HC Deb 21 June 1982 vol 26 cc22-30 3.31 pm
The Secretary of State for Employment (Mr. Norman Tebbit)

With permission, Mr. Speaker, I should like to make a statement on youth training. Last December I told the House of the Government's plans to introduce from September 1983 a new youth training scheme which would guarantee up to a full year's foundation training for all 16-year-old school leavers who find themselves without a job. This would remove from them the threat of unemployment during their first year on the labour market and help them to acquire the skills they need to obtain and keep jobs.

At the same time I announced increased expenditure for the training of young workers and said that, if the Manpower Services Commission could make other proposals to bring more young unemployed people into paid jobs with proper training, the Government would be willing to consider the transfer of resources proportionately from the new scheme to such proposals.

In response to this invitation, the MSC published on 4 May a comprehensive scheme proposed by its youth task group, on which representatives of the CBI and TUC sat. The scheme was unanimously recommended to me by the MSC, supported by the CBI and the TUC, and has generally been endorsed by the Select Committee on Employment.

The scheme is fully in line with the Government's ultimate objective for training young people. It meets the Government's requirements on the guarantee to all unemployed 16-year-olds, on the September 1983 date of introduction, on the content and length of the training programme, on involvement of the local community in delivery and on the need to keep within the resources made available in last December's White Paper. However, the MSC scheme extends beyond last December's proposals by covering also many young people in employment, including apprentices, and it proposes a higher level of training allowance.

In this wider scheme employers share in the training costs and the Government accept that in these circumstances the training allowance can be increased without more cost to the taxpayer or any loss of training standards. A training allowance of £1,300 a year seems appropriate for the launch of the scheme in 1983, although this and the question of excessive travel costs will be reviewed in the summer of 1983, when the MSC will offer its advice to me.

The Government generally accept the revised scheme and delivery arrangements as set out in parts IV and V of the youth task group report, on the basis that its costs will be kept within resources already made available for 1983–84 and 1984–85. Although we believe the resources will be sufficient to cover all unemployed 17-year-old school leavers when the scheme begins, it is not yet possible to give a guarantee to this group nor to say when we might extend the scheme to cover all other unemployed 17-year-olds. In deciding the resources required we have assumed substantial assistance from the European social fund, and this is essential.

We accept the need for large initial Government funding of the new scheme while youth unemployment is still high, but we intend before 1985 to review the future distribution of the training costs between employers and the Government. The MSC intends to undertake, in cooperation with the Government, a study of the funding of industrial training generally, which should help us decide the level of public funding in the longer term.

We already undertake that all unemployed school leavers will be offered a place on the youth opportunities programme. My predecessor as Secretary of State for Employment made it clear that, when the Government were in the position to guarantee that no 16-year-old need be unemployed, it would be time to withdraw supplementary benefit from 16-year-olds in their own right. Last December we also stated our belief that it would be right for young people, whether in education, the new training scheme or unemployed, to be regarded in general as dependent on their parents for the first year after reaching the minimum school leaving age.

We still believe that these young people should not be entitled to supplementary benefit in their own right. None the less, the Government have noted the firmly held and clearly expressed views of those on whom the operation of the scheme depends that its launch could be seriously impaired by the withdrawal of supplementary benefit from 16-year-olds. We have therefore decided that withdrawal of supplementary benefit will not take place in September 1983 and that there will be a further review after a year's operation of the scheme.

This will, I believe, also meet the views of the Select Committee and the Social Security Advisory Committee, which were similarly concerned. Meanwhile, in line with their views, we shall provide that those who unreasonably refuse a suitable training place will, like adults, have their benefit reduced for six weeks.

This scheme is an immense step forward towards setting standards and systems of training for our young people as good as those anywhere overseas. Its success now depends above all on the efforts made by employers and other sponsors, supported by unions, all of whom have fashioned its shape, to provide enough good quality training places. We shall certainly expect commercial and industrial establishments in the public sector to contribute and I hope that all in this House and outside will give this imaginative new scheme the wholehearted support needed to ensure its successful operation from September 1983.

Mr. Eric G. Varley (Chesterfield)

Is the Secretary of State aware that the Opposition welcome the changes that he has just announced in the youth training scheme? We congratulate the task group of the Manpower Services Commission on convincing him that had he proceeded with the ludicrously low level of allowance that he proposed and withdrawn supplementary benefit from non-trainees the scheme would have been unworkable. Having been saved that humiliation, will the right hon. Gentleman confirm that the allowance will be at least as much as the current youth opportunities programme allowance, adjusted to meet the increase in inflation? The task group called for that in its report.

