§ [Relevant documents: Third Report from the Employment Committee of Session 1989–90 on Employment Training (House of Commons Paper No. 427) and the Minutes of Evidence taken before the Committee on 2nd May 1990 (House of Commons Paper No. 394-i), so far as they relate to training]
Motion made, and Question proposed,
That a further sum, not exceeding £1,286,770,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1991 for expenditure by the Department of Employment on improving, promoting and disseminating training among individuals, small firms and employers, encouraging enterprise, running services for small firms and the Enterprise Allowance Scheme, providing training programmes for young people and adults, providing employment rehabilitation services, technical and vocational education, work-related further education and the costs of the Skills Training Agency until privatisation, on the administration of training and enterprise, and central and miscellaneous services.—[Mr. Eggar.]
§ Mr. Speaker
I have selected the amendment in the name of the hon. Member for Bradford, South (Mr. Cryer). A large number of hon. Members want to take part in this debate which lasts for three houses. I ask hon. Members who want to speak to make brief contributions because if we can start the second debate within the three hours, that would benefit the House.
§ Mr. Ron Leighton (Newham, North-East)
I am pleased to introduce this debate on the Department of Employment's estimates. It will enable the House to debate training and the Government's policy and record in that regard. I am also pleased to see the previous Secretary of State for Employment, the right hon. Member for Sutton Coldfield (Sir N. Fowler) in the Chamber today.
If we follow where Government money goes—or does not go—we can follow where policy is going. I must emphasise that I am giving a personal view and no doubt other members of the Employment Select Committee, if they are fortunate to catch your eye, Mr. Speaker, will do the same. The hallmark of our times is the rapid and constant advance of new technology and product innovation. If our industries cannot innovate and deliver the new products, the orders will be lost to suppliers abroad. Not only overseas customers but our own domestic market will be supplied from abroad.
We live in an ever more competitive world market. Any country, any industry or any company that does not keep abreast of the development of technology will lose out and be overtaken. Much of the new technology can be transferred. State of the art equipment can be brought in. However, the question is: does the work force then have the skills and ability to use and exploit it to the best advantage? If technology can be transferred, countries and companies will compete on the skills of their work forces.
503 The successful countries and successful companies are invariably those with the best training programmes and the best trained work forces. They understand that it is as important to invest in people—perhaps even more so—as in the fixed assets of plants and machinery. The most important resource, the one in which systematic investment yields increasing returns, is people or human capital.
A number of countries have based their success on understanding that truth. The industrial revolution occurred in Britain first and, as a result, Britain then led the world. Other countries, like Germany, adopted conscious policies to catch up with Britain. They did that and surpassed us. Germany now has the renowned dual training system which gives a thorough, first-class grounding of vocational training. In Japan and the United States, participation by 16 and 17-year-olds in full-time education is almost universal. In France, the United States and Japan the education system is the important source of job skills at craft level. That leads to a greater share of the costs of initial training being borne by the Government. The newly industrialised countries of the Pacific rim all now have impressive systems of education and training.
What is the position in Britain? Last year, the Government's Training Agency published the document "Training in Britain". That was the most detailed and authoritative study of training ever undertaken in Britain. What did it tell us? It revealed nothing for our comfort. The picture was startling and bleak. Two thirds of economically active 19 to 59-year-olds said that they had not had any training in the last three years. Over half of economically active adults with no prior qualifications said that they had not received any training since leaving school.
Employers reported that about half of their work forces had received no training during the year. Systematic approaches to training were found to be the exception. No fewer than 42 per cent. and roughly half of those over 35, said that they could not imagine any circumstances leading them to undertake any education or training. Even those who said that they could imagine themselves training, had done little about it, often through lack of funding and time and were waiting for others to take the initiative.
As for young people, the report showed that only around one third of all 16 and 17-year-olds were in full-time education. There had been a dramatic decline in the number of apprenticeships and very few 16 or 17-year-olds entering jobs, outside the youth training scheme, receive any substantial training.
At a time when rapidly changing technology increases the demand for people with high levels of skill and reduces the demand for unskilled manual labour, when increasingly fierce international competition raises the importance of training if we are to achieve a satisfactory economic performance and when there is a premium on a more flexible and competent work force at all levels, how are we to describe the abysmal situation revealed by the Training Agency's study?
§ Mr. Leighton
I prefer not to give way at the moment, because I have been asked to be brief.
The description given by the previous Secretary of State for Employment, the right hon. Member for Sutton 504 Coldfield whom we are extremely pleased to see in the Chamber this afternoon and to whom the Training Agency's report was presented, was that the position was "mind-boggling". The right hon. Gentleman actually issued a press notice on 16 November headed "Mind boggling". For the benefit of Employment Ministers who often make complacent statements pretending that all is well, I should point out that the right hon. Member for Sutton Coldfield did not mean mind-bogglingly good, he meant mind-bogglingly bad.
So what is to be done about that? We all know the facts and they have been analysed to death. We need action. We get lots of governmental lip service to training, but where are the resources? Are the Government going to put their money where their rhetoric is? The estimates show that that is not the case.
The Government's expenditure plans 1990–91 to 1992–93 are grouped under the headingSkills and competence for workin table 6.3 of Cm 1006. If we analyse and compare expenditure with previous and future years we can take an index figure of 100 for the estimated outturn for the year 1989–90. In real terms, the figure for 1987–88 was 122. Therefore, two years ago we were spending 22 per cent. more. In 1992–93 it is planned to be only 73. Therefore in two years' time we shall be spending a further quarter less. The cash for training has been falling and is planned to fall further. Even since last year's White Paper, the cash for 1990–91 and for 1991–92 has been cut in real terms by 18 and 21 per cent. respectively. That is a measure of the cuts in planned expenditure on training which the Treasury obtained from Ministers in last autumn's spending round.
§ Mr. Leighton
No, I am sorry. I do not have time. [HON. MEMBERS: "Give way."] Well, if hon. Members want me to give way, and take up more time, I will.
§ Mr. Janman
The hon. Gentleman has referred to the amount of money that is being spent. Does he accept that how much is spent is important, but so too is how well it is targeted? Does he also agree that the Government's new initiative of training credits will do much to achieve the right balance between what is being spent and ensuring that it is spent in the right place, on the right person being trained in the right way?
§ Mr. Leighton
I have a great deal of affection for the hon. Gentleman, but he has a bad habit of interrupting every speech that I make in the House. If he had had a little more patience he would have found that I was about to come to his point.
As I was saying, those cuts were a major victory for the Treasury, but a defeat for the nation's training needs. I hope that no one will try to pretend that those cuts in expenditure are justified by the fall in numbers. For example, employment training reaches only a fraction of the client group. Over the next three years, cash for youth training will fall by nearly half in real terms, but the numbers will fall by only a quarter. Real expenditure per trainee will fall from £50 to £33. Quality is likely to go down, not up.
Of course we want to see employers spending more. However, is it right to say that we shall spend less? Is that the right signal to send out? For demographic reasons there will be fewer school leavers. As employers compete for them, there will be less youth unemployment. Does 505 that mean that the Government should spend less per person per unit on youth training? That lends credence to those who say that YTS was just a cosmetic and a means to disguise unemployment and that the Government will now pull out and wash their hands of the matter.
The Minister was good enough to go along to the launch of the London East training and enterprise council. He knows that some people complained of their difficulties with YT. He said that the guarantee would still be given. I must tell the Minister that I received a telephone call today from Mr. Ernest Large, the chairman of the east London managing agents network, who told me about a meeting this week in east London of more than two dozen managing agents to discuss what he called the crisis in YT. He told me that, last year, they got £39.03 a week for each trainee and that they had received that sum for the past four years. Not having been inflation-proof, in real terms that sum had gone down. It has now been cut to £32, and that has brought about a crisis that will lead to lower quality.
Mr. Large told me that college fees had gone up three times in the past two years as a result of the Education Reform Act 1988, meaning that full costs are charged. The managing agents are angry and demoralised. They told me that their hard work made the scheme a success for which the Government took the credit. Now they say that they are being kicked in the teeth and that the guarantee cannot now be delivered. Today Mr. Large sent 12 letters to potential trainees, telling them that he cannot offer them places. Mr. Large's address is suite J, Roycraft house, 15 Linton road, Barking IG11 8HG. That is the position in east London as told to me by the people who are operating on the ground today.
Employment training was launched amid much hype, which we seem to hear rather less of at the moment. The fall in numbers cannot be convincingly argued, as the programme reaches only about two thirds of its original target number. Even if the programme had reached the original number, it would have reached only a fraction of the client group. The Select Committee on Employment has monitored the programmes since its inception, when it replaced the new job training scheme. JTS was also supposed to provide training that was tailored to individual needs, but it was plagued by drop-outs from the scheme.
In a previous report the Committee revealed that, in 1987–88, JTS had used only £64 million of its £215 million provision. That was a disappointment on a heroic scale. We took evidence from the Training Agency and asked what lessons it had learnt from that failure, and it told us that there were four—first, the targets for numbers on the scheme had to be realistic; secondly, trainees had to have a financial incentive to join; thirdly, managing agents should have higher incentives; and fourthly, employers needed to be encouraged to have a more positive attitude to the long-term unemployed. It does not seem that those lessons have been learnt or adequately applied.
The target for ET was 600,000 on the scheme in one year and 300,000 participants at any given time, given an average six-month course. Those numbers were far too optimistic. They might have looked good for massaging the unemployment figures, but it was impossible to cope with them without an adequate training infrastructure of agents, managers and willing employers. The numbers have been successively reduced.
506 In the autumn of 1988, the number was reduced to 265,000, in the autumn of 1989 it was reduced to 250,000, and, in December 1989, according to Roger Dawe, now the director general of the Training Agency, there were 210,000 on the scheme and 40,000 unfilled places. As the numbers envisaged dropped, so did the amount of money allocated, with underspending followed by two large cuts.
As for the financial incentive for trainees, they get £10 over benefit. That has not proved attractive. Many say that why are worse off. That allowance could be doubled at a cost of £120 million, and that point should be seriously considered. As for incentives for managing agents, the training agent in London gets £38, and an agent outside London gets £31.50 to interview a client and draw up a personalised action plan. Action plans are not drawn up very thoroughly. There is evidence that, in some cases, it takes half an hour to draw up such plans, according to parliamentary answers, it takes four to five hours over two days. The training agent then gets £15 for every placement with a training manager. That can only be described as a shoestring budget.
At the next stage, the training manager gets £15 for every person who starts training, and then £18 a week basic grant for training. There are also supplementary grants averaging about £20, making about £38 a week to pay for training. What quality training can we get for less than £1 an hour?
Of course, employers could make a contribution, but is it any wonder that most of them have had nothing to do with the scheme? The hon. Member for Cambridgeshire, South-East (Mr. Paice) asked questions on that very point when he was a valuable member of the Select Committee. He knows that I am right, because I read his questions and answers only a couple of days ago. Only a quarter of trainees get placements with employers. The rest are expected to struggle on with the sums that I have mentioned.
Although ET has the germ of a good idea, in its present form it is badly flawed. It is underfunded and, as a result, often inadequate and unattractive. It has been unable to reach its targets and it has not spent the money allocated to it. Perhaps the most graphic indicator of its flaws is the staggeringly high drop-out rate, the customers voting with their feet.
Roger Dawe of the Training Agency told us on 11 December 1989 that about 45 per cent. of those referred dropped out before they got to the training agent and that there was a further large drop-out before they got to the training manager. Only about 20 to 25 per cent. stay with a training manager for more than a week. Of that number, 70 per cent. did not complete their original action plans. Of the small minority who actually complete their training, 49 per cent., or virtually half, get a job.
With the best will in the world, I find it impossible to describe that outcome as other than shambolic. None of us would be happy with that or accept it. An inferior programme is wasting public money, and no one can pretend that it matches up to the training needs of the country. Because it is so unattractive and because there are so many drop-outs, the scheme does not spend the money that is allocated to it.
§ Sir Norman Fowler (Sutton Coldfield)
I accept what the hon. Gentleman says about the drop-out problem and that there has been a problem under all programmes. Will he equally accept that the great majority of those people 507 drop out before they get to the training programme? That is the point. Under any programme, that problem will continue, and we must tackle it.
