§ The Minister of State, Department of Employment (Mr. Peter Morrison)
I beg to move,That the draft Industrial Training Levy (Construction Board) Order 1984, which was laid before this House on 3rd December, be approved.The House will recall that at about the same time last year a similar order concerning the construction industry training board was laid before the House. It was debated and approved unanimously by both Houses. The present order similarly requires parliamentary approval in accordance with the Industrial Training Act 1982 because one part of it involves a levy of 2 per cent. on payments made for labour-only subcontracting.
I hope that the hon. Member for St. Helens, North (Mr. Evans) will agree that it is important to ensure that all except the smallest firms contribute to the costs of training. We must do everything we can to ensure that we are not bedevilled by skill shortages, as we have been in the past. That is why I hope that the hon. Gentleman will agree that it is essential that the order is approved so that the money will be available for the board for grants and the necessary training within the industry.
The levy is expected to raise a total of about £42.5 million. An occupational levy is proposed on the main part of the construction industry. That is a set amount for each occupation but subject to an overall limit of 1 per cent. of employers' wage bills.
As the hon. Gentleman will appreciate, occupational rates vary according to the type of craftsmen trained. The board believes that that system reflects the extent to which it meets the training needs of various categories of workers. Levy rates, therefore, reflect the specific training costs and needs of each occupation in the industry. I am pleased to say that the occupational rates remain largely unchanged from last year.
It may be appropriate if I were to say a word or two about the board. As hon. Members will be aware, the board was retained following the general review of training arrangements for which I, as the Under-Secretary of State at the Department of Employment, had responsibility in 1981. It was retained because it enjoyed widespread support from industry and employer organisations. I have worked closely with the board since then, and I believe that its performance has justified this support. The chairman of the board, Mr. Leslie Kemp, his staff and all his board members, employers, trade union representatives and educationists have done sterling work. I should like to pay tribute to them for what they have done in making the youth training scheme in their industry such a success. I have today laid before the House the board's annual report for 1983–84.
As the hon. Gentleman will be aware, the Federation of Master Builders was represented on the board in June last year for the first time. I welcome that representation. I am sure that it has an important role to play on the board. It is a sensible move because I have talked to its representatives, at length, about training within the industry.
There has always been a consensus in the industry on the board's training proposals. That was demonstrated clearly last year. This order follows proposals adopted 236 without opposition by the board, which were approved by the Manpower Services Commission, which decided that they are necessary to ensure proper training in the industry.
However, from letters that I have received from many hon. Members, it is clear that there is still some anxiety about the proposals. The Federation of Master Builders wants to change to a payroll system of levy. Other employer organisations would reject that and say that it was tried in the 1960s and did not prove to be the best way to do things. They maintained that it proved inequitable.
All other employer representatives on the board support the proposal. I have received many letters supporting the proposals from organisations such as the Building Employers Confederation, the Federation of Civil Engineering Contractors, the Construction Plant Hire Association, the Electrical Contractors Association and the Heating and Ventilating Contractors Association.
As I said, there have been many representations from both sides of the industry. What I have said consistently to the board and to the interested parties is that it would be much better for the future if such matters were settled within the board and not by the Government. I hope that the interested parties will be able to sit around a table to discuss the best way ahead for the years to come, because they know their industry better than I do or, dare I venture to say it, anyone of us in the House.
I hope that as in the past, the board will be able to reach an agreement that will be in the interests of training for the construction industry. I know what an important role that industry has to play in the nation's economy.
I hope that hon. Members will agree that the order is necessary to bring in revenue vital for the board to meet the industry's training needs. I trust that the order will enable the board to play a significant role in the Government's training plans, especially the youth training scheme and the other objectives of the Government's new training initiative. I commend the order to the House.
§ Mr. John Evans (St. Helens, North)
The construction industry training board levy order has almost become part of our Christmas season. Immediately before the House rises for the Christmas Recess one of its last tasks is to approve the proposals of the industry's training board, which have already had the seal of approval of the Manpower Services Commission. The one difference this year is that tonight we are debating the order at a more reasonable hour because of a happy chance of circumstances—normally we debate it after midnight.
The Labour party does not oppose this or similar orders because, unlike the Tory Government, we are strongly in favour of industrial training boards, and still bitterly regret the narrow dogmatism that brought about the abolition of many training boards about three years ago. The Minister will recall that because he was in charge of the legislation.
