CONTRIBUTIONS TO TRAINING AND ENTERPRISE COUNCILS

HC Deb 15 May 1990 vol 172 cc751-81

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The Financial Secretary to the Treasury (Mr. Peter Lilley)

; I beg to move amendment No. 34, in Clause 68, page 55, line 34, after 'council', insert 'or a local enterprise company'.

The Chairman of Ways and Means (Mr. Harold Walker)

With this it will be convenient to take the following amendments; No. 35, in Clause 68, line 49, after 'council', insert 'or company'.

No. 36, in Clause 68, page 56, line 17, at end insert 'and

1. (b) "local enterprise company" means a company with which an agreement (not being one which has terminated) under which it is agreed that the company shall carry out the functions of a local enterprise company has been made by the Scottish Development Agency, the Highlands and Islands Development Board, Scottish Enterprise or Highlands and Islands Enterprise.'.

Mr. Lilley

In line with the statement on Budget day, we announced last week that the new tax relief proposed in the clause for business contributions to training and enterprise councils in England and Wales will also be available for contributions to local enterprise companies in Scotland. The amendments simply achieve that result. They provide that the relief for contributions to LECs will be on the same basis and for the same period as that for TECs. I hope that they will be welcomed by all hon. Members. As TECs and LECs will have many similar functions, it is clearly right that the same tax relief should be available to both.

Mr. Gerald Bermingham (St. Helens, South)

I apologise for the intrusion into the Minister's brief opening remarks, but will he reassure me that tax relief granted in respect of investments in training and welfare will extend beyond what is considered to be the normal business sector, for example into professions and other such spheres, so that the broadest possible tax relief is given to training and investment in those sectors?

Mr. Lilley

I reassure the hon. Gentleman that there is no discrimination between different sectors of industry. As long as the contribution meets the conditions of the clause, whether it is in England, Wales or Scotland, it will attract relief.

Amendment agreed to.

Mrs. Margaret Beckett (Derby, South)

I beg to move amendment No. 21, in page 55, line 45, leave out 'if' and insert 'to the extent that'.

The Chairman

With this it will be convenient to take the following amendments: No. 19, in line 47, leave out 'of any kind whatsoever' and insert 'in money or money's worth.'.

No. 20, in line 49, at end insert 'provided that neither this subsection nor subsection (4)(b) below shall apply where the benefit in question comprises the training of employees of the person making the contribution and that training is wholly or mainly for the purpose of enabling those employees to better perform the duties of their employment.'.

Mrs. Beckett

As a first priority in the debates on the Finance Bill, we sought to examine the clause that confers tax relief on contributions to training and enterprise councils. The Opposition deliberately intended to make that the first issue we raised because we share the almost universal view that good training and retraining, for employed and unemployed alike is not only beneficial and desirable for the individual, but vital for a strong economy.

We seek by means of the amendment to probe the Government's intentions in the clause and perhaps even to improve the Bill. We do not oppose the clause itself but we believe that the more one studies it the more it throws into sharp relief the defects and inadequacies of the Government's training programme—if one can dignify it with such a name.

The background to the clause and to our amendment is also one of almost universal agreement about the terrifying inadequacies of the scale of training in this country and of the Government's approach to that training, not to mention the inadequacies—in the view of the Opposition —of such solutions as the Government propose.

It is rather difficult to tell to what degree the Government share our concern about the state of training, that state being identified by the fact that between 65 and 69 per cent. of 16 to 19-year olds are in training in this country, whereas in Germany more than 90 per cent. are, in Belgium more than 80 per cent. are, and in the United States and Japan similar figures obtain. The same imbalance applies to specific industries which need crafts-people to bring them up to strength.

We thought that the Government shared this view—all the more so because on 6 December the former Secretary of State for Employment, the right hon. Member for Sutton Coldfield (Sir N. Fowler), said that Britain's training position was "mind-boggling" and because in Employment News a few months ago the word was that we have a mountain to climb. The former Secretary of State set targets for training: that by the end of 1992 no young person should be employed without training; that two thirds of them should get to National Council for Vocational Qualifications level and a quarter to level 3; and that by 1995 all of them should be at least at level 2, and half at level 3. He went on to say: Unless we set outselves these kinds of stretching targets we shall not meet the need for upgrading and multi-skilling in a decade of continuing and rapid change. The new Secretary of State, however, said in March: My predecessor offered a framework of objectives for training … Progress … depends … on action by organisations outside Government; they cannot be specific Government targets."—[Official Report, 8 March 1990; Vol. 168, c. 804.] Moreover, the consistent theme of the new Secretary of State has been not the great need for improved training but how well we are doing. That is a substantial shift of emphasis. As I said a few moments ago, that shift of emphasis is not universally shared. The CBI said a few months ago: Britain's skill levels are lower than those in most of its competitor countries and the gap is widening. The head of the Training Agency, Roger Dawe, said: At every level we are towards the bottom of the training league table, whether it is in education, youth training, higher level skills training or in management. A most interesting recent edition of "The Money Programme" had a number of comments to make on our training policies. On the programme, the chair of the Blackburn TEC said: The situation is desperate. We are falling further down the ladder. Apart from the move away from targets, the new Secretary of State's second, equally alarming, shift of emphasis was to be found in the words that I have already quoted: Progress on meeting the objectives"— for the development of training— depends primarily on action by organisations outside Government; they cannot be specific Government targets."—[Official Report, 8 March 1990, Vol. 168, c. 804.] It seems to us that the Government are in terrible danger of repeating a mistake that they have made in other areas. The one that always springs to mind is community care. It is the mistake of picking up a perfectly reasonable policy which is in itself a good idea—in this case the idea of encouraging employers to make greater efforts to provide training—and using it as an excuse to shuffle off that part of the responsibility for the policy that properly belongs to Government and use that transfer as an excuse for cuts. Therein lies the danger, and it is one that the Government are running in community care, of discrediting the whole of a policy that might otherwise be acceptable.

On the first occasion on which I met a senior business man who was involved in the early stages of setting up TECs, he talked about his enthusiasm for the idea. He spoke about the challenge of the needs of training and of the way in which he and his colleagues hoped to be able to begin to tackle it. However, he went on almost immediately to say anxiously that, although he thought it was a good idea and that he was looking forward to being involved, he hoped that the Government did not intend to transfer the entire responsibility for training to the shoulders of private industry.

That concern is widely shared and was well expressed in the edition of "The Money Programme" to which I referred. One of the people interviewed said: Somebody has to do it. I do not think we are necessarily the best but there is no one else. That was a sad commentary on that person's view of the Government initiative. However, there is still a good deal of enthusiasm in some quarters for the TEC initiative, just as there might still be some enthusiasm for the intention behind the clause if the Government had not pulled the rug from under TECs by taking away with one hand what they seemed initially to be giving with the other. I refer, of course, to the cuts made by the Government in the support from public funds that were previously allotted to training. In a sense that was the unkindest cut of all and it was made without consultation with those on whom the burden of greater responsibility would inevitably devolve.

There is almost no doubt that, for most of those involved in TECs, the cut in funding was a devastating blow. They were also shattered when it took place without consultation and dismayed at the timing. Even as they warmed to their task, they were already expressing concern about the restrictions placed on the flexibility that they hoped to use to develop training and to meet the training needs in their areas. They expressed the view that reductions in scope followed directly from their duty to run the existing Government programmes of employment and youth training while their initial funding seemed to be too restrictive. It did not offer the flexibility to go further and bring in new initiatives in which they were particularly interested.

The decision substantially to cut funding has undoubtedly created immense disillusionment. In its economic report in April, the Employment Institute said that the cuts in funding are visible every year, beginning in 1988–89 with a real terms cut of 9 per cent. It was 11 per cent. in the estimate for 1989–90 and there is to be a continuing series of percentage cuts in the years ahead. The institute draws attention to the fact that, between March 1989 and March 1990, £500 million was cut from the funding of TECs.

Apart from that overall and substantial cut, individual industries are seeing the impact on the way in which they operate. I quote again from "The Money Programme" in which reference was made to the abolition of the electrical contracting industry board, its replacement by a voluntary body, and then Government money being cut in terms of the amount per head. An industrialist appearing on the programme said: It baffles me sometimes, the inconsistency of policies. Government can have a policy of encouraging and then the next minute, a bolt from the blue, cuts in funding. Mr. Alan Bartlett of the Association of British Chambers of Commerce said: I understand what the Government are trying to do but the general feeling is that it was not appropriate for it to turn its funding taps off long before most employers had been persuaded to turn their investment taps fully on. An editorial in the Financial Times said: The Government are right to argue that industry should spend more on training, but it is sending the wrong signals by sharply cutting its own spending just as TECs are trying to mobilise support. The Government's usual excuse is that those cuts in training are justified because unemployment has been falling. Leaving aside, if one can, the fact that that fall is likely shortly to be reversed, not only have the Government cut those substantial sums, but they have cut funding per head. Even though the numbers are smaller, funding is less per head in every sector of training that the Government are in any way supporting—in employment training for the long-term unemployed, in youth training and even in training for the employed or for people such as the disabled.

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Nor will the clause, even amended, do much to redress the balance. The National Council for Voluntary Organisations estimated from its survey the impact of what is taking place. Again, it identifies the fact that in its view—after all, it is a training provider—employer contributions would have to treble to make good the fall in Government funding for employment training alone.

It would be interesting to know—I hope that the Financial Secretary will be able to tell us—just what impact the Government expect the clause to have. I am sure that most hon. Members will be aware that, in the Red Book, the entry for this clause is marked with an asterisk, showing that it is of insignificant proportions, which I think usually means that it is expected to be less than £3 million. That is against cuts of at least £500 million which I have already identified.

