HC Deb 05 December 1988 vol 143 cc25-37 3.52 pm
The Secretary of State for Employment (Mr. Norman Fowler)

With permission, I would like to make a statement on the White Paper "Employment for the 1990s" which I am publishing today.

Over the last five years, almost 2 million new jobs have been created in this country. Unemployment has also fallen in each of the last 27 months. Since the 1987 general election, unemployment has fallen by almost 700,000, and there has been a particularly significant reduction in long-term unemployment. Our unemployment rate is now below that of the average in the European Community, and, with an estimated 700,000 job vacancies in the economy. there is no reason why unemployment should not fall further.

One of the main reasons why unemployment has fallen so far and so fast is that, over the last nine years, this Government have sought to remove some of the main barriers that stood in the way of employment growth. The theme of this White Paper is the need to tackle barriers which could impede employment growth in the 1990s.

Ten years ago, one of the most serious barriers was poor industrial relations. In the 1970s we lost an average of 13 million working days a year through strikes. As a result, British job after British job was exported overseas, and, all too often, our industries had a record for unreliability. We have moved decisively away from that position.

The number of strikes today is lower than at any period since 1940. There is no doubt that one of the major reasons for this improvement has been this Government's reform of trade union law. The White Paper makes it clear that we will take any further legislative steps which may be necessary and that, in particular, I will be reviewing the operation of the pre-entry closed shop.

There is a clear link between pay and jobs. Pay arrangements need to be more closely linked to local labour market conditions, differences in performance and the continuing profitability of the individual company. The Government also believe that the time has come to reconsider the future of the wages councils.

There are real questions about whether a statutory system of this kind is relevant to pay determination in the 1990s; about whether, even now, wages councils give sufficient weight to the impact of settlements on jobs; and about whether a system which is so shot through with anomalies should be preserved. I am therefore publishing, together with the White Paper, a consultation document inviting views on the future of the wages council system.

As we move into the 1990s, the greatest obstacle to employment growth is likely to be lack of skills. Over the next five years we shall see a significant slowing down in the growth of the labour force and, in particular, a dramatic fall in the number of young people in the work force. The number of people in the work force under the age of 25 will fall by over a million between now and 1995.

Therefore, employers will not be able to rely solely on young recruits to meet their new skill needs. They will need to look increasingly to other sources of recruitment, such as women, unemployed people, and older workers. Above all, employers must train the people they already employ. If we are to have the skills our economy will need, employers must undertake a massive retraining effort.

This White Paper describes the radically new training framework to which the Government believe we must now move. The key element in this framework is the establishment of a network of local employer-led training and enterprise councils. These councils will be responsible both for promoting training by employers and for operating the Government's existing training programmes. They will also become responsible for the day-to-day operation of most of my Department's small firms and enterprise programmes. I shall be inviting employers to come together at local level and contract with my Department to set up these councils.

Two thirds of the council members will be drawn from private sector companies at chief executive level. Chambers of commerce, the CBI, and local employer networks will all have a vital part to play. The other council members will be drawn from organisations in the local community which want to play an active role in promoting training. The Government's aim is to establish a network of about 100 councils throughout Great Britain over the next three to four years, and I expect the first councils to be in operation before the end of 1989.

The training and enterprise councils differ from the present training framework in two important respects. First, they will be executive bodies, not advisory. They will give the leadership of the national training system to employers. It is employers who are the customers for training and they are also the main providers of training. Secondly, the establishment of the councils will move the focus of planning and delivery of training to the local level. It is in the local labour market that training needs can be best assessed and practical steps taken to meet them.

To help and advise me during the transition to these new arrangemens, I am setting up a national training task force. The task force will have up to 12 members. drawn primarily from leading figures in industry and commerce. The chairman will be Mr. Brian Wolfson, the present chairman of the Training Commission.

The White Paper also describes other steps I propose to take to improve the effectiveness of our training arrangements. These include consulting the remaining industrial training boards about the steps they need to take to become independent non-statutory organisations and determining the future of the Skills Training Agency. The agency is currently loss-making and over-dependent on Government training contracts. It would be in a better position to win more employer business if it were to move into the private sector, and the Government are therefore taking advice on this.

