr. Speaker: Order. Questions and answers are unreasonably long today.
    Mr. Jenkin: I am aware of the importance of accommodation for the disabled in many instances and my hon. Friend is examining this.

    Industrial Production Index
    Mr. Knoxasked the Secretary of State for Industry what is the index of industrial production at present; and how this compares with the comparable figure for the same month in 1974.
    Mr. Patrick Jenkin: In the first quarter of 1982 the index of industrial production is provisionally estimated to have been 100·0, taking 1975 as 100, compared with 102·1 in the first quarter of 1974.
    Mr. Knox: Does my right hon. Friend agree that those figures tell a story of eight wasted years in industrial production, which applies as much to the Labour Government as to the Conservatives? What steps do the Government intend to take to increase demand for the products of British industry so that we may return to the increases in production achieved in the 30 years after the war?
    Mr. Jenkin: The secret of increasing industrial production must be that industry becomes competitive and thus recaptures more of the home market and makes greater inroads into export markets. The Government's policy to reduce inflation, which is now having signal success, is the most important single step to increase companies' productivity. My hon. Friend the Minister of State referred to the signs. We are now through the worst of the recession. As industries become more competitive, we expect that they will increase their market share and that this will result in lower unemployment.
    Mr. Foster: Does the Minister agree that the reduction in industrial output has been greater since 1979, and that it has been greater in this country than anywhere else in the Western world? Does he further agree that this has had a devastating affect on the real public of the North of England? Does he realise that more jobs have been lost since 1979 than were created in 15 years of regional policy before that?
    Mr. Jenkin: I should be more inclined to listen to the hon. Gentleman if he showed some contrition for the part played by the Labour Party in the steady debilitation and decline of the competitiveness of British industry. As a result of three years of our policy, British industry has begun to regain competitiveness, we are getting on top of inflation and British industry will win a greater share in world markets. That is how to get the people about whom the hon. Gentleman is concerned back to work.
    Mr. Orme: If that is so, why are there more than 3 million unemployed and why are firms still closing? Where are the signs of recovery? The CBI and other organisations say that there is no recovery and no indication of any, so will the Minister please give us some indication?
    Mr. Jenkin: Recovering jobs will be a matter of recovering competitiveness, which the right hon. Gentleman's question does not acknowledge. My hon. Friend the Minister of State cited a whole range of indicators showing that we are through the worst of the recession and that the signs are now for an increase in output, albeit a modest one, and an increase in investment—a little this year and a faster increase next year. That is how we shall achieve recovery in the growth of GDP and the reduction of unemployment. I assure the right hon. Gentleman that if the policies that he has repeatedly stated from the Opposition Dispatch Box ever came into effect they would put paid to any prospect of industrial recovery in this country.

    Nissan Project
    Mr. Hal Millerasked the Secretary of State for Industry if he has had any indications as to plans for the Nissan project.
    Mr. Norman Lamont: I recently met representatives of the company in Tokyo, but I am afraid that on the substance of our discussions I cannot add to my previous answer to my hon. Friend on 22 March.
    Mr. Miller: Has there been any evolution in the Government's thinking since the project was first announced in February last year, in the light of studies of possible effects on our components industry and the nature of the technological gain, if any, that Nissan is likely to bring to this country?
    Mr. Lamont: No, the Government's attitude has not changed. We have had discussions with Nissan and we have indicated to the company the terms on which it would be acceptable to the Government for it to come to this country. In the views that we conveyed to Nissan, we naturally took account of the effects on the components industry. As my hon. Friend knows, we attach considerable importance to a high local content.
    Mr. Geoffrey Robinson: More than a year ago we were promised a decision on the feasibility study. Does the Minister realise that the delay is causing widespread uncertainty in the market place? What is his best assessment of the likelihood of the project going ahead? If it does not go ahead—and there seems to be real doubt about this—will he enter into discussions with the chairman of BL to see that it comes forward with a new project to produce 200,000 extra cars in this country?
    Mr. Lamont: I agree that it has taken a considerable time, but it is a very important project for Nissan and it is natural that it should wish to research it throughly, as considerable sums of money are involved. I am sure that BL will take account of developments in this project when making its own investment decisions.

    Telephone Attachments
    Mr. Cockeramasked the Secretary of State for Industry what progress has been made in the liberalisation of telephone attachments; and if he will seek to encourage a wider range of British-made equipment being made available for sale to the public.
    The Under-Secretary of State for Industry (Mr. John Butcher): The framework for the independent approval of telecommunication subscribers' apparatus AS now in place, following the incorporation of the British Approvals Board for Telecommunications on 7 May 1982. The British Standards Institution will open a new telecommunications testing laboratory on 6 July. Work on the preparation of standards is well advanced, and I expect the first standards to be published and approved in July.
    Mr. Cockeram: Does my hon. Friend agree that the Buzby bird has been behaving more like a cuckoo and seeking to eject other fledglings from what it chooses to regard as its own exclusive nest? Will he now take up the cudgels on behalf of the consumer, who favours choice, variety and competition?
    Mr. Butcher: I appreciate my hon. Friend's fear in this regard. There is some feeling that BT has become rather

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    predatory. I assure the House that we shall take up the cudgels, and have indeed already done so, on behalf of my hon. Friend and all those who complain about this phenomenon. I have already approved a further third tranche of marking orders under the current procedures and we hope for rapid progress through the BABT in the future.
    Mr. Campbell-Savours: Is it right that British Telecom Enterprises Ltd. should be allowed to buy £½ million worth of fancy telephones from Messrs. Telcer of Milan? Why could not those telephones be made in the United Kingdom?
    Mr. Butcher: Within the confines of the GATT and EEC arrangements, we are mindful that liberalisation should produce jobs for British workers in British companies. I am bound to say, however, that liberalisation holds fears for some of us that unless British companies respond positively and quickly we shall run the kind of risk to which the hon. Gentleman has referred.

    British Telecom
    Mr. Marlowasked the Secretary of State for Industry whether he will make a statement on the financial performance of British Telecom.
    Mr. Patrick Jenkin: The report and accounts of British Telecom for 1981–82 will be published shortly. Indications are that it has met its financial target.
    Mr. Marlow: Given the activities of monopolies in certain spheres, how will we know whether these are good or bad results?
    Mr. Jenkin: My hon. Friend is right. It is inherent in the nature of State monopolies that it is extremely difficult to ascertain whether they are as efficient as they might be. That is why, as my hon. Friend said, the Government are vigorously pursuing a policy of exposing British Telecom to increasing competition.

  ATTORNEY-GENERAL

    Operation Countryman
    Mr. Christopher Priceasked the Attorney-General whether any prosecutions have yet been brought as a result of the renewed Operation Countryman investigation.
    The Attorney-General (Sir Michael Havers): I am not aware of any renewed Countryman investigation.
    Mr. Price: Can the Attorney-General tell us what usefulness he attaches to "supergrasses" in investigations of this nature? Has the Attorney-General noticed that when "supergrasses" are discovered by the regional crime squad they tend to produce information that is useful to Operation Countryman, but when they are discovered by the Metropolitan Police they tend to be individuals who bring allegations against others, who sometimes become hostile witnesses later? Finally, can the Attorney-General inform the House when we can expect a decision on whether prosecutions will take place in the six to eight investigations mentioned by Sir Peter Matthews in his evidence to the Home Office Select Committee?
    The Attorney-General: On the hon. Gentleman's last point, the evidence that was reported in the press today was given in March to the Select Committee. There are no
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    further matters before the Director of Public Prosecutions other than the current ones arising from the Countryman investigations. As regards "supergrasses", there is at least one case of which I know where a "supergrass" may be a witness. It is, therefore, better that I do not comment on what he says or on how good or bad "supergrasses" may be.

    Prosecutions Against the Police
    Mr. Dubsasked the Attorney-General how many cases against police officers were referred to him in 1981; in how many such cases he decided to prosecute; and in how many of these a guilty verdict was returned.
    The Attorney-General: A total of 8,830 files involving complaints against the police were opened by the Director of Public Prosecutions in 1981. It would take considerable time to say how many such cases were prosecuted or in how many of these a guilty verdict was returned. Of the 690 prosecutions undertaken in 1981, some would have been in respect of files opened in previous years. However, the great majority of these would be Road Traffic Act offences, where the conviction rate is usually very high. Of the remaining 84 prosecutions, 66 resulted in convictions. Included in these figures were: 21 prosecutions for assault, resulting in 10 convictions; 41 prosecutions for theft, resulting in 36 convictions; four prosecutions for sexual offences, resulting in four convictions; and 18 prosecutions for miscellaneous offences, resulting in 16 convictions.
    Although in 1981 there were no completed prosecutions for corruption, the average conviction rate over five years for corruption is about 48 per cent.
    Mr. Dubs: Does the Attorney-General agree that where a case has been referred to him following a complaint from a member of the public there is great dissatisfaction with what happens subsequently when a decision is taken not to prosecute because it is most unlikely that the police officer concerned will be subject to any disciplinary action? Will the Attorney-General, at the very least, ensure that where no decision to prosecute is taken, the member of the public who has made the complaint is given a full explanation of why nothing has been done?
    The Attorney-General: Complaints end up on the desk of the Director of Public Prosecutions rather than mine. The point raised by the hon. Gentleman was one of the matters dealt with in the recently published report of the Select Committee on Home Affairs. The whole of that report is receiving the Government's careful attention.
    Sir Charles Fletcher-Cooke: Will my right hon. and learned Friend look again at the application of the double jeopardy rule in such cases, because it is not understood by the general public, even although it may be based, at least theoretically, on a good legal principle?
    The Attorney-General: This matter also arose in the Select Committee and it has given me a certain amount of anxiety. It is certainly a matter that I, with the Director of Public Prosecutions and my right hon. Friend the Home Secretary, will be carefully considering.
    Mr. Archer: For the avoidance of doubt, can the Attorney-General confirm that the cases referred to the Director of Public Prosecutions arose from complaints by

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    individuals and did not include general offences against public justice, such as in the Operation Countryman type of offence? Has the Attorney-General noted that the Select Committee on Home Affairs has endorsed the recommendation of the Royal Commission on criminal procedure for a system of local Crown prosecutors to investigate such complaints? What are the Government's views on that proposal?
    The Attorney-General: As regards the first point, the figures that I have been given refer to complaints against the police by members of the public. I am sure the right hon. and learned Gentleman will have read the evidence that I gave to the Royal Commission, when I spoke strongly in favour of regional Crown prosecuting solicitors. As regards the future method of dealing with complaints against the police, the report has only just been published and I am sure that the right hon. and learned Gentleman will not expect us to have an immediate answer.

    Criminal Jurisdiction Act 1975
    Sir John Biggs-Davisonasked the Attorney-General if he will make a statement about the use to date of the Criminal Jurisdiction Act.
    The Attorney-General: Since the commencement of the Criminal Jurisdiction Act 1975 consent has been given to the prosecution in Northern Ireland of nine persons under the provisions of the legislation. Five of these persons have been tried, of whom four have been convicted of extra-territorial offences and one has been convicted of an offence which is not an extra-territorial offence. Four persons in respect of whom consent to prosecute has been given have not yet been tried.
    Wherever there has been sufficient evidence to warrant proceedings I have given my consent to prosecution. The Act has been a useful addition to the criminal law.
    Sir John Biggs-Davison: Does the Attorney-General agree that that is second best? Is not the refusal of extradition in cases of alleged terrorism now the subject of concern in the Supreme Court of the Republic? However the Act works, will Her Majesty's Government continue to inform the Irish Government that the Irish dimension in which we are interested is the observance of international legal obligations by the Dublin Government?
    The Attorney-General: I think that my hon. Friend is referring to the Southern Irish legislation—the Criminal Law Jurisdiction Act, which is a different Act. It gives the Republic the power to prosecute those cases referred to it by the Chief Constable of Ulster. In the past few months nine persons have been referred, six have been convicted and three acquitted. Others are pending. That Act has been a useful additional weapon in dealing with serious crime, but, as my hon. Friend will know, the Government's view has always been that extradition would be more effective.
    Mr. Stanbrook: Has my right hon. and learned Friend made any progress in his talks with the Attorney-General of the Republic?
    The Attorney-General: I had very useful discussions with the previous Attorney-General of the Republic and I am hoping that I shall be able to reach the same degree of happy discussion with his successor.

    Charities
    Mr. Wolfsonasked. the Attorney-General whether he is satisfied that the present law and practice covering the registration and review of charities gives adequate protection to the public.
    The Attorney-General: I consider that there is adequate protection to the public under the present arrangements so long as it is remembered that if cases occur in which it appears that a charity—or body claiming to be a charity—is being used for non-charitable or private purposes it is up to the public to draw the circumstances to the attention of the Charity Commissioners, or to my attention.
    Unfortunately, from time to time it does occur that appeals and collections are made for charitable funds by those who have no intention whatsoever of using more than a small fraction of the funds for the benefit of charity and whose principal aim clearly is to secure a ready supply of finance for their own requirements. Such appeals are fraudulent and any case should be reported to the police. It is equally important that such a case should be reported to the Charity Commissioners to ensure that they can require registration of the appeal and ensure that any moneys that are contributed are used for the purposes which the donors intended.
    Mr. Christopher Price: Does the Attorney-General believe that the whole law of charity is in desperate need of renewal? Is he aware that neither the report of Lord Goodman's committee nor the report of the House of Commons Expenditure Committee has yet been responded to properly by the. Government? It is absurd that Eton college can be a charity whereas the Penlee lifeboat fund cannot. Have the Government any plans for legislation?
    The Attorney-General: Everyone involved was anxious that the Penlee lifeboat fund should not be a charity. Therefore, that is not a particularly fair comparison with a public school. The law on this matter is in a state of perpetual development, and as the needs of society change, so does the character of charity. It is important that the Law should be as flexible as possible, because, whatever their other attractions, statutory definitions are inclined to present great problems if they lack this important measure of flexibility.
    Mr. Wolfson: I am grateful to the Attorney-General for his full reply to my question. Is he aware of the recent disturbing revelations concerning a leader of the Earmark Trust? On the basis of what my right hon. and learned Friend told me, can he assure me that the law on charities is adequate to cover those who may have donated sizeable assets to a charity but later find that they have done so under false pretences?
    The Attorney-General: I repeat what I said in answer to my hon. Friend's question. If it is considered that the funds are being used for non-charitable or private purposes, that should be drawn to the attention of the Charity Commissioners or myself, so that action can be taken.
    Mr. George Cunningham: Why is the Attorney-General answering this question? Has responsibility for the law on charities been transferred from the Home Secretary to the Attorney-General?
    The Attorney-General: For his sins, the Attorney-General has over many years had a responsibility in the
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    public interest to protect both charities and those who might be defrauded by bogus charities.

Port Stanley (British Subjects)
Mr. Tam Dalyell(by private notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the safety of British subjects in Port Stanley.
The Minister of State, Foreign and Commonwealth Office (Mr. Cranley Onslow): Throughout the course of our military operations to repossess the Falkland Islands our forces have attached the greatest importance to ensuring the safety of the civilian population on the islands. This has been a major consideration in the planning for, and conduct of, all our operations.
The most effective way of protecting non-combatants is through the establishment of a neutralised zone, as provided for in article 15 of the fourth Geneva convention. Such a zone in Port Stanley has been proposed by the International Committee of the Red Cross, which was able to visit Port Stanley for the first time on 10 and 11 June. The ICRC has been trying for several weeks to establish a presence on the Falkland Islands, but hitherto Argentina had not permitted this.
The British Government agreed forthwith to the neutralised zone which had been proposed by the ICRC. We have since been told by the ICRC that the Argentine Government have also agreed to this. The zone will consist of a rectangular area of roughly five acres around the Anglican cathedral. The cathedral is a large prominent building built of red brick. There are a number of other stone and brick-built buildings within the area of the zone, which is bounded by John Street, Dean Street, Philomel Street and Ross Road. Instructions have been sent to the British commander to respect this zone with immediate effect.
Besides the civilian non-combatant population, the zone may also be used for the protection of wounded and sick civilian and Service personnel. The area which has been designated should be large enough for the temporary accommodation of those expected to need protection.
I should like to express the Government's appreciation of the action of the ICRC in arranging for the establishment of this zone.
Meanwhile, as the House will be aware, Argentine sources have reported that some civilian casualties have occurred in Port Stanley during the fighting. We have no official confirmation of these reports. However, there is some independent evidence to support them, and I regret to say that we must regard it as likely that they are true. This tragic incident only underlines the importance of establishing a neutralised zone to minimise the risk to the islanders. We would hope to obtain further details concerning this incident when the representatives of the Red Cross return to Port Stanley.
Mr. Dalyell: Does not international opinion, considered so important in early April, now view with nausea the slaughter of young British men, young Argentines and Falklanders, and does it not call for an immediate end to the shooting? In the light of what is now happening to the Falklanders, is not the reality the same as it always was—that this war is less about the interests of the people on the Falkland Islands and much more to do with the injured pride of politicians making decisions?
Mr. Onslow: I am tempted to repay the hon. Gentleman in kind with use of the word "nausea", which
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is inappropriate in the sense in which he has imported it into this discussion. It is a fact that everyone in this House, as well as all international opinion, wants to see an end to the fighting, but it is also true that almost everyone, except the hon. Gentleman, understands the principles for which these lives have been lost—
Mr. Dalyell: Not true.
Mr. Onslow: —and, much though we regret them, we believe that it is necessary to go through with the enterprise.
Sir Timothy Kitson: Would it be possible to arrange for the Red Cross to try to get some of the civilian casualties out? While we may not know officially who has been injured, certain people in Britain have been informed about deaths and serious injuries to their relations and are deeply concerned because they cannot get any further information. Could not we attempt to contact the Red Cross to see whether something could be done at least to remove the civilian casualties?
Mr. Onslow: I share my hon. Friend's concern about the uncertainty, but no direct or reliable source of information is available to us. Even the Red Cross has no resident presence in Port Stanley at the moment, and the information made available by it is based on only a brief visit during which its officials were able to meet only a small number of islanders. As soon as it becomes possible for the Red Cross to make an informed assessment, and if that suggests that evacuation is a practical possibility, we will, of course, do everything we can to co-operate with that suggestion.
Mr. Roland Moyle: Is the Minister aware that the Opposition fully approve of the concluding of negotiations through the ICRC with the Argentines with a view to securing the safety of the civilian population of Port Stanley? That almost goes without saying. We only regret that it has taken so long because of foot-dragging by the Argentines. We want no more civilian casualties. We regret those that have been admitted this afternoon and wish to express our sympathy for the relatives.
Can the Minister give an authoritative, even if only approximate, figure of the number of civilians in Port Stanley? Various figures have been suggested in recent weeks. Why has the area around the cathedral been selected? I gather that there are a number of wooden buildings in that area. Are the Government satisfied that the arrangements they have now concluded will provide for the safety of the civilian population of Port Stanley, given the difficult situation that has arisen?
Have the British forces at any time offered a limited ceasefire to allow the civilians to be evacuated entirely from Port Stanley, and has there been any Argentine response either directly or through the International Red Cross? Do the Government accept that the presence of 600 civilians in Port Stanley, however they are arranged, is bound to place a restriction on our military operations? Have our commanders been informed that the preservation of the lives and well-being of the islanders is of prime importance, and are the Government confident that future operations will not put them seriously at risk?
Mr.Onslow: I am grateful to the right hon. Gentleman for his preface. The fact that hitherto there has not been an ICRC presence in Port Stanley is no fault of the Government or the ICRC.

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I shall answer the right hon. Gentleman's questions as best I can, but, as I told my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson), the sources of information available to us are sketchy and sometimes of questionable reliability. We have no independent accurate corroboration of the figure of 600 civilians.
I can put forward no particular reason why that part of the town was selected. It must have recommended itself to the ICRC as being most suitable for a variety of reasons, doubtless including the type of buildings and the ease of definition. The safety of the civilians in Port Stanley depends on the ease and speed with which the Argentine authorities can get them into the neutralised zone. That again is not under our control, but I hope that it will receive all necessary priority.
I have no knowledge of ceasefire proposals initiated locally. It is not our intention from here to dictate to the force commander his operational priorities. Although we must accept the possibility of further civilian casualties as long as fighting continues, we should not expect the force commander to endanger the lives of his men by taking decisions that might in other contexts seem commendable.
Mr. David Steel: As the neutral zone has been created through the mediation of the ICRC, can the Minister confirm that the Government have at no stage, even at this late hour, ruled out the possibility of similar third-party intervention to secure a ceasefire and a peaceful Argentine withdrawal?
Mr. Onslow: The issue of a ceasefire goes wider than the context of the question. Our approach to the question of a ceasefire has always been that it must be linked to immediate Argentine withdrawal. If there is evidence to suggest that the Argentines are now willing to proceed direct from the one to the other, we should consider the matter.
Several Hon. Members rose—
Mr. Speaker: Order. Exceptionally, I shall call three more hon. Members from either side of the House, although it is a private notice question and not a statement.
Mr. Eldon Griffiths: Everyone will be glad that the Red Cross has established the refuge for civilians and will note my hon. Friend's agreement that the United Kingdom would assist in evacuating civilian casualties, but can he tell us what arrangements there are to supervise the zone under the Red Cross so that there is no question of its being used by the Argentines for military purposes while being presented to the world solely as a neutral refuge for civilians?
Mr. Onslow: I am grateful to my hon. Friend for what he says, but I hope that he will appreciate that it is not in our power to monitor the use of a neutralised zone. That responsibility falls to the International Red Cross. However, I have no doubt that it is well aware of the rules and I am confident that it will do everything that it can to see that they are enforced.
Mr. Donald Anderson: What is the state of information about the well-being of the British people on West Falkland? As we have more time available before we begin mopping-up operations on that island, is it not possible now to consider means of obtaining evacuation of those residents?
Mr. Onslow: I note what the hon. Gentleman says. I am sure that any appropriate action will be taken, but at this point I cannot go beyond that. Apart from anything else, our preoccupation must be with where the danger is greatest, which is undoubtedly in Port Stanley. That is where we want the ICRC to operate effectively as soon as possible.
Mr. Robert Banks: Considering the number of civilians in Port Stanley and the volume of the bombardment, is it not a remarkable feat that the task force aimers have been able to select military targets and, however sad, so far there have been only two civilian casualties?
Mr. Onslow: It is a relief that civilian casualties have so far been so small. Additionally, I have no evidence to suggest that the casualties that have unhappily occurred were the result of British military action. The matter has not been investigated and I am not prepared to pronounce on it.
Mr. Eric Ogden: Is the Minister aware that the Falkland Islanders who have been so tragically killed or injured are personally known to the hon. Member for Uxbridge (Mr. Shersby) and myself and that we are proud to call them our friends? Mrs. Doreen Bonner was a fine and courageous lady. She was a third generation kelper, who was much respected and will be missed by everyone who knew her. Mrs. Susan Whitley was a lovely and lively lady of good Welsh parentage, newly married to an excellent young husband. She was a teacher who was dedicated to the children and other people of the islands. Will the Minister accept our sympathy for the families of those who died and our good wishes that Mr. and Mrs. Fowler, who are also dedicated to the people of the islands, and Mrs. Mary Goodwin should be restored to good health? Will he bear in mind—perhaps the hon. Member for West Lothian (Mr. Dalyell) will also note—that no one on the islands will blame the British task force? They share pride and sorrow with other British families whose loved ones have been lost or injured in a common and just cause.
Mr. Onslow: It goes without saying that the sympathies of all hon. Members must be with the relations and friends of all who have been killed or injured. I am sure that what the hon. Gentleman says will be noted with appreciation and gratitude by the Falkland Islands community in particular.
Sir Frederick Burden: Although the setting up of a neutral area is welcome to us all, might there not be problems with food, heating and sanitation with the large number of people in the area? Will my hon. Friend keep in touch with the Red Cross and get the latest reports on the situation and, with the agreement of the Argentines, see what might be done to alleviate what might be considerable suffering by those in the refuge area?
Mr. Onslow: I note what my hon. Friend says, but the problem stems from the presence in Port Stanley of civilians. Their concentration in one area, which can be effectively preserved as neutral, should effectively reduce the problem. Any needs that they may have can better be treated there. The area is big enough to satisfy

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accommodation problems, but if problems become more intractable we shall look to the ICRC to report on them without delay.
Mr. loan Evans: Is it not a tragedy that we went in to defend the lives of the Falkland Islanders and now the first islanders have lost their lives? Will the Minister ensure that the House is kept informed of casualties, not only among the islanders but among Service men? Last week the Government made a statement about the Welsh Guards casualties. Many of us have constituents in the Welsh Guards who were injured or lost their lives. Could we not have an opportunity to ask questions about points raised with us by the families of these men?
Mr. Onslow: The hon. Gentleman is asking questions which are not for me and which have been dealt with by my right hon. Friend the Secretary of State for Defence in his statements. I am sure that my right hon. Friend will keep the House as fully informed as his judgment tells him that it best can be. As soon as it is possible to produce accurate and reliable information on civilian casualties, I intend that it should be made available to the House.
Mr. John Stokes: On a point of order, Mr. Speaker. I rise with hesitation on this sad and serious subject, but I wonder whether the private notice question by the hon. Member for West Lothian (Mr. Dalyell) was in order. It purported to be about the suffering of British civilians in Port Stanley, but it turned out to be an attack on the Government's policy.
Mr. Andrew Faulds: Quite right, too.
Mr. Speaker: The hon. Member for West Lothian (Mr. Dalyell) asked a supplementary question. The original question was the one of which he had given me notice.
Mr. Dalyell: Further to that point of order, Mr. Speaker. Is there any suggestion that my supplementary question was not absolutely pertinent and relevant to the original question?
Mr. Speaker: I am not raising any question. The matter was raised by the hon. Member for Halesowen and Stourbridge (Mr. Stokes).

United Nations Special Session on Disarmament
Mr. John Silkin: You will recall, Mr. Speaker, that on Thursday my right hon. Friend the Leader of the Opposition. asked the Leader of the House if he could arrange for the Prime Minister to make a statement today on the policy that she had in mind for her visit to the United Nations special session on disarmament. No statement has so far been made, but in view of the extreme relevance of that question, and the fact that the Leader of the House said that he would communicate with the Prime Minister on that question, and as there are now three large-scale wars in three different parts of the world—all of which are highly relevant to what she has to say in New York—have you, Mr. Speaker, had any intimation about what time the right hon. Lady intends to make such a statement?
Mr. Speaker: I have had no notice of any statement by the Prime Minister.

Lebanon (Israeli Action)
3.50 pm
Mr. Tony Marlow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, Mr. Speaker, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the present Israeli actions as a threat to world peace and prosperity".
We have had five debates on the Falkland Islands and few hon. Members would complain about that. There are two main reasons why the task force was despatched and why we are now facing battle. The first is self-determination for 1,800 Falkland Islanders. As my right hon. Friend the Prime Minister herself has said, that argument applies equally to the 4¼ million Palestinians. The second is the principle that aggression shall not pay and the robber shall not walk away with his spoils. Israel is already sitting on half the Lebanon, and is busy despite declarations of a bogus ceasefire, creating new facts. We have responsibilities in the Falkland Islands, but this country as the mandate Power also has residual responsibilities towards the Palestinians.
There are five further specific points that should be debated. First, there is the genocide of Palestinians by the Israelis, referred to euphemistically—in terms that would do credit to Dr. Goebbels—as mopping up. Secondly, there is the plight of Palestinian prisoners plucked by the Israelis from their temporary legitimate home in the Lebanon and taken to Israel. Thirdly, there is the intense and appalling suffering of the civilian population of the Lebanon caused by the unprovoked blitzkreig.
Independent observers have said that 1,000 civilian casualties have been caused in Sidon. There have been 600,000 people made homeless. In the town of Rashidiye alone there live tens of thousands of women and children. 90 per cent. of the buildings have been razed and made uninhabitable.
We must be interested in the long-term effects of that challenge to Arab rights and dignity which have the gravest dangers for world peace and, if the oil weapon is used, to the prosperity of the free world.
I should like to discuss, but cannot, the veracity of statements emerging from Israel. As one of six hon. Members about whom a dishonest statement was made, I feel that that is something that should be investigated. We should debate the real reasons for the holocaust and ask what has become of the democracy that is now the Fascist State of Israel.
Mr. Speaker: The hon. Gentleman gave me notice this morning before 12 o'clock that he would seek leave to move the Adjournment of the House for the purpose of discussing an important matter that he thinks should have urgent consideration, namely,
"the present Israeli actions as a threat to world peace and prosperity".
The House listened in silence to the hon. Gentleman because he was drawing attention to serious matters. The House has instructed me to take into account the several factors set out in the Order but to give no reasons for my decision.
I listened carefully to the hon. Gentleman, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Falkland Islands (Welsh Guards' Casualties)
3.53 pm
Mr. D. E. Thomas: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the tragic and severe casualties sustained by the Welsh Guards and supporting units at Bluff Cove on Tuesday 8 June announced by the Ministry of Defence last night".
My request is even more urgent, Mr. Speaker, than when I raised it with you this morning. We have not had a statement from the Ministry of Defence today on the matter. It has been a national disaster for Wales and has already been compared with the Gallipoli disaster in the First World War.
Since we have not had a debate on the Falklands issue, nor on the South Atlantic war, there should be an opportunity for the full facts to be made available and for the House to demand an inquiry into the reasons why young soldiers were left on landing craft in exposed positions for a long time without anti-aircraft protection. We want to know why Welsh Guards were landed in that way rather than by helicopter. We must have the strategic reasons fully explained so that we may be able to equate the high cost of the war with the loss of those young lives. Such a disaster for Wales deserves priority debate.
Mr. Speaker: The hon. Gentleman gave me notice this morning before 12 o'clock that he would seek leave to move the Adjournment of the House to discuss
"the tragic and severe casualties sustained by the Welsh Guards and supporting units at Bluff Cove on Tuesday 8 June announced by the Ministry of Defence last night".
As the House knows, my powers are strictly limited, and the hon. Gentleman in making his application for a three-hour debate on the events of Bluff Cove will know that I have to take into account the several factors set out in the Order but to give no reasons for my decision. Naturally, everybody in the House will have listened with anxiety to the hon. Gentleman. Everyone in these islands—not only the Welsh people—will be grieved by the news. I must rule, however, that the hon. Gentleman's submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

Standing Order No. 9 (Applications)
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Over the past week, there have been three separate Standing Order No. 9 applications. Within the powers conferred upon you by the House you found it impossible to allocate us time. You may be aware that a great many hon. Members on both sides will have been pressed by their constituents as to why there has been no debate about what could turn into a major international conflict. The controversy will be well known to you. Some of us have pointed out that there is congestion in the legislation on the Floor of the House. One particular piece of legislation which is contributing to that congestion is the Northern Ireland Bill, which is being obstructed by a number of Conservative Back Benchers.
Will it be possible, Mr. Speaker, within any Standing Orders of which you may have knowledge, for the rest of the Committee stage to be taken upstairs, thereby freeing the Floor of the House for a much-needed debate on the Middle East? That could be done at the discretion of the Government, in the light of the decisions you have made on Standing Order No. 9 applications.
Mr. Speaker: I have no power to transfer the Bill to Committee upstairs when the whole House has decided that it should be debated on the Floor of the House. May I say, in case it is misunderstood outside, that I am not preventing the House from debating the Falkland Islands? All I am saying is that it is not an appropriate subject for an emergency debate tonight or tomorrow. The House has several other ways in which it can discuss that matter. I should not like anyone outside to have the wrong impression.
Mr. Campbell-Savours: With respect, Mr. Speaker, it was not the Falkland Islands, but the Middle East to which I was referring.
Mr. Speaker: The same principle applies. I am not preventing a debate. All I am saying is that it is not an appropriate subject for emergency debate tonight or tomorrow night.

