HC Deb 28 April 1986 vol 96 cc749-56 10.11 pm
Mr. John Cope (Treasurer of Her Majesty's Household)

In the absence of my hon. Friend the Minister, who will be here shortly—

Mr. John Evans (St. Helens, North)

Where is he?

Mr. Cope

—I beg to move,

That the draft Industrial Training Levy (Engineering Board) Order 1986, which was laid before this House on 14th April, be approved. The order is before hon. Members today because one part of it involves a levy in excess of 1 per cent. of emoluments. Therefore, it requires an affirmative resolution of each House under section 12(6) of the Industrial Training Act 1982. I shall outline the full details of the levy order.

Hon. Members will be well aware, as I am in my constituency and as my hon. Friend the Parliamentary Under-Secretary is in his, of the importance of the engineering industry, which is the largest manufacturing sector in terms of employment. In 1985 engineering output rose by 5 per cent., the fourth consecutive year of growth.

Mr. Dennis Skinner (Bolsover)

rose—

Mr. Speaker

Order.

Mr. Cope

Mechanical engineering in particular experienced its strongest growth since 1974 with output 6 per cent. above its 1984 level. If the industry is to build on those achievements, it is important that all firms play their part in training. We must ensure that employers continue to develop the skills of their work force in order to increase both productivity and growth.

I refer to the details of the levy. It is expected to raise about £171.5 million before taking exemption into account, and over £19 million after exemption. The levy will cover a period of 12 months to 31 August 1986, and it makes no changes to arrangements currently operating, which were approved by the House last year. It is in two main parts. In the mainstream of engineering establishments of 1,000 or fewer employees, where there is a levy of 1 per cent. of emoluments, 0.06 per cent. of the levy is non-exemptible. In larger establishments 0.06 per cent. is non-exemptible in respect of the first 1,000 employees, and 0.054 per cent. is non-exemptible in respect of the remainder.

For establishments in the mechanical and electrical engineering construction industry sector, the levy is in several parts, and my hon. Friend the Parliamentary Under-Secretary will give the details of that if the House requires it. The employer and employee members of the Mechanical and Electrical Engineering Construction Industry Sector Committee agreed to the levy unanimously and the proposals were subsequently endorsed by the board without dissent. Letters of support have been received from the two major employer organisations in the sector. There is thus consensus in the industry for the proposals, as required by the 1982 Act.

I therefore recommend the order to the House. It has widespread support and is necessary to meet the industry's future training needs. If there are any further points that any hon. Member would like to raise, my hon. Friend the Parliamentary Under-Secretary is here to deal with them.

10.16 pm
Mr. Barry Sheerman (Huddersfield)

This is an historic evening, with the Government failing to get their business by two votes—[Interruption.]—and then with the appearance by the Minister, too late to bat when he was supposed to. I am sure the speech by the Whip, the hon. Member for Northavon (Mr. Cope), was every bit as good as the one that we might have had, had the Minister got here.

Mr. Evans

It was much better.

Mr. Sheerman

It is important to concentrate on the background against which we see the introduction of the order. I shall seek first to set the order in context because it was the original purpose of the engineering industry training board levy in the 1960s to assess the training needs of the engineering industry, which is so crucial to the industrial effort of our country. It was then the intention of the legislation that the engineering industry training board should levy the requisite amount of money to fund and carry out training appropriate to the needs of the industry and the country.

Originally, that levy was set at 2.5 per cent. It was based on a firm's payroll—the numbers employed—but it was intended to meet the real costs of training for that industry. Sadly—on reflection—there was such an outcry from industry and the employers' organisations that there was an early reduction to 1 per cent. of the payroll. That forced the original intentions of the EITB off the track. Since that time it has never been fully equipped to do the job envisaged for it by the initial legislation. That was to identify the training needs of the industry and the country, in the national interest, and to ensure that they were carried out.

Indeed, the EITB has been forced off the track particularly since the introduction of exemption certificates to the levy. Sadly, the income to the EITB has withered away. We see that 97 per cent. of firms in the engineering industry can claim exemption, and indeed do so. So much of the industry is exempted that the budget of the EITB is far too small to begin to perform the task that it should be doing. The basic criterion for exemption was too low and the system, as the Minister must know, does not work. The Government know that very well.

The effects of that background and the disastrous policies pursued by the Government on education and training since 1979 are clear in the even more clearly reduced circumstances of the industrial training boards in general, the closure of most of them and the fact that the engineering industry training board is supposed to stand on the sidelines while market forces and the philosophy of voluntarism triumphs.