The changes I have set out mark a radical change in our training arrangements. International competition is fierce and the old ways have not been successful. People are this country's key resource. Seven out of 10 of the work force in the year 2000 are already in the work force now and therefore will be unable to benefit from the changes taking place in education. What is needed is the fundamental reform of our training arrangements so that they are employer-led and based on the local labour market.

Over the past five years, we have had dramatic success in creating new jobs and reducing unemployment. For the 1990s, success in training is the best guarantee of jobs and continued growth.

Mr. Michael Meacher (Oldham, West)

Is the Secretary of State aware that the Opposition fully accept that a major new training initiative is urgently needed, when the CBI is now reporting that a huge and growing skills gap is limiting output in one third of companies and constraining investment in nearly half, and that more than two out of five companies expect it to worsen? Is he further aware that half of the total work force got no training last year and that one third has never had any? Yet he is now proposing that employers, who have shown little or no foresight or will in meeting their own training needs, for which they have the strongest private incentive, should be the very people to be put into the driving seat to meet the training shortfall for the nation as a whole. Is it not perverse that employers who have persistently refused to spend enough of their own money on training their own employees are now being put in undisputed control of £3 billion of public money to train others—rather like putting Barlow Clowes in charge of investment protection?

Is the Secretary of State aware that our most successful competitors are moving in the opposite direction by adopting a national training strategy, based on an overall skills audit to meet the needs of industry, by ensuring that employers invest adequately in training their own employees and by having Government investment in high quality skills training for the unemployed? This Government, in their fourth restructuring of adult training in nine months, are now passing the buck to a series of unrepresentative and unaccountable local quangos. How can the Secretary of State justify giving employers absolute control, when the Government, local authorities, trade unions and the voluntary sector have at least as much, if not more, commitment and expertise in achieving high training standards?

I shall now deal with funding. It is widely acknowledged that employment training is grossly under-funded. Will the White Paper add a single extra penny of new money to that budget? Given the parallel organisation, for several years, involving retaining ET while switching to the new training enterprise councils, will the Secretary of State not be cutting the level of training, unless he also increases funding? What provision is there in the White Paper to ensure that employers will be spending a penny more on training? Will not the removal of the training levy, through the abolition of the statutory powers of the industrial training boards, actually reduce employers' spending?

The proposals are based on the experience of the United States, but is the Secretary of State aware that, while he has lifted American ideas, he has omitted the legal safeguards that exist there against job substitution, the duplication of training provision and exploitative pay rates? That is one reason why the Opposition totally oppose the abolition of the wages councils.

These proposals come from a Government who largely created the skills gap by abolishing the grant levy system for training those in work, by chopping three quarters of the industrial training boards, by axing one third of the skill centres and by decimating apprenticeships. Is it not clear that the White Paper is motivated far more by ideological dogma that favours the privatisation of training than by a desire to build a new national consensus to confront and overcome the huge skills gap facing the nation? The Chancellor of the Exchequer has often spoken about a low-pay, low-skill, low-tech economy. The White Paper will help to deliver that objective.

Mr. Fowler

I cannot bear to take lectures from the hon. Gentleman on training. When he spoke about a national consensus, one remembers his own performance on employment training. He, the Labour party and the Trades Union Congress turned their backs not only on the unemployed, but on training. His own record on that was lamentable, and he is in no position to lecture anyone about training incentives.

Our aim is to achieve a well-trained, professional work force for the 1990s. In essence, we want more training of staff to be carried out by employers. The hon. Gentleman made international comparisons, but he should consider West Germany's programmes, which are based on the chambers of commerce. In this country, it is employers who understand the local needs of the labour market and the local needs for training. The training enterprise councils will be employer-led and they will involve local organisations. Why are they to be employer-led? The reason is that they are training for industry. Employers know what the skill needs are because they are the customers for training and the providers of training. Everything that I have been told by organisations such as the Confederation of British Industry and the chambers of commerce has led me to have confidence that employers will take the opportunity with both hands.

There will be no cut in resources. A new programme—the business growth through training programme—is proposed. It will unify 10 existing programmes and will have £55 million to help to encourage training for small firms.