I wish to renew the commitment of the Labour party to the principle of re-establishing industrial training boards for most sections of British industry when we are returned to power. The Labour party believes in the massive expansion of training and educational opportunities for young people, unlike the present miserable Administration, who think only of harrying our young people into compulsory youth schemes, no matter how dead-end, unskilled or repetitious and boring they may be.
The imaginative training schemes prepared and implemented by the CITB are the sort of schemes that we 237 wish to establish for all our young workers. We wish to provide schemes that give them a solid start in learning about their industry, a first year of good, off-the-job training and a further two or three years of training at work in their chosen skills. I join the Minister in paying tribute to Sir Leslie Kemp, his board and all who work hard in the CITB to make a success of training in industry.
Normally the order comes to Parliament from the board without controversy. It has usually been thrashed out in the industry through joint talks between employer and employer, trade union and trade union, and employers and trade unions. That is absolutely right. Most agreements in industry should be reached after full discussions between employers and free trade unions with the minimum of interference by central Government. That is what good industrial relations are about. It is time that the Government realised that and shaped the whole of their industrial relations policy accordingly.
However, it cannot be said that this order has come to us free of controversy. A major section of the industry, the Federation of Master Builders, has spent a great deal of time and money seeking to change the entire basis of the method of collecting the levy payments. It is important to note that the FMB, which, generally speaking, represents smaller builders, is not challenging the levy itself, but merely the levy's basis.
It is also important to note that if the case of the FMB was accepted and the levy was switched from a per capita basis, as it is at present, to a payroll levy, as the FMB proposes, it would represent financial savings for the majority of members of the FMB. It would also mean an additional financial cost to the majority of large firms which make up the Building Employers Confederation.
The Labour party is not taking sides at this stage because we feel that the matter should be sorted out, if possible, by those who work in the industry. Yesterday I was given information that the CITB had established a working party, one of the purposes of which is to examine the method of obtaining the levy. Another purpose is to examine the feasibility of construction industry apprentices being indentured to the CITB, rather than to individual employers. I shall return to that later.
I was informed that the chairman of the working party was to be a long-serving CITB member, Mr. Coatsworth, who is an academic, and that the FMB would be free to refer any other matters relating to the board's income and activities to the working party. However, today I heard from another source within the industry that that may not be quite the whole story. It has been suggested to me that some of the board members thought that the working party was to be established for the sole purpose of considering the problem of indenturing apprentices. My source told me that a working party was held a relatively short time ago, which returned with a hybrid proposal combining some elements of a percapita levy and some elements of a payroll levy that went some way to meeting the objections of the Federation of Master Builders and was broadly acceptable to it.
However, it is alleged that that proposition has disappeared. Nothing further has been heard of it, and the fear has been expressed to me that any working party set up now would be used as a delaying mechanism further to circumvent the demands of the master builders. I ask the Minister for a guarantee that the working party will be established quickly and that it will report quickly. Most of the data are readily available. If the working party 238 recommends changes in the levy that are acceptable to the board, I hope that they will be implemented in next year's order. I say that because, on its face—I accept that a detailed investigation may reveal much more than is being said now — there is some validity in the FMB's submission that there is an imbalance in what its members pay in levy and receive in grant and what the large civil engineering contractors pay in levy and receive in grant.
While I am on the subject of small and large firms, will the Minister confirm that when the construction industry training board is reconstituted in 1985 the trade unions will retain parity with the employers on the board, and that the FMB's membership will be increased so that it is more fairly represented?
I shall now deal with another aspect of the board's income and relate it to the training of apprentices. I have been given to understand that, in 1984, the total income of the CITB was about £84 million. Of that, about £45 million was raised by the levy on employers, and no less than £35 million was income from the Manpower Services Commission for youth training schemes run by the CITB. About 18,000 or 19,000 youngsters are part of CITB youth training schemes, thus making it one of the biggest participants in the YTS. Indeed, I am led to believe that the entire first-year trainee intake in the construction industry was Government-funded youth trainees. Will the Minister tell me, if not tonight by writing to me later, how many of those trainees went on to enjoy full apprenticeships in the construction industry? That important information should be available to the board and to the Minister because of the claims made by some Ministers about the number of YTS trainees who have gone on to full employment.
