Mr. Brian O'Donoghue (Hansard, 22 February 1989)

§ Mr. Ernie Ross (Dundee, West)

Mr. James O'Donoghue is a small business man trading as J. K. Allan, which is a company involved in plumbing and electrical work. His son Brian O'Donoghue left school in 1985 and started at Kingsway technical college in Dundee on a plumbing and technical course for a City and Guilds certificate. Mr. O'Donoghue then approached the local MSC area office in Dundee for advice on assistance with training of apprentices. That was in response to an approach made by the Construction Industry Training Board, which had requested that Mr. O'Donoghue take on an apprentice electrician. He advised the board that there was not enough electrical work to justify that and to ensure that proper training would be given to an apprentice electrician, but he offered to start an apprentice plumber. That is the job that he created, and the vacancy was filled by his son.

Mr. O'Donoghue then tried to register his son as a YTS apprentice and was advised that that was not allowed as he was in employment. However, the CITB said that grants were available if Mr. O'Donoghue's son attended technical college on the appropriate courses recognised by the CITB, which lead to a qualification as a time-served, certified plumber. Mr. O'Donoghue agreed, and his son attended college on block release. When Mr. O'Donoghue applied for the grant from the CITB he was informed that, as his son had not started his career as a YTS trainee, no grant was available apart from a single payment of £200, the grant payable to English and Welsh employers who elect not to send their apprentices on block release but to send them on day release instead.

As no day release is available in Scotland, Mr. O'Donoghue naturally felt that this was grossly unfair. When he complained to the CITB management he was told that a special payment of £550 would be made if he continued to send his son to college.

Mr. O'Donoghue was given two reasons for the non-YTS rule. First, on YTS the numbers of apprentices can be controlled. However, inquiries revealed that in 1985, of the 158 YTS places allocated to the Tayside region, only 101 were filled. The number of apprentice plumbers on YTS attending Kingsley college in 1985 was only six. If those figures are projected into the future, there will be a serious shortage of skilled plumbers by 1995. Indeed, the CITB chairman, Derek Gaulter, openly states that there is an acute shortage of trainees now. In his words, their numbers are insufficient to meet natural wastage let alone to provide the skilful work force needed to sustain growth. Despite this assertion, the CITB picked out plumbing apprentices who were not on YTS in 1985 to disqualify them from grant payment from 1987 onwards. Other apprentices, such as joiners, bricklayers and plasterers, who are also covered by the CITB, are not affected.

The second reason given was that the rule was introduced as a cost-cutting measure by the CITB. Every adult employed in the building industry is levied by the CITB. The levy is paid by the employer annually and is in the region of £70 to £95 a year per class of employee. This 1122 money is used to pay for all aspects of training within the industry. The board under the Industrial Training Act 1982 collects this money by Acts of Parliament.

The recent history of the plumbing industry is that many plumbers have started their own businesses, but not paid a levy to the CITB, either because they are unaware of the levy, or their payroll is less than £15,000 a year. To counteract the loss of revenue the CITB made a decision in 1985 not to support non-YTS apprentices.

However, due to the decline of the industry, many firms have few apprentices or trainees, but continue to pay large levies to the board. In the financial year 1987–88, the board showed a surplus of £13,548,000. The CITB has also used money that was to have been used for training purposes to buy Government stocks and bonds to the value of ?60 million. In other words, the CITB introduced the non-YTS rule simply to save money, while at the same time running a surplus of millions of pounds. My constituent and his son see the actions of the CITB over the past few years in that light.

As the Minister knows, I raised this matter on Mr. O'Donohue's behalf as early as January 1988. The Under-Secretary, who has responsibility for the CITB, said at first that there was nothing wrong, and he would not interefere. There was persistent letter-writing and telephoning—;much of it, I admit and the Minister will confirm, done by my constituent, who has taken an extraordinary interest in his son's affairs. It is only fair to compliment Mr. O'Donehue on his determination to ensure that his son receives the support training that one would hope that one's children would receive when they go into employment.

At first, the Minister said that there was nothing wrong, and he would not interfere, but after this series of exchanges he told me that he was not entirely satisfied with the situation, and he confirmed, in his letter of 14 June 1988, that he would be calling on the board to simplify its grant system and adopt a more flexible policy for grant aid, moving the emphasis away from the particular pattern of training being followed and placing it instead upon the achievement of vocational qualifications, based upon standards of competence established by industry. In this way I hope to encourage the Board to free the training market in the industry from unnecessary complaints. In a further letter to Mr. O'Donoghue, the Under-Secretary confirmed his earlier decision and restated that he would not intervene but expected that conditions would change in 1990, and Mr. O'Donoghue's son would then qualify. He will then be too old. It appears that the Minister has identified a serious fault in the grants procedure, but, due to his earlier decisions, has taken no immediate action to assist my constituent, whose persistent and determined campaign on behalf of his employee highlighted the anomaly in the first instance.