Standing Order No. 9 (Applications)

  STATUTORY INSTRUMENTS, &c.
  Ordered,
  That the draft Job Release Act 1977 (Continuation) Order 1982 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Goodlad.]

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, if proceedings on the Motion relating to Industrial Training have not been disposed of by Ten o'clock, Mr. Speaker shall, notwithstanding the provisions of Standing Order No. 4 (Prayers against statutory instruments, &c. (negative procedure)), put forthwith the question thereon.—[Mr. Goodlad.]

Industrial Training
4 pm
Mr. Harold Walker: I beg to move
That an humble Address be presented to Her Majesty, praying that the Industrial Training (Air Transport and Travel Industry Board) (Revocation) Order 1982 (S.I., 1982, No. 657), the Industrial Training (Carpet Board) (Revocation) Order 1982 (S.I., 1982, No. 658), the Industrial Training (Chemical and Allied Products Board) (Revocation) Order 1982 (S.I., 1982, No. 659), the Industrial Training (Footwear, Leather and Fur Skin Board) (Revocation) Order 1982 (S .1., 1982, No. 660), the Industrial training; Iron and Steel Board) (Revocation) Order 1982 (S.I., 1982, No. 661), the Industrial Training (Knitting, Lace and Net Industry Board) (Revocation) Order 1982 (5.1., 1982, No. 662), the Industrial Training (Man-made Fibres Producing Industry Board) (Revocation) Order 1982 (S I., 1982, No. 663), the Industrial Training (Road Transport Board) Order 1982 (S.I., 1982, No. 664) and the Industrial Training (Wool, Jute and Flax Board) (Revocation) Order 1982 (S.I., 1982, No. 665), dated 6th May 1982, copies of which were laid before this House on 14th May, be annulled.
Given the diversity of the industries and the matters that are covered by the orders in the motion, it is obviously rather difficult to present to the House a carefully structured speech. Perhaps I might start by recalling that in recent years a great amount of legislation has been generated by the Department of Employment and its predecessors, much of it extremely controversial. But no measure was more widely welcomed—not only by both sides of the House but by industry and commerce—than the Industrial Training Act 1964, which established the industrial training boards.
There was then a widespread recognition, first, that our national economy suffered from inadequate and ineffective training provisions and, secondly, that that was very much a consequence of the voluntary arrangements on which we had relied for far too long.
The White Paper that preceded the 1964 Act 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 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 then Conservative Minister of Labour, who was responsible for that White Paper, said at the time:
"We must all realise the extent to which sound economic growth depends on the use of our most valuable national 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 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."
He went on to say that
"few industries have developed any means of ensuring that they get the number of trained people they need; there is no way of ensuring that all employers play their part; there has been little control of the quality of training."
In short, there was in 1964 a state of affairs which Lord Scanlon—who has unparalleled experience in these matters—described in another place as chaotic. Yet, incredibly, it is down the road back to that state of affairs that the orders mentioned in the motion before the House take us today.
The orders to seek to abolish eight industrial training boards and seek significantly to diminish the scope of

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another—the road transport industry training board. Soon there will be before the House more orders seeking to wind up another eight boards. Of the present 23, only seven will survive, some with their scope and power diminished, and all of them henceforward existing only in a state of uncertainty and anxiety about their role and their future. The survivor boards and the staffs and industries they serve will live on in constant fear of where the axe may fall next. A framework of institutions that has been painstakingly built up over nearly 20 years is being demolished almost at a stroke.
When the Act from which the orders stem was before the House—it is now the Employment and Training Act 1981—the then Secretary of State for Employment, the right hon. Member for Lowestoft (Mr. Prior), tried to pretend that it was a modest and innocuous measure, but today we see the foolish and far-reaching consequences of that Bill. In all our long proceedings on the Bill, we were never able to extract from the Department's Ministers any defence of or justification for a step that is so damaging to industry and to the nation's economy, other than that he wanted, first, a better return for money and, secondly, that because we live in a period of rapid change, for that reason alone we should change our training arrangements. The Government must do better than that today.
Today the House is entitled to expect that the Minister will tell us precisely how the manpower needs of the industry concerned will be enhanced or better met by the abolition of the boards, or how the nation's interest will be served. The House needs to know in specific terms what is the real purpose of the abolitions. What will be the effects on the manpower needs of the industries concerned? What will be the benefits for training in those industries? What estimates has the Minister made of the effects of his proposals on the needs and supply of skilled and trained labour in those industries?
In May, the Under-Secretary of State—I believe in response to a request from the Select Committee on Employment—placed in the Library some notes about the voluntary arrangements that will replace the training boards, and he kindly sent me a copy. Presumably the information that is contained in those notes was supplied by the Manpower Services Commission. It reflects some of the material in the papers submitted and commissioned by its training services division in March. It is regrettable that the Department's notes do not contain all the information in the commission's paper. The Select Committee and the House are entitled to know the whole truth.
For example, the MSC paper, in referring to the successor voluntary arrangements, says:
"Firm judgments cannot yet be made about them".
That was in March.
"Most are not yet set up".
It then goes on to say:
"Nineteen ITBs are likely to be replaced by up to 100 voluntary arrangements."
Unless that was an error by the typist or by the person who prepared the paper, we are entitled to know where the figure of 19 comes from. So far, we have been talking about 16 boards out of 23, but the commission's paper talks about 19 out of 23. We want to know more about the
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100 voluntary arrangements, for in the notes submitted to us by the Department so far nothing like 100 voluntary arrangements are described.
The commission's paper goes on to say:
"Economies of scale will be lost, many small sub-contractors will have access only to very simple arrangements, and difficulties may be created for some group training arrangements which span sub-sectors … How successful sponsors of the new arrangements will be in attracting support from firms beyond their current membership is not yet clear. Obviously, they are unlikely to achieve as much coverage as ITBs achieve through compulsion."
The distaste of the Government's own officials for the new arrangements comes through clearly in that passage, as it does elsewhere in their papers. Presumably the latter sentence which I have just quoted refers to a difficulty on which we would welcome the Minister's comments. I refer to the position in the future of firms that are not in membership of an employers' association and will be taking on the responsibility for handling the successor arrangements. One thinks, for example, of the administration of key training grants—the money supplied by the MSC from public funds to assist training boards in financing key training activities. Will they continue to be paid in sectors where the statutory industrial training board has been abolished? If so, will they be administered by the successor body, and what assurances have we that they will be administered fairly and objectively if the administration is to be in the hands of employer's associations representing only a part of the firms employed in the industry?
Then there is the question of the monitoring of training by the successor bodies, particularly in regard to firms that have not volunteered to enter into the new arrangements. Perhaps I may be permitted to return to that a little later and to say something more about it.
I return to the commission's paper and refer to its comments on trade union involvement. It says:
"In most cases unions do not at present wish to join the arrangements, and have criticised the sort of involvement that is being offered and/or the levels of resourcing".
The great value of the contribution that the unions have made and are making to industrial training is beyond question. Their support and participation has been one of the great strengths of the industrial training boards. Without their co-operation and their involvement, training arrangements will be greatly weakened, and in some cases ineffective. Not the least of the benefits of the boards has been that they bring both sides of industry to a forum where there is a feeling of community of interest rather than of conflict. In that way they have made a positive contribution to industrial relations. Indeed, the former Secretary of State, addressing the Select Committee on Employment on 18 March 1981, said:
"I believe that progress in training depends on the cooperation of employers, unions and educational institutions".
Now, in a large part of British industry, those benefits are being lost because of the Government's crude and doctrinaire approach to these matters, an approach that has alienated the trade unions.
I shall not weary the House with excessive quotations from the MSC papers. The House would have been saved some time, and would have been better informed, if the Ministers had asked the commission for permission to make the papers freely available. However, a couple of other matters arise from the papers, on which I shall welcome the Minister's comments in due course. I understand that the Minister of State will seek to catch

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your eye, Mr. Deputy Speaker, when I resume my seat, and if he says that he would like more time, or that it would be more appropriate for the Under-Secretary to reply later this evening to detailed questions, we shall not cavil at that.
The first of our two other worries is the frequent reference in the press to the need for bridging loans for group training associations that are now threatened with collapse. Are these group training associations to be yet further casualties of this new doctrine of the Government? If so, how many are there? Are they to be rescued with grants or loans? If so, what is the estimated cost?
The second matter is rather more serious, and it concerns the assets of the boards that are scheduled for abolition. Paragraph 5 of the commission's paper MSC/82/N7 says:
"Ministers have announced that those assets of ITBs to be abolished which are of particular value to training may be made available free of charge to support future training, and that they"—
Ministers—
"will consider transferring training centres which are to continue to be used for training to their new owners free, or on favourable terms, and that they will consider proposals to use any cash surplus to promote training in the industry. It is intended that where successor bodies can make effective use of these assets they should normally have first claim, but other dispositions are possible. For legal and administrative reasons the assets would be passed from the ITBs to their recipients through MSC rather than directly".
It goes on:
"A board proposal for a trust to take over the Shipbuilding ITB's centre at Southampton has been put to Departments."
It may be my fault, but I have not heard about that before, although it says that "Ministers have announced" it.
What an extraordinary package the passage that I have just quoted represents. It raises several questions, not least in the light of the higly critical report of the Public Accounts Committee about the Shenley Trust and the underwater training centre at Fort William. The House will recall that in that case the MSC gave a body with no track record in industrial training the responsibility for the running of a highly technical and expensive training facility, which eventually gave rise to serious allegations that became the subject of critical debate in this Chamber. Nevertheless, here we are told, not merely of the possibility of some kind of licensing arrangement, some kind of subcontracting, but of the handing over, perhaps,
"free, or on favourable terms"
to new owners.
It seems that some people have learnt little or nothing from the Public Accounts Committee's inquiry. What legal authority has the Minister or the Manpower Services Commission to give away other people's property and money? My understanding is that the boards' fixed assets and cash assets, in most cases, have come out of levy income, and not from public funds. The Under-Secretary shakes his head. If the Under-Secretary tells me, for example, that the MOTEC establishment of the road transport industry training board at Livingston or the distributive industry training board's video centre have come out of public funds, it would be interesting. However, there is also mention of giving away the cash assets, although almost certainly those assets must have come from levy income.
Perhaps there is some obscure legal jargon tucked away somewhere in a schedule of the 1964 Act which gives the Minister the power to do these things. I should like to
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know, so that I and my right hon. and hon. Friends can study it. We could then see whether it was equally possible in the fullness of time for a future Minister to reclaim such assets given away in this manner.
I wonder, too, what are the
"legal and administrative reasons"
that make the Manpower Services Commission a more suitable agent for giving away other people's assets than the boards themselves. Once those assets are given away, or sold at knockdown prices, what accountability will there be on the part of the recipients, and to whom, so that any possible abuse of the procedure may be safeguarded against? I have already mentioned the road transport industry training board. It would be interesting for the House to hear how the Government's policy would apply in the case of that training board, which has substantial fixed assets, including its MOTEC centre at Livingston, which will continue in existence, despite being dramatically cut in scope. Will that board retain all its assets, or do the Government intend to do some asset-stripping there?
There is another matter of common interest to all boards and their staff, on which I hope that the Government will make a full statement, and that is the common pension fund. I understand that all the staff of the boards have been covered by a common pension fund. I do not know to what extent it is a fund or a pay-as-you-go type of scheme, but clearly, once 16 of the 23 boards have been abolished, there will be a substantial reduction in the income to the fund, which will have a continuing commitment to the pensions of all the staff who will remain in their posts and those who are made redundant as a result of the abolitions. I hope that the Minister will give us an authoritative statement, on the record, which will reassure all the staff who are affected.
I turn to another aspect of the disposal of assets. What do the Government intend should be done with all the records and statistics that have been accumulated by the boards? Only today I received a letter from a trade union official who has been involved with boards, who says that ITBs have a wide range of valuable material, including training manuals and programmes, training recommendations, research reports on manpower needs in industry, and training methods, training films, careers literature, self-help guides to managers, and so on, much of which is unpublished.
He says:
"There seems to be no energetic attempt to maintain a library of this material".
He says that he is concerned—as I am—about the future of such valuable records and information. I hope that the Minister will tell us how this highly valuable information will be dealt with in future. Of course, obvious difficulties, not least questions of confidentiality and copyright, stand in the way of turning material over to successor bodies.
I said a few minutes ago that I might say a few more words about monitoring under the new arrangements. The present Secretary of State for Northern Ireland, in giving evidence to the Select Committee in March last year, said that
"the objective of any voluntary arrangement would obviously include monitoring skill shortages and other training needs and arranging voluntary action to alleviate them".
When the orders at present before the House were laid, the Under-Secretary issued a press notice which said:
"I am satisfied that employer organisations in the industries covered by these boards"—

625
that is, those now being abolished by these orders—
"are making good progress in setting up satisfactory alternative arrangements for monitoring training".
That was the one matter that he picked out for specific comment and for the assurance that he was satisfied that good progress was being made in setting up satisfactory alternative arrangements for monitoring training.
The Government gave the House assurances that ITBs would not be abolished unless the successor arrangements were adequate and satisfactory. Effective monitoring was the first of the criteria that were laid down by the former Secretary of State.
May I briefly put the Under-Secretary's assertion to the test? Let us see what credence we can give to his assurance in the press notice about satisfactory progress. We can do that by looking at the changes that are proposed for some of the industries that are within the scope of the orders.
Dr. Keith Hampson: May I make one thing clear? I recall the debate in 1981 when the Opposition agreed that not all the boards were by any means perfect, that amalgamations and, indeed, some abolition may well be needed. Some of the boards in the list today were the weak boards then being discussed. Have the Opposition now changed their mind? The Opposition look as if they are going to the stake to defend all the boards and their practices. That, to use the right hon. Gentleman's words, seems to be crude and doctrinaire.
Mr. Walker: The hon. Gentleman takes a keen interest in these matters and I recognise his knowledge. However, his memory may be a little vague about the 1981 debate. I do not recall that either my colleague or I, speaking from the Dispatch Box, agreed to the abolition of any boards. We both recognised that there may be a case for changes as time went on in the light of changing circumstances and the needs of the industry. Of course, there may be a case for looking at the scope for mergers. We made the point that that was already possible and taking place under the legislation as it stood. However, those legislative arrangements provided for that to be done after consultation with the MSC. The Minister has now taken powers to disregard completely the views of the MSC and ride roughshod over them. That is one of the essential differences between the Opposition and the Government. That is why I am entitled to refer to the crude, doctrinaire approach of the Government. Instead of moving carefully, in full consultation with those who will be affected, the Secretary of State has arrogantly taken the powers to disregard everybody and consult nobody.
The Under-Secretary of State for Employment (Mr. Peter Morrison: Does the right hon. Gentleman agree that in all cases we have consulted the MSC? In some cases, we may not agree with it, but to say that we have not consulted is not correct.
Mr. Walker: The hon. Gentleman's consultations put me in mind of the rapist who holds a knife at the damsel's throat and says that he is consulting her and telling her what he will do. The hon. Gentleman may seem a most unlikely rapist, but, in essence, his approach is "Lie back and enjoy it".
I return to the notes that were supplied by the Under-Secretary and consider first what is proposed for the knitting, lace and net industry. The employers have joined
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to form the Knitting and Lace Industries Training Resources Agency, called for short by the acronym KLITRA. It sounds faintly obscene, but that is by the way.
In 1981 that ITB had within its scope 1,471 establishments and 132,000 people. To achieve effective monitoring the new organisation, KLITRA, must, in the view of the Under-Secretary, have two training specialists supported by secretarial and administrative staff. In its document setting out its training objectives, KLITRA says:
"The monitoring of training recommendations and guides etc. at individual company level is seen as unnecessary, and in any event only capable of achievement at totally disproportionate cost."
Apparently, that virtually total negation of monitoring is "satisfactory progress" to the Under-Secretary.
The air transport and travel ITB has within its scope 128,600 employers and 439 companies. The new successor body for the travel industry will have a staff of 13, including nine training specialists. The air transport industry's new body will have a total staff of about six, including four training specialists. I assume that the word "specialist" is here used to show that the other staff know little or nothing about training.
The carpet industry ITB currently has within its scope 140 companies and 30,000 employees. Under the new arrangements there will be not nine, not six, not three, but one full-time training officer. Does the Under-Secretary consider that to be satisfactory? My latest information is that the carpet industry—no doubt in response to representations made by the Under-Secretary—has improved on that. In addition to the one full-time training officer, I understand that it will also have a part-time training officer.
Dr. Shirley Summerskill: Will my right hon. Friend bear in mind that all the unions involved in the carpet industry have said that they will not support the voluntary scheme? They regard it as wholly inadequate and unacceptable. There is little future for a voluntary scheme that none of the unions will support.
Mr. Walker: In the notes supplied by the Under-Secretary one sees frequent references to the establishment of new tripartite bodies. In this context, we have assumed that the word "tripartite" means the employers, the unions and educational interests. Yet, I understand that nowhere have trade unions agreed to participate. Indeed, in many cases they have not been asked to. We need to bear that in mind when we hear the Under-Secretary refer to "tripartite" arrangements.
In its most recent annual report, the carpet ITB says that voluntarism will almost certainly fail for the lack of financial support and commitment in the majority of companies. What the House has just heard seems to be swiftly proving it right, since the industry's commitment to training runs to only one full-time training officer.
The chemical and allied products ITB has within its scope 438,000 employees, 1,322 employers and 3,172 establishments. The information supplied by the Department does not give the numbers of staff under the new scheme. All that we have is a statement about the establishment of a series of councils and committees. We need to know what staff it will have to fulfil the objectives laid down by the former Secretary of State. What resources and staff it will have is presumably known at this stage only to the chemical industry employers who will be

627
participating in the new arrangements, and perhaps the Minister. If the Minister knows, he should tell us today, otherwise we must assume that the mere formation of councils and committees represents "satisfactory progress" for the Government.
Mr. John Golding: Is it not important that the Minister of State should tell us now? This debate is about details, and if we are not satisfied on them we must oppose them in debate. Surely it is incumbent on the Minister of State to tell us the detail of the alternative arrangements. We should not wait for the Under-Secretary at the end of the debate.
Mr. Walker: I hope that the Minister of State will respond to my hon. Friend, who speaks with all his authority as the Chairman of the Select Committee on Employment, which is currently preparing a report on those important matters.
In the light of what the Secretary of State and the Under-Secretary said in evidence and what is in the notes, the Select Committee might believe that it has been misled and perhaps not been put fully in the picture. It is incumbent on Ministers, as it is on witnesses in court, to provide not merely the truth, but the whole truth. Apparently we have not heard the whole truth.
Let us consider the footwear and leather training board. I promise not to mention the entire list, but we must consider some of the industries. That industry's training board covers 88,000 employees spread throughout 1,481 firms. The information provided by the Department describes nothing more than the formation of committees. No mention is made of any person being employed specifically to monitor training or to provide guidance and advice. The Department's note says nothing about arrangements for leather goods manufacture, footwear repair, surgical footwear, fellmongering or the hide, skin and fur trade which together account for more than a quarter of the employees within the scope of the board. The notes are silent on that. The people in the industries want to know what the new training arrangements will be.
It is no wonder that that training board has expressed doubts about a willingness to establish and maintain voluntary training at an effective level. The board's annual report states:
"Such voluntary arrangements will only satisfy a small proportion of firms and cause damaging reductions in the amount and quantity of training throughout the leather, footwear and fur skin industries."
That board includes among its membership people who are involved in and are knowledgeable about training.
In 1981 the wool, jute and flax training board represented 881 establishments employing 67,000 people. Last year the board employed 35 training staff. Under the new arrangements there will be only three training staff in the wool industry and apparently none in the other two industries. What provisions will there be, if any, for the monitoring of training, the identification of skill shortages and the setting of standards in the industries within the scope of that board, particularly in the jute industry, which is substantial in eastern Scotland?
The notes say that the new committee on wool textiles is tripartite. I understand that the unions challenge that. On the voluntary aspects of the proposals the training board for that industry states:
"There is a definite need for statutory arrangements to ensure adequate attention to training in industry. Prior to 1964, all the experience of voluntary initiatives indicated that these were
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insufficient to be effective, and there is no subsequent reason to suppose that any fundamental changes have taken place to alter the lessons of that experience."
The frequency with which that view is expressed shows that people involved in training are convinced that the Government are the only people who have not learnt the lesson of the pre 1964 period.
Mr. John Townend: The right hon. Member has commented at length on the views of the various training boards, but we have heard little from him about the views of the industries themselves. Does he accept that the training boards have a vested interest and that some of the business men disagree with him emphatically and have campaigned for the boards to be abolished?
Mr. Walker: Board members are nominated by the employers, trade unions and education interests. I am expressing the boards' views. The boards comprise those who are most knowledgeable and interested in the manpower needs of the various industries.
Mr. Bill Walker: The right hon. Member has an extensive knowledge of the boards' construction. Does he agree that companies that carry out the bulk of their own training are rarely represented on the boards?
Mr. Walker: To answer that I should have to analyse the composition of each of the boards. If the hon. Member for Perth and East. Perthshire (Mr. Walker) has done that I accept his word, but I remind him that after the passage of the 1981 Act only employer representatives have a vote. Board members are nominated by the industry. If the hon. Gentleman suggests that large employers involved in training dissent from the boards' views they must be missing their opportunity to ensure that their voices are heard.
Mr. Philip Holland: Surely members of each board are appointed by a Minister from a list, perhaps prepared by industry. The Minister says who shall be a member of a board.
Mr. Walker: Technically, the Minister appoints the members. In practice the Minister selects from names submitted to him.
Mr. Golding: Never.
Mr. Walker: My hon. Friend may say that, but he knows that it would be serious if a Minister told employers, the TUC or educationists that he knows better about who should; it on the boards.
Does the Minister expect the House and those involved in training to believe that the forming of committees and councils, with a minimum of resources and staff, and in some cases with no staff or resources, provides a satisfactory and acceptable alternative? Does he ask the House to accept that they match the criteria for voluntary arrangements with which the Secretary of State sought to reassure the Select Committee when he said:
"the objective of any voluntary arrangement would obviously include monitoring skill shortages and other training needs and arranging voluntary action to alleviate them, devising and keeping up to date and publicising training standards, working as appropriate with trade unions and educational institutions"
None of that can be done without the employment of skilled and trained people with adequate resources. Those

629
in the industries who have the expertise and experience are being made redundant wholesale by the Government policies.
A full statement and a debate on the White Paper "A New Training Initiative. A Programme for Action" are long overdue. Much of what the White Paper says about training for craft, technical and professional skills is relevant to today's debate. The MSC's document, with a similar title, recognises that the achievement of training objectives depends on adequate resources, including increased public support for training; on the development of adequate machinery, the need for statutory underpinning and greater emphasis on training standards.
The White Paper admits the need for increased expenditure on training. Paragraph 60 of the White Paper recognises clearly that employers are unlikely to carry out the training necessary to meet industry's manpower needs and the needs of the national economy unless financial coercion and incentives are provided.
The White Paper contemplates methods of doing so that go beyond anything that has been suggested by any Government. Paragraph 60 proposes a remissible training tax to be imposed on all employers or a system of training grants that will be financed out of general taxation. I do not criticise those proposals. They are worthy of serious consideration, but it is a clear recognition by the Government that statutory intervention in training is inescapable if we are to match up to the nation's manpower needs. Paragraph 60 contains a glaring contradiction in the ideology behind the orders.
Paragraph 60 marks a significant and welcome shift in the Government's position, which makes it all the more extraordinary that they should persist with such foolish orders, which were condemned in advance by the chairmen of 23 out of 24 boards. They wrote last year to the then Secretary of State saying that a reversion to voluntarism would be a retrograde step that would place their industries in the same unfortunate position as before 1964 and strongly urging the Government to reconsider the policy. In its corporate plan last year, the MSC said that it was exceedingly uneasy about the proposition.
The emerging problems in the industries where industrial training boards are being abolished reinforce my support for the view that the basic statutory framework for influencing training within industry has many important strengths relevant to all our priority objectives for training in the 1980s. The right approach is to build them up and not to cast them aside. Radical changes in the existing structure would cause massive disruption. Alternative structures must have clear advantages to justify risking a major hiatus in training effort in a decade when training will be very important. We have not been convinced of the reality of those advantages, nor was the review body of the MSC, which said in its report "Outlook on Training" dealing with this point:
"nor, it is clear, have the great majority of those who submitted evidence to us."
The only purpose of the orders is to placate the mindless, unthinking quango-hunters and to persuade industry that the Government are doing something to alleviate its cost burdens. If the Government are sincere in that intention, there are less damaging ways to help industry, such as providing energy at the same price as our European competitors. Of course, training costs money,
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but in the long run it will cost us much more if we have not trained. Money invested in the acquisition of skill and technical learning is as essential an investment as any that an employer can make. However, under the Government's policy, an irresponsible employer can once again steal his competitors' investment.
The orders are 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 to our young people, and to win through against the challenges of international competition and advanced technology. For that reason, I ask the House to oppose the orders and urge my right hon. and hon. Friends to vote against them tonight.
4.43 pm
The Minister of State, Department of Employment (Mr. Michael Alison): The right hon. Member for Doncaster (Mr. Walker) has made a substantial and trenchant speech of criticism and observation on the orders. It is a pity that such a substantial speech was not matched by substantial numbers of Labour Back-Benchers listening to him.
As well as making many generalised comments and criticisms, the right hon. Gentleman asked many questions. The hon. Member for Newcastle-under-Lyme (Mr. Golding) was anxious that I should not palm off those technical questions on my hon. Friend the Under-Secretary of State. I shall try to answer some questions, but it would be of greater benefit to the House if my hon. Friend answered the others when we have had a chance to research them adequately this afternoon.
Before explaining why I hope that the prayer against the statutory instruments will be rejected, I should say why we are today debating as many as nine of them. My right hon. Friend the Secretary of State announced in the House on 16 November last year that he had decided in principle that 16 of the present 23 statutory industrial training boards should be wound up, and that the scope of three of the seven continuing boards should be reduced. The Government decided that it would be sensible to table the orders needed to give effect to those decisions in two batches. The nine statutory instruments to be debated today, the first batch, were laid before Parliament on 14 May. The orders to wind up the other eight industrial training boards covered by my right hon. Friend's announcement were laid before Parliament last Friday, 11 June. There remain four orders to change the scope of continuing boards, one of which will put into effect a minor change in the scope of the clothing ITB which was not announced last November. Those orders will be laid as soon as possible.
Statutory industrial training boards were originally set up in the 1960s following the passage of the Industrial Training Act 1964—incidentally, a Conservative measure. A total of 27 boards were set up at the time. The first major reform of the training boards took place following the passage of the Employment and Training Act 1973, the main purpose of which, for the boards, was to exempt from levy firms whose training was judged to be adequate. I mention those facts, not as a matter of history but simply to demonstrate the Conservative Government's close involvement in and concern for industrial training. Our review of training boards, the results of which were

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announced by my right hon. Friend last November, carries forward our reforming approach to training matters. It is of a piece, for example, with the new training initiative.
It was flattering to hear the right hon. Member for Doncaster paying tribute to the 1964 Act, but it is a pity that he wishes to stick unwaveringly with it after nearly two decades and to maintain the status quo. It serves to show the unnecessary conservatism of the Labour Party in contrast with the flexible progressiveness of the Conservative Party.
When the Government came to power in 1979, we were committed to a review of the role of the industrial training boards—that was clearly consistent with our approach in the 1960s and the 1970s—but we found that officials had beaten us to it, in that the Manpower Services Commission had already set in hand a major review of the working of the legislation. The results of that review were published by the commission in July 1980 under the title "Outlook on Training". Many suggestions were made for amending the legislation, some of which were put into effect in the Employment and Training Act 1981.
That review recommended that there should be an examination of the scope of existing training boards and of the boundary between industries in scope and those not in scope to boards, and that that should be done in full consultation wish both sides of industry. The Government welcomed that recommendation, and invited the MSC to undertake a review of future training arrangements in each sector of the economy and to report by June or July 1981. At the time my right hon. Friend the then Secretary of State expressed a strong preference for voluntary as opposed to statutory training arrangements.
Mr. Harold Walker: Will the Minister urge the House to consider what is contained in "Outlook on Training", especially chapter 8 which states:
"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 cast them aside."
That is the opposite of what the Government are doing. The Minister has a duty to give the House the whole truth and not just a part of it.
It concludes:
"Radical changes in the existing structure would involve massive disruption. Any new bodies would take time to win credibility and influence. There would inevitably be teething problems and mistakes due to inexperience."
This shows that the review body supported and identified with the existing statutory structures and did not, as the right hon. Gentleman is trying to mislead the House, take an entirely different view.
Mr. Alison: I shall have to skim quickly through the rest of my speech to see whether I quote any other MSC documents. If the right hon. Gentleman is going to read out long extracts from every MSC document that I quote, we will be here until kingdom come. He will recognise two points in response to the particular criticism that he made of my reference to "Outlook on Training." First, we are not sweeping all industrial training boards away. The principle of ITBs remains valid and acceptable. Secondly, some new construction is best done on the basis of previous demolition. That is a well-established principle.
Mr. Richard Needham: Far be it from me to quote "Outlook on Training", but chapter 4, page 16 states:
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"(d) However, current training arrangements have made little advance in securing fundamental reforms of training.

(e) The difficulties which they experience in dealing with small firms are evident to some extent in the area of quality as well as that of quantity.

(f) Firms are unhappy with the bureaucracy which remains in levy exemption and with what they perceive as excessive MSC influence on ITBs.

(g) The discrepancy between the national sector focus of MSC and ITBs and the local, focus of the education service creates problems for relationships.

(h) The education service and ITBs feel that they have insufficient influence or national training policy.

(i) The relationship between MSC and ITBs has involved unproductive tension and frustration, particularly as a result of the system of MSC funding of ITBs' operating costs."