The majority of CITB youth training schemes are praiseworthy; if all youth training schemes were of such a calibre, we would not have the ridiculous spectacle of Tory Cabinet Minister seriously suggesting that young adults should be deprived of their pitiful £17.30 supplementary benefit if they refuse, for example, to pack supermarket shelves for £25 for a 40-hour week. The Government should provide the choice and opportunity of training, not the Hobson's choice of youth coercion or empty pockets.
Another serious point is that some people in the construction industry have raised the question of the industry's apprentices being employed by the CITB instead of by the individual employers. In a television interview yesterday, the Prime Minister said that she was in favour of a two-year training scheme for all those aged between 16 and 18. The introduction of such a scheme, funded by the MSC, would go a long way to bringing about the highly desirable policy of all apprentices being indentured to the industry's training board. That would end the appalling and frequent spectacle of young apprentices being thrown onto the dole halfway through their apprenticeships when their employers go into liquidation — a not uncommon happening in the construction industry. I assure the Minister and the House that if the Prime Minister institutes a comprehensive and well-financed two-year training scheme she will have my and my party's fullest support.
The background to the debate on this order is the announcements today from the Secretary of State for the Environment and the Secretary of State for Wales of the substantial cut in capital expenditure by local authorities which, whatever else they do, amount to another massive 239 setback for the construction industry, which is already laid bare by the successive blows that it has received from the Government. I did not hear the Secretary of State for the Environment deny that his announcement would mean redundancy for some 100,000 workers in the construction and related industries.
The question, "Training for what?" is entirely relevant in this industry today, and it is undeniable that a substantial amount of local authority expenditure finds its way straight into the private building sector. Because of these announcements, there will be a further crop of closures and bankruptcies of building companies that will not be able to pay the levy to the board, which will further reduce the board's income. The construction industry training board faces a difficult, if not bleak future. It needs all the good-will in the world, and it has the goodwill and best wishes of the Labour party in its work. That is why we shall not be opposing the order.
§ Mr. Andrew Hunter (Basingstoke)
I welcome the opportunity to speak in this short debate. I make no secret of the fact that I have received the strongest representations from firms and individuals in my constituency on one aspect. What I shall now say reflects the approaches which I have received from these interested parties, but nevertheless they are views that I accept and endorse personally, without qualification.
My first point is one of regret. I regret that debate and contention have entered into the construction industry levy board's affairs. In this respect, I welcome the comments made by my hon. Friend the Minister a few minutes ago. As I understand it, the proposals now before us were agreed to at a training board meeting in April. I further understand that in course of time the Manpower Services Commission approved the proposals, which were duly recommended to the Secretary of State. I am told that no objections were made by the Federation of Master Builders until a few weeks ago. This "holding of fire" is hard to understand, let alone applaud.
Representatives of the building industry in my constituency, not least two respected local firms, H. N. Edwards and Maurice Smith, have told me that other organisations represented on the levy board have publicly urged the Federation of Master Builders to try to resolve this dispute by means of discussion within the industry. It is sad and unfortunate that the federation has declined this invitation.
My second point is that the case being made by the FMB—I do not derive any satisfaction or pleasure from entering into dispute with the federation — contains weaknesses and flaws, as I understand the case which has been put to me. As we know, the federation bases its argument—the hon. Member for St. Helens, North (Mr. Evans) referred to this—on the belief that the present dual system of levy arrangements — the per capita system and the raising of levies on labour-only payments — is unfair to smaller builders. That view is not generally shared in the ranks of the small builders.
The Federation of Master Builders does not have a monopoly of the interests of the smaller builders. As I understand it, all other employers' organisations represented on the levy board support the per capita system. Furthermore, the Building Employers 240 Confederation, among others, has convincingly pointed out the fallacies in the Federation of Masters Builders' argument that small builders are being penalised by the present system. It should be remembered that companies on the training board register whose annual payroll is less than £15,000 a year are specifically exempted from paying all the levy. The significance of this increases when we bear in mind the fact that the smaller companies receive over £3 million a year from the board in training grants.
Much the same applies to companies with an annual payroll of between £15,000 and £30,000 a year. About £1,500,000 is raised in levy from such firms. That is a considerable amount, but all but 5 per cent. is returned in grants. Surely that creates no burden. Indeed, on 27 October, a written answer revealed that about 83 per cent. of the levy is handed back to companies of all sizes in training grants.