Let me give a final quote from "The Money Programme": If the cuts prevent us from doing something worthwhile, most of us will think it is time to go. We will give up trying to persuade the others. That is a good employer who is concerned about training and who is prepared to give up time which, as we all know, is money, to try to promote training; to do the very thing that the Government want and which the Government are claiming to encourage. Such employers are now saying that they are prepared to give that time to try to encourage others to train, but they are not prepared to do so if the Government pull the rug from under them. Even as it stands, the clause is somewhat restrictive, whether intentionally or otherwise.

The Financial Secretary will recognise, as I expect will hon. Members, that tax deductions are already available for training. The scope will be a little greater because of the impact of the clause, but there will not be a vast change. Under section 84 of the Income and Corporation Taxes Act 1988, a deduction is available to be used for the purposes of technical education at universities and similar institutions. In sections 588 and 589, there is already a deduction for the cost of retraining employees, although with limits, and elsewhere, in section 74 under the general rules for training deductions and section 75 under expenses management, there is provision for some tax deduction.

We presume that most TEC contributions by an employer would be allocated to the local initiative fund, where the greatest flexibility exists in the operation of the TEC and where the activities are most likely to be tailored to the needs of local industry. Again, it is likely that existing law would have given a deduction for some part of the contribution and, although the relief is a little greater, it is not as generous a relief as some hon. Members might have assumed when the Chancellor announced it.

We are particularly concerned about clause 68(3), which says that the provisions identified in subsection (1) do not apply in relation to a contribution if he—the person making a contribution or an associate— receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution". We interpret that as meaning that even the smallest benefit of any kind, from anyone, will result in the whole contribution being disqualified for the purpose of tax relief. We share the Government's wish to make effective anti-avoidance law, but that provision appears to go too wide. I shall explain why that is so.

As clause 68 is worded, if a TEC agreed to train local youngsters in word processing, say, and offered free places on such a course to the employees of a particular company that had made an annual contribution of £100,000 to that TEC, because the company was receiving a benefit from those free places, it could, as a result of its past support, lose £35,000 of tax relief on its current year's contribution.

If clause 68 really means what it says, if a TEC offers contributors free access to its video production facilities, those companies might lose their right to tax relief—even though they might seldom, if ever, use the facilities.

Amendment No. 21 seeks to deal with some of those issues. Clause 68(4) says that, where relief has been given and a benefit has subsequently been received, the value of that benefit shall be chargeable for tax purposes. That implies that the Government intended in subsection (3) that only the amount of the contribution equal to the value of the benefit should be denied relief. Amendment No. 21 seeks to deny relief not if a benefit has been received but only "to the extent that" a benefit has been received. We hope and believe that that was the Government's intention.

Amendment No. 20 raises the question of whether the provision of training for a contributor's employees should be regarded as a benefit. It seems to us that it should not be so regarded, and should not result in the employer losing tax relief. If the contributing company had incurred training costs, they would have been tax deductible. If the excess of the contribution over the training costs had been paid to the TEC as a no-strings contribution, it seems that, under clause 68, tax relief would have been given. We see no reason for a different rule applying if the whole sum is given to the TEC and then it provides employee training.

Amendment No. 19 concerns a narrower issue. We understand that the Inland Revenue may be concerned in cases where a company enjoys a tax deduction by contributing a certain sum of money and is then refunded it in a tax-free form. If that is the intention of subsection (3), it can be narrowed by applying it only if the contributor receives the benefit in cash or in money's worth from the TEC, leaving intangible benefits such as the use of facilities, advertising support, and so on, untouched.

I refer finally to a possible drafting error, on which we have not tabled an amendment. I do not expect the Minister necessarily to answer the point today, but perhaps he will consider writing to me. We are concerned about interaction between subsections (1) and (2). Subsection (1) specifies that the contributions may be deducted as an expense in computing the profits or gains of the trade and subsection (2) refers to any such contribution made by an investment company being deductible as a management expense. Again, it appears that expenditure will not be allowable as a tax deduction under subsection (1) because it is not made by a trader for the purposes of his trade. It appears to deny the relief that subsection (2) seeks to give. If contributions are allowable under subsection (1), why is subsection (2) needed in addition?

It may be that the intention is to interpret subsection (2) as it is meant to be interpreted—but we are concerned whether the clause as drafted gives effect to the Government's intentions. Perhaps the Financial Secretary will give us an assurance that if, on re-examination, the clause is found to be defective in that respect, it will be remedied by the Government later in the Bill.

The Opposition do not oppose the clause, but the issues that it highlights expose the Government's short-term and short-sighted approach and the weakness of their case as regards the provision of training.

The Government seem to recognise no interest wider than that of the individual, which is perhaps a practical expression of the Prime Minister's view that there is no such thing as society. The Government seem to be seeing no interest wider than that of the individual employer or the group of employers and others from the locality who share representation on the training and enterprise councils. That may be the Government's view, but employers do not believe that—they have more sense. It is not the employers but the Government who are charged with the duty of defending the public interest in training, and employers recognise that.

Opposition Members commend the amendments to the Committee because they represent a small improvement to a flawed policy, but they do not affect the fact that the Government's overall policy and intention is being defeated by their actions and mistakes, and that the Bill makes only a minor contribution to our substantial training needs.

Mr. Ian Gow (Eastbourne)

I shall take up some of the words which have flowed from the lips of the hon. Member for Derby, South (Mrs. Beckett) when she quoted my right hon. Friend the Prime Minister as having said that there is no such thing as society. I am not sure of the context in which the hon. Lady suggests that my right hon. Friend made those remarks.

Mr. D. N. Campbell-Savours (Workington)

She did say that.

Mr. Gow

Yes, but I am not sure of the context in which, according to the hon. Lady, she made that assertion.

I shall begin my remarks by quoting with approval, what a former Conservative Prime Minister said at a St. George's day dinner. Stanley Baldwin started his speech by saying: The responsibility for progress rests not only with the Government but upon evey man and woman in the country. That theme seems to underline the approach of my right hon. and hon. Friends on the Treasury Bench to training responsibilities.

The clause grants tax relief for the current year which did not exist for the past year in respect of contributions made to training. The hon. Member for Derby, South made it clear that the Labour party would not oppose clause 68. She said perfectly properly that her amendments are probing amendments. The hon. Lady, the Labour party and I think even the two representatives of the once-mighty Liberal Party will not oppose clause 68. Therefore, the issue before the Committee this afternoon is whether the clause is an improvement upon the law which existed hitherto or whether the Government should go further, as the hon. Lady believes. She believes that the Government—which means her fellow countrymen and mine—ought to make further direct contributions towards training. My right hon. and hon. Friends on the Treasury Bench believe that there should be a partnership between the Government and industry for responsibility for training.

I welcome clause 68 because it will give additional tax relief and additional encouragement to those who have a responsibility for training—the employers. The responsibility for training rests upon employers and management. That responsibility cannot be foisted on the Government. As clause 68 provides further encouragement and additional fiscal incentives to managers and employers to carry out their responsibilities, it is a significant improvement upon the law up to 5 April 1990.

The hon. Member for Derby, South made a compelling speech, but her philosophical proposition seemed to be that the responsibility for training rests exclusively with the Government.

Mr. Paul Boateng (Brent, South)

Nonsense.

Mr. Gow

That was the impression that I formed when I listened to the hon. Lady's speech. Her proposition is, I believe, misconceived. If, therefore, she presses her amendment to Division, we shall resist it.

Mrs. Beckett

If I gave that impression, let me correct it at once. The Opposition do not believe that the Government have the sole responsibility for training; we believe that it is the responsibility of many employers to train. Therefore, we regret the fact that so many employers in this country do not do so, but instead poach those who have been trained by others. We believe also that the partnership to which the hon. Gentleman referred is perfectly proper and that one side of that partnership—the Government side—is being dissolved.

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Mr. John Battle (Leeds, West)

A partnership is crucial, and many believe that the Government are not keeping to their side of the deal. We have to consider the matter in the context of the approaches to the Treasury by the spending Departments. We have read in the press that the spending Departments have put in bids worth £12 billion and that the Chief Secretary to the Treasury has said that he will be hard-pressed to pay out the £3 billion that is needed to cushion the effects of the poll tax if reductions are not made in the budgets of other spending Departments.

It is interesting to consider which Departments would bear the brunt of those reductions. It was suggested yesterday in the Financial Times that one of the budgets that would be reduced in an attempt to cushion the effects of the poll tax was the training budget. Therefore, it is fair to question the Government's real commitment to properly funded training.

The Government have cut this year's training budget by £190 million. Spending on the Department of Employment's main training programmes will be £212 million less than in 1988–89. The Government are quick to tell us at Question Time that that is due to the fall in the number of young people, but that is not the reason for the reduction. Spending per head on youth training has been cut by £8 a week.

It is widely believed that the training and enterprise councils have been set up by the Government in an attempt to get training done privately and to keep it in the background. They are not interested in ensuring that it is properly supported by a partnership between the state and industry. It is an attempt by the Government to shuffle off their responsibilities and hope that the private sector will pick up the tab, and at the same time leave the Government the leeway to carry through further reductions. That is the prevailing view, even within the TECs.

The TECs were relatively unpopular and hard to get off the ground when they were first introduced. The tax reductions and concessions in clause 68 are an attempt to increase the incentives—a bigger carrot—in the hope that enterprises will continue to contribute to TECs on a scale that will make up for Government reductions. It is clear that the initial enthusiasm of some employers is waning, and the scheme needs a boost.

That is the purpose of the clause. The promised levels of public funding for TECs have not been forthcoming, and participating employers are becoming reluctant to contribute to TECs when they see that the public budget—the Government's commitment to that partnership—has been cut back, squeezed and reduced.

I hope that the Financial Secretary can assure the House that the Chief Secretary to the Treasury will not cut the Department of Employment's training budget, and that training will not pay the price for the cushioning of the poll tax. Already the Employment Institute is calling for an increased public contribution to each TEC. Mr. Russ Mason of the Thames Valley TEC has said that TECs are a picture of inadequate funding, particularly in the start-up year". That is precisely the year when they need guarantees of investment and income.