It is clear from its annual accounts that the CITB has no shortage of money, and that it discriminates not only between YTS and non-YTS young people but between England and Wales, and Scotland, as there is no day release in Scotland. Although the board is determined not to fund non-YTS youths, it will expect to be paid on those same youths when they are older, have completed their training and are working in the industry.

When this matter was first raised, my constituent was the only employer in Scotland affected by the rule. When it was introduced, it affected another two companies and apprentices, but they quickly dropped out of employment, so until quite recently my constituent was the only 1123 employer affected by the decision taken by the CITB in 1985. It has taken the Minister over six months to admit that the changes need to be made, but if the rules will he wrong in 1990, they were wrong in 1985 and both Mr. O'Donoghue and his son have been badly treated. The situation will have changed only because of my constituent's determination to challenge what is clearly a harsh ruling, and his son will not benefit because by the time the changes come in, his son will be too old. It appears that, although my constituent has highlighted this matter and brought it to the Minister's attention, he stands to gain nothing from it. It certainly does not help his son.

Mr. O'Donoghue's son may have been taken on by his father as an apprentice plumber in exactly the kind of circumstances which the existing Manpower Services Commission and CITB rules envisaged as normal for the industry, hut, for every set of rules, there are legitimate exceptions for which Ministers should be prepared to make special provision.

Mr. O'Donoghue and his son are hard-working citizens who are endeavouring to keep in business the kind of small family company which the Government properly claim that they want to help. Mr. O'Donoghue had undertaken to provide an apprenticeship in the family business, and there should have been no problem in ensuring that he be given all possible help by the Government and other agencies to do so. Only mind-boggling bureaucratic hair-splitting can lead to a situation in which no agency would give proper support to his son's apprenticeship.

The purpose of the Industrial Training Act 1982 was to make better provision for and to encourage adequate training of apprentices. One assumes that the CITB exists for those very purposes. Therefore, why could it not come to Brian O'Donoghue's assistance by helping to fund his training programme, as it already does for other apprentices? Mr. O'Donoghue should not have been penalised for trying to give his son a start in life, rather than allowing him to leave school and start life on the unemployment register.

This saga, which has dragged on since 1985, ended rather tragically on 1 February 1989. My constituent's company went through a period when it required all its employees to make a contribution to the work in hand. My constituent was forced to make his son redundant. Brian O'Donoghue is now unemployed. No matter the rights and wrongs of the case, and no matter how my constituent decided to pursue this matter, the CITB may not be too happy with the way in which this employer has challenged it at every turn. It may not like the fact that that he has highlighted an anomaly in the 1985 decision—that is, that it did not leave room for the exceptions that one would normally expect.

Through no fault of his own, Brian O'Donoghue is now unemployed. I ask the CITB to do all that it can to ensure that he does not suffer because of its decision and by the failure of his employer, who also happens to be his father, to continue to employ him and to continue to allow him time off to attend college.

Therefore, even at this late stage, I call on the Minister to reverse his decision and use his considerable influence to release financial support for Brian O'Donoghue's continuing apprenticeship. The sums involved for a small family business such as the O'Donoghues' are minuscule, compared with the CITB's massive surplus. That is an extremely relevant point, given that the CITB's accounts for 1987 showed a surplus of more than £87 million. 1124 Therefore, a shortage of funds cannot be cited as the cause of the board's failure to support Mr. O'Donoghue's son. It is clear that someone at the Minister's level is required to make a decision.

As I said, in every matter the Government have flexibility and responsibility finally to give advice and say that, for whatever reason, there are exceptions to every rule. The Minister can make that decision in the case of Brian O'Donoghue without seriously jeopardising the CITB's proposals. Given that the Minister has already identified expected changes to the CITB, it is not too much to ask him to say that he will take on board the O'Donoghues' determination to try to ensure that their son can make a useful contribution to the construction industry as a time-served plumber, and, even at this late stage, will intervene to help my constituent Brian O'Donoghue.

§ The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)

As the hon. Member for Dundee, West (Mr. Ross) knows, I am well aware of the case involving his constituent, Mr. James O'Donoghue, and his son Brian. As has been made clear here tonight, there has been a great deal of correspondence involving the CITB and Ministers at the Scottish Office, as well as my own Department, and meetings have also been arranged to allow Mr. O'Donoghue to put his case to the Construction Industry Training Board and to my own officials here in London.