If we bear those facts in mind, and not least the fact that the majority of small firms are not members of the Federation of Master Builders, the federation case begins to look flimsy. The Building Employers Confederation believes that many small firms would actually pay a higher levy if the percentage-of-payroll system were introduced. If that is so, the federation argument is self-defeating.
The employers confederation claims that the federation has overlooked the fact that substantial amounts of training board levy come from self-employed operatives. About two thirds of the total levy from the building sector is being raised this way this year. The counter-charge against the Federation of Master Builders is simply that it has got it wrong. The present system does not penalise or victimise the smaller builder.
The levy order should be made without delay. I accept some of the sentiments expressed by the hon. Member for St. Helens, North (Mr. Evans). It is hard to over-estimate the importance of the construction industry to our economy. Likewise, it is hard to overstate the importance of the training board's work. I think that I have a sympathy for training boards with which the hon. Member would approve.
The training board is, among other things, the largest single managing agent of the youth training scheme. If the levy order were not made, or if it were even delayed, confidence in the training board would be affected profoundly. Firms have already undertaken training in the expectation of receiving training board grants. Their financial difficulties would be acute.
A delay in making the levy order might compel the training board to draw on its reserves. That could have disastrous repercussions. It could damage the board's successful YTS programme. If the board were compelled to draw on its resources, it would encounter severe problems in continuing to run its four training centres which are attended by 20,000 trainees a year.
For those reasons, set out briefly, I believe that the order should be approved.
§ Mr. Bernard Conlan (Gateshead, East)
The comments by the hon. Member for Basingstoke (Mr. Hunter) are astonishing in some respects. He explained that his interest was aroused by representations from constituents who were members of the Federation of Master Builders.
§ Mr. Hunter
I did not say that. The people to whom I referred were not members of the Federation of Master Builders. I am sorry if I gave that impression.
§ Mr. Conlan
I apologise. However, the hon. Gentleman denounced the proposals by the Federation of Master Builders.
I take part in the debate simply because of representations made to me by members of that federation. I was impressed by their case. The hon. Member for Basingstoke said that their case had been put only in the last few weeks. That is not so because they have made that case for many years.
The Minister conceded that the federation, in spite of representing 20,000 small and medium-sized firms in the building industry, had no representation on the board. It was only because of the generosity, understanding and sympathy of the Secretary of State for Trade and Industry and the Minister of State—I pay tribute to the part that the hon. Gentleman played as well—and the feeling of a need to give representation to the federation that it was given, belatedly, one seat on the industrial training board. That one seat was balanced by one additional seat for the trade unions.
The case for the payroll levy has been advanced by the federation over a long period. I pay tribute to the work that the board undertakes. It is doing an extremely fine job of work in providing training in a difficult and complex industry and I pay tribute to both sides of it, but that does not mean that we must accept everything that it does. If some of my remarks appear to be critical, that is not because I condemn the general view that the training boards for the construction industry and many others are indispensable. I make these remarks because I think that changes are required urgently.
It is admitted readily that there are fundamental differences of opinion within the industry on the method of raising the levy. The federation goes for a straight payroll levy, which would be simple to administer. However, there are others who differ fundamentally with that approach. When the Conservative Government came into office there were 24 training boards and there are now a mere seven. It is astonishing that every other training board, with the exception of the offshore petroleum ITB, raises its levy by the payroll method. The offshore petroleum ITB has an entirely different system which is possibly even simpler. It relies upon contributions that are made by its member firms. Only the construction ITB has a convoluted, difficult to administer and confusing method of raising a levy. Not only that, it is controversial.
It is not only the Federation of Master Builders that is crying out for changes. The Minister said last year that every member of the training board was in support of a per capita levy but he did not go that far this evening. He said that the proposition was approved by the board earlier this year without objection.
§ Mr. Peter Morrison
I think I said that the order came forward following proposals that were adopted without opposition from the board.
§ Mr. Conlan
I suppose that we are playing with words. Does "without opposition from the board" mean that members of the board supported the recommendations on a split vote? Did they divide? Were there any dissenting voices within the board when it discussed the matter? That is all I am saying. I am surprised that the Minister can 242 come here tonight and say that there was no opposition from the board. Is that so? The Minister nods, so it must be. I am surprised to learn that.