Does the right hon. Gentleman agree that the scale of unemployment among the young is now the most serious problem afflicting the nation? Does he agree also that of the hundreds of thousands of young people who will enter the youth opportunities programme this year and the new youth training scheme next year, only a tiny proportion, rather less than 50 per cent., will get permament jobs?

Does the Secretary of State accept that after the proposed training young people will face a long period of unemployment? Does he agree that any analysis of the problems show that although worthwhile training is to be welcomed—we welcome the scheme—the Government should bring forward policies of economic and industrial expansion to create more jobs? Is it not abundantly clear that every indicator shows that the Government have failed dismally and that the only hope for the young and for the other 3 million unemployed is to get a Government who are committed to expansion and full employment?

Mr. Tebbit

First, I thank the right hon. Gentleman for his generous welcome of the scheme. I find no difficulty in conceding that those who are to deliver the scheme have made proposals to me which I have accepted. The Government are providing taxpayers' money and it now depends upon those who have proposed that the scheme should operate in this way to deliver it.

I emphasise that we have decided that the allowance should be £25, which is the current YOP allowance, subject to review next year, but I can give no undertaking in advance of the outcome of that review—otherwise I should be conducting it now.

I differ slightly from the right hon. Gentleman, because, in the light of this scheme, I believe that the most serious problem that we now have is not so much youth unemployment, which is being dealt with to a considerable extent by the scheme, but long-term unemployment among many other age groups as well.

Finally, I believe that for the first and subsequent generations of youngsters coming out of the scheme the economic climate, on any reasonable forecast, is likely to be much more optimistic than the present situation. If the right hon. Gentleman persists in advocating enormous public expenditure in the belief that that will improve the state of the economy, I think that my right hon. Friends and I could get together to raise enough money to send him on a day trip across the Channel.

Several hon. Members


Mr. Speaker

Order. As there are two Supply debates today, I propose that questions on this statement should not continue after 4 o'clock by the digital clock.

Mr. Alan Haselhurst (Saffron Walden)

Does my right hon. Friend accept that today's news will be very welcome to young people and will provide a fine new foundation for training prospects? How quickly does he estimate resources will be available for the scheme to encompass 17-year-olds as well as 16-year-olds, as the MSC hopes?

Mr. Tebbit

I emphasise that we think that the resources are already adequate to deal with all unemployed 17-year-old school leavers, but it is difficult to offer guarantees to this group at present and I should not wish to offer a guarantee which I could not be absolutely sure of delivering.

Mr. A. J. Beith (Berwick-upon-Tweed)

Is the Minister aware that we welcome the improvement in the allowance and the removal of the compulsory element, which will get the scheme off to a better start? Does he agree, however, that the scheme may prove much more attractive than staying on at school to take the new 17-plus qualification or A-levels? Will he therefore have urgent discussions with the Secretary of State for Education and Science about educational maintenance allowances?

Mr. Tebbit

First, as I have said many times, there never has been, and there was never intended to be, an element of compulsion. Secondly, the proposed level of the allowance is being made possible because employers are willing to finance it. If the hon. Gentleman thinks that we could now finance educational allowances of that nature, he must be incapable of basic arithmetic. Moreover, youngsters participating in the scheme will be in a very different position from those still at school. Their expenses will be greater and they will bring benefit to employers, albeit not a net benefit.

Mr. John Golding (Newcastle-under-Lyme)

Is the right hon. Gentleman aware that the Select Committee will be pleased to learn that he has decided to increase the level of allowances and that the Government do not intend to stop supplementary benefit? Is he further aware that the Select Committee also recommended that 18-year-olds with special needs, including the disabled and the educationally subnormal, should be included in the scheme from the start? As we understood from the MSC that this would not greatly disturb the costing, why are the Government not making provision immediately for this group of young people, who are very much at risk in terms of finding employment?

Mr. Tebbit

I in turn thank the hon. Gentleman and his Committee for their very helpful report on this matter. I considered carefully whether the problems of the 18-yearolds to whom he referred could best be dealt with within this scheme or through some other scheme. I feel that they will be best dealt with through community industry, as I believe the MSC agrees, and I hope that that will be the best way forward for them.

Sir David Price (Eastleigh)

I congratulate my right hon. Friend and the MSC on their initiative. Is my right hon. Friend aware that, at long last, we are beginning to catch up with our European competitors in the training of young people? Is he aware that the key to this lies in the recommendation in the MSC report that young people joining the scheme should be treated as trainees and not as young employed, so that they will remain part of the educational process, as envisaged in the unimplemented parts of the Education Act 1944?