§ Mr. Leighton
The former Secretary of State is absolutely right. About 45 per cent. drop out before they get to the training agent. After the personalised action plan is done, there is a further large drop-out, and only about 20 per cent. actually stay with the training manager. Of the minority who stay with the training manager, 70 per cent. do not complete their personal action plans. Of those who complete their training, 49 per cent. do not get a job. Those are the facts as told by the Training Agency, and they are less than satisfactory.
Because people did not go on the scheme and the money was not spent, the Treasury took back money. It first took back £100 million and then it took back £200 million. Rather than make those cuts, the Government should make an essential investment in a quality training programme. They should restore the cuts and improve the programme. We know that the Department of Employment commissioned a scrutiny and a survey on ET——
§ The Minister of State, Department of Employment (Mr. Tim Eggar)
§ Mr. Leighton
The Minister is nodding his head. I believe that the Secretary of State has had the result for a couple of months now and, as far as I know, it has not yet been published. I have asked for it to be published and I am asking again now that that official scrutiny, which was commissioned and carried out on behalf of the Department, should be published. Why have the Government clammed up and kept it secret? Surely we should lay all cards on the table.
§ Mr. Leighton
I made a note earlier to hope that as a result of the debate we might have an outburst of glasnost and the report would be published. That might help us to decide what we can do to rescue and transform the programme and to give it some credibility. The very least that we should do is to restore the cuts. Instead of a cheap, low-quality scheme, we should restore the original money and go for higher-quality training, with fewer but more realistic numbers. Anything less will fail the country's training needs.
§ Mr. Dave Nellist (Coventry, South-East)
My hon. Friend has spoken about restoring the scheme in real terms. Is he aware that I have received yet another written answer from the Department during the past fortnight, showing that the original youth training scheme that was set up by the Labour Government in April 1978, paid trainees an allowance of £19.50 per week and that if that had risen at the same rate as average earnings over the past 11 years, youngsters would now receive £63.48 per week instead of the £29.50 that they are paid? Does he agree with me and, I suspect, a hell of a lot of parents and trade unionists, that one of the things that needs to be restored is the real value of the training allowance, which the Government have steadily eroded over the past 11 years?
§ Mr. Leighton
My hon. Friend has paid close attention to the youth training scheme since he has been a Member of Parliament and makes a sound and effective point. We shall have to wait for the Government's response.
I hope—this is my final point——
§ Mr. James Paice (Cambridgeshire, South-East)
I am grateful to the hon. Gentleman for giving way, especially as he referred to me earlier. He has made great play of the fact that the number of trainees has not reached the total that was originally set. However, he has not taken into account the fact that the target group of the long-term unemployed has dropped dramatically—beyond anybody's expectations—in the two years since my right hon. Friend the Secretary of State announced the scheme and has dropped considerably more than the numbers by which the Labour party promised to make it drop at the last election.
§ Mr. Leighton
That is not an adequate excuse for not hitting the targets. I do not want to become involved in any party political badinage about the way in which the figures for the long-term unemployed are arrived at. Many people who begin a scheme but then drop out in the first week are then not treated as long-term unemployed. However, even accepting the alleged figure for the long-term unemployed, if we had hit the original target, we would still have dealt with only a fraction of the client group. It is not as though we are short of people who are long-term unemployed to take part in the programmes. That is not a good enough excuse to explain the inadequacies, drawbacks and flaws of the programme.
I hope that we shall hear something of moment and consequence from the Minister. He has at least suggested that he will publish the survey. I hope that he does not seek to shuffle off or abdicate his responsibilities or wash his hands of such an important issue by saying that it is a matter for the training and enterprise councils and that he is handing all this over to the TECs—that it is their problem and not his. There is a national interest in training which is greater and larger than that of any particular group of companies. We must all wish the TECs well —after all, they are the only show in town. I wish well and will closely follow the experiences of the London East TEC under the excellent chairmanship of Mr. David Dickinson and his enthusiastic group of people.
Although we wish all the TECs well, the ultimate responsibility always lies with Parliament. The Select Committee will continue its interest in and scrutiny of these matters. I hope and trust that we have done a service in bringing them before the House.
§ Sir Philip Goodhart (Beckenham)
I share the anxiety of the Chairman of the Select Committee on Employment about the fact that employment training has an unacceptably high drop-out rate. However, a considerable proportion of those who drop out of ET do so because they have found jobs, which makes it understandable.
§ Sir Philip Goodhart
I believe that at the moment the proportion is about four fifths of those who drop out.
As my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) has pointed out, there has been a sharp fall in the number of long-term unemployed during 509 the past two years. Naturally enough, that means that many of those who are left have considerable social and educational problems, and those are the reasons why they have remained unemployed for so long.
§ Mr. Chris Butler (Warrington, South)
I am interested in my hon Friend's point because in the evidence given by MDS Training Ltd., it appeared that about 55 per cent. of trainees had literacy and numeracy problems. Does my hon. Friend agree that that points to deficiencies in the education system and that that is why there are so many people with problems which employment training then has to sweep up?
§ Sir Philip Goodhart
That is certainly true. I believe that about 16 per cent. of those on ET have identifiable literacy and numeracy problems. However, paragraph 30 of the report points out:we do not however assume that learning difficulties such as those described by our witnesses should be dealt with only by ET; many other agencies are available for this task.I know that the charities involved in the employment training programme are particularly well qualified to help those with literacy and numeracy problems. Our report has thus appeared at a particularly propitious moment as I believe that there is a three-way move between the Department of Employment, the TECs and the National Council for Voluntary Organisations in relation to the proposed cut in training places provided by the charities represented on the NCVO. It appears that about 5,000 training places are to be cut in the coming year, which is about 11 per cent. of the places provided by those charities. As so many people on ET programmes have special literacy and numeracy problems, I hope that my hon. Friend the Minister will press the TECs to ensure that the number of places offered by charities with special skills in dealing with such handicap can be maintained at the current level.
I note that during the past couple of years the Department of Employment and training in general has moved rapidly in the direction of consumer choice and taken up the suggestion that training vouchers should be widely used. I am glad that pilot schemes for the voucher system are under way as I am worried about the large number of drop-outs from ET, which clearly shows a lack of identification between the trainee and the scheme. The introduction of vouchers will get over that problem and in the years ahead will sharply reduce the number of people who drop out from this most valuable programme.
§ 6 pm
§ Mr. Mike Carr (Bootle)
It is a great honour for me to make my maiden speech in the House of Commons today. On this occasion I am reminded of a saying which the Secretary of State for Transport, who has left the Chamber, might appreciate. It is that speeches are like babies— easy to conceive but hard to deliver.
First, I wish to refer to my election campaign. Considering the tremendous pressures placed on candidates of all parties these days in by-elections, I must say that the campaign was conducted for the most part with good humour and without resort to personal insult or abuse. I take great pleasure in the remarkable achievement of increasing the Labour share of the vote from 67 per cent. in the 1987 general election to 75 per cent. in the Bootle by-election. The overall swing of some 9.5 per cent. to Labour in what was already a Labour stronghold 510 underlines a trend that was demonstrated in the mid-Staffordshire by-election and the May local elections. The Labour party is on course to form the next Government of this country.
Before I leave the by-election, I wish to refer to the right hon. Member for Plymouth, Devonport (Dr. Owen) and the Social Democratic party. Bootle has been described as the graveyard of the SDP. I am reminded of the words of Hilaire Belloc:Here, richly with ridiculous diplay, The politician's corpse was laid away, While all his acquaintances sneered and slanged, I wept; for I had longed to see him hanged.On a more serious note, it would be remiss of me in making my maiden speech not to comment on my predecessor, Allan Roberts. He was not only a serious politician but a warm, generous personality. I will quote the words that he wrote in The House Magazine last year, when he said:I'm proud to be a British Member of Parliament elected on a Labour ticket for one of the world's leading democracies. I've had a superb life, I enjoy good friends, good food and good wine. I have no regrets.Allan will be sadly missed and I shall continue the work that he did so well in the constituency.
I owe my success—as did Allan and Simon Mahon before him—to the Labour party and movement, and to the loyal Labour voters of Bootle who returned me to this House with such an overwhelming majority. As one journalist commented in the campaign, the people of Bootle do not just vote Labour—they are Labour.
Bootle, home to 96,000 people, is described as a tough dockland town. Its skyline is certainly dominated by the cranes on the dockside and the docks play an important role in the economy and culture of the town. But Bootle is much more than a dockland town. It houses the headquarters of National Girobank, one of the town's largest employers, with 5,500 staff. The Inland Revenue also has offices in Bootle and it is hoped that more civil service work will be transferred from London to Bootle.
The town is not so much tough as independent. Local people are proud to come from Bootle. It long resisted being taken within the borders of its southern neighbour, Liverpool. In the mid-1970s, however, it was swallowed up by the metropolitan borough of Sefton, which includes the towns of Southport and Crosby. But Bootle still asserts its independence by refusing to vote either for the Tories or for the Liberals favoured by the populace of the other two towns.
Every one of the 24 council seats in the constituency of Bootle is Labour, and Labour is the largest party in the hung council, with a total of 27 councillors. The people of Bootle work hard and have strong trade union traditions. The town is predominantly working-class, with twice as many semi-skilled and unskilled workers as the national average. Many skilled workers have moved out of the town to find work. The population has fallen by 20 per cent. since the 1971 census. More than a third of the population is either under 15 or over 65.
With some success, Bootle has broadened its range of employment to avoid becoming a one-industry town, but civil service relocation has not always placed jobs for local people at the top of its agenda and unemployment is still rife. Department of Employment figures suggest that there is 13.9 per cent. unemployment, but the unemployment unit, using the pre-1982 method of calculation, puts the 511 figure at 20 per cent. In the league table of constituencies with high unemployment, Bootle is 18th in England and 27th in Great Britain.
Young people, in particular, bear the brunt of unemployment with 22 per cent. of Bootle's unemployed under the age of 25 and more than half of them out of work for more than six months. The point that is relevant to today's debate is that if a sizeable proportion of the young have no stake in society, society itself appears to have given up its stake in the future. Britain is in danger of becoming the worst educated and most poorly trained nation in Europe. Further and higher education has been undermined and skill centres and industrial training boards have been shut down.
In the recent giveaway privatisation of the nation's Training Agency, 28 staff at the Liverpool skill centre were sacked immediately by the new private owners, Metel. Existing training programmes—the youth training scheme and employment training—offer low quality training, often without any recognised qualification. Among the half million 16 and 17-year-old school leavers entering the labour market, 315,000 joined YTS in 1988–89 but only 42 per cent. left having gained any qualification. Why is that so? Previous speakers referred to the reason. For the most part, the scheme is about providing cheap labour to employers who are more interested in job substitution than the provision of decent training—and the taxpayer forks out £1 billion per year for the privilege. It is nothing less than a gross scandal. I have four children who have been on the youth training scheme. It is an insult to expect our young people to do a week's work for £29.50.
Of the 176,000 people on employment training last year, only 25 per cent. completed their action plan. My hon. Friend the Member for Newham, North-East (Mr. Leighton) referred to that. Is it any wonder that people drop out? Where is the motivation for people in receipt of benefit, plus a £10 a week so-called training premium which has not been increased since ET started and has been reduced for single people under 25 and childless couples?
The poor provision of training perpetuates an economic cycle of poor products and reinforces a human cycle of unemployment, insecure work, low skills and low pay, in which 9 million people are now trapped. Education and training holds the key to Britain's future prosperity. To meet the challenges of the 1990s, Britain must invest in the urgently needed skills that will enable us to compete in future world markets. Therefore, our goal must be to provide a clear, well-defined structure of educational and high quality training opportunity for all.
That means ensuring that everyone, including the redundant and the long-term unemployed, has the opportunity to acquire new or improved skills, so that they can increase their job satisfaction, widen the range of their opportunities and extend their contribution to the economy and to society. It means that education and training needs must be regularly reviewed and an adaptable framework provided to meet those needs. It means ensuring that people have a constant opportunity to update their skills throughout their lives. It also means giving a new priority, throughout our education, training 512 and retraining strategies, to the needs of women so that we can tap the huge potential of skill and talent in the majority of the British people.