The position of the wages councils has changed fundamentally since their inception in 1909. The system is out of date. There are, for example, still wages councils that look after coffin furniture workers, flax and hemp workers and ostrich and fancy feather workers. Those councils are still in existence. There is no evidence that the changes that we made in 1986 affecting young people had any impact on the position of young people, except that unemployment among the 16 to 19-year-olds has come down by no less than 62 per cent.

The Opposition have no credibility in their views on training and unemployment or on programmes to bring down unemployment. The White Paper will bring about more employment now and, above all, more employment in the 1990s.

Mr. Jim Lester (Broxtowe)

I assure my right hon. Friend that I welcome the system of local delivery, for two principal reasons. First, it will minimise the number of free-loaders, who have been a problem in training for as long as I have been involved. Secondly, what is needed more than anything else is a period of continuity, so that those who are involved in training can convince local communities that training is an essential part of any company and essential for the future of this country. We need a period of continuity so that people can get on with the training.

Mr. Fowler

I accept what my hon. Friend, with all his experience, has said. The training and enterprise councils will be responsible for encouraging and promoting training. For the first time, we have brought together training for the employed and for the unemployed and training and development for small businesses. It is crucial to the proposals that training is carried out at local level, as that is where progress will be made. I have no doubt that proposals will be put forward that will have the effect of transforming training in this country.

Mr. Ken Eastham (Manchester, Blackley)

Now that the Secretary of State has admitted that we are facing a training crisis, will he also admit that the Government abolished three quarters of the industrial training boards and closed down skill centres, which were making profits? Is it not a fact that one of the most successful skills training organisations is the engineering industry training board? Will the Secretary of State ensure that it will have an assured budget which will provide some continuity because at present it does not know where it stands from one year to another? What steps will the Secretary of State take to ensure the quality and standards of training under self-regulation? Can he guarantee that we shall not have the bad standards of the past few years?

Mr. Fowler

The Training Agency will continue to monitor standards for the training of unemployed people. We shall also seek to guide and examine the training that is provided for employed people, so that there will be monitoring and checking arrangements.

The hon. Gentleman referred to the industrial training boards. There are now only seven training boards, which have progressively reduced their dependence on levies and exempted most companies. The clothing and allied products industry training board levies under half of the relevant companies and receives 90 per cent. of its costs from training services. We want to move all the boards in that direction, while keeping the good qualities of the training boards.

I must point out to the House that, at the moment, the Skills Training Agency is making a loss of about £20 million on a turnover of about £55 million. I put it to the hon. Gentleman—the Public Accounts Committee has already raised this point—that in the face of those figures the Government have no alternative but to seek a way of satisfying and finally reconciling that position.

Sir Peter Hordern (Horsham)

Does my right hon. Friend accept that, for many of us, the sooner the wages councils are done away with the better? However, will my right hon. Friend tell the House whether the West German scheme, to which he has referred, produces a much greater number of people with vocational qualifications as opposed to vocational training? Does my right hon. Friend think that it is a good idea to consult his right hon. Friend the Secretary of State for Education and Science to see whether there is cause for joint action in producing more people with vocational qualifications than is the case at present?

Mr. Fowler

My hon. Friend has made a strong point. Of course, my right hon. Friend the Secretary of State for Education and Science and I will work closely together on this. The basic case for seeking to take action on training is that seven out of every 10 people who will be in the labour force in the year 2000 are in the labour force now, so unless we act on training in employment now, those people will miss out on any improvements that take place in the education system.

It is right to consult on the future of the wages councils. They are full of anomalies and date back to 1909. Looking at the position today and comparing it with what it was in that period, one sees that today's circumstances would not lead anyone to set up the kind of wages council system that we have at the moment.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

Although the Secretary of State is correct to identify the need for greater local sensitivity in the organisation and delivery of such services, will he concede that the absence of any commitment on the part of the Government to increase real funding is bound to be an impediment to the progress that he wishes to see achieved?

In looking at local sensitivities and regional disparities throughout Britain in the context of the abolition of the wages councils, will the right hon. Gentleman bear in mind that in many parts of the country—my own is an example—there is genuine rural deprivation because of distinct local geographic and economic factors? Surely the Government have a duty to maintain a tolerable minimum income that can be met on the part of the potential work force?