Mr. Tebbit

I thank my hon. Friend for his remarks. Certainly the youngsters will be trainees and will receive considerable benefit in improved training. In addition, we shall receive the benefit of a better trained work force.

Mr. John Grant (Islington, Central)

I congratulate the Secretary of State on a welcome and sensible decision, which may well have been against his own natural instincts. I hope that the scheme will now be speedily and successfully implemented. May I press the right hon. Gentleman on the matter that he himself raised? Will he make a further statement before the Summer Recess on the problem of long-term unemployment, which he accepts is becoming increasingly acute and about which the Government have so far been remarkably vague?

Mr. Tebbit

I thank the hon. Gentleman for his compliment, even though it was a slightly backhanded one. I assure him that the Government are actively considering how we can develop the proposals made with regard to the long-term unemployed by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget.

Mr. Derek Foster (Bishop Auckland)

Does the Secretary of State accept that all those responsible for implementing the scheme will be glad to learn that he has belatedly seen sense over the allowance and compulsion? Is he aware, however, that for young people the great test of the scheme will be whether they find jobs at the end of it? Does he agree that that is no more likely now than under the youth opportunities programme? Is he further aware that the scheme really requires the proper working together of the Department of Education and Science and the Department of Employment? Will he pay attention to the crying need for proper educational maintenance allowances, so as to encourage those who should remain at school or go to colleges of further education to do so?

Mr. Tebbit

Again, the hon. Gentleman seems incapable of basic arithmetic. I do not know what level of educational allowance he has in mind, but if he reckons that there are about 400,000 16-year-olds and 400,000 17-year-olds at school, he might rapidly begin to tot up the cost. It is simply not possible. Secondly, as I have already said, the status of a trainee in industry is different from that of a youngster at school. That is recognised in the terms and conditions that apply, and have applied for a long time, to apprentices as opposed to those remaining at school.

Mr. John Major (Huntingdonshire)

Is my right hon. Friend aware that his statement will be very good news for hundreds of thousands of school leavers? How much support does he expect from the European social fund, as this is clearly critical to the level of support available for the scheme?

Mr. Tebbit

I thank my hon. Friend for his remarks. Currently, the European social fund is supporting the youth opportunities programme, the costs of which are less than one-half of those of the new scheme, to the tune of some £60 million per year. That is certainly useful.

Mr. Peter Hardy (Rother Valley)

Will the right hon. Gentleman ensure that the new scheme will not in practice actually diminish the prospects of employment of those 17-year-olds and 18-year-olds who have never had a job? What steps does he intend to take to persuade such young people that society and the Government have not written them off?

Mr. Tebbit

The hon. Gentleman should be reasonable in what he asks. We cannot guarantee that a scheme that brings many more youngsters into useful and paid service in the community will not have an effect somewhere on someone else.

I am sure that the hon. Gentleman fully understands that nothing can guarantee jobs in the future for the youngsters, the middle-aged or the elderly except an ability to compete and to satisfy customers by offering goods that they want, that they can afford and at a time when they want them.

Dr. Keith Hampson (Ripon)

Is my right hon. Friend aware that, unlike the wingeing brigade on the Opposition Benches, many Conservative Members are aware that he has been trying to ensure a much higher and improved element of training in the new scheme compared with the old, and at the same time have a reasonable maintenance allowance? To achieve that balance, a major employer contribution is required. Therefore, the scheme is welcome. Can my right hon. Friend confirm that it is not a short-term scheme and that it is part of the Government's intention to have a fully integrated long-term training provision for the entire age group?

Mr. Tebbit

Certainly it is the Government's intention not only that the standard of youth training is raised next year and the year after but that it is continually improved to meet and beat that offered by our competitors. The scheme is funded through 1984–85, and the MSC will be considering, in a much wider context, how we fund industrial training in future.

Mr. Allen McKay (Penistone)

When considering the travel allowance in the summer of 1983, will the Minister also take into consideration such things as safety boots, equipment and overalls, which the boys will need and which sometimes the parents will have to purchase?

Mr. Tebbit

I am not sure exactly how those items will be provided, but I take note of what the hon. Gentleman says. However, that is part of the reason why these youngsters are in a different category from those at school and why they will receive an allowance which those at school do not get.

Mr. David Madel (Bedfordshire, South)

To ensure that these welcome alterations are effective, does my right hon. Friend agree that it is important that the MSC should make sure that local education authorities are ready with the appropriate personnel and premises to carry out their important functions under the scheme?