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Quotations should be kept short. A great number of Members wish to catch my eye.
Mr. Alison: That was an extremely effective piece of offshore shelling on a naval vessel engaged in an assault on the change that we seek to make. I am much obliged to my hon. Friend. for that support.
The review recommended that there should be an examination of the scope of the existing training boards and of the boundary between industries in scope and those not in scope to boards, and that this should be done in full consultation. The Government welcomed that recommendation and invited the MSC to undertake a review of future training arrangements in each sector, with preference emphatically laid on voluntary as opposed to statutory arrangements.
The review was duly carried out and the results published in July last year in the document "Framework for the Future", in which the MSC recommended specifically that seven of the 23 ITBs should be retained. As to the 16 other boards, the MSC stated that it was not in a position to come to any firm conclusions about training arrangements for the future, but that employer organisations in the industries concerned should be invited to develop their proposals for voluntary training arrangements.
Without wishing to be unduly critical of the MSC—indeed, it tackled the formidable task of the sector-by-sector review with exemplary thoroughness—its conclusions were perhaps inevitably what might have been expected from a tripartite body—an uneasy compromise based on a recommendation that difficult decisions should be deferred.
In responding to the MSC's document, the then Secretary of State said:
"I shall need to study the report carefully, and to consider representations from those concerned. However, it is now very important to end uncertainty, and to announce decisions as soon as is consistent with giving proper consideration to the issues involved. Those who wish to express views on the report, or to put forward or develop proposals for alternative training arrangements, are requested to do so during September to me and the commission, so that I can be in a position to announce decisions early in the new session".—[Official Report, 30 July 1981; Vol. 9, c. 481.]
I should perhaps explain to the House why the Government were anxious to announce decisions about the future of industrial training boards as quickly as possible.Their future had by this stage already been uncertain for over two years. This had not only had unhappy effects on the morale of boards and their staff—to use the words of "Framework for the Future"—but, not to exaggerate too

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much, the training world was afflicted with something like planning blight. The MSC had made much of the point that decisions on ITBs should not be taken until the way ahead on the new training initiative seemed clearer. I would emphasise the complementary case—that the new training initiative could only be given a fair wind as and when the future of the boards was known.
Mr. Jim Craigen: Does the Minister agree that in large measure the Government contributed to the uncertainty because they had already taken the powers under the Employment and Training Act 1981 which gave them in effect the blank cheque they required?
Mr. Alison: As I explained earlier, when we came to office in 1979 there were already the rumblings of a review going on in the MSC. Therefore, the roots of this matter go back further in time.
"Framework for the Future" rightly laid great emphasis on boards being replaced by adequate alternative non-statutory training arrangements, and the Government fully share that view. That is why the Government embarked on an intensive period of consultation last autumn, with the emphasis on the voluntary arrangements that might replace statutory boards. My hon. Friend the Under-Secretary met the chairman and other members of every individual ITB and had a very large number of meetings with employer and other organisations. Whatever else he could be accused of, lack of assiduity in consultation certainly could not be one of them. It was against that background that my right hon. Friend the Secretary of State announced his decisions on 16 November.
Our guiding principle in reaching decisions was that, where employers proposed to set up alternative training arrangements which the Government considered to be adequate, the sector concerned could be released from the scope of a statutory board. Here we had very much in mind the advantages of the voluntary system as set out succinctly by the MSC in "Framework for the Future":
"gains in flexibility, reduced costs and administrative simplicity from dismantling the apparatus of levy, exemption and grant payments and leaving a wider discretion to individual companies and their organisations".
Where employers wanted the statutory system to continue or where they were unable to come forward with adequate alternative arrangements, then the Government take the view that training boards should continue. That is why such boards are to continue for the engineering, construction, road transport, clothing, plastics, offshore petroleum and hotel and catering industries.
I ought to remind the House that, if our proposals go through, about 61/2 million employees—about 30 per cent. of the relevant work force—will still be covered by statutory boards, as against 11 million, or 50 per cent., at present. Therefore, it is not all that draconian. Sixteen of the 23 boards are going, but by and large they are the smaller boards.
I ought also to tell the House what characteristics we are looking for in the alternative arrangements that employer organisations proposed to us and are now actively engaged in setting up. Above all we are not seeking to impose any rigid institutional framework on industry. Training needs vary greatly from industry to industry, depending on various factors such as the degree
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of skill required of the work force. An obvious example is the differing training needs of the airlines and the bus industry. Another factor is the degree of transferability of skills. In some industries—the textile industries are a good example—many skills are unique to the industry; indeed sometimes skills are unique to individual firms which use particular processes or methods of work.
Another factor is the economic health of the industry. One which is declining and has a diminishing work force—again, the textile industries are unfortunately a good example—will have fewer training needs than one which is expanding or stable, such as the travel industry. In this context, one of the faults of the statutory system is that the necessarily rather rigid framework of the legislation can impose too artificial a degree of conformity.
The Government have been anxious to avoid insisting on one simple model for non-statutory training organisations. In our discussions with employers and others we have suggested, first, that they should set up adequate machinery to monitor the quantity of training that is being carried on so as to guard against skill shortages, though the sophistication of the machinery can vary from industry to industry.
We have suggesed also that organisations should check that standards or quality of training are being maintained and keep those standards up to date to meet changing needs. In every case the arrangements should have the active support of their industries and should be appropriately financed and staffed in order to meet their objectives. We do not necessarily expect finance and staff to conform to any rigid formula. The references of the right hon. Member for Doncaster to changes in the numbers likely to be engaged in these operations were rather wide of the mark. We hope that the bureaucratic dimension will contract. The right hon. Gentleman knows that many of the staff employed by the former training boards were engaged directly not in training but in the administrative and bureaucratic function of levy collection and distribution. If we manage to reduce the bureaucracy, we hope automatically to reduce some of the manpower resources.
Dr. Hampson: I endorse my right hon. Friend's last comment. May I urge upon him the extra principle of even-handedness in dealing with the companies in scope to the statutory boards which are to be retained and with those that are just outside? My right hon. Friend and I both have connections with the clothing industry. I hope that he will recognise that the notoriously named KLITRA is so under-funded, regardless of its ambitious objectives, that there are clothing companies that feel that competitors under KLITRA's auspices will have a considerable competitive advantage. The companies that are within the statutory boards will still be levied whereas KLITRA will be asking for very much less.
Mr. Alison: I shall have something to say about KLITRA at a later stage.
We are looking to training organisations to involve trade union interests. The exact form of involvement will vary from industry to industry, often depending on the pattern of collective bargaining, and this seems to me sensible. I have no doubt that this is a subject which will be raised by hon. Members following the lead given by the right hon. Member for Doncaster in his reference to the

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trade union involvement. I expect that my hon. Friend the Under-Secretary of State will be able to introduce more information about individual examples when he replies on behalf of the Government.
Given the key role that the education service plays in our training system, we are expecting that it will be actively involved. Indeed, I am happy to be able to tell the House that the majority of the new training organisations will be involving educationists directly in their work.
Finally, we want to be sure that the new non-statutory training organisations will be able to play their part in implementing the objectives of the new training initiative. We have been encouraged by the extent to which employer organisations have been telling us that they are fully committed to helping in this vital area.
As I have already said, the plans which were put to us during the period of consultation last year formed the basis for the decisions announced by my right hon. Friend last November. But the House will recall that he made it clear that the orders to wind up training boards would not be laid until he was satisfied with the progress being made in setting up alternative arrangements, and that he was looking to the MSC to take matters forward.
Before I go on to tell the House about what has been happening in the months since my right hon. Friend's announcement last November, I shall say a brief word about the financial arrangements made for winding up training boards.
The House will know that under the 1964 legislation, boards met their own operating costs out of levy income. For reasons which need not detain the House at present, the 1973 Act transferred responsibility for boards' operating costs to the Manpower Services Commission and, therefore, indirectly, to the Exchequer. I think it is common ground between the Government and the Opposition Front Bench that this change has proved to be less than wholly satisfactory, and the Employment and Training Act 1981 gave the Government power to transfer the responsibility for operating costs back to the boards.
The Government have decided that Exchequer support for operating costs should cease at the end of 1981, but, following representations from industry, this deadline was extended to the end of March 1982. However, in the case of boards that are being wound up, we felt it right that residual operating costs and the net cost of winding up should be met by the Exchequer. This was because industry was being expected to meet the cost of setting up new non-statutory arrangements, and we felt that it would give these arrangements a better start if employers were not also having to meet the costs of winding up the outgoing boards. Of course, the boards that are being wound up have assets of their own, and these are being used to meet winding up costs, but where these assets are insufficient, as is the case with most of them, the balance is being met by the Exchequer. We have set aside a total of £30 million for this purpose, £8 million of which will come into charge in the 1981–82 financial year and the remainder in the current year, though the final cost to the Exchequer may be somewhat less than this.
The same principle is being applied in the case of boards, such as the road transport ITB, whose scope is being reduced as a result of the decisions announced last year. The assets attributable to the sectors being taken out of scope are being used to meet the costs of the scope reduction, with any net deficit being met by the Exchequer.
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I shall tell the House what has been happening since my right hon. Friend 's announcement last November. Two processes have been going on in parallel. First, the boards, in close co-operation with officials of the Manpower Services Commission, have been making arrangements to wind up their activities with all reasonable speed consistent with discharging their commitments and with the progress being made to set up alternative arrangements. At this point I should like to pay tribute to the staff of the boards, particularly over the last few very difficult months.
No Government relish making decisions that will result in people being made redundant, particularly at a time of high unemployment, but we have been impressed with the way in which most board staff have accepted the Government's decision with good grace and have gone about the unpleasant task of winding up their board's affairs with the same professionalism that they showed in more normal times.
At the same time as the boards have been reducing their activities and winding themselves up in an orderly manner, discussions have continued with employer organisations and other bodies on the establishment of successor arrangements. In accordance with the Government's wishes, the lead has been taken by MSC officials, but my hon. Friend the Under-Secretary has been very active in these discussions, in making employers well aware of what we are seeking and pointing our areas where improvements are necessary. Anyone who has been at the receiving end of my hon. Friend's activities will know that he carries a good deal of persuasion. We are confident that, in the industries covered by the boards whose orders we are debating today and those whose orders were laid before Parliament last Friday for later debate, overall the arrangements that are now being set up are satisfactory.
Some criticism has been levelled at the allegedly pernicious fragmentation of training arrangements that has taken place, on the grounds, for example, that 16 statutory boards are being replaced by over a 100 non-statutory training arrangements. My view is that this should be welcomed.
When the boards were being set up, the Government of the day clearly faced dilemmas of grouping: should there be a very large number of small boards, or a smaller number of large boards? There are potential inefficiencies in having many small separate organisations, yet there are disadvantages in grouping together disparate industries with different training needs. In many respects the present pattern of training boards is an uneasy compromise between the two extremes, and some boards represent what can only be described as unhappy marriages, or in some cases uneasy partnerships, between industries that do not have a great deal in common. For example, I doubt whether anyone would pretend that the dairy products and whisky industries or the glass and quarrying industries have a great deal in common, yet both pairs found themselves covered by the same training boards. The winding up of these boards, and the ending of the rigidities which they imposed, have resulted in most industries wishing to consider their own training needs with a fresh eye and a fresh look. This is to everyone's advantage. I am wholly in favour of this, and firmly believe that it is one of the major benefits of the present exercise.
I shall refer briefly to one or two of the alternative training arrangements that are being set up. I do so in an

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attempt to respond to the request of the hon. Member for Newcastle-under-Lyme (Mr. Golding) that I take up certain of his right hon. Friend's remarks.
In the aviation industry, for example, United Kingdom carriers, who employ nearly 70 per cent. of the employees covered by the statutory air transport and travel ITB, are setting up a new organisation known as the air transport industry training board. This will operate as a limited company and be financed by a per capita levy from the industry. The board will be a tripartite body fully representative of the United Kingdom carriers, general aviation and airports, with the exception of local authority airports, which are to have their own training arrangements.
The objectives of the board will be to represent the industry's views on manpower and training, identify training needs, and initiate and monitor appropriate arrangements to meet them, undertake training development, provide an advisory service and assist the industry to meet the objectives of the new training initiative.
The industry is firmly committed to the new board both financially and in its willingness to accept responsibility for training. Consultations with the unions have taken place, and seats on the board are available for the unions as soon as they wish to take them up.
The board is financed by a levy of £2 to £3 per employee—although small firms with fewer than 16 staff are excluded—which will produce an annual income of about £200,000. Initially six staff, including four training specialists, are to be employed, but further staff will be employed as and when need arises. It seems to me that this organisation should be well equipped to supervise training arrangements in a vitally important industry.
With one very small exception, all the industries at present covered by the knitting, lace and net ITB, to come to another mentioned by the right hon. Member for Doncaster, have combined to form a new training organisation that will replace the statutory board. This body, the Knitting and Lace Industries Training Resources Agency, is an independent limited company funded by a voluntary levy raised by the sponsoring employer organisations. There will be a national training committee, with five employer, six trade union and three educational representatives together with a chairman and vice-chairman from the agency's council of management. There will also be representatives from a network of three sector and eight local training committees, also tripartite in structure.
The objectives in this case are again to identify training needs and encourage training to meet those needs—with particular emphasis on new technology—to develop schemes of vocational preparation for young people, to improve the quality of training and to encourage the formation of more training groups.
Firms employing over three quarters of employees in the industries concerned have already paid their £1 per head levy to finance the new agency. It is unfortunate that so far the trade unions involved have refused to co-operate. I hope that in due course they will change their minds.
Finally, I should like to tell the House what is proposed in the larger part of the present scope of the chemical and allied products ITB. These are the arrangements proposed jointly by the Chemical Industries Association and the Association of British Pharmaceutical Industry. These two
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associations are setting up a two-tier system—a federal training body and increased training resources at the level of the individual associations.
The federal body, known as the chemical and allied industries training review council, will keep under review training activities in the two industries. It will do this bearing in mind the objectives of the industries, which include identifying training needs and taking action to meet them, maintaining and improving the quality of training, ensuring the availability of expert advice and the establishment or continuation of group training schemes. The council will consist of nominees from the two main employer organisations together with representatives of unions and the education sector—tripartite, in other words.
The main resources of the training review council will be provided by the participation and commitment of the constituent associations, which are committed to providing the funding necessary for the council. Within the two main constituent associations the Association of British Pharmaceutical Industry is taking steps to reinforce its already significant training activities, which include a long-established training and education committee. A further senior appointment is being made to the association's training staff. The Chemical Industries Association is establishing a new specialist training department initially with three full-time training specialists backed by support staff.
Before concluding, I should like to turn to the content of the orders that we are debating today. Hon. Members will have noticed that the eight orders, winding up the air transport and travel, carpet, chemical and allied products, footwear leather and fur skin, iron and steel, knitting lace and net, man-made fibres producing and wool, jute and flax industry training boards follow a common format apart from the names of the individual boards.
The preamble refers to the consultations required under the legislation before an industrial training order can be made. The consultations in the case of all these orders took place as part of the Manpower Services Commission's sector-by-sector review, published as part of "Framework for the Future".
Article 1 of the orders specifies two dates for the coming into operation of the orders. The later date in each case is the date on which the board concerned will cease to exist. The earlier date, as is explained in article 2 of the orders, is the date on which the board is to cease to carry out its functions, except for activities related to the winding up of the board.
Mr. Golding: What point is the Minister making about the MSC review?
Mr. Alison: Simply that this is the format of the consultation process that is required by the statute before we can introduce the orders.
Mr. Golding: What notice has the Minister taken of the ceramics board?
Mr. Alison: We have decided to overrule the ceramics board's recommendation. It is the only one.
The remainder of article 2 requires a board to discharge its liabilities so far as is practicable before winding up and to present a final report on its activities to the Secretary of State, who shall
"lay a copy of the report before Parliament."

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Article 3 provides for the winding up of the board, while article 4 states that all outstanding property, assets and liabilities of the board shall be transferred on revocation to the Manpower Services Commission. Under article 2(4), all the remaining assets of the boards are to be applied by the commission to encourage training for employment. As I have already explained, the assets of the boards will initially be applied to meet the winding up costs.
The right hon. Member for Doncaster made one or two references to the handling of assets. I have taken note of those, and my hon. Friend will no doubt throw further light on this in his reply.
However, assets of particular value to training, such as training books, materials or equipment are being made available free of charge to support future training and will be passed on by the MSC to training organisations.
The order to change the scope of the road transport board is different, and reflects the decision announced last November by my right hon. Friend to remove from the scope of the board road passenger transport, agricultural machinery, warehousing, security transport and driving schools. The order revokes the present industrial training order for this board, and sets out the new scope.
Finally I should like to express the Government's confidence that the winding up of these boards will not have adverse effects on training in the industries concerned. Indeed, we are confident that training, under arrangements that are backed by, and have the confidence of, the industries concerned, will be more soundly based than in the past.
I do not wish to criticise in any way the boards that are being wound up by these orders. Many have done a great deal of useful work. Others could perhaps be judged to be the victims of their own success—having brought about a once-for-all and greatly needed change in attitudes, they have now outlived their useful life because they have achieved what they set out to do. In most cases they have dedicated and professional staff who have greatly helped their industries. These boards have in common the fact that employers now feel that they would rather be without them—I am not talking just about small employers but firms led by people whose views must be taken very seriously by all of us who have any interest in this subject. When boards can no longer command the confidence of those they exist to serve, there can be little to be said for their continued existence. Instead, we have a set of varied training arrangements, all of which have the confidence of the industries that they will cover, and which we are confident will be better suited to meet industry's training needs. This is a great gain.
We have demonstrated our flexibility in this matter. Where statutory boards are still needed we have kept them. Indeed, we shall do everything in our power to ensure that they succeed. It is therefore my earnest hope that the House will reject the prayer against these orders.
5.20 pm
Miss Joan Lestor: The Minister was asked about private firms that are not involved in industrial training boards, and about their views. One of the tragedies in my constituency, which contains one of the largest trading estates in the country, is that many of the firms that provided their own form of training for apprentices have drastically cut back that provision. Indeed, many of the best have closed down. Therefore,
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some training facilities that existed, irrespective of industrial training boards, no longer exist. That should be borne in mind when discussing the future of the industrial training boards.
I shall deal specifically with the problem facing women. One of the worries in part of my constituency is the lack of any long-term guarantee of alternative methods that might be set up. Moreover, the trade union movement is not, by and large, happy with the alternative arrangements. I shall refer to the industries that affect the interests of women. More than 40 per cent. of the work force that are affected by four of the six training boards that we are discussing are female. Nowhere did that fact appear in the Minister's speech. The industries are carpeting, footwear, knitting wool and lace.
Sixty-seven per cent. of the workers in the knitting and related industries are women. The abolition of the chemical industry training board will affect the prospects of 118,000 women. To be persuaded to accept the Government's proposal I should have to be convinced—I am not—that the alternative proposals in each of those industries will be more than adequate to meet the needs of women who work there. Women employed there, as is often the case elsewhere, tend to be semi-skilled or unskilled. Opportunities for training for women and girls have always been inadequate, and even those opportunities are being removed by the abolition of the training boards. I have examined the alternative arrangements to see whether they improve women's opportunities. They have never been adequate and show no sign of improving.
In the industries that I have mentioned—carpeting, footwear, knitting wool and lace—there was always a tremendous need to update training and retraining under the industrial training board schemes. The argument that that training has outlived its usefulness or that the time has come to replace it cannot be sustained. The abolition of some of the training boards means the abolition of perhaps the only access of women in the industries concerned to training and retraining. That is especially so with regard to semi-skilled jobs.
We all know that day release for girls and young women has been minimal in many industries. It has been far from adequate for young men. It has been minimal for girls and young women for a variety of reasons, including conditioning, education and traditional attitudes of employers to young girls who have not been encouraged to continue their education. That aspect does not seem to have been taken into account in the proposals. Indeed, they will enhance the conditioning process that I have tried to persuade girls to abandon. I have urged them to seize every opportunity for training and retraining, to be skilled and gain skill in their various occupations.
The industrial training boards have not outlived their usefulness—they have always been inadequate for women. The proposed changes mean that many young women and girls will continue to be segregated into low-paid, less attractive and unskilled jobs, despite the contribution that we all know that women make to the economy. They often constitute as much as 60 per cent. of the work force in an industry. Despite the advances of the Labour Government's sex discrimination and equal pay legislation, we have not witnessed the improvements in training opportunities for young women and girls for which we had hoped. We know that the Government resist

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change in the matter. It is often found that legislation, once on the statute book, must be changed or its emphasis altered.
Taking into account what has happened to women in industry, the package that we are discussing is bad news for women and young girls. It offers them no opportunity to improve themselves or to take advantage of training opportunities to bring them up to a level whereby they can compete with men. Nor does it enable an industry that is characterised by female labour to be considered on a par with male-dominated industries in which wages tend to be much better. The carpets and printing training boards have made a special effort to improve opportunities for women. They have published guides and established courses that are specifically aimed at training women. Will it be demanded that such courses be contained in alternative arrangements? What consideration has been given to the specialised training that some boards were developing for women?
Training for women and opportunities for training for girls in British industry have been neither generous nor adequate. The alternative arrangements threaten to make them all but non-existent. The cuts in the training boards come at a time when women's participation on training opportunities schemes has been reduced by 7 per cent. Participation is now back to the pre-1979 level. The courses in which women have traditionally participated have been slashed, yet there has been no compensating expansion. Such factors must be taken into account when we discuss the abolition of training boards for women.
Ministers in the Department of Employment have placed emphasis, sometimes outspokenly, on the notion that the woman's place is in the home. There was such an instance during employment questions last week. Ministers have suggested that, at a time of recession and increasing unemployment—we all know that unemployment will continue to rise—women should take a backward step and leave jobs for the men. At least three Ministers have made that point explicitly. I understand that Ministers in the Department of Employment last week said that it would be helpful and useful if that were so. This must also be set beside cuts in child care and a host of other provisions.
Training is being severely curtailed in certain industries and the voluntary alternative arrangements, for which there is no long-term guarantee, are inadequate. Moreover, the work forced in some of those industries is dominated by females, who are traditionally less well paid than employees in many male-dominated industries. Training facilities have been inadequate in the past, but attempts have been made to improve and enhance them because of the difficulty caused to women. Now, once again, opportunities for women are being cut and women are being force to bear the full brunt of the Government's economies—false economies, in my view—to save yet further expenditure.
The proposals are very bad news for everyone, but in at least four of these industries they are particularly bad news for women, and represent a large step backwards. Given the female concentration in those industries, I am surprised that the Minister did not spare a little time to deal with the prospects that he envisages for women's training in the alternative arrangements. I have just returned from a conference at which this was discussed. Most women in
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the trade union movement believe that this is a backward step and that women and girls will be deprived of training, which was never adequate but which will now be largely non-existent.
5.32 pm
Mr. Philip Holland: The hon. Member for Eton and Slough (Miss Lestor) will not expect me to match her expertise in what is important for the employment of women. She referred, however, to the inadequacies of training for women, even under the training board schemes. Therefore, I wonder whether she is right in her diagnosis that they should be retained rather than trying to put something better in their place.
Miss Joan Lestor: Or something worse.
Mr. Holland: I actively supported the Industrial Training Act 1964 in the final year of my first term as a Member of this honourable House. In the same year that that Act reached the statute book, there was a general election and I lost my seat—and it serves me right.
That was not, however, the end of the story. On losing my seat, I obtained employment as a personnel manager with a large electronics company and had the mortifying experience of having to implement the provisions of the Act and to fulfil the requirements of the relevant industrial training board. I soon found that that process added nothing to the amount or quality of the training that a company had carried on for years in its own interests. It meant, however, taking a number of previously usefully employed people from more productive work to complete lengthy, comprehensive and highly detailed statistical forms.
The result was not a catalogue of all the training that we were doing, which might have had some value for the company archives. More accurately, it was a catalogue of those training activities best calculated to minimise the impact of the board's levy and to attract a balancing grant. Our schemes were far in advance of the training board's requirements, but in order to bear as little as possible of the cost of subsidising its headquarters and growing number of staff we had to increase our expenditure on the production and maintenance of statistical data and the man-hours required to do that, without adding a single item to our training. Thus I learnt that the result of my former, well-intentioned endeavours had been to create bureaucratic bodies with great empire-building potential at the expense of industry. Later, of course, it was at the expense of the taxpayer as well, as my right hon. Friend the Minister of State made clear in opening the debate.
It is a source of some regret to me that the engineering industry training board, of which I had experience from the moment of its birth, is not included in the clutch of quangos whose demise is foreshadowed in the orders. Nevertheless, my experience with that board was a mirror image of the experience of many other companies in other industries. During the past five years of my not entirely successful efforts to stimulate a quango cull, I have received many accounts of employers' experiences with industrial training boards.
A small chemical company situated in the docks area of a provincial city was compelled for a long time, as a result of its location, to suffer the ministrations of the shipbuilding industry training board, which was also the subject of a recent statutory instrument. The board had no

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connection with and no knowledge of, or interest in, the company's activities. The financial burden was significant and the absorption of time and the interference with production was disastrous—and all this at a time when the company's traditional markets were dwindling to nothing and it was exerting all its efforts to survive by securing new markets. Eventually, as the managing director explained to me, the company managed to escape from that board and was then administered by the chemical and allied products industrial training board, which is the subject of one of the orders before us. That board was good enough virtually to ignore the company, except to send regular glossy brochures about its own achievements to justify the levy that it exacted.
The chemical and allied products industrial training board also assumed responsibility for a company providing a pest control service because it used chemicals to control pests. As one of the directors pointed out, the company used chemicals much as the housewife uses chemicals for washing up and cleaning the house. In no way was it part of the chemical industry. Yet it had to submit training returns to that board. Incidentally, the same company also came under the auspices of, and had to submit returns to, the furniture industry training board, which is the subject of another statutory instrument, because one of the pests with which it dealt was woodworm.
Mr. Golding: Did the firm appeal to the Manpower Services Commission and to the Minister in respect of that categorisation?
Mr. Holland: Although it dealt only with pest control, an area not specifically covered by any industrial training board, the company was the subject of attention from four different training boards. It repeatedly appealed against demands for levy and after three years managed to gain exemption from levy by the four boards. Nevertheless, it had to pay levies for three years. It did not fit into a specific slot, so it had to pay everybody.
I note that road passenger transport is to be excluded from the activities of the road transport industrial training board. Two years ago, the director of a passenger transport company gave me his experience of that board. The right hon. Member for Doncaster (Mr. Walker) is not the only person to receive letters on these matters. The director said:
"The Board staff did not appear to have been recruited from the Road Transport Industry and none of those I had contact with seemed to know much about the different types of Transport vehicle, the methods of operation or the commercial considerations involved."
He was referring, of course, to the passenger transport side of the industry. He continued:
"Whilst I and my employees were beavering away with our accumulated experience, the RTITB was hindering us with endless questions, reams of forms and then glossy books of trivia and unwelcome advice which over the years developed a terminology unintelligible to those who have spent a lifetime in the industry".
In other words, it developed a special kind of "industrial-training-board-speak." He went on to say:
"The last time I visited Capital House, the Road Transport Industrial Training Board headquarters in London, I was appalled to see the opulent glass tower with its Rolls and Jaguars parked underneath and the unhurried indifference of those insulated from the realities of responsibility."
I like that phrase. I commend it to the House—
"the unhurried indifference of those insulated from the realities of responsibility."
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That is typical of the criticisms that I received from a substantial number of employers about a variety of industrial training boards.
A common complaint about the officers of three industrial training boards—two of which, I am happy to say, are included in the list—has been their insistence that companies should produce details of an induction scheme to tell each new employee what he is in any case required to be told under the Contracts of Employment Act, but with the additional information of the location of the nearest toilet. The location of the nearest toilet apparently weighs heavily on the minds of industrial training board officers.
I have a substantial filing cupboard in my room, full of letters of complaint about the expensive and wasteful activities of industrial training boards. Many of them relate to the subject of these orders and to other orders that have been laid since tonight's orders were first laid before the House. The letters of complaint also refer to the industrial training boards that are to continue.
Although I welcome the orders, I make a special plea to Ministers to keep the remaining seven boards under constant scrutiny, with a view to reducing them in due course. I must declare an interest. Such action would go some way towards reducing my own correspondence work load. That must be of some advantage. The proposals certainly help in that respect.
Mr. Stan Crowther: If some examples of bureaucratic nonsene are to justify the complete destruction of the organisation concerned, can the hon. Gentleman think of a single Government Department that would survive in the circumstances?
Mr. Holland: There are vast areas of bureaucracy still in existence that I should like to see abolished.
The orders will help me a little. It is a small step forward but I hope that my right hon. and hon. Friends will accept that there is scope for yet more action and I hope that they will take it.
5.44 pm
Mr. James Tinn: I am particularly worried about the order that, if accepted, will abolish the chemical and allied products industry training board, because of the probable effect or, the supply, or rather the continuing shortage, of a particular category of highly skilled craftsmen.
Modern high technology industry is completely dependent on sophisticated control devices—instrumentation requiring skilled installation, maintenance and repair. This is particularly so for the petrochemical industry, where continuous and accurate monitoring and control of processes is essential. This monitoring and control is essential in almost every other modern manufacturing industry and plant, such as the steel complex in my constituency at Redcar.
Teesside being the centre of the largest petrochemical complex in Europe, if not the world, it was inevitable that we felt the shortage of skilled instrument artificers first, and worst. This was during the period when massive construction in oil, petrochemicals and steel on Teesside was taking place—a period in which no less than three quarters of the industrial capital investment in the country was going ahead on Teesside. Clearly the strain was