After the abolition of most of the industrial training boards, and taking into account the cowed position of those which remain, 97 per cent. of engineering firms are exempted. The levy is too low and the exemptions are too many. The criteria for training done by industries to enable them to get out of training and paying the levy are laughable. There is a serious need to return to the original spirit of the engineering industry training boards when they were established. The reasons for that are clear if we consider the broad picture of education and training in Britain, and especially in engineering. In this crucial sector of our manufacturing industry, we see a total collapse, skill shortages and the decline of the skill base of the engineering industry. Firms are poaching rather than training. The commitment to training has reached rock bottom. That is a sad position for a once great and proud industry. So much for the Government's devotion to the watchword "voluntarism" as though that was all that ever mattered.

The House would not wish me to rely merely on rhetoric to advance the seriousness of the position. I need rely only on the facts published by the board. The board's influence has withered away and its ability to influence industry has been undermined by the exemption certificate system. For the past three years and longer, the Opposition have warned the Government about what would happen to engineering training if they treated the problem as lightly as they have, and more pressure has been mounting to give exemptions to training so that they are almost universal.

The board compared April 1978 with April 1985. It carried out a spot check on one day in each month and these revealed that the numbers of those in training declined much faster than the decline in manpower in engineering. We are not juggling the figures. Even if we took into account the acknowledged decline in the industry's employment, we can see from the figures for engineering technicians that, in April 1978, there were 140 technicians in training for every 1,000 technicians in the industry. Sadly, that figure has declined to 90 for every 1,000 technicians. For craftsmen, the position is even more disastrous. In 1978, there were 145 men and women in training for every 1,000 engineering craftsmen. The figures today are down to 75 in 1,000, and that is a disastrous drop from 145 per 1,000.

Let us look at another interesting category. We may not associate industrial training boards with graduates, but in 1978 there were 160 graduate engineers per 1,000 in training in the industry. That was down to 120 in 1,000 in 1985. Those are the most reliable statistics. They are more sensitive and accurate than those published by the Department, because the EITB is so much closer to the industry.

What are we seeing in engineering apprenticeships overall? We know that between 1979 and 1986 they have halved, and that is during a period when we have seen a lack of skilled young men and women in industry. In 1979 we had 20,000 craft and technician apprentices. We now have fewer than 9,000. That is a disastrous decline.

It is estimated that we need between 4,000 and 5,000 apprentices coming out of training every year simply to meet the natural wastage caused by retirement. The sad fact is that we are not even producing enough apprentices to meet the natural wastage. The number has fallen from 20,000 to 9,000 and we are on a spiral into decline and frustration for our country and its economy.

I understand that just last week there was an MSC review of engineering industry training board funding which was generally pessimistic. We can expect even further cuts in the board's budget. I remind the Minister that in the past three years that has declined from £17 million to £5 million this year. That is the result of a wicked policy of moving away from the proper funding of proper training to short-term, pump-priming, gimmicky training that does no one any good.

Put those hard facts in the context of a recent independent survey which showed that Britain'ss manufacturing industry spends 0.15 per cent. of turnover on training yet our major industrial competitors spend between 1 per cent. and 2 per cent. That is the measure of the problem that we in Britain face and the context in which the order is being moved this evening.

Put it in the context of a speech made by the chairman of the MSC, Mr. Bryan Nicholson, on 21 March, just a few days ago. He said that Britain' work force is "a bunch of thickies" compared with our competitor countries. That is a sad comment on seven years of Government control of our training programmes.

The MSC has also published a study by a respected firm of accountants—Coopers and Lybrand—entitled "A Challenge to Complacency". When it was published, Mr. Bryan Nicholson wrote to a large number of manufacturing companies in this country, but he received such a pathetic response that even he, whose appointment was made by this Government, is beginning to believe that the Government's adherence to voluntarism and market forces urgently needs to be reviewed.

The lessons to be learned in engineering could not be clearer. Any intelligent Government response would be properly to assess, plan and evaluate British engineering needs. When those needs had been assessed the Government ought to plan ahead for manpower needs, not to rely upon the day-to-day response of market forces. However, this Government do not like to plan ahead. Government resources and legislation would be required to raise the money to meet British engineering needs. That would be in the interests of both the industry and the country.

That brings me back to the order absolutely square-on. That was the original intention of the Engineering Industry Training Board and the levy system. How sad it is for this country's future productivity that we have moved so far from the original intention.

A comprehensive national strategy covering education and training is needed, of which the EITB should be a key part. Instead, the EITB, together with a few other training boards, is embattled, isolated and fragmented. It cannot train properly, because it is not part of a proper training system and is unable to grapple with the immense problems that face the engineering industry and this country. It has no hope of dealing with cross-sectoral problems and the regional problems that are so important to any industrial training plan.