Mr. Tebbit

Yes. I am not sure whether many local authorities are short of premises these days. I hope that most of these youngsters will be accommodated in normal employers' places of work. I am not saying that local authorities are not normal employers or that in many cases they cannot give very good training, but I hope that most of the training will be given in the course of normal employment and not have to be done by local authorities setting up special centres.

Mr. Andrew Faulds (Warley, East)

In view of the right hon. Gentleman's original under-funded and compulsory scheme, would not a moment of contrition and private prayer on his part be in order?

Mr. Tebbit

I can recommend contrition and even public prayer to the hon. Gentleman. I am sure that he would find that extremely beneficial. The scheme was not under-funded and the taxpayer is not putting in any extra funds. As usual, the hon. Gentleman only hears what he wants to hear. He did not hear that the employers' side is providing the extra resources to enable these youngsters to have higher allowances.

Mr. Kenneth Lewis (Rutland and Stamford)

Is my right hon. Friend aware that all Conservative Members congratulate him on showing the flexibility that we have come to expect of him? Can he assure the House that the Government will cover any extra cost involved in the travel allowance and that it will not be a charge on employers? Some young people who have to travel long distances might experience difficulties.

Mr. Tebbit

I thank my hon. Friend for his welcome to the scheme, and I note what he says about the travel allowance. He must note that there is a substantial taxpayers' contribution to the scheme, which already amounts to about 1p on the standard rate of income tax.

With regard to my flexibility, I hope that everyone inside and outside the House can recognise an olive branch when it is offered and do not go too far by using it to beat about the ears those who offer it.

Mr. Greville Janner (Leicester, West)

I welcome the Minister's conversion to dove-like capitulation, but does he nevertheless agree that unless permanent jobs are available for these young people at the end of their training they will merely regard the year as the postponement of unemployment? They will come out of that year even more wretched and disillusioned.

Mr. Tebbit

I notice that the hon. and learned Gentleman is as adept as anyone on the Opposition Benches at finding a cloud to every silver lining. He should accept that the scheme is a useful step forward that will improve the prospects for these youngsters, and he should accept it on that basis.

For my part, I have got the scheme that I wanted, at no extra cost to the taxpayer, and I am perfectly content about the outcome of it. I still believe that the Government's view on supplementary benefit is right and that it is socially and morally correct that youngsters should be given an incentive to go into constructive paths rather than an incentive to opt out from socially constructive paths. I am content to accept what those who will have to deliver the scheme have said—that to make this change in September would prejudice it. I think more of the future of these youngsters than I do of the view, even though I have so strongly expressed it, that now is the time to make the change.

Mr. Jonathan Aitken (Thanet, East)

I welcome many of the concessions announced today, but is my right hon. Friend aware of the anxiety over the fact that he may have been too flexible on supplementary benefit? Will he bear in mind that Germany and many other European countries do not pay supplementary benefit, or its equivalent, to those who refuse a place under their State training schemes? When my right hon. Friend reviews the operation in a year's time, will he make sure that it is not Britain alone that takes the soft option?

Mr. Tebbit

I note what my hon. Friend says, and he has no doubt noted my remarks. When I review the scheme after it has been in operation for a year I shall consider how effectively we do things here compared with abroad.

Mr. Alexander W. Lyon (York)

As there never was a tendency for people to refuse a YOP scheme when it was a viable way to a job, and as the Government could always deal with the problem by giving people jobs, would that not have been a better method than dealing with the problem by means of supplementary benefit? I accept that the Minister has announced some improvement, but having done the little bit of maths suggested by him, on the educational maintenance allowances it appears that the cost, even at the rate proposed, would be just over £1 billion. That is substantially less than we have spent on the Falklands adventure. Surely the interests of 800,000 young people are worth putting into the balance against the interests of 1,800 people on the Falkland Islands.

Mr. Tebbit

I shall not tangle with the hon. Gentleman on the morality of whether we should be willing to spend to uphold freedom and the rule of law. I merely note that he has introduced yet another proposal for spending by his party that would put 1p on income tax.

Mr. Peter Bottomley (Woolwich, West)

Would my right hon. Friend prefer to avoid the embarrassment of being welcomed as a good, moderate leading member of the Tory Party, and instead accept that he has broad support from his party for the decision that he has taken rather than the concessions? Will he emphasise to the MSC, through his Department, that families and parents will need to support their young people in order to get the best value from this new training initiative? Will he also correct the reference by the Opposition to boys and emphasise that the scheme applies just as much to girls as it does to boys?