§ Mr. Hunter
Perhaps the hon. Gentleman should not be surprised if he bears in mind the fact that the Building Employers Confederation has demonstrated that a levy based on the percentage of payroll would mean a greater levy being imposed on smaller companies.
§ Mr. Conlan
I understand the difficulties. The larger firms object to paying more, but the basis of the argument is that the larger companies, under this arrangement, are not paying enough and the small firms are paying too much and doing most of the training.
§ Mr. Richard Holt (Langbaurgh)
Much of the argument is related to the levy. Surely the real thing is the balance between the levy and the grant. It is the difference between the two that is important. When I was responsible in the furniture industry, we made a profit on our levy. Therefore, the argument about the levy in isolation to the grant is a non-argument.
§ Mr. Conlan
That is a matter for Mr. Deputy Speaker.
The proposal for a payroll type of levy is not new. It existed in the industry until 1970, and still exists in every other training board. The Manpower Services Commission, in a letter to the industrial training board's planning services committee as recently as 1979—only five years ago—asked that committee how soon it could adopt a percentage-based approach in line with the other industrial training boards. Therefore, even the MSC was concerned about those arrangements and was asking specifically whether the training board could move towards a system based upon a payroll rather than a per capita system.
There must be changes. I think that the Minister will recognise that changes must be made. The Federation of Master Builders has been given assurances — I do not know how strong they were — both formally and informally that it would move gradually towards a different system, which would be simpler, more efficient and more equitable. That is all that the members of the federation are asking for. They are not pleading poverty. They will not go round with a begging bowl. They are saying that they are prepared to play their part, to pay their full costs and to do the training that is required of them. That is a fair and reasonable approach.
I understand why there was a move from the payroll to the per capita sytem in 1970—it was because the big civil engineering contractors that do not employ many skilled craftsmen felt that they were paying too high a proportion of the total cost of the board's operations. Presumably, those arguments still apply today. In the industry, building service firms are required to engage and employ a high proportion of skilled labour to carry out their function. They are different from the civil engineering contractors, who manage largely en labour-type operatives. Clearly there is an imbalance. If that is the case, why cannot a method be devised by the industry training board to segregate those elements with a high preponderance of skilled labour from other elements, 243 which largely exist through the use of labour-type operatives? If that could be done, the anomaly of one section of the industry claiming that it subsidised the work of another would disappear.
I am impressed by the words that frequently appear in the papers I receive from the industry training board. Everyone is seeking a solution to this problem, and there are regular calls for efficiency, simplicity and equity. That is also sought by the Federation of Master Builders, and it is a principle that every hon. Member can endorse.
§ Mr. David Penhaligon (Truro)
I begin by making absolutely clear how much I support the general concept of the order. I believe that the 1984 legislation, from which all this flows, was in concept and effect among the most successful legislation enacted during those years.
To an extent I must declare an interest, because at one time I benefited substantially from training through an industrial training board. It was not the board that we are now discussing, but the principle is the same. This was a good idea in 1964, and it is a good idea now. I am delighted that this board is very much alive and well, and so far as I am aware, no hon. Member from any quarter of the House is arguing that it should be abolished.
There is merit in training. I cannot recall any economy on this great planet in which the difficulties with which a government have had to deal have been caused by too many skills and too much training among their work force. Even in the situation we now face, when manifestly one fears there is not enough work to employ the skills available, I would argue vigorously that we should prepare for a recovery. The nation would do itself a service if it concentrated more of its mind and its resources on training and an improvement in general skills. I am a bit of a training fanatic. It is good, and those who encourage it deserve praise.
The hon. Member for Gateshead, East (Mr. Conlan) referred to the argument, of which we are all aware, about whether this should be based on payroll or per capita. As a layman looking in from outside, my conclusion is that there is much to be said for a payroll levy. That is a fair and sensible way of reflecting the size and significance of various companies, not to mention the value they place on the skills they employ. What better sign of a company's value of a skill can there be than what it pays the personnel involved? Having read the arguments, I see strength in the case put forward by the Federation of Master Builders. In principle, therefore, I believe that the arguments it has put forward should be investigated with vigour.