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particularly felt there, with contractors who lacked their own training facilities often poaching the craftsmen from the firms that did provide it.
The installation of modern plant involved a greatly increased demand for men skilled in the installation, testing and maintenance of the essential instrumentation. I can remember at that time the commissioning, or bringing on stream, of a massive new section of plant at Imperial Chemical Industries' Wilton works being delayed and jeopardised by the shortage of these skills, despite the fact that ICI has an excellent record of training its own craftsmen. Unfortunately, ICI would often lose them to those firms that failed to do so. They were poached from such firms as ICI with the attraction of high wages and allowances.
I stress that investment in such skills is as essential as investment in modern technology. One is completely frustrated and useless without the other.
This shortage of a particular skill when unemployment was already too high was not confined to Teesside, although it was certainly felt most acutely there. The shortage was, and still is, a national and, indeed, an international problem. Under the auspices of the Manpower Services Commission a study of present and future requirements showed how serious was the situation. It found that there were no training facilities for instrument artificers generally available anywhere in the country to all employers. The report recommended that four such training centres should be set up—the first to be at Teesside.
In contrast with what the hon. Member for Carlton (Mr. Holland) said—I presume his examples were highly selective instances of the behaviour of the chemical and allied products industry training board—I can give an example of its swift action. In this case, it identified the need and prescribed the solution and moved even more swiftly to provide a solution, for as long as it has been allowed to continue. The training centre at Skippers Lane industrial estate on Teesside was set up within 18 months of the decision being taken—ahead of time. That success was warmly praised by the chairman of the Manpower Services Commission who spoke in glowing terms in praising the training board for identifying this need and of its action in setting a standard which was an example to other training boards. Little did he, or any of us at the time, envisage that within less than three years the training board was to have its future called in question and threatened.
The phrase "unhurried indifference" was used in regard to the boards. It was far from unhurried indifference in the example I have mentioned. Speedy action was provided, but as a reward the board is to be abolished.
I concentrate now on the future of the centre itself. The Under-Secretary knows of my interest and we have had some discussions already. However, I first pay a well-deserved tribute to the manager, Mr. Cooke, and his staff on the board. Their work in constructing and installing much of the equipment in the centre accounted for the speed with which it was brought into action. It was largely due to his enthusiasm and that of his staff that the centre was opened ahead of time and has since established such an excellent reputation.
In recent months, however, since the announcement of the decision to abolish the training board, these men have spent an agonising time trying to save what must be
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regarded as a worthwhile venture into which they have put so much work and creative effort. Who can deny them their anger that all this might be thrown away at a time when the need is as great as ever, and certain to be much greater if ever the economy is allowed to get off the floor and once again to invest in the most modern productive methods?
It is some indication of the dedication and concern of the staff that they were immediately prepared to risk their own money to keep the centre open had the MSC and the Government allowed them to do so. In my opinion, that would not have been a particularly hazardous gamble on their part, because even in present depressed conditions there is no shortage of employers, particularly from overseas, who are only too willing and anxious to sign contracts to sponsor their apprentices for training at the centre.
It is sad that all such inquiries have recently been returned because the impending abolition of the board has cast such a cloud over the future of the centre. I ask the Minister to dispel that cloud and to take whatever steps are necessary to ensure that the centre can continue to do its valuable work.
What is the basis of valuation to determine the selling price of the assets to any potential buyer? I understand that this will cover only the equipment installed, as the building and site are both leasehold. What is the attitude of the Treasury? I am not sure whether it has been entirely helpful. For example, has it been seeking a totally unrealistic figure for equipment which, after all, is redundant? It ought not to be redundant, but it is.
I understand that the Treasury has insisted on at least three bids before accepting an offer. If so, how many have been received? The only one of which I am aware is from Cleveland county council, which is certainly prepared to invest a reasonable amount in the centre's future. I ask the Minister for an early, favourable decision, which in particular is required to safeguard the second-year apprentices for whom alternative places have not been found. There are 18 such apprentices who are direct employees of the board that is about to be abolished, and a further 37 sponsored by firms that lack the facilities to train those young men.
Several hon. Members have referred to the attitude of large and small employers who provide their own training and have not participated in the scheme. I quote from one of the many letters of support that I have received from trade unions, local authorities, firms and employers' associations. It comes from ICI at Wilton and states:
"ICI on Teesside believes that instrument artificers will be one of the trades in greatest demand in the future and that shortages will occur nationally from time to time. For this reason we believe it is important that the training centre at Middlesbrough should be kept open."
It adds:
"It must be possible for the training centre to be maintained under some Government agency, local or national, and we support your approach to the Secretary of State to persuade him to keep the centre open."
There is united recognition of its need and a demand for the centre to be kept open.
The sands are fast running out. The staff cannot for much longer delay safeguarding their future and that of their families. Urgent action is needed to safeguard the future of the trainees. I hope that the Minister will take the action that I have suggested, and I desperately hope that he will assure me about the future of the centre.
5.55 pm
Mr. Alan Haselhurst (Saffron Walden): I hope that the debate will not develop into a battle of dogmatic extremes. When I listened to the right hon. Member for Doncaster (Mr. Walker), I felt that the Opposition's case was getting close to saying that the industrial training boards represented all that was good and virtuous. I am not impressed by the argument that the boards themselves are in favour of their retention. Organisations tend to favour their own existence, whatever the antecedents of the people who constitute those boards. Therefore, I cannot accept that as the most conclusive evidence that could have been presented by the right hon. Gentleman.
Equally, I do not have a great deal of sympathy for that type of employer attitude, which sees in the training boards the embodiment of all that is obstructive, bureaucratic and evil. Nor, with great respect to my hon. Friend the Member for Carlton (Mr. Holland), do I necessarily judge these matters in terms of the effect on the quango count. We must look at training in a sober and practical fashion and make our judgment on the orders in the light of that.
I make one concession to the Opposition. I believe that the timing of the Government's progress on dealing with the industrial training boards might have been happier. I indicated that earlier when the Government were seeking the enabling legislation. It is possible to argue that, because this was moving out of gear with the proposals on the new training initiative, the trade unions and others were more worried than they need have been about the plans for the training boards. Having said that, we must now look at the substance of the matters before us.
I start from the proposition that training is important to Britain. For a long time it has been an unfashionable subject about which there has not been an intensive public debate. In recent years we have not seen the need for a major training initiative. Rather, in response to the increase in unemployment, particularly among young people, there has been a rash of stop-gap measures and out of those has been born something that might be of more lasting value.
Now that there is an earnest debate about training and its future shape, it would be a great pity if the debate were to become overlaid with too bitter a partisan approach. We must now try to get it right for the future. It is extremely important for Britain's chances of industrial revival that once and for all we should show that we are able to sort out our training needs and meet them in a sensible way. Therefore, our concern should be with the amount of training that needs to be undertaken, the quality of that training and the commitment to training—a commitment from the Government downwards through the employers' organisations to the firms and the trade unions.
Essentially, my approach is pragmatic. I want to see more and better training. I readily accept that new systems and structures may be required. I found it odd that the Opposition appeared to be wedded to the things that exist, and were passionately asking the Government to hang on to those, without having the capacity to recognise that perhaps new forms are required to deal with the problems. I believe that the Opposition should accept that the ITBs have not been a universal success.
We should get away from the old notions of time serving apprenticeships, over-rigid statutory training frameworks and what I regard as the absurdly doctrinal
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differentiation between education and training that exists in this country. It is 3 wholly inappropriate to be discussing orders that are winding up certain of the training boards without constant reference to the new training initiative.
We are about to move into a new era for training. I compliment the Government on opening the door as far as they have done. I welcome the response from the Manpower Services Commission and I await as eagerly as anyone a Government announcement as to what will be set in train. It is on the new training initiative that we should be building the pattern and structure of training for the future. The good features of the new training initiative are the emphasis that it lays upon local determination. I am sure that this is the way forward. I recognise that the CBI does not believe that the initiative is a complete substitute for statutory training boards and, indeed, that is not what the Government are offering industry. They are retaining certain of the statutory training boards. However, local assessment, local appreciation and local delivery of the appropriate training courses is the right way forward. The training initative is also the right way forward because of its second feature—flexibility. Within a particular area, one has to respond to the types of job opportunity likely to arise in the short, medium and long term, and that requires the ability to chop and change as circumstances dictate.
We can learn about flexibility from other countries. We need that form of flexibility that an over-reliance on a network of statutory training boards cannot bring. Within the new training initiative we must lay the foundation for continual training. This is an essential feature of the new approach, which can deliver more results than we have seen during the past 18 years.
The Government's attitude is crucial to this whole process. Much will depend upon the exhortation that the Government give and the stance that they take. In the new era of training, as I have called it, everyone will want to see whether the Government are serious about their objectives. From the assurances already provided by the Government, I am sure that those in industry who are chiefly responsible for industrial training understand that the Government are serious about wishing to seek more and better quality training.
However, I hope those leaders will also see a stick in the Government's hand, to be wielded if in any instance it appears that the non-statutory training organisations are failing in their duty. I am satisfied about what we know so far of the new arrangements, but one must still be cautious and ensure that employer organisations will be aware that the Government will oversee their industrial training in the years ahead. I hope that the Government will make it clear to industry continually that this training initiative will be taken increasingly seriously and that the Government will have no hesitation in taking further action if it seems that these new arrangements are in any way falling short of the expectations that the Government hold for them.
This is a new beginning. If we are trying to get our training arrangements right: from now, we must do it differently from the pattern that we have inherited. It is perfectly sensible to make changes where appropriate. We have a chance to establish a better system of training that will be of great benefit to young people especially, as well as all members of the work Force. It would be crazy if the unions and everyone else did not join in to ensure solid gains from this new system.

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Let us acknowledge that up to now we have not got training right in this country. We should not be committed to the past, as the Opposition seem to be, but should concentrate on the future and on finding a better way. The Government deserve backing and not carping criticism for opening up this new prospect for training.
6.4 pm
Mr. John Grant: The hon. Member for Saffron Walden (Mr. Haselhurst) made a mainly sensible and constructive speech, as he always does on these issues. I cannot help feeling that he will not go into the Lobby with the Government enthusiastically. He underlined anxieties that many of us feel.
I suppose that the hon. Member is regarded as a wet. It surprised me that the previous Secretary of State for Employment introduced the Employment and Training Act 1981 that has set the scene for the debate. Many of us criticised the right hon. Gentleman, but that departure from industrial sanity was especially hard to understand. It was perhaps political good sense. He fought many other battles over economic expansion and trade union legislation inside and outside the Cabinet. I suppose that he had to toss the hardliners something, and he chose industrial training boards.
That will prove to be a costly gesture for the nation. I believe that the right hon. Gentleman came to realise that as he pushed the legislation through the House. I do not believe that his heart was in it. We could not say that about the present Secretary of State. Assuming that he has one, his heart is in everything that he does. I am afraid that his views on this issue are reflected by his departmental colleagues. It is a pity that he cannot take part in the debate. I expect that he is framing more damaging industrial legislation, perhaps to abolish wages councils.
Another tragedy lies behind the grave direct cost to British industry of the abolition of these and other industrial training boards. The hon. Member for Saffron Walden touched on it when he talked of the need for a bipartisan approach. The excesses of our adversarial and class-based political and industrial systems have been, and are, at the root of many of our economic inadequacies and poor performance. But, politically and industrially, in this area the approach has been largely bipartisan. The Minister of State reminded us that the boards stem from a Conservative Act, built on subsequently by Labour legislation. The all-party support held pretty firm until 1980.
More importantly, joint responsibility of management and unions for the boards has been fully recognised. It is hard to find examples of a major breakdown in this worthwhile co-operation. Such breakdowns happen all too often in other parts of our industrial society. It is disturbing that the Minister appeared to want to bring industrial training into collective bargaining arrangements. That is a dangerous course. By its nature, collective bargaining is adversarial. Industrial training boards and training have not been. It would be a great tragedy if they became so.
The co-operation between both sides of industry is being scuppered. The orders are a further example of the way in which our training threatens to lag still further behind the pace of industrial and technological
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change—and heaven knows we are far enough behind already. We are the least trained of the world's industrialised nations.
Mr. Philip Holland: Is not the hon. Gentleman confusing training boards with training? They are quite separate. The lack of training boards does not by any means signify a deterioration in the standard or level of training.
Mr. Grant: I believe that it does. I shall refer later to the point raised by the hon. Member for Carlton (Mr. Holland). We are told by Ministers that we need not worry and that industry can be relied upon to do the job. We are told to remember that the Government are spending more on training than ever before, especially through the new training initiative. The Minister and other speakers have stressed that initiative.
The hon. Member for Carlton is absolutely right to mention timing. We are entitled to ask "What new training initiative?" All we have at the moment is a piece of paper. We do not have a new initiative. I agree wholeheartedly that the Manpower Services Commission task group report points that way towards a major breakthrough, and, I believe, a training system that can be built on to meet our industrial training needs for the rest of this century and beyond. We do not have it yet, and we may not get it because of the Secretary of State's attitude. We all know that the Manpower Services Commission, the CBI, the TUC, Youth Aid, the National Council for Voluntary Organisations, and the British Youth Council, and so on, all want the task group report implemented, but they want the full package.
The Secretary of State, so far as one can see—perhaps he will change his mind—will not climb down over the compulsory supplementary benefit issue. The Secretary of State will probably say that it is not compulsion. Let us talk about coercion or intimidation. It does not matter which word is used, we all know what we are talking about. The Secretary of State appears to be the only one out of step, but he will not accept it.
Mr. John Townend: Does the hon. Member agree that for a youngster to leave school and receive supplementary benefit would harm him in his future career? Where there is a lack of parental influence, is it right that the State should give youngsters that alternative when they could go on training courses?
Mr. Grant: I was not seeking to debate the merits of the issue. I disagree with the hon. Member. I believe that a choice should be given, but I do not believe that the receipt of supplementary benefit should depend upon whether that choice is taken. That is certainly not the view of employers who do not want what they fear they may get, a number of disgruntled youngsters in their work force with whom they would have great difficulty in coping.
As a result of the Secretary of State's attitude, we could end up with no scheme. Unless he climbs down and accepts the package, there is a probability that there will be no scheme because the trade unions will refuse to cooperate. We should have no statutory industrial training board system. There would be some system but it would be vastly emaciated.
We have heard something about the voluntary arrangemets. The Manpower Services Commission has not been happy with the voluntary arrangements that will

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replace the abolished powers. The right hon. Member for Doncaster (Mr. Walker), who has probably had greater experience in speaking about these matters than anybody else, painted a horrendous picture of the shortcomings of the voluntary arrangements. Although the Minister to some extent answered the point, it was a selective response, and I do not believe that he answered the basic question.
Mr. Needham: Is the hon. Gentleman saying that if the trade unions refuse to accept the scheme, there will be no scheme? Is it the SDP's policy to say that it is the trade unions which determine whether there will be any training in this country? Does he accept that if the Government propose a scheme and determine to continue it there will be a scheme?
Mr. Grant: The hon. Member knows that I did not say that. I was pointing to the fact that there is a risk that the scheme will be jeopardised, and perhaps ended, because the trade unions will refuse to co-operate. It is not a question of whether they are right or wrong; it is a fact of life. That threat is undoubtedly there. It is more important that both sides of industry, educational interests and everybody else, believe that the scheme should go forward on the basis of what the task group has suggested. That seems perfectly reasonable and does not seem too much to ask of the Minister. I believe that the hon. Member for Chippenham (Mr. Needham) will find some support for that even on the Conservative Benches. I hope that he will use his influence, instead of making a point about the SDP, to persuade the Secretary of State to accept the package in the interests of young people.
The hon. Member for Carlton was right when he said that the boards themselves have little responsibility for actual training. They have advised, encouraged and monitored. That has been extremely important. They have provided a large body of professinal advice and expertise. The Minister talked about exemplary professionalism. That is certainly true. It has been painstakingly built up over the years at no little expense. We are entitled to ask what will happen to all that expertise and exemplary professionalism and to the relationships that have been constructed. I shall not mention the question of resources which has been dealt with at some length. What will happen to the skilled manpower involved with the board? Many people will become redundant and will have to join a dole queue.
While the new training initiative rightly spells out national needs, at company level matters are often seen differently. One understands why. They were seen differently before 1964 and it is because firms were not training that the 1964 legislation was enacted. Too many firms were poaching rather than training. That will happen again. No major industrialised country relies on the voluntary principle to meet training and skill requirements as we shall be expected to.
At a time of deep recession it is inevitable that hard-pressed managements—they are probably shortsighted—will cut training if they can get away with it and do not see an immediate commercial advantage in carrying out a training programme. In case hon. Members think that I am exaggerating, let me quote from the current edition of Personnel Management, the journal of the Institute of Personnel Management. Roy Williams, who is the group employee development manager for the Imperial Group Ltd., states:
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"Already the decision to close most ITBs has affected training in many companies where training budgets and training staff have been cut."
That is first-hand evidence from a practitioner at the sharp end of the business. I suspect that he is only revealing what will turn out to be the tip of the iceberg.
We know that all the industrial training board chairmen appealed to the Minister not to take this step. That does not seem to matter to the Government. The Manpower Services Commission's earlier review was unequivocally in favour of retaining statutory boards. The Minister chose to make some fairly selective quotations from "Outlook on Training", but it wanted to retain the boards, although not without changes. have not heard anyone argue that the boards are faultless. That would be absurd. There is a case for rationalisation and perhaps mergers. These orders are a further example of the Government's industrial vulgarity and antagonism to necessary statutory intervention in our industrial system.
Mr. Peter Morrison: The hon. Member says that there is a case for rationalisation. As he is aware, seven boards will remain. I shall be interested to hear the hon. Gentleman's views and those of his party on the kind of rationalisation to which he is referring.
Mr. Grant: I shall mention the views of the Social Democratic Party in more detail later. We are seeing a clear threat to the development of the skills and ingenuity that will prove increasingly essential to our national prosperity in an era of new technology. A number of pertinent question; have been posed to which the Under-Secretary will reply. I understand that the Government accept the Manpower Services Commission's views on the need to modernise apprenticeships through standards rather than time served, and the need to improve training and retraining opportunities for adults. The House will approve of that approach.
Do the Ministers recognise that for many industries—some of them are covered by the orders that we are now debating—the most fruitful and perhaps the only viable way to get the necessary arrangements on apprenticeships is likely to be, with unions, employers and education services fully involved, through the industrial training board system? How do the Government reconcile that situation with scrapping the boards? What will the Government do to resolve the problem of getting agreements on apprenticeships? Their policy is making the task immensely more difficult.
The MSC task group report suggests a new style of approved sponsors with training responsibilities. In passing, it refers to the ITBs in that context. Will the Government agree to include in the managing and sponsoring category the ITBs that remain? What positive steps will the Government take, urgently and immediately, to harness the resources—I refer particularly to the professional expertise—of the abolished boards before those resources are dissipated and lost to British industry, so that they can assist in the new training developments which we very much hope will go ahead? The Government have had plenty of time to consider that aspect—I should be surprised if they have not considered it—so I hope that the Minister will give a full reply.
I have made it clear that: the Social Democratic Party backs the MSC task force report in its entirety. Like the hon. Member for Saffron Walden we believe that it is the best way forward for industrial training. We shall have a

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good deal more to say shortly about increasing the scope of the proposed scheme and the best way to ensure that quality and quantity are established and maintained. We have no hesitation in condemning the abolition of the industrial training boards when the Government are incapable of offering any proposals for an alternative or improved system.
We recognise that to resurrect the boards, once they had vanished, would be immensely difficult. We are examining other possible ways of ensuring that industry trains and that the nation's longer term needs are met. I include here the question of the remissible training tax, mentioned earlier, which is worth further examination.
It is deplorable that the Government have taken yet another retrograde step, which can only impede our industrial prospects in the years ahead. We have already put down a prayer against the orders for the abolition of further industrial training boards, and we shall certainly vote against the Government tonight.
6.23 pm
Mr. Tim Renton: At the end of last year I attended a half-day conference in the House of Commons organised by the Industry and Parliament Trust—a trust to which many hon. Members from each side of the House belong. We have the rather grand title of "fellow". It is a trust that many of us support. The conference was on the subject of the education needs of industry.
During the course of the conference, I was sufficiently struck by the words of a prominent British industrialist to write them down. He said that the United Kingdom was in danger of "doing a British Leyland" nationally and of becoming an industrial backwater in the 1990s unless we transformed the way we trained.
I refer those remarks particularly to the hon. Member for Islington, Central (Mr. Grant), if only to remind him that so far what we have done in Britain in regard to training has simply not worked. The industrial training boards have not worked, and it is no good pretending that they have. Equally—I say this to the hon. Gentleman without wishing to be antagonistic—the bipartisan approach has not worked. That assertion can be proved by quoting any number of statistics about the state of training in Britain as compared with that in other industrialised nations.
Mr. John Grant rose—
Mr. Renton: I should like to continue for a few minutes. If the hon. Gentleman then wishes to intervene, I shall gladly give way to him.
I should like to mention a few statistics that are very sad from Britain's point of view. We have only about 100,000 new apprenticeships a year. Last year the figure was only 80,000. That compares with over 400,000 a year in West Germany, which has a working population only slightly larger than ours. The figure of apprenticeships in France is 215,000, with a working population somewhat smaller than ours.
In Britain, 70 per cent. of the work force lack professional skills. That is double the comparable figure in Germany. In Britain, 44 per cent. of school leavers have some kind of technical education, compared with 94 per cent. in West Germany.
Mr. Craigen: I understand that in West Germany employers give far greater support to apprenticeships than is given in Britain, and that in France the State provides support through a payroll tax.
Mr. Renton: The hon. gentleman must realise that it is a very old problem in Britain. Because we had the first Industrial Revolution, we needed only fairly simple skills for it. We have never had in Britain the technical high schools that Germany has had since the early nineteenth century and that France has had since the late nineteenth century. Therefore, it is not a problem that started with this Government, nor is it a problem that started with the previous Labour Government. It is a deeply ingrained problem, with which the ITBs have failed to cope.
Mr. John Grant: Surely the hon. Gentleman recognises, as has already been said, that the boards do not do the training. The short answer is that in Britain we have not been prepared to invest resources in training. It is as simple as that. Other countries have done so. That is not an argument against the boards or for their abolition. It is an argument for industry to get on and do far more.
Mr. Renton: The hon. Gentleman must accept that it is an argument for a new approach. It was up to the industrial training boards to set the framework for the training in each industry, and to set the levy—subject to certain Government approvals as to the amount by which it could go up each year. It was then up to the employers and the unions working within the training boards, but it was the boards which set the framework.
I should like to draw the Minister's attention to one of the training boards that is continuing—the construction industry training board. The Federation of Master Builders is most anxious to join that training board, as it bears in mind the number of employees it has in the industry. I was present at its conference not many weeks ago. [Interruption.] I was very flattered to be asked to speak at the conference. The federation is very anxious to join the CITB-and here I can give some support to the point made by the hon. Member for Islington, Central-because it understands that the training levy is set by the CITB. Representing a number of large employers within the industry, yet not at present in the CITB, it wants to have a say in what the training levy should be, and some control of over how it is spent. That is perfectly fair.
In recent years, training in Britain overall has been dominated statutorily by the training boards, and as a country we have not succeeded in coping with the problems of industrial training in an increasingly complex technological world in which people need not only to be trained in more difficult skills but to be retrained throughout their lives.
I should like to make a further comment to my hon. Friend the Under-Secretary about the construction industry training board. I am sure that he will know from representations made to him by the industry that it is often not the respectable firms, but the cowboys, that survive. The cowboys pay the low wages, they do not pay the training levy, and they are often willing to accept payment in cash and not to charge VAT on house repair bills where they do not need to render an invoice. Perhaps my hon. Friend will pass on this comment to his colleagues in the Treasury. The respectable firms strongly make the point that if all house repairs were made VAT exempt, as in the case of new buildings, it would be a major blow to the

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cowboys, because it would remove their greatest advantage. It would, therefore, help the totally respectable companies, those which are within the training schemes, paying the levy, and offering traineeships. I hope, therefore, that my hon. Friend will pass on that thought to the Treasury.
I shall devote the rest of my remarks, not as an epitaph on the industrial training boards, but—here I take up the theme of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst)—as a prologue on the new training initiative. The right hon. Member for Doncaster (Mr. Walker), in his long speech, gave us a repetition of his well-known act, the aria in support of the dying swan, that we heard many times during the proceedings on the Employment Bill. He is the best and most fervent speaker in the House in support of lost causes. I shall not pursue his line. I would rather talk about the future.
I am glad that the orders will be passed, and that therefore most of the training boards will cease to exist—even without the support of the Social Democratic Party, which at least has made up its mind on this occasion. We assume that its members will not abstain this time. They have reached a great decision to vote in the Lobbies, and that will be a great encouragement to their party's supporters in the leadership election that lies ahead of them.
As we look ahead, against the background of a poor national performance on training, we must realise that what we are now to provide in vocational training is of fundamental importance to both this generation and the next. How many times have we been asked in our constituencies, for example, about the new training initiative, "Fine, we like the idea of this training for one year for all youngsters who do not have jobs, but will it provide real jobs, and if so where will those real jobs come from"?
As Britain searches for another industrial revolution, we all know that there will be new jobs in manufacturing industry, and that there are more jobs in manufacturing now in the world than at any other time, but where are the jobs, and what are they making? Where are the drilling tools that drill out the holes in the printed circuits being made? They are not yet being made in this country. Where is the machinery for robotics being made? Where is the machinery to produce semiconductors being made? It is being made not in this country, but in the Far East, or California, or in the Philippines or in Korea—one of those countries where I am reminded of the phrase of Silicon Valley, that once something has left the research and development stage and is being manufactured, it is already out of date. How do we cope with those circumstances with our untrained work force? I sincerely hope that the new training initiative will work. Certainly it has been a tremendous development on the part of this Goverment to build on all the discussion documents that were produced by the Labour Government, but which never led to anything concrete, and to produce a positive scheme. We all must have doubts at this stage, but only because we await the final shape of the scheme.
I held a seminar on youth unemployment and vocational training for jobs three weeks ago in. my constituency. In the course of that day's seminar, the subject of industrial training boards was not mentioned once. What came up the whole time was the gap between schools and industry, the great gap between education and industrialists. There was constant repetition—
Mr. David Ennals rose—
Mr. Renton: I shall give way to the right hon. Gentleman in a moment. There was constant repetition of the theme that if the training initiative is to succeed, better links are needed between schools and industry. Cine suggestion was that industrialists should meet the heads of schools every half-term for a half-day's seminar, emphasising what industry in the area needed, so that the schools could consider those needs and, if necessary, change their thoughts accordingly.
Mr. Ennals: I thank the hon. Gentleman for giving way. I simply wanted to ask him whether any trade unionists took part in the seminar, because I find it surprising that there was no reference to industrial training boards. In my view, it must have been a rather strangely constructed group of people.
Mr. Renton: Trade unionists did attend, not least myself, because I am a trade unionist. Indeed, members of trade unions were present, as were two dozen young unemployed people. I particularly wanted to hear their views about why they did not have jobs.
We must all be aware of the necessity for a much better linkage between schools and industry on industry's current needs. That leads to the question: how do we achieve a proper match between skills and jobs available? Training must be placement-led. It comes back to the question that we are asked all the time: where will the real jobs be? It is no good being .trained if there is no job at the end.
The emphasis should be on training and retraining throughout life, so that skills can be updated along with the advance in technology. That places an enormous burden on the Manpower Services Commission. I do not know whether the commission will match up to that task, because to provide perhaps 400,000 good training places by next year will be a fantastic task for any large organisation such as the MSC. I am sure that the spirit and the good intent are there, but whether it will work in the way that we all want it to has yet to be proved.
It is against that background, and against that background only—and conscious that my right hon. and hon. Friends the Ministers are currently considering their reply to the youth task group reports, and that we expect an announcement shortly—that I want to touch on the matter of supplementary benefit for 16-year-olds. I completely reject the playing with words indulged in by the hon. Member for Islington, Central about whether withholding supplementary benefit was compulsion or coercion. The matter has nothing to do with that.
No one is being compelled to take a training place. There is no conscription. But it is most important that the new training initiative should get under way with the full-hearted support of employers, unions, teachers and youngsters. Once it is under way, few young people will not have training places offered to them. Therefore, the numbers and sums of money involved in maintaining supplementary benefit to 16-year-olds who are not on the new training initiative will be unimportant. It is the principle that is important. Therefore, I suggest to my right hon. and hon. Friends that for a year or two they postpone the decision on whether to offer supplementary benefits to 16-year-olds who are not within the new training initiative.
Mr. Giles Radice: Until after the election.
Mr. Renton: How cynical the hon. Gentleman is. I am surprised at him.
Mr. Needham: He always has been.
Mr. Renton: I do not know that that is true. I think that sitting on the Opposition Front Bench has made him a cynic.
As I was saying, the decision to offer supplementary benefits should be postponed for a year or two until we can see that the MSC is able to implement the new training initiative and to offer the necessary 400,000 training places, a place to everyone who needs one. Once the places are available and offered to everyone, the Government can review the matter. That decision should not be rushed. It should be postponed until the likes of myself can be convinced that the MSC is doing what we wish.
Mr. Needham: I agree wholeheartedly with my hon. Friend. He accepts and continues to support the principle, seemingly forgotten by the hon. Member for Islington, Central (Mr. Grant), that if someone unreasonably refuses employment he is not entitled to supplementary benefit for six weeks. If the principle is already there for the adult, why should the principle not continue for youngsters who unreasonably refuse places on the new scheme?
Mr. Renton: My hon. Friend makes a fair point out of his deep knowledge of the problems.
Mr. Golding: Does the hon. Gentleman accept that the real objection to the Government's proposals is that they are creating opposition among employers towards granting places? Because of that, the Select Committee established that the cost of direct provision will be substantially greater than the cost of supplementary benefit. The Government's proposals will lead to a massive increase in public expenditure at the risk of spoiling what could be an otherwise useful scheme.
Mr. Renton: With respect to the hon. Gentleman, I remain to be convinced of that. My solution is that the decision on this issue of principle should be postponed for a year or two while the training initiative gets under way and we see the employers' reaction and how it can be organised in areas such as mine. It will be difficult because there are no large employers in my area who can take 200 youngsters and who have training officers and schemes set up. The small employers are keen and enthusiastic to take more than they do at present, but one waits to see how it can be organised. The important thing is that the scheme should get under way and work.
My last point concerns the training of non-academic youngsters and relates to my first point about the need for a better bridge between schools and industry on vocational training. I was struck by an article in the Financial Times in November 1981 by Michael Dixon, which said:
"Only two kinds of education are available to the great majority of young people in the United Kingdom. About a third of them receive a middling-to-good academic education. The rest undergo an indifferent-to-bad academic education …Children whose intelligences run in directions other than the academic are left to take a mishmash of diluted scholarly studies, or to leave it. Many choose the latter. In some areas rates of truancy among older pupils are 25 per cent. or more."
That emphasises the fact that schools must now learn to deliver both academic and practical training. Many nonacademic young people are much more prepared to learn when they have passed the age of 13 or 14 from those who work—from doers rather than teachers. They relate to
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someone who is doing something and who has practical experience when they have ceased to relate to or take instruction from teachers.
In an area such as mine in Sussex where unemployment among youngsters has doubled in the last year—it is now coming down again—there are no plumbers available. If I want a plumbing job done, I cannot have it done for six months. There is no one to repair a washing machine or a vacuum cleaner. It is difficult to find an electrician. One has to pay for a car service at a rate of £15 an hour for labour when the actual cost is about £3 per hour, for which many people are happy to work.
Britain is bad at training for manual servicing. Therefore, our secondary schools should go back to training for trades. Many people will say that there are all sorts of social objections to that and that one should not talk about returning to the 11-plus, and so forth. I am doing nothing of the kind. The United States has trade schools for the non-academic youngsters alongside academic schools. It is an accepted system that equips far more young people to enter the manual trades than we have in Britain.
It is important that our secondary schools should cease insisting, with historic pride, on providing academic education only. They must now concentrate on providing more trade courses in which mechanics and engineers are involved with young people in on-the-job training and on training in the school workshop to help those youngsters who will never be academic to have a trade when they leave school and need to get a job.
I fear that the jobs that will be created after the recession has passed will not be matched by qualifications. That would certainly be so if we relied only on the old industrial training boards. The Government's new training initiative is a most important and exciting development. A new partnership between education and industry is needed, and a strong political will is required to bring that about. I do not doubt that Ministers have the will. I just hope that the MSC will have the necessary skills to forge that partnership.
6.48 pm
Mr. John Golding: This Government have a blitzkrieg mentality. The Department of Employment has a policy that to increase productivity one should get rid of firms. It follows a policy that says that to improve industrial relations one should introduce bitterness and hostility. Now, in order to improve training, the Government have come up with the answer—abolish training boards. The Government have done an enormous amount of harm to British industry and its capacity for increased productivity over the past three years.
I do not want to put up a blind, blanket defence of industrial training boards. As a Minister, I was critical about training systems. I said that the ITBs were not sufficiently involved in determining national policies, that they did not take local needs into account sufficiently and that too few senior staff on some boards were recruited from industry. The demarcation between boards and the grouping of industries within boards was not always satisfactory. The financing of industrial training needed reform, but on the whole I was impressed, as I went from board to board to discuss their work and progress, with their commitment to the improvement of industrial