Education and training are the keystones of a society of opportunity and personal fulfilment, and an economy that is competitive and efficient. Investment in education and training is a measure of a Government's vision and commitment to the future.
§ Mr. Simon Coombs (Swindon)
It is a pleasure to be the first to congratulate the hon. Member for Bootle (Mr. Carr) on his maiden speech. It is some seven years since I made my maiden speech, and if the hon. Gentleman was as nervous today as I was on that occasion I can only say that he is an extremely good actor. He conveyed no sense of the gravity of the occasion that we all feel when we first come to the House.
I was delighted to hear the hon. Gentleman pay a warm tribute to his predecessor Allan Roberts. We are all aware that he was well respected not only in his constituency but by hon. Members throughout the House. We miss him, but we warmly welcome his successor. I must tell the hon. Gentleman that he will not always be listened to in this House with the same rapt attention that has been his lot on this occasion. Indeed, there may in future be the odd moment when Conservative Members may find something in what he says with which to disagree. Nevertheless, our welcome is warm and we wish him well.
I wish to say a few words about each of the two training schemes that we are debating. I shall start with employment training. As the Chairman of the Select Committee on Employment said in opening the debate, the Select Committee has this week published a report on that matter. It is right that, during this short debate, the House should dwell upon some of the points made by the Select Committee.
The report was fairly critical of the employment training scheme, but I think it right to point out that a great deal of good value has come out of employment training in its few short months of existence. There are faults and we need to improve the system, but many people have benefited from that training and have returned to the workplace, to real jobs. When we are trying to be constructive in our criticism of the scheme, it is important not to lose sight of the fact that much good work has been done already.
The shortfall in numbers from those originally suggested as appropriate for the funding of the scheme has been mentioned. It must be recognised that, during the life of the scheme, there has been a substantial reduction in the number of unemployed people. In parts of the United Kingdom such as Swindon, there are now relatively few unemployed people who are available for employment training. Therefore, it is natural that there should be some reduction in the overall funding of the scheme.
I do not want to go over the ground that has already been covered by the hon. Member for Newham, North-East (Mr. Leighton). There are imperfections in the scheme, and I look forward with interest to what my hon. Friend the Minister says about the results of the internal review. We must look to the future for the scheme, and I agree with the hon. Member for Newham, North-East and 513 my hon. Friend the Member for Beckenham (Sir P. Goodhart) that we need to target ET and make it more user friendly.
There is no doubt that the sort of people coming forward for employment training find it tough enough to go through one interview, so they must find it even more difficult when they have to go through a second interview before they can hope to start their training package. Can we not discover from the internal review whether we can simplify that process for many of those who lack confidence and need a great deal of support and encouragement? Can we find a way of making it easier for them to get to the point of starting training? As was said by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), there is a substantially higher drop-out rate among those who never even start their training than among those who start but then fail to complete it. That is the first point that we must tackle.
My experience from talking to training managers in my constituency is that once people start with a training manager and get stuck into their training, many are surprised by their experiences. They have heard a great deal of criticism about the scheme from the House—and Opposition Members are always the first to criticise any scheme that the Goverment put forward—and they often initially come to the scheme lacking in confidence in what they can achieve. Very often they are pleasantly surprised, they find the training valuable and they then find jobs in the real world outside the world of training. I ask all hon. Members interested in the debate to agree that we need to simplify the processes that get people into the training system and I look to my hon. Friend the Minister to say something about that.
I wish to touch on the need for increased concentration on those who lack personal skills—those who may be unable to read or write, and especially those who may lack motivation and have a low opinion of themselves, perhaps as the result of a long period of unemployment or family difficulties. Whatever the reason, they lack the self-confidence to believe that training is right for them and they need encouragement.
Like the Chairman of the Select Committee, I believe that we must increase the per capita spending on such people to provide the additional support to get them up and running and ready for the job market. I am not talking about large sums. No doubt my hon. Friend the Minister will say that he has read the Select Committee's report, so he will know that we are not arguing for a vast increase in public expenditure. We are saying that there will be an increasing need to target resources on those—and we hope that it is a diminishing number—who have such problems and therefore need that support.
My hon. Friend the Member for Beckenham rightly said that ET is not the only way in which that problem could be tackled. The Select Committee was right to say that other agencies must play their part in trying to help with problems such as difficulty with reading and writing. The key—and this is where Opposition Members lose their way—is the share of responsibility for the potential employers of the trainees. The Opposition have frequently said that there is no private sector involvement. When we hear their attacks on the level of Government expenditure we might think that that was the whole story, and that it was simply the Government reducing expenditure. That is not true, and I know that Opposition Members would not wish to mislead the public into thinking that it was.
514 The point at issue is the degree to which employers will be prepared to take up what the Government and Conservative Members think are their responsibilities in this matter. The problem is that, the more difficult it is to place the individual trainee, the more reluctant the employer will be to give him the opportunity or to help to fund the training scheme in some way. So I hope that the Minister will not be content with the simple answer that employers will come forward to fill the gap between what is available in public expenditure terms and what is needed to ensure good-quality training for those who would otherwise be without it.
I am afraid that employers will be tempted to import labour—not necessarily from overseas, although after 1992 that must be a developing question in our minds—but from other parts of the country. They may be prepared in an area such as mine to bid up the cost of labour and engage in competition between themselves to get workers to fill vacancies.
We should be making it clear in this debate that we want everybody to have a chance of sharing in the job market. That must include those with learning difficulties and those who lack motivation and self-confidence. They, too, must be part of it all, and that means that extra help will be needed from the public purse to ensure that such people take the first steps on the ladder into training and later, we hope, into jobs.
I pay tribute to the Minister of State and the Secretary of State for the way in which they have promoted pilot schemes for those with learning difficulties, so that there are now 15 job clubs with pilot schemes. In my constituency, the jobcentre, under the management in recent years of John Down, has done well in trying to help those with learning difficulties. Much has been achieved, but the question at the heart of the matter is who will give the quality training that is needed and how will it be funded. Having put a series of questions on that issue, I hope that, by the conclusion of the debate, we shall receive some helpful answers.
The same problem, in a sense, must be tackled in youth training. Will the funding from the public purse be sufficient to ensure that young people with learning difficulties coming into the job market for the first time have a chance to get training and find a good job?
Recently in my constituency I was approached by the Taurus training centre, an organisation set up in 1969 to help young people with learning difficulties to find a way into the job market. I pay tribute to Sue Morgan, the manager of that centre, and to Raychem, a large international company which has supported the venture from its inception, and the senior personnel manager of which, Philip Griffiths, is currently chairman of the Taurus training centre.
The Taurus organisation was threatened with reduced funding. It came to me, as the Member for the area most affected, asking for my help, having made it clear that its client base was not reducing. Hon. Members may think that Swindon is a place where everything is going well, with high employment and good opportunities. That is so, but there are still young people left out in the cold of the bright new world that exists in Swindon and many parts of Britain. That client base has not declined and Taurus argues that the money should be available to support those requiring special help.
I am pleased to say that, as a result of what I was able to do, the Wiltshire training and enterprise council, which 515 has only recently entered its development phase, was able to initiate discussions. This story may convince Opposition Members that there are ways of overcoming problems. As a result of discussions between that training and enterprise council and Taurus, extra money has been found. We see that flexibility and room for manoeuvre exists within the budget to provide help where it is needed.
The Minister of State was involved in that matter. An exchange of letters between us led to meetings in the constituency, as a result of which not only has the Taurus training centre obtained additional funding to help young people with learning difficulties, but contact has been made with employers who are not simply interested in employing the youngsters but have a philanthropic approach to the problems that have been brought to their attention.
A combination of extra public money and help from the private sector means that the Taurus training centre in my constituency will have a better chance of continuing with its excellent work than seemed likely a few weeks ago.
What next? What is the Government's message to those young people? I hope that it is not, "You are on your own. It is up to you to find help. It is up to the people who want to help you to find help." I hope that the Government's attitude will be clearly spelled out. We want everyone in the country, irrespective of ability to have a chance to get into the job market through the high-quality training that the Government intend to provide throughout Britain.
The cost of what I am suggesting—which is flexibility to allow additional expenditure on a per capita basis to help these people—is small compared with the cost to the economy of the wage cost inflation that would result from bidding up the cost of labour in areas such as mine, or the house price inflation that would result from people moving about the country, if they were able to do so, to find jobs in relatively prosperous areas.
We cannot rely on a few public-spirited private companies to fund training in Britain. Nor do I believe that the Government believe that that, any more than the education system, which has all too often failed the disadvantaged, can be held responsible for all that has gone wrong.
I will not be joining Opposition Members in any wholesale criticism of ET or YT, because there is much to be said for both of them. They have achieved a great deal in an area that was underfunded until the early part of this decade, but which has been increasingly better supported by the Government in the past five to 10 years. But the time is coming when we must review our priorities. We must see what can be done for those who up to now have missed out on the help that has been available. On their behalf I appeal to the Minister to make a positive contribution and so to help them to feel that they have not been forgotten by us.
§ Mr. Matthew Taylor (Truro)
I wish at the outset to congratulate the hon. Member for Bootle (Mr. Carr) on taking his seat and making his maiden speech. I appreciate, having myself fought a by-election, what a nerve-racking experience it is, not just in being a candidate in such a contest but in being the candidate whom everybody else wants to knock down. On arriving here, 516 one finds that it is not the easiest place in which to make one's maiden speech. I congratulate the hon. Gentleman not only on his speech, but on the words he chose to refer to his predecessor. I recall having to make a similar, in many ways sad, speech when I first arrived here.
I have no doubt that the hon. Gentleman and I will not always agree, but today I agreed with much of what he said about training. Having some knowledge of Bootle, I endorse what he said about the needs of the area. I hope that he will campaign hard to bring to the attention of the House the issues that his constituents are anxious to have raised.
The report published this week by the Select Committee on Employment is a damning indictment of this country's record on training. I say "this country's" rather than just "the Government's" because in the long term this country has failed to give young people—indeed all people—the skills and opportunities that they should be given in an increasingly high-tech and complicated age. The numeracy and literacy shortcomings and weaknesses are a particular indictment, and should not exist.
Many of those problems do not exist merely among people leaving school. Although not all hon. Members would agree, we probably have the highest standards of numeracy and literacy that we have ever had in this country among young people coming out of college. But there are many people, of all ages, who do not have those skills and whom we have neglected. We have not fully addressed those problems and I agree with the hon. Member for Swindon (Mr. Coombs) that we must do so. I hope that the Minister will pay particular attention to the points made in the report on that matter.
More specific criticisms are made in the report which are laid, in part, at the Government's door. The report states that 70 per cent. of those who agreed a personal action plan did not complete it, and 42 per cent. of the trainees who completed the scheme returned to unemployment. I stress three key points on employment training mentioned in the report. First, it has an unacceptably high drop-out rate. Secondly, however they arise, the high drop-out rates represent a waste of public money and the programme's failure to give trainees the necessary skills to find jobs and careers. Thirdly, the Committee wants the Government to put more emphasis on higher-quality training in view of the fact that unemployment has fallen.
We must address the need to increase the quality of the training elements and resources given to improve the skill levels of people, at whatever level. The Government should respond to the lower numbers using the schemes by using the resources that have already been earmarked to improve the training provision, and not by reducing the amount of money spent. That choice falls to Ministers, who have the option to react in either direction. They have been wholly mistaken and used the opportunity to try to save money rather than to improve the provision that we are able to offer such people. If we look at the employment, training and educational opportunities for young people in other countries, it is hard not feel that we have neglected and left behind some of those in this country who could benefit from a greater input than they currently receive.
One point that has not so far been raised is specific to rural communities such as mine. The allowances and help given to those entering the schemes in rural areas—compared to those who simply continue to claim benefit 517 and do not go on to training or educational schemes—do not meet the extra cost that some people face when taking up the courses. That has been true for a long time, and it is still true. Some people coming to my surgeries feel that they cannot afford to take some of the courses available, whereas they would be able to if they had allowances and support from the Government.