The Federation of Master Builders believes that small firms receive less than their fair share of the repayment and that small firms do more than their fare share of training. The belief is that the smaller firms are making a bigger training contribution than their size warrants but that they are not receiving reasonable recompense for their efforts. My attention has been drawn to a letter dated 6th March 1984 from the head of CITB's planning services. It says:I have looked at the trainee ratios based on levy returns. These would appear to indicate that the smaller firm employs proportionately more trainees than the larger firm".The letter also states that smaller firms appear to train more than their fair share.
Given the sums of money involved and the number of years that the CITB has been in existence, the inadequacy 244 of the statistics is amazing. The argument revolved around assumptions rather than the statistics which the board could have accumulated over 20 years.
§ Mr. Conlan
The Minister chided me when I asked a parliamentary question about this problem. He replied that the cost of a reply to the question was £700. So what?
§ Mr. Penhaligon
I saw that. It might be of interest if all questions asked in this House were costed. There might be times when information is obtained at quite considerable cost—at far greater cost than the value of information obtained. There is observable truth in the argument that smaller firms generally employ people with more skills than do larger firms. I suspect that this is due to the way in which companies plan their work.
There was a time when a working party of the CITB reached a compromise. We are told that that compromise was unanimous. It argued for a mixed per capita and payroll scheme. I have not received a satisfactory answer about what happened to that scheme. The Minister could be very helpful if he could refer specifically to why the compromise agreement of 1972 has never seen the light of day. It has been mentioned twice in the debate and seems to be relevant. It is one of the reasons why some are cynical about yet another inquiry. A unanimous compromise was reached but that compromise has bit the dust.
The Minister will have seen the figures relating to the differences. Small payroll firms—15,000 to 30,000—pay in something like £1.1 million. Under the payroll system that would go down to £0.6 million and under the compromise to £0.73 million. That is nearly £400,000 in terms of the transfer of levy away from smaller companies. That sounds a substantial sum. One would obviously like to hear any counter-argument.
The next band up is the £30,000 to £60,000 a year payroll company. They currently pay £1.8 million. Under the compromise they would pay £1.3 million. Under a payroll system they would pay £1.1 million. One has to get near the top, the £200,000 to £300,000 a year payroll company, before one sees a percentage difference which is less. They now pay £1.6 million. Under the compromise they would pay £1.5 million. Under the payroll system they would pay £1.4 million. One has to get to a turnover of £1 million or more a year in terms of wages, of which there are apparently 750 companies, before there is a significant transfer the other way. They currently contribute £10.9 million. Under the compromise they would pay £12.4 million. Under the payroll system they would pay £13.5 million.
The Federation of Master Builders has at least asked enough questions and made enough points to demand something rather more significant and substantial from the Minister or the training board to explain why the present system is worthy of support.
I am sure that the Minister is aware that from the outside one fears a little bit of conspiracy in the CITB on the employers' side. One suspects that the larger enterprises have a large portion of the say. One fears, or is suspicious, or thinks that it is a remote possibility, that the larger companies may well be in favour of a system which obviously shifts the load down to those who are not strongly represented. I am sure that the Minister has been in politics long enough, as I have, to be familiar with the 245 situation where sections of an industry decide that the fair arrangement is for somebody else to pay. One fears that there is a tendency in that direction.
It would be interesting to hear the Minister explain why the different levies have been selected. I notice that somebody trained in mechanical engineering is paid £85, and in electrical engineering £75 and that a craftsman is paid £71. I must admit that, as a mechanical engineer, I have always thought that they were far better trained and more value than electrical engineers, but I am not sure that an analysis of the training of the two would back that argument. Why is there a £10 difference?
One of my objections to the scheme is that it discourages the sort of flexibility of skills that are demanded in many building sites. Not all that many people, especially in smaller companies, are employed purely for their mechanical or electrical engineering skills, or purely for their craftsman skills. There is at least a flexibility at the edge. As somebody who believes that we should be encouraging a flexibility at the edge, I think that the levy scheme could well encourage a regimenting of people's skills that I would not appreciate. It seems reasonable to ask why there should be a difference and I would appreciate an answer.
The hon. Member for Basingstoke (Mr. Hunter) argued the big companies' case. He referred to the answer which said that 83 per cent. was repaid. I am sure he is aware that it is now admitted that that answer is wrong. The figure is nowhere near 83 per cent. If he looks at the chart from which he got the 96 per cent. figure, he will see that that is the only group that got over 83 per cent. Manifestly, the average cannot be 83 per cent. It must be in the order of 73 per cent. The fact that that answer is wrong — I suspect it is the simplest question of all to answer—makes one a shade suspicious of other statistics.