Finally, on education, will the Secretary of State confirm that, despite his statement, as a country we are still lagging woefully behind our main industrial competitors in gearing our education system to the available and potential labour market?

Mr. Fowler

On the hon. Gentleman's last point, we have made a great number of strides in the past four or five years with, for example, the training and vocational education initiative and the new compact system., which has been an outstanding success and has taken off in a short amount of time.

The hon. Gentleman will be aware that wages councils govern only 11 per cent. of the work force and that the two thirds of the work force who are governed by wages councils are part-time workers in any event. Therefore, by definition, the other 90 per cent. of the work force are not covered by wages councils at the moment.

As far as the task of the training enterprise councils is concerned, I must make it clear that training in employment is first and foremost a task for the employers themselves. It is not a task that Government can carry out. We are not in a position to double-guess the requirements and needs of employers. Training is essentially a task for employers, and I am confident that they will take up that challenge.

Mr. John Bowis (Battersea)

Is my right hon. Friend aware that the White Paper will be widely welcomed by those who believe that the next stage in improving the employment position is to ensure that more people acquire skills? Is he further aware that there will be a particular welcome for the greater involvement of employers in the scheme? Will he take note of the points that have been made about education, and does he agree that to date the further education sector has played an important part in working with employers, in creating jobs and in helping people to acquire skills? Therefore, in what way does my right hon. Friend see that sector playing a full part in the future?

Mr. Fowler

I believe that our further education system will continue to play a part in training and it is important that it should—certainly the offer is there as far as the Government and the Training Agency are concerned In most local authorities, such involvement is taking place, and I hope that will continue. The basic point about the involvement of employers is that training must be relevant to jobs. It is the employers who provide the jobs, so training must be relevant to their needs. We are following the logic of that in the new training structure that we are setting up.

Mr. Eric S. Heffer (Liverpool, Walton)

The Secretary of State must know that some of us who have had experience of training in engineering and other areas have been explaining to the Government for years that we were heading for a crisis unless we had proper training, carried out by the employers as well as by the Government, and with the involvement of trade unions. I am absolutely delighted that the Secretary of State has now come round to the view that some of us have been expressing for a long time.

How will the White Paper affect the position in the construction industry where there is the growth of lump labour and the decline of direct labour through the local authorities, which used to train people in the construction industry? What will this scheme do to ensure that we have proper training and apprentices in the construction industry? Will the construction industry training board be strengthened or diminished?

Mr. Fowler

I am sure that the hon. Gentleman will concede that training problems go back over many years. It is complete nonsense to say that training has suddenly become a problem in the past 10 years: I am sure that the hon. Gentleman will accept that.

As for industrial training boards, in general the most effective incentive for companies to train is an understanding of their own skills needs and not a centralised regulatory system, based on statutory powers. As I have said in the White Paper—the hon. Gentleman will have an opportunity of studying it—I recognise that particular issues affect the construction industry training board, and we shall be talking with the CITB about those.

Mr. Simon Coombs (Swindon)

To what extent are the new TECs modelled on the private industry councils in the United States, which my right hon. Friend had the opportunity of studying earlier this year? What encouragement or inducements will be given to the chief executives of companies in local economies to join the new councils? Does he have an answer to the problem that faces constituents such as mine where there are relatively few chief executives of large employers in our towns, but large numbers of plant directors, at lower than chief executive level? Finally, if my right hon. Friend is encouraged and stimulated by the PIC example in the United States, does he intend to give TECs any interface or mechanism to link them with local education authorities at secondary level to encourage employers to have some input into what is taught in our schools?

Mr. Fowler

Obviously, there must be a relationship between the training enterprise councils and the education system. Indeed, there must be a relationship and direct links between training and education and between industry and education. I believe that those links are developing.

My hon. Friend asked me about the origins of this plan. It certainly contains elements of the United States experience and the West German experience, but above all it recognises that employers locally know the needs of their labour market and therefore the training needs to guide us.

My hon. Friend also asked me about the positions of chief executives and staff. One real advantage of the programme that we are putting forward is that we can get good people, top people, from local companies to come on to the boards of the training enterprise councils, but the work will be carried out by the professional staff who are now employed by the Training Agency, and who can be seconded to the training enterprise councils. I hope that in that way we can get the best of both worlds.