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relations. The training position was unsatisfactory, but without the industrial training boards it would have been much worse.
The Conservative Government created the industrial training boards in 1964 because we were so far behind our European and main international competitors in training. The gap has not been completely narrowed, but much good work has been done since then. The boards have brought together a body of people totally committed to selling the idea of training in British industry. It is important to have groups so committed and willing to sell the idea of training to managements who have never given it sufficient thought. Without them there would be little training consciousness.
The boards have provided the expertise. I am distressed at the present proposals because teams of people welded together to do a job are to be broken up. We can ill afford to lose to the unemployment queues the people who have committed their lives to training. It is a disgrace that we are declaring redundant people who have skills in the organisation of training.
According to answers, Ministers appear to think that training boards have not been involved directly in training. That shows clearly that they try to perform their job from desks in Tothill Street. Anyone who is assiduous in finding out about the boards' work will know that much is involved directly with the provision of training.
One of the most important jobs that the boards do is to prepare training manuals. All those involved in small or medium-sized firms know that the lack of training manuals causes difficulties. The abolition of the boards will destroy the central production and planning of manuals. The Government appear to believe that training is essential only for certain occupations and industries. It is almost as if the Government say "Certain industries are important." Engineering springs to mind. They say "Certain occupations are of national significance." Technicians spring to mind. They say "We shall continue to make provision for such training, but the rest can go hang." That is nonsense. It is wrong to regard training in one industry as less important than training in another.
The problem for British industry is not that people are unwilling to work sufficient hours. The hours of overtime worked have for long been a national disgrace. The problem is not the failure of workers to work long hours or to put in effort. British industry's problem is inefficiency. People perform jobs inefficiently and managers organise work inefficiently.
The basic problems are failure to deliver on time and failure of quality and price. They are not the result of bad motivation by managers or trade unions. We have failed, not because of the evils of capitalism or the iniquities of Labour shop stewards, but because we have not tackled the basic problem of how to organise work efficiently.
In my book, one of the most important aspects of industry is to train people to do a job properly. That covers the managing director, the skilled and the semi-skilled. It is accepted that we should train for skill and have an apprentice system. That system became fossilised and we experienced great difficulties in changing it. Had it not been for the engineering industry training board there would be no chance of moving from time-served apprenticeships to apprenticeships based on standards. The leadership of Lord Scanlon and others in the EITB made it possible to talk realistically about changing the apprenticeship system.
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The failure to train the semi-skilled in the engineering industry is deplorable. People have not been trained to do jobs as efficiently and effectively as possible. "Sitting next to Nellie" for too long has been the basis of industrial training. The semi-skilled will suffer from the Government's decision. Britain will also suffer. Without attention to the training of the semi-skilled the quality of work will be lowered and work will be delivered later that it should be because efficiency is impaired. It is an indictment of the Government that they will make it more difficult for Britain to regain competitiveness in the world.
I do not believe that employers will train sufficiently on a voluntary basis. They did not before 1964, why should they now? Why should employers in industries with no training boards train heavy goods vehicle drivers, for instance? Why should those outside the EITB carry out training in engineering? Why should those outside the construction industry train electricians? We know what will happen. The amount of skilled and general training will plummet in the industries that do not have industrial training boards. The. ITB industries will do the training and the workers will be poached by other industries.
The Government are living in cloud-cuckoo-land if they believe that training will take place in sufficient quantity and of sufficient quality under the arrangements that industry is being forced to accept. I have seen many references to the difficult task of the Under-Secretary, who has been given some ideological decisions by his masters but who knows full well that they cannot be fulfilled in practice. He has had to turn a blind eye to the fact that industry has not come up with the goods for alternative voluntary arrangements. With the other eye he has tipped industry the wink that it will not matter. That is causing much disillusion throughout British industry.
The Government have taken a decision to get rid of some boards under certain conditions. The conditions have not been met but the Government are still committed Ito getting rid of the statutory boards and to go over to the principle of voluntarism, which cannot succeed. Given the choice, at this time of economic recession, employers will say: "If it is a choice between maintaining our cash flow and paying heed to the long-term human investment needs of the industry, we shall pay attention to our short-term needs and neglect training."
The Government must reconsider their policy on training. The Labour Party—I am chairman of the employment committee—has a specific training policy. The co-ordinating role of the Manpower Services Commission must be strengthened because we believe that we need national priorities in training. We must develop priorities in training. We must develop regional and local structures and improve co-ordination with the education services. On that, 1 agree with other hon. Members. 'We must have comprehensive services with direct access to individual companies to provide assistance and advice on training at the place, of work. Most importantly, we must place a statutory obligation on employers to carry out the necessary training to an approved standard. A Labour Government would impose a statutory obligation on employers to establish work place training committees and to consult trade union representatives on all training matters.
Mr. Peter Morrison: Is the hon. Gentleman saying that if the House were to approve these and subsequent orders the Labour Party would not reintroduce industrial training boards?.
Mr. Golding: I did not say that. We must consider the position. The Labour Party should not take a doctrinaire view about the reintroduction of industrial training boards in their present form. However, we must reintroduce the function that they serve. It has been harmful to get rid of bodies that provide a central initiative. We should examine the boards' functions to see what should be reintroduced but I do not say that we should reintroduce them in exactly the same form. That would be a nonsensical position for any Labour politician.
It is essential that there should be adequate funding. Resources would be provided through a system of collective funding by industry and the State. It is a great pity that the Labour Government's proposals for collective funding did not get off the ground. Industry, which was frightened of the bureaucracy involved, resisted the sharing of the expense of training between it and the Government. It is as important for the Government to put money into the modernisation and support of training as it is for them to provide money for education. It is vital to British industry that we expand and improve training. I regret that the Government, under the guise of improvement, will smash something that is essential to Britain's economic recovery.
7.6 pm
Mr. John Townend: I am sure that Labour Members, especially my former colleagues on the Employment Select Committee, will not be surprised to hear that I welcome the revocation orders that abolish nine training boards. I am delighted that it is only the first instalment and that a further nine orders have already been laid before the House, especially as I have had experience of two of those boards. However, I am slightly disappointed that the Government did not include the hotel training board. As a hotelier with a medium-sized private hotel, I can tell my hon. Friend that many such hoteliers believe that the board is of benefit to the national hotel groups rather than to them.
Like my hon. Friend the Member for Carlton (Mr. Holland) I congratulate the Government on taking this action as it takes us further along the road to fulfilling our election promise to reduce dramatically the number of quangos that have been a burden, not only on the taxpayer but, much more importantly, on industry and especially small firms. I was a little disappointed at the speed with which we have moved. I hope that the latest proposals are a demonstration of some acceleration. Perhaps some of my hon. Friends have had difficulty in moving the civil servants in their Departments.
I am sure that hon. Members on both sides of the House and the vast majority of people in industry appreciate the need for training. None of those who support the Government tonight are against training. But experience has shown that training for specific industries can be carried out most cost effectively by individual firms or by industry-controlled schemes rather than by bureaucratic quangos such as industrial training boards. For example, management training could be carried out much better not in industrial sectors but nationally, with industry and educational establishments co-operating.
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We cannot get away from the fact, although the right hon. Member for Doncaster (Mr. Walker) glossed over it, that there has been massive opposition in industries to the activities of training boards. One cannot ignore the strength of that opposition and, like my hon. Friend the Member for Carlton, my mailbag has been heavy with such opposition. We have to be honest—we must not pay too many tributes to civil servants—but many of us feel that the training boards have failed in many areas. Indeed, the hon. Member for Newcastle-under-Lyme (Mr. Golding) supported that view when, after 15 years of training boards, he was complaining bitterly about quality in British industry and about the standard of delivery dates.
My hon. Friend the Member for Mid-Sussex' (Mr. Renton) drew our attention to an important point that has been touched on by a number of hon. Members when he said that in his area there is a shortage of skilled people in the building trade, plumbers, electricians and so on. Training boards have failed in apprentice training. Indeed, it has been said that in the past two years, despite 15 years of training boards, we have had far fewer apprentices than previously. We have heard that the training boards brought the unions and employers together but that has failed to overcome the problems of our archaic apprenticeship system. Although it may have been discussed, we have not yet, so far as I know, had accepted training for standards for apprentices rather than training for a period. In my constituency one of the major causes of the shortage of apprentice opportunities is not dealt with by the training boards. The economic cost to the employer of taking on apprentices has soared in recent years.
Our apprentices are far more highly paid in the first or second year than similar apprentices in virtually any other industrial country. In Germany they start off at much lower rates. In the late 1940s an apprentice in the building industry would start on 15 per cent. of a skilled man's rate. Now an apprentice starts on 50 per cent. of a skilled man's rate.
In my constituency, we have the same problems as my hon. Friend. We have a great many small businesses—country builders, country joiners, country plumbers and country electricians. I am interested in youth employment, and when I travel around I ask whether such small businesses are taking on apprentices. The answer I receive is "No. Apprentices are simply uneconomic." I am told that whatever an apprentice produces in his first year is worth far less than the cost of supervision and wasted materials. I am convinced that we would have a substantial increase in apprentice opportunities if starting wages were 20 or 25 per cent. of skilled wages. I am sure that the youngsters who are now not able to get an apprenticeship would be delighted to work for that rate, particularly in the first year. If an employer could get over that first year, he would find the economic cost was not so great.
Mr. Crowther: Whether or not the hon. Gentleman is right in his belief that the number of apprenticeships is somehow affected by pay rates, will he explain how that has anything to do with orders abolishing ITBs? They do not determine the rates of pay for apprentices.
Mr. Townend: My point was that the ITBs have not been able to solve the major cause of the fall in the number of apprentices. That is why those of us who believe in the need for training are saying that the level of training might not fall because many of the major problems have not been

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dealt with. The ITBs have not dealt with the problem of apprenticeships and, to be fair, they have not dealt with the problem of improving the relationship between industry and educational establishments. That area will need to be examined most carefully if we are to overcome our problems.
The main burden of bureaucracy of the ITBs has fallen on small and medium-sized firms rather than the large companies with their in-house personnel and training departments. When the form-filling for the ITBs, the visits by inspectors and, in some cases, the payments of levy are added to all the other burdens borne by small firms—the employment legislation, planning regulations, wages councils, the Health and Safety at Work etc. Act, the Office, Shops and Railway Premises Act and numerous other Acts—there is little wonder that the small business man and the entrepreneur feel that Government—not only the present Government but previous Governments—are trying to stop enterprise rather than encourage it.
Like my hon. Friend the Member for Carlton, I have some practical experience of training boards. I can recall the first time that an inspector came to see me, which was prior to my election to the House, when I was a full-time business man. He came to discuss the training that my firm undertook. He was particularly interested in the managers of my retail branches. He asked me about the training we gave to managers. I explained that we had monthly meetings, that we allowed them to taste samples of the wine and that the various qualities of the wine were explained to them. He said "That is excellent. You are doing everything that we would expect you to do." I said "We will get the levy back then." He said "May I have a look at your records?" I said "What do you mean by my records?" He said "You must have a card for every manager. Every time you have a meeting of your managers you must enter on each card the date and time of the meeting, how long you spent with them and the cost of the wine used." I said that if I did that I would probably never have another meeting. Eventually we were given back the levy. We did no more training than we had done before but we had one person in the firm spending two and half days a month filling in forms.
The revocation orders will be one step forward in a progressive programme to continue to lift the bureaucratic burden on small firms. Indeed, we hope that this is another nail in the coffin of the "nanny" State. Many areas of industry do not need Government intervention for their training.
As the importance of training has become more and more recognised—we must give credit to the training boards for that—and as a result of the introduction of training boards a whole new industry has developed—the training industry—in which the growing number of the people involved has had a vested interest in keeping that industry going and in expanding it. There have been proliferations of expensive courses, many of which are of doubtful value. I regret to say that much of the money spent in training has benefited the people working in the training industry rather more than those who have been trained or the industries in which they work.
Empires tend to be self-perpetuating. It is understandable that the main criticisms of the Government's present proposals for abolishing the boards come mainly from those with vested interests. They come mainly from the training boards themselves. We all know that no organisation or committee ever likes to be abolished. The
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opposition comes From the paid staff, who have had first-class conditions and pension rights that are often much better than those in private industry. The opposition comes from trade union officials, who have a certain amount of patronage, as they appoint members to the boards. The small degree of opposition from industry tends to come not from the man at the top or from the entrepreneur but from the head of the personnel or training department who, because of the current legislation, has probably been able to build up his own empire.
Industry cannot afford unnecessary burdens or bureaucracy, and that is what the training boards have produced in the industries in which I have had personal and practical experience. Having been pressed by many of my colleagues on the Government Back Benches and from industry, the Government have grasped the nettle of the training boards and have started to lift the burden. I hope that they will continue along this road and lift other burdens on industry. My right hon. Friend knows that I have an interest in wages councils, which have been far more harmful than the training boards. I thank my right hon. Friend and his ministerial colleagues for the step that they are taking tonight, which has my wholehearted support.
7.21 pm
Mr. Jim Craigen: As the hon. Member for Bridlington (Mr. Townend) recounted his personal experience of industrial training I was reminded of the story "An Inspector Calls". I hope that there was no under-age drinking on the premises when all the wine tasting took place. I read in the recent issue of the CBI's newsletter a letter from the hon. Member for Bridlington in which he said that £15 a week would be too good for the young people caking part in the new training initiative. The hon. Gentleman was taking the CBI to task for having been a signatory to the task group's report.
Mr. John Townend: I did not claim in my letter that £15 a week was too much. I supported the Government's proposal, which I believe was about £15 a week. I said that I disagreed with the CBI's proposal to increase the payment to £25. 1 had received a letter from the CBI the previous week asking me to support its campaign to reduce Government spending.
Mr. Craigen: On a previous occasion when I caught the eye of the Chair immediately after the hon. Gentleman the House was debating regional development grants. On that occasion he wanted the status of Bridlington to be upgraded, which would have led to more public expenditure.
Debates on training should not become ideological dog fights. The inter-party co-operation that has been built up over the past two decades has been important. The partnership between the CBI and the TUC on training is crucial to the success of our training policies. Of course, it is only natural that an Opposition might oppose the Government merely because they are the Government, but I do not think that the Opposition are taking that approach . today. We believe that there are serious defects in the Government's approach to industrial training. The Government are signing their first blank cheque and eight industrial training boards will disappear. They have the authority to take this action under the Employment and Training Act 1981. We know that another eight boards will

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disappear. The standing of the remaining ITBs will be seriously depreciated. There is a serious risk that the system that remains will be badly crippled in the way in which it will be able to go about its business.
The Under-Secretary of State, the hon. Member for City of Chester (Mr. Morrison), said in April 1981 that every industry will need custom-built arrangements. Had I seen the thumbnail sketches that were provided after the Select Committee interviewed the Secretary of State and the Under-Secretary of State, I should have been much more critical in questioning them.
The information that has been provided by the Department on the winding up arrangements and successor voluntary arrangements is sparse and inadequate for our purposes. Statutory provisions are being abandoned, and this afternoon the Minister of State engaged in a great deal of nifty footwork in the way in which he avoided giving a specific answer on whether employers, unions and educationists are entirely satisfied with the arrangements that have been laid before the House.
I, too, must criticise the timing of the arrangements. We are moving towards the introduction of the new youth training schemes and a broad welcome has been given to the task group's report on the training initiative. At the same time we are dismantling an important section of the training system. The new training initiative tends to become more and more like a fig leaf because of the Government's lack of clarity in telling us about the direction which they wish to take in training. On 1 February the Secretary of State for Employment said:
"A country like Britain cannot expect to fall down for long on its industrial training and get away with it. But we have been doing just that for some years and it's beginning to show."
The right hon. Gentleman rightly continued to say that he set great store by the training initiative. It seemed implicit in his remarks that too much weight and expectation will be placed on the youth training schemes. At the end of the day the schemes will last for only 12 months, and even more important is what will be done subsequently to provide training in the various industries. It would be most unfortunate if we assume that the training initiative will resolve all these problems.
When we talk about improving the links between schools and industry there is every danger that the one year of training will be reinventing the wheels that should have been "invented" in the primary and secondary stages of education. I hope that we shall not be repeating our failings. The proposed structure that is set out in the task group's report provides that under the national supervisory board there will be 50 to 60 local boards. Perhaps we shall have the blind leading the blind. We shall expect officers to be involved with the local boards who are in a position to monitor the quality of the training that is provided by the various companies that are taking on the young trainees.
I shall refer briefly to a number of issues which I do not think were covered properly in the Minister's introduction. They are not answered satisfactorily in the orders that are before us. I am entirely in favour of adult access to training that is traditionally associated with young people. However, unless we have economic expansion and the creation of more employment opportunities, young people
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and older workers will be competing for the same jobs. That is all that will happen. It will be much more difficult for young people to enter the employment market.
Secondly, at the workplace, we require more involvement and participation by workpeople and their trade unions in the in-company training schemes. It has been one of the misfortunes of our industrial training legislation that we have not sufficiently involved board rooms in the key decisions that are taken on training matters. Some employers are very interested, and others could not care less. This remains a crucially important question, and one in which there has to be a much more positive Government lead.
Thirdly, with regard to the orders, while we might be satisfying some people that we are doing away with eight quangos, the MSC and the Department of Employment will now have to look to many more voluntary agencies. I wonder how keen they will be to exercise the necessary oversight in ensuring that these new voluntary bodies are doing the work they have been given by these paper pledges.
One of the more important questions before us with regard to training is the extent to which the white-collar sector will be involved not only with the upgrading of skills but perhaps with the downgrading of many office jobs, and the skills and status involved with those jobs.
One of the points that has come through time and again, not only today but on previous occasions when we discussed the work of the industry training boards, is the extent to which employers do not articulate their opinions through membership of these boards. The employers on the boards have probably let us down in that they have not always articulated the needs of their respective industries. I wonder whether the Government expect any more from the proposed local boards that are to be set up, as employers will be serving on their local boards. Can we be assured that they will be any more articulate in putting across the problems that employers face, and in proposing the kind of training policies that are sensible and appropriate for their industries.
At a time when the Government are dismantling a large part of the existing ITB network, we are erecting a scaffolding for a new training initiative when no one knows quite where it is going. That is largely because the Government have not given any clear expression of view about Britain's training system, and where it aims to go. They have acted like training machinery Luddites, and operated on a small-minded basis, rather than giving any vision or impression of the kind of training policies that are required for the 1980s and beyond.
7.33 pm
Mr. Richard Needham: It is always a pleasure to follow the hon. Member for Glasgow, Maryhill (Mr. Craigen), whose footwork is as nifty as that of anyone on the Government Front Bench. It is also a pleasure to listen to the right hon. Member for Doncaster (Mr. Walker) when he praises a Tory Government, even if it was one of many years ago. He has every reason to do so because most of the time since 1964—until 1980 when my right hon. Friend decided to amend the present regulations affecting industrial training boards—it was he and his friends who were in charge of the implementation of the Acts concerned.
I hope that in the spirit of cross-party unity that has, on occasions, been shown on this matter we could agree that

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there are three criticisms that can be made of the training boards. The first, I suggest, is their inability to do as much as they might about the problem of adequate apprenticeships in the United Kingdom, and I shall return to that in a moment. Secondly, they have been unable to make much impact on assisting worthwhile training for small companies, which are extremely important to the economy. Thirdly, they have not been able, because they are structured on an industry basis, to produce transferable skills and cross-sector skills in the amounts and numbers that the economy has needed.
As to apprenticeships, Labour Members must explain to the House why the industrial training boards have not been able to increase the numbers to anything like those in comparable countries. I shall not bother to quote again the figures given by my hon. Friend the Member for Mid-Sussex (Mr. Renton). Nevertheless, there has not been a significant increase in apprenticeships and certainly nothing like the numbers that we ought to look for. That is because the industrial training boards have not had the teeth or the ability to be able to force employers. I am not opposed to that, but they have not got the message of the needs across to the vast majority of employers, with one or two exceptions.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) mentioned the progress of the engineering industry training board in working towards the setting of standards and modules. How long has that taken? Eighteen years after 1964 is a long time to achieve something that should have been done, and has been accepted as being in everybody's interest, many years ago. Therefore, generally speaking, I do not think that its record in setting standards and modules has been a good one.
I am in agreement with my hon. Friend the Member for Bridlington (Mr. Townend) about wage rates. In some cases, although not in all, there is no doubt that apprentice wage rates have altered in percentage terms when compared with adult wages since the war. It is true that in certain industries that has made it less easy for employers to take on apprentices.
However, there is the other side of the coin. Because of the extraordinary wage structure for young people in the United Kingdom, apprentice wages fall about half way up the ladder between those on the bottom of the scale and those who find full-time employment without training. Many apprentices do not look forward to an apprenticeship, not only because of serving time but because their wage rates are considerably less than those less skilled in full-time employment. Again, industry training boards have not been able to effect significant alterations, although it must be true that much larger numbers of young people would like to take on apprenticeships than have been able to do so. The training boards have failed, with their statutory powers, and been unable to establish agreed systems of apprenticeship training that could have benefited the economy.
My second criticsm concerns the failure of the boards to make much impression on small firms. It has been accepted by both sides of the House that small firms should, by and large, be exempt from the provisions of training boards, but the problem is that, looking through the list in "Outlook for Training", the majority of large employers have become exempted from levy because the majority of them do training well enough for them to gain exemption. That means that the training boards' advisers, when they go to the larger companies, are given systems
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of training that the larger companies put forward as a way of getting themselves out of paying the levy, rather than instituting systems of training that they really need. The real problem is that much of the training that should be done in the small companies that make up a significant proportion of Britain's economy is not done. That leads to the problem of poaching and stealing, to which I shall return.
One of the other difficulties facing companies with regard to training boards is that they did not, as the right hon. Member for Doncaster reminded me several times in Committee, have power to institute training systems. Their job was to ensure that companies trained properly and to suggest ways of training—not to do it. But because of that role, because they were outsiders to the industries concerned and were not voluntary organisations, they became interlopers to many employers. It must be clear, even to Opposition Members, that they were extremely unpopular among many employers. I am referring not to medium-sized companies that tried to get away with the minimum training but to large, well-organised companies that believed that they were not fulfilling the purposes that they had been set up to achieve.
My hon. Friend the Member for Beeston (Mr. Lester) who was a Minister said:
"The boards have increasingly been seen as an arm of Government and Manpower Services Commission instead of as an integral part of their own industries."—[Official Report, 9 February 1981; Vol. 998, c. 633.]
I am sure that anyone who is involved in industry knows that that is true. It is not, therefore, in any way wrong that the Government should reconsider the present structure of training boards or that they should examine the boards as they have been established to discover whether, where, possible, they could return to voluntary arrangements that would at least have the support of the majority of employers. The training boards did not have that support even among the large employers in many of the sectors that they covered.
That leads me to the third criticism—the structure of the training boards and their ability to produce transferable skills. Because they operated at industry level, because the trade unions are powerful in many industries and because they are obviously trying to produce skills that are relevant only to the specific industry, it is clear that they are unable to produce transferable skills. Yet many of the skills that we so desperately require are not ones that the training boards are capable of providing. They may be perfectly competent at producing skills in industries that are in decline—the mechanical side of engineering and textiles are but two examples. There is a variety of industries in which industrial training boards may have been of some assistance by forcing employers to do more than they would otherwise have done. But what about the new industries that are emerging?
The industrial training boards are almost irrelevant there. The Government have been right to insist that, wherever possible, training should return to a voluntary system, by which employers have shown that they can produce credible schemes within their industries. The Government have also been right to insist that it is through the MSC and the new training initiative that the real development of training should take place. It is absolutely right for the Government to say that they want to establish a one-year scheme I hope that it will develop into a two-year one. It will be validated. It will have proper

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certification that will allow young people at the end of their first year—I hope, perhaps later, at the end of a second year—to feel that they are on the ladder to a skill that will be useful, not merely in one industry but across several.
To some extent, the arguments that are advanced can behalf of training boards are specious. They may not have been years ago. The hon. Member for Newcastle-under-Lyme and the right hon. Member for Doncaster talked about poaching and stealing. I can understand that in some industries, in some of which I am glad to see that the Government have kept statutory regulations—such as construction—where there are large numbers of small employers and self-employed people, it is reasonable to suggest that one small company may try to steal a highly skilled man from another. With regard to many industries, the right hon. Member for Doncaster is not living in the real world. Industry is now so highly technical and complex and the people who work in it are so important to the employer that when he trains them to perform a job he has all sorts of ways of tying them to the company—pension rights, holiday settlements and all the other inducements that are available to an employer to keep his staff. That is much more the case now than it was when the vast majority of semi and unskilled workers, 20 or 30 years ago, went out and hired their labour to the highest bargainer. In the vast majority of industries today that is utterly impracticable. I do not believe that people who have been trained, who are happy in the company in which they work, where they have a decent pension scheme and reasonable conditions—as the majority of people in British industry have—will disappear because someone comes along and offers another £5 a week.
The hon. Member for Huddersfield, East (Mr. Sheerman) may laugh. His experience of industry is obviously different from mine. With the training boards that are being retained, the Governent may have accepted the poaching argument and kept them statutory, but who is to say that concept of poaching is relevant today in the iron and steel or chemical industries? Nothing is more important to an employer than to keep his staff and to keep them happy. They are his most important capital asset. If an employer allows his company to face industrial strife or his key personnel to remain untrained or to go sick unnecessarily, he is left with millions of pounds worth of plant that he cannot use. I do not accept that the notion of poaching or stealing, which seems so easily to be talked of, will really happen.
I support my right hon. Friend in keeping the hotel and catering board. I am not so sure about the distribution sector of the economy. There is a wide range of people in a broad industry there. I should have thought it crucial that adequate training should be maintained and seen to be maintained in that sector. I notice that the legislation allows my right hon. Friend to reintroduce the statutory board if he believes that training in the industry is not working properly. I hope that in such circumstances he will not be disinclined to do so if an industry fails to do what he believes should be done.
I return to the new training initiative. It will be at a local level. It will be with employers. The hon. Member for Maryhill said that employers had not performed quite as adequately on training boards as he might have hoped. That may have something to do with the fact that
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employers have to run businesses, obtain orders and manufacture products, so they are not always able to sit through endless meetings, as other board members may be in a better position to do. There may be problems with employers at local level, but it is then up to the other members to ensure that the boards work as effectively as possible and do not waste people's time. They must also realise that the employers' commitment is of crucial significance.
The hon. Member for Islington, Central (Mr. Grant) said that the new scheme might not work because the trade unions would not allow it to work. That may or may not be so. It is certain, however, that it will not work unless the employers give their total commitment to it because it is they who will have to take on the youngsters and ensure that the training is properly carried out. I am delighted that it will be validated and certified and that there will not be the misuse that there has been in some YOP schemes in the past. I am also delighted that the TUC has accepted the basis of the scheme.
The hon. Member for Islington, Central was not quite fair in his remarks about the allowance, as it has long been accepted that a person who unreasonably refuses to take employment may forfeit his benefit. The principle therefore exists. I agree with my hon. Friend the Member for Mid-Sussex, however, that it is unnecessary to put at risk the new scheme, which I regard as of far greater importance and interest than the industrial training board argument, because of a very small number of people who do not want to take part and who will feel that they have been forced into it in order to obtain the allowance. This would damage the reputation of the scheme as well as being very expensive. It will undermine the scheme and sow doubts in the minds of many youngsters taking part as to whether it is a proper scheme from which they will emerge feeling that it has been worthwhile. To put the scheme at risk in that way would be quite unnecessary. I hope that this is clearly understood by everyone.
Finally, I am not so bothered as the Opposition about the proposals before us. I believe that a voluntary system, where such a system can be applied, is always better than one that is foisted on an unwilling industry. I have heard nothing to suggest that the failings of the training boards have been properly understood by the Opposition. I therefore believe that the Government are right to bring forward the orders. Provided that statutory boards are maintained where necessary, as they will be, I welcome the fact that voluntary arrangements can now be made.
7.53 pm
Mr. David Ennals: This is a sad day for British industry. I have no doubt that the Government's decision to press on with the abolition of so many industrial training boards will lead not to more training, as some Conservative Members have suggested, but to less.
When the hon. Member for Mid-Sussex (Mr. Renton) said that there were more jobs in manufacturing industry than ever before, we pointed out that the jobs were not in Britain. That must be taken into account. It is a tragedy that Conservative Members, recognising weaknesses in the industrial training boards—I do not say that changes and improvements are not needed—should decide not to reform and improve them but to carry out a massive demolition job that I believe will undermine the confidence that exists in many of the boards. I find it

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impossible to accept that the Government's initiative will lead to more training. I am convinced that it will lead to less, which can only harm British industry.
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) rightly said that one of the great problems of British industry is that jobs are being done inefficiently both by workers and by management, and he was right to relate that to the inadequancy of training. It is therefore to the improvement of training that we should direct our attention. In this context, I congratulate my right hon. Friend the Member for Doncaster (Mr. Walker) on his vigorous opening speech and the arguments that he deployed. The uncertainty in the Minister's mind was illustrated when, failing to answer most of the questions put to him by my right hon. Friend, he said that he hoped that the abolition of the training boards would have no adverse effects. That suggested that the Minister himself was doubtful whether the method to which the Government were moving would produce the desired result.
I shall concentrate on the footwear industry and its industrial training board because of its great importance to my constituency, and I imagine that my hon. Friend the Member for Norwich, South (Mr. Garrett) will do the same. We were reminded that 88,000 people work in the United Kingdom footwear industry. The Government's decision is shortsighted. The footwear industry is going through a very difficult period. The report of the British Footwear Manufacturers Federation published this month states that
"overall the level of activity remains low with little sign of imminent recovery."
In the early part of this year
"Orders … showed signs of turning down again—the seasonally adjusted figures for February and March being particularly weak. Short-time working has fallen significantly over the past year, but it is still far in excess of overtime working and persists despite a drop of 10 per cent. in employment".
That is particularly true in Norwich. There is increasing import penetration, with no signs of improvement. The report further states:
"The outlook does not yet seem to hold much prospect for real improvement. There is nothing to give reason for hope of a real recovery in consumer spending, nor for retailers to build up their stocks."
The depression in the footwear industry cannot be allowed to continue. It is due in part to Government economic policy, in part to world depression and in part to the Government's failure to protect the industry. All hon. Members, with whichever industries they are mainly concerned, must hope that eventually there will be an upturn in industrial production in Britain, whether under this Government or under the next Labour Government, and all of us know that this will be achieved only by an improvement in industrial training in Britain.
The demolition act being performed by the Government can only damage industry rather than improve its prospects. To achieve progress, training must be improved at every level, including management. Neither I nor the trade unions, nor, indeed, the industrial training boards, believe that the voluntary approach will be adequate. When the principle was introduced and the boards set up in 1964, the Government took the same view. In 1980, when the all-party footwear and leather interests committee in the House considered the subject of industrial training boards, it took the view that
"We believe that commerce and industry is not the place for amateurs. Success is achieved through well trained experienced
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people at all levels—this applies equally to the Board as it does to the shop floor. Industry and commerce, particularly individual firms, are not all fully aware of training needs. Technical colleges, universities, consultants etcetera—even Government Departments—all offer training facilities. A catalyst, however, is still essential in the majority of cases to ensure that the right training is given to the right person at the right time.
The State cannot provide this service, neither can industry by itself on the comprehensive scale which is needed. The ITB's are an area where employers and unions can work together to provide a 'grass roots' service which has no satisfactory alternative."
One of the tragedies is that the Government's decision has broken the consensus that existed between employers and unions in terms of training.
Too many employers, like the Government themselves, seek to run away from their responsibilities. That is why they have supported the Government in their initiative to abolish the statutory nature of boards and to proceed on a voluntary basis. There have certainly been good schemes. I pay tribute to the UVP scheme, and not least the project in Norwich, but with the abolition of the industrial training boards the impetus for imaginative and effective training schemes will gradually weaken.
When we were debating the issue in 1981 I suggested that if the Government insisted on abolishing the footwear, leather and fur skin industry training board they should at least consider amalgamating it with the clothing and allied products industrial training board. There is a case for some reformation and flexibility, but I received a wholly negative answer when I put forward that proposal. The proposal had been widely discussed with the footwear industry and it had been sounded out with those in the clothing and allied products industry. In a letter to me dated 26 November 1981, the Secretary of State said that
"we decided it would be best to move to entirely voluntary training arrangements for the sectors in scope to the footwear, leather and fur skin industry training board."
He gave no reason for doing so, just that they had decided to do it regardless of the possible consequences. He added:
"We believe … that the outline proposals which have been put forward by the major employers' organisations will form a sound basis for adequate voluntary training arrangements."
The Secretary of State did not give me the evidence then, and I have seen no evidence since, that in the footwear industry voluntary schemes are coming forward that will provide better training methods and a higher degree of training than we have under the industrial training boards.
I hope that when the Minister replies to the debate he will give an explanation of ministerial thinking. Surely there is a case, if the industrial training board for the leather and footwear industry is not to remain, for merging two other groups which have much in common—much more so than whisky and milk, as one hon. Gentleman said.
I look forward to an explanation from the Minister, but I shall in any case vote against the orders. I said at the beginning of my remarks that the Government are moving backwards. The greatest need now is for increased opportunities for training at every level in industry if Britain is to drag itself out of the depression into which it has now fallen. New initiatives, not the demolition of existing projects, should be the Government's objective. I shall, therefore, vote with enthusiasm for the prayer tabled by my right hon. Friends and against the demolition job that is being dole by the Government.
8.4 pm
Mr. John G. Blackburn: I exercise the basic fundamental right of a Member of Parliament to