Face-saving gestures are not needed, such as a department of education and training. That would not deal with the problems. It would divert the attention of the public away from the real gaps in our training strategy. We need a commitment to rise from the dead—I use that term reluctantly—this nation's education and training system and to introduce innovation, dynamism and growth.

Inadequate though it is, the Opposition do not intend to oppose the order. The EITB is still part of the slim 25 per cent. of industry that comes under the umbrella of the industrial training boards. Consequently we shall not vote against the order. However, that is not to be seen by anybody, particularly by the Minister, as meaning that we do not believe that the training system is in tatters. The EITB deserves more than the passing of this order. It needs to be completely reframed and resuscitated.

10.33 pm
Mr. David Penhaligon (Truro)

My view is that the situation is rather worse than that which has been outlined by the hon. Member for Huddersfield (Mr. Sheerman).I do not argue about his statistics, but one of the ironies about this great nation, where the Industrial Revolution started, is that, although that historic fact can be denied by no one, Britain is an anti-technology and anti-industrial country. I say that, having reflected upon the attitudes expressed by members of the Civil Service and the education service, and by those in schools and universities and, indeed, Parliament.

I am one of the few hon. Members who is a qualified engineer. Among the middle classes and the better educated people there is a belief that one cannot be proud of engineering and technology, especially of the more mechanical sort, and that a career in engineering and technology is to be pursued only if other opportunities do not present themselves. That fundamental weakness is now catching up with us in terms of our competence in various skills.

I began my apprenticeship with an engineering company 24 or 25 years ago. On reflection, I recognise that the level of skills being taught then was insufficient, but that unsatisfactory state of affairs 24 or 25 years ago has become a great deal worse since then.

I do not intend to defend the former apprenticeship system. It had many merits, but it also had some weaknesses. It was a time-serving operation as opposed to a skill-acquiring operation. However, one is tempted to believe that, although the time-serving part of the apprenticeship system has been abolished, the skill acquisition side of it has not been introduced to the extent that is needed.

The order is all right as far as it goes, but, if we are to pull the country up in terms of competition and industrial production, a different attitude must be adopted at many different levels. For example, far too much of Britain's production engineering is designed by skilled engineers, not using the skills which exist within their companies, but making up for the skills not available within their companies. Job elements are reduced to the minimum so that someone with a few weeks or days training can do the job. That will not build an international reputation for the level of competence in engineering products that we must have to survive as an industrial country.

The Government are in charge and they have power to influence such matters. I urge the Government to reexamine the level of skills acquired in our nation—at all levels. I am not talking only of manual skills. Manual skills are of tremendous importance and I do not underestimate them, but some people seem to believe that all that we have to acquire are manual skills. That is not so. We must acquire low technician skills, high technician skills and entrepreneurial, fresh and new engineering skills. All those skills are required if the country is to get out of the mire.

I have been a Member of the House for about 12 years, and the more that I become influenced by my friends in London, as opposed to my friends in Cornwall, the more I am persuaded of the view that there is, at a middle and upper class level inwards, an anti-technology and anti-making things attitude. Britain's living standards rely upon those who can make things, mine things, grow things or catch things. The country has no other means of wealth production.

The mining people are experiencing difficulties in Cornwall—to put it mildly. For all that, we cannot develop a series of policies which expand Britain's poor capacities when in the long run, in this great nation of ours, there is nothing like an economic future for them. Some Government of the future must turn around this long-ingrained attitude that exists in the British person and British society which, ironically, is anti-technology. That is amazing in view of Britain's history of industrial revolution and innovation over the last 50 to 100 years.

10.38 pm
The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier)

I apologise unreservedly to the House for my discourtesy in not being present when the debate began.

The hon. Member for Huddersfield (Mr. Sheerman) said that he would set the order in context, but he failed to do that. He ended his remarks by saying that the Opposition did not intend to oppose the order because he thought that to a certain extent it was fair enough. There was something of a dichotomy in what he said to the House. He suggested that the budget was far too small for the engineering industry training board and the purpose for which the board wished to use that budget. However, the House is aware that the board is made up of representatives of the trade union movement and employers. The board was unanimous in its decision that this order should be presented to the House.

There is no difference of opinion between the hon. Member for Huddersfield (Mr. Sheerman) and myself as to the importance of training. We both consider it an important investment and not a cost. When the hon. Gentleman suggests that the levy is too low—I think he used those specific words—why did the ITB decide to agree unanimously to the measures which we are considering tonight?

