Individual Learning Accounts (Hansard, 26 February 1998)

§ 1. Mr. Wyatt
If he will make a statement on the role of individual learning accounts in the workplace and the home. [29877]

§ The Parliamentary Under-Secretary of State for Education and Employment (Dr. Kim Howells)
My right hon. Friend the Secretary of State published yesterday our consultation document "The Learning Age". That set out our proposals for developing individual learning accounts to help people to take more control of their learning and manage their own careers.

§ Mr. Wyatt
Will my hon. Friend explain how people who are out of work might benefit from the learning initiatives and credits, and what impact they might have on the national grid for learning and the university for industry?

§ Dr. Howells
Individual learning accounts will focus in particular on those who are currently out of work and would like to acquire new skills in order to return to work. The accounts will run alongside a range of other Government initiatives, such as the new deal, which is aimed specifically at 18 to 24-year-olds and is designed to help them to return to training and education, and to obtain work.
Through the Green Paper, we are consulting on how that will impact on the national grid for learning. We believe that the grid will extend to colleges and universities, and to public places. The individual learning initiative will be linked in many ways to many parts of the national grid for learning, and to the whole education and training spectrum.

§ Mr. Willis
We were deeply disappointed by the Green Paper that was published yesterday, but one feature that pleased us was the introduction of individual learning accounts. That has long been a Liberal Democrat policy, and we are glad that the Government have adopted it.
To date, have any financial institutions expressed interest in taking up the 1 million £150 bank accounts that are to be introduced as part of the policy? Has the 478 Chancellor of the Exchequer already ruled out the two other important elements of individual learning accounts—tax relief on income put into the accounts by employers or individuals, and the matching of income by the Treasury?

§ Dr. Howells
I am very glad that the Liberal Democrats have seen fit to support individual learning accounts. We think that this is an excellent initiative, and we are very encouraged by the response of industry. We have discussed the initiative widely with industry, and we will continue to do so. We hope very much that employers will see the sense of topping up individual learning accounts: we think that they are an excellent way in which to promote training, and we think that training equals better profits. The best firms understand that, and are already putting a great deal of money into training—£10.5 billion last year. We want to do everything to encourage them.

§ Mr. Derek Foster
Will my hon. Friend commend the managing director of Thorn Lighting in Spennymoor? Speaking about the work force, he said, "We discovered that with every pair of hands we were given a free brain." Is it not true that most employers only scratch the surface of all the skill and talent that they have in their work force? Is that not why lifelong learning and individual learning accounts are crucial?

§ Dr. Howells
My right hon. Friend is right. Many firms contain enormous potential that has hardly been recognised, and certainly has not been developed. We must encourage employers to take such action—especially the great mass of small and medium-sized enterprises that are often firefighting just to stay alive. All too often, such employers worry only about their margins and their bottom lines. We need to reconfigure the whole delivery of training and education, so that it is tailored to meet the requirements of employees and employers, and to improve their competitiveness and that of the country.