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represent his constituency in the House and to ask how these orders will affect my constituency of Dudley in the West Midlands. Is there anything in these orders that will affect the prospects of employment, training and industrial growth in my constituency? The right hon. Member for Norwich, North (Mr. Enna1s) rightly exercised that right and spoke about the footwear industry in his constituency.
My constituency is in the heartland of industrial Britain. It is a metal-based community, dominated by one of the finest steelworks in the country—the Round Oak steelworks of Brierley Hill. It is true that the steel industry has been having a difficult time. The northern part of my constituency was ravaged by unemployment with the closure of the Bilston steelworks. Equally, the centre of my constituency was torn apart with the closure of the Cookley steelworks.
Order No. 661 refers to the iron and steel industry training board. Naturally, Members would expect me to direct my comments to that aspect of these orders that were originally laid before the House on 14 May.
I am sure that no right hon. or hon. Member opposes training. Training is the lifeblood of British industry. Indeed, I am unashamedly a dedicated disciple of training, but not training at any price. I am particularly happy when training takes place at local level, involving local industry.
However, it is the role of the House tonight to determine the advantages, or otherwise, of the measures laid before us. There are clear advantages in my area for voluntary schemes to be adopted in place of the industrial training board. A structure has been set in motion. It is saturated with enthusiasm—never with any breath of mine would I decry enthusiasm, particularly in training—and I believe that it offers real hope in the training concept for the young people in my constituency.
Positive moves have already been made with regard to the West Midlands iron and steel industry by the formation of the Midlands Independent Steel Training Association under the presidency of Mr. John Palmer of Ductile Steels and the chairmanship of Mr. Ian Copland of Round Oak steelworks.
The voluntary training arrangements proposed by the industry therefore seem to have met the criteria that have been established by the Government in this part of their legislative proposals. Indeed, I understand that in future training facilities for the iron and steel industry will revolve around four voluntary organisations—the British Steel Corporation; the Wire and Wire Rope Employers' Association; the Northern Independent Steel Training Association, which I understand will be centred on Sheffield; and the Midlands Independent Steel Training Association, which will be centred on my own constituency of Dudley. That association will embrace many of the well-known steel companies that have become everyday names, including Allied Steel, GKN, F. H. Lloyds, Duport, Glynwed, Ductile and Round Oak. The initiative that has been taken by the Midlands steel industry is to be applauded.
About 15 months ago, I had the opportunity, which I never take for granted, of being present at the opening of the new training centre for the Round Oak steelworks which will serve the Midlands steel industry. It is a commendation that that training centre was opened by Mr. Bill Sirs. In my judgment, no trade unionist should ever lightly condemn training facilities.
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I am a trade unionist and for three years had the privilege of serving on the national executive of my union. We spent hour upon hour devising training schemes for the benefit of the membership of the union that I served and of which I am still a member. It was, therefore, deplorable to hear the hon. Member for Islington, Central (Mr. Grant) say that the trade unions would have no part of these training schemes. Such comments are an indictment of the hon. Gentleman, who I am sorry is not in his place. His comment that our skilled craftsmen were among the most poorly trained in Western Europe was a further indictment of British industry as a whole.
Flexibility is one of the keynotes of training in this industry, and adequate machinery has already been set up by voluntary effort to carry out this important training function. Although I am a dedicated disciple of training, I hope that hon. Members will not get the impression that I am willing to give a blank cheque to the Government, because I feel strongly about the skillcentre at Dudley, which was the subject of a recent Adjournment debate. Alien to my nature, I am hostile to some of the decisions that have recently been made by the MSC.
Dudley has a purpose-built skillcentre for training and retraining on the Pensnett trading estate. It was subject to a 25-year lease which allowed for intermittent reviews, but it has now been closed—closed when I am crying out for training and retraining within my constituency. The decision of the MSC was to open an experimental skillcentre at Redditch to which my constituents would be taken by coach. Day after day they travel 25 miles past our own skillcentre to Redditch. I hope that the two Ministers will accept this as a marker buoy of serious complaint about the MSC and training for young people in my constituency whom I am here to serve.
I am also worried about training because I come from the heart of industrial England. For 17 years before coming to this House, I walked the avenues of the engineering industry and I am especially anxious about the engineering training that should be provided. It is an indictment of our industry that someone can open premises and put up a notice reading "Bill Smith, Engineer". Engineer in what? With what qualifications?
I was recently invited on an extended tour of West Germany when I had the opportunity to go to Spandau, the Bavarian motor works. After seeing the quality of engineering there, and the qualifications of those West German engineers, I feel that perhaps we are falling behind in the quality and quantity of the training that we provide.
Mine may be a forlorn plea but at least I have the courage to make it. Within the confines of training much more benefit could be derived if the Finniston report, "Engineering Our Future", could be taken down from the shelf. Within the pages of that report lie many valuable features that could help us towards the resurrection of our industrial and economic fortunes.
I have confined all my comments to my constituency because I have no mandate to speak for any other. I welcome the prayer as it relates to the iron and steel industry only because steps have already been taken to institute a training programmme within the private sector. The aims of the Midland Independent Steel Training Association, which are clearly set forth in its constitution, are to furnish a trained work force that is fully competent in the unique skills of steel-making and the technologies of the last part of the twentieth century and equipped for

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the tasks demanded of it. Those tasks are demanded by an internationally competitive and profitable private sector of our steel industry. It is in that spirit that, on behalf of the steel industry and workers in my constituency, I welcome the prayer and wish it godspeed.
Mr. David Stoddart: On a point of order, Mr. Deputy Speaker. I understand that news has come through that the Argentine garrison in Port Stanley has surrendered and a ceasefire has been signed. Have you heard from the Government whether they intend to make a statement tonight?
Mr. Deputy Speaker (Mr. Bernard Weatherill): That welcome news has not been vouchsafed to me. I am sure that those responsible for organising the Government's business will have taken note of what the hon. Gentleman says.
Mr. Stoddart: Further to that point of order, Mr. Deputy Speaker. There has been no sign from the Government that they are to make a statement. Is it possible for you to inform them that the subject has been raised and that the House is anxious to have a statement tonight?
The Secretary of State for Employment (Mr. Norman Tebbit): Further to that point of order, Mr. Deputy Speaker. Although there are stories to that effect, they are not yet confirmed. I shall ensure that my colleagues are informed of the point of order, and, if it is possible and appropriate, that a statement be made. But I am sure that the House understands that we would want to be absolutely certain of the veracity of the news before a statement was made.
8.20 pm
Mr. John Garrett: That is a hard act to follow.
I wish to speak about the direct and specific effect of the abolition of a board on my constituency. The hon. Member for Dudley, West (Mr. Blackburn) spoke of the effect on his constituency of a board being abolished, as did my right hon. Friend the Member for Norwich, North (Mr. Ennals). We represent the same city.
I oppose the ending of the footwear, leather and fur skin training board, particularly in the light of inadequate alternative arrangements. The hon. Member for Dudley, West supported the abolition of a board affecting his constituency because there were alternative arrangements. I follow the footwear industry's activities closely, and as far as I can tell there are no alternative arrangements for the industry. I read that committees, committees about committees or working parties are to be set up, but there is no direct replacement for that important and worthwhile service to the industry.
The board provides services that the industry requires to survive. Few industries have been as hard hit by the recession as the footwear industry, with the most serious consequences for the city of Norwich. Employment in the industry is down to 55,000. My right hon. Friend the Member for Norwich, North quoted 88,000, but that is for all the people covered by the board. Over 10,000 people in the footwear industry are on short time.
At the time of the footwear study report in 1977 the industry employed 74,000 people. It has lost one-quarter of its employees in five years. In general, the contraction is continuing. The industry's sales volume has fallen by
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15 per cent. in the recession. Imports are taking 55 per cent. of the market, compared with 49 per cent. last year. One-quarter of the imports are from Italy, which has shown a 17 per cent. gain in the past year. That is of particular significance to the debate. The Italian industry competes the hardest with the Norwich industry, and it succeeds because, of its training and expertise in design, marketing and manufacturing management.
The past year was the worst since the war for footwear maufacturers. The industry is in desperate trouble, yet the work force is co-operative, moderate in its wage demands and has shown willingness to adjust to new skills. The industry is a victim of monetarism. High interest rates have caused de-stocking and the high value of the pound has choked off exports and encouraged imports.
But there are long-term problems in the industry which were examined by the footwear study group set up by the Labour Government in 1977. I was a member, as were some Members of the Conservative Party. The study analysed what had gone wrong over the preceding decade or so. It pointed, for example, to the monopsonistic position of the high street retail chains. It dwelt particularly on the quality of management, especially in design and marketing, and it proposed a revolutionary scheme of assistance that hinged very much on the provision of new managers in marketing, design and manufacturing and on new management skills for the industry. Training is of particular importance to the industry.
The Labour Government responded to the proposal by bringing in a scheme of assistance to bolster management skills. They supported it with £4·5 million, and the Conservative Government ended the scheme as soon as they came to power. Once the present Government took office all help to the footwear industry stopped. There was no support for modernising the industry or for the so-called retail commitment which was an attempt to get British retailers to buy British footwear. There was no assistance on imports.
We now have the end of the footwear, leather and fur skin industry training board which does valuable work at remarkably little cost. The industry could not provide training of that quality and cost on a voluntary basis. The board costs a little over £½ million—under £5 per head of the employees in the industries it covers. The board emphasised those aspects of management training that needed emphasis, marketing and design. In-company advice on design was given to about 70 firms. In 1980–81 the board ran 23 management development courses, and was heavily involved in vocational preparation and further education for young people. It instituted a number of special courses for training in small business management. The Conservative Party always goes on about its dedication towards encouraging small businesses and providing means by which they can grow and prosper. The footwear industry training board gave assistance to small business management in group training and training courses. The board provided just what the industry needs. upgrading the skills in the industry so that it can more easily compete with foreign manufacturers.
The board knows the industry and its problems. produces training packages aimed directly at the industry's needs. Its field staff are valuable in an industry made up of small units scattered throughout provincial Britain—the Midlands, the North-West, the South-West, Norwich and East Anglia. These industries are fighting for survival and

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the training of people is of national importance and should be a national responsibility. Before the board was set up in the middle 1960s, training was mainly for operatives at a fairly low level of skills. The board covered the full range of technical, commercial and managerial skills that the industry desperately needs to survive. Voluntary arrangements will lead to a damaging reduction in the amount and quality of training.
The Secretary of State said that statutory ITBs will be kept in a few key industries. Where it can be shown that training is of importance to an industry, why not keep the ITB? The industry would be best served by a statutory board financed mainly by public funds. It is not a cost to the country, it is an investment. Without upgrading the skills in manufacturing, design and marketing the industry is in grave jeopardy.
The lesson is clear. The present Government have done nothing for the footwear industry. They have abolished the schemes of assistance introduced by the Labour Government. They have refused to take action against imports, as the last Labour Government did. They are now abolishing industrial training boards. No Conservative Member has spoken for the footwear industry. Although the bulk of the footwear industry is represented by Conservative members of Parliament it has been left to Labour Members to speak for that industry. I hope that the footwear industry knows it.
8.28 pm
Mr. Robert C. Brown: Winding up the industrial training boards is one more step on the road to the abolition of suitable statutory training arrangements in industry. One would have thought that even this discredited Government would have been happy to maintain forums where employers, employees and the trade unions could get together. We all know that the Government—through their hatchet man the Secretary of State for Industry—have been pressing for over a year for the abolition of most of the ITBs. The eight boards proposed for the chop today are only the start of the disgraceful procedure. Another eight are due to follow. That would leave seven ITBs. Can we believe that they will not sooner or later go the way of those that we are discussing today? Will the Minister give us a firm assurance on that point?
The Government have been determined to steamroller the policy through, in spite of the overwhelming evidence from all quarters in support of statutory training boards.
One of the major purposes of the Employment and Training Act 1981 was to give the Government the right to ignore completely any recommendations from the Manpower Services Commission in this area. Detailed studies carried out last year by the MSC caused the majority of the commissioners to recommend the retention of all existing ITBs.
Only the CBI and the wild men on the Conservative Benches believe in a free market solution to the problem of industrial training and support the Government's policy. As my right hon. Friend the Member for Doncaster (Mr. Walker) said earlier, we all know what such a policy was worth in years gone by. A minority of responsible employers provided decent training facilities. Alas, the majority could not care less. That was the position before the introduction of the boards.
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Once the statutory framework is abolished, there is no pressure on companies to reach even a minimum level of training. The weakness of the voluntary system is that it does not work if there are insufficient volunteers. Past experience tells us that many companies will not volunteer. On the contrary, they will fail to accept the responsibility to train; instead, they will poach those with the skills who have been trained by other firms which accept the good sense of having a proper training scheme. That—regrettably, in my view—will result in an overall reduction in the national training effort. Even good firms with advanced training programmes will come under pressure to cut back because of the competition from companies which are saving money by not training workers.
The abolition of industrial training boards will, of course, enable firms to save money on training in the short term, but in the long term it will be disastrous for the British economy. If we are to compete in the markets of the world, we need to have a work force trained at least to the level of that of many of our competitors, who leave us standing in this regard. Far from cutting back industrial training, a substantial expansion of it, right across British industry is badly needed.
Why were the ITBs introduced in the 1960s? The Minister of State knows that the answer is that the previous voluntary system was completely and utterly inadequate. The Government are putting the clock back 20 years, instead of looking to the future and strengthening the powers of the boards in respect of training.
Surely the Minister cannot be satisfied with the arrangement for the eight industries in which he is now to abolish the boards. What guarantee has he that at some time in the future the employers will not abolish even the very limited central bodies that are proposed? Has he any answer to that question? The example of the British Carpet Manufacturers Association has been referred to in the debate. It has already been made clear that many companies are completely against incurring the expense of funding a voluntary arrangement. That type of resistance, and the reluctance of employers to pay for even a minimal training organisation, means that there must be a question mark over the future of training in all the industries embraced in the orders.
My union, in common with other trade unions, does not support any of these voluntary arrangements. One of the successes of the ITBs, as I said at the start of my speech, is the equal participation of trade unions and employers. The new arrangements are entirely employer-dominated.
The chemical and allied industries review council cannot possibly be seen as a substitute for the ITB because, first, the trade unions are violently opposed to that, and, secondly, although the Chemical Industries Association is supporting the new body, the CIA represents only 15 per cent. of firms in the chemical industry which are at present covered by the industrial training board.
Chemicals are a key sector of British industry. It is nothing short of a national scandal that the Government's proposals will directly result in shortage of skills in that vital industry. The Government have been unbelievably doctrinaire in their approach to training. No consultations with the trade unions have been held. That shows a closed mind, and a closed mind is acknowledged as typical of the skinhead. In addition, the Government have completely ignored the views of the Manpower Services Commission

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and, equally, those of educationists. Only a rejection of these orders will maintain minimum standards of industrial training.
Much has been said on the Conservative Benches about the lack of apprentices. A major and obvious reason for that lack of apprentices is the murderous state of the econommy. I can think of numerous undertakings in my neck of the woods which employed scores of apprentices three or four years ago, but which this year are employing none or, perhaps, a handful.
A couple of weeks ago, I had the pleasure of attending the opening of an apprentice school at Vickers in my constituency. That company has always been exemplary in the training of apprentices. This splendid new training school at Vickers on Scotswood Road in Newcastle would not have been possible for Vickers alone, because it employed insufficient apprentices to pupil such a school. However, the school will be a huge success because of the number of apprentices from other firms in the industry nominated by the industrial training board for engineering and by the MSC.
I hope that the Government, even at this late stage, will see the merits of the boards that they intend to maintain, and change their mind on a lot of the boards that they intend to abolish.
8.38 pm
Mr. Bill Walker: I welcome these orders, and I do so from a position of some understanding of the problems faced by the training boards and within companies.
It was suggested by Opposition Members, in particular the right hon. Member for Doncaster (Mr. Walker), that the Government's approach to training is crude and doctrinaire. Some of us have long memories about training. Im my opinion, the Government's approach is both pragmatic and responsible in the circumstances of today. I said that some of us have long memories. I remember the Government who set up the training boards in 1964 and the circumstances that led to their establishment. I also remember how the major firms in almost every industry supported the idea at that time, and those major companies were represented on the training boards.
As the years went by, come 1973, there was a demand for change. Again, the Conservative Government introduced change. We have heard a lot from the Opposition about how wedded they are to training. My adult experience has largely been involved in training and personnel work and I have yet to remember legislation being introduced by a Labour Government to change fundamentally the training of young people, or even older people, in the United Kingdom.
In 1979, when the Conservative Party came into office, we found once more that the experience of training within British industry was not happy. There were further demands for change. Therefore, once more a Conservative Government decided to take action in this field.
I have been both a training and education officer for a national association and a director of personnel. In addition, I had the honour to be the first chairman of one of the pilot training schemes set up under the first group training scheme in Britain. Therefore, I can claim to have some involvement in industrial training, both at the sharp and at the blunt end.
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We must look carefully at what we are trying to achieve. Who does the training? What are the training needs? How is the training done? How is it measured? Those are the questions that have to be answered before one can decide who should foot the bill. An enlightened company that is concerned with being competitive, that wishes to prepare its work force for tomorrow, must train it. That company will not look to "nanny"—State or anyone else. Since 1964 the good companies have discovered that they could get out of the levy and grant system altogether by doing more than was required by the training boards. They did it because they deemed it necessary to make their company both efficient and profitable.
We must face up to the fact that Britain's training arrangements, since the introduction of industrial training boards in 1964, have not prevented skill shortages. They have not given us what we require to meet the demands of a rapidly changing world. We must look carefully at that. It is no good adopting either a doctrinaire approach of the Right or the Left. Neither would be sensible.
It is wrong to suggest that the Government are doing that. If the Government were being crudely doctrinaire, they would have abolished all the boards. Instead, they looked carefully at each board in turn to see how each 'was assessed by the people who knew best how to assess it—the people in the industry who were responsible and footed the bill for the training. On that basis it was decided that some boards were no longer required, because they had outlived their usefulness. They had carried out that which was necessary. They had interested companies in training, its value and how it could help them to become profitable.
Are we adapting quickly enough to meet the demands of technological change facing Britain? We either trade to survive or we do not trade and our standard of living goes down year by year. Other countries have an option; Britain has no option. When one looks around the world and examines other major trading nations and how they train their people for the vocational needs of today and tomorrow, it can be seen that they tackle it in a much more efficient and effective way than Britain has done. Yet we have had statutory boards since 1964. Anyone, however impartial, will say that if, after 20 years, the goods have not been produced, it certainly must be time for change.
There has been criticism of voluntary bodies. Earlier we were told—and I hope that it is true—that our voluntary forces had beaten the Argentines, who are not volunteers but were coerced. In business or anywhere else one volunteer is always worth more than 10 pressed men.
One of the great problems was that some companies were no longer in step with their training board. Because the companies were forced into a relationship, relations deteriorated year by year. A responsible, pragmatic Government had to find a way to persuade the companies to take a more enlightened view and to remove the impediment—the boards. We did that.
The right hon. Member for Doncaster suggested that it was wrong to hand over training assets to the new voluntary bodies I see nothing wrong in giving the nation's assets to volunteers to use for the nation's benefit. That is the yardstick. Are we able to measure and check? I believe that that is possible.
I have direct experience of a number of boards. I was heavily involved in two—the distributive industries training board and the furniture manufacture training

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board. I am relieved and pleased that we have taken long overdue action in relation to both. There is no doubt that in 1964 both boards were required, but they have outlived their usefulness. Some boards, including the distributive industries board, were no longer relevant to the rapid changes in the industry. That was partly because major employers were no longer directly involved with the boards. The fringes became more an more involved and that created problems.
Opposition Members say that we shall lose the experience of all the people involved in training boards. I shall put on my employer's hat and advise hon. Members that in my experience there are never enough people trained in specialist skills. That is equally true of trainers. There is something marvellous and unique about the individual who is capable of passing information to others. There are never enough such people.
Experienced and capable training officers will be snapped up. I was head-hunted when I was a training officer. I was made a number of tempting offers. That was because I was doing a job that impressed some who were prepared to pay me more to do a better job with them. That is true of every capable and experienced training officer. They will be in demand. If they are known to carry out their duties effectively they will be snapped up.
I see little substance in the claim that skills will be lost to industry. Such skills, when they can be applied effectively, are never lost, either to the individual or to industry. It is always useful to have a person in the board room who has done the job. More and more people in board rooms have come up through the ranks and can tell their colleagues first hand about the problems. That is as true of training as anything else.
We have heard much scaremongering and emotional nonsense, but I believe that the changes were long overdue. I do not suggest that everything will be right in all instances. In real life that never happens, but I am confident that we are right and that the benefits will be seen. The new training initiative, coupled with the recession, provide us with a unique opportunity to introduce fundamental changes in vocational training. That is long overdue.
8.49 pm
Mr. Stan Crowther: I always listen with great interest to the hon. Member for Perth and East Perthshire (Mr. Walker), who has great experience in employment matters. His speech seemed to follow the theme of many Conservative Members, who expressed genuine concern about the inadequacy of the present training arrangements and who came to the conclusion that, because the existing industrial training board system has not worked as well as it should, it should be abolished. My view is that because the system has not worked as well as it should it must be improved.
I was intrigued by the Minister of State's argument that the Government are still moving forward. However, they are moving in the opposite direction from that taken by a previous Conservative Government in the 1964 Act. I was reminded of the famous Duke of York who, having marched his men to the top of the hill, turned them round and marched them down again so that he could say that they were still moving forward. The Government are embarking on a massive backward step.
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No one can pretend that the present system is perfect. I accept all the criticisms—indeed, I have voiced them—that the system is not producing the number of skilled people that it should. However, far from abolishing the industrial training boards, we should be strengthening them, widening their scope and giving them new additional responsibilities.
Since the Second World War, whatever Government have been in power, Britain has never seriously tackled resource planning. We tend to stagger along hoping that everything will turn out all right in the end, but of course it never does. The more complex our society becomes and the more technologically-based and energy-consuming our industries become, the less likely it is that matters will be all right in the end. Our only major natural resource that has ever been the subject of some serious planning is land. The town and country planning legislation, with all its weaknesses and loopholes—I learnt much about those in 12 years as chairman of a planning committee—is at least an attempt to plan the rational use of that resource. Perhaps one day, if we are lucky, a Government will attempt seriously to plan the use of our energy resources.
Possibly the greatest of our natural resources is our people. Our failure to develop to the full the potential skill of millions is a criminal waste. Proper planning for the use of our human resources is a vital necessity if we are to be able to face the challenges of the twenty-first century. No one denies that it is a huge task, but I am reminded of G. K. Chesterton's comments on Christianity:
"It has not been tried and found wanting, it has been found difficult and not tried".
But sooner or later it must be tried, and industrial training boards will play a crucial role in the attempt to plan the proper use of our human resources.
It must be obvious that a free market in skill does not work. It cannot produce the right results because of the time lag between demand and supply. The supply of skilled labour cannot be turned on like a hot water tap. If, for example, a company needs 12 toolmakers, it needs them now and not in four or five years' time, after they have been trained. Tomorrow's supply should not be based on today's demand. That is the way that we have always operated our training system. As long as it is company based it has to be that way and that is what we must change.
Even in comparatively recent times, when there has been a substantial level of unemployment, companies in my constituency have been unable to find skilled people in certain trades, mostly engineering trades, simply because the apprenticeships were reduced at times of previous recession. While training facilities are based on what a company may need today, tomorrow or even next year, we shall not be able to meet the demands of 10 or 20 years ahead. Real planning is needed to ensure that there will be an adequate supply in the future of people with all types of skill.
I shall quote briefly from the annual report of the iron and steel industry training board 1980–81. It refers to the MSC review and to the subsequent reviews on which the present legislation is based. It states, rightly or wrongly—I assume that it is correct:
"The Secretary of State will base the final decision"—
the decision on the future of the ITBs—
"on the institutional framework for industrial training on the following criteria:—
avoiding shortages of skilled labour in future economic upturns;

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satisfying industries' future demand for manpower trained in new technologies."
That is marvellous and is precisely what we need. I have not heard one word from the Minister of State to explain how the Secretary of State, under his new arrangements, will be able to meet those two criteria. I cannot see how he can possibly meet those criteria on any type of voluntary arrangement, however good it might be.
The ITB system must form the basis of the future arrangements and its imperfections must be removed but those two criteria are impossible to meet on a voluntary basis. For a long time I have taken the view that the primary responsibility for training in industry should rest with the industry rather than with the individual company. The individual company's needs will be today, tomorrow or next year. The companies must adjust their training system to their short-term rather than to their long-term needs.
The only way in which we can base our future training on an industry rather than on an individual company is to keep either our present ITBs, or some type of organisation resembling them, which has an industry-wide responsibility. That is why doing away with the ITBs is a massive backward step. We are abolishing the very organisations that could form the nucleus of a completely new system and a brand new approach to the whole business of training for skill.
I accept that there are many imperfections in the present arrangements. We should be trying to make them better and not trying to get rid of them. The present hit or miss system is well demonstrated in the case of the steel industry, which is a matter of great concern to me because of my constituency interests. The iron and steel industry training board report 1980–81—we must bear in mind that it is already a year out of date—states:
"As predicted in the last report, the major areas of concern during the year were the continuing downward trend in the numbers of young people recruited into the industry and the reduction in the numbers of training staff employed. This latter point has arisen from the demanning exercise carried out over the past year and the question now must be seriously considered as to whether there are sufficient training staff in post to help meet the large number of training needs arising from demanning, technological change and developments. The total number of full time and part time training staff employed in the industry at April 1980 was 2,038. This represents a reduction of 44 per cent. in numbers since the last information on training staff was collected in November 1975. During the same five year period the total number of employees in the industry reduced by 27 per cent."
The number engaged in training decreased a great deal more proportionately than the total number in the industry, which caused the ITB serious concern.
At the BSC's Rotherham works there are trainees who will have no job at the end of their training. Unless there is some juggling with redundancies, trainees will complete their training and then will be put on the dole. If there were a change of economic policy, or a change of energy pricing policy, which produced a revival in the steel-using industries, there would be an immediate upturn in demand for British steel from the public and private sectors, but where would be the skilled workers to meet the extra demand? Those workers have already been put on the dole. That is why we need a much broader national approach than the day-to-day approach that has been followed for far too long.
The iron and steel industry training board is one of the boards that will be abolished. I am told that in the private sector there will be two group training associations and a
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training committee and that trade union and education interests will be represented only at regional level, and in only an advisory capacity. Surely that is nonsense. If there is to be a voluntary system that restricts trade union and education interests to an advisory capacity, who can blame the trade unions for saying that they do not want to know anything about the system? I received a letter last Friday from the Iron and Steel Trades Confederation, which stated that in the private sector conditions seemed even worse than in the BSC since
"We have no knowledge of any replacement plans at all."
Those who have the plans have not bothered to tell the largest union in the industry about them. The letter continues:
"The position in short is just what has been forecast for all sectors where ITBs will be abolished, with big firms continuing with training where it is in their interests and arrangements lapsing elsewhere."
That is precisely what has caused my right hon. and hon. Friends and myself to be afraid. We fear that there will be substantial areas of British industry where there will be no training, or virtually no training. I fear that we shall see a reversion to the bad old days when some companies operated sensible and effective training schemes and other companies, which did not bother about training, poached their trained personnel. There is no doubt that under the orders that are before us that will happen. That will be no good for industry and no good for the country.
9.4 pm
Mr. Raymond Whitney: The hon. Member for Rotherham (Mr. Crowther) spoke of his 12 years as chairman of a planning committee. That experience has coloured his views and he seems to believe that there is complete virtue in planning, especially for training. Planning the use of land resources is one thing and making dispositions for the future industrial development of Britain is quite another. He leads himself astray if he believes that one approach can be used with the same effect as the other.
The hon. Member for Rotherham said that planning had not been tried, but the boards have been here for 18 or more years. We have had four Labour Administrations and one Conservative Administration and we have the results that we see today in planning for resources and manpower. The hon. Member needs to think again carefully about whether the training boards, as the system has been created, are capable of fundamental reform.
If the hon. Gentleman wishes to see a real planning system, where the resources are planned by the little men in the middle, he can go to the ultimate of that idea, which would be the Soviet Union, China, or any of the Socialist States. He will then find that planning by the little men in the Ministry, or the little men on the board, does not meet the needs of a modern industrialised country. He would therefore find that the real effects of planning by the little man in the centre do not provide an economy that is capable of meeting the challenges that we meet today, and shall meet in the future.
The Government have shown a lead through their actions in the past three years by responding to industry's requirements in meeting a really developed training system in this country. We have seen that in the new training initiative, which is the most imaginative proposal put forward in any industrialised country. There are many problems to be solved, as I am confident that they will be