Dorset TEC has had its funding for 1990–91 cut by 18 per cent. As a result, it has been forced to cut its programmes. While the Labour party would be keen and eager to back genuine training that is properly supported in a partnership between Government and business, the Government must ensure that they underpin their commitment to that partnership rather than undermining it. We know that Secretaries of State and other Ministers are in the background, bidding with the Treasury to ensure that their Departments' budgets are not reduced in these difficult times.

The TECs have not been built on principles of partnership, or democratic principles; there are no employee representatives on their boards. There is no policy underwriting to ensure that the special needs of people with disabilities, women—whom the Government now claim that they are eager to bring into the work force—and ethnic minorities are provided for in the TECs. Positive action and programmes for such people would be welcome. They would turn the Government's training policies into genuine training policies. Such policies require a high level of commitment through public funding: that is part of the partnership.

I hope that the Government will accept their responsibility. It would be nonsense for them to suggest that TECs are providing employment opportunities for all when they cannot do that as their budgets are being persistently cut and undermined.

Mr. James Wallace (Orkney and Shetland)

Other speakers, especially the hon. Member for Derby, South (Mrs. Beckett), have already pointed out that we are debating training at a time when our provision is at a low ebb compared with that of our competitors. That can be illustrated by reference to statistics. Only about 32 per cent. of young people in Britain stay on at school until they are 18, compared to some 76 per cent. in the United States and 95 per cent. in Japan. Figures show that about 39 per cent. of 16 and 17-year-olds are currently in full-time education; 9 per cent. are unemployed; 24 per cent. are on youth training schemes; and 30 per cent. are in employment. Those in employment often receive no training. A recent survey suggested that only 5 per cent. were on day release schemes. So we start at a competitive disadvantage compared with those with whom we shall shortly be competing on even more equal terms once the single market becomes further established.

Against that background, the Government's response in recent White Papers has been to set up TECs in England and Wales and local enterprise companies in Scotland. Just as they are getting under way in England and Wales and are about to be inaugurated in Scotland, the Government introduce the new clause, which my hon. Friends and I will not oppose. But what the Government are giving by way of tax incentives they are taking away through the cuts that are about to take place in the training budget.

Hon. Members who, like me, are not members of the Select Committee on Employment will have seen recent televised exchanges in that Committee with the chairman of the Training Agency who, when put under pressure, eventually admitted that, with training already in a poor state in Britain, the amount actually to be spent on training, once one removed all the frills, would be cut. I understand that the youth training budget will be cut by 25 per cent. over three years, which in real terms approximates to 45 per cent.

The Financial Secretary will probably reply by referring to the demographic changes that are taking place and the fact that there are fewer youngsters in the age group to which youth training applies. But as we accept that more should be spent on training, we have a wonderful opportunity to take advantage of those demographic changes and increase in real terms the amount that we spend on training.

Mr. A. J. Beith (Berwick-upon-Tweed)

My hon. Friend may recall that, when the Treasury and Civil Service Select Committee examined witnesses on that point, they claimed that expenditure could be reduced on training because there were now fewer people unemployed, which, apart from being a doubtful prophecy for the months ahead, suggests that the Government's view is that training is necessary only when people are out of work. That represents an extraordinary failure to grasp the training problems that we face.

Mr. Wallace

My hon. Friend, who is a distinguished member of that Select Committee, makes a valid point to which I shall return. The TECs and LECs are about to be given a remit for training, a substantial part of which is taken up with their being administrators of national training schemes—youth and employment training—which, in different parts of the country and in their own ways, no doubt have some merit, but which go nowhere near to addressing the real problems of training, in particular the need to train those who are already in employment.

We must consider the effects of the cuts in training expenditure. Figures I was given last week by the Shetland Islands council show that, in the current year, there will be a 10 per cent. cut there in training. About £21,000 per annum will be withdrawn from training in Shetland. I understand that a similar cut will apply in the Orkney Islands council part of my constituency. That is the first of a number of instalments, and further cuts are to take place next year.

Although cuts are taking place and new contracts are coming into operation at the end of this month, there has been precious little consultation up to now about how the transition is to be achieved. One wonders, with the Government putting greater emphasis on TECs and LECs in the provision of training, what role the Government see for local authority involvement in training.

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In my constituency, the role of the local authority in pump-priming and giving additional funds to assist with training has been important, not least in helping those with special needs. If the Government see no real role for local authorities and continue to put pressure on their expenditure in other directions, we are in danger of handing over responsibility to the private sector and losing what has been a valuable partnership with the involvement of local authorities. How does the Minister see the future role of local authorities in supporting training in their localities?

Coming to the TECs and LECs, with which the clause is concerned, the Government are taking a risk. If training is vital to our country's interests and they represent the main mechanism by which training is to be delivered, it must be in the interests of all hon. Members to be sure that that mechanism works. There is no point in wishing the TECs and LECs ill, and to the extent that the clause tries to assist what they are doing, it is to be welcomed.

As I say, it is a risk. After all, in its White Paper entitled "Scottish Enterprise", the Scottish Office was more blunt than its English and Welsh counterparts about the role of the private sector up to now. That White Paper said: Efforts to date to persuade the private sector to take greater interest in and responsibility for training have had disappointing results. Far too many firms take little interest in assessing and training for their own future needs, assuming that supply will always be there to meet demand. Now, having admitted the failure of the private sector, the Government are putting so many eggs in that basket that one hopes that they have properly weighed up the risk involved.

As I said in response to the intervention by my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), we have training that will be particularly geared to employment training and the youth training scheme, with not enough attention being given to what can be done to provide training for those who are already in employment, for those with special needs and, as the hon. Member for Leeds, West (Mr. Battle) pointed out, for the training and encouragement of women.

An obvious example is the special allowances for employment training that are available to single parents but are not available to married women. A number of married women in my constituency have made representations to me that they would be only too willing to take up employment training if they had that additional resource. It is a short-term attitude—we frequently see such an attitude being taken by the Government—to encourage more women into the workplace without providing additional incentives. Will the TECs have flexibility to encourage training for women?

The prospectus for the 1990s entitled "Training and Enterprise Councils", issued by the Department of Employment last year, stated: At least two-thirds of the directors … must be local business leaders … who are 'chairmen, chief executives or top operational managers at local level of major companies.''' I welcome the effort that is being made to encourage local top people from business to take that interest, although I sometimes wonder whether they are sure of the level of commitment that they are making.

There could be an inadequacy in going for chief executives and top business leaders. We accept that, over the years, British business has been woefully inadequate in providing training. The trouble is that many of those at the top know precious little about training. They do not have expertise and skill in training. I hope that that point will be taken on board by those running the TECs and LECs.

We need to provide for trainers, not just for trainees. We need people with skill and experience in training. The editorial in the Financial Times of 9 May 1990, to which the hon. Member for Derby, South (Mrs. Beckett) referred, pointed out: The UK's educational reforms are threatened by a lack of qualified teachers. The same constraint applies in youth and adult training; the difference is that it is almost certainly more severe. After decades of neglect and the near disappearance of traditional apprenticeships in many industries, the UK lacks the human resources required for a training revolution. It is important for the TECs to address that problem.

Linked to that is the need to stimulate a culture of training. People must want to learn, and I agree with those who say that this matter cannot be left entirely to the state, the Government or local authorities. They cannot command people to learn and train. It is up to all concerned—industry, parents and the schools—to generate an atmosphere in which young people see it as worth their while to stay on and achieve educational attainment or to go on a training course, and at the end of whatever they do they must see some reward for their training efforts.

We must examine the experience of other countries. For example, firms in France that provide less training than the average in their sector pay the extra costs of the firms that provide above-average amounts of training.

As I said in my opening remarks, other countries seem to manage training so much better than we do. We should not be ashamed or hesitant about looking at their experience and adapting some of what they do. By setting so much store by TECs and LECs, the Government are taking a risk which, if it does not come off, will put us even further behind.

Mr. Lilley

First, I welcome the good will that has been shown by hon. Members on both sides of the House towards the substance of the clauses, although there is disagreement about what has been omitted from them and concern about some matters which the amendments address. Before I continue, let me make one general observation. Although we have had a great deal of talk about the amount of money dedicated to training, and the involvement of the public and private sectors, so far in the debate there has been no mention of specific skills or the training curriculum.

Perhaps it is an indictment of us all, and the difference between our attitude and that on the continent, that when we talk about training we think about how much money we spend and not about the output of training, which is crucial. That is why the Government attach so much importance to TECs. We believe that the involvement of industry in the process of providing and managing training will ensure that it is orientated more to the generation of training suitable to the needs of people and businesses, and not simply to abstract management and spending a certain amount of money.

The hon. Member for Derby, South (Mrs. Beckett) began with an accurate description of the training desert and the total lack of Government provision for school leavers that we inherited from the last Labour Government. At that time there was no youth training scheme or equivalent of employment training, there was no direct involvement of industry in the provision and management of training, there were no training credits, for which pilot schemes are now being announced, and there was little or no contact between schools and industry. There has been a huge change on all those fronts.

Mrs. Beckett

The Minister is right in listing all those provisions which did not exist then, but there also was not mass unemployment on a scale that made a training scheme necessary to take people off the unemployment registers. There was also a substantial number of high-quality apprenticeships run by private companies. From memory, I believe that a training company initiative to promote further training in the private sector was one of the first things that the present Government cancelled when they took office, and there was a campaign of co-operation between industry and schools. Another thing that the Government cancelled when they took office was the programme that we had started to put computers into schools, but they later reversed that decision. Whatever the Minister may imagine, I assure him that the picture he paints does not represent what was happening under the last Labour Government.