The hon. Gentleman referred to the decline in engineering, and, more specifically, to the decline in apprenticeships. However, the decline in apprenticeships was arrested as a result of the introduction of the youth training scheme. There is evidence of that fact and I discussed that when we considered the matter in Committee at an earlier date.

I am concerned about some of the hon. Gentleman's allegations about those training organisations which now come under the umbrella of non-statutory training organisations. The hon. Gentleman will be interested to hear that I have recently written to all the NSTOs previously covered by ITBs asking them precisely what they are doing at the moment. It is some time since we introduced legislation to rearrange the training and to keep some statutory training organisations and some non-statutory. I shall be interested to learn what is the current state of play and whether they have honoured the undertakings they gave when they were applying to the consultation exercise with regard to tackling certain ITBs. I am sure the hon. Member for Huddersfield will be interested in their answers.

I welcomed the intervention of the hon. Member for Truro (Mr. Penhaligon). He also referred to apprenticeships and I sympathise with what he said. The hon. Gentleman suggested to the House that there was an anti-technology feeling in Britain. I would go further and suggest there is an anti-industry or anti-manufacturing feeling in Britain.

That is one of the reasons why the hon. Gentleman and I welcome Industry Year 1986. This is another opportunity for us to dispel the dirty overalls image of manufacturing industry. I know that the hon. Member for Huddersfield will welcome the fact that much is being done by the trade unions in Industry Year, as well as by the CBI, the Institute of Directors and other employer organisations. These bodies and the Church are trying to get the message across about the improved interface between industry and education.

We should have done this 40 years. I am not making a party political point; it does not matter who was in power at the time. The effort has been made a little late in the day, but it is never too late. Many moves are afoot to try to dispel the dirty overalls image of industry and that must be for the betterment of improved relations between industry and education.

Mr. Trippier

Some time ago I had the privilege of launching a video, which has gone to every secondary school in the land, entitled "To be an engineer". This works to dispel the dirty overalls image of engineering. I hope it will improve the image of engineering specifically, and I hope it will convince not only youngsters to consider engineering but also their parents. That is important.

Mr. Andrew Rowe (Mid-Kent)

My hon. Friend mentioned the interface between education and training. Does he agree that the dramatic shortage of mathematics teachers in schools—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. We are discussing the industry training board levy, not training and education in general.

Mr. Trippier

I know that my hon. Friend has an important interest in this subject. I am sure that I am to blame for leading him down that path. Those who concentrate on that subject in school would have a natural bent towards engineering later in life.

I pay tribute to the hon. Member for Truro (Mr. Penhaligon) for introducing this important aspect of what we are trying to achieve in 1986—a matter that draws all sides of the House together.

Mr. Sheerman

Surely the Minister is aware that, on a public relations level, of course the matter draws the House together, but we are deeply divided by the fact that the Government have not put in the resources for the training that is needed. Voluntarism does not work. The Minister has not said how he will get the Government to see that, and get money into training.

Mr. Trippier

The hon. Gentleman says that voluntarism does not work. He is prejudging the results of the consultation exercise that I am conducting, which will be open to public scrutiny when it is completed. I am sure that the hon. Gentleman welcomes the fact that I have written to the NSTOs inviting their views about what is going on. The hon. Gentleman may be in for a surprise. Perhaps I might put it a little more strongly. The hon. Gentleman may be in for a pleasant surprise—it was to me—to discover that some of the NSTOs have gone a little further and done much more than they ever did when the training bodies were statutory. The hon. Gentleman is a little premature suggesting the outcome of the consultation exercise.

Mr. Penhaligon

If a young man or woman has designs on becoming a competent technician engineer not a graduate or craft engineer, how would the Minister suggest he or she goes about it? Surely he is not telling us that YTS, although it has some advantages, is the most obvious course?

Mr. Trippier

The hon. Gentleman is not making a valid point. Apart from the normal channels, which have been open for some time, YTS can play a significant part in the youngster gaining credit towards a proper craft apprenticeship which would be recognised by a validating body, which would enable him or her to be qualified.

I welcome the fact that, broadly, the alliance welcomes YTS. The hon. Member for Huddersfield is invariably supportive. I despair of some of his hon. Friends, who try at every possible opportunity to knock or rubbish it. It has proved the most successful training scheme that we have had and it bears comparison with international programmes or schemes.

We have had a useful and interesting debate. I am grateful to the hon. Member for Huddersfield for saying that the Opposition will not oppose the order, and I commend it to the House.

Question put and agreed to.

Resolved, That the draft Industrial Training Levy (Engineering Board) Order 1986, which was laid before this House on 14th April, be approved.