INDUSTRY AND SOCIETY

HL Deb 09 February 1977 vol 379 cc1171-268

4.1 p.m.

Debate resumed.

Lord SEEBOHM

My Lords, perhaps I should first explain that I have been moved up in the order of batting at the request of the noble Lord, Lord Annan, who wishes to speak later. May I say how much I agree with previous speakers that this is an important subject for debate, one from which I hope we can get some practical solutions. I personally shall not speak for long on such a subject as this because I do not think one should speak about things that are not matters of personal experience.

I am lucky enough to head a business which has investments in 2,000 companies. I do my best to visit a different factory every week. I cannot always do that, but I have visited a great many in the last year or two. I should like to explain what happened at the first factory I visited in the North of England, a textile factory employing about 1,500 people divided into units of about 500 each and led by an enthusiastic managing director. The whole show seemed to me to be extremely good and exciting. There existed a very high degree of maintenance of quality, absolutely religious adherence to delivery dates, and everything seemed to be splendid. At the end of the day I was asked whether I would see a deputation of middle management. I was rather nervous when these people came forward. They were a fine looking group of young men, and they had only one thing to say: "We want to ask you one question, and that is whether there is any way whereby you can stop the careers masters in the local schools telling the bright young men that in no circumstances must they go into industry". They further said, "We need bright men here; we are an expanding business, and we cannot get them. They are told that this is a dangerous, a dirty and a risky business ".

It so happens that by a strange coincidence a colleague of mine was present at a staff party at the same company at Christmas. I do not know whether what I am about to say now is strictly relevant but it is an important matter to remember. With the relaxation of constraints at the Christmas party he was talking to some of the machinists. He said, "Do you like working in this factory?" They said, "We like it very much. We like the people we work with. We like the people we work for, and we like the money. But we don't say so outside here. We don't like people to know that we are machinists. Most of our friends seem to prefer to be called clerks in the local authority." I ask your Lordships to draw your own conclusions from that. That occurred in the same factory. The same aspect was brought up on two different occasions, to two quite different people; it was done quite spontaneously, without the men being asked this question at all. I think I should finish the story by saying that when these middle management people said goodbye to me they said, "We want to assure you that the jobs we have here are more exciting and more interesting than we ever expected them to be."

I think that the Careers Advisory Service for school leavers is now distrusted. I am afraid that I think it is incompetent and biased. My first suggestion—whether it is a practical suggestion is for your Lordships to say and not for me—is that the Careers Advisory Service is taken right out of the education system. I believe that there should be created local commissions composed of people who work in the area in the professions and the factories, and of course to include people from the Education Department, and that the whole thing should be done on an entirely different basis from what happens now. Naturally, there should be much more co-operation between schools and the local businesses, so that they get to know each other far better than they do now. I blame the businessmen just as much as I blame the schools for not having done that.

On the other side of the picture, if the esteem in which industry is held is to be improved we have to ensure that business is estimable. This is something I am not at all sure about. I have little, if anything, to criticise in any of the companies I have visited, but the problems of the small and medium-sized businesses are trivial compared with those of companies which employ 1,000, 2,000 or 3,000 men. There the problems are very much more difficult. To me job satisfaction and efficiency are interdependent. Here there seem to be three components. The first is communication of information. It is absolutely essential that the people at the bottom understand everything that is going on. It is a constant effort to see that this happens. At one stage in my career I was sent to look after a group consisting of 1,000 people, because it was felt that something was wrong. I found that by talking to them and telling them things which they thought they ought not to know was a good type of medicine. At that time I invented a phrase which I have used many times since, that calculated indiscretion is the best lubricant in staff relations.

I believe that having got this right the next stage—the stage of consultation, which was my second criterion—became much more meaningful, much easier, much more practical. The men knew what they were talking about; they knew that you had confidence in them because you told them everything, and they gained confidence in you. Only when you have those two things right does the next stage, which is called participation, become not only practical but almost irrelevant. Those are the three things which I discovered myself the hard way. I do not wish to say a great deal more on that side, but I must add that the other chief matter which ought to be mentioned is that industry, if it is to be estimable, jolly well has to be profitable. There has to be a career structure and something to go for.

In the companies in which I have spoken over the last 2½ years always the first thing they want put right is personal taxation; and they are not necessarily talking about themselves, they are talking about middle management. I have visited three factories in the last three weeks, one in Canterbury, one in Stoke-on-Trent, and one in Leeds yesterday. Always one hears the same story, that the middle management is getting very sad; they are having to sell their cars; they are very unhappy. They say that their standard of life, even though that of some of the people below them has also gone down, has dropped between 30 per cent. and 40 per cent., whereas the standard of the semi-skilled at the bottom has dropped, if it has dropped at all in some cases, nothing like to this extent. It has come so quickly, and it has come as a great shock.

One of the messages that I want to leave with your Lordships today is that unless something is done so that earnings really mean something, so that the entrepreneur can afford to take risks with his own money, I do not think that we shall get businesses starting again. This is really the only way they got started in the olden days. The last two or three years have shown me how exciting industry can be, and how, given half a chance, the country could still take the lead.

4.10 p.m.

Lord BOWDEN

My Lords, I wish to begin by thanking the noble Lord, Lord Rochester, for initiating this extremely important debate, to say how much I agreed with what he said and to say how much I admired the observations of the noble Lord, Lord Carr of Hadley, and the noble Lord, Lord Seebohm. I find myself slightly embarrassed to know how to tackle the extremely important problem with which we are dealing, a problem which goes very deeply into our national consciousness.

If one reads the novels of Jane Austen one finds that in her days, trade, commerce and manufacturing were underestimated and were not thought to be the proper professions that a young man should aspire to enter. If one reads the autobiography of Somerset Maugham one finds that his own aunt refused to accept as a friend the wife of a local banker on the ground that he was in trade. This prejudice against manufacturing industry is very deep-seated and goes back a long time, and I am sure there is no immediate and simple answer to it. However, the matter has become much more acute and very much more obvious in the last few years.

I spent a month in Ghana and I think I have seen many of the problems facing this country more clearly in the tropical sunlight than I can in the rather murky atmosphere here. The economy of Ghana depends almost entirely on the growing of cocoa, but neither university graduates nor professional men seemed to have any intention of doing anything for the cocoa farmers on whose efforts they totally depend. They expect that the helots, whoever they may be, will provide the national wealth which the professional men, the graduates and others so happily aspire to spend. Our problem has been in this country for centuries and it can be found in many other places.

It is fair to say that I have spent almost the last 25 years trying to struggle with this problem in a university which has always been educating men who go into industry and who thereby help to create the wealth on which the whole community depends and which so many rejoice to spend. Although we have always had a tradition of sending people into industry, in the last few years the number of young men coming into the university hoping to study a subject which would qualify them for a career in productive industry has notably, markedly and tragically declined. I am glad to say that in this last year matters have somewhat improved, so that departments which seemed almost likely to disappear if trends had continued much longer may revive and there may be an improvement in the prospects of industry. As I talked to people about their careers I began to wonder whether any responsible parent could allow his son to go into manufacturing industry when one takes into account the consequences for him and the possible alternatives open to him.

This is a very dramatic thing to say, but I have been much concerned of late to compare, for example, the salaries offered to graduates in the town hall and the salaries offered to men with equivalent qualifications who can go into factories. There was a disparity of as much as £1,000 a year two years ago in favour of work in the town hall. Why should a man work in a factory, where the conditions are difficult, the hours often unsocial, the pay poor and the security of employment very low, if he can easily get a more prestigious, better paid and more secure job simply by going round the corner? Many of my students have wrestled with this problem and I have talked with them about it many times, and I assure the House that it is a difficult question to answer.

Only a fortnight ago in the Guardian there were three advertisements on one page which seemed to convey the whole story in a nutshell. They were in each case for graduates; newly graduated students or men who hoped to graduate next June. They wanted graduates to enter the police force, graduates to enter industry and graduates to enter the inspectorate concerned with the enforcement of the Health and Safety at Work Act 1974. This is an Act of 107 pages, 85 sections and 7 Schedules, and it is obviously a very obscure and complicated document. The fact is that the people who presumably will be at risk if anything goes wrong in a factory or if there is a riot in the street may start with £2,600 or £2,700 a year according to qualifications. On the other hand, the inspector who stands back and tells them to keep out of harm's way starts, if he is lucky, at £4,200.

Who would be a policeman, who would go into a factory, if he can earn so much more by standing back and telling policemen and factory workers to keep out of harm's way and interpreting the 107 pages of the Safety at Work Act? Here is the most important single problem confronting us today. We have failed to realise that in the last few years—and this problem has come about only in the last five years—the salaries awarded to people in Central Government and even more notably in local government have wildly exceeded the salaries awarded to men with equivalent qualifications working in industry. This has never happened before and we must not be surprised at the consequences.

I have tried to pursuade students that despite this apparent anomaly, the time must come, if society is to survive, when industry must be properly paid; we cannot hope, as Lord Carr seemed to suggest, to persuade people to go into industry by using the argument that it is a service to society and that it is something from which people derive satisfaction. After all, we underpaid our nurses for 50 years until finally they went on strike and insisted on being properly paid for doing what is often disagreeable, hard and sometimes very frustrating work. Despite all that can be said in favour of its social importance and the sense of satisfaction people get from performing a service to society, industry cannot be run as it was hoped one time to run the nursing profession. We have to face the total change in the ratio of rewards to be expected by graduates in industry compared with those to be expected by the same kind of person, often with the same class of degree in the same subject in other parts of the Commonwealth.

It has been said that people tend to become accountants nowadays. In either 1972 or 1973, each of the three great firms, Price Waterhouse, Cooper Brothers and Peat, Marwick and Mitchell, recruited more graduates than ICI and ICL put together; yet these two firms in England are the most dependent on skilled graduates, men of proper education—in other words, men who can develop an extraordinarily complicated technical subject. Nevertheless, those two great organisations did not recruit as many graduates as went into each of the three great firms of accountants to which I have referred.

What is the reason for this? I heard one reason last night in a lecture given by Professor Stamp. He pointed out that the best paid professional men nowadays are accountants; for the first time, so far as I can make out, the salary scales for accountants have gone above the £100,000 a year level for partners in largish firms. I cannot accept responsibility for this figure, but it was given last night. Certainly the salaries available to accountants are enormously greater than those available to ordinary engineers, the kind of men who create the wealth which the accountants spend their time dividing up. The two most dramatically growing industries in the country today, it seems to me, are those concerned, on the one hand, with what one might call the imposition of ever greater and more sophisticated taxation and, on the other, those who help firms to evade the payment of the taxes levied in the ever more complicated laws which Parliament in its wisdom chooses to pass. These are the most rapidly growing and the most highly paid of all the occupations known to us today; they are totally unproductive but they both command salaries vastly greater than those available to men who create the wealth upon which we all depend.

My Lords, I had an extremely interesting experience last summer when I sat upstairs in your Lordships' House listening to the House of Lords in its Judicial capacity considering for the whole of a week—Monday, Tuesday, Wednesday and Thursday—the interpretation of three words in the 1972 Finance Act, as amended. The three words were, believe it or not, "goods are supplied". I should have felt that there could have been few less ambiguous phrases in the whole of that Finance Act. Nevertheless, there were five Judges (Members of your Lordships' House); there were, I think, a dozen Queen's Counsels; there must have been 20 or 30 juniors, and the place was stiff with solicitors. Goodness knows what the total cost must have been in that case! Of course it had arrived in your Lordships' House after penetrating all the inferior courts. After it was over I spoke to one of the Judges, and said to him "I have been most profoundly impressed by the sophistication of the argument, by the skill with which the case was deployed, and by the extraordinary amount of wealth which was obviously at stake in the operation. I could not help contrasting it with the available resources, both intellectual and material, available to the people who had made the goods which were to be supplied."

