§ I begin with some measures directly related to employment and training.
One of the most long-standing problems in this country is our failure to prepare our school-leavers adequately for work. Since it was first launched in 1983, the youth training scheme has proved to be a very successful bridge between school and work. I has also helped to make young people's pay expectations more realistic. But too many trainees are still reluctant to accept rates of pay which reflect their inexperience, and too many employers still fail to recognise that training is an investment in their own commercial interest. This is in marked contrast to our major competitors overseas.
The Government have therefore decided to promote a substantial expansion of the youth training scheme. Provided employers contribute a major share of the cost, the Government are prepared to provide further funds to launch this new initiative, over and above the existing £800 million a year of public expenditure on the YTS. The expanded scheme would offer places lasting two years for 16-year-old and one year for 17-year-old school-leavers, leading to a recognised qualification.
The main aim of all this is a better qualified work force. It would also be a major step towards our objective of ensuring that every youngster under the age of 18 will either be in full-time education, or in a job, or receiving training, with unemployment no longer an option. But first we have to get the expanded scheme in place. It will 789 require the active co-operation of employers, trade unions and school-leavers, which I am confident will be forthcoming.
The existing YTS provides foundation training and preparation for work. The expanded scheme will also involve occupational training for both the employed and the unemployed, geared to the needs of business and industry. In the long run, we would expect employers to meet the full cost, as those in other countries do, but I recognise that such a major change in attitudes may take time. I am therefore prepared to set aside a fixed sum in public funds to launch this new initiative and get it moving in the right direction.
My right hon. Friend the Secretary of State for Employment will be arranging consultations through the Manpower Services Commission about the quality of the training, the share of the cost to be borne by employers, and the level of trainee allowances. We aim to complete these consultations by the end of June so that a second year will be available for as many as possible of the 16-year-olds leaving school this year. Provided the outcome is satisfactory, I have undertaken to increase the Department of Employment's programme by £125 million in 1986–87 and £300 million in 1987–88. This expenditure will be partly offset by savings in social security payments and the ending of the young workers scheme, which will close for applications at the end of March 1986.
I am also providing the MSC with an additional £20 million in 1986–87 to finance a programme of appropriate in-service teacher training courses.
It has become increasingly evident that our output of graduates in high technology disciplines is not keeping pace with the expanding needs of industry. My right hon. Friend the Secretary of State for Education and Science will therefore be announcing later today a special programme, costing around £40 million over the next three years, to provide additional places in engineering and technology at selected higher education institutions. In this case the cost will be met from within existing public expenditure programmes.
While school-leavers are catered for by the youth training scheme, there remains the problem of the long-term unemployed genuinely seeking work. Under the community programme, local authorities and voluntary bodies provide temporary work for the long-term unemployed on projects of community benefit. This scheme, which at present provides 130,000 places has proved its worth, with a significant proportion of those who leave it going on to other jobs.
I have therefore agreed to make funds available to provide an additional 100,000 community programme places by June 1986. These places will be for 18 to 24-year-olds who have been unemployed for six months or more, and other adults who have been unemployed for over a year. To accommodate this, the Department of Employment's programme will be further increased by £140 million in 1985–86 and £460 million in 1986–87.
To an even greater extent than with the youth training scheme, the net public expenditure cost will be substantially less than the gross cost because of savings on social security benefits. The net addition to public expenditure as a result of all the proposals I have just announced will be £75 million in 1985–86, £300 million in 1986–87, and £400 million in 1987–88.
We also need to do more to remove legislative impediments to the effective working of the labour market.
790 However well intentioned, these can only lead to fewer jobs. Accordingly, my right hon. Friend the Secretary of State for Employment will be extending to all employers the provisions on unfair dismissal which currently apply to small firms. The qualifying period for unfair dismissal claims will thus become two years for all new employees. This is a reasonable period of time and should lessen the reluctance of some employers to take on new people.
In addition, my right hon. Friend will be issuing a consultative document about the future of the wages councils later this week. Wages councils destroy jobs by making it illegal for employers to offer work at wages they can afford and the unemployed are prepared to accept. This applies in particular to small employers and to youngsters looking for their first job.
§ Mr. Lawson
The document will cover a number of proposals for radical change, including complete abolition.
My right hon. Friends the Secretaries of State for Employment and for Education and Science will be issuing press notices later today giving further details of these measures.