Part of the problem is not merely the quality of the courses or the opportunities given, but the ability of people to make use of them. Some people may have to look after a family, and some single mothers may have to look after their children. Such people may not be able to afford to go on the courses. That problem must be addressed, because it cannot be acceptable that people genuinely committed to getting themselves out of difficulties find they cannot financially afford to do so.
The records on spending and projected spending on training shows that the January expenditure plans are that spending on training and education programmes is to fall from £2.5 billion for 1990–91 to £2.4 billion for 1991–92. That is a reflection of the fall in unemployment, although we could have a long debate about what that fall shows in terms of such people obtaining work. The juggling of figures that has taken place has allowed them to fall into disrepute, but there have been some real falls which should be welcomed. Why not take the opportunity presented for improving the training for the rest? I believe that all hon. Members would acknowledge that, more than anything else, employers are now talking about a lack of the right people with the necessary skills to fill the places available.
Last year it was estimated that British industry was short of about 30,000 experienced information technology staff. However, the same report predicted that by 1993 Britain would be short of 100,000 such experienced staff if we continue with the present IT training. The widespread use of up-to-date IT and people with the skills to operate it is imperative in every sector of our business, industrial and educational life. The need for such IT skills is a sign of the need for a better-resourced education system, and better provision of IT equipment and training opportunities.
In my constituency, the Cornwall information technology centre has pulled out of providing such training programmes for those on the information technology schemes. That is an example of the sort of problems that have arisen from the recent changes that have taken place in the funding of the management side of such courses. The hon. Member for Swindon gave an example of how he had been able to obtain extra funds when a problem had arisen over the provision of training. In my case, that was not possible. The changes that have been made to the management and decision-making structure, while sometimes welcome, have led to difficulties in pinning down who is responsible for sorting out the problems. I have received a series of letters that effectively transferred to somebody else the responsibility for the decision and the reason for Cornwall ITEC pulling out. It was a circular argument.
It is to be deeply regretted that the major supplier of information technology training to those, mainly young, people should be pulled out. One of the worst experiences I have had recently in relation to training, young people and opportunities was with a number of young people who had been at the Cornwall ITEC and found themselves completely left out in the cold when they were halfway through their courses. I do not lay the blame at the door 518 of the Government—there was something wrong with the system that meant that those people were let down Even if there was a good reason for a long-term decision to change the courses—I do not believe that there was—I do not understand why, and I do not believe that it is right, the change should have been implemented in such a way that the Cornwall ITEC felt obliged to stop providing courses for people in the middle of gaining qualifications after a long period of working towards them. Those people were thrown onto the street without gaining any benefit from the work they had been doing for a long time.
We must do more towards adopting a more systematic approach to training and providing better provision for retraining that brings together all the qualifications. The Government have started to do that, but very little has happened yet. We should bring together all the qualifications for the 16-to-18 age group, and those who return to education later, so that they all work towards a recognised system of qualifications at suitable levels. I acknowledge that that has been done in part, but it should be extended to ensure the development of a full-blooded modular system that people can re-enter or leave, knowing that the work they do is adding to their qualifications.
If there is any issue other than spending on which we will disagree for ever across the Floor of the House, I hope that it will not be the development of an integrated approach, so that people may have an opportunity to gain new qualifications. That will produce a more adaptable work force better suited to a growing and changing economy—getting away from the short-term, narrow approach to training that involves qualifying people for a specific job in isolation from everything else that is going on, and the attitude that once people are trained for a job, they will never need to train again. That is not true now, if it ever was. The Government have only scratched the surface of the radical changes that are needed.
The Government say that the implementation of such changes are a priority for them, as have all the parties represented in the House, yet every right hon. and hon. Member knows that, when it comes to the individual constituent, something is still missing. We are not filling all the gaps that exist and offering all the opportunities that people need. Time and again in our constituency work, we come across people who, in one way or another, fall through the holes in the system. If this debate can help change that, it will have made a real contribution.
I feel particularly strongly about training, as do many other right hon. and hon. Members. The report clearly demonstrates that we have not yet succeeded in meeting the aims that I have described.
§ Mrs. Edwina Currie (Derbyshire, South)
I will not join the hon. Member for Truro (Mr. Taylor) in his criticisms of employment training because from my reading of the Select Committee's report it is clear that more than 200,000 people a year are helped by it, most obtain jobs after receiving that training, and most believe that ET assisted them to do that. To me, that counts as success. It may not quite live up to the hype that surrounded ET a few years ago, but helping 200,000 people a year to get jobs that they previously did not have seems to me pretty good going. I place on record my congratulations to the people concerned.
519 What of the people who are not so easily helped by ET, such as those suffering from chronic illness, mental problems, or difficulties of illiteracy—which has surfaced in my area? I am not in the least surprised that the Committee found that 16 per cent. of those receiving ET have problems of illiteracy or innumeracy. A number of other problems also exist, and it is to those that I turn my attention.
The Select Committee skated over the wide variety of problems that prevent many people from obtaining jobs. For example, most trainees are over 30, and are returning to work after redundancy or unemployment, or—as the report observes in just half a sentence—after caring for their families. There is, first, the problem of ageism—discrimination against people simply because they are regarded as too old. I suspect that there also exists somewhere along the line the problem of sexism. That applies particularly to women returning to work after caring for their families.
There is no doubt that we need to recruit from both categories. The number of 16 to 25-year-olds available for the work force over the next 10 years will drop from 8 million currently to about 6 million. If all the other schemes and hopes that we have come to fruition, many more will be staying on at college and be unavailable for work. The Department of Employment estimates that, by 2000, 90 per cent. of all new jobs will have to go to women. Many of them will be women returning to work in the way that I described. However, we find that the returners experience great difficulties—and the women among them most of all.
Resistance comes not from the women themselves, or from their husbands and families—who are often extremely encouraging—but from personnel directors in boardrooms and businesses throughout the country. They are precisely the people who ought to know better. A survey undertaken by Gallup on behalf of the employment agency Brook Street, "Ageism—A Problem of the 1990s", received extensive press coverage last week. That survey of 250 personnel directors found that 86 per cent. of them preferred to recruit under-35s. Two thirds preferred people aged 22 to 35, and a further 30 per cent. wanted under-25s. In other words, those personnel directors wanted to select their staff from a diminishing pool.
The reasons most often given by companies for having age criteria were that young people were not set in their ways, are quick thinking, have more stamina, and better fit the dynamic image that many companies want to cultivate. That rules out most of the people in this Chamber. One wonders what those personnel directors think they are up to. There is no doubt that there is extensive discrimination against most women.
A separate survey of 1,000 older employees also commissioned by Brook Street showed that nearly 80 per cent. had been turned down for a job on age grounds. In another poll, three in five applicants believed that there should be no age limits in job advertisements. Sixty per cent. of employers said that demographic changes will affect their recruitment policy in the next five years, so they all know about them. One in three said that they intend to make more use of women returning to work. However, when employers were asked into what age categories they thought certain staff should fall, two thirds answered that 520 secretaries should be under 35, and three quarters thought that receptionists should also be under 35. What is to be done in a country that is now short of manpower in so many places—and literally short of man-power—when almost 90 per cent. of personnel directors prefer dolly birds?
However, when personnel directors were asked which categories of employment they feel are most appropriate for the over-50s, they name company chairmen and company cleaners. That tells us a lot about the ignorance, stupidity and prejudices of many of the people responsible for recruitment in this country. I exclude from that criticism a number of businesses. The DIY retail chain B and Q has gone against the age trend by staffing one of its stores entirely with over-50s. It feels that the scheme at Macclesfield, in Cheshire, will give many older people a new lease on working life. Good for them. I am sure that the company will receive an excellent response in terms of loyalty from that work force.
Age discrimination affects women far more than men. Two in five interviewed for the survey said that a woman having the same skills as a man is more likely to be turned down because of her age. Those of us past 35 are not ready to give up just yet. That is just as true for women Members of Parliament as it is for the men.
There is no doubt that employers know about impending problems and that they will have to change their employment training and procedures. One third of all companies polled said that they are prepared to meet staffing needs by attracting women returners. The majority of them, particularly in the south, are willing to consider incentives such as flexible working hours, job sharing, and time off during holiday periods. However, there was a marked reluctance towards providing help with child care, which is the most urgent and pressing need. Only 8 per cent. of companies are interested in making that provision. It is no use the hon. Member for Fyfe, Central (Mr. McLeish) pointing at my hon. Friend the Minister of State, Department of Employment. The fact is that the civil service is addressing those issues far more than private employers, and is in many ways setting an excellent example—particularly in respect of senior women. I look at the Box and see that they are all very pleased.
Only 5 per cent. of employers are prepared to give financial help with child care and, despite the recent tax changes, only 10 per cent. would provide workplace nurseries. That survey was undertaken after my right hon. Friend the Chancellor of the Exchequer made his very welcome announcement. Clearly there is a large gap between the preferences of personnel directors and managers and public opinion. As The Daily Telegraph reported on Monday, there is overwhelming public support for increased availability of child care facilities for working mothers. The percentage in favour in another Gallup poll on that aspect is much higher than it used to be.
When my hon. Friend the Minister has a go at companies and their employment practices, and tells them that they are pushing up wage rates, he should also point out to them that a substantial pool of excellent labour is available—people who want to return to work, have the necessary skills and are keen to make themselves useful. They are mainly women returners, but—as the survey has shown—many men are keen to get back to work, and need advice, support and assistance.
521 Retraining the returners is a very different proposition from training young people. Many returners lack confidence, as they may not have been at work for 15 or 20 years; the style of training that is adopted for them needs to be different from that applied to 16 to 18-year-olds or people who are on work experience. The first step is to restore their confidence and be sensitive to their anxieties. They may also take a while to start learning, as they may not have been in the classroom for 30 years; it is inappropriate to expect everyone to respond in exactly the same way. Later, of course, they often prove much better and more committed employees, but the traning systems must recognise their initial needs.
The Brook Street study showed that young people were often preferred by employers becauseThey are more familiar with modern technology.That is one of the most unfair comments that could be made by personnel directors about both women and men returners. Frequently, the reason the older workers are less familiar with new technology is that no one has ever given them the opportunity to become familiar with it. What, above all, saps the confidence of a woman returning to work after 20 years is walking into a secretarial office that is full of word processors: she may not even know how to switch them on.
We are often training the untrainable, instead of employing the employable who want to work. Often that is due to sheer prejudice. Perhaps some of the vast sums now directed at training should be aimed at the personnel directors who are so short-sighted about what women want, and what they can offer. Many training directors need retraining themselves, and fast.
I commend those thoughts to my hon. Friend the Minister.
§ Mr. Bob Cryer (Bradford, South)
I beg to move,That Class VI, Vote 1 be reduced by £100,000 in respect of Subhead H1 (Skills Training Agency running costs).The £100,000 is a nominal sum covering payments to consultants, and to three civil servants who were given time during work to prepare a work plan to take over 46 skill centres. The skill centre giveaway is becoming a major scandal. I believe that privatisation is wrong in principle; but to do it behind closed doors—as it has been done, with the Minister's approval—is doubly wrong.
Since my Adjournment debate on 15 May, information has come to light—not, I need hardly add, from the Minister, who has been reluctant to provide any information, but from other sources. There were at least 61 other bidders, who are listed in early-day motion 1106. Before the Minister says that there is a possible error, let me anticipate him. Mr. C. F. Lakin is listed as a potential bidder. As the motion says thatthe following potential bidders were not informed that £14 million was to be donated by the Government to the `purchasers' of skillcentres",it is clear that Mr. Lakin—who subsequently became a director of TICC Skill Centres and the recipient of £2 million—was one of those who did obtain some information.