It seems to me that we have reached a perfectly ridiculous situation. I could not believe that anyone engaged in the manufacture of the goods had received a salary one-tenth as great as those of the accountants or the lawyers who were debating distribution. So here is a very positive thing, and I can suggest that something has to be done to change the ratio of salaries awarded on the one hand to those who argue about the distribution of the wealth, as compared with the salaries of those who actually create it.

There is no doubt at all that the complexity of the legislation, and in particular the fiscal system under which we now operate, is getting to be so appalling that a very large part of the total resources available to industry, limited though they are, are diverted into such operations as an understanding of the legislation on, say, safety at work or anything else (admirable as all those things may be) so that they have no time or effort to devote to what should be their proper function. I know a production engineer who told me that he has not been near the factory for weeks. He has been trying to sort out the implications of the last emanations from Whitehall. This means that they have almost stopped making anything. They are simply deciding whether whatever they are doing is legal or not.

I should like to mention another consequence, too, of the fiscal policy of the country which has a direct influence on industry. It is the use by the Chancellor on industry of what he calls his regulator. We find that great industries, particularly the motor-car trade and the building industry (which are the most notorious) have been almost destroyed, their credibility distorted, as a result of action taken by the Chancellor for purposes which he seems to understand but no one else clearly does. At this minute there are a quarter of a million people redundant in the building industry. I must remark with great feeling that the Civil Service has never made a quarter of a million civil servants redundant. On the other hand, it seems to take it quite for granted that in the long-term interests of the Treasury view, a quarter of a million building operatives can be put out of work. What, after all, are they doing, except idling away their time, destroying themselves as human beings, and depriving the country of the goods and wealth which they could otherwise have been creating?

I should like to illustrate my point by taking the case of an industry which I happen to know rather well, but which perhaps is less familiar to your Lordships; that is the industry concerned with the building of television sets. This is an industry, small by the standards of the two I have already mentioned, which has been very much subjected to the operations of successive Chancellors' whims. In fact, since the end of the war no fewer than 51 changes in regulations concerned with the sale and renting of television sets have been promulgated from Whitehall. That is an average of two or three a year. There has never been a period as long as a year at a time in which the industry could manage its own affairs, in its own way, uninterrupted by diktats from Whitehall. No other country in Europe has had more than six changes in regulations, while we have endured our 51.

I well remember that when Mr. Barber was the Chancellor in 1972 he removed all restrictions on the renting and hiring of sets. Of course the demand increased; of course British industry was unable to supply; of course we had to import sets from Japan. But, equally, many enterprising businessmen, with the help of Government funds, set up factories to try to make the sets which were obviously to be needed. Mr. Christopher Chataway came North to open a factory, which had been built with Government funds, and which was going to make, I think, about 1,500 sets per shift. A year later, before the factory came on stream, another Chancellor put 25 per cent. on VAT; the market for TV sets totally collapsed, and the factory had to be closed before it had ever been properly opened.

Now, my Lords, what sane student, aware of these matters, would dream of going into an industry subjected not only to the ordinary effects of competition internationally, but to the devasting effects of the whims of successive Chancellors, who had first built it up and then destroyed it, and in the process of so doing had effectively wasted the time and efforts of men interested in creating wealth, and had made it perfectly evident that no one in the central Government pays the slightest attention to anything that the enterprising manufacturers have done? No self-respecting student would like to subject himself to the humiliation of building a factory and seeing it closed as a result of the whim of a Government.

So here is a very positive recommendation that I can make to the Government: not only should they consider the relative salaries which they offer to their own servants, and the enormous difference in security of tenure which is available to them in the Civil Service as compared with industry, but they should remember also that much of the fluctuation in demand, and many of the lay-offs and the crises which have beset much of our industry, have been due to the direct policy of successive Governments, the inconsistency, the rapid changes which have taken place in it, and the devastating consequences which have followed for people, trying against all odds, still to maintain productive industry in good kilter. The country has an immense tradition of making things. Your Lordships would be astonished how exciting an operation it can be, how men who have once done it can never really willingly do anything else. The great firm from which the noble Lord, Lord Rochester, came was once fortunate enough, or unfortunate enough, to employ me. I probably left before the noble Lord joined. But be that as it may, I was privy to one of the little plots which were then organised to persuade people to join ICI on anything other than the research side. The general feeling was that nice people can either go into academic work or join the research department of a firm of repute. The plot used to be this. They would go to one of the old universities and hire some of their best chemists, put them into a research laboratory and leave them alone for a month or a year. Then, accidentally or sometimes deliberately, a production plant would be found to be faulty and in danger of blowing up. All possible efforts had to be made to save it, and someone would rush to the research lab. and say, "Will you drop everything and come and save it." They would go and they would work night and day for a week and fix it. Then they would suddenly say "This is marvellous. Can we switch from research to production?"

It is an extraordinary thing for a university to do—to produce men who appreciate the prodigious challenges of manufacturing industry only when they have been put through a charade of that kind. We have an astonishing tradition in our universities of underestimating the values of creative and productive work. The whole of society does it, but it is only in the past two or three years that Government policy seems deliberately to have attempted to make matters worse than they otherwise would have been.

My Lords, my own university has always had the most intimate links with industry and we have had industrialists in and out of the place all the time. I think that most of my own students have always as a matter of course expected to go into industry, but very many of them in the past few years have come to me and said "Why?" As I said a few minutes ago, I have found it impossible to believe that any responsible parent, confronted with the facts as they were a few years ago, could do otherwise than recommend his son to take to some professional job as an accountant, a lawyer, a solicitor perhaps, a doctor, and most of all a local government officer, or a member of the Civil Service. Until something dramatic is done by the initiative of central Government, who control these things, it seems to me that the image of industry will remain abysmally low, and the whole of our society, which depends on productive industry for its very existence, will never be able to prosper.

4.30 p.m.

Lord TEDDER

My Lords, it is a formidable task to rise to address your Lordships after the noble Lord, Lord Bowden, has been speaking with such magnificent éclat, but I should very much like to take up the point which he has raised; that is, why, by and large, my science students—I am a university teacher—are not enthusiastic about going into industry. In fact, I have to tell your Lordships that most of them say, "I suppose I will go into industry ". However, I should first like to say how much I think the House owes to the noble Lord, Lord Rochester, for introducing this debate at the present time. The last time I was in your Lordships' House, which was before Christmas, we were debating the Flowers Report on nuclear power, and that, clearly, was a debate on a matter of great national importance. But it seems to me that what we are discussing today is of even greater importance, because unless we can get the best of our young men and women into industry enthusiastically, then the outlook is gloomy indeed.

With your Lordships' permission, I should like to begin by considering why we lose some of our best boys and girls at a much earlier stage; namely, at school. The main reason, I think, is that modern science and engineering are very difficult subjects to study. They require considerable mathematical skill, intense intellectual discipline and a great deal of very hard work. One of the many dangers of the educational revolution is that it has encouraged boys and girls to attempt to use their own initiative without the necessary intellectual background and training. This is a much more difficult problem than is thought by many people. At first sight it seems obvious that young boys and girls should be encouraged to use their own initiative. The unfortunate facts are, however, that in science and mathematics there is very little opportunity to use your own initiative and to develop your own ideas in a useful way until you have had a great deal of training.

We frequently get boys and girls coming up to St. Andrew's who expect, when they go into the laboratory, to be immediately able to do projects of their own devising, or at least projects with some original content. They are disappointed when they find that for the first two years in the laboratory all their time will be spent in learning basic techniques, which any student must have mastered if he is going to do meaningful projects at a later stage. One of the sad facts of life is that you often have to work hard and practise hard in order to be able to do what you want to do. The further you go in science and technology the greater must be your numerate skills.

I do not think there is any doubt that we lose very many intelligent boys and girls to the softer but superficially more glossy subjects in the wide field of study called social sciences. Of course these subjects merit study, but apart from specific occupations where an expertise in some social science is essential, they are not, I would suggest, the ideal training for future managers and industrialists. My first plea to your Lordships, then, is that we support the recommendation of the headmaster of Westminster School in The Times last week, that there should be a basic core curriculum which all boys and girls study and which includes not only English, history and a modern language, but also mathematics and science.

My Lords, I now want to turn to the university students who concern me most closely, and to follow up what the noble Lord, Lord Bowden, was saying. I have definite suggestions to make which I hope the noble Lord, Lord Rochester, will consider of sufficient merit to be worth discussing with his former colleagues in ICI. Let me begin by considering one area where we have no difficulty in recruiting students of the highest calibre. I refer to medicine, where there are dozens of excellent candidates for every place at university. There are, of course, a number of very real attractions about the medical profession which the technological industry lacks. The doctor has long ere now become an accepted member of established society; but, more important, medicine provides a very secure and well paid job, which Dr. Kildare and Dr. Cameron, in their different ways, have helped to glamorise.

Accepting all this, I still believe there is a very important feature of the training of doctors which encourages students to opt for medicine. The most distinguished members of the medical profession are almost always also men and women with academic titles taking an active part in teaching at one or other of the big medical schools. The same is not true for applied science and engineering. In civil engineering, a young man's highest ambition is surely to be associated with the building of some major new bridge, or the construction of the Channel Tunnel. Similarly, a young aeronautical engineer will hope to be part of a design team for Concorde's successor, and not to be the professor of engineering at a university.

In Germany, in particular, it seems to me, they have overcome this problem. Scientists and technologists in industry can, and do, at the same time hold university appointments. We have this system in Britain in medicine, but in no other branch of learning. At the time when the new universities were being established there was a move to encourage senior members of industry to take up chairs in the new universities. I am sure this was a step in the right direction, but unfortunately it was a very little and a very faltering step. Just as a medical school is not made up only of senior consultants who become professors but has a number of quite junior consultants who become lecturers and readers, so I believe engineers and scientists in industry should also hold academic posts in universities. To be an industrial member of staff at a university should not mean simply spending a week or, at the most, a fortnight a year at the university giving a course of lectures: it must mean that the industrial lecturer or professor actually carries out part of his industrial work in the university.

Some years ago I wrote to two of the largest chemical concerns in the United Kingdom. My letter went something like this: You recruit mainly at Ph.D level and you put the recruits first in your research department. At the end of five years you have to make a decision: Are these men and women going to stay in the research department or are they going to be moved out of research and trained for a management position? I then went on to say: If they are going into a management position you can send them to Henley, to the Manchester Business School or wherever you like; but if they are going to stay in research, send them to St. Andrew's for a year so that they can get up to date in the most modern academic chemistry". Much to my surprise, both research directors welcomed this idea, and both of them took preliminary steps to see that it was carried out. Unfortunately, two factors prevented this concept from being fully developed, although one such Visiting Fellow did spend six months at St. Andrew's. The biggest difficulty was the reluctance of the most able research workers in industry to leave the company for a year, not because they did not want to come to St. Andrew's, not because they did not think the idea of spending a year back in an academic community was desirable and would be beneficial, but because of the fear that once they were out they would have lost their place in the promotion ladder. Even the strongest assurances of their respective research directors were inadequate to convince them that they might not put their careers at risk by spending a year away.