Mr. Frank Field (Birkenhead)

As the Secretary of State has commended the West Germany scheme to the House, will he tell us when, under his proposals, average skill levels in this country will equal those of West Germany? He need not be too precise in his answer: the year will do.

Mr. Fowler

During the 1990s we shall be able to catch up with the West Germans. If the hon. Gentleman considers my White Paper, he will see that comparisons with West Germany and with Germany go back not just 20, 30 or 40 years, but well into the last century. It is a long-standing problem and I believe that the TEC is the best hope that we have to catch up not only with Germany, but with our other major competitors. If we do not do that, our prospects for the 1990s will not be as good as they otherwise would be.

Mr. James Paice (Cambridgeshire, South-East)

As somebody who has worked closely with the Training Agency, will my right hon. Friend accept how pleased I am that its excellent staff will be part of the new proposal and under the guidance and control of those at the front end of the consumption of training? Will my right hon. Friend also accept that it is the skills shortage, in part caused by the fact that employers have not been in control of available training, which has led to the present problems faced by industry?

Mr. Fowler

In the past, we have failed to attract the involvement and enthusiasm of all employers in the way that we might. That is not to say that some extremely impressive training is not already taking place. The aim must be to bring up the standards of every company in this country to the standards of some of the best. I believe that some real progress has been made in the past four or five years, and I want even more progress based on that.

Mr. James Lamond (Oldham, Central and Royton)

Why should we have any confidence in employers leading the way in training, when the lack of apprenticeships in the past few years has clearly demonstrated that they cannot see beyond the end of their noses? We not only need to train people for the jobs that are available now: we also need a long-term strategy for training in the future. Employers who are concerned only with the present profits that can be made will not pay that factor sufficient attention.

Mr. Fowler

I remind the hon. Gentleman that it is the employers who provide the jobs. Whatever his own ideological hang-up on this might be, training must be relevant to the jobs that the employers are providing. He asks what evidence there is of employers changing; I believe that it is there for him to see. One example is that of the compacts that have now been formed between education and industrial companies. Thirty of such compacts are up and beginning to run after a few months. That is an incredible rate of progress. There is new enthusiasm among employers and we should use it.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Does my right hon. Friend accept that this kind of programme is vital and will be warmly welcomed by manufacturing industry? Does he also accept that the problem does not lie so much with school leavers, because within five years they will be able to get any job for which they have been trained at school? Does my right hon. Friend agree that the great problem lies with the unions, which, last time, helped to kill off the apprenticeships that are the seed corn of all industry? Does my right hon. Friend believe that, this time, there is any greater hope that the unions will not just look upon people who are training as cheap labour and so scare them away, or make sure that they do not get the jobs that are vital to the country?

Mr. Fowler

My hon. Friend makes an important point. It is not just a matter of employers understanding the importance of training, but of the work force and the trade unions understanding its importance. I believe that the Trades Union Congress made a bad mistake regarding the employment training programme for unemployed people, and I believe that many members of the TUC recognise that. I hope that that mistake will not be repeated with training in employment.

Mr. Roy Beggs (Antrim, East)

In the absence of any reference in the statement to Northern Ireland, is the Minister indirectly complimenting us on the excellence of our education system and the training facilities already in place? Will he please convey to those industrialists who are fearful of not having an adequately trained work force in the future that we in Northern Ireland have lived with low wages and high unemployment and that there is a great appetite for employment opportunities in the Province? Will he commend those industrialists to look to Northern Ireland as a possible location for some of the new investment that they may require in the future? I am confident that the excellence and skills of our work force and the good relations that have always existed between management and employees will be rewarding for those who take up the opportunity of investing in Northern Ireland.

Mr. Fowler

I am glad to endorse what the hon. Gentleman says about the importance of Northern Ireland and also about the importance of investing there. My right hon. Friend the Secretary of State for Northern Ireland is sitting on the Front Bench and he will have heard what the hon. Gentleman said. The reason why Northern Ireland is not mentioned in the White Paper is that it does not apply to it, but the hon. Gentleman will be aware that my right hon. Friend the Secretary of State is presently consulting on this issue.