The Minister tried, more or less in vain, to defend his position on the BBC television programme "Face the Facts" on 17 May. The programme featured comments from people who were not told that £14 million was available. I will quote some of them—people who 522 broadcast publicly, some of them doubtless sympathetic to the political position of the Minister and the Prime Minister. One person said:It's fairly obvious that if we'd have known that there had been Government money available, our view would have been completely and utterly different. I felt, and feel, that the financial people should have come back to us, and made that simple fact available".Among the other bidders was Geoff Bowers of the Sheffield-based Bowford Engineering Services. His company was keenly interested in obtaining the Ipswich skill centre, because it is one of the few companies that are accepted to train welders to the high standards demanded by the nuclear industry. The centre was also close to the Sizewell B construction project. Mr. Bowers said:After due consideration we decided that there was simply too much distance between the losses, that in particular the Ipswich Centre was making, and the viable commercial operation.Mr. O'Reilly of Wimpey—not an inconsiderable organisation, and one that is probably politically sympathetic to the Government—said:We were notified that the basis of the bid which had been sort of roughly agreed was no longer valid, that they weren't prepared to accept a bid in that form. Under the circumstances, being very disappointed with all the work we'd put into it and so on, we could do nothing other than actually withdraw from the sales of the skill centres we were interested in. They moved the goal posts at the last minute, and it was impossible for us to put together any sort of bid. I think the joint venture that we were putting forward which had been acceptable a month or six weeks beforehand, was no longer acceptable. I was always aware that there was an in-house bid going on, as everybody I think bidding was, and I really didn't see that much difference between what we actually proposed, and what actually came out at the end of the day.Why was Wimpey turned down?
My final quote comes from a representative of Essex Training Limited, a company owned by the motor trade in Essex. Mr. David Hale said:Prior to making our final offer, we said, tongue in cheek, jokingly, 'We're taking on all of these responsibilities, what's the chances of any of the so-called sweeteners that we hear about?' And immediately, the atmosphere became very frosty and prickly, and it was made abundantly clear to us that's not the things that you should say, and not the line in which they were going to go down. But subsequently, we found that people have been paid to take skill centres off the Government. If we had known, then of course we could have made it a serious suggestion.Why was that organisation rejected? Was it because the people who rejected it were chums of the three civil servants who were making an insider bid? That is a serious point, and it is no good the Minister shaking his head.
Since my Adjournment debate, 400 people have been made redundant by Astra Training Service. It got the plum that Jack Horner pulled out of the pie: the 46 skill centres and the £11 million. The Metel firm in Liverpool has sacked 27 people. I wonder whether this was not a simple case of the Government's bribing those organisations to carry out Government policy.
The Minister has uttered platitudes about the three civil servants being removed from "sensitive decisions" in April 1989. However, the Crown employee rules produced by the Cabinet Office were simply jettisoned. They should be restored in every detail, and applied on every occasion.
The three civil servants responsible for the skill centres were also responsible for the deficits that the Government complained about. That raises the question of how those deficits occurred. Was there a gleam in the eye of civil servants, who knew that they might be able to pick a plum out of the pie that the Government were about to provide 523 for them? There is a rich stench of internal corruption about this. At best, Ministers have been foolish. The stench will remain whatever they say, and one of the problems is that they say very little.
No figure has been given for the value of the assets transferred, at no cost to Astra and to TICC Skill Centres Ltd., plus more than £13 million which was transferred to them. The total value of the land and assets given away, with minimal conditions, is at least in excess of £120 million.
While that was going on, honest straightforward bidders were excluded. I quote Mr. Bowers again; describing what happened when they discovered that between £13 million and £14 million was being handed out, he says:We were absolutely flabbergasted. It's fairly obvious that if we'd known there'd been Government money available, our view would have been completely and utterly different. I mean as a private company, and we are very much the children of the Thatcher revolution in the fact that we take our own risks, we don't borrow public money, and maybe we should have thought in terms of subsidies. We simply didn't. I felt, and feel, that the financial people should have come back to us, and made that simple fact available to us. I think that we should have been given an opportunity, if that sort of money was on the table, for a re-evaluation of the bid.Finally, I quote from a person who has written to me from a skill centre which has been privatised. He says:I would like to thank you for your stand against the privatisation of the Skill Centre Network. I work at the … skill centre"—I shall not give the name, so that they will not be victimised by the Minister's chums—which has become part of the TICC skillcentres Ltd. … which acquired 3 other skill centres.The four are East Lancashire, St. Helen's, Cumbria and Ipswich, thus retaining anonymityI would like to bring to your attention the way in which our centres plus £2,000,000 of Tax Payers' Money were acquired. The Centres … and all personnel were given to Mr. Howard Lieu, accountant; Mr. Chris Lakin, university administrator; and Mr. Clive Ibbison-Steel, general production manager … This new company, T.I.C.C. Ltd. which had no past experience of running a training organisation, nor had the Directors, managed to be in a position to receive £2,000,000 plus 4 Skillcentres with all their assets (Cumbria Freehold) the rest leasehold. This seems difficult to believe but it's true. We at … Skillcentre would be obliged if you could ask the Minister concerned the following questions".I am asking the Minister now and I look forward to the answers.How could 3 individuals with no experience of running a multi-million pound Skillcentre Network, suddenly find that they have hit the jackpot? They now own 4 Skillcentres plus £2,000,000. How much was their personal financial input? Who vetted these people and why were they allowed to proceed with their so called bid? I have enclosed Rantfix and T.I.C.C. company information. Again, I would like to thank you for your efforts on our behalf and I look forward to hearing from you.I look forward to hearing from the Minister, and I want one final assurance—that no Ministers, when they leave their posts, will join any of these companies to share in the spoils when the Government sell the lot off.
§ 7.2 pm
§ Mr. Lewis Stevens (Nuneaton)
The report of the Select Committee on Employment contains some disappointments because of the nature of its criticisms. However, no surprises came out of it. The sort of training that we have 524 now accepted that the Government and the country need, which requires the association of industry and a wide range of training organisations, is relatively new to this country.
The hon. Member for Truro (Mr. Taylor) was quite right when he said that present training difficulties and the lack of training in the past were the fault of the country and not of any Government. In truth it was. Our approach to training was extremely static. For many years,on the industrial scene we accepted apprenticeships, which varied enormously from good to bad, and an academic structure within which the content of many courses changed very little, although they were updated at the higher level. We got into a rut.
Some 10 years ago, we had to consider the whole concept of training. We had little experience of how to proceed. What has happened since? Perhaps the most significant thing that has happened in the past 10 years is that the Government, training organisations and those in education have not remained static in their approach to training. With the employment training scheme, we have made training more flexible.
One part of the report which causes some concern is the way that it refers to drop-outs. Drop-outs have been a problem in almost every voluntary training scheme that I have had experience of in technical colleges, adult education courses and employment training.
My hon. Friend the Member for Swindon (Mr. Coombs) stressed the user-friendly aspect of training. I hope that, as a follow-up to the Select Committee's report, there will be an analysis of why people do not attend training courses and why people drop out—apart from those people who drop out because they have moved to a job. There should also be an analysis of those people who finish courses. Only when we have done that will we be able to modify training to provide a better structure in the future.
Most of what we doing now has been learnt over a relatively short time but can be developed through analysis of the results of present schemes. Almost certainly, much of the training which has been carried out in this country has not been structured in such a way that it enabled people to move from stage to another or to pick up a course again if they were made redundant or moved. It has not been possible to move easily back into training. If we were to analyse training methods and the way that people enter further training, we could keep up the momentum in training systems. We need a momentum for change in training, and so do the individuals who use it. We have not been successful in that respect, because that sort of training is relatively new to this country.
Many people do not find training acceptable or easy to take to. My hon. Friend the Member for Derbyshire, South (Mrs. Currie) commented inadvertently that people may not have been at school for 20 years and are therefore not used to the classroom. We should not consider modern training as merely another classroom exercise of the sort that we did at the age of 12, 13 or 14. Training is a wider concept than having to get used to a classroom atmosphere. That sort of training is fine for academics. Much employment training and youth training is action and job-orientated, although not necessarily for a specific job. I am sure that many people find it difficult to maintain an interest in that type of training. It is difficult to concentrate for long on learning, even if it is practical learning, without motivation.
525 Hon. Members have pointed out that many people who go on training schemes are not best fitted to start learning again or perhaps they have just left school and are on such a course for the first time.
The group of people which worries me most are those at the bottom of the academic ladder—for example, some young people coming out of what used to be called schools for the educationally subnormal and those young people who are slightly handicapped. It is important to provide the cash and effort needed to provide them with the resources to enable them to make the most of their potential. We are still not coping very well with that.
I am not complacent about what the Government have done, although they have done well. Training is dynamic and must keep progressing. There are gaps, especially for disadvantaged people, and they should be addressed now and in the future.
We have not concentrated sufficiently on the continuation of education in business, in the engineering profession and all the other professions. The Engineering Council and other organisations are trying to encourage training, but that has not been welcomed with the enthusiasm for which one might have hoped. Figures show that industry is training more people than ever before and that it is spending more money on training than ever before. Unless, however, people in industry are trained continually, the skills that we need will not be available. We praise Germany and Japan for the training that they provide, but that is an insult to the many fine professional people and technicians who work in British industry. Many of the people who work in the engineering industry are technically as good as any that one will find in Germany or Japan. If opportunities are provided for them, they are enthusiastic about increasing their knowledge and qualifications.
We have been slow to train managers. It must be nearly 30 years since I last went on a management training course. At that time, the Institution of Industrial Managers was just ticking over. However, in those days we looked forward to the time when the majority of industrial managers would have a management qualification. That did not happen, not because the institutes were lax but because of higher management's lack of enthusiasm to train their personnel, or send them for training. If managers are not trained in management skills, and if they do not update them, there is no hope for the future. Nothing changes faster than the need for management to train. Their ideas and their skills must change if they are to manage effectively. The most difficult thing to manage is change. If during the past 10 years we have not learnt that the management of change is the key to the future and that it is a continuing process, we have not learnt very much.
Employment training has been criticised, but its foundations are sound. By means of good analysis, it can be made more user friendly. Through the training and education councils we shall be able to provide the best training for people. The continuation of education and training is vital in almost every aspect of business life. Moreover, if managers are not fully trained and are not enthusiastic about being trained, the prospects for their employees to receive training will be damaged. If we train our managers and their employees, industry will succeed. Employees will then be enthusiastic and will be sufficiently trained to be capable of being employed.
§ Mr. Ken Eastham (Manchester, Blackley)
I agree with the hon. Member for Nuneaton (Mr. Stevens) that the skills of some of our personnel are as good as any in the world. The problem is that we do not have enough of them. The hon. Member for Swindon (Mr. Coombs) said that the Opposition carp about the Government's recommendations. The Opposition's role is to point out to the general public what the issues are and how things ought to be improved. It is important to face the facts. The Government use the word "training" as a buzz word, but when we compare the United Kingdom with other countries we find that the very opposite is the case.
The Select Committee on Employment reported that this year £200 million less will be spent on training than in the previous year. Whenever the Government make a cut, they try to justify it by saying that the numbers have gone down. They play the numbers game. When, however, the Government find that they have an additional £200 million, they ought to try to improve the quality and standard of training, which so often are nowhere near good enough. As we live in a highly competitive world we must improve the quality and the standards of training.
We are faced with a disastrous balance of payments deficit—the highest in our history. The only way to get rid of it is to export. To be successful, we must export excellent products which are better than those of our competitors and they must be competitively priced.
The hon. Member for Nuneaton referred to the need to improve management training. We do not concentrate sufficiently on that. Seven out of 10 British managers receive no training. If they are to lead their companies effectively, that is a serious indictment. We made a grave mistake about eight or nine years ago when we abolished most of the industrial training boards. I pay tribute to the man who set them up—Lord Carr. He established the industrial training board in the early 1960s because we were in such a mess; industry was making no provision for training. Soon after the 1979 election, the Tory party decided to abolish most of the industrial training boards. That was a disaster.
Education is the key to improving ability and potential. The Department of Education and Science, however, has been starved of funds. According to a press release that I received only today from the Department of Education and Science:It must be a priority for all those responsible for post-16 education and training that the provision they offer equips young people with the skills and qualities that employers need in their workforce.But they are fancy words with no substance, as is demonstrated when one examines the provision of education. Earlier in the debate reference was made to the lack of numeracy and literacy. It is obvious that, if people cannot grasp the basics, they will never be technological experts. We seem to be going wrong with the basics, but we cannot have one without the other. It is therefore important that the Department of Employment and the Department of Education and Science should work in tandem.