Mr. Lilley

The hon. Lady is entitled to her view that everything was all right then, but I am inclined to think that there has been a long-term weakness. We have taken a decade to get it right, but we are now getting it right.

We are now spending £900 million a year on youth training and £1.2 billion on employment training, and we have announced pilot programmes for training credits. The LECs will control some £2 billion out of a total budget of £2.5 billion of Government money to be spent on training. That is all good news, but the real improvement on a much larger scale has occurred in the private provision and expenditure on training. One estimate mentioned by my right hon. Friend the Chancellor of the Exchequer in his Budget speech is that no less than £20 billion a year is being spent by private industry on training. I am sure that we all welcome that.

Last night, the hon. Member for Newcastle upon Tyne, East (Mr. Brown) reminded us of the hon. Lady's assurance that the Labour party has no spending demands beyond the two commitments to social security spending. Some scepticism was expressed in the House about whether the Labour party would be able to limit its demands for extra spending to those two commitments and, sure enough, the hon. Lady has broken her own self-denying ordinance today and called for more spending on training. The hon. Member for Leeds, West (Mr. Battle) joined in.

Mr. Battle

The Minister will have read the account in the Financial Times—perhaps he will say that it is a speculative newspaper report—that the budget for training in the Department of Employment was to be reduced. What action did he take when he read that report?

Mr. Lilley

I certainly do not take action every time I read reports in the Financial Times; if I did, I should be hyperactive.

The public expenditure round proceeds on its stately course every year and all sorts of reports are made in the newspapers in ignorance of what is really happening. However, it is clear that the number of young people requiring post-school training and, happily, the number of people who have been long-term unemployed is diminishing. That means that more people are in work where they should be receiving training from employers in private companies and in the state sector, and that is what is happening.

The hon. Lady asked specifically what is the likely impact of the clause. Obviously, that is impossible to assess as it is an enabling clause which will remove the disincentive to companies from making contributions to local employment companies.

Mr. Wallace

The Minister said that young people who are in work should be receiving their training there and that is what is happening. What is his evidence for that? Does he contradict the recent survey that I quoted showing that only 5 per cent. of 16 and 17-year olds in employment were getting day release to undertake further training? What is his information?

Mr. Lilley

I recall hearing one of my colleagues in the Department of Employment referring to some European statistics showing that a high and rising proportion of people in Britain are receiving training, and that we are beginning to compare favourably with a number of our continental competitors. That is good news.

It is impossible to assess the likely response to the removal of a disincentive, but a similar incentive exists for contributions to local enterprise agencies which have raised some £35 million in recent years. Therefore, a significant but by no means enormous sum of money may be raised. The contributions that companies are making are very good news and demonstrate their sense of responsibility to their neighbourhoods and their recognition of the benefits that ultimately flow back to them from a better training environment.

The hon. Lady asked whether a company would lose relief if it received training after making a gift, and particularly if it were the condition of making a gift. I reassure the hon. Lady that it would not. There is already full relief for any expenditure by a company on the provision of training for its own staff, whether it provides it on its own premises or whether it buys in training from a LEC or elsewhere. The clause will simply ensure that there will be relief for purely altruistic contributions which might not otherwise exist as LECs are not charities. The hon. Lady suggested in her amendments—which are helpful and well-intentioned; we accept their underlying spirit—that relief should be removed only in so far as there is any benefit. I thought about that, but it does not seem necessary and it would certainly add an extra burden of complexity.

The hon. Lady also asked about a possible drafting error in subsections (1) and (2). I shall examine the point and write to her, although I have been given a preliminary indication that there is no problem. It is a tribute to her assiduity that she should have discovered a potential error.

5 pm

The hon. Member for Leeds, West rightly referred to the importance of provision for the handicapped and other special needs groups. I assure him that training and enterprise councils must set out plans for the provision that they will make for the handicapped and others before they can sign a contract. Obviously that matter will be considered carefully before a contract is signed.

The hon. Member for Orkney and Shetland (Mr. Wallace) said that other countries managed their training much better than us and that we should learn from them. Training and enterprise councils are being established partly because of the lessons we learned abroad. Germany has been successful: a major part in managing and providing training there is played by chambers of commerce. We do not have the same network of statutory chambers of commerce, but TECs will essentially involve business in the provision and management of training in a similar way, so we hope that we are learning from others.

Technically we are discussing simply the amendments before us. I have responded specifically to those by saying that we accept their spirit but feel that they are unnecessary and might lead to unnecessary complications. I hope that the Committee will not take them to a vote.

Mr. Battle

I found it surprising that the Minister said that the amendments would be too complicated. He said that, if a company gained benefit, it would lose the whole carrot and that it was not possible to find a way round that. We should encourage employers to come forward. Their record in the past has been bleak. That is why the Government have had to take the lead.

The skills shortage is not a new phenomenon. In 1982, when I served as a councillor on Leeds city council, it was involved, with the local chambers of commerce, in examining the skills needs of the future. Those were the years of recession in the engineering industry and in clothing and textiles. With the dismantling of some training boards, a shortage of some skills emerged precisely in the industries with new technology. The skills shortage was being identified then, eight or nine years ago, so it is not a new phenomenon. Yet the record of companies in providing training has not been commendable. The Government have been forced to offer tax concessions to employers to encourage them to take training seriously.

I welcome the Minister's response to the points about the disabled, women and ethnic minorities, but they need stronger emphasis. I am interested in the background to the clause and what will have to be agreed before a contract is signed. In the past companies have not been ready to provide schemes to train the disabled and women, and we may have to cajole them again. I hope the Minister agrees that it is not the case of the Government's saying, "We will have a partnership now."

There are problems about the Government's sticking to their funding contribution. I was not happy with the Minister's response on budget speculation. There should be hard bids. If the Secretary of State for Employment believes that he should work in partnership with companies, he should defend the employment and training budget and ensure that the Treasury will not cut the provision in order to cushion the poll tax.

Mrs. Alice Mahon (Halifax)

My hon. Friend has referred to gaps in training. Did he see "The Money Programme" to which my hon. Friend the Member for Derby, South (Mrs. Beckett) has referred? In that programme we heard that invisibles had declined since 1986 and that, for the first time since the Napoleonic wars, we had a deficit in our invisible trade. One reason was that there was very little organised training for specialist functions in the financial sector. I do not think that the Minister can blame that on a Labour Government.

Mr. Battle

My hon. Friend makes a telling point.

The identification of skills shortages has not been a new phenomenon. As industry has changed, there has been a shift from manufacturing to service. In Leeds, we set up training institutes to train women, people from the ethnic minorities and the disabled to enable them to enter jobs requiring new technology skills.

The Government are trying to cajole employers to fall in with their plans. Unless the Government are prepared to keep their side of the partnership bargain and give a real commitment that the training will not be subject to annual budget dealing which may put the partnership at risk, how can employers be persuaded to put in cash? We agree with the clause, but we think that our amendment should be acceptable. The Financial Secretary said that he accepted the spirit of our proposals. Why can he not accept the content?

Mr. Lilley

I shall respond specifically to the initial concern of the hon. Member for Leeds, West (Mr. Battle) about whether the amendments are necessary to avoid frightening people off. These subsections are essentially about avoidance. They are to prevent abuse of the scheme; there is nothing particularly novel about it. There is an identical provision in the legislation that provides tax relief for contributions to local enterprise agencies. Its purpose is to ensure that relief is not available for contributions with strings attached—for example, a contribution made on the understanding that the training and enterprise council would later provide training for a member of the contributor's family in something not connected with the contributor's business. We do not want abuse where a firm will make a gift, with a rider attached that a nephew will get training on something wholly unconnected with the business. The purpose of the subsections is to see off that potential abuse.

We did not find difficulties in the case of an almost identical provision for local enterprise agencies. I do not imagine difficulties will arise in this case. Precisely because the provision is to see off improper strings being attached to gifts, there is no case for saying that, as the improper string cost only £4,000, tax relief should be lost on only £4,000. If there is abuse and an attempt at nepotism, it is better that it should be seen off outright by the loss of tax relief in its entirety. That is why the provision is set out as it is. I am sorry that I did not spell it out at greater lengths earlier. I am glad to have had the opportunity to do so in response to the hon. Gentleman's request for further clarification.

Mrs. Beckett

We have had an interesting though short debate. The hon. Member for Eastbourne (Mr. Gow), whose courtesy I appreciate, made, as always, a telling and effective speech. The hon. Gentleman said that responsibility for progress in training—and I think that he said that he was quoting Balfour, or perhaps it was Baldwin—rests with every man and woman in the country and, of course, we do not dispute that. He also said that there was a need to maintain a partnership between Government and industry in the provision of training. I am happy to place on record once more the point that I made in an intervention in his speech. We recognise, of course, that it has always been the case—and we hope that it always will be—that there is a great need for industry to provide good training. Nevertheless, we believe, as industry does, that the provision of such training is a partnership between Government and industry. There is a growing belief and concern that the Government are failing to provide their side of the partnership.

My hon. Friend the Member for Leeds, West (Mr. Battle) remarked in his first contribution on the way in which the cuts in training have been made not just in the overall budget, but in the provision of training and the cost of training being allowed per head. Again, the answer is giving in Cm 1006. In paragraph 26, table 6.5, which refers to youth training—frequently quoted in the House and outside—shows clearly the decline in the gross public cost per trainee week, not only in the estimated outturn for 1989–90, but in the coming year and the two succeeding years. It estimates a fall from about £50 per head in 1989–90 to about £33 a head by 1992–93. There is no doubt that that will be a substantial cut and will have a damaging effect.

The Financial Times editorial, which I quoted earlier, made explicitly the point that the Opposition so often try to make to the Government and which they tend to contest—that it is not possible to provide high quality training on the cheap, which the Government are attempting to do.