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by September next year. When the initiative gets under way, it will offer our young people the best opportunity that has ever been presented to British people. We shall compare favourably with industrial countries throughout the world.
This recognition that a new flexible approach is required, manifested in the new training initiative, has also been demonstrated in the Government's approach to the examination of the role of the industrial training boards. It has been a careful, methodical and thorough examination. As a number of my right hon. Friends have pointed out, it has been far from dogmatic, but has been conducted case by case, board by board and industry by industry.
Labour Members, if they are prepared to be honest about this, must concede that that is the effect. Clearly the investigation and careful study have shown that the results are not satisfactory. The industrial training boards have not produced the trained force that is needed in times of expansion, and there must be a better way.
The reaction of the industries to the boards has to be a crucial element in their decisions. Many companies—for example, in the furniture industry in my constituency—believe that they can do better in a different structure. The British furniture manufacturers federated associations have already appointed a national training executive. Its intention is to produce other training officers. I know a number of employers who are confident that with far less bureaucracy, and far more effectively, they will produce the sort of training that will be needed by that industry in the future. What is true for the furniture industry is true for others.
I am sure that it is wrong to suggest that companies are ready to cut costs on training. They have learned a great deal during the past few years. They have learned to get back to realities. One of those realities is that money must be spent on research and development; another is that it should be spent on training their work force. Any company that does not understand that does not deserve to be in business. Indeed, it will not be in business for long.
It is accepted and not surprising that the Opposition will react in the traditional and Pavlovian way to any changes. Although we carry the label "Conservative", there is nothing more hard-backed diehard reactionary than the present Labour Party. Any suggestion of change, flexibility and progress is anathema to it. I am absolutely delighted that those epithets cannot apply to my right hon. Friend the Secretary of State and his colleagues in the Department of Employment. I applaud their initiative. They have demonstrated the necessary flexibility. The answer will show that British industry, unlike the Labour Party and other Opposition parties, understands the need for training and the needs of the 1980s, and that the proposals that were advanced in the 1960s are no longer good enough for the Britain of today.
9.11 pm
Mr. Marcus Fox: I have—[Interruption.]
Mr. Speaker: Order. I understood that it had been arranged that the winding-up speeches would begin at 9.15 pm. The hon. Member for Shipley (Mr. Fox) was the only Back Bencher to rise.
Mr. Fox: Opposition Members might allow me to use the few minutes at my disposal when I remind them that when I made my maiden speech on 21 January 1971 I tried to annul a statutory instrument that allowed the road transport industry training board to take the taxpayer for a ride.
Mr. Harold Walker: The hon. Gentleman has not listened to the debate.
Mr. Fox: If other hon. Members had been present all day and had tried to speak, I should have given way. I hope that the right hon. Member for Doncaster (Mr. Walker) will not try to prevent my right of free speech. I shall quote from my maiden speech. Not many hon. Members do that. I said:
"I do not argue from the point of view that these boards should be dispensed with overnight. There is widespread dissatisfaction, which we all accept, but in the case of this board, what we have to do is to decentralise".
I went on to say that there were three obvious sectors of the industry where that could be done. The Government are being too timid in that respect. They are allowing two sectors of the industry to which I have referred to remain within the existing system. Only the passenger transport industry, with which I was involved before coming to this place, is being allowed to carry on its own trade. I welcome that wholeheartedly. I regret only that the Government have not allowed that industry to hive off.
In my maiden speech, I went on to say that the three sectors to which I had referred
"would automatically be responsible for raising their own levy and for deciding how grants are given."
Not only are the Opposition trying to prevent that. Their motion also refers to a board that is prominent in my constituency—the wool, flax and jute industry training board. Opposition Members do not seem to realise that I said in 1971 that that board
"has 18 different sections and it levies what it needs to do the necessary training. It is important that these boards should be run by people within the industry and that we get the training that is necessary."
That was indeed happening in the textile industry and it is right that it should be mentioned here. I further stated:
"At the end of the day, with certain safeguards, the Government should be able to opt out … We all want to be cost effective … There are some big firms who have done very nicely out of training, and it is time that we called a halt".
I thought that I introduced that debate fairly successfully. The hon. Member for Nuneaton (Mr. Huckfield) then said:
"On the … public service vehicle side there are comprehensive training programmes and facilities for training are offered by the National Bus Company and by various municipal corporation bus fleets. Some independent bus operators offer training".—[Official Report, 21 January, 1971; Vol. 809, c. 1419–21.]
Of course they do. Indeed, more training will now be offered to more firms by the two trade bodies concerned than was the case under the road transport industry training board. I welcome that, I welcome the Government's proposals and I shall certainly vote against the move to annul them.
9.16 pm
Mr. Barry Jones: It should be placed on record that the last two hon. Members who have spoken had not spent a great deal of time in the Chamber listening to this lengthy and well informed debate.
I think that it is generally agreed that my right hon. Friend the Member for Doncaster (Mr. Walker) made a

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weighty and probing speech. He dealt at length with the disposal of assets and the discontent of the trade unions at the proposed orders. In responding to my right hon. Friend, the Minister of State defended the Government's proposals wholeheartedly, but it seemed to many of us that he delivered a sketchy, complacent and even platitudinous speech. Nevertheless, it was a shrewdly cast speech—low key, and even meriting the epithet "pellucid".
My hon. Friend the Member for Eton and Slough (Miss Lestor), in a very important speech, spotlighted uncompromisingly the plight of tens of thousands of badly paid women who would find fewer opportunities for training if the orders were passed. She instanced specifically the chemical and lace industries.
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) boldly stated that we should not make training officers redundant when they could be employed to train the unemployed.
My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) feared, as I do, that the remaining statutory training boards have been undermined and have become less confident and less effective as a result of the Government's policies.
My right hon. Friend the Member for Norwich, North (Mr. Ennals) and my hon. Friend the Member for Norwich, South (Mr. Garrett) concentrated on the footwear industry and the 88,000 people employed in it, and comprehensively denounced the Government's intention to abolish the industrial training board for that industry.
I hope that the Minister in his reply will respond to the points that I have picked out. I hope that he will also tell us whether the policy of his right hon. Friend the Secretary of State for Employment is the same as what is clearly the policy of his right hon. Friend the Secretary of State for Northern Ireland who stated in the Department of Manpower Services document "Training for the Future" that
"the Government is anxious to extend the principle of voluntarism into the statutory sectors wherever possible".
Is it the intention to apply that principle to the remainder of the United Kingdom?
We shall be grateful if the Under-Secretary will inform us of what legal authority he and the Government possess with regard to the assets. My right hon. Friend the Member for Doncaster made strong reference to the assets of boards that are to be wound up. Why did the Under-Secretary slip out the basis of his policy on the dispersal of board assets at 4 o'clock on 8 April in answer to a written question when most of the House had left for the Easter Recess and there would he no newspapers the next day? He owes the House an explanation.
The Under-Secretary was the chief proponent of the Employment and Training Act throughout its many stages. In Committee he succinctly, although inelegantly, laid bare his party's view. He said:
"We believe that the State should not do the training, and that industry is better at deciding its needs and should do most of the training for the future. It is because we have successful companies that most of industry is doing very good training."—
[Official Report, Standing Committee D, 14 April 1981; c. 281.]
Earlier in the proceedings, at his most sanguine but offhand best, he hazily expressed his hopes for Britain's industrial training future. He said that
"the ITBs have played a valuable role … Having turned the industry concerned around and made it look towards a better
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training system, a voluntary system could work somewhat better."—[Official Report, Standing Committee D, 17 March 1981; c. 33.]
Against tonight's proposals those remarks are indeed hollow. How many training officers are now in post for the 1½ million employees taken out of scope by the orders?
One of the consequences of a pell mell pursuit of voluntarism is that massive numbers of able training staff have been made redundant. But from the perfunctory, anodyne and bland notes supplied to me, albeit courteously, by the Under-Secretary I can identify only 22 actual training staff for the successor bodies to the eight boards, excluding the figure for the iron and steel board, whatever that may be. In February 1982 a reliable estimate of 110 training officers for this board is available, although that plummeted rapidly from 900 in 1979.
In 1979 the chemicals industrial training board employed 80 training officers. Today, at best, it employs only six. Likewise, the wool, jute and flax board has declined from 40 training officers in 1979 to only six in post in February of this year. The same applies to the knitting, lace and net training board, having changed from 36 officers for training to only six. Is not the Under-Secretary ashamed of such figures? Is that the best that he can do? Who are the victims? Clearly they are our young school leavers as well as the redundant middle aged job seeker.
There has been some degree of pre-emptive closures. The orders are a form of retrospective legislation. The chemicals industrial board effectively closed its doors on 31 December last year. It is asserted that all the field staff left at that time and only a handful of administrative staff remain in post. What has happened to the Government's assurance that there would be a smooth transition to voluntary bodies?
The knitting, lace and net industry board now has only eight staff, and so far as we can ascertain only two are traning staff. Is it not a fact that the carpet industry board is literally closed clown? Despite tonight's sleight of hand by the Government, the Opposition are convinced that to all intents and purposes the debate is about a form of retrospective legislation. In that sense, what the Government propose is an insult to the House.
Currently, 45 apprentices work in the chemical and allied products board's Teeside training centre. What is the future there? The Minister relies heavily on the proposed future contribution of a body called the Chemical and Allied Industries Review Council, a supposedly tripartite body, yet the influential Mr. David Warburton, the GMWU national officer of the Chemical Unions Council wrote to the Secretary of State on 10 June:
"I must express the concern of the Chemical Unions Council at the implication that the so-called Chemical and Allied Industries Review Council is a voluntary tripartite body involving the trade unions. There is, in fact, major concern on the part of the unions, shared incidentally by many employers, that the abolition of the CAPITI3 will result in several shortages of adequately trained personnel up to 1990."
That influential trade union officer added:
"I made representations direct to your department, as well as to the MSC, but it seemed too clearly evident that a decision had been made in advance of our representations for political reasons, rather than those which are in the interests of our industry".
Mr. John Townend: Will the hon. Gentleman give way?
Mr. Jones: I shall not give way. I am very short of time and wish to address myself to the many points that hon. Members have made.
My hon. Friend the Member for Rotherham (Mr. Crowther) as the well as hon. Member for Dudley, West (Mr. Blackburn) referred to the iron and steel board. In his excellent speech, my hon. Friend the Member for Rotherham included an apposite quotation from Chesterton. Under the new arrangements, what is to be the fate of the enhanced four-year university graduate course leading to a masters degree in metallurgical engineering sponsored jointly by the University of Sheffield and the training board? Will the voluntary arrangements ensure at least 26 training officers? How many training officers will there be for that board?
The national officer of the T&GWU, Mr. Larry Smith, is not the only well-informed transport industry personality to indicate his deep dissatisfaction about the road transport board. He is on record as saying that he will not surrender the T&GWU's responsibilities to its members to a highly suspect successor organisation.
So far, one has raised the important issue of safety. I challenge the Minister to say whether or not, under a voluntary training system for the 6 million employees no longer covered by the statutory system, the Government guarantee that safety matters will not be neglected to the detriment of the workers. How will the Minister monitor safety and training, given his responsibilities and those of his Department?
At a time when the Government claim that they are launching a new training initiative, it is hard to believe that the House is debating these orders. The youth task group which has just reported on the new initiative states, plaintively;
"No ready-made delivery system exists … The remaining Industrial Training Boards cover only one-third of employees. The delivery system in the Youth Opportunities Programme is much nearer to what is required but it has been less successful in delivering quality rather than quantity".
Not surprisingly, the team concludes that it will need managing agencies for the NTI programmes. On the list of possible candidates we find the training boards. Listing the responsibilities of managing agencies reads like a description of about half the former boards' work.
The Government are prepared to axe training boards that have about 6 million employees within their scope. Our debate encompasses some 1¼ million employees. For millions of workers these boards represent some assurance of sound industrial training and future prosperity. To destroy these boards is to deny that assurance and hope. That is pitifully poor industrial psychology and the negation of leadership by the Minister's Department. The resources and expertise of the training boards are to be scattered to the winds. Right hon. and hon. Members seek to end mass unemployment and to regenerate Britain's flagging industries.
We, the Opposition, say that statutory industrial training boards are a means to that end, and that when Britain seeks to renew its industries, and the depression ends, we fear that the required skills for industrial renewal will be lacking. There will be a damaging, frustrating and delaying bottleneck of major skills. We go further and say that these superficial, cosmetic measures will not stand the test of time. They will prove to be inefficient and unworkable. They could even collapse within two years, so flimsy are the provisions.
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No doubt the Secretary of State takes pleasure in destroying the political consensus on industrial training. He can happily toss aside the 1963 statutory training provisions of the Conservative Government of Sir Alec Douglas Home. He can blithely dance on the reputation and political grave of lain Macleod, a former Secretary of State for his Department. He can spitefully cock a snook at the 1973 statutory provisions of the previous leader of his party, the right hon. Member for Sidcup (Mr. Heath).
The Opposition predict the eventual rejection of voluntarism and a return to State intervention later this decade. Lest the House believes that mine is the polemic of an outraged, politically motivated Opposition in alliance, as indeed we are, with a deeply concerned TUC, I refer to an article by Roy Williams of the Imperial Group Limited in which he states:
"I judge that whatever national system is developed we will see an early return to economic coercion to meet national perceived needs …"
Secondly, I quote from the CBI news letter No. 3, 1982, where there is a description. The writer states:
"We as employers are walking into a situation where we are asking for the nationalisation of training in the form of legislation and a take over by the Government Departments involved."
Last year, the engineering apprenticeships that were supplied by the employers totalled only 10,000 and Britain's industrial seedcorn—for that is what skilled workers are—reached a depressing low. Only 90,000 apprenticeships were offered. Revealingly, it took £70 million of the taxpayers' money to provide one in three of these apprenticeships.
Employers take a commercial and cyclical view of skill training. They undertake to train largely when it suits them. Britain's economic and training needs—those of a Britain ravaged by the social and economic ills consequent on the cancer of mass unemployment—are not considered. The House will make its own judgment of information in the CBI's now celebrated and injudicious newsletter from which I previously quoted. It further states:
"By the way, we calculate that the hard work many of us put in to win the first round has saved employers the following:—
3 Months Operating—all ITBs £12 million
1 year Operating costs, 16 ITBs £25 million
Winding up costs, 16 ITBs £30 million to £40 million".
The CBI says that ultimately £67 million to £77 million will be saved. Are the Government engaged on an exercise to save money? Is the abolition of the boards the Department's contribution to the now infamous public expenditure cuts?
We fear that there is a real danger of a damaging vacuum being created in training arrangements for workers in many sectors of industry if the Government proceed. We have even more rapid industrial and technological change, yet the Government seem to have forgotten the lesson of the 1950s that the nation cannot depend on employers' efforts alone for the supply of trained manpower. The Minister should heed the journal of the Institution of Plant Engineers, which states:
"It really is time that the Government awoke to the threat that is developing to the craft base of this nation's manufacturing industries. Failure to do so will cause Great Britain to be no longer one of the workshops of the world, but merely an offshore supermarket for the rest of the world's produce."
Our industrial competitors will benefit from the Government's hapless approach. To savage the boards is to undermine the mechanism that might in the immediate future help to make the new training scheme a success for the benefit of tens of thousands of our young school

691
leavers. It appears to many outside the House that the proposals are an indirect public expenditure cut. The policy could undermine thousands more jobs. It is a body blow to Britain's jobless, whether school leavers or middle-aged redundant workers. When the crunch comes we do not expect companies to pay a second annual subscription to their non-statutory boards if their balance sheet is under pressure. Market forces will let the Government down. The policy as adumbrated by the Government is doomed to failure. As my hon. Friend the Member for Eton and Slough said, with the proposals the prospect for training and retraining women declines.
The orders are a reckless folly and possibly a sneaky sortie in to privatisation via voluntarism. They are a vicious act of industrial vandalism and a typically malevolent contribution from today's Department of Employment to the fight to save the British economy. The Government should stay their hand. They are on course for a disastrous return to laissez faire.
9.39 pm
The Under-Secretary of State for Employment (Mr. Peter Morrison): I enjoyed listening to the hon. Member for Flint, East (Mr. Jones). It reminded me of the halcyon days that the right hon. Member for Doncaster (Mr. Walker), the hon. Gentleman and I spent in Committee on the Employment and Training Bill last year, which I admit has made today's debate possible.
Today's debate, as the hon. Member for Flint, East said, has been long, interesting, provocative and wide-ranging. It has been marked by one factor in my view. I have been staggered and fascinated at how amazingly reactionary the Opposition have been. I include among the Opposition, if it satisfies right hon. and hon. Gentlemen opposite, the only hon. Member from the Social Democratic Party, the Member for Islington, Central (Mr. Grant). Even he apparently did not wish to see any change of any kind. He said that he had some ideas about the rationalisation of industrial training boards and when I asked him what those ideas were he said that he would be coming to that later in his speech, and, of course, we heard no more.
Mr. John Grant: I made the point of a remissible tax. That is something we are considering seriously. I said that we would be making our own proposals shortly.
Mr. Morrison: The remissible training tax is something that I shall be referring to. In terms of the rationalisation of the remaining boards it would be interesting to know what ideas the hon. Gentleman and his colleagues have.
Mr. Harold Walker: Where are his colleagues?
Mr. Morrison: The right hon. Gentleman asks "Where are his colleagues?" There have been no more than three present. One wonders whether tonight the alliance is breaking up. Throughout the day there have been no Liberal Members present.
Mr. Walker: No Scots, no Irish—none of them.
Mr. Morrison: The right hon. Gentleman is making my speech for me. Apparently I do not have to make political points any longer. The right hon. Gentleman and his hon. Friend the Member for Flint, East reminded the House that it was the Conservative Government in 1964 and 1973 who started the industrial training strategy
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moving. I wholly accept from the right hon. Gentleman and the hon. Gentleman that they have supported, by and large, that strategy as it has been implemented through the legislation. I am grateful to the right hon. Gentleman for making that point because it sets in context that we are making minor and moderate changes in the way forward in terms of industrial training. I am sure that he and his right hon. and hon. Friends will see that in time, I understand the reason why they have to oppose it at the moment. He will see that our proposals represent the sensible and pragmatic way ahead.
Mr. Craigen: My hearing must be a little at fault. Did the Minister say "mindless" or "minor" changes?
Mr. Morrison: The hon. Gentleman obviously came down in the aeroplane from Scotland this morning. I said "minor". Right hon. and hon. Gentlemen on the labour Benches were looking back to the pre-1964 position. They were not looking at the post-1982 position. I hope that the right hon. Gentleman will accept that I mean what I say. I accept that the boards and their staffs have played an important role in training in industrial sectors to get the show on the road. I pay tribute to them and express the Government's gratitude.
This debate about the future of industrial training boards started before I arrived in the Department of Employment. My right hon. Friend who is now Secretary of State for Northern Ireland and my hon. Friend the Member for Beeston (Mr. Lester) in November 1980 asked the Manpower Services Commission to review the future of training boards in each sector of the economy. The right hon. Member for Doncaster, in his opening speech to which I listened carefully, pointed out that not long after that 23 of the 24 chairmen wrote a letter to my right hon. Friend, saying that in their view it would be a great mistake to abolish the boards.
I am sure that all hon. Members would accept that anyone who takes on the job of chairman of a board does so because he believes in what the board is doing. He also has a broad obligation on behalf of his staff, whom he knows are working well and to the best of their ability, to achieve the purposes laid down by statute. I should have been amazed if in those circumstances 23 of the 24 ITB chairmen had not written such a letter to my right hon. Friend. [Interruption.] The right hon. Member for Chesterfield (Mr. Varley) says that that is the end of the story. I should have hoped that if he employed people he would want to support them, just as the chairmen of the ITBs supported then. staff. They have a vested interest.
Since November 1980, when my right hon. Friend made his request to the Manpower Services Commision, many important decisions have been taken, as the right hon. Gentleman knows. I have already referred to the fact that the Employment and Training Bill was discussed by the House last spring, was agreed to by the House, and is now an Act. Since then there has been the publication by the Manpower Services Commission of "Framework for the Future" in July of last year. Further consultation took place among interested parties, in the two months following the publication of that document, and then the Manpower Services Commission, in October of last year, made further recommendations.
My right hon. Friend the Secretary of State announced his decisions in principle about the 16 boards which he thought it was sensible to abolish, provided the House

693
agreed. That was in November of last year. At the same time—and several hon. Members have raised the point—the new training initiative was published, and then developed during the following period.
I was asked whether the remaining boards and the non-statutory training boards relating to the new training initiatives would all be cohesive to ensure that the three main objectives were achieved. I have told the chairmen of the statutory boards that I hope they will knit in very closely, and in regard to the non-statutory training arrangements I have put forcefully the point that the new training initiative objectives are very high in the Government's list of priorities.
My hon. Friends the Members for Saffron Walden (Mr. Haselhurst) and Chippenham (Mr. Needham) referred to the deficiencies of the statutory boards in the last 10, 15 or 20 years. They both in their expert ways—knowing a great deal about the subject—said how important it was that there should be national standards and local delivery. That is exactly the objective behind the three prongs of the new training initiative.
Reference was made to the remissible training tax that was mentioned in the White Paper, published at the end of last year. I accept entirely that a remissible training tax was mentioned in the White Paper. Any Government would be very unwise not to consider it as a possible option in regard to training in the future. One cannot possibly say more than that at this stage.
I find it almost inconceivable that Opposition Members contend that, because we are putting forward proposals to abolish statutory training boards, we are not remotely interested in training. Yet in 1979, when the Labour Government left office, the amount of money that they had decided to spend on industrial training on behalf of the taxpayer was about £385 million. In 1983–84—next year, I accept—we shall spend £1,280 million on behalf of the taxpayer, which is a very substantial increase. So I hope that right hon. and hon. Gentlemen will understand that, as a result of the development of our training initiatives, there is a high level of training.
Mr. Derek Foster: Will the Minister tell us whether that figure includes all the money that is to be spent on the youth training scheme? If so, surely that deals only with the problem of high youth unemployment. Is it not wrong for him to claim that that is a net increase in training?
Mr. Morrison: I am amazed that the hon. Gentleman should say that, when the youth training scheme is principally a training scheme, and something that Labour Members tried to persuade their colleagues when in Government to introduce, and totally failed to do. It is a training scheme, first and foremost.
Opposition Members were concerned to know whether I was satisfied that the criteria for the non-statutory training arrangements were satisfactory. I assure them that tripartitism—if that is the right word—involves educationists, trade unionists and industrialists. I have consistently made it perfectly clear that it is important to involve all three sides of the training triangle. I also made it clear that, for the non-statutory training arrangements, there should be monitoring of all the skill shortages.
Mr. Harold Walker: As I said in my speech, the trade unions are not involved in what the Minister now describes
694
as tripartite arrangements, yet he is saying that that is one of the essential criteria for approving the non-statutory arrangements. It is difficult to reconcile the absence of trade unions from those arrangements with his criteria.
Mr. Morrison: The right hon. Member for Doncaster does not quite understand the situation. The employers have accepted that there should be an open door and that there should be seats around the table for trade unionists. As the right hon. Gentleman well knows, the Trades Union Congress sent out a remit to all its members that the trade unions should not be involved. I cannot say too much, because it would undermine the trade unionists concerned, but I happen to know that in one or two cases, despite the diktat that went out from Congress House, some trade unionists have got themselves involved with the non-statutory training arrangements. However, by and large, trade unionists have not done so. That does not convince me that they are all that interested in the training as Labour Members suggest that they are. Once these orders are behind us, I hope that trade unionists will come forward on a voluntary basis and involve themselves in something which their rhetoric tells me that they are interested in.
Mr. Crowther: Name them.
Mr. Morrison: I should have thought that it would be better if they were not named, because no doubt they would not be considered as loyal members of the TUC. That is how I see the situation.
Mr. Crowther: Does the Minister deny that in the private sector of the iron and steel industry the intention is to offer both trade union and education interests nothing more than an advisory role at nothing more than a regional level? If that is all that is to be offered, how can the Minister claim that there is any possibility of real involvement of the trade unions, even if they wished to be involved?
Mr. Morrison: The hon. Gentleman misunderstands. The important thing is that there should be a flexible approach and that the employees and trade unionists within the industry should be involved in training for the future because it has a major and important bearing on their future as well as that of their industries. That is what is happening in the iron and steel sector.
Mr. Golding: Does the hon. Gentleman realise that the trade unions' attitude must be judged from the history of previous boards? They believed that the Government were trying to destroy the training system and they did not want to be a party to its destruction.
Mr. Morrison: I understand why the hon. Gentleman makes such a remark at five minutes to ten. As Chairman of the Select Committee, I take what he has to say seriously. However, given that the trade unions are still closely involved with the new training initiative and with the MSC, he may be exaggerating the case a little.
The hon. Gentleman's interruption reminds me of a point that he made when I interrupted his speech earlier. It seemed to me that Labour Members, like my hon. Friends, did not really believe that the statutory training boards had proved their worth. Some of them had, but not all. When I intervened to ask the hon. Gentleman whether a future Labour Government would reinstate the statutory training boards that it is proposed should be abolished, the

695
hon. Gentleman, who is a senior member in his party, said that under the circumstances he did not think that that would be the case.
Mr. Golding: That is not the question that the hon. Gentleman asked. I have checked in the last half hour, and that is not the question in Hansard.
Mr. Morrison: If I misunderstood the hon. Gentleman, I apologise, but that is what I understood him to say.
Mr. Barry Jones: As time is running out, will the hon. Gentleman please give the source of his statutory, legal authority for giving away, or selling at knock-down prices, the boards' assets?
Mr. Morrison: The hon. Gentleman and the right hon. Member for Doncaster have both raised the question of the disposal of the boards' assets with particular reference to training. The hon. Gentleman seemed to suggest that assets such as training books and equipment should not continue to be used for training in the industries concerned. What we are doing is entirely reasonable. As statutory bodies, industrial training boards have no power to give away their assets to successor bodies without charge. Yet it is surely right that they should be given away without charge because in most cases those assets have already been paid for by employers through the levy. Therefore, we are passing those assets to successor bodies through the MSC which, under the Employment and Training Act 1973, has the power to make payments by way of grant, loan or otherwise for the purpose of furthering training. I hope that answers the question.
Mr. Harold Walker rose—
Mr. Morrison: I should have thought that the right hon. Gentleman and the hon. Member for Flint, East would agree that it is important that those assets that have been used for training should continue to be used in that way. They have been paid for in principle by a levy on the employers concerned.
Mr. Walker: It is late, but this is an important point. The Government are apparently deciding that they will dispose of the fixed assets and the cash assets of the boards either by giving them away or by offering them at knockdown prices. What statutory and legal authority do the Government have for that?
Mr. Morrison: The right hon. Gentleman obviously has not listened. I have only about 30 seconds left.
Mr. Walker: Answer.
Mr. Morrison: I answered the right hon. Gentleman's question 30 seconds ago.
My right hon. Friend and I are accused of being quango hunters, almost as if we were devotees of blood sports. With the present state of the Labour Party, I find that somewhat bamboozling because Labour Members appear to like the type of blood sport that I would call cannibalism.
Question put:—
The House divided: Ayes 221, Noes 273.

Division No. 205]

[10 pm

AYES

Abse, Leo

Alton,David

Adams,Allen

Anderson,Donald

Allaun,Frank

Archer, Rt Hon Peter

Ashley, Rt Hon Jack

Hooley,Frank

Ashton,Joe

Horam,John

Atkinson,N.(H'gey,)

Howell, Rt Hon D.

Bagier, Gordon A T.

Hoyle, Douglas

Barnett,Guy(Greenwich)

Huckfield,Les

Barnett, Rt Hon Joel (H'wd)

Hughes, Mark(Durham)

Bennett,Andrew(St'kp'tN)

Hughes, Robert (Aberdeen N)

Bidwell,Sydney

Hughes, Roy (Newport)

Booth, Rt Hon Albert

Janner,HonGreville

Bottomley, RtHonA.(M'b'ro)

Jay, Rt Hon Douglas

Bradley,Tom

Jenkins, Rt Hon Roy (Hillhead)

Bray, Dr Jeremy

John,Brynmor

Brocklebank-Fowler,C.

Johnson, Walter (Derby S)

Brown, R. C. (N castle W)

Johnston, Russell(Inverness)

Brown,Ron(E'burgh,Leith)

Jones, Barry (East Flint)

Buchan,Norman

Kilroy-Silk,Robert

Callaghan,Rt Hon J.

Kinnock,Neil

Callaghan, Jim (Midd't'n&P)

Lambie, David

Campbell-Savours, Dale

Lamborn, Harry

Canavan, Dennis

Lestor, MissJoan

Cant, R. B.

Lewis, Arthur (N'ham NW)

Carter-Jones, Lewis

Lewis, Ron (Carlisle)

Cartwright,John

Litherland,Robert

Cocks, Rt Hon M.(B'stol S)

Lofthouse,Geoffrey

Cohen,Stanley

Lyon,Alexander(York)

Coleman, Donald

Lyons, Edward (Bradf'dW)

Conlan,Bernard

Mabon, Rt Hon Dr J. Dickson

Cook, Robin F.

McCartney,Hugh

Cowans, Harry

McElhone,Frank

Craigen, J. M. (G'gow, M'hill)

McKay, Allen(Penistone)

Crawshaw,Richard

McKelvey, William

Crowther,Stan

MacKenzie, Rt Hon Gregor

Cryer,Bob

Maclennan,Robert

Cunningham, G.(Islington S)

McMahon, Andrew

Cunningham, DrJ.(W'h'n)

McNally, Thomas

Davidson,Arthur

McTaggart, Robert

Davies, Rt Hon Dentil (L'lli)

McWilliam,John

Davis, Clinton (Hackney C)

Magee, Bryan

Davis, Terry (B 'ham, Stechf'd)

Marks,Kenneth

Deakins,Eric

Marshall, D(G'gowS'ton)

Dean, Joseph (Leeds West)

Marshall, DrEdmund (Goole)

Dewar, Donald

Marshall, Jim (Leicester S)

Dixon, Donald

Martin,M(G'gowS'burn)

Dobson, Frank

Mason, Rt Hon Roy

Dormand,Jack

Maxton,John

Douglas,Dick

Maynard, MissJoan

Dubs,Alfred

Meacher, Michael

Dunn, James A.

Mikardo,Ian

Dunwoody, Hon Mrs G.

Millan,Rt Hon Bruce

Eadie,Alex

Mitchell,Austin(Grimsby)

Ellis, R.NE D'bysh're)

Mitchell, R. C. (Soton Itchen)

Ellis, Tom (Wrexham)

Morris, Rt Hon A. (W'shawe)

English,Michael

Morris, Rt Hon C. (O'shaw)

Ennals, Rt Hon David

Moyle, Rt Hon Roland

Evans, Ioan (Aberdare)

Newens, Stanley

Faulds,Andrew

Oakes, Rt Hon Gordon

Field,Frank

Ogden,Eric

Flannery,Martin

O'Halloran, Michael

Fletcher,Tedf(Darlington)

O'Neill,Martin

Foot, Rt Hon Michael

Orme, RtHon Stanley

Ford, Ben

Owen, Rt Hon Dr David

Forrester,John

Palmer,Arthur

Foster, Derek

Park, George

Fraser, J. (Lamb'th, N'w'd)

Parker,John

Freeson, Rt Hon Reginald

Parry, Robert

Freud,Clement

Pendry,Tom

Garrett, John (Norwich S)

Powell,Raymond(Ogmore)

Ginsburg, David

Prescott,John

Golding,John

Price, C. (Lewisham W)

Graham, Ted

Race, Reg

Grant, John (Islington C)

Radice, Giles

Hamilton,James(Bothwell)

Rees, Rt Hon M (Leeds S)

Harrison, Rt Hon Walter

Richardson,Jo

Hattersley, Rt Hon Roy

Roberts,Albert(Normanton)

Haynes, Frank

Roberts,Allan(Bootle)

Heffer, Eric S.

Roberts, Ernest (Hackney N)

Hogg, N. (EDunb't'nshire)

Roberts,Gwilym(Cannock)

Holland,S. (L'b'th,Vauxh'll)

Robertson,George

HomeRobertson,John

Robinson, G. (Coventry NW)

Homewood,William

Rodgers, Rt Hon William

697

Rooker, J. W.

Tilley,John

Roper,John

Tinn, James

Ross, Ernest (Dundee West)

Torney,Tom

Ross, Stephen (Isle of Wight)

Varley, Rt Hon Eric G.

Ryman, John

Wainwright,E.(Dearne V)

Sever, John

Walker, Rt Hon H.(D'caster)

Sheerman, Barry

Watkins, David

Sheldon, Rt HonR.

Weetch, Ken

Shore, Rt Hon Peter

Wellbeloved,James

Short, Mrs Renée

Welsh,Michael

Silkin, Rt Hon J. (Deptford)

White, Frank R.

Silkin, Rt Hon S. C. (Dulwich)

White, J.(G'gowPollok)

Silverman,Julius

Whitehead,Phillip

Skinner,Dennis

Whitlock,William

Snape, Peter

Williams, Rt Hon A.(S'sea W)

Soley, Clive

Williams, Rt Hon Mrs (Crosby)

Spearing,Nigel

Wilson, Gordon (Dundee E)

Spriggs, Leslie

Wilson, Rt HonSir H.(H'ton)

Stallard,A.W.