I represent a Manchester constituency and I have experience in education there. I have always supported the colleges of further education. The further education system used to be far stronger than it is today. One of its great strengths was public accountability. Further education was not organised just by the local politicians 527 and educationists. Industry was represented in the colleges of further education and managers took an interest in training. It is often implied that industry never had any input into further education, but that is a complete fallacy that should be refuted today.
Despite the success of colleges of further education—and they had considerable success—further education in Manchester has suffered savage cuts. The further education budget for this year is £18 million; last year it was £24 million. It is no investment in future technology to starve colleges of further education of funds. Last year, there were three colleges of further education; this year, because of the financial crisis, there will be only two. Last year, they were allocated only £500,000 for equipment. Anyone who knows anything about technical equipment will understand that £500,000 does not go very far.
The Government have a strong preference for private agencies. There is a great myth that something is better because it is private. But many of those so-called private agents were not qualified as the experts in the further education colleges were. They constantly put profit motives before quality training. Already Manchester has experienced many disastrous schemes which were set up by the Department of Employment. Only a few months ago one organisation collapsed, ditching 1,000 trainees. That is what happens in a privatised education system.
Now the training and education councils have come to Manchester and have been allocated well in excess of £10 million which will be administered by private companies. I keep asking questions, but I never get satisfactory answers about how the costs will be monitored. We get all sorts of promises from civil servants, but as soon as anything goes wrong it is hushed up and covered up. It is all supposed to be a great success, but the private organisations suddenly disappear. Cost monitoring will not be the same as it was when training was publicly organised by the further education colleges. There will be less accountability for decisions about what training should involve and concentrate on.
The engineering industry is one of our most important industries. It is the biggest exporter of British industry and the biggest money spinner, along with the chemical industry. The engineering industry is now talking about the new engineering training agency. According to the Government's diktat, that agency will be funded by subscriptions and fees. That immediately means a reduced budget, which means cuts in training, especially in small firms. Usually, small firms do not have adequate training. They will not be funded and they certainly will not volunteer any money. That was a great problem in the early 1960s, when Lord Carr had to decide to make some proper provision for training. Because the new private training agency has been set up, there will no longer be access to European funding because they are not public bodies. Hundreds of thousands of pounds that would have been available for training in Britain will no longer be available.
We already have serious skill shortages, but we only face them when it is too late. I agree that Britain's skill force has the highest technical skills, but it is the smallest in Europe. I can illustrate that. A publication that I picked up the other day referred to a recent survey published by the European Commission which contained a pecking 528 order of the proportion of skills in European industrial work forces. According to the survey, France had 80 per cent. skilled workers, Italy 79 per cent., Holland 76 per cent., Germany 67 per cent., Belgium 62 per cent., Denmark 62 per cent., Ireland 59 per cent., Spain 56 per cent. and Portugal 50 per cent. The United Kingdom was bottom of the pile with 38 per cent. skilled workers. That is where we stand in the provision of skills. Everything has to be privatised. We have private agents with fancy titles, but they are meaningless and they do not come up with the goods.
Today I received a letter from the British Institute of Management saying:The recent European Commission survey indicating that Britain lagged woefully behind other Community countries in the proportion of skilled workers in out workforce shows that much more needs to be done.That is not a picture of the success that the Minister may attempt to present to the House tonight.
I have just a few questions. Why do our European competitors take such a different view from that of the Conservative Government in Britain? Why do Japanese companies give greater importance to industry and training, and achieve such great success? Why are trade unions not encouraged to become involved? The trade unions represent the producers. Nowadays there is always a confrontation between the Government and the trade unions. I assure the Minister that the trade unions are not Luddites; their jobs and futures are involved.
Some Conservative Members may be involved in the stock exchange, floating money about in companies. The difference for trade unionists is that they devote their whole lives to their industries. That is why they see the matter differently. I get the feeling that the Minister is not serious about this. He is smirking and nodding his head, but I am making a sensible plea for industry to move away from confrontation. There must be a partnership. I come from industry, so I mean what I say and I do not want empty gestures.
There are many subcontractors in the offshore oil industry and there are men working on two-week contracts. I am sure that there is no adequate training and it is possible that some of the disasters on the oil rigs have been the result of inadequate training. There must be changes. We should do away with two-week contracts because the men on the rigs are not properly catered for or protected. We must improve; if we do not, we shall lose for the rest of the 1990s.
§ Mr. James Paice (Cambridgeshire, South-East)
I want to remind my hon. Friend the Minister and other hon. Members of my long interest in training. I thereby declare an interest—albeit faint, but it is right that I should declare it—as I used to run a training company and I remain a director of the parent holding company. I have, therefore, a particular interest in training.
I have been listening to the hon. Member for Manchester, Blackley (Mr. Eastham), with whom I served for about two years on the Select Committee on Employment. We cannot let him get away with one or two of his remarks. He referred to education. Most Conservative Members agree—although Opposition Members would not share the view—that many of today's problems stem from the failure of education to keep pace with the ever-increasing demands being put on it. To 529 pretend that it is simply a matter of money, as the hon. Gentleman did, is far from the truth. Literacy and numeracy are not expensive skills to teach. They do not require much equipment or fancy buildings. However, we fall down on those skills. We heard from the Chairman of the Select Committee on Employment, the hon. Member for Newham, North-East (Mr. Leighton), that many people on employment training are without proper literacy and numeracy skills.
The hon. Member for Blackley also referred to colleges of further education. Most of us would say that when further education colleges came into existence they did a good job. The problem was that they did not move with the times and that they became entrenched in the systems they had used in the 1950s and 1960s. Such systems were not up to date for the demands of the 1980s.
It was not until we moved into the training programmes which are the basis of this evening's debate—the youth training scheme, employment training and its predecessors —and which involved private contractors that employers started to place demands on further education colleges to which they had to respond. The hon. Member for Blackley referred to the public accountability of such colleges. The most important accountability is to the people who will employ those whom the colleges are training. The change has come about as a result of the introduction of private contractors, whom the hon. Member for Blackley spent some time rubbishing.
It is a matter of great concern to us all that Britain is still so far behind some of our competitors in training. However, we must not pretend that all is gloom and that nothing is getting better. We must not underestimate the fact that expenditure by all sectors of industry has increased dramatically in the past few years to £19 billion per annum. That is a major increase of about £7 billion on the figure shown in a survey carried out only three years ago. It may not be enough, but let us not talk ourselves into believing that nothing is happening.
It is even clearer to anybody who studies training over the past three or four decades that an awareness of a skills shortage is no new phenomenon. We have lagged woefully behind in training since the second world war. Why were the training boards set up if we did not have a skills problem'? The Government of the time believed that the boards would meet that need. However, the training boards did not achieve their aim.
It has seemed right to Labour and to Conservative Governments to try initiative after initiative to improve the level of skills, but they have failed. When the hon. Member for Coventry, South-East (Mr. Nellist) referred earlier to the youth opportunities programme, which the Labour Government introduced in the late 1970s, my heart sank. Of all the initiatives tried by Labour and Conservative Governments, that must be pretty near the bottom of the pile. I am sorry that the hon. Gentleman is not present to hear what I have to say. He referred to the real value of the wage being paid then, which was £19 a week. That underlines clearly the fundamental difference between the youth opportunities programme, and the youth training scheme—and now youth training. The youth opportunities programme was purely a make-work scheme—an opportunity to get people off the streets for six months and to pay them to do something.
When the youth training scheme was introduced in 1983, it was a major step forward. It was not a make-work scheme. It was not intended simply to provide work, so 530 one should not consider the payments to trainees as wages. The young people were receiving training and, in the long term, training is of greater benefit to them than a few pounds a week would be.
We seem to have a regular mental block about the concept of integrating training with work experience. I am the first to accept that there have been times when standards in YTS, in YT and in employment training have been woefully bad to an extent that none of us as individuals would be prepared to support. However, we cannot and should not damn the whole scheme simply because standards are wrong.
I served on the area manpower board for Norfolk and Suffolk until I was elected to the House. I stressed time and again that we should be far more rigorous in trying to sort out the sheep from the goats among the providers, not by some easy division into public bodies and private bodies, but into those who were providing quality training and those who were not. The Government then introduced the approved training organisation status which was a major step forward, but it was not draconian enough in weeding out many organisations and managing agencies that were failing to produce the required standards.
We have heard much about money this evening. However, we must also remember the effect of the demographic change especially on youth training. In his maiden speech, the hon. Member for Bootle (Mr. Carr) referred to the fact that Bootle is about 18th from the top of the list of places with the highest employment.
§ Mr. Paice
That may be the case. However, there are many constituencies at the other end. My constituency is fifth from the bottom of the same table with unemployment of 1.2 per cent. That is great good fortune for my constituents and it means that businesses are crying out for people to work for them. Businesses recognise the market demand for them to contribute and to pay well to gain employees. They recognise the need to participate in youth training as the means of training their young people. We cannot glibly say that the allowances are not sufficient. In vast areas of the country, especially in the south-east and London, employers need young people to work for them. They recognise that the market demands that they pay a substantial contribution to employ those young people.
I welcome the changeover from YTS to YT. We are now moving away from something that has long been a weakness of the training schemes introduced by Governments of all parties, and emphasising outcome rather than time-serving. It is the outcome of the training that is important, and it does not matter whether it is achieved in a week or in five years. We are trying to enhance people's ability and improve their skills. To insist on a fixed period, as we have in training schemes going right back to the old apprenticeships, is to fail to recognise different learning and skill abilities and the great advances that have been made in training technology and techniques.
Many of those points apply equally to ET. What is missing—perhaps particularly from ET but also from YT —is motivation, not through money but through personal stimulus. I believe that part of the problem lies in the low calibre of many of those who run training operations and —I am sorry to say—many of those working in the 531 employment agencies. That is part of the reason—only a small part—why 46 per cent. do not progress from their interview at the jobcentre to the first action-plan work in a training agency: they simply do not have the necessary enthusiasm or motivation. We must examine more carefully why that is because we are talking about 46 per cent. of the whole. The Chairman of the Select Committee referred to other percentages, but they were percentages of the 54 per cent. who actually went along. In numerical terms, the biggest chunk consists of drop-outs who never even start on the scheme. We must consider that as a matter of urgency.
My hon. Friend the Member for Nuneaton (Mr. Stevens), who has left his place—[HON. MEMBERS: "He is here."] He is hiding; I have to remind the House that, as he is behind the Bar, he is still outside the Chamber. My hon. Friend said that it is those in work who are the most important. The House spends a lot of time debating the 5.7 per cent. of the population who are unemployed. But if we are worried about Britain's economy and the importance of training to it, we should concern ourselves more with training for the 94.3 per cent. who are in jobs because, to a greater or lesser extent, they contribute to the wealth of Britain. For far too long we have failed to recognise that a skill learned at 19, 20 or 21 is not sufficient to last someone for the rest of his life. Updating and refresher courses are most important.
We must also recognise the importance of management training, as my hon. Friend the Member for Nuneaton said. Far too many people are promoted because they are the best technicians rather than because they will make the best supervisors or managers. We have gone a long way to improving high-grade management training. We have new MBA courses, and training for top managers is improving dramatically, but training for first and second-tier management often makes or breaks a company and we have a long way to go in that. It is perhaps more important in small and medium-sized companies than in large companies, which tend to have good training operations.
Let us look to the future. I have already referred to the failure of many previous initiatives. Should we now make the political choice to adopt a programme that mirrors more closely those of our major competitors, such as the United States, Germany and even Sweden? Those countries have operations where the employers are in the driving seat. The training and enterprise councils introduced by the Government are based on what is happening in those other countries. It has to be said that many of those countries would not experience the drop-out rate that we have with ET, for the simple reason that one's receipt of unemployment benefit depends on one's attendance of the scheme.
In that respect, our operation is far more lax than those of many other countries. The TECs that are rapidly coming into being will go a long way towards providing employers with the opportunity to get into the driving seat. We need look for no greater justification for the new arrangements than the fact that virtually the whole country is covered by TECs; the programme is already well ahead of the target set for it by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) when he 532 first announced the establishment of TECs only a little over a year ago. We must respect the opportunities that TECs give.