Another point that is often made is that those companies with a payroll of less than £15,000 a year make no contribution. A company with a payroll of less than £15,000, even with wage rates in my part of the world, probably does not employ three people. We are talking about something small. I stand to be corrected but I am told that that sort of company would often offer to subcontract particular skills on a bigger job. The reality of what happens is that the big contractor collects a payroll out of a part of its labour-only expenses. It is passed on by the bigger company. I do not make any complaints about that. It sounds a good way of getting the money. However, it would be unfair to pretend that a two-man building company does not make any contribution when it is having a percentage of its labour-only contract taken out of its labour contract and paid in by the bigger companies. I suspect that at least some of the apparent generosity is not quite so simple, if one pays nothing and gets £3.9 million back.
I am sure that no one will vote against the order. I shall certainly vote for it because I believe in training. Nevertheless, by dint of persistence, the Federation of Master Builders has put up a number of questions which deserve to be answered in far more depth than hitherto. The quality of argument put up by those who defend the present system is simply not adequate backing for a system entering its 14th or 15th year. I therefore welcome the inquiry, but I hope that it will achieve something better than the conclusions reached when these matters were last investigated in any depth.
§ Mr. Richard Holt (Langbaurgh)
I had not intended to intervene, but much of the debate, to which I have listened carefully, has concerned finance and very little has concerned training. The two options discussed have been a per capita and a payroll basis. The Government might care to consider whether payment by results would be more in keeping with today's needs.
I speak as a former chairman of the furniture trade industry training board dealing with apprentices in the London area. In my experience the need to pass examinations or to obtain skills was the least important consideration for either employers or trade unions. The most important thing was to ensure that the levy form was filled in and the maximum grant obtained, irrespective of the standard of training achieved by the young person concerned. I suspect that matters are not very different in the construction industry. I doubt whether there is any rule that youngsters entering the industry must go to a training college and achieve a good standard in their examinations before any levy or grant is paid.
All too often, we look at training from entirely the wrong angle. We should be considering whether we are training enough people properly in the skills required for the future. In this context, I commend the attitude of the Electrical, Electronic, Plumbing and Telecommunications Union, which has approached this nationally by encouraging a far larger number of young people to come into the industry and to be trained adequately, the criterion being not whether they have lived long enough or whether the levy has been paid or the grant received, but whether the employers and trade unions are satisfied that the young person is competent to go out into the world and say, "I am an electrician."
I was horrified, though, to hear from the Labour Front Bench the suggestion that there might be an apprenticeship to the construction industry training board. That is a horrific prospect. Any employer would immediately wash his hands of his apprentices because it would all be the responsibility of the CITB — elected, appointed, or however it might be constituted at the time.
§ Mr. Evans
Is the hon. Gentleman aware that there are strong arguments within the industry that employers should be indentured to the CITB? Far from employers washing their hands of apprentices, the position would be far better than it is now, when every year thousands of apprentices find themselves on the dole queue because their employers have gone bust and there is no other work for them. That would not happen if they were indentured to the CITB.
§ Mr. Holt
I realise that, Mr. Deputy Speaker. I apologise profusely to you. I meant that if the hon. Member for St. Helens, North (Mr. Evans) does not understand that there is a correlation between the content of training and the money involved, that is hard luck for the Labour party—although we know that the party is in its death throes in any case.
I had not intended to make a political speech. I am concerned about young people. I am interested in their training. That is why I attended the debate. It is a pity that there are not more Labour Members here, demonstrating their interest in young people and in training.
§ Mr. Deputy Speaker
It was a general reproach, not specifically directed towards the hon. Gentleman.
§ Mr. Holt
I hope that my hon. Friend the Minister will accept that we all want the order to be passed. However, the discussion must not be limited to an argument between two sectors of employers in the industry, and the way in which the levy and the grant are carved up. We must think about the young people and the needs of the future, and make an assessment of what is required. If there is to be an annual exercise of filling in forms and seeking to maximise the amount of money that can be received back by way of grant to set against the levy, irrespective of whether the youngsters involved ever do any of the jobs required of them or attain any skills, the country will be in a bad way.