The hon. Member for Orkney and Shetland (Mr. Wallace) talked especially about the training needs and problems identified in Scotland, and about the training needs of women and the disabled which, of course, we very much endorse.

The Financial Secretary has shown previously a trait—and I am not sure whether it is because he writes his speeches in advance and does not like to amend them—

Mr. Lilley

No.

Mrs. Beckett

If I have insulted the Financial Secretary, I apologise. However, he has a tendency to make remarks that do not seem to some of us to be borne out by the debate. In this case, he said that the only worry expressed by the Opposition was about the provision of public funds and that nothing had been said about the detail of training.

That is not wholly accurate. I referred to the various targets that were needed. It is certainly the case that the Opposition in a variety of ways, including through our members of the Select Committee on Employment, have studied and been alarmed by the detail of what is happening in training. My hon. Friend the Member for Sedgefield (Mr. Blair) gave some examples in the Budget debate which were taken from studies of sector training organisations obtained by our hon. Friend the Member for Newham, North-East (Mr. Leighton), who is Chairman of the Select Committee on Employment.

It is worth reminding the House of one or two of the points that my hon. Friend the Member for Sedgefield identified. There is likely to be a shortfall by the middle of the 1990s of 50,000 trained people in information technology. The computer services industry council presently covers 44,000 people and that number is soon to increase substantially. At present, it has five full-time staff only, although it is an area of great need in which we have a substantial deficit. The national retailing training council covers 2.5 million people, but it has only five full-time staff. The United Kingdom Agricultural Supply Trade Association has 1.25 people covering the entire association. Only 0.6 of a person—and I do not know how the figure was arrived at—covers the National Association of Master Bakers, Confectioners and Caterers. The detailed studies of training confirm the alarm we expressed in the debate. I believe that only one in four companies train.

The Financial Secretary then referred to the training desert. I thought that we were experiencing a wholly new phenomenon of commendable frankness, with Ministers admitting to sins of commission or omission, but I should have known better. He was talking about the previous Labour Government. I seem to recall that you, Mr. Walker, were a luminary adorning the Department of Employment. The Financial Secretary is fortunate that you are not in a position to set him straight by joining in our debate. Few who had any experience in the area would recognise the Financial Secretary's picture of the state of training then.

5.15 pm

The Financial Secretary referred to Opposition pressure on the Government to restore cuts in the provision of training to which we have referred in the debate. I am not sure whether it is deliberate on the part of the Ministers, or whether they simply have not grasped the distinction. In case it is the latter, let me make it plain. When we talk about the present public expenditure White Paper, about the present Budget or about Government policies, we set those remarks in the context of what we think that the Government should be doing now. We think that they should now be restoring the cuts they made in the training budget. It was in that context—

Mr. Lilley

Spending more?

Mrs. Beckett

Yes, spending more. The Government should spend enough to restore the cuts they made in the training budget in the public expenditure White Paper. The Minister should recall that I made a similar point earlier, although I am not sure that he was paying quite the close attention that I should have liked to every word I said. I drew his attention then to the fact that, in the debate on the public expenditure White Paper, when we called for the restoration of the cuts in spending, we made several proposals about areas in which we thought that the Government were making mistaken choices in spending money and in which we would not spend money, and several other proposals about areas in which the Government were making cuts and in which we would not make cuts.

Ms. Diane Abbott (Hackney, North and Stoke Newington)

Does my hon. Friend agree that our concern for a full-hearted Government partnership for training is not just with the overall level of spending? We are concerned that training should be carried out not as a privatised entity, but within the framework of overall social objectives. In my constituency, the unemployment rate among young black males is one in two. Society will pay a terrible price for the Government's policy. The Government seek to back away from their responsibility for training. The training needs of young men in areas such as Hackney, inner London, Manchester and Birmingham are ignored. This country will pay a terrible price for the Government's lack of seriousness on training, not just in terms of overall finance, but in terms of the overall social objectives which a serious Government policy on training should have.

Mrs. Beckett

Yes, I whole-heartedly endorse what my hon. Friend has said. Her observations about the way in which all of us draw on our experience of our constituencies and the problems there challenge the Government's view about the problems and the nature of the difficulties.

I reiterate for the benefit of the Financial Secretary, and in the perhaps vain hope that we shall not need to have these conversations over and over again that we proposed the restoration of the cuts in the public expenditure White Paper and that we also proposed cuts in spending in areas where we thought that the Government were misdirecting. I assure the hon. Gentleman that, broadly speaking, the cuts that we proposed and the cuts that we opposed balanced out. I assure him that there was no net increase in public expenditure in our package, which fits into the context of my remarks about our plans.

That brings me to my second point on the issue. The training cuts that we were discussing were in the context of what the Government are doing this year and what we think that they should be doing. When we referred to what a Labour Government would do, possibly in one year or two years—neither the Financial Secretary nor I can predict that—we were referring to a different framework. At the moment we have a couple of specific, clearly identified commitments which are our priorities. Beyond them, there are several desirable directions in which we should like public expenditure to move, but which we cannot quantify now. There is a clear distinction there and I assure the Financial Secretary that there was no contradiction in the points made by Opposition Members.

As we have identified, the overall context of clause 68 is one of encouraging business, through tax reliefs, to contribute to training programmes in TECs. It has been suggested in the press, and I am not aware that the Government have contradicted it, that the Government are drawing on the American experience. I remind the Financial Secretary of an article that appeared in The Economist on 21 April 1990. The article included several not very encouraging remarks about the Government's plans. It said that business men had responded to the Government's arguments with glum faces and that they were complaining that the Government might have shifted expenditure rather than reduced total investment. The article continued: A glance across the Atlantic at the models for these proposals deepens the gloom. Despite a strong American tradition of corporate largesse, the equivalent proposal in the United States has never received more than a tiny proportion of their money from private industry. The article explains that one of the most successful training schemes in the country, in Philadelphia, raises only about 5 per cent. of its budget from the private sector.

The Economist, which is not exactly a left-wing magazine, stated that the Secretary of State and his colleagues could hardly have chosen a more effective way"— that is, through the cuts— of sending a negative signal to a movement which stands or falls on voluntary effort. Some businessemen are asking themselves why they should be generous with their time and energy when the public budget is being squeezed and their own discretion to spend it is being so tightly constrained. The Economist suggests that some more cynical souls are wondering whether the Government are trying to offload responsibility, even for the training schemes that they run at present.

Mrs. Mahon

Is my hon. Friend aware that the chairman of the Blackburn TEC threatened to resign because of the cuts in funding?

Mrs. Beckett

I was not aware that the chairman of the Blackburn TEC had threatened to resign. However, judging from the strength of his remarks and his depressed tone that he revealed in a television programme that I saw, I am sorry to say that I am not surprised to learn that he has threatened to resign.

An article in The Guardian on 21 March 1990 referred to the leader of a midlands TEC. The article said that the Government were trying to place responsibility on the private sector for providing training. The article was lukewarm about the proposals in clause 68.

I listened with care to the observations made by the Financial Secretary, and I am glad that the Government do not believe that people would lose as a result of the difficulties that we identified and which we sought to address in amendment No. 21. The Financial Secretary believes that our amendment is unnecessary. However, we are not entirely convinced. I do not mean to criticise the Financial Secretary when I say that the drafting of legislation is an issue on which the Government's record is, how can I put it—

Ms. Abbott

Shocking?

Mrs. Beckett

Shocking is probably the best way to put it. I was going to be more gentle than that. However, my hon. Friend the Member for Hackney, North and Stoke Newington (Ms. Abbott) has probably described it better.

We have extensive experience of the Government assuring the House, in all good faith, that this or that provision in a clause meant this or that and was correctly drafted. However, we then discovered, sometimes before a Bill had completed all its stages and sometimes not until a subsequent year, that that was not so. I believe that there are some clauses in this Bill that correct something that the Government said did not need correcting from last year's Finance Act.

With respect to the Minister, if amendment No. 21 would do no harm and is merely regarded as unnecessary, we are inclined to press it to a Division. We have reservations about whether payment, not "wholly and exclusively", as needed by section 74 of the Act will cover the case to which the Financial Secretary referred. Of course, we understand his point about drafting the clause to stop people, according to his example, providing training or education for a nephew. We would not want people to avoid tax. However, although we share the Financial Secretary's desire to rule out tax avoidance—we wish that the Government shared our view about that more often—we believe that the Bill as drafted goes over the top. I intend to advise my hon. Friends to vote for amendment No. 21.

In conclusion, I want to quote from the ubiquitous and extremely useful "Money Programme". That programme placed the context of this debate in a clear light. One of the contributors to the programme said: We are moving away from the practices of our most successful competitors who supplement the market in training and regulate it heavily. We are moving towards complete dependence on the market. Unfortunately, that is the answer for the hon. Member for Eastbourne. We are very concerned about that and that is why we raise the issue and why I advise my hon. Friends, despite the assurance from the Financial Secretary, to be on the safe side and support amendment No. 21.

Mr. Frank Haynes (Ashfield)

With regard to this so-called incentive that the Government are giving to businesses in the form of tax relief to encourage them to take on their responsibilities for training, I must tell the Financial Secretary that we were telling the Government years ago that they were destroying the training of this nation.

Ms. Abbott

And would they listen?

Mr. Haynes

No, they would not. In fact, we were saying that before the young Minister became a Member of this House. I am sure that you, Mr. Walker, will remember this. I remember you at the Dispatch Box telling the Government of the day where they were going wrong on training.

The Financial Secretary should listen to these things, which have had to be said about training. The Government have missed the boat. They are trying to pour a little money into the pockets of the employers to have what the Government believe will be a sensible and successful training programme. I was a member of the Standing Committee that considered the Employment Bill, the Report stage of which we will debate on Thursday. In that Committee, Ministers tried to tell us what they were going to do about training. They are part of a Government who have almost destroyed training in this country.