There is an alternative, about which we may hear a little more in a few minutes. We could go back to a compulsory levy, as the Labour party proposes. We could impose a 0.5 per cent. payroll tax and appoint more bureaucrats to administer it. That would mirror the failure of the industrial training boards: a bureaucracy was required to administer them and they failed to do what really matters.
I believe that the Government's policy on publicly funded training is absolutely right. We must devolve responsibility for the management of, and expenditure on, the schemes to those who can make real decisions—the businesses—and, through them, to the TECs.
If we debate this matter two or three years hence, we shall find that things have improved dramatically. We shall find that, whereas previous initiatives had failed, this initiative has worked.
§ Mr. Jack Thompson (Wansbeck)
Like most hon. Members, I have no objection to the allocation of money from the Consolidated Fund to support expenditure on improved training facilities, although, like many of my hon. Friends, I am somewhat concerned that £159 million has been taken out. We should have done training a better service had that sum been kept in, particularly had the money been spent in the interests of better opportunities in engineering and the development of engineering skills.
I make no apology for concentrating on the engineering aspects of training. We have to answer a fundamental question: can we afford training—or, rather, can we afford not to have training? That is the essence of the argument. If there is one thing that frustrates me it is Britain's attitude—this is not necessarily the Government's problem—to those in the engineering profession who are considered to be second-class professionals, whose skills come somewhere below those of lawyers, doctors, dentists, artists and financial manipulators.
"Engineering The Future", a document produced in January this year by the Engineering Council and the Secondary Heads Association, says under the heading "Proposals for action":The Finniston Report made this point in 1981: 'Long-term improvements in the supply of engineers will be to no avail—indeed, may not occur—unless the contributions of the current stock of engineers are harnessed to greater effect than hitherto'.What applied in 1981 still applies in 1990. The document continues:A young Oxbridge graduate made a similar point this year: 'At (a household name in British industry) I would have been a junior assistant engineer in ten years' time. At (a London-based business consultancy partnership) I could be advising the Chairman of that company in less than a week'. In this comment, and in the comparative salary figures he quoted, there is a major issue for industry itself to resolve.In this country the people who are producing the wealth are not recognised as they should be. We have forgotten that the modern economy of this country has been built on the skills and expertise of the legions of engineers who, over the past century in particular, created the wealth of this nation. People such as Stephenson, Parson, Swan and Armstrong, all from my part of the world, and numerous others over the years have given this country a sound industrial base. However, that has now been weakened by the Government's short-sighted policies.
533 We do not acknowledge those skills as we should. Often the public's perception of engineers is one of greasy overalls and unpleasant working conditions coupled with comparatively low pay at a professional level—that was the impression of the student to whom I referred. That is not an accurate description of an engineer's work. Engineering can be an interesting and rewarding career for a young person. However, unless attitudes change—and the Government can help in changing those attitudes—serious problems will arise as we move towards closer economic links with Europe. In general, engineers in Europe receive proper respect and remuneration, reflecting their position in the professional social structure. Most western European countries understand that their economic future depends to a large degree on professional engineers as wealth creators.
Why has the need for the continued development of craft skills suddenly become of interest to the Department of Employment? Why has the Department suddenly woken up from its deep Rip van Winkle sleep during the 1980s, when the limitations of the YOP, YTS and ET became evident, and suddenly introduced the training credit scheme described in a press release on 27 March from the Secretaries of State for Employment and for Education and Science asA revolutionary new approach to training in this country"?That is a fine expression. In some parts of the world revolutions cause those responsible for the regime under attack to be shot. I do not advocate that the previous Secretaries of State responsible for inadequate training schemes should be treated in that way because I do not support capital punishment. However, that revolution is being somewhat delayed and the revolutionary torch will not be lit before April next year. Even then it will produce only a glimmer in the dark.
From time to time there will be a number of pilot schemes involving about 10 per cent. of the national total of 16 to 17-year-olds at a time when we lag seriously behind the rest of our western European neighbours. Over a number of years I have had the privilege of being linked through my constituency with a town in Germany on the Rhine called Rhemsied. I have visited that town, which is part of the engineering area of the Rhine valley, on several occasions. It has an engineering training establishment which caters for about 1,000 male and female apprentices —or trainees as we would call them.
That engineering training establishment provides a full range of engineering skills from motor mechanics to electronics, electrical engineering and mechanical engineering. It covers the whole gambit of engineering skills to a very high standard. Indeed, I saw equipment in that training establishment which we do not have in factories in this country. The most interesting point was that that establishment was custom-built as a training centre in 1982 when unemployment in Germany was as high as it was in this country.
Even then, the Germans were prepared for the changes that would happen in the 1990s. They recognised that their economy was going to improve and they were preparing for it. I believe that that was a typical example of what was happening particularly in the northern parts of western Europe at that time. Such things are happening now as well. As my hon. Friend the Member for Newham, 534 North-East (Mr. Leighton) said earlier, that is why most of those countries have a greater number of skilled personnel than we have in Great Britain.
Some action has been taken here. I pay tribute to the Engineering Council, which has introduced the neighbourhood engineering scheme, and, in my part of the world, the northern engineering centre. The latter will develop neighbourhood engineering schemes linking three or four engineers with secondary schools in teams with teachers. My next-door neighbour is an engineer who will be involved in the scheme. As I understand it, he sent his application form off, but has not received a reply. If any scheme requires urgency, it is that one.
I hope that the neighbourhood engineering schemes will provide an opportunity to increase the interests of students and pupils in engineering as a career. I recognise that the Department of Trade and Industry has contributed £612,000 to that scheme. That is a fine gesture, but it is not enough. I argue that it is a little too little and a little too late.
The waste of the enormous engineering talent in the northern region following the demise of mining, shipbuilding and heavy engineering in the 1980s threw thousands of skilled personnel on the scrap heap. There should have been opportunities for proper training if those people had been handled properly. Not only did the people with the skills in those industries lose their jobs, but there were fewer opportunities for the apprenticeships that might have followed on in those industries. I saw the decline in my industry, the mining industry, and the lack of opportunity for young people to pick up those skills.
I believe that two generations have lost out in the 1980s. Their chance to pick up those skills will not come again. I believe that another organisation deserves public recognition for its activities in engineering. Through its education and training committee, the Machine Tool Technologies Association has established an educational trust fund with a contribution of more than £400,000. It has encouraged other sponsors for its design and building competition as a flagship scheme. It has accepted a commitment to fund both that and students to take an interest in machine tool manufacturing and to allow employees to continue their studies.
Government encouragement and financial support could assist in the rapid development of such enterprising schemes, but not all trade associations are able or willing to follow the example that I have given. The introduction of training and enterprise councils and the pilot schemes, including one in my county of Northumberland, which I suspect might be hit by the poll tax, and the training credit scheme, if successful, will not be effective until at least 1993 or 1994. Those projects must be seriously affected by the cut of £159 million in Government contributions.
It is already clear that the construction industry training board is prepared to introduce major cuts in its training programme at a time when there is a high demand for skilled workers. A report to that effect appeared in our regional newspapers this week. That cut will penalise the proper development and make vocational training even more industrial based.
That is a national issue. Over the next 10 years it is likely that the economy of this country will suffer severely from the lack of Government initiative in earlier decades. Complacency seems to have been the order of the day in 535 the Department of Employment. The country cannot afford that attitude if we are to catch up with our European and international competitors.
§ Mr. Henry McLeish (Fife, Central)
No one would dispute the fact that the United Kingdom faces a skills crisis, and the Opposition can be forgiven for being deeply cynical about the widening gap between the claims of the ministerial team in the Department of Employment and the skills reality that they are supposed to be tackling.
After 11 years of the Conservative Government, training policies are in a mess. We still have no coherent strategy for 16 to 19-year-olds. We have no policies for the unemployed which do not smack of coercion and employees in the work force seem to be the least important part of the Government's strategy. Obviously there is a widening skills gap between the United Kingdom and Europe and each day that passes shows clearly a developing crisis here even in the funding and application of Government programmes.
Over the past two or three months, we have seen a catalogue of cuts and crises involving TVEI, the Rathbone Society, the Spastics Society and the YMCA, training providers, training agents and training managers who are all suffering not only from massive cuts measured against the previous budgets, but also from panic policy reactions which do the Government no good and certainly do nothing to help improve the quality of our skills base. Recent news from Europe suggests that we are officially at the bottom of the international skills league. That does not give us any satisfaction, but we hope that it shakes the Government from their complacency.
The damning report from the Employment Select Committee demonstrates what most people have believed for a long time—that ET does not provide quality or positive outcomes for the majority of entrants—and certainly has nothing to do with value for money.
Another crisis is creeping up on the country. It started with the election of this Government. It relates to the assault, the undermining and, finally, the dismantling of much of our training infrastructure. I shall spend my brief time talking about that part of the training infrastructure that has been privatised. Obviously, I refer to the privatisation of the Skills Training Agency. We have seen a scandal at the very heart of Government.
My hon. Friend the Member for Bradford, South (Mr. Cryer) referred to growing complaints from employers and private companies throughout the country which have been involved. There has been a shabby series of political blunders in the past few months. My hon. Friend was charitable when he described it as possible foolishness. There is growing evidence that the problem goes well beyond foolishness. It is a sensational tale. We want to reveal the serious charges to be levelled against the Government. I hope that the Minister will take those matters very seriously.
It would be bad enough if the debate were only about approximately £135 million of public assets being not sold but given to the private sector. It would not be so bad if the debate were about the £16.4 million of sweeteners that the Government have acknowledged in the estimates. It would not be so bad if the debate were about the £8.6 million that 536 we believe was concealed in the trading accounts of the Skills Training Agency for the year 1988–89—£8.6 million that was destined to help out with early retirement. It would not be so bad if the debate were only about the way in which civil service employees have been treated.
The Liverpool lockout has been mentioned. There has been the laughable Lambeth matter, in which skills centres have been handed over to people with no experience, no track record and virtually nothing that would endear them to any sensible Government. Obviously, there is a deep sense of betrayal among civil servants at the launch of the Astra Training Services bonanza, whereby 400 civil servants were to be made redundant and removed from tackling the skills crisis in this country. As I said, that would be a sensational story, but we believe that it goes much further than that.
Opposition Members challenge the ministerial team within the Department of Employment for abandoning the Government's much-vaunted sound money approach for showing total contempt for accountability to Parliament, and blatant disregard and disrespect for taxpayers. We are seeing a crisis that was hatched under the previous Secretary of State for Employment, the right hon. Member for Sutton Coldfield (Sir N. Fowler). Sadly, that crisis was taken to its logical conclusion by an announcement in the House on 19 February that the centres were to be privatised.
Our charges are quite simple. First, I want briefly to refer to the role of the Ministers, Deloittes, and Mr. Bishell, Mr. Kent and Mr. Wells, who are now the directors of Astra Training Services and were formerly senior civil servants within the Skills Training Agency. Secondly, we wish to talk about the transformation of supply estimates that were brought before the House between March 1989 and February 1990. Thirdly, we want briefly to mention an extraordinary survey that we undertook yesterday with 10 telephone calls to the prospective bidders for the skills agency. What they had to say was certainly damning of the Government. Unless the House takes action to remedy what we have heard, it will clearly bring Parliament into disrepute.
The Government announced that the three civil servants involved would be taken away from sensitive issues of policy and finance in April 1989, but later in a parliamentary answer we found that the three civil servants, Bishell, Kent and Wells, had been working on the privatisation management buy-out since the autumn of 1988. For seven months they had access to sensitive, highly confidential and commercial information about the future of the agency, and they were also working with Deloittes in that process.
The tragedy is that the management buy-out team was being advised by Coopers and Lybrand. The feasibility study for the same Department was undertaken by Deloittes Haskin and Sells. A few months later, they merged to become Coopers and Lybrand Deloitte.