Mr. David Madel (Bedfordshire, South-West)

In relation to existing skills and the need for new skills in the construction industry, will the new arrangements allow firms whose activities are factory production orientated, which do not have any construction site activities and which therefore, get no training or advice from the CITB, to withdraw from it, providing that they pay the levy that they would have paid towards their own training activities?

Mr. Fowler

My hon. Friend will understand from my statement that we are seeking to move the statutory industrial training boards to an independent, non-statutory basis. The specific issue that my hon. Friend has raised is essentially a matter for the CITB and industry to consider under the new arrangements. Certainly, if my hon. Friend thinks that something is unfair, we shall be glad to look into it.

Several Hon. Members


Mr. Speaker

Order. I must have regard to the business on the Order Paper and the fact that we have employment questions tomorrow. I shall allow questions to continue until 4.35 pm.

Mr. Ieuan Wyn Jones (Ynys Môn)

Although I acknowledge that we are facing a skills shortage in the economy and although I accept that we must change the way in which we train our young people and the unemployed, does the Minister accept that, particularly in rural areas and constituencies such as mine, it will be very difficult for employers to find the time and the resources to take the lead in the type of enterprise that the right hon. Gentleman has in mind under the new TECs? Does he accept that, especially in rural areas, we need a far more co-ordinated approach and that the Welsh Development Agency and the Scottish Development Agency should also be involved and have a role to play? Does he also agree that schools, and especially careers teachers, need to be given more resources to provide advice on training? In the past few weeks in the press we have heard talk about the Enterprise Scotland initiative. Where does that fit in with the current programme?

Mr. Fowler

My right hon. and learned Friend the Secretary of State for Scotland will make a statement shortly—it may be tomorrow—and will also issue a. White Paper then about the position in Scotland.

Mr. Tony Baldry (Banbury)

Does my right hon. Friend agree that, although machinery and technology may be the same the world over, what makes the competitive difference is the skills of the people using that machinery and technology? The skills of our people are our greatest asset; at the end of the day they are our only asset. Does my right hon. Friend agree that the White Paper will do much to help to develop the necessary skills? My right hon. Friend should be assured that we in north Oxfordshire and in the Cherwell valley want to be among the first of the TECs, building on what we have already achieved with Enterprise Cherwell, the local employer training network and other initiatives to ensure that, locally, we have the skills to take us into the next century.

Mr. Fowler

I am grateful for that offer. I am sure that there will be a number of areas around the country that will want to make bids soon as a result of the White Paper. Obviously we shall consider them all.

What my hon. Friend has said about training is absolutely right. The demographic influence must also be underlined, because, by 1995, there will be a million fewer under-25s in the labour force. That adds to the importance of training in employment as well as considering other items such as training unemployed people to acquire the resources, and the source of new recruits.

Mr. Bruce Grocott (The Wrekin)

How can the Secretary of State come to the House and say that the greatest obstacle to employment is the shortage of skills, without any recognition that this Government have been in power for the past nine years and he has been a Minister in it for the past nine years? If there is a shortage of skills, the Government must take the prime responsibility for it.

If the right hon. Gentleman does not recognise that, will he accompany me—we both represent west midlands constituencies—to see the training schools of major engineering companies that have been shut in the west midlands in the past nine years? Does he acknowledge that two thirds of engineering apprenticeships in the west midlands have collapsed under this Government? Is not the abiding legacy of the past nine years that a whole generation of young people have left school with no opportunity for skills training? He has created a generation without hope.

Mr. Fowler

That is just political jargon and slogans. It is also shallow and superficial. Probably more progress has been made in training during the past five years than during the past 40 years. If the hon. Gentleman wants to go round the west midlands, he should look at the training at Rover, Jaguar and Lucas, get up to date on the current position in the west midlands and then come back to the House.

Mr. John Watts (Slough)

In view of the need to make the maximum use of skills in the economy, especially in the Thames valley, where the problem of skills shortage is not new, does my right hon. Friend have specific proposals for the special training needs of disabled people and ethnic minorities, whose abilities are much under-used in the economy?

Mr. Fowler

We have sought within the training programme to make special provision for the disabled. We shall keep that under review, because I entirely agree with my hon. Friend that we must use their skills. The same applies to members of ethnic minorities. Recent research conducted in London shows that many of them have skills and can go into employment. I want more people from the ethnic minorities to go into employment, and oppor-tunities for them to do so will arise during the next few years.