Ministers now squeal at the Dispatch Box that we do not have enough people with the skills to do the new jobs that are becoming available in the new technologies. They are bawling their eyes out. Even the Prime Minister at No. 10 is doing that. The Prime Minister and the Ministers on the Treasury Bench have some lessons to learn. I am sure that, like me, Mr. Walker, you remember the training programmes that we used to have. The responsibility then was where it should be. This Government have a responsibility, but they are trying to duck out of it by chucking a bit of corn down. It will not work, and it will not help the Government to stay in office at the next general election. The Government have failed the people who need training, especially youngsters coming out of school.

In the Minister's constituency as well as in mine, young people are put on so-called "training programmes", when they push brushes around a factory floor for about two years, but there is no job at the end of it for them, and we are now finding out that there will be an increase in unemployment because of the Government's policies.

The Government have wasted money, and that has been at the expense of the ordinary folk that the Financial Secretary is supposed to represent and I certainly represent, back in the beautiful country of Nottinghamshire, where the Government have destroyed industry. Our mining industry used to have a first-class training programme, but what did that lot on the Treasury Bench do? They closed the pits, with the result that the training programme has been lost as well.

5.30 pm

As I have said, the Government are chucking a bit of corn on to the floor of the Chamber in the hope that the employers will pick it up. The Ministers and the Government have another think coming because that will not happen. The Financial Secretary must have heard what my hon. Friend the Member for Derby, South (Mrs. Beckett) has just said about only one in four employers being interested in training. That is shocking. All of them should be involved. The Government should be encouraging employers to train.

The Financial Secretary has a little grin on his face, but I am trying to be serious for a change. Let us face it, from time to time I have sat in the Chamber and been bored to tears. The Government have poured out statistics until I am sick of hearing them. Sometimes we hear a speech that livens up the debate and which hon. Members enjoy, including you, Mr. Walker. I have seen you with a smile on your face sometimes. Indeed, you are smiling right now.

Nevertheless, training is a serious matter. It is all very well to dangle a carrot before the people who are supposed to be providing a proper training, but the Government have ducked their real responsibility for a number of years.

I shall give an example of an industry in my constituency that encourages the training of disabled people without any encouragement from that lot on the Treasury Bench. It has done so ever since I have been a Member of the House. Provisions governing the employment of disabled people are supposed to be on the statute book. Although firms do not have to follow the provisions, it is recommended that about 3 per cent. of the work force should comprise disabled people. In the firm that I am talking about, disabled people make up 3.5 per cent. of the work force and they are trained, which is how it should work but, oh no, training has gone down, down, and downhill under the Government.

Give us the opportunity at the next general election—I am sure that it is coming—and my party will sit on the Government Benches and do something about training programmes. My hon. Friend the Member for Derby, South has spelt out what should be done, but I do not think that the Financial Secretary was listening to her. He was gas-bagging to whoever was sitting next to him—

Mr. Lilley

Withdraw.

Mr. Haynes

No, I shall not withdraw that, because it is true. With my own eyes I saw the Financial Secretary gas-bagging instead of listening to the serious points being made. I am pleased that he is listening to me when I am trying to be serious because we are discussing a serious subject.

The Financial Secretary was lucky enough to have a bit of training in finance—at least, that is the impression I get when I listen to him speak from the Dispatch Box. Nevertheless, he has a lot to learn. I said the same thing last night, but from a sedentary position. The young Minister has a lot to learn—he has not lived yet. I was in industry for many years and I am now 64, so the Minister can understand the point of what I am saying. I have seen good industry and good training within industry. Indeed, I participated in that training.

The Government ducked their responsibilities when they took over in 1979. Come the next election, we shall change all that. The sooner the Prime Minister calls the election, the better off will be those people who need proper training—without the incentives and the corn that the Government are chucking down to employers.

Several Hon. Members

rose—

The Chairman of Ways and Means (Mr. Harold Walker)

The debate is now getting wide, and although I have allowed a wide debate, I shall obviously have to have regard to the extent to which we have debated the general matters relating to the clause when we come to debate clause stand part. I call Mr. Martlew.

Mr. Haynes

On a point of order, Mr. Walker. I promised earlier not to raise any points of order, but you have forced me to my feet. I hope that on Thursday when we debate the Employment Bill you will not say that I have gone wide of the scope of the debate.

Mr. Walker

Thursday is a long way off. I call Mr. Martlew.

Mr. Eric Martlew (Carlisle)

I shall try to stick to the scope of our amendments and the need for them. Eleven years of this Government have reduced us from a skilled to a semi-skilled nation. I am afraid that, if the Conservative party won another election, we would be reduced to being an unskilled nation.

If one wants to consider the decline in training in this country, one most go back to the legislation that destroyed the training boards. A Labour Government in the 1960s put in place a system that did not give incentives to employers, but approached training from the other direction. A levy was imposed on employers who had to provide training of a certain standard to receive a rebate.

That immediately created the position of training officer. I was one for quite a while. Originally, the function of a training officer was to recoup the amount of the levy, but they soon went beyond that and started to look at companies' training needs. We found that very little training had been done between 1951, when the Conservatives took over, and 1964. Therefore, there was a need for Government intervention and the training boards were set up.

I was involved with the food, drink and tobacco training board, which began as a bureaucratic organisation, but which created a high standard of skills in many of the companies involved. Unfortunately, that training board was destroyed. I recently served on the Committee considering the Food Safety Bill, a major proposal of which was that training in the food industry should be dramatically increased because the lack of training has contributed to the food poisoning epidemic in this country. That lack of training in the industry was caused by the Government allowing the industry to stop training.

At one time, we used to have the right number of skilled people to match the number of jobs, but in the many years since, the Government have decimated our apprenticeships. Industry thought in the short term; because it was expensive to train an apprentice—it could amount to about £20,000 per year—firms decided to recruit direct from the labour market. Those industries are paying for that now, because there is a skills shortage and people with skills are rightly selling them to the highest bidder.

The Chancellor of the Exchequer stands at the Dispatch Box complaining about the high level of wage increases, but one reason is that the Government themselves have created a skills shortage, by destroying our training systems, which in turn means that those with the skills are demanding the highest price for them.

Mrs. Mahon

Does my hon. Friend agree that it is ironic that the Government, who are attempting to privatise training with the formation of the TECs, have put in charge of the TECs the very people who failed to provide the training in the first place?

Mr. Martlew

I could not agree more with my hon. Friend. I was discussing this matter about a year ago with one of the senior managers of a Carlisle company, who asked me what I thought about TECs. I said that I was concerned that those in charge would be the very people who had neglected training in their own companies over many years. Fortunately, one or two of the individuals on the board of the Cumbrian TEC are of a high calibre, and hopefully they will be able to carry on the job. However, one of their worries, which I share, is that they will not be given the tools and money to carry out the job. In addition, they will not have the support of the work force for TECs, because there are no workers' representatives on the TECs boards, which is another mistake, and is based on dogma, not common sense.

A common-sense Government who were concerned about improving training and getting the TECs off the ground would have gone for a consensus approach, but the word "consensus" has been struck out of the dictionaries of Conservative Members. I think that the Prime Minister struck out the word, but I think that the Government will rue the day.

The Opposition have said many harsh words about youth training schemes over the years, some of which have been justified. I used to be what was called a managing agent for a youth training scheme, and I used to take great pride in helping youngsters who came to my company through that initial period from school to work.

I was not a great believer in the idea that the YTS was an ideal way to train youths, but it was better than the dole. There was no doubt that it made youngsters aware of the work ethic—it got them up in the morning, coming to work and used to working with other people. Given a reasonable level of resources and a company that did not want to make a profit out of YTS kids, the scheme just about managed to give them a decent, reasonable level of training. The company that I worked for did so; many of the youngsters continued to work for that company, and some got apprenticeships afterwards.

To start to reduce in real terms the amount of money put into YTS schemes is an insult to those youngsters who have been unable to find employment but do not want to opt out. Many youngsters decide that they do not want to be exploited by youth training schemes and do not become involved. The youngsters who will be penalised are those who have decided to get up in the morning and do something. The Government are saying to them that they will get second-rate training, in a scheme that was not ideal to start with. The reason for reducing the amount of money will be lost. I hope that the Minister will tell us why he proposes a reduction in the amount of money spent on YTS youngsters.

We should have been building on the resources already there, and putting in more. Most of our youngsters not going on to higher education should be going into training schemes, highly geared to giving us the skilled work force required for the 1990s. This country does not have the natural resources of many of its competitors. North sea oil will run out before long. How will we adjust our balance of payments problems if we do not have a skilled work force?

Are we to become screwdriver workers in screwdriver factories for the Japanese? Why are we not opening car factories in Japan? The reason is that the Government have got the training wrong. We have not got the skills, either managerial or further down. Unless the Government start to apply themselves seriously to where the country is going and what sort of work force it will need in future, we shall become an unskilled work force, depending on Japanese, Germans and Swedes, to provide not only the factories, but the quality training. That is what we have lost.

5.45 pm

I do not believe the TECs will work. We must be more interventionist than that. We must say to employers that they must make a contribution—not a voluntary one, but a levy that they will receive back when they reach the standard required. The free market will fail this country every time in training, because it takes the short view; training needs a long view, because it is a long-term investment. The Government give us no encouragement to believe that they have grasped that lesson. TECs are the best we have and that is why we have tabled an amendment to improve them and give them more money.

When the Labour party returns to power, which we hope will not be too long, we shall hve to provide radical solutions to revive the skills. The Conservative Government left a mess over training for us to deal with the last time we came to power. We must support TECs, which are being short-changed. I am sure that the managers and directors who came forward to help the Government feel that they have been kicked in the teeth. They were the better managers from the more progressive companies.