To what information were they privy in that seven months between autumn 1988 and April 1989 which gave them a preferable bidding position in any privatisation process and also undoubtedly gave them a competitive edge when faced with the challenge of bids from any other participants in the process? As soon as an interest was declared by the three civil servants about a management buy-out, they should have been immediately taken out of that sensitive arena for the period autumn 1988 to April 1989. It is barely credible that, when faced with such 537 insider information, the participants in that bidding process could have felt anything other than a deep sense of dismay, anger and betrayal. As my hon. Friend the Member for Bradford, South has mentioned, those people are not traditional allies and friends of the movement and the party that we represent.
Serious charges are being made as to why this matter arose and why the ministerial team in the Department of Employment could not accept that it would be highly damaging. It also meant that people who were bidding for the skill centres would regard it as an elaborate charade.
In March 1989, the supply estimates showed not the accounts of the skills training agency but its income, expenditure and turnover. It was showing a surplus of £16.4 million in March 1989. Why did that surplus turn into a deficit of £22 million by February of this year? Eight months is not long enough for the information upon which the first estimates were based to be redundant by the time the Department of Employment, the Treasury and Ministers had submitted the estimates in February 1990. What is more intriguing is that those same estimates reveal that £40 million was taken out of the employment training budget, £19.2 million of which was then applied to the expenditure totals of the skills training agency. Another £19 million was used as a bookkeeping exercise to cover the Department's expenditure.
The Government may argue that they were going to privatise the agency earlier than anticipated. If that is true, it is simply incompetence. Indeed, we can be charitable and say that it is incompetence and financial mismanagement, and it is. We can say that the Government are complacent about the use of public expenditure—and they are. However, the more serious charge is that there are now serious doubts about the way in which the supply estimates that were presented to the House were handled by the ministerial team in that Department. It is clear that Parliament has been misled by the actions of Ministers when presenting the estimates to the House.
The other argument that the Government may advance is to say that they could not get sufficient numbers to fill the employment training schemes, so income went down. However, if they are arguing that the expenditure figure decreased because it was only a partial year because of the privatisation, how can they cope with a full year of income? The income from employment training and from employers decreased significantly. There was a 40 per cent. cut in the income of the skills training agency between March and February. In the country as a whole, there was only a 5 per cent. cut in employment training expenditure, and yet there was a 40 per cent. cut in the money taken from the skills training agency.
I have said that the Government have at least misled Parliament, but there is a suspicion that things were a great deal worse. We must ask why money is moving about so easily in the Department of Employment budget. Why does expenditure dip and then rise? Why does its income decrease, unrelated to anything that is happening in the country as a whole? In my view, the answer is simply that a combination of ministerial incompetence and of civil servants working to prepare estimates may have created a situation in which privatisation was the best solution for a problem that was created largely by the Government.
Our final points are convincing. Yesterday we telephoned 10 people who had been involved in the bidding process. They are too frightened to go public, but 538 they levelled charges, and the dossier will be given to the appropriate authorities in the House so that they can investigate it.
Those people say that the bidding process was an elaborate charade and that there was no level playing field. They say that they were given desperately inadequate information upon which to base their bids. They are concerned because when the finals bids were submitted, but before they were accepted and announced in the House on 19 February, certain bidders were asked to rebid. That has implications for fair trading. I hope that the Minister will consider that point.
Most of the bidders were not given any idea that large tax handouts would be available as part of the restructuring. The Lakin consortium is a classic example because £0.5 million was given to each of the four centres and yet was denied to the bidder mentioned earlier by my hon. Friend the Member for Bradford, South. Those bidders believe that the management buyout had the hid sewn up from an early date.
If that is the case, we must ask who the Government are trying to fool. Are they trying to fool the 61 prospective bidders who had thought that they were making a real bid? Are they trying to fool Parliament, or are they trying to fool themselves by thinking that they could transfer nearly £200 million worth of publicly provided assets from the public sector to the private sector and yet provide no income either for the Consolidated Fund, the budget of the Department of Employment or to defray in any way the huge excesses that we have identified this evening?
We think that it is a scandal. We demand firm action from the Government and that they make a statement at the earliest possible date. We shall give our evidence and dossier to the Select Committee on the Treasury and Civil Service so that it can investigate the misleading of Parliament in the supply estimates. We shall also seek further to expose the fair trading aspects of the bidding process and if our evidence is conclusive, we shall take it to the Law Officers. We look forward to the Minister's speech.
§ The Minister of State, Department of Employment (Mr. Tim Eggar)
I begin by paying tribute to the maiden speech of the hon. Member for Bootle (Mr. Carr). We were all touched by his tribute to his predecessor, Mr. Allan Roberts, who was a very well liked Member. I was also touched by the hon. Gentleman's obvious commitment to the constituency that he is taking over. I was interested in and reflected on his comments that Bootle has provided a permanent majority for hon. Members representing his party. It must therefore be a shock for the hon. Gentleman to come to the House, where, of course, he will be in a permanent minority throughout his parliamentary career.
I am grateful to the Select Committee on Employment and to its Chairman for ensuring that the House has had this opportunity to debate the training estimates today. No hon. Member—of any party—underestimates the importance of training to our future economic prosperity and international competitiveness. Only with a skilled and competent work force will the country possibly be able to meet the challenges which lie ahead of us in the coming years.
I shall try to cover as many of the points that have been made as I can during the time available to me.
539 The hon. Member for Fife, Central (Mr. McLeish) and several other hon. Members of all parties have drawn attention to the European Commission's report on relative skill levels in this country and other European Community countries. It is extremely difficult to make sensible international comparisons about such matters. That fact cannot be better illustrated than by the survey that was mentioned by the hon. Member for Fife, Central, which suggests that Greece has a more highly skilled work force than Germany. That may be Madam Papandreou's aspiration, but on an objective level, it is not thought likely.
We have heard a lot from Opposition Members over the last couple of hours about reductions in Government expenditure on training. The House must recognise that the Government will be spending £2.7 billion on training in the current year. That is a massive investment by any standards. Government spending on training has risen sharply, by 60 per cent. in real terms over the past four years. Over the same period, unemployment has gone down by 50 per cent. The hon. Member for Newham, North-East (Mr. Leighton) did not say that the current level of our training expenditure is nearly three times more in real terms than the amount that the Labour party spent on training in its last year of government
Of course, the funding levels on youth training and employment training reflect changes in the groups that those programmes are designed to benefit. As the House knows, there has been a severe decline in school leavers. In conjunction with that, there has been a welcome increase in the number of young people staying on at school in full-time education, and a sharp fall in unemployment. It is right that Government programmes and expenditure should adapt to and meet those welcome developments.
As my hon. Friends the Members for Swindon (Mr. Coombs) and for Cambridgeshire, South-East (Mr. Paice) have said, it is important that a Government should work in partnership with employers on training. After all, employers are best placed to judge what training is needed and how best that training can be delivered. Employers spent £18 billion on training in 1987, and their contribution to the youth training scheme increased no less than sixfold between 1985 and 1989. We believe that it is right and proper that employers take the main share of responsibility for the investment in training.
I agree with my hon. Friend the Member for Derbyshire, South (Mrs. Currie) who stressed that employers need to consider taking advantage of recruiting older workers and women returners.
§ Mr. Eggar
As the hon. Gentleman should be aware, about half of the people involved in ET at any one time are on a work placement. The hon. Gentleman suggested that the figure was one quarter. Employment training is helping a wide range of unemployed people, many of whom have particular disadvantages. My hon. Friends and several hon. Gentlemen referred to the need for ET to assist those with special needs of one kind or another. A third of all those who start on ET have been unemployed for more than two years.
Employment training has been of great value to people who lack confidence and motivation to take on a training course, let alone present themselves directly to an employer. Most significantly, the trainees themselves on ET value their training highly. As my hon. Friend the Member for Swindon said, and as the Select Committee knows, a recent survey showed that four out of five of those interviewed agreed that ET had increased their self-confidence and improved their chances of obtaining a job.
Madam Deputy Speaker
Order. The Minister has made it clear that he is attempting to reply to the debate and is not prepared to give way.
§ Mr. Eggar
I apologise to the hon. Gentleman, but I have a great deal to cover. The hon. Member for Fife, Central raised several points that I wish to address. The Select Committee also raised several matters. If the hon. Gentleman had sat throughout the debate and had spoken, of course, I should give way.
§ Mr. Nellist
On a point of order, Madam Deputy Speaker. The Minister started it. If he had given way, this would not have happened—[Interruption.]——
§ Mr. Nellist
If the Minister had given way, we could have dealt with this more quickly. Given the constraints of the debate, it is not possible for everyone who wants to take part to speak. I spoke to the occupant of the Chair at the beginning of the debate and advised the Chair that I would not seek to take up the time of the Minister and other hon. Members but would seek to make only one point. I have tried to make that point to the Minister for the past lour or five minutes. He should withdraw his remark that I did not take part in the debate.
Madam Deputy Speaker
That is not a matter for the Chair, as the hon. Gentleman knows. If the hon. Gentleman had sought to catch my eye or that of my predecessor in the Chair, I am sure that every attempt would have been made to accommodate him.
§ Mr. Eggar
I was commenting on the Select Committee's report about drop-out from ET. We have introduced several measures designed to deal with the problem. I should like to run through them.
We made several important changes to the employment service's counselling arrangements designed to provide more effective help for people returning to work, particularly the long-term unemployed. Those include specific back-to-work plans setting out the agreed action at the end of each counselling interview and more rigorous and systematic follow-up of those who fail to take the agreed action. That should meet some of the Committee's anxieties.
Secondly, we have introduced more intensive help and advice for every unemployed person who remains unemployed after two years. From the autumn, those in that group who persistently refuse all options on offer will be required to take one of our short restart courses.
Thirdly, we have set the new Employment Service Agency a specific target for the number of long-term unemployed people who start on ET—rather than those who are simply referred to employment training. That will give the employment service clear responsibility for helping people to start on programmes.
Fourthly, we have streamlined the procedures for entry into ET, to cut down time from the initial interview to the start of training.
Finally, as I have said already, we set up an internal scrutiny group to examine the specific issue of take-up. Several of the measures that I have announced today address the scrutiny group's recommendations. We intend to make the scrutiny public and to decide on any further action before the recess. I shall certainly take into account the points made on the matter by both the Select Committee and hon. Members on both sides of the House when we come to make our decisions.
In the few minutes available to me, I shall deal with the points raised by the hon. Member for Bradford, South (Mr. Cryer) and the hon. Member for Fife, Central. Both commented on the sale of the Skills Training Agency. On behalf of the Government I wish to make our position 542 absolutely clear. There is no scandal. No one received favourable treatment and there were no sweeteners. The sale was conducted in an entirely fair and scrupulous way. All the organisations that expressed an interest were able to bid on an equal basis. All the bids that we received were evaluated on an equal basis by our professional advisers so that a proper comparison could be made between each bid.
In our final decision on the sale, we went for the combination which best met the Government's objectives for the sale. Those objectives started with the need to preserve training capacity and to offer the best return to the taxpayer. I resent the attack that was made on civil servants. I assure the House that those three civil servants were divorced from decisions affecting personnel and resource matters which might affect the new companies.
The right way to have the matter examined—I welcome the decision of the National Audit Office—is for the NAO to carry out a study into the sale of the Skills Training Agency. The appropriation accounts audited by the NAO show that the STA made a loss in all but one of the past five years. Estimates were laid before the House and were available for all hon. Members to sell. We expected to sell the STA in the financial year of 1989–90. We missed that deadline. We completed the bulk of the sale at the end of April, some four weeks after the end of the financial year in 1990. The House will recognise our difficulty in producing estimates to cover that time of flux. I am confident that the NAO will confirm the substantial loss of the STA indicated in the revised estimates.
I apologise to hon. Members on both sides of the House that I have not covered some points. In the time available to me, I have tried to deal with the issues as fully, comprehensively, and fairly as possible. I welcome the decision of the House to have this debate. I know that the hon. Member for Newham, North-East wishes to have the last word.
§ Mr. Nellist
I do not need to ask the leave of the House to speak a second time. Therefore, I rise to take the last minute if the Minister does not want it.
The scandal about this debate, which the Minister has refused to answer, is the point that——
§ The Questions necessary to dispose of the proceedings were deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of Estimates) and the Resolution [6 June].