Mr. Tebbit

I thank my hon. Friend for his kind remarks. It is difficult to be both good and moderate, but I always do my best. We should all emphasise the measure of support that youngsters of both sexes should expect from, and should be given by, their families. Certainly this scheme applies to girls as well as to boys. After all, there are many abilities—I almost said unused talent, but that is probably the wrong expression—that are not fully used in our industrial and commercial world.

Mr. Arthur Lewis (Newham, North-West)

The right hon. Gentleman referred to travel allowances. As there is a need to get people back on to public transport, will he consider issuing a public transport pass rather than introducing cash allowances for travel?

Mr. Tebbit

Among other things, we must increase the revenues so that public transport can be effectively operated. Perhaps the best way of doing that is for people to pay their fares.

Several Hon. Members


Mr. Speaker

Order. Two hon. Members on either side are waiting to be called. I think that I can call them all and still ensure that we begin the next business before five minutes past Four.

Mr. Dennis Skinner (Bolsover)

Will the right hon. Gentleman confirm that what he has proposed today is little more than a scheme to carry the Government over the next general election? There is nothing long-term about what he has said and therefore he cannot receive my congratulations. Will he acknowledge that in its policy the Labour Party has proposed a £20 a week maintenance grant, covering the full 52 weeks in a year? That had better be put on the record, because the whole tendency has backed that. Will he also confirm that while hundreds of thousands of young boys and girls have no prospects for the future, it is significant that today, when the nation is awaiting the birth of the Royal child, that child will not have to suffer a YOP scheme or look for a school maintenance grant?

Mr. Tebbit

The answer to the hon. Gentleman's first question is "No". I note what he said about another of the barmy schemes that have been put forward. I notice that he does not now describe that scheme as the policy of the Labour Party, but rather the policy of the "tendency".

Mr. Michael Colvin (Bristol, North-West)

Will my right hon. Friend confirm that this youth training scheme is the first real attempt by any British Government to produce a truly comprehensive scheme to bridge the gap between school and work? Will he also confirm that its success will largely depend on the co-operation of employers and employees, notably the CBI and the TUC? Can he anticipate what their reaction will be to his new proposals?

Mr. Tebbit

I thank my hon. Friend for what he has said. I hope that both the employers and trade union sides will welcome what I have said, because in effect I have given them exactly what they asked for as condition; for setting up the scheme and taking it forward. This is an ideal example of collaboration between the Government, both sides of industry and education interests.

Mr. David Ennals (Norwich, North)

The Secretary of State has received some credit either for flexibility or capitulation. One wonders why it took him so long to realise that the original proposals were unacceptable. What sort of opportunities will the young people have for consultation about the nature of their courses, both through trade union membership and perhaps even membership of the appropriate boards?

Mr. Tebbit

I thank the right hon. Gentleman for his half-carping congratulations, for which, I suppose, I should be grateful. As to consultation, these youngsters, who are trainees, will be coming from school into work. It is likely that the employers and trade union sides, as well as educationists, will have the best idea of what courses these young people should follow and the way in which those courses should be constructed. I hope that everyone will listen to the youngsters as well. After all, if they find the courses unattractive the scheme will be a failure, and we want to make it a success.

Mr. Tim Eggar (Enfield, North)

I join in the warm welcome that has been given to my right hon. Friend's announcement. Is he satisfied that enough places will be forthcoming and that co-operation at local level will be similar to the level of co-operation at national level?

Mr. Tebbit

There is no reason why co-operation at local level should be less than that at national level. I hope that it will be much more, because there is good reason for it. As a result of my conversations with major employers over recent months, I believe that places will be available. However, there will be some areas where this will be difficult, not least perhaps in rural areas, where it is difficult to find large employers who have training facilities of this sort.

Mr. Tony Marlow (Northampton, North)

My right hon. Friend will correct me if I am wrong, but I calculate that 300,000 young people getting an extra £10 a week will cost employers and industry about £150 million a year. What additional advantage over the original proposals will industry and employers get from the scheme?

Mr. Tebbit

Many advantages are possible for employers and industry, not least the fact that it has been agreed that there can be provision whereby an employer will be allowed to take on as trainees some youngsters whom he would have wanted anyway alongside some of these youth trainees. In that way, he can reorganise his training system so that he and the youngsters concerned can gain some benefit from it. There is a benefit in that respect. The CBI is convinced that there is a benefit, and it should know best.