My Lords, the second factor which terminated this project was the sharp economic decline in the 1960s, which made (I think incorrectly) the research directors feel that it would cost money and they could not afford it. If we are to have industrial members of staff in the universities, it must be a prestige appointment; and, so far from inhibiting the potential career of a bright young scientist or technologist, it should be accepted as an important road to advancement at the highest level. I would suggest that able scientists and technologists should be seconded to universities as part-time staff at around the age of 30 and on a five-year contract. Their duty in university, in addition to teaching, would be actively to pursue their own profession. In the case of pure science, this would mean that they would have research students or assistants working in the university laboratories on projects related to their industrial research. Similarly, in engineering, they would have research students working on projects that would have direct bearing on their professional work. The noble Lord, Lord Carr, spoke of academics going into industry. I am sure that this is very beneficial and I welcome the moves to bring it about. However, I do not think that it is the most important one; it is the other way round.

In medicine, we have already achieved complete integration between practice and academic study. I am convinced that we must seek to achieve a similar integration in science and engineering. It is not as difficult as people might imagine. Industry will object that it cannot afford to lose the services of its most gifted staff, but I am convinced that it will soon find that the contact and the stimulation that these people get from working with students in an academic climate will more than pay back the time lost to industry. The universities will object on two counts: first, they will have members of staff who are apparently of the same status but who are paid different salaries. Secondly, the universities will say that they cannot participate in work that is to remain confidential and cannot be published. I believe that both these objections, though they be strongly made, can be ignored.

The first objection on the score of salaries is already met in the medical schools, and the second is really only valid if the sole way to academic advancement is through publication. It is my contention that the way to the top should be through achievement, simultaneously through the academic and technological spheres. Although the universities would have many senior academics with no connection with industry and industry would have still more members of staff who had no connection with the universities, the highest that any aspiring scientist or technologist could aim at would be an industrial professorship, as in the medical profession. The industrial professor would teach and direct research in the university and at the same time would direct and advise his company on policy.

We want no more industrial professors who are in reality pensioned-off senior citizens whose company has retired them with the maximum courtesy. Industrial professors must be working scientists and technologists with an active interest in work both in industry and at the university. The student must feel—and I believe that this is the most important point—that he is being taught by a successful practitioner of his own subject, not simply by a pedagogue regurgitating material that he has acquired from textbooks. Then, and only then, do I think that we shall be successful in attracting the very best intellects into industry. I am sure that this can be done. Indeed, I believe that it must be done.

4.44 p.m.

Lord POLWARTH

My Lords, I am sure that we are all enormously grateful to the noble Lord, Lord Rochester, for having introduced this subject, with its immense importance, and for giving us the opportunity to discuss it. Nobody could be better than he to do so, for he has had a lifetime of experience right down at the grass roots working in one of our greatest industrial companies and close to the personnel function. I am somewhat hesitant to join in this debate, having been seduced—I believe that that is the word—on leaving university into the profession of accountancy, which the noble Lord, Lord Rochester, claims to be seducing in turn an increasing number of his own students away from industry and other things. I believe that we all know the reasons for that. The principal reason is the ever-increasing complexity of our company and taxation legislation. For that, our profession can hardly be blamed. We are constantly urging upon the Government a simplification of the tax system.

To be fair to the Government, I feel that one should also say that it was during that period that the accountancy profession—certainly the Scottish and, I believe, the other sectors of the profession—adopted a university degree as an obligatory qualification for entry. If, indeed, the salaries of leading partners in practising firms of accountants are at the levels that the noble Lord, Lord Bowden, has told us, I begin to suspect that I should have done much better to remain in practice rather than make my way into what I consider the far more interesting field that brings one into direct contact with industry. I am honoured to speak as a non-executive director of the same company as Lord Rochester's.

This subject is of immense importance and I am glad to say that there appears to be a growing realisation that it is by our industry and our industrial performance that we stand or fall. What is more, there is a growing realisation that the main responsibility for its performance lies with management. There is at long last some appreciation that management must get fewer kicks and more carrots if it is to attract and keep the quality of recruits that it deserves. The Motion refers specifically to the image of industry so far as students are concerned, and it is upon that that I should like to speak, because, after all, whether they come from school, college or university—wherever the industrialist may start, be it the shop floor, as a trainee or in any other capacity—it is from among students that management ultimately comes.

We of our age group may have our own theories as to why so many of the young do not hold industry in esteem. I believe that it is most important to know what they think and why they do not hold it in esteem, so I asked one of my own family who is aged about 27 and who, after university, tried his hand at a variety of jobs. After moving around from one to another, he has settled happily, not, I am sorry to say, in industry but, nevertheless, in a satisfying job. So I picked his brains and nearly all that I have to say stems directly from what he said. This was from his own experience and that of his friends and contemporaries.

First, there is no doubt that, among the young, the image of industry is generally rather dry and dusty. It appears to be lacking in excitement. Possibly, I would except from that one or two glamour industries, in particular the oil industry which I know is not having any difficulty in finding recruits. I also except some companies with nationally known names and with enlightened policies. Nevertheless, the image of industry generally is not an outstanding one. Of course, this generation is far more conscious of the variety of alternatives open to it for work. Its members are also sensitive to the quality of humanity and they feel that industry is not. They see the bad Press that industry so often gets. One major strike or one—happily rare—event such as a boardroom scandal attracts more space than all that company's technological and export achievements in a year. The young are concerned about the environment. They believe, rightly or wrongly—and I believe wrongly—that industry is not so concerned. They think industry is constantly in a state of strife or being messed about by the Government.

The young want above all to be individuals and to have responsibility. They feel that in industry they would merely be a cog in a big machine. They have a great deal of idealism and they want to do something worth while for society. They want to give satisfaction and enjoyment and to receive the money to enjoy their family life and leisure to the full. Of course, there will always be some who will opt for security or routine and who are best fitted to do so. I would never suggest, for instance, that all chartered accountants could more profitably or more usefully be employed in productive industry, though, happily, many of them move into industry after initial experience and fulfil a useful function there. But there will always be those who will opt for administration, the public service or a profession as, on the whole, something more sheltered from the rough and tumble of life than is industry.

Contrary to the general view, a great many of these young people want to exercise initiative and believe in free enterprise rather than being sheltered or cosseted. Rightly or wrongly, they feel that they are less likely to find these qualities and opportunities in industry than in a whole variety of other occupations. They will even be prepared to move around, to try out a variety of different jobs in the hope of finding the right one rather than settling at once, because the conventions about staying in jobs these days are much less rigid than they used to be. If that is the image they have of industry, where is the fault? Surely the image is, to a large extent, false.

I am aware of all that has been done by the various careers services, careers officers in schools and universities, and organisations like the Careers Research Advisory Centre at Cambridge in feeding out information. I know that in the university with which I have associations now, Aberdeen, one of the latest developments by our careers service was making a television recording on careers in management in industry which is now being reproduced as a cassette and made available for schools and universities throughout the country. That is the kind of useful thing that is being done.

I agree that there is a great deal more need, particularly at the school level, to overcome the bias which is found so widely at the school level against industry as a career; because it is not just from the universities, as we tend to think, that students are recruited. One complaint came from my university. It was that when industrial companies come to do their "milk round" and send teams to try to persuade young people to join them, whereas 200 or 300 youngsters came along to be interviewed, only 30 or 40 were chosen. The companies, so far as graduates were concerned, were looking for the cream only.

I believe that the answer is that a great many young are going on to university for lack of an idea of what to do, when they would be better occupied if they went straight into industry of some kind at that stage, possibly even on a trial basis. I should like to think that one thing that industry and education between them could do would be to give more opportunity to the young to try being in industry without being finally committed to it, to see what it is like. It is not enough to show children round a factory and see what happens on the shop floor. Somehow—and this is more difficult—one must get over to them the multifarious aspects and interests of the job of management. This is not an easy thing. What does a manager do? He does almost everything. What is meant by industry? In their image most people think of industry as being Shell, ICI or GKN working away in the Midlands, in the South or in great countries overseas. Could it be also that they might think of it at a slightly lower scale? A hypothetical case would be a successful woollen ski-bonnet maker in Inverness. None the less, that is industry.

Then there is the question of motivation which other speakers have mentioned. I think it is completely false to think, as some do, that the young are not interested in material reward. They certainly are. In comparison with other careers, they will weigh up the demands of an industrial career: the demands of making decisions, of taking risks, of protracted negotiations on labour and on other matters and, as the noble Lord, Lord Bowden, said, dealing with piles and piles of fresh legislation, to take only some of the demanding subjects they have to deal with. I think it rather ill became the Chancellor of the Exchequer, speaking in Birmingham a few weeks ago, to berate industrial management in the way he did for failure to achieve success.

Thanks to our pay policy and our levels of taxation, the young can see little to be gained by opting for life in the main stream, frequently in the rapids, exciting though it may be, when they can earn as much (and sometimes more) in a quieter backwater and very often with an inflation-proof pension thrown in. A number of your Lordships will have seen the report published this week in the Press by Opinion Research Centre in which they commented on the disillusionment of those already in middle and higher management. I can confirm this from my personal contacts. This altitude is bound to feed back to potential entrants to industry. I am glad that there are at last signs, even in circles formerly hostile to industry and those who manage it, of a growing understanding that something will have to be done about rewards and taxation—and done quickly.

The combination of inflation with our fixed tax brackets with their steep progression, and a top rate of 83 per cent. tax on earned income, have dealt management a severe blow to their standard of living and morale. No other major country has a top rate much above 60 per cent. Even India, not a notably capitalist country, recently reduced their top rate from 85 per cent. to 66 per cent. We cannot go on trying to isolate ourselves from the rest of the business world and offer to those who carry the heat and burden a fraction of the real rewards of their opposite numbers abroad. We are already seeing the effects and I could quote examples individually: less readiness to accept responsibility and promotion, particularly if it involves the upheaval of moving house and family; more interest in going to posts abroad, whether temporarily or, more regrettably, permanently. One company with which I am connected have just lost a senior executive director permanently abroad for this reason; and then there is a real reluctance, once abroad, to come back.

There has been a lot of encouraging talk from Ministers and others; but I must say that it is hypocrisy to say that they cannot lower taxes at the top rate when they are asking for such sacrifices from the lower earners. Turning to the Diamond Report on higher income from employment, noble Lords will see from one table that over the five years to July 1975 the average earnings after tax, adjusted for the retail price index—that is, in real terms—in the case of manual men workers increased by 9 per cent.; for a foreman, they decreased by 5 per cent.; for a works manager, they decreased by 18 per cent. and for a managing director by 27 per cent. These are average figures. I think I should like to check my reference to the Diamond Report. I am fairly certain that it was there; but in any case it is from a reputable researched source.

My Lords, not only must the higher rates of tax be reduced but so must the starting rate; because 41 per cent.—35 per cent. income tax and 6 per cent. National Insurance—is a very heavy deduction for every extra pound earned once an individual starts to pay tax. I think we have got to have a major switch from direct to indirect taxation so as to give the recipients more say in how they spend their earnings and whether they save; and, if so, how much. It is a complete fallacy, I believe, to say that the shop floor would not stand for a reduction of the higher rates. I believe that the ordinary man respects reward for effort if it is duly earned.

My Lords, time is running out. The Budget is not far off. I hope that we shall see the light. If I have spoken on this one aspect at some length it is because I have a good deal of personal experience of it, and together with all the other points that I have mentioned it originated, as I have said, from a 27-year-old who is seeing the scene from that group's viewpoint. Nevertheless, what are we to do? We all know what we want to do but it is extremely hard to turn it into specific action. I think that a number of useful suggestions have already been made.