Before I comment on the particular details of Mr. O'Donoghue's case, I think it would be helpful to the House if I outlined the relationship that exists between the Government and the Construction Industry Training Board.

The CITB is a statutory body, established under legislation now consolidated in the Industrial Training Act 1982. It exists to encourage adequate training to appropriate standards in the construction industry throughout Great Britain. The chairman and members of the board are appointed by the Secretary of State for Employment—in most cases after consultation with employer organisations, unions or educational interests in the industry.

The board's main source of income is the levy it raises from employers in the industry. Each year, the board has to present its levy proposals to the Training Commission for approval. The commission then passes the proposals to Ministers for consideration, and, if we are content, we bring them before the House for approval. So the board's main source of income comes from the industry; it does not come from Government. It is therefore right that the industry, not Government, should decide how that money should be spent, and in particular on the nature of the grant scheme which the board should support.

The board has therefore established a system of sectoral committees in which representatives of the industry—employer and employees—discuss the skill and training needs of their industry and determine the detail of the grant scheme that they wish to finance from their levy income. Their proposals are put to the full board and then, if approved, to the Training Commission. The CITB is not required to present their grant scheme to Ministers for approval.

1125 That is an important point. Although the CITB is a statutory body, it is very much in control of the industry, and it is for the industry to determine the detail of its grant support for construction training. It would not be right—and the House will, I think, agree with me on this—for Government to impose a specific grant scheme upon the board. It is the employers' money which is being spent through the board's grant scheme, and it is therefore right and proper that the details of that grant scheme should be determined by the employers, through the board's committee structure. What the Government want to see is less regulation in training, not more; less central direction and more emphasis on commitment from employers at the local level, sectoral and national levels, to investment in training for their own business success.

Turning to the particular case involving Mr. O'Donoghue and the lengthy correspondence which has resulted, I can perhaps help by making two main points. First, to reinforce what I hope I have already made clear, the rules are formulated by the industry itself, not by Government.

I have made it consistently clear to the board—and for that matter to Mr. O'Donoghue—that I would like to see some changes in some of the conditions imposed by the board in the past upon eligibility for grants—for example, the emphasis upon registration with joint industry bodies or the following of particular and inflexible patterns of training. I can tell the House that I am confident that the board's scheme for 1989–90 will be far more flexible and more accessible.

Obviously, I cannot say tonight what the implications of that will be for Mr. O'Donoghue. But he would be well advised to keep in close contact with the board on this. I would also point out—and I underline, in effect, what the hon. Gentleman has said—that Mr. O'Donoghue did receive a grant in 1987 of £200 to which he was entitled under the scheme in operation at that time. My second point is that, as I understand it, Mr. O'Donoghue's son's eligibility for grant support resulted from his apparent decision not to allow his son to participate in YTS.

1126 The youth training scheme is the preferred method of entry into plumbing, because the board's mechanical engineering services committee feels that it assures the quality of training necessary to achieve the standards of competence required in the industry. Mr. O'Donoghue's decision on YTS effectively placed him outside the rules and so made his son ineligible for grant support.

I can only regret Mr. O'Donoghue's decision and must confess that I am at a loss to know why he chose not to take advantage of the funding available for quality training through YTS. Be that as it may, that was his choice and, as I and my officials have consistently told him, I do not have—and neither should I have—the power to require the CITB to alter the rules of its grant scheme to suit his particular whims.

What I hope I have been able to do tonight is, at least, satisfy the hon. Gentleman's concern, but I strongly suspect that nothing I have said will satisfy Mr. O'Donoghue for one moment. Everything I have said has been said to him on numerous occasions in meetings, correspondence, and telephone conversations not only with me, but with my officials and CITB officials. Not only has considerable ministerial time been devoted to this case, but the CITB chairman has been able to give me his personal assurance that a great deal of time and consideration has been given to this case by the board.

In short, I have no doubt that Mr. O'Donoghue has been treated fairly and correctly, and while my acquaintance with Mr. O'Donoghue leads me to believe that he will not be convinced of that, I would like to think that I have been able to satisfy the House.

The hon. Gentleman has suggested—it was implicit in his remarks, but has been explicitly suggested by Mr. O'Donoghue on many occasions—that, in some way, the board has operated improperly when it comes to the question of its investments. Under the 1982 Act an ITB must obtain the Training Commission's approval for all of its investments. To the best of my knowledge, that procedure was fully adhered to in this case.