Mr. Allen McKay (Barnsley, West and Penistone)

Do not the facts speak for themselves? Since 1979, industry has closed training schools, dismissed its training officers and got rid of indentured apprenticeships. I am talking about real training, not about the superficial training that the Government provide. Genuine training in crafts and genuine indentured apprenticeships have disappeared because of Government policies. The only way to get them back is to encourage employers to take them on again, but it cannot be done without money, statutory obligations and Government intervention. That is the way that we should go.

Mr. Fowler

The hon. Gentleman believes that statutory obligations and central control will cure the skills shortages, but he is speaking against a background of failures in the past. Since the 1960s, such policies have failed. We recognise that employers have the crucial responsibility for training in employment, and it is sensible to base that training at local level.

Mr. James Cran (Beverley)

Does my right hon. Friend agree that the White paper emphasises, crucially, the contribution that training can make to closing the productivity gap between Britain and its major European and American competitors? Does he further agree that there is no reason to believe that employers will not rise to the challenge that he has set for them, given the contribution that they have already made to the youth training scheme?

Mr. Fowler

That is right, in relation not only to YTS but to employment training. In addition, productivity is improving substantially. The position has improved greatly during the past five years, and we now have a good opportunity permanently to improve our training arrangements.

Mr. Max Madden (Bradford, West)

Does the Secretary of State recognise that many of my constituents are at a loss to understand why the Government plan to spend £7 million to £8 million on building a city technology college in Bradford, which few of my constituents want, at a time when Bradford college, which makes a positive contribution to skills training, is having its budget cut by £200,000 and must sack staff and cut classes? Will he investigate the matter urgently?

Does the right hon. Gentleman recognise that, in Bradford and west Yorkshire generally, employment training is regarded as a complete flop? What safeguards will there be against employers who are ready to reap the benefits of training for which other employers have paid but who are not prepared themselves to invest in proper training?

Mr. Fowler

The city technology college is a matter for my right hon. Friend the Secretary of State for Education and Science, but I believe that it will add to the skills in the country. It will certainly not detract from them.

Far from employment training being a flop, during the past 12 weeks it has got off to an extremely good start. Almost 100,000 people are being trained under the scheme, which is vastly in excess of what the Labour Government achieved. It is no good the hon. Gentleman saying that it is a flop. It is not, but he and his hon. Friend have put every obstacle in the way of training. The public will remember the Labour party's record on that.

Mr. Richard Holt (Langbaurgh)

In relation to the remarks about training officers, will my right hon. Friend note that the number of training officers in the Institute of Personnel Management has grown to such an extent that they have developed their own section?

May I draw my right hon. Friend's attention to the furniture industry? One reason why there is an acute skills shortage in that industry today is that the trade unions did not allow us to take on as many apprentices or dilutees as we wanted to. They obstinately refused to allow numbers to be increased. I welcome the fact that the pre-entry closed shop will be abolished. Will my right hon. Friend examine the position of the London furniture school, which is under threat? It is the only centre of excellence in Europe for the repair and maintenance of musical instruments.

Mr. Fowler

I shall certainly look into that matter. I welcome what my hon. Friend said. As for the pre-entry closed shop, the White Paper is concerned with barriers to employment, and needing a union card before one can get a job is such a barrier to employment.

Mr. Derek Fatchett (Leeds, Central)

Did the Secretary of State see the comments reported today by the chairman of the Trustee Savings bank, who suggested that the acute skills shortage was a socially divisive time bomb? Will the White Paper, with its threat to industrial training boards, its lack of additional resources and its commitment to an organisation of training that was rejected in the Secretary of State's original White Paper on employment training, strengthen the fears about an acute shortage of training and skills? When will the Secretary of State face the fact that the Government's record has left the country short of skills and of the ability to compete, especially in the Common Market after 1992?

Mr. Fowler

The hon. Gentleman is wrong to say that skills shortages have appeared suddenly in the past 10 years. Any objective commentator would say that skills shortages in Britain go back over 50, 60 and 70 years. The devices used by the Labour Government have been proved not to work, and we are putting that right.

  1. STATUTORY INSTRUMENTS, &c. 62 words