I think that there is still a great divide to be bridged between those in industry and those outside, between managers and administrators, between the doers and the talkers, and even between Lord Bowden's inspectors and those they inspect. Many companies are already actively trying to expose and project their image of industry, the true image, but there are too many still reluctant to expose themselves. They prefer to keep their heads low and will not get up and speak for themselves. I think that this is something that they must be persuaded to do. Somehow industry must get together more with the media over the projection of its true image. The noble Lord, Lord Tedder, I think, spoke of the doctors and of what a fictional television series had done for the profession. I am sure that the famous "Mogul" series dealing with a mythical oil company helped to recruit entrants to that industry. I am certain the Royal Navy benefited from "Warship", but I am not sure that I recommend "The Brothers" as a model for the industrial pattern. Seriously, industry should try to work out how to project a better image of itself. Companies must give the opportunity to the young of experience of industry at first hand and the schools must collaborate. The careers service, particularly in the schools, must be strengthened. I thought a great deal of Lord Seebohm's suggestion of making it more professional and less directly connected to the education system.

Last, but not least, Government, whether politicians or civil servants, must show a little less equivocal attitude to industry and those who work in it in their public utterances, and perhaps refrain from such irrelevancies, and worse, as Bullock and their latest effort at reputedly improving the tax position of those working overseas, which in fact is going to have exactly the opposite effect. It is on industry and those who run it that our whole future depends and, with understanding, it can be one of the most exciting, challenging and worthwhile careers. What we are discussing this afternoon is one of the most important subjects before us in this Session.

5.1 p.m.

Lord SEGAL

My Lords, I too feel that we ought to acknowledge our indebtedness to the noble Lord, Lord Rochester, for affording us an opportunity for discussing this vitally important subject. I would not dare to follow the noble Lord, Lord Tedder, into the by-paths of the medical profession, because I fear that I might stray rather too widely from the subject under discussion. But there is one point especially that I should like to emphasise in today's debate, and that is how to ensure that the relationship between industry and our centres of higher education can be developed into a two-way traffic, from industry into the universities, as well as from the universities into industry.

I recall visiting on many occasions—now some 30 years ago—the factory of Leyland Motors near Preston, which was my constituency at that time. That was in the days when Leylands were in their heyday. They manufactured lorries only and had a reputation for excellence which was unique all over the world. Leyland Motors then confined their energies to the hardy North, years before they extended their activities to the more easy-going South. There were giants in those days, pioneers of the motor industry, such as Basil Nixon and Sir Henry Spurrier. I had a vested interest in the firm, as most of their employees were my constituents. I remember how the directors often talked about their difficulties in absorbing entrants from the universities, youngsters glowing with pride at their newly-acquired honours degrees in engineering, but who were unable to adjust themselves readily to their new surroundings, especially to working conditions on the shop-floor.

The personal relations of these young graduates with their new workmates were vastly different from their relationships at the universities, and they had to unlearn a good deal of the knowledge that they had acquired in achieving their university degrees. Far preferable was the firm's policy in picking out their own promising apprentices who had already served two years on the shop-floor, and sending them at the firm's own expense to take a degree in engineering at the universities of Liverpool or Manchester. This policy paid dividends hands down. The apprentices had to attain a certain standard of proficiency before they could gain entry into a university. This they did by attending night classes—often partly in the firm's time—and they had every incentive to make good, with the prospect of three years' university education ahead of them, in order to achieve entry.

Equally, in their export department a promising youngster would be sent, also at the firm's expense, for two years to South America to acquire a thorough mastery of the Spanish language. I remember being introduced some 30 years ago to the Mayor of Leyland, also an employee on the shop-floor, who was given ample time off work, at the firm's expense, to perform efficiently his mayoral duties. Call it paternalism if you like, but in those days a happy relationship existed between the managerial staff and the shop-floor and, above all, a pride of craftsmanship and sense of fulfilment that established Leyland lorries as the Rolls-Royce of the motor-lorry industry.

I am equally convinced that the entry of promising apprentices, with two years' shop-floor experience, into the undergraduate population of our universities would increase more than anything else the esteem in which industry should be held. It would enable students during their undergraduate years to gain a direct contact with the workpeople with whom they would have to live for a good part of their lives, and would form the basis of their human relationships. These young apprentices direct from the shop-floor could become true apostles of industry, and provide a valuable factor in increasing, in the words of today's Motion, the esteem in which industry ought to be held in society. Tomorrow evening the Council of the Oxford Society is holding its annual reception to meet the presidents of the junior common rooms and middle common rooms of the various colleges. These are the elected representatives of each college community, and, in some ways, the cream of the undergraduate population. Certainly among them are some of the future leaders of our country.

Yet, in going around and talking to them on previous occasions, I have often been impressed at how few of them had the faintest inkling of how they would earn their future livelihood. Indeed, I am constantly amazed at seeing how often the vast majority of our present-day university students, perhaps some 70 or 80 per cent. in all, have not the faintest idea of their future careers. They are cocooned in a cloistered world, studying such subjects as sociology, economics or anthropology—certainly very useful in themselves, but often landing them in frustrating, blind-alley occupations, or floating like driftwood in the stream of unemployment. For many students their time at a university merely postpones for three valuable years their inevitable day of decision only to land them, if they are lucky enough, into the first job that comes to hand when needed. These undergraduate years are highly expensive to the taxpayer and do not, as at present organised, always yield the highest dividends. Is there not scope here for some guidance and encouragement on the part of industry, especially our public-spirited firms, to utilise more fully than at present this great wealth of human material?

In this highly competitive world, the dictator countries are compelled to set a premium upon excellence, and select their most promising human material at a very early age. Surely we are in grave danger of being left far behind in today's ruthless race for survival, unless some of our present attitudes are radically changed. We all know how generously many leading industrial firms have subsidised research and endowed scholarships in some of our universities. But I should like to ask the Minister, when he comes to reply: How far have these firms enabled their own employees to acquire a university degree, or to obtain a full technical training, and how far they have received encouragement from the Government in this direction? Those figures may not be readily available, but surely they are worth inquiring into. To stimulate and encourage a steady two-way traffic into our universities from the shop-floor would, in my view, go a very long way towards enhancing the esteem of industry in our present-day society, which, after all, is the whole purpose of this afternoon's debate.

5.11 p.m.

Lord ANNAN

My Lords, I hope your Lordships will allow me slightly to widen the scope of the debate at this moment and talk a little about social attitudes. If we go back 200 years, what were the careers then which won esteem in the eyes of men of substance? The ideal, of course, was that of a man who, by his own efforts, gained such a fortune and position in society that he was able to buy land and, if he could buy enough and succeed sufficiently, become a Member of your Lordships' House. But concurrent with this was also the ideal that a man, through trade, through merchant banking and through industry, should also acquire wealth and succeed in those professions—professions which in those days were lauded by poets and writers. Writers from Macaulay to Samuel Smiles gave those who worked in industry and commerce a sense that they were of great importance. It is true that Dickens would satirise in Hard Times such characters as Mr. Gradgrind and Mr. Bounderby, who were the prototypes for him of all that was odious in industry. But Dickens never doubted for one moment that the wealth of this country depended on industry and commerce.

Then if we go back only 100 years, what do we find? There has been a subtle change. It was in the 1880s that this country's industrial decline began. We were the first country to experience the Industrial Revolution, and it was inevitable that other countries whose technological development had come later would overtake us in certain fields, as Germany was doing in the 1880s. It was also at that time that the great middle-class critics, both in the novel and in the essay, were beginning to attack the whole ideals on which industry and commerce were founded. If your Lordships think in this century of the culture of our times, if one thinks of a poet such as T. S. Eliot or of that great novelist, D. H. Lawrence, or of a number of writers—some of lesser and some of greater stature but all influential in their way—you will find an almost unanimous opposition to the life which is lived in industry, or in commerce, of amassing money. It is not only the writers of the Left Wing who took that line. A great satirist such as Evelyn Waugh was just as much opposed to the life of those who worked in industry and commerce as any writer who sneered at business from the Liberal or Left standpoints.

There is nothing new or peculiar in that. It is the stock in trade of the intelligentsia in all countries in the world. All over Europe you will find exactly the same attitude among the intelligentsia. In France or Germany today, you will find these attitudes are just as strong, if not stronger—because there they are guided much more than in this country by the ideals of Marx or of the neo-Marxist movement of the Frankfurt School in the 'fifties and 'sixties.

What is peculiar is that in this country we have followed the advice of our sages. In France, in Germany or in the United States, the same attitudes are to be found, as I say, among the intelligentsia; but they have no effect whatsoever on the way those nations live. In Japan, wild snake-lines of students will dance through the streets, causing intolerable havoc. But what will they be doing in a few years' time when they have ceased to be students?—they will be sueing for positions in the great industrial concerns in Japan. We find exactly the same thing in Europe. Although the prevailing temper of the intelligentsia derides the life of industry and commerce, nevertheless we find that the young disregard their youthful ideals when they grow to the age when they have to earn their own living. In this country there is a most curious difference. We have followed our sages, and I think that the intelligentsia in this country has much to answer for in this. I am not saying that their ideals were phoney.

If you read a novel such as E. M. Forster's Howards End, you will find there the opposition of two families: the Wilcoxes, who represent commerce and industry, brutal force and insensitivity, and the Schlegels, who represent the world of the intelligentsia, of enlightenment, of going to concerts, and the world of culture. But Forster, in that novel, makes it very plain that you cannot have one without the other. The Schlegels and the Wilcoxes intermarry in that novel, as an indication that you cannot have culture without wealth. I remember that Forster himself once told me that when he was in Alexandria during the First World War, talking to the great Greek Alexandrine poet, C. P. Cafavy, the poet said to him: "Ah, Forster, you British; never lose your wealth. If you lose your wealth, you have lost everything".

In a curious way, those social attitudes have eaten very deeply into us, and they affect our students, as they are bound to do. That is because they present other ideals to students—ideals of a life which can be lived without strife, without harshness and without those difficult and impracticable decisions which every day face those who work in industry and commerce. But let me say at once that students are also affected by money and by prospects. Here I must echo what was said both by the noble Lord, Lord Carr, and the noble Lord, Lord Bowden. The great change which has taken place since the 1920s is highlighted by the rewards which can be gained from different professions and from different modes of service in society. In the 1920s, when the noble Lord, Lord Strang, had entered the Foreign Office from University College, with no personal fortune, did he look for a career in which he would make his fortune in the Diplomatic Service? Of course not. He won what he was entitled to win—honour and renown—in that Service. But the financial rewards were negligible. The change that has come about, is that every profession says "I am necessary to society. Pay me more than I was paid before", and of no profession is this truer than the profession to which I belong, the academic profession.

In his recent report, the noble Lord, Lord Houghton, very understandably advocated—and it was accepted by the Government—that the salaries of most of those in the public sector of higher education should be equated with those in the universities. University salaries had risen very much during the '50s and '60s, and it was of course during this time that it became so attractive to a young man to opt not for industry, but for a life of fundamental research in science. That was the career which held out to him, first, enormous intellectual excitement, the belief that he was pushing back the frontiers of knowledge and doing something to make our civilisation a better place; and secondly, let it not be forgotten, he was asked to make no special financial sacrifice to do so. Whereas in 1905, when Sir John Sheppard, as he later became, was a young don at King's College, Cambridge, his salary was £80 a year; and even if you allow for inflation I think your Lordships will agree that that is not a very high sum.