The ones who do not give a damn will never be caught sitting on the boards. They might be seen at the Rotary club, or somewhere like that, complaining about the standard of education that their children are getting, but they will not be among the school managers or on the TEC boards. Those people who have come forward have been kicked in the teeth and not been given the necessary money. They know that, and the Government know it. This provision provides a stop-gap solution to a long-term problem, and I hope that hon. Members will support the amendment.

Mr. Lilley

Perhaps with your compliance, Mr. Deputy Speaker, I may wind up this debate by treating it as a discussion on the amendments and the clause stand part combined, by summarising the background to TECs and responding to some of the arguments that have been raised since I previously detained the House with my thoughts.

TECs are a major new initiative designed to promote local participation in training and enterprise activities. They are private companies with boards consisting mainly of local business, and will work under contract to the Department of Employment's Training Agency. The first TECs signed contracts in April 1990. Much of the TECs' activity will cover existing Government training programmes, such as youth training, but there will also be a discretionary local initiative fund that TECs can spend on projects of their own choice to promote training or local enterprise activities.

The first 12 TECs signed contracts in April 1990, and a further 70 are at various stages of development. It is expected that over the next year, a national network of TECs will be established. TECs will work in conjunction with local enterprise agencies, where those already exist.

Mr. Ian Taylor (Esher)

Has my hon. Friend noted that one of the TECs that has been given permission under this scheme is one covering my constituency and the region of Kingston and Elmbridge? The measure before us has been welcomed by businesses in that area because it should enable them to give additional help to the TEC's training programmes that are being set up.

Mr. Lilley

I am happy to recognise that, and I am sure that it reflects the interests of the local Member. I am also happy that Hertfordshire is another area in which TECs have been established, and there are a number of others that have already made good progress.

In the absence of the special relief that the clause introduces, some TECs might have sought charitable status so that businesses could obtain tax relief on donations under existing legislation. However, not all the TECs' activities would qualify as charitable. In general, training activities could be regarded as charitable, but certain enterprise activities would not, and TECs would need to divide their activities and functions to ensure that charitable status could be obtained for the relevant part of their work, which would involve increased administrative burdens on the TECs. Hence our decision to introduce the clause.

Overall, the Government are spending £2.5 billion a year on training programmes, and the value of tax relief on companies spending must be at least as much again. The main responsibility for training must lie with employers, who need to invest in their work force. That is a message which we cannot emphasise too much. It is employers, not Government, who are best placed to judge the skills needed in their business, and to organise training accordingly. Happily, the evidence proves that that is precisely what they are increasingly doing.

The 1989 labour force survey, published on 9 March, showed that the number of employees receiving training increased by more than 70 per cent. in the five years up to 1989. Employers in both private and public sectors have been investing £20 billion a year in training.

Mr. Martlew

How does the Minister get these statistics? Are they collected in forms that land on the desks of personnel managers, who then just fill them in? If so, his jubilation is misplaced.

Mr. Lilley

The figure that I gave—£20 billion—was based on a Department of Employment publication of last year, which in turn was based on a survey originally carried out in 1986–87. It estimated the total costs of training borne by public and private employers. It was a one-off survey and a fairly significant one, which is why it is not repeated every year. The estimate has been updated modestly to allow for a little inflation; the actual sum could now be more than £20 billion.

It is important to recognise that companies are now spending more—a fact which should be welcomed. Such spending is a duty of companies; and it is in their interests—that is why they are spending more. They do not do it, by and large, out of altruism. However, they can spend the money because they are now profitable. There were a number of reasons that led to the inadequacies of private provision for training, one of which was that, for a long time, industries, profits were simply not sufficient. As profits have recovered, so has spending on training.

The hon. Member for Derby, South mentioned our frequent and pleasurable exchanges on the subject of spending. I must disappoint her by saying that I enjoy them so much that I intend them to continue. The fact is that she has advocated spending more, and her hon. Friends have done so even more emphatically. She referred to the debate on public expenditure earlier this year when she claimed that her spending bids were offset by her proposals for cuts. I read the debate afterwards because I was not quite sure whether I had missed something.

It seemed to me from the text of Hansard that most of the spending cuts that she was proposing were to do with the cost of achieving privatisations. I do not agree that those amount to cuts, because if the Government were not carrying out privatisations they would lose all the revenues—

Mrs. Beckett

It looks as if I had better read the debate too, but I did talk about the way in which the Government have wasted money, particularly on marketing privatisations. From memory, the sort of areas that I had in mind were, for example, what the Government call the 2 per cent. incentive on personal pensions and what we call the 2 per cent. bribe; the granting of tax relief on health insurance; and so on.

Mr. Lilley

Not much would have been gained from the hon. Lady's latter point. If she is proposing more spending in the current year, which can be accommodated in the current public expenditure round, she will have to go through the same painful processes as my right hon. Friend the Chief Secretary to the Treasury and propose more cuts. We look forward with interest to what she has to offer. Otherwise, I suppose that we can only assume that she is following the old dictum that more means less.

The hon. Member for Halifax (Mrs. Mahon) said that the chair, as she referred to him, of the Blackburn TEC had threatened to resign. I understand that there has been no threat of resignation. Blackburn TEC is still negotiating its first budget, and as it is its first budget it cannot yet have been cut.

I listened to the hon. Member for Ashfield (Mr. Haynes)—he is very much the Labour party's answer to my hon. Friend the Member for Eastbourne (Mr. Gow), and I listened to him with almost as much pleasure as I do to my hon. Friend—and found everything that he said beyond criticism, except in one respect: he described me as young. I regret that that is no longer so.

The hon. Member for Carlisle (Mr. Martlew) made an interesting speech in which he referred to the old apprenticeship scheme. There is a lot of regret about its disappearance over the years, but it is worth considering why it disappeared. One reason was the pressure on profitability, which was of two sorts—the overall lack of profitability of British industry, and the increasing insistence on adult wages for those undergoing training. That is in marked contrast to the experience in most continental countries in which there has been a far greater differential between the pay of those undergoing training and of those who are trained and on adult wages. So we were moving in the opposite direction, with the obvious consequences.

Mr. Martlew

I would not disagree with what the Minister has said. The old apprenticeship scheme needed changing from a time-served basis to a skill basis. The fact that the wages of apprentices became nearer those of skilled workers was the fault of weak management in British industry at the time.

Mr. Lilley

I am quite prepared to agree with the hon. Gentleman. I hope that industry is listening and will respond to our consensus of wisdom. None the less, we have to replace what has passed, and that is what the Government have been doing in the major programmes that they have announced.

I commend the clause to the House. I believe that it provides a useful change to the legislation; it will allow a relief for altruistic contributions to TEC and LECs. We understand the reasons for the amendment. We have no disagreement in principle or substance, but we believe that the amendment would prove onerous if it were agreed to, so I shall be asking my hon. Friends to oppose it, albeit in a fairly friendly spirit.

Question put, That the amendment be made:—

The Committee divided: Ayes 152, Noes 244.

Division No. 207]	[5.56 pm
AYES
Abbott, Ms Diane	Cunningham, Dr John
Allen, Graham	Dalyell, Tam
Anderson, Donald	Darling, Alistair
Archer, Rt Hon Peter	Davies, Ron (Caerphilly)
Armstrong, Hilary	Davis, Terry (B'ham Hodge H'l)
Ashdown, Rt Hon Paddy	Dewar, Donald
Ashley, Rt Hon Jack	Dixon, Don
Barnes, Harry (Derbyshire NE)	Dobson, Frank
Barnes, Mrs Rosie (Greenwich)	Doran, Frank
Barron, Kevin	Dunwoody, Hon Mrs Gwyneth
Battle, John	Eadie, Alexander
Beckett, Margaret	Eastham, Ken
Beith, A. J.	Ewing, Harry (Falkirk E)
Bidwell, Sydney	Fearn, Ronald
Boateng, Paul	Field, Frank (Birkenhead)
Boyes, Roland	Fisher, Mark
Bradley, Keith	Flannery, Martin
Brown, Gordon (D'mline E)	Foot, Rt Hon Michael
Brown, Nicholas (Newcastle E)	Foster, Derek
Buchan, Norman	Foulkes, George
Buckley, George J.	Fyfe, Maria
Callaghan, Jim	Garrett, John (Norwich South)
Campbell, Menzies (Fife NE)	Garrett, Ted (Wallsend)
Campbell, Ron (Blyth Valley)	Golding, Mrs Llin
Campbell-Savours, D. N.	Griffiths, Nigel (Edinburgh S)
Carlile, Alex (Mont'g)	Griffiths, Win (Bridgend)
Cartwright, John	Grocott, Bruce
Clark, Dr David (S Shields)	Harman, Ms Harriet
Clarke, Tom (Monklands W)	Heal, Mrs Sylvia
Clelland, David	Henderson, Doug
Cohen, Harry	Hoey, Ms Kate (Vauxhall)
Cook, Frank (Stockton N)	Hogg, N. (C'nauld & Kilsyth)
Corbyn, Jeremy	Home Robertson, John
Cox, Tom	Hood, Jimmy
Cryer, Bob	Howells, Geraint