Wilson, William (C'trySE)

Steel, Rt Hon David

Winnick,David

Stewart, Rt Hon D. (W Isles)

Woodall,Alec

Stoddart,David

Woolmer,Kenneth

Stott, Roger

Wrigglesworth,Ian

Strang,Gavin

Wright,Sheila

Straw,Jack

Young, David (Bolton E)

Summerskill,HonDrShirley

Thomas, Jeffrey (Abertillery)

Tellers for the Ayes:

Thomas, Mike (Newcastle E)

Mr. George Morton and

Thomas, DrR. (Carmarthen)

Mr. Ron Leighton.

Thorne,Stan(Preston South)

NOES

Adley, Robert

Churchill,W.S.

Aitken,Jonathan

Clark, Hon A. (Plym'th, S'n)

Alexander,Richard

Clark, Sir W.(Croydon S)

Alison, Rt Hon Michael

Clarke,Kenneth (Rushcliffe)

Amery, Rt Hon Julian

Clegg, Sir Walter

Arnold,Tom

Cockeram,Eric

Aspinwall,Jack

Colvin, Michael

Atkins, Rt Hon H.(S'thorne)

Cope,John

Atkins, Robert(Preston N)

Cormack,Patrick

Baker, Nicholas (N Dorset)

Corrie,John

Banks,Robert

Costain, Sir Albert

Beaumont-Dark,Anthony

Cranborne,Viscount

Bendall,Vivian

Critchley, Julian

Benyon,Thomas(A'don)

Dickens,Geoffrey

Benyon,W. (Buckingham)

Dorrell,Stephen

Best, Keith

Douglas-Hamilton, LordJ.

Bevan, David Gilroy

Dover,Denshore

Biffen,Rt Hon John

du Cann, Rt Hon Edward

Biggs-Davison,SirJohn

Dunn,Robert(Dartford)

Blackburn,John

Dykes, Hugh

Blaker,Peter

Eden, Rt Hon Sir John

Body,Richard

Eggar,Tim

Bonsor,SirNicholas

Elliott,SirWilliam

Boscawen,Hon Robert

Emery, Sir Peter

Bottomley, Peter (W'wich W)

Eyre,Reginald

Bowden, Andrew

Faith, MrsSheila

Boyson,Dr Rhodes

Farr,John

Braine,SirBernard

Fell,SirAnthony

Bright,Graham

Finsberg,Geoffrey

Brinton,Tim

Fisher,SirNigel

Brittan,Rt. Hon. Leon

Fletcher-Cooke,SirCharles

Brooke, Hon Peter

Fookes, Miss Janet

Brotherton,Michael

Forman,Nigel

Brown, Michael (Brigg&Sc'n)

Fowler, Rt Hon Norman

Browne,John(Winchester)

Fox, Marcus

Bruce-Gardyne,John

Fraser, Peter (South Angus)

Bryan, Sir Paul

Gardiner,George(Reigate)

Budgen,Nick

Gardner, Edward (S Fylde)

Bulmer,Esmond

Garel-Jones,Tristan

Burden,SirFrederick

Gilmour, Rt Hon Sir Ian

Butcher,John

Glyn, Dr Alan

Cadbury,Jocelyn

Goodhart,SirPhilip

Carlisle, John (LutonWest)

Goodhew,SirVictor

Carlisle,Kenneth (Lincoln)

Goodlad,Alastair

Carlisle, Rt Hon M. (R'c'n)

Gorst,John

Chalker, Mrs. Lynda

Gow, Ian

Channon, Rt. Hon. Paul

Gower, Sir Raymond

Chapman,Sydney

Gray,Hamish

698

Greenway, Harry

Morris, M. (N'hampton S)

Griffiths, E.(B'ySt,Edm'ds)

Morrison, Hon C. (Devizes)

Griffiths, Peter Portsm'th N)

Morrison, Hon P. (Chester)

Grist, Ian

Mudd, David

Grylls,Michael

Murphy,Christopher

Gummer,JohnSelwyn

Myles, David

Hamilton, Hon A.

Neale,Gerrard

Hamilton,Michael(Salisbury)

Needham,Richard

Hampson,Dr Keith

Nelson,Anthony

Hannam,John

Newton,Tony

Haselhurst,Alan

Nott, Rt Hon John

Hastings,Stephen

Onslow,Cranley

Havers, Rt Hon Sir Michael

Oppenheim, Rt Hon Mrs S.

Hayhoe, Barney

Page, Richard (SW Herts)

Heath, Rt Hon Edward

Parkinson, Rt Hon Cecil

Heddle,John

Patten, John (Oxford)

Henderson,Barry

Pawsey, James

Heseltine, Rt Hon Michael

Percival,Sir Ian

Hicks,Robert

Pink, R.Bonner

Higgins, Rt Hon Terence L.

Porter,Barry

Hogg,HonDouglas(Gr'th'm)

Prentice, Rt Hon Reg

Holland,Philip(Carlton)

Price, SirDavid (Eastleigh)

Hooson,Tom

Proctor, K. Harvey

Hordern, Peter

Raison, Rt Hon Timothy

Howe, Rt Hon SirGeoffrey

Rathbone,Tim

Howell,Rt Hon D.(G'ldf'd)

Rees, Peter (Dover and Deal)

Hunt, David (Wirral)

Rees-Davies, W. R.

Hunt,John(Ravensbourne)

Renton,Tim

Irvine, BryantGodman

Rhodes James, Robert

Irving, Charles (Cheltenham)

RhysWilliams,SirBrandon

JohnsonSmith,Geoffrey

Ridley,Hon Nicholas

Jopling,Rt Hon Michael

Ridsdale,SirJulian

Joseph, Rt Hon Sir Keith

Rifkind, Malcolm

Kaberry,SirDonald

Roberts, M. (Cardiff NW)

Kershaw,SirAnthony

Roberts, Wyn (Conway)

Kimball,SirMarcus

Rossi, Hugh

King, Rt Hon Tom

Rost, Peter

Knox, David

Royle,Sir Anthony

Lamont, Norman

Rumbold, Mrs A. C. R.

Lang, Ian

Sainsbury,Hon Timothy

Langford-Holt,SirJohn

St, John-Stevas, Rt Hon N.

Latham,Michael

Scott,Nicholas

Lawrence, Ivan

Shaw, Giles (Pudsey)

Lawson,Rt Hon Nigel

Shaw, Michael(Scarborough)

Lee,John

Shelton,William(Streatham)

Lennox-Boyd,HonMark

Shepherd,Richard

Lester, Jim (Beeston)

Shersby,Michael

Lewis,Kenneth(Rutland)

Silvester, Fred

Lloyd, Ian (Havant & W'loo)

Sims, Roger

Lloyd, Peter (Fareham)

Skeet, T. H. H.

Loveridge,John

Smith,Tim(Beaconsfield)

Luce, Richard

Speed, Keith

Lyell, Nicholas

Speller, Tony

McCrindle,Robert

Spence,John

MacGregor,John

Spicer, Michael (S Worcs)

MacKay, John (Argyll)

Sproat,Iain

McNair-Wilson,M.(N'bury)

Squire,Robin

McNair-Wilson, P. (New F'st)

Stanbrook,Ivor

McQuarrie,Albert

Steen,Anthony

Madel, David

Stevens,Martin

Major,John

Stewart,A.(ERenfrewshire)

Marland,Paul

Stewart, Ian (Hitchin)

Marlow,Antony

Stokes,John

Marshall, Michael(Arundel)

StradlingThomas,J.

Mates,Michael

Tapsell, Peter

Maude, Rt Hon Sir Angus

Taylor, Teddy (S'end E)

Mawby, Ray

Tebbit, Rt Hon Norman

Mawhinney,DrBrian

Temple-Morris,Peter

Maxwell-Hyslop,Robin

Thatcher, Rt Hon Mrs M.

Mayhew, Patrick

Thomas, Rt Hon Peter

Mellor,David

Thompson,Donald

Meyer, Sir Anthony

Thorne, Neil (llfordSouth)

Miller,Hal(B'grove)

Thornton,Malcolm

Mills,Iain(Meriden)

Townend,John(Bridlington)

Mills, Peter (West Devon)

Townsend,Cyril D,(B'heath)

Miscampbell, Norman

Trippier,David

Moate,Roger

van Straubenzee,Sir W.

Monro,SirHector

Vaughan,Dr Gerard

Montgomery,Fergus

Viggers, Peter

Morgan, Geraint

Waddington, David

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Wakeham, John

Whitney, Raymond

Waldegrave, Hon William

Wickenden, Keith

Walker, B. (Perth)

Williams, D.(Montgomery)

Waller, Gary

Winterton, Nicholas

Walters, Dennis

Wolfson, Mark

Ward, John

Young, Sir George (Acton)

Warren, Kenneth

Wells, Bowen

Tellers for the Noes:

Wells, John (Maidstone)

Mr. Anthony Berry and

Wheeler, John

Mr. Carol Mather.

Whitelaw, Rt Hon William

Question accordingly negatived.

Falkland Islands
10.12 pm
The Prime Minister (Mrs. Margaret Thatcher): On a point of order, Mr. Speaker. May I give the House the latest information about the battle of the Falklands? After successful attacks last night, General Moore decided to press forward. The Argentines retreated. Our forces reached the outskirts of Port Stanley. Large numbers of Argentine soldiers threw down their weapons. They are reported to be flying white flags over Port Stanley. Our troops have been ordered not to fire except in self-defence. Talks are now in progress between General Menendez and our Deputy Commander, Brigadier Waters, about the surrender of the Argentine forces on East and West Falkland. I shall report further to the House tomorrow.
Hon. Members: Hear, hear!
Mr. Michael Foot: Further to that point of order, Mr. Speaker. First, may I thank the right hon. Lady for coming to the House to give us the news, particularly because the news is so good for all concerned, especially because it appears from what she has been able to tell us that there will be an end to the bloodshed, which is what we have all desired. There will be widespread, genuine rejoicing—to use the word that the right hon. Lady once used—at the prospect of the end of the bloodshed. If the news is confirmed, as I trust it will be, there will be great congratulations from the House tomorrow to the British forces who have conducted themselves in such a manner and, if I may say so, to the right hon. Lady. [HON. MEMBERS: "Hear, hear."] I know that there are many matters on which we shall have to have discussions, and perhaps there will be arguments about the origins of this matter and other questions, but I can well understand the anxieties and pressures that must have been upon the right hon. Lady during these weeks. I can understand that at this moment those pressures and anxieties may have been relieved, and I congratulate her on that.
I believe that we can as a House of Commons transform what has occurred into benefits for our country as a whole. I believe that that is the way in which we on the Opposition Benches will wish to proceed. There are many fruitful lessons in diplomacy and in other matters that we can draw from this occasion, and that will be the Opposition's determination.
Mr. David Steel rose—
Dr. David Owen rose—
Mr. Speaker: Order. I shall call both right hon. Members in turn.
HON. MEMBERS: Why?
Mr. David Steel: Further to the point of order, Mr. Speaker. Will the Prime Minister accept that this is an occasion when the whole House should rejoice and congratulate both the Government and the forces involved on bringing this sad matter to a satisfactory and peaceful conclusion?
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen)rose—
Dr. Owen rose—
Mr. Speaker: I call the right hon. Member for Plymouth, Devonport (Dr. Owen). [HON. MEMBERS: "Why?"]
Dr. Owen: Further to the point of order, Mr. Speaker. May I join the Leader of the official Opposition and the Leader of the Liberal Party in conveying the congratulations of the whole House to the Royal Navy, the Army, the Royal Air Force and the Royal Marines, and to the Government and all the Ministers who played a crucial role in the achievement of an extremely successful outcome? I wish all well, especially—thinking of those who have lost their lives—those families who are currently grieving tonight for their sacrifice. The sacrifice of their loved ones was a sacrifice which was necessary for all.
Mr. Foot: There is some business on the Order Paper that remains to be transacted, but I suggest to the Leader of the House that in these circumstances it would be much better if the House adjourned now and the business were brought forward on another occasion. I think that that is the general desire of the House.
Mr. Biffen indicated dissent.
Mr. Foot: The right hon. Gentleman shakes his head, but I think that he will find that what I have said is the view of the House.
Mr. Biffen: I beg to move,
"That, at this day's sitting, notwithstanding the provisions of Standing Order No. 4 (Prayers against statutory instruments, &c. (negative procedure)), the Motion relating to Public Health (Scotland) may be proceeded with, though opposed, for one and a half hours after it has been entered upon"—
Hon. Members: No!
Mr. Biffen:
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"and Mr. Speaker shall then put any Question necessary to dispose of the proceedings thereon, if not previously concluded."
Several hon. Members rose—
Mr. Speaker: The Question is that the motion—
Mr. Christopher Price: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I must put the Question. The Question is the motion just moved by the Leader of the House.
Mr. Christopher Price: On a point of order, Mr. Speaker. It has been the custom when this sort of occasion has occurred for previous Leaders of the House to recognise the feeling of the House and to arrange the business accordingly. In all the circumstances, nobody wants to go on with the business. The Leader of the House knows that if the House wishes to prevent the business from going through there are ways and means of doing so.
We had a right to expect that the Leader of the House, whom we all respect, would not move the motion but would proceed with some understanding of the feeling on both sides of the House. We should not be expected to proceed with the business that is set down on the Order Paper. We should be allowed to end this sitting at this moment.
Mr. Bruce Millan: Further to that point of order, Mr. Speaker. The Opposition had already decided not to move the prayer, so all this fuss is unnecessary, as is the motion moved by the Leader of the House.
Mr. Biffen: I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

Paper Industry (Energy Costs)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
Mr. Frank R. White rose—[Interruption.]
Mr. Speaker: Order. I suggest that the hon. Member for Bury and Radcliffe (Mr. White) waits for a moment. I shall time the Adjournment from the moment that I call him.
10.21 pm
Mr. White: I am grateful for the opportunity once again to place before the House the problems of the paper industry, problems which have a potentially serious consequence for my constituency and in particular for the thousands of my constituents who are employed in it.
Bury and Radcliffe has the heaviest concentration of paper mills and associated trades, not only in this country but in Europe. Therefore, our prosperity is very much intertwined with the industry's success and with its problems.
On two previous occasions, as chairman of the all-party paper industry group, I have expressed the concern that we have felt regarding the needs of the industry. In particular, many hon. Members and I have directed the Government's attention to the problems created by high energy costs. On 4 August 1980, speaking in the summer Adjournment debate as reported at c. 85 of the Official Report, I stressed my fears that if positive action were not taken then to combat foreign energy subsidy, the six mills that had closed that year with the loss of 5,000 jobs would soon be followed by more.
I regret to inform the Minister that since that date 14 mills have closed, 46 paper machines have been shut down and over 9,000 paper workers have been made redundant. The kiss of death to which I referred in that debate is eagerly twitching on the lips of our foreign competitors. In the energy debate held on 21 January 1981, Official Report, c. 284, I referred to the Government's response to this continuing problem and criticised the Government's intervention into energy policy in forcing gas prices 10 per cent. higher and electricity prices 5 per cent. higher than the rate of inflation.
In political terms we are led to understand that the Government are reluctant to intervene in the industry, preferring free market forces to apply. Five hundred of my constituents previously employed at Transparent Papers Ltd. would agree with that, because there is a strong possibility that if the Government had kept out they would be in work today. In one year, that decision on gas prices turned a company profit of £1·2 million into a deficit. The gas price increase alone entirely accounted for that loss.
I should be the first to agree that not all the paper industry's problems can be laid at the door of the Department of Energy. Trade dumping and lack of industrial investment incentives certainly play a part. Energy costs, however, are entirely within our own control, and it is beyond the comprehension of the industry that the Government are prepared to allow this key industrial sector to disappear without fighting to support it. The industry seeks a United Kingdom energy policy that places British energy-intensive industries at no disadvantage in comparison with their competitors—no more and
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no less. How else should we reflect the benefits of our indigenous energy resources? Certainly not by paying dole money to unemployed paper workers.
No doubt the Minister will claim that the Government have tried to act on this problem, and I acknowledge that, but at the same time I label their action a failure—not enough, not in time and in no way effective to the basic problem. The Chancellor's announcement of a gas price freeze was welcome, but the revised electricity charges did not help many companies. Important, too, is the fact that the heavy fuel oil tax remains too high. Indeed, increased derv and petrol prices cancelled out the gas price freeze and it is estimated that, despite the Government action, three-quarters of the paper industry will be worse off than it was before the Government's action on energy prices.
I stress that energy cost is not the only adverse factor affecting the paper industry, but the rapid increase in energy costs is the most important single issue facing the industry. The cost breakdown of a typical board mill shows that between 1976 and 1981 raw material costs fell from 45 per cent. to 42 per cent., labour costs fell from 22 per cent. to 21 per cent., rates remained constant at 5 per cent., other costs rose from 10 per cent. to 18 per cent., and energy costs rose dramatically from 4 per cent. to 18 per cent. of total manufacturing costs—the latter being the principal factor in turning a 4 per cent. profit into a 4 per cent loss. That example is by no means an exaggeration. Moreover, a similar pattern is shown in the cost breakdown of a fine paper mill.
Regrettably, the price of heavy fuel oil in the United Kingdom is still up to 20 per cent. higher than in most EEC countries, due to the £8 per tonne excise duty. Electricity prices remain much higher than in other EEC countries and the disparity grows with every increase. These factors are not figments of the industry's imagination. They are real, and they are supported in the second report of the NEDO energy task force, which confirms that the United Kingdom continues to pay higher energy prices than many of its competitors.
Since October 1979, the industry has had 13 meetings with Ministers, at which unions and management have pressed the urgency of action on energy prices. It is regrettable that the moves made by the Government have been regarded as a minimal sop—a token acceptance of the case with a lack of political will to take the necessary action.
That failure places a burden on the industry and on individual mills, creating investment and employment difficulties. The fact that we continue to have some investment and some semblance of an industry is due to the common sense and co-operation of local management and trade unions.
Should the Minister retain some scepticism about the case that I have made, I quote a letter from Mr. Jeff Morgans, manager of the New Bury paper mill, which is part of the Wiggins Teape group. He says:
"As you know we have papermaking operations at ten sites throughout the United Kingdom and comparable operations in Europe. We have a full time Energy Manager for our Group who compares energy costs at our different sites and advises our local management on ways of minimising energy costs, so what follows are facts.
No account seems to be taken of the continuous even loads that we take from the Electricity Boards. Without these they would be involved in expensive stopping and starting of base load power stations at night."

705
That is the key point, which I emphasise. The letter continues:
"In comparing this mill in Bury with one of our Belgian mills, on electricity charges alone, we paid £127,000 more last year than if we had purchased electricity at Belgian prices, and that was before the Belgian franc was devalued. It is 3 per cent. of our total manufacturing cost! Put another way it is equivalent to sixteen jobs!
The story is the same for other energy sources. Oil at our Belgian mill is 13 per cent. cheaper than at our United Kingdom mills, and gas 17 per cent. cheaper than the United Kingdom."
I received confirmation of Mr. Morgans' views regarding the purchase of electricity from the boards in a letter I received from Mr. Common, the managing director of Olives paper mill. He confirms the board's inability to respond to specific requests on this issue. Mr. Hayworth, the chairman of Crompton's paper mill in Bury—a company that has successfully invested in special long fibre papers—confirms tariff increases averaging 21 per cent. on the consumption of electricity, gas and oil over the past year.
Heavy fuel oil, electricity, gas—both interruptible and firm supply—all remain much higher in price than for our international competitors, whose Governments seem to recognise more positively than our Government the benefits of cheap energy to manufacturing industry and to the prosperity of the country.
The Government scheme to encourage conversion from oil to coal is helpful but regarded as a classic Catch 22 scheme. The problem is that companies fighting against the recession and putting what money is available into retaining their market share have little or no chance of financing the conversion balance of 75 per cent. of total cost. The Government might say that it is in the best interests of the company to invest in the efficient use of the correct energy source. We in the industry would not doubt or question that, but merely point out to the Government that many of our competitor countries such as Germany, France and Sweden have recognised that there is a Government role in that objective and have made available huge loans or direct grants for such efficiency measures, again placing United Kingdom mills at a disadvantage.
To summarise, whilst we accept that it is not the sole responsibility of the Department of Energy to revitalise the paper industry, there are specific areas where energy policy could tip the balance our way in surviving or going under. The British paper industry seeks similar treatment from the Government to that received by EEC competitors from their Governments in the area of improving energy use efficiency. The Government must establish a system of funding loans or direct grants. The industry, which is, in the main, a continuous process operation, does not benefit from the electricity load management proposals announced in the Budget. We believe that the tariffs charged to such industries as paper should reflect the benefits that the supply industry gains from a continuous load. I ask the Minister to assure me that he will consider that specific point.
I urge consideration of a further freeze on gas prices, holding the United Kingdom industrial prices to a similar level to that of our Continental competitors. Finally, I ask that interdepartmental discussions be initiated with the Treasury to bring about a freeze or a reduction in the price of heavy fuel oil for our industry.
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This is not a question of featherbedding an industry against reality. Management and unions have responded to the present challenge. That has produced many refreshing examples of a willingness to introduce new technology and an important change in attitude towards new practices. These requests are made in the knowledge that the industry believes in its own future. We ask the Government to share in that belief.
The East Lancashire paper mill in my constituency recently opened a £1½ million automated finishing line for the packaging of its products. This was done as an act of faith in itself and its employees. More important, it is an act of faith in the United Kingdom paper industry as the development rivals anything in Europe and signals to our competitors that they have a fight on. The Government must not stay in the wings like a reluctant and blushing rose. They must have a part to play.
The Prime Minister encourages the term "constructive intervention". I leave the Minister with an example that should energise his constructive support. In 1955 Japanese paper mills held a 100 per cent. share of the home market. Our mills held 75 per cent. of our home market. In 1981, despite Japan's consumption and production escalating eight-fold, its mills retained the 100 per cent. holding. Our share of the British home market fell to 51 per cent. It is not our fault. We fear no one on technology or development. If our paper workers had equivalent machines and the Government support that the Japanese have, we could compete with anyone and recapture our market share. The only thing that we fear is the Government's indifference. Our competitors do not suffer similarly. I ask the Minister to persuade his colleagues to support the industry.
10.35 pm
Mr. Robert Litherland: In spite of the news and the scenes that we have just witnessed, I felt it right briefly to support my hon. Friend the Member for Bury and Radcliffe (Mr. White), who has outlined the case with clarity. He is sincerely anxious about the decline in the paper and board industry.
I drew attention to the decline in the book manufacturing industry in a previous Adjournment debate. Individually and collectively the all-party paper group tried to draw the Government's attention to the critical situation. As my hon. Friend said, energy is only one factor.
No one is more aware than my hon. Friend of the disaster that could befall a manufacturing industry if decline is not corrected. In our part of the world we have witnessed the decimation of the textile industry and the consequences for the North-West. The paper manufacturing industry is headed for the same destruction.
I am a sponsored member of the SOGAT print union. I have served my apprenticeship and spent most of my working life in the print trade. I am deeply worried about the effects of the decline not only for the paper manufacturing industry but for associated sectors. In just over two years my union alone has suffered 27,000 redundancies and the number is growing. We had 639 last January and 867 in February. Of the February total, 264 were from central Lancashire. The loss is a tragic waste. The industry can never be the same again. The majority of the people made redundant, especially in the paper manufacturing section, because of the nature of the work, will never be employed in the industry again. The industry

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was buoyant, with good labour-management relations. The decline, redundancies, waste of human resources and consequent detrimental effect, especially on the North-West, are disgraceful.
I congratulate my hon. Friend on drawing attention to the problem and support his attempt to get the Government to take action. I hope that the Minister will deal with the energy aspect and give us something to take back to our constituents to show that the Government are at least doing something.
The Under-Secretary of State for Energy (Mr. David Mellor): I am grateful to the hon. Member for Bury and Radcliffe (Mr. White) for raising this subject. I know of his strong personal and constituency commitment to the paper and board industry. He has for some time pressed the case for the industry with great vigour in the House and in private meetings within the Department.
I was glad to receive a deputation from the industry shortly after I took up my responsibilities. I and my colleagues in the Department of Energy and the Department of Industry are always prepared to enter a dialogue with the industry in the hope that we can pinpoint assistance which is possible within the necessary framework of the Government's strategy to get the whole economy moving.
Concern about the industry is common to both sides of the House. I particularly mention the presence tonight of my hon. Friend the Member for Faversham (Mr. Moate), who has been most vigorous in his presentation of the industry's case to the Department and to the House.
I am grateful for the recognition that came from the hon. Member for Bury and Radcliffe—in what was necessarily, from his point of view, a tough speech—of the fact that energy is not the only problem that assails the industry. The industry has several problems, not least the need to compete with countries that have much more ready access to timber and to cheap energy resources of a kind that it would be difficult for any Government, however well intentioned towards the industry, to reproduce in Britain. I speak particularly of access to the cheapest form of electricity—hydroelectric power—in two or three of the major countries in which the paper and board industry flourishes, such as Canada and the United States.
I acknowledge that the past three years have seen an acceleration in energy prices for the second time in a decade, and the consequences of these high energy costs are very properly a matter for public debate. No one, either in the United Kingdom or the rest of the world, has been immune from the rising energy prices which followed the two oil crises of that decade, in 1973 and 1979. I recognise and understand the particular problems which have faced energy-intensive industries such as the paper industry, but I am quite clear that these problems need to be combated, first by rational and competitive pricing of our fuel supplies and secondly by the rational and efficient use of energy by consumers.
In the time available, this is not the occasion on which to go into a lengthy explanation of our approach to energy prices, but that approach was set out, as the hon. Gentleman knows, in some detail in our response to the Select Committee's report on industrial energy pricing. But it is our aim to ensure that the energy market operates as freely as possible, so permitting the most efficient and economic supply and use of fuel.
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Subject to the need for the energy utilities to cover their long-term costs of supply, the market mechanism should work so as to allow our energy prices to be as competitive as possible, and we believe that economic pricing which provides the right market signals will help us to reduce our dependence on oil and achieve the most economic balance of energy supply and demand. It should also ensure that large industrial consumers, whose demand results in lower unit costs of supply, should pay prices which reflect those lower costs.
With regard to the hon. Gentleman's point about energy price disparities between the United Kingdom and our overseas competitors, it is certainly true that in March 1981 the NEDO task force reported that for a number of energy-intensive industries price disadvantages existed—in large part due to sterling's depreciation against other European currencies in the second half of 1980. As those disparities became evident, so the Government took steps to help consumers.
In 1980, my right hon. Friend the then Secretary of State for Energy commissioned a review by the Electricity Council of its bulk supply tariff arrangements and asked area boards to ensure that industrial customers benefited as much as possible from flexibility in existing tariffs. The British Gas Corporation relaxed its policy of relating gas prices to the competing oil product.
In the March 1981 Budget, the Government took a substantial step forward in announcing measures worth £118 million, which were implemented by the fuel industries to help large consumers. These included a gas price ceiling and flexibility in electricity pricing arrangements.
We asked the NEDO task force to report again and it did so in November 1981. That report showed that the position on price disparities had improved considerably. There was no general price disadvantage compared with the rest of Europe. Most large gas consumers—those on interruptible contracts, which is principally the position of gas users within the paper and board industry—were enjoying a price advantage.
Over 90 per cent. of gas supplies to the paper and board industry are on interruptible terms. It is important to recognise that even the latest figures show that that advantage is continuing in relation to our European competitors. Electricity prices were closely comparable with those elsewhere in Europe in general, but with two principal exceptions, France and West Germany.
It is worth considering the reasons that the task force gave for the improved United Kingdom position. Energy prices in the United Kingdom had generally been lower during 1981 than on the Continent. The measures taken in the Budget had had their effect and, in contrast to the previous task force report, sterling had depreciated against European currencies. Of course, that reveals the difficulties of comparing energy prices at any given moment wth Continental opposition, because exchange rate fluctuations can lead to comparisons that can be misleading. The matter has to be considered over a longer period.
I assure the hon. Gentleman that it is the Government's determination that United Kingdom energy prices should be as competitive as possible. That is reflected in the measures which we have continued to take since the November 1981 report to try to help energy-intensive industries. In the Budget of March this year, my right hon. and learned Friend the Chancellor of the Exchequer

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announced help of over £150 million for industrial energy users. That included new contracted consumer load arrangements for the largest electricity consumers, which should produce price reductions of up to 16 per cent. for over 100 industrial firms. I am pleased to say that, although the names of the companies must be a matter of commercial confidentiality, about half a dozen undertakings in the paper and board industry have benefited from those electricity measures.
It was also announced—the hon. Gentleman paid tribute to the fact—that British Gas would freeze the price of contracted gas supplies until the end of 1982. That meant that, for the two years 1981 and 1982 taken together, the total increase to industrial consumers of gas would be about 3 per cent. to 4 per cent. That was warmly welcomed by the industry, as it was welcomed by the hon. Gentleman. Together with the 1981 measures, it means that industry in general has benefited by over £250 million, compared with what it would have paid if the Government had not taken action. Gas accounts for more than 20 per cent. of the energy costs of the industry. So the freeze has been of material benefit.
I want to mention also the £50 million coal-fired boiler scheme. The hon. Gentleman was somewhat more pessimistic about it than some of our indicators would perhaps justify. Although it is true that some companies cannot invest as much as they would like—I sympathise with that fact in the present financial pressures—several paper and board companies are now taking advantage of and applying for grants under the scheme. There have been applications for substantial projects worth several millions of pounds. Again, I cannot give examples, but I can say that there is a project from one British paper firm that is worth £7·7 million, which has already been accepted for a grant of probably 25 per cent. of that amount. So there is evidence that the scheme is beginning to assist the paper and board industry, as it is other industries.
The hon. Gentleman mentioned heavy fuel oil. I think that he knows why my right hon. Friend was not in a position to make the reduction. It is a matter that goes back years and is not due to this Government. It is a difficult matter, and I shall not take up the time of the House in going into the details. However, I will say that, although the level of duty remains higher than in most European
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countries, it has not been increased recently. I think that the "in" word is revalorisation. It is a crude term, but I think we know what it means. It is worth noting that, in real terms, because it has not been revalorised, the duty has fallen by over 20 per cent. since the 1980 Budget.
The hon. Gentleman also referred to the duty on derv. There is already a considerable differential in favour of derv as between the petrol and derv duties which were introduced as a result of legitimate pressure by hon. Members during the passage of the 1981 Finance Bill. The Government recognise that at least the maintenance of that differential is of assistance to industry and commerce. For that reason my right hon. and learned Friend the Chancellor of the Exchequer decided to limit the rises in both duties in the 1982 Budget so as only to compensate for inflation. The differential is now 10p.
Although I have concentrated on the European Community, the competition for this industry lies to a large extent elsewhere, particularly in Scandinavia and North America. It is a matter of regret that no one standing at the Dispatch Box could say other, when dealing with Scandinavia and North America, than that we simply cannot match the energy prices charged there.
Of course, we are fortunate in our indigenous energy resources. They enable us to enjoy a security of energy supply that is the envy of many other countries. However, the crucial difference between Britain and Canada and Scandinavia, with their great quantities of hydro-electric power, is that our resources cannot be won so cheaply. That must remain the difference between us. We have a great deal of coal, but, compared to countries where the coal can be open cast mined, the mining of British coal is inevitably much more expensive. I do not need to mention that to those hon. Members with a particular interest in the mining industry. That must have an effect. Adequate resources is not the only issue.
In conclusion, I want to say a word about the more efficient use of energy. As the Minister responsible for energy conservation, I attach particular importance to o energy-intensive industries coming to terms—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at nine minutes to Eleven o'clock.