First, as I said, there were the dons, and then in the '50s we heard that the top civil servants were being grotesquely underpaid, compared with those who could get rewards in industry. Recruitment to the Civil Service had been affected by this, and therefore the move began to increase their salaries; and very understandably, for, after all, were not the top civil servants, particularly those with responsibility for nationalised industries, doing a job comparable to that of any industrialist? So the salaries of the top civil servants went up, and these increases were naturally followed up by the trade union movement within the Civil Service in order to increase the salaries of the lower paid civil servants. That in turn spread, as the noble Lord, Lord Bowden, said, to the town hall; and all this time the prospects of industry were getting gloomier and gloomier. So, this is the picture with which we are faced.

The only part of the speech of the noble Lord, Lord Carr, with which I slightly disagreed, was when he said that you must not take away anything from those who have gained in salary increases during the past 25 to 30 years. Alas! I think it is necessary to take something away: of course you do not do it by cutting salaries. You just allow them not to rise as fast as others, and this has certainly happened to the academic profession in the universities. I do not complain, but, inevitably, we must re-think our priorities about the salary structure in our society.

Those jobs which are so attractive, and particularly attractive to the young—the jobs in the intellectual world, the jobs in universities, the jobs in the media—have an attraction because they are freewheeling jobs. You go into them and your hours are elastic. That does not mean you are lazy. It simply means that you do not clock in. You may work exceptionally hard, but the work is rewarding and often exciting for a young man or woman. Are not these the jobs which, perhaps initially, should be less well paid? And are not those jobs in industry and in commerce, which are not going to be as exciting and which will inevitably mean a good deal of grind in the early years, the jobs which we should be thinking of as deserving a special inducement for people to enter? How that is achieved is a matter of very delicate adjustment between the Treasury's taxation policy, and what industry can afford to pay. But it is now true that industry is now no longer in a position where it can challenge any of the other professions which attract graduates in the early stages.

There are many bad sides to the situation at the moment. One of the bad and sad sides is the way in which industry itself employs graduates. Very often, firms have themselves to blame for not realising that, when somebody comes from a university or a polytechnic, he is not trained to think in industrial terms or even in commercial terms. He has been used to thinking in a totally different way, and you have to be sympathetic to the young and make them understand what kind of world the world of industry is, what it demands from them and what, indeed, it will give to them reciprocally, for until that is really done you will not get a significant change. That will happen only when you can get a graduate going into industry feeling that he is going to be treated, not on special merits because he is a graduate—that would be entirely wrong—but as someone who is potentially of great value to the firm. Of course, as the noble Lord, Lord Rochester, will know, great firms in this country, such as ICI, have long ago recognised this and their training schemes are models of enlightenment. But, of course, the large firms are not the only firms and they are not the majority in the country. It is the small firms and their lack of imagination that are so difficult to cope with.

Then there is the problem of the schools. Much has been made of unfilled science places in the universities. In fact, the number of 24,000 unfilled science places was bandied about in the Press the other day, as being an example of how the universities are failing to attract the right kind of students to their scientific and engineering departments. May I say that that figure of 24,000 is really illusory? It is simply a figure based on the theoretical capacity, in terms of space, of all scientific departments. The real figure is very much lower than that. But having said that, I do not for one moment deny that there are vacant places, and that universities are at a loss to know how these places are to be filled. They are at a loss in that it will require a very great effort in the next decade for the schools to reform their methods of teaching of mathematics, in particular, and, indeed, of the scientific subjects.

It will be difficult because, as I have said before in this House, what has happened in the past 15 years is that some of the very best teachers, in those subjects which are so vital to somebody who is going into a career in engineering, have been absorbed in the expansion of higher education, with the result that children of 13—and children of 13 are very "fly" indeed—will sec that if they go on to the scientific side they will be badly taught, whereas if they go on to the history side they will get exciting and illuminating teaching. So that is one problem which will take a long time to solve.

Lord WYNNE-JONES

My Lords, will the noble Lord agree that there is a real shortage on the science and engineering side, and does not the statement he has just made, that there is a shortage of teachers in the schools, reveal exactly this tragedy?

Lord ANNAN

Indeed, my Lords, I did say that, and I hope that I did not mislead the noble Lord. I said that 24,000 science places was a gross exaggeration. I then went on to say that, indeed, there is a shortage of scientists in universities, and that we should very much like to see those places filled.

If I may move to one point about the professions and try to give the noble Lord, Lord Polwarth, some comfort, I think that some unnecessarily unkind statements have been made today about chartered accountants. It is true that chartered accountants are useful in—I believe the technical term is "applying massage" to the accounts of various firms. But this is not the only thing that chartered accountants do.

I remember that during the War, when I worked in the Joint Intelligence Staff in the War Cabinet Office, my opposite number in the Air Force was somebody who was 25 years older than myself and was in advertising. When I, as a young man, made satirical comments to him about his profession he said, "Do you realise what an advertiser does? He is a business doctor. When a firm comes to him and says 'Look, I want you to advertise my product. What do I do? I say 'Will you give me a week to have a look at your product and your balance sheet?' And having done that", he said, "I nearly always have to tell the client that he is selling a worse product at a higher price than his competitors. If my prospective client can take that on the chin, then I will do business with him and my first job then is to show him how he can run his business better". This, I suggest, is something which chartered accountants also do. It seems to me that we should not satirise too much the fact that eight out of 10 chartered accountants go into industry and commerce. They do not merely sit in firms of chartered accountants applying massage.

We must remember that industry is not solely a matter of production. One of the most important sides of it is sales, and some of the very best salesmen are not necessarily those who have come out of departments of engineering and science. Sometimes they are those who have done a course in English literature and have learned the art of rhetoric.

The other thing, too, that is necessary for industry to inculcate into students who arrive in their businesses is that while of course industry is concerned with profit, it is also concerned with fun. It can be the most extraordinarily stimulating career. You are being asked to try to solve problems. Very often the clever student who has enjoyed this process of solving problems and wants to go on and do research, which simply is another name for the solving of problems, neglects the fact that exactly that kind of mind is required in industry. You solve problems there by analysing evidence. No doubt there are many bad sides, as I have said, to the problems which we are looking at today: the underpayment of engineers; the fact that between 1965 and 1974 there was a 6 per cent. drop in scientifically qualified school leavers; the teacher shortage in mathematics; and the fact that careers services have not sufficiently emphasised the importance of industry. But there is a bright side, too. In October 1976 there was a substantial increase in those who had been applying for places in engineering, accountancy and management. For example, this year at London University there has been a 60 per cent. increase in the numbers of those who have applied for interviews for jobs in commerce and industry. I think that the penny is dropping. It is dropping partly because thelabour market is much more competitive now. It is dropping because students realise and recognise that a change is coming about in the social attitude of society, with which I began this speech.

There is another pointer. The Secretary of State for Education and Science, when speaking recently to the Chairman of the Vice-Chancellor's Committee, asked him to remember one of the 16 points which she, when she was Minister of State in the 1960s, raised with the universities. It was whether there was any merit in studying whether it was possible to have a break between school and university as we had in the days of national service for men—not, of course, for women. This is something which I very much hope will be thought about. It is going to produce the most formidable difficulties in the labour market and in commerce and industry, because you cannot expect people to wait for two years and to do nothing in the meantime. They have got to be found jobs. Certainly we ought to study this problem.

The third and last matter—a point which is of importance, too—is the development in our higher educational system of a much closer relationship between the training of higher civil servants and the training of industrialists. In a speech in March in your Lordships' House I drew attention to the fact that this has been one of the shining examples of the system of the Grandes Écoles in France. There, with their L'École Nationale d' Administration, they have an organisation which trains people who are going to be civil servants and also people who are going to be the leaders of industry. Indeed, they regard the two as completely interchangeable. I wish that we could do something to revivify the Civil Service College which was set up as a result of the Fulton Report.

The last thing that I have to do today is, I am afraid, to apologise to the noble Lord, Lord Winterbottom. In common with all your Lordships, I received a letter the other day from the Chief Whip's Office which begged noble Lords who had spoken not merely to attend the opening speeches, which I have done, and not merely to attend the speeches of those who succeeded them speaking, which I shall do, but also to stay to the end of the debate. It was on those grounds that I had to write to the Government Chief Whip to say that I really could not speak today. She told me that, at any rate on this occasion, I should be excused, although I gather from certain noble Lords on the Front Bench opposite that the flogging box from Eton is to be brought here to be chained in your Lordships' House for those who disobey the Whip's instructions!

Lord WINTERBOTTOM

My Lords, before the noble Lord sits down may I say that he should not interpret too pedantically the ruling of the Chief Whip.

5.38 p.m.

The Lord Bishop of WORCESTER

My Lords, may I also add a word of gratitude to the noble Lord, Lord Rochester, for introducing this enormously important subject and say straight away how indebted we are to the noble Lord, Lord Annan, for widening the debate into the whole field of attitudes and the creation of attitudes. I shall be bold enough to try to say a few words on the question of the changing values and attitudes in our society, for it would not befit me or my work to take up the financial or legal issues which have been so adequately debated. However, when we come to the question of the changing values and attitudes among our people we find that it is one of the most elusive occupations that we can choose.

There is substantial evidence to show that we in the United Kingdom esteem considerably more highly those who work in the professions and public services than those who work in industry. I have come to the conclusion—as, indeed, the noble Lord, Lord Rochester, said himself—that a society which cannot affirm and, indeed, celebrate the value of the underlying occupation of its own people and cannot enjoy that which provides its own livelihood, faces a major ethical dilemma. We cannot take a positive and hopeful view of our future because our people do not take a positive and hopeful view of the activity upon which that future depends. This I believe to be our condition in the United Kingdom today, and it is a very serious problem of attitude.

As the noble Lord, Lord Carr of Hadley, indicated only briefly, agriculture is an illustration of this situation. It is noteworthy that in the case of the one industry which we assume, affirm and celebrate as necessary, valuable and virtuous, namely, agriculture, we are as a nation extremely successful. British agricultural management and workpeople are highly productive, technologically adventurous, and the human relationships within that industry are good. It is interesting to note that the productivity graph for agriculture appears to go up steadily while the productivity graph for industry is a very erratic line indeed. Speaking from my own experience, the Northern end of my diocese, commonly called the Black Country, is in a low state of morale; the Southern part of my diocese, which includes a beautiful area, the Vale of Evesham and a great deal else, is in a high state of morale because of the simple fact of the esteem in which those occupations are now held.

How can we begin to change this attitude or to correct the balance? Perhaps this public attitude is most nearly expressed in the way in which people still go to church for Harvest Festival. It is way beyond the wit of most parish churches to arrange an industrial harvest festival, and even if you do wheel in a certain amount of machinery it tends to be meaningless. Why? Because it has no symbols, images, folk terms which assume and assert the underlying goodness of industrial societies. It is this question of the basic industrial culture to which we must address ourselves, for without an affirmation and acceptance of the fundamental goodness of the activity itself no subsequent tinkering with the way in which that activity is carried out will shift the deep assumptions of our minds and of society; and although we may improve upon the actual ways in which we conduct our industry, to me discussions on the subject still leave the impression that many people regard the matter as evil or, at the best, questionable. This is the attitude that we must overcome.

I wish to add only one or two comments. In the face of this dilemma of course we have learned a tremendous amount this afternoon about education. This "mismatch", as it has been called, between the school and work. The fact is that it is a common accusation that our schools are preparing boys and girls not for work—no, not for play, but not for the occupation that will enable them to fit in the society in which we are at present. For several decades public schools and grammar schools have looked with disdain on the philistinian world of commerce or industry. I am not primarily referring to them, but there is a real accusation that we have encouraged the view that a career in the non-industrial professions or in the public services is in some ways better and more virtuous than a career in industry. Surely that is wrong. Our public schools and universities have emphasised the value of service, but it has always been seen as public service. As I find myself in talking to parents today—and I am privileged to meet a great many of them at public school confirmations and on other such occasions—parents are more pleased to tell their friends that their child is an up and coming local government officer rather than an up and coming engineer in GKN. Teachers in State schools have seen their task as saving children from industry much too often by encouraging them to try for one of the non-industrial professions.