It is time for a thorough investigation, taking in more than the CITB. However, I want to use this debate as a coat-hanger for discussing all elements of training. When I was responsible for signing indentures, together with the responsible trade union official, our only criterion was whether the person involved had lived long enough. The young people did not have to pass any examinations or present any work. I suspect that that is true in the CITB to this day. Before we say that someone is an electrician, a bricklayer, a joiner or a plasterer, we should ensure that indentured apprenticeships are meaningful and that the financing of the apprenticeship is a secondary and not the primary consideration.
§ Mr. Peter Morrison
I entirely agree with my hon. Friend the Member for Langbaurgh (Mr. Holt) that the debate should be about training and about the quality of training in the construction industry. I also agree with his comments about standards as opposed to time-serving. A greater emphasis on standards is one of the objectives which the Government — and, I believe, the CITB — wish to attain as quickly as possible.
Inevitably, the debate has been about the altercation —if that is the right word—between the two employers' associations in the building industry. In my opening remarks, I was at pains to express my hope that the industry would be able to sort out its own training problems. Like the hon. Member for St. Helens, North (Mr. Evans) I hope that in the weeks and months ahead the working party to which he referred will sit down and work out the best way in which to proceed. I do not believe that 248 the House is best qualified to find a solution. I believe that it would be much better for the industry to do so itself. In the meantime, I will do what I can to bring the parties together, as I have tried to do during the past three months.
My hon. Friend the Member for Basingstoke (Mr. Hunter) expressed his regret that there should be a debate between the two employers' associations. Such differences of opinion are an inevitable fact of life. We must look to the future — as does the hon. Member for Gateshead, East (Mr. Conlan)—rather than to what may have happened in the past. I hope that the parties concerned will look to the future and try to resolve their differences of opinion.
The hon. Member for Truro (Mr. Penhaligon) said that he is glad that the board is alive and well and that he is a training fanatic. Having been responsible for these matters, first as an Under-Secretary of State and now as Minister of State, for nearly four years, I cast myself in the same category. I believe that training is incredibly important. It is an investment which should be hoisted high on the list of priorities. The hon. Gentleman and I are at one on that. He asked about the occupational levy. Different occupations get different levies and the industry, through the boards, decides what the levy should be for each occupation. I hope that he agrees that the best people to make that decision are employers, trade unionists and educationalists rather than he or I, who are not working so closely with the industry.
The hon. Member for St. Helens, North started by being somewhat controversial about the youth training scheme. I suppose that we have grown accustomed to that but his remarks were somewhat misplaced. The scheme costs the taxpayer about £800 million, the trainees believe that the scheme is impressive and constructive and yet the hon. Gentleman said, in the context of the CITB, that it has had an amazing outturn figure. Of the 18,000 or so trainees who were last year under the CITB managing agency, some 90 per cent. who have completed their training have gone on into further skills training. I wonder whether he is able to point to such a good record at any time between 1974 and 1979 when his party was in power.
§ Mr. Evans
Did the Minister not understand that I was not criticising the youth training scheme as it affects the CITB? I was criticising the many other schemes such as the packing of shelves in supermarkets, which are an abuse of training schemes. I suggested that every scheme should be as good as the CITB one.
§ Mr. Morrison
That is interesting. The hon. Gentleman would have us not approve the youth training scheme when the managing agency is Sainsburys where, if my memory serves me correctly, there was a 500-place scheme, after which virtually 100 per cent. went into a job. The hon. Gentleman does not like that either. The hon. Gentleman must substantiate what he said. If he does not like such schemes on which the placement rate is so outstandingly good, I must report that that is what the Labour party feels.
I am sure that industry has listened carefully to what the hon. Member for St. Helens, North said about the reintroduction of statutory training boards. I hope that, on consideration, he might think again. Surely he agrees that training is better done if it is done voluntarily, whether in a statutory or a non-statutory system. It is better done because it is done with conviction and commitment. I am 249 delighted that the hon. Gentleman commends the order to the House — it is for the good of training in the construction industry.
§ Question put and agreed to.
That the draft Industrial Training Levy (Construction Board) Order 1984, which was laid before this House on 3rd December, be approved.
§ It being Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions which he was directed by paragraph (2)(c) of Standing Order No. 19(2)(c) (Consideration of Estimates) to put at that hour.