Hughes, John (Coventry NE)	Powell, Ray (Ogmore)
Hughes, Robert (Aberdeen N)	Primarolo, Dawn
Hughes, Roy (Newport E)	Quin, Ms Joyce
Ingram, Adam	Radice, Giles
Johnston, Sir Russell	Redmond, Martin
Jones, Barry (Alyn & Deeside)	Rees, Rt Hon Merlyn
Jones, Martyn (Clwyd S W)	Richardson, Jo
Kilfedder, James	Robertson, George
Leighton, Ron	Rogers, Allan
Lewis, Terry	Rooker, Jeff
Litherland, Robert	Ross, Ernie (Dundee W)
Lloyd, Tony (Stretford)	Ruddock, Joan
McAvoy, Thomas	Salmond, Alex
McKay, Allen (Barnsley West)	Sedgemore, Brian
McLeish, Henry	Sheerman, Barry
Maclennan, Robert	Sheldon, Rt Hon Robert
McWilliam, John	Smith, Andrew (Oxford E)
Madden, Max	Smith, C. (Isl'ton & F'bury)
Mahon, Mrs Alice	Smith, J. P. (Vale of Glam)
Marek, Dr John	Snape, Peter
Marshall, David (Shettleston)	Soley, Clive
Marshall, Jim (Leicester S)	Spearing, Nigel
Martin, Michael J. (Springburn)	Steel, Rt Hon Sir David
Martlew, Eric	Steinberg, Gerry
Maxton, John	Strang, Gavin
Meacher, Michael	Straw, Jack
Meale, Alan	Taylor, Mrs Ann (Dewsbury)
Michael, Alun	Thompson, Jack (Wansbeck)
Michie, Bill (Sheffield Heeley)	Wallace, James
Mitchell, Austin (G't Grimsby)	Walley, Joan
Molyneaux, Rt Hon James	Wareing, Robert N.
Moonie, Dr Lewis	Welsh, Andrew (Angus E)
Morgan, Rhodri	Wigley, Dafydd
Morley, Elliot	Williams, Rt Hon Alan
Morris, Rt Hon A. (W'shawe)	Williams, Alan W. (Carm'then)
Morris, Rt Hon J. (Aberavon)	Wilson, Brian
Mowlam, Marjorie	Worthington, Tony
Mullin, Chris	Wray, Jimmy
Murphy, Paul	Young, David (Bolton SE)
Oakes, Rt Hon Gordon
O'Brien, William	Tellers for the Ayes:
Orme, Rt Hon Stanley	Mr. Frank Haynes and Mr. Jimmy Dunnachie.
Patchett, Terry
Pike, Peter L.

NOES
Adley, Robert	Bruce, Ian (Dorset South)
Aitken, Jonathan	Buck, Sir Antony
Alexander, Richard	Burns, Simon
Alison, Rt Hon Michael	Burt, Alistair
Allason, Rupert	Butcher, John
Amess, David	Butler, Chris
Amos, Alan	Carlisle, John, (Luton N)
Arbuthnot, James	Carlisle, Kenneth (Lincoln)
Arnold, Jacques (Gravesham)	Carrington, Matthew
Aspinwall, Jack	Carttiss, Michael
Atkins, Robert	Chalker, Rt Hon Mrs Lynda
Atkinson, David	Chope, Christopher
Baker, Nicholas (Dorset N)	Clark, Hon Alan (Plym'th S'n)
Banks, Robert (Harrogate)	Clark, Dr Michael (Rochford)
Batiste, Spencer	Clark, Sir W. (Croydon S)
Bellingham, Henry	Clarke, Rt Hon K. (Rushcliffe)
Bendall, Vivian	Colvin, Michael
Bennett, Nicholas (Pembroke)	Coombs, Anthony (Wyre F'rest)
Benyon, W.	Coombs, Simon (Swindon)
Bevan, David Gilroy	Couchman, James
Blaker, Rt Hon Sir Peter	Currie, Mrs Edwina
Body, Sir Richard	Curry, David
Bonsor, Sir Nicholas	Davies, Q. (Stamf'd & Spald'g)
Boscawen, Hon Robert	Davis, David (Boothferry)
Boswell, Tim	Day, Stephen
Bottomley, Mrs Virginia	Dicks, Terry
Bowden, Gerald (Dulwich)	Douglas-Hamilton, Lord James
Bowis, John	Dover, Den
Boyson, Rt Hon Dr Sir Rhodes	Dunn, Bob
Braine, Rt Hon Sir Bernard	Durant, Tony
Brandon-Bravo, Martin	Dykes, Hugh
Brazier, Julian	Eggar, Tim
Bright, Graham	Emery, Sir Peter
Brown, Michael (Brigg & Cl't's)	Evans, David (Welwyn Hatf'd)

Evennett, David	McNair-Wilson, Sir Patrick
Fairbairn, Sir Nicholas	Malins, Humfrey
Fallon, Michael	Mans, Keith
Favell, Tony	Maples, John
Field, Barry (Isle of Wight)	Marland, Paul
Fishburn, John Dudley	Marshall, Michael (Arundel)
Forman, Nigel	Martin, David (Portsmouth S)
Forsyth, Michael (Stirling)	Mates, Michael
Forth, Eric	Maude, Hon Francis
Fox, Sir Marcus	Mayhew, Rt Hon Sir Patrick
Franks, Cecil	Mellor, David
Freeman, Roger	Miller, Sir Hal
French, Douglas	Mitchell, Andrew (Gedling)
Fry, Peter	Moate, Roger
Gardiner, George	Montgomery, Sir Fergus
Garel-Jones, Tristan	Morris, M (N'hampton S)
Gill, Christopher	Morrison, Sir Charles
Glyn, Dr Sir Alan	Moss, Malcolm
Goodhart, Sir Philip	Mudd, David
Goodlad, Alastair	Nicholson, David (Taunton)
Goodson-Wickes, Dr Charles	Norris, Steve
Gorman, Mrs Teresa	Onslow, Rt Hon Cranley
Gow, Ian	Oppenheim, Phillip
Grant, Sir Anthony (CambsSW)	Patnick, Irvine
Greenway, Harry (Ealing N)	Patten, Rt Hon John
Gregory, Conal	Pawsey, James
Griffiths, Peter (Portsmouth N)	Peacock, Mrs Elizabeth
Ground, Patrick	Portillo, Michael
Grylls, Michael	Raison, Rt Hon Timothy
Hague, William	Riddick, Graham
Hamilton, Neil (Tatton)	Ridsdale, Sir Julian
Hanley, Jeremy	Rifkind, Rt Hon Malcolm
Hannam, John	Roberts, Wyn (Conwy)
Hargreaves, Ken (Hyndburn)	Rossi, Sir Hugh
Harris, David	Rost, Peter
Haselhurst, Alan	Rowe, Andrew
Hawkins, Christopher	Ryder, Richard
Hayhoe, Rt Hon Sir Barney	Sackville, Hon Tom
Hayward, Robert	Sainsbury, Hon Tim
Heathcoat-Amory, David	Scott, Rt Hon Nicholas
Heseltine, Rt Hon Michael	Shaw, David (Dover)
Hicks, Mrs Maureen (Wolv' NE)	Shaw, Sir Giles (Pudsey)
Hicks, Robert (Cornwall SE)	Shaw, Sir Michael (Scarb')
Higgins, Rt Hon Terence L.	Shelton, Sir William
Hill, James	Shepherd, Richard (Aldridge)
Howarth, G. (Cannock & B'wd)	Shersby, Michael
Howe, Rt Hon Sir Geoffrey	Skeet, Sir Trevor
Howell, Ralph (North Norfolk)	Smith, Tim (Beaconsfield)
Hughes, Robert G. (Harrow W)	Soames, Hon Nicholas
Hunt, Sir John (Ravensbourne)	Speed, Keith
Irvine, Michael	Spicer, Sir Jim (Dorset W)
Irving, Sir Charles	Spicer, Michael (S Worcs)
Jack, Michael	Squire, Robin
Janman, Tim	Stanbrook, Ivor
Jessel, Toby	Steen, Anthony
Jones, Robert B (Herts W)	Stern, Michael
Kellett-Bowman, Dame Elaine	Stevens, Lewis
Key, Robert	Stewart, Allan (Eastwood)
King, Roger (B'ham N'thfield)	Stewart, Andy (Sherwood)
Kirkhope, Timothy	Stewart, Rt Hon Ian (Herts N)
Knapman, Roger	Stokes, Sir John
Knight, Greg (Derby North)	Stradling Thomas, Sir John
Knight, Dame Jill (Edgbaston)	Sumberg, David
Knowles, Michael	Tapsell, Sir Peter
Knox, David	Taylor, Ian (Esher)
Latham, Michael	Taylor, Teddy (S'end E)
Lee, John (Pendle)	Tebbit, Rt Hon Norman
Leigh, Edward (Gainsbor'gh)	Temple-Morris, Peter
Lennox-Boyd, Hon Mark	Thompson, D. (Calder Valley)
Lightbown, David	Thompson, Patrick (Norwich N)
Lilley, Peter	Thorne, Neil
Lloyd, Sir Ian (Havant)	Thornton, Malcolm
Lloyd, Peter (Fareham)	Thurnham, Peter
Lord, Michael	Townsend, Cyril D. (B'heath)
Lyell, Rt Hon Sir Nicholas	Tracey, Richard
McCrindle, Robert	Trotter, Neville
Macfarlane, Sir Neil	Twinn, Dr Ian
MacKay, Andrew (E Berkshire)	Vaughan, Sir Gerard
Maclean, David	Waddington, Rt Hon David
McLoughlin, Patrick	Walker, Bill (T'side North)

Waller, Gary	Wolfson, Mark
Wardle, Charles (Bexhill)	Wood, Timothy
Watts, John	Woodcock, Dr. Mike
Wells, Bowen	Yeo, Tim
Whitney, Ray	Young, Sir George (Acton)
Widdecombe, Ann	Younger, Rt Hon George
Wiggin, Jerry
Wilkinson, John	Tellers for the Noes:
Wilshire, David	Mr. John M. Taylor and Mr. Sydney Chapman.
Winterton, Mrs Ann

Question accordingly negatived.

Amendments made: No. 35, in page 55, line 49, after 'council', insert 'or company'.

No. 36, in page 56, line 17, at end insert

1. (b) "local enterprise company" means a company with which an agreement (not being one which has terminated) under which it is agreed that the company shall carry out the functions of a local enterprise company has been made by the Scottish Development Agency, the Highlands and Islands Development Board, Scottish Enterprise or Highlands and Islands Enterprise.'. —[Mr. Lilley.]

Clause 68, as amended, ordered to stand part of the Bill.