I should like here to say a few words on the careers service and the careers officers. Far be it from me to take issue with the noble Lord, Lord Seebohm, but I have a feeling here that we must not cast the careers service into too severe a critical light. In a sense I would pay tribute to them because I have found, especially since juvenile unemployment has been upon us in quite severe numbers, that it has been the careers service that have tried to come to grips with an understanding of what industry is all about. All too often they make good provisions for outlining the work for boys and girls and their needs on entering industry, but what is the good of teaching mathematics to a boy or girl at 16 when he or she has been entirely taught modern languages? What is the hope of introducing the whole culture and attitudes of the world of production and the thrill of it to those who have heard it denigrated for too long?

I have found that the careers service have been trying increasingly to come to grips with this very matter. For my part I wish to pay a tribute to them: I quite believe that there may be a very real case for the careers advisory service being, not wholly taken out of the sphere of the Department of Education and Science, but at least given a much greater facility by the world of industry. I believe their work among leading schoolboys and schoolgirls has to develop along the lines of what has been said this afternoon—that is the wider responsibilities of management.

The growing generation is not only interested in service as such, but as it looks at industry its interests go beyond profit; its interests go beyond shareholders and their dividends. Therefore, the wider objectives of industry need to be outlined at that stage of education. The wider objectives obviously include not only the shareholders but the workforce, the consumers, the suppliers of the raw materials, society at large, the needy world overseas. But as one begins to introduce those elements of the best in industry young people respond much more fully and it makes a much more attractive proposition for them.

I very much endorse all the words of the noble Lord, Lord Bowden. I was reading in preparation for this speech—but I have crossed out most of it since he has said it himself—the very fine speech that he made at the annual great occasion of the Institute of Science and Technology of which he is head. I hope I may be allowed to quote what he said: Englishmen no longer want to study any discipline which would fit them for a career in productive industry. They have deserted universities and schools of science and technology in droves. The places they left vacant have been filled by a multitude of eager foreign students who have come here to learn and to make their native countries prosperous. I have no doubt that is a situation which is very true, but also it is very worrying.

In conclusion, my Lords, I see this whole issue as an enormous moral responsibility, not only of the teaching profession and of the managerial profession; a great moral responsibility now upon the Churches. The moral responsibility has indicated that the creation of wealth is a true and wonderful responsibility—to till the ground and to subdue it. The moral uprightness of wealth is a necessity for a growth economy. If we want to go on growing as a nation we are dependent upon recognising the moral uprightness of all that we are talking about this afternoon. To create wealth is a major responsibility.

In one very great book there are plenty of references to talents and powers and thrift. The more we think about the use of our talents, the use of our powers, the use of our resources, the creation of wealth, the more we realise that that is what holds any future for society. The Church has been consumed over the last 200 years with the concept that the creation of wealth and certain areas of labour were wrong. No, we now need to see a fresh view and to understand that to fear the use of wealth is a positive dereliction of duty and to accept the creation of wealth is a necessity for any social progress.

These are all attitudes which today are not easy to change or to engender, but we are beginning now, I think, to open people's eyes, to see the vital social service which industry performs in our society It is a vital social service, and with a vision of its true value, then some of the unacceptable faces of capitalism can be tackled. So we can make it clear that one of the most moral and socially responsible things a person can do is to get into the wealth-producing work of industry and by that production alleviate the material poverty of much of the world. It is only because of that that a bishop can say such a thing, that it is right to get into the wealth-producing work of industry. I am aware of all the economic problems that such an assertion involves, but they are no greater than economic problems which we have encountered before.

Baroness GAITSKELL

My Lords, before the right reverend Prelate sits down may I ask one question about his fascinating speech. When he speaks of attitudes and esteem towards industrial society, are not we back again to our class attitudes towards industry and manufacturing industry? It is all a matter of class.

The Lord Bishop of WORCESTER

My Lords, I would be hesitant to attempt to reply to the noble Baroness on such an issue. I would say that attitudes here have in fact, if anything, increased over the last 200 years a sense of the division of class. But what we are now discovering is that there is a common cause and common attitudes and a common education that is breaching more and more the gulf that has in the past been created by class divisions.

5.54 p.m.

Lord KAGAN

My Lords, we are all indeed very much indebted to the noble Lord, Lord Rochester, for having brought about this debate. I speak with a background of experience in the textile industry in Yorkshire. Touching on the point just raised, in our part of the world it is not class; it is a joint effort. To the people in Yorkshire in the textile industry the job has not only been a means of making a living; it has been a way of life; it has been a way of expressing one's personality and fulfilling oneself. We have not had a strike for 32 years, and possibly not before that, but I do not remember.

I agree that being an employer is possibly, next to being a parent, the most responsible task one can undertake, because when a man or a woman goes to work they do not just give you time at £1 or £1.25 an hour. Time is the raw material of life, and what they give you is two-thirds or three-quarters of their waking life. If you deduct sleeping time, eating time and travelling time, the job claims over three-quarters of your waking time. That is a fearful responsibility. For that contribution it is quite right that money alone is not enough. There must be something more in the wage packet, a sense of fulfilment, a sense of significance and dignity.

I believe it is not immodest to say that in Yorkshire in the textile industry we have not failed, both employers and employees; it is a co-operative effort. But I fear that society, or perhaps the people who make the decisions of society, may have failed us. With respect, I think it is necessary not just to change the attitude of society to industry or the attitude of education to industry, but perhaps to educate the people who advise our lawgivers as to what they do and the consequences. It is rather unfortunate that people removed from industry, as was so well expressed by the noble Lord, Lord Bowden, very often make laws. Of course, they are omnipotent; of course, they can enforce them; but what they cannot escape is the responsibility for the consequences of the laws. They have pursued the concept of fairness in an obsessive way, misguidedly, instead of the effectiveness of what industry should do. In our part of the world there is practically no difference in reward for responsibility or for skill. This is an almost unforgivable situation. People refuse to accept it, and rightly so.

I should like to cite some concrete examples, from two of the largest companies engaged in textiles, not only in this country but in the world. They are British companies; they have subsidiaries abroad. They produce there exactly the same goods as we do, on exactly the same machinery, with exactly the same know-how, and mostly British management. I am referring to two factories, one in Lancashire and one in Colmar in Alsace-Lorraine, in Germany. These are the facts. The weaver in England gets £194 per month pay after tax—and it is wrong to look at pay in any other way except after tax; this is what the wives and children are concerned about. The foreman gets £226 after tax, and his identical counterpart—in most cases an Englishman who has emigrated—gets £380 for the same skill. The line manager in England gets £297. In the same English-owned factory in Colmar he gets £623 after tax.

How can one explain that as a fair deal? If you go higher up the scale, a senior designer, married with two children, in England, after tax, gets £3,118 per year. In France he would receive £6,261 per year and in Germany £6,707 per year. Further up the scale, a senior manager in the United Kingdom, married with two children, would receive after tax £6,100; in Germany he would receive £15,700 and in Holland £13,500. That applies to English-owned factories. The graph of growth in France and Germany in these English subsidiaries is very different from the graph relating to such companies in England. It is all very well saying, as we said to our nurses, "You enjoy your work so much that we will deduct tax from your wages". I am sure that the English worker or weaver—the English manager who, incidentally, trains the French and Germans in their respective factories—enjoys his way of life in England; he enjoys living in Lancashire. Can one possibly justify paying him less than half the salary received by his counterpart?

What is happening to the school-leavers and those who graduate from the technical colleges? If they are any good, the first thing they do is to apply for jobs in Europe. They do not need a work permit; they simply have to cross the Channel. When it is explained to them that all that stands between them receiving a salary of £3,000 a year or one of £7,000 a year after tax is a six-months' concentrated course in German or French, they think that that is not too high a price to pay. Therefore, we are now creating a steady drain of talent from this country to Europe. We shall be left possibly breeding mediocrity; we shall find ourselves on the bargain counter. This is a dangerous trend. The argument that may be advanced by the Treasury for the differential between the £16,000 salary of the manager in Germany and the £6,000 salary for the same man in England is that we cannot afford to forgo the tax at that level. However, the fact is—and I believe it was Lord Diamond's Committee which established this—that if one was not taxed but if all income over £8,000 a year was confiscated, it would not make one penny in the pound difference. The noble Lord, Lord Houghton of Sowerby, who I believe will speak later, is much more competent to judge on this issue. These are psychological taxes; they are not economic or justifiable taxes. It is not fair to ask people to wait for the rewards for their work hereafter. They want that reward now.

I should like to describe what is happening in the textile industry. I am in touch with a very fine local comprehensive school which has very bright and alert youngsters. They often talk about careers. Can one, as the noble Lord, Lord Bowden, said, in good conscience say to a bright youngster: "Come aboard my ship; it has a big leak in the middle. The ship on the right has sunk, as has the one on the left. Will you build your future on a melting ice-floe—it is a shrinking industry—when with your brains and ability you can get a job in the Civil Service, the police or in a local authority, where your pay will be indexed and where there will be no question of redundancy or unemployment?". It is not that such youngsters do not hold us in esteem. We simply do not have a deal to sell them. We do not value our industry; we have not made it secure enough. Ours is an ageing labour force. Young people are not entering the industry. Those who are propping it up are those who say that it is too late to change at this point in their life so they are stuck with it.

In management there is no reward for responsibility. Because of the present taxation policy, a person in top management does not have much to lose by not being too effective. When I hear about productivity being low in this country, I sometimes wonder whether it does not reflect a credit on the intelligence of those who work in British industry, because if we decide as a matter of doctrine to pay a man or a woman only 60p for every £1 that he or she contributes to the country, why should that person give more than 30 or 40 minutes effort in every hour? He simply counts the change before he leaves the counter. He discovers that trying a little less hard and living a little more sensibly is perhaps not so bad after all.

Most of us who reach the top level of industry rather late in life discover that we are sacrificing time which we do not have for money which we cannot use and do not need. A friend of mine in insurance told me that it is much cheaper to insure a British businessman than an American, a Canadian or a German one. He said that the pension scheme was such that those people do not live to draw their pensions—they have worked themselves so hard throughout their lives. However, we are much wiser. We do not come to work until 10 o'clock in the morning; at 3 o'clock we beat the traffic jam home. We play golf. We make better husbands and more tolerant fathers and mothers.

Let us make no mistake about it. Many people in the overtaxed bracket—and in fairness when one reaches the highest bracket it is not taxation but confiscation—undergo an adjustment. They slow down. They live quite happily, do not find life disagreeable and can afford things. They may even benefit. However, can the country afford to deny itself the results of the efforts that those people would have made if they did not have these psychological taxes?

I suggest that it would not be a bad idea for someone to sponsor a study into the productivity and taxation systems in various countries. We have heard today about agriculture giving a better performance. Agriculture is the only branch of industry which is not a one-generation industry any more. In agriculture ownership cannot be taxed without fatally injuring the country. In other words, because profits are low it is all capital gain and no damage is done. However, in other industries this has caused the most damage. There are of course more qualified experts than I to judge whether or not it can be remedied. It is an established fact that to tax spending encourages incentive and to tax earnings erodes incentive.

It is a most curious fact that in the so-called Socialist countries—and I include the Soviet Union—the maximum income tax is 8 per cent. Perhaps they are not Socialist enough—I do not know. However that is a fact. In those countries the differentials are much higher than they are in this country. Perhaps a lesson should be learnt from that. I know that taxation also exists in Europe. I asked an Italian friend of mine who is a textile manufacturer, "How does it affect you?". He said: "Well, when we have bad laws we match them with bad administration. Since our taxes are not collected, the bad laws have never taken any root; not done any harm. But you are in the unfortunate position that if you ever have a wrong law you have a most conscientious carrying out of it ". That is the reason why Italy and France have done better.

We have often heard that the textile industry is a dying industry because of Korea, Taiwan, India and so on. It is not so. It is a very virile industry in France, and even more so in Italy. It is almost painful to go from Milan down to Turin and see new factory after new factory with brand new machinery. Therefore, we should not delude ourselves: we have to change the direction. I do not wish to detain your Lordships any more, and I thank you for your patience.

6.11 p.m.

Lord GORE-BOOTH

My Lords, may I first join others of your Lordships in expressing our great gratitude to the noble Lord, Lord Rochester, for introducing this debate. It really could not have been more timely. It is one of the most important questions in this country to be discussed, and I think in some ways your Lordships' House is the best place for this discussion to be launched. Having listened to those noble Lords who have spoken, I begin to have a feeling that we may be assisting in the turning of a corner in this nationally most important matter. It is good to speak after another voice from Yorkshire. One of my rather few qualifications for intervening in this debate is that I grew up in the industrial atmosphere of Yorkshire in which my father was an engineer in a large factory. I regrettably defected, not for any class or school reason but simply because events disclosed at an early age that I would have been a very poor engineer.

We are talking essentially about management—and high time too. I shall a little later get on to one aspect of this matter which was briefly referred to by the noble Lord, Lord Polwarth, but not really by anyone else, and that is the public relations aspect of this difficult question. I should like to express an opinion on one or two points on which I do not wholly agree with eminent speakers, and then move on to this other matter.

On the matter of what I would call academic or institutional adjustment, I think that what that can do, as opposed to what changes of major attitudes on remuneration can do, is probably rather small. I say this not as a belated academic but because I had a certain amount to do with the effort to help people from industry and diplomacy to learn something of each other's jobs. This came up against two difficulties. One was that the inclination of anybody in an industry is to get to the point where you make decisions while civil servants are fated pretty well always to advise, which is quite different psychology. Secondly, the point which the noble Lord, Lord Tedder, made was absolutely valid; namely, as soon as somebody comes out of industry to spend some time away, he cannot help looking over his shoulder and wondering what is happening to his job and whether it will be there in a year's time. While one must not discourage such exchanges, one has to recognise that this, as a way out of our difficulties, has a somewhat limited application.

The debate has also shown that one would have to approach the young very cautiously, if at all, in suggesting that in entering the rough and tumble of industry they are doing a public service. I doubt whether that, at the moment, would appeal. The psychology has changed on that, and I think people have to discover that they are doing a service rather than being told so. They really do look, as almost all noble Lords have said, at their personal balance of payments, and they come to some of the gloomy answers about which some noble Lords have spoken.

Perhaps before I get on to the main purpose I may allude to one or two of the more ridiculous points which have been made to me by young people which show something of the really basic psychology of these matters. I know well a young man from a school which normally does not send people to industry who very bravely insisted that he would go into industry. After a year I said to him, "How are you getting on?" He said, "Well, it is all right, but nobody ever tells anybody where I work what it is all about. I asked the person next door to me, and he does not know either. I feel that the whole exercise is unappreciated by anybody, and I feel very discouraged." I am sure that there are many noble Lords in industry who would at once protest that in their factory no such thing prevails, but it is the kind of warning you get from highly educated young people who would like to try their hand at this rough and tumble and are desperately discouraged by what I can only call the careless conditions of organisation which exist inside a particular factory.

Another absurd story corroborates very much what one noble Lord said—I am afraid I have forgotten who it was, and I apologise. Visiting a school in Yorkshire quite recently, I was told by the mathematics master of that comprehensive school that a boy had come to him and said that he wanted to take an advanced physics course. The mathematics master then said, "Would you solve this simple equation for me." The boy said that he could not. That bears out something of the tendency of some young people to wish to take the short cuts, though I should not like to be interpreted as criticising all our young people in that way. Of course, it would not be true.

However, there are misconceptions. As the noble Lord, Lord Annan, said in his eloquent speech, I think education has to take some of the blame for what has happened. I would also follow the noble Lord, Lord Annan, on a somewhat less elevated plane—as Shakespeare might have said, "I am no orator as Annan is"—but rather on the more pedestrian plane of political thought. That is, that over perhaps the last half century we have been living through what I think the historians call a secular trend. It started—and I can still remember it from my young days—when one of the favourite phrases was, "I suppose the authorities know what they are doing." Now we have gone round the half circle and the normal comment is, "I suppose the authorities don't know what they are doing." It was a period in which you assumed that there was a reason for something done by higher management, or by directors, or even by managers. Now we seem to have created within ourselves—and it possibly starts from Marx and has been developed by others—a situation in which the balance has swung too much (in politics it nearly always does) in the other direction.

Part of the reason for this is the point at which the noble Lord, Lord Rochester, started—that profit has become a dirty word. It is important not to over-argue in favour of profit, because if you take a quick profit for no particular purpose except taking the quick profit this is not socially advantageous. Sometimes people over-argue the profit motive. I need not elaborate the point, because when the present Prime Minister is quoted as saying that today's profits are tomorrow's jobs, possibly that is also a corner that we are just beginning happily to turn.

Then we have the situation in which—and this is the really basic public relations point—industry and commerce have somehow been divided by the media, by people talking to each other, into two factions. One is directors and the other is workers and there has been a sort of bipolarisation as if people sitting in a boardroom gave some orders and then the workers either did what they were told or objected and went on strike. There has been, in other words, a great chasm in public knowledge of what managers are for and what they do and how they do it, and it is absolutely characteristic that the point on which the Bullock Report is so incredibly weak is that of management. This weakness takes away a great deal of the argument.

There is a moral to be drawn from this. There was a time when anybody on the employing side took a low profile in public; did not go on television and was not visible except at the occasional banquet. I have bored stiff a number of my friends in those positions by going on and on saying, "You must go on television or learn how to do it, if you don't already know, and you must go on not just once because that is not enough". Managers are in a very difficult position because it is difficult for them to go on television and make their case, although television is much the best place for them to do so, if only because they may have a difficult management situation on their hands and if they say one word wrong they may provoke industrial trouble.

It is important for the health of the country and for the health of management that somehow the voice of middle management is heard. I do not know how this can be organised. There are of course management associations, but somehow, because of this middle position, we have the "us and you" view of industry very popularly spread and a gap in the popular knowledge which is very serious when we want to recruit more managers. That is where it really hits badly.

On the other point where our thinking has gone wrong—the noble Lord, Lord Kagan, made some allusion to this—is the divorce of pay from responsibility in the way that things have developed. This is a very difficult subject. How does one measure the responsibility of an airline pilot against the responsibility of a man or woman running a large department in a factory? I do not know the answer, but it is a very serious subject and we have obviously got it wrong because we are, in our present society, underpaying the responsibility shown and needed by managers. An attempt was made to start work on this subject at the end of Mr. Heath's Government, but alas! we were going through a period when each main political Party seemed determined to shut down anything created by the other and the relativity studies disappeared with that. We now need to get back to the thought that responsibility gives a particular obligation to an employer to pay for it and a particular right for somebody exercising the privilege of being "where the buck stops" to get rewarded for that fact, and we are far from that situation today.

So many of the most important points have been made by other noble Lords that I can, mercifully, conclude briefly. What am I asking should happen? I join with all noble Lords—I think there has been no exception—in pressing for a really serious look by the Government at the taxation level of middle management. One is encouraged by certain remarks that the Chancellor of the Exchequer has made, and I hope we can send him a message from your Lordships' House that we look to him to fulfil what were not promises but were certainly hopes.

Finally, I have noticed that in this debate nobody has asked the Government to do or say anything in particular. Clearly, we cannot ask the Minister who will reply tonight to give any information on what the Government intend to do about taxation; that would not be proper. However, I hope that the noble Lord will join us in thanking the noble Lord, Lord Rochester, for provoking this debate and will give us at least some hope that what has been said this afternoon will be taken seriously into the Government's thinking and planning for the future.

6.25 p.m.

Lord HOUGHTON of SOWERBY

My Lords, one always envies the noble Lord who has the opportunity of opening a debate of this kind. First, he can choose his own subject; secondly, he can set the tone of the debate in his opening speech; thirdly, he can take as long as he likes in opening it; and fourthly, he has the opportunity of a few remarks at the end of the day. Who could wish for anything better in this House? We are, of course, obliged to the noble Lord, Lord Rochester, for introducing this subject.

Because I intend to keep my remarks brief, I will resist the repeated invitation of my noble friend Lord Kagan to talk about the iniquities of the present levels of direct taxation. There is quite a lot we could all say about that and I am sure that the noble Lord, Lord Gore-Booth, was right when he said that something must be done quickly about the level and incidence of income tax, otherwise the borders between those at work and those not at work will become blurred and almost indistinguishable and, higher, there will be serious feelings of discrimination against responsibility and skill, not only compared with other workers in industry in this country but by comparison with those serving in other countries in comparable positions. The noble Lord, Lord Kagan, gave some striking comparisons of pay in this country and in Europe of workers at different grades employed by the same firm on similar jobs and similar machinery.

Lord Gore-Booth said that very few people had asked the Government to do something about the problem. We have said that something should be done about taxation and I pass from that straightaway because that is a message which many people are giving the Chancellor of the Exchequer at this time, and I doubt whether a former general secretary of the Inland Revenue Staff Federation will carry any more weight in that regard than anybody else. In fact, with 90,000 people engaged at the present time on income tax, one might say it would be a good thing if there were fewer employed in expressing their predatory instincts so freely as they do now.

When one thinks that there are nearly 300,000 people employed in the Departments of Health and Social Security, the Inland Revenue and the Ministry of Defence, what a wide variety of opportunity there is for young people to go into the public services and State agencies and find jobs which are satisfying, relatively well paid, secure and which give them some purpose in their vocational lives! We must bear in mind the way in which the wide extension of the public services and State agencies has increased enormously the scope, opportunity and variety of jobs available in the public services, which on the whole conform to civilised conditions of employment. When one speaks to young people about their preferences for jobs they will probably say that industry is not attractive to them for a variety of reasons, but that the public services and especially the social services, teaching and other branches of public activity, offer greater security, better pay, better working conditions, better staff relations and better careers.

What about pay? I am constantly hearing that pay in the private sector—in industry—is now falling behind the pay of comparable positions in the public sector. It used to be the other way round. In 1955, the Priestley Commission on the Civil Service introduced the principle of fair comparability. This, it suggested was the only way of measuring the pay of people in the public sector as compared with those in private industry, commerce and other vocations, and of adjusting it. So the Civil Service Pay Research unit was set up. This was an elaborate institution for making detailed comparisons between the Civil Service and industry. The Civil Service has benefited from this. It made enormous strides in the adjustment of its pay when the principle of fair comparability was applied. What has happened since if it is true that industry is now in an unfavourable position in comparison with the public sector? It seems to me that we ought to try to get at the truth of the matter and that, if it is true, it ought to be corrected.

I wonder whether the time has not come to have an agency similar to the Civil Service Pay Research Unit which would carry out a two-way investigation, would have a two-way responsibility and would make a two-way comparison. At the present time, the Pay Research Unit is being wholly used for considering Civil Service pay in relation to private industry. Why not consider the levels of pay in private industry in relation to the public sector? Let us get the balance right if it has indeed unexpectedly gone wrong. I therefore think that, instead of suspending the Civil Service Pay Research Unit—which is what the Government have done—it should be revived and enlarged and the scope of its activity broadened. I believe that we should now have some agency where the truth of the comparability of pay in the private and public sectors can be closely examined.

What about careers? It is not unworthy, I suggest, that young people should ask about their prospects as well as about their pay. Young people starting in life are contemplating the responsibilities of home and family, mortgages, insurance and the rest. It is not a lack of adventure that prompts a young man to ask what are the career prospects of a job. In the public sector he would be shown the whole staff, the opportunities, the ratio of lower to middle grade posts, the ratio of middle grade to higher grade posts. He would be told when he might expect to become this or that and the salary that he would obtain if he did so. Where is the comparable career expectation in industry and business?

When I was looking after the teachers' pay inquiry in 1974, we had the greatest difficulty in getting comparisons in industry which would enable a judgment to be made of how teachers fared, career-wise, as compared with those of comparable standards of academic attainment who went into industry. Where does the graduate get to in industry by the age of 35? Show me that man. Recently, in September, at a Financial Times seminar, I was looking at the pay of executives and relationships between middle and higher grade people. I said "We have seen the pay—where are the careers?" In large-scale organisations and big firms I have not the slightest doubt that they can offer career expectations, but what about the multitude of middle-sized firms? Where is the career there? In many cases, there are inherited preferential opportunities offered to relatives in small and middle-range businesses. Where then, is the career for the person who goes in from outside? This is also true of some of the very large firms: look at the House of Fraser—father goes out and son comes in and look what happens! Is this how we intend to run our industry? Is it to be a kind of Apostolic Succession from father to son and from son to son? If so, where are the opportunities for those who have neither capital or influence but who merely have brains?

At least if one goes into the public sector one can rely on receiving a pretty fair examination of one's potential, of one's talents and of one's ambitions, and one may be able to realise what one wants to do. I believe that business must accustom itself to what people are expecting. It cannot all be left to chance. We cannot leave it all to a feeling of insecurity. There were glittering prizes for those who succeeded: those are not there any more. Taxation is taking care of many of them and depression of a great many more.

The third point to which I want to refer is staff relations. I have not the slightest doubt that many people feel that industry is a bit of a jungle. Strange things happen. Management is frustrated by powerful and obstructive unions. There are walkouts and relationships between management and staff altogether are not very pleasant. But in the public sector all is arranged and has been arranged for 50 years on the Whitley Council system, where reason and good sense prevail, where argument can take place around the table, where staff are taken into the confidence of management, and all the rest of it. What a lesson private industry could learn from the Whitley Council system, which it ignored when it was on offer 50 years ago! Industry has since taken little opportunity of developing such a system of joint consultation or an exchange of information which would provide a much better foundation for the Bullock proposals than we have at the present time.

I shall not enlarge on Bullock this afternoon but what I say is that there will be no health in industry until this question of industrial relations is on a better footing. The mixed economy cannot succeed unless there is a greater degree of involvement of the worker with the prosperity of his own industry. This must be found. Otherwise the claim will be that private industry has failed the nation and that there is only one remedy—that of socialisation, nationalisation, public ownership. That will be the cry if private industry cannot adjust itself to the natural desire of people to have a share in deciding how they live at work.

My noble friend Lord Kagan gave figures to illustrate what a proportion of our lives is taken up by work. If that does not give us satisfaction, where are we to get it? Are we thrown into the hands of the Tin Pan Alley people, the entertainment industry, where value for money is never sought because those who go into it are not looking for value for money but think that all is fair if one is happy and enjoying oneself? No, at work one examines every penny, every hour and every minute of one's relationship with one's industrial masters. I believe that there is a great deal to be done here to make industry more attractive. I believe that there is a responsibility on those who wish the private sector of industry to continue as a large sector of the wealth creating activity of the nation. It is no good claiming others. The management of industry must realise that this is a very serious matter for them.

My final word is this. We must not overlook—and a few moments ago the right reverend Prelate the Bishop of Worcester was talking about attitudes—the fact that the idealism of the young is better satisfied by public and community service than by going into competitive industry. There is not the slightest doubt that many people want to work in the community, want to be of service to others, and want to feel some moral purpose in their life and activities. We find them in the schools, in the universities, in the Health Services. Throughout the public sector they feel that there is a purpose there which is not satisfied in industry, which is concerned with competition, with profits, with dividends, with grinding the face of the poor. How we look back! Goodness me! At present television is one big look back to the days of the past, to the horrible cruelties of the Industrial Revolution, to the General Strike—all the things that can poison attitudes towards industry today.

We cannot live on our history. For heaven's sake, let us look forward! Let us resolve to have done with much that we are ashamed of from the past, and go ahead with a new spirit of confidence and of joint enterprise and co-operation. It can be done. I hope that on both sides of industry an effort will be made and that out of Bullock there will come a new foundation for greater confidence in the co-operation of workers and management at all levels, so that we can at least match the productive capacity and the prosperity of our friends in Europe.

Lord MACKIE of BENSHIE

My Lords, before he sits down can the noble Lord tell the House which of the industries in the public sector are supplying the wealth which he wishes to divide?

Lord HOUGHTON of SOWERBY

My Lords, I suppose that all forms of activity are contributing to the wealth of the nation, but I am not pretending that the public sector is of itself the wealth creating sector. That is indeed the importance of private industry and of manufacturing industry, those who are exporting, those who are going into the markets of the world. They are the people upon whom we rely. The services may be given by some form of nationalised industry, whether it is power, or steel, or coal, or whatever. Nevertheless, I am not underestimating the importance of the private sector, nor am I exaggerating the contribution made by public nationalised industry. They are both essential in the effort that we have to make.

6.42 p.m.

Lord ALEXANDER of POTTERHILL

My Lords, I share the general gratitude of your Lordships to the noble Lord, Lord Rochester, for introducing this debate. I cannot think of any problem which more justifies a debate in your Lordships' House. I have a feeling that people in this country have enjoyed a standard of living of more than they have earned for a very long while. We had an empire which enabled us to do that, but we have not got an empire now, and I have a feeling that we are finding it very difficult indeed of our own energies to earn enough to justify the standard of living which we enjoy, and we have got to do so. This is the simple reality.

I share the view—indeed I think that I go beyond it—of the noble Lord, Lord Gore-Booth, that education is not free from blame. On the contrary—or rather going beyond that—I think that it is utterly guilty. Society in this country has for a very long while very highly esteemed academic value. This is the reality. In the beginning of this century we created higher grade schools; they became grammar schools. We created senior elementary schools; they became grammar schools. So it has gone on. We created technical high schools; they became grammar schools. We created colleges of advanced technology; and let us face it, when we sought a charter so that they could award degrees in their own right it was the universities which resisted that so violently that we failed, and so in due course they became universities.

This is the simple fact. The whole educational system is geared to academic values. When one goes into a school one does not look at the honours board to see which of the school's distinguished pupils went into industry or commerce. Their names will not be there. The name of those who won an open scholarship to Oxford or Cambridge, or to other universities, will be there. This is the reality. Therefore, I think that we have to face a very fundamental problem. I do not for a moment suggest that the education system can resolve this fundamental problem, but it has a contribution to make; nor would I wish to enter into the issues of relative payments and so on because, frankly, these are things which can be adjusted more readily than many other things.

It seems to me that we are getting our emphasis this evening in the wrong place. We have talked about university graduates. In my opinion this is not where the problem lies. The problem lies in the 16 to 19 age group which we have utterly neglected, save in respect, again, of those who had academic aptitude. For the rest we really have not been interested. It is the result of what happens in the 16 to 19 age group that the rest follows in universities.

Let me give your Lordships one or two figures. In 1973 for every student in production engineering there were five in economics, 12 in law, and 16 in sociology. The whole emphasis in this preparation for entry to higher education is academic. This is the reality. In an earlier debate I referred to what would happen in the Education Service with the tendency to go comprehensive and the inability therefore to maintain sixth forms in all schools, and therefore the need to look again at the problem of the organisation of education in the 16 to 19 age group. I want to come back to it because I think that it is relevant.

This can be done in two ways. We can establish sixth-form colleges, and maintain the problem which has contributed to our difficulties, with a total emphasis on academic values, on entry to higher education in academic subjects, and procedure there into the public service or into the professions, leaving the rest to go to further education establishments. But, my Lords, notice what we are doing immediately. Those of ability go to the sixth-form college. These are the academics. They are going into the professions, not into industry and commerce. The rest can go into industry. This I utterly and totally reject. I believe that there is the greatest opportunity that the country has ever had of establishing a new stage in education from 16 to 19, which I have called the tertiary stage, and establishing tertiary colleges; by all means with courses leading to A-level, but with courses leading to the qualification of the Technical Education Council, the Business Education Council, to craft courses—the whole range of education and training which will become necessary, in an atmosphere in which even those on A-level courses will be meeting people who are interested in and concerned with industry and commerce, with half the staff having a background in industrial and commercial life, instead of it being entirely academic.

There is a fundamental problem which I do not think we are facing. Again let me give your Lordships a few figures to illustrate my case. In 1968 28,000 children leaving school did not get a job. In 1971 the figure was 58,000. In 1975 it was 158,000, and in 1976 it was 209,000. As I see it we are failing to recognise that in the nature of a technological society we can sustain a very high level of production with a very much reduced labour force. This, I think, is the reality into which we are moving.

Facing that problem, there are two possible solutions. We can reduce the age at which people give up working, so to speak—we can have earlier retirement—or we can delay the age at which they enter productive enterprise. Of these two, I prefer the second. First, I believe it is very much more effective, and, secondly, I believe it is also very much more economic. I note, for example, that whereas we have 20 per cent. of these age groups involved in educational training, Germany has 84 per cent. We are the lowest of all European countries. I believe, therefore, that within a measurable period of time—I do not mean a year or two years; it may be five, it may be 10—we shall reach the point where we have to accept full-time education and/or training (and I put great emphasis on "and/or training"; I do not mean full-time in college) to the age of 18-plus. Some will be full-time, obviously; some two days a week in college and three days a week in practical experience, or one day a week in college and four days a week in practical experience—but under training, not productive; with entry, in fact, at 18-plus.

I do not think there is any profit in finding whom to blame. I note that industry has not been very responsive. When I sat on the Henniker-Heaton Committee 250,000 young people were on day release, and we planned for an increase to 500,000 over a period of five years. I note that after 10 years the figure is 200,000. It is 50,000 fewer than it was 10 years ago. In other words, industry has not been very responsive to the concept of effective training for young people. My plea, therefore, is a very simple one: not a solution to the problem, but trying to get an Education Service which recognises that parity of esteem between studies in technology or commerce and studies of a strictly academic value would make a very great contribution, and trying to contribute to that purpose in the organisation of our education system.

I would not myself wish to expand university provision at all. Indeed, I am firmly convinced that a number of those now in universities would be very much better on sandwich courses in business studies or other similar purposes. But I would expand the polytechnics. I hope—I profoundly hope—that the tragedy of the colleges of advanced technology becoming universities will not be repeated in the case of the polytechnics; that it will be recognised that they have a different function from that of the universities, and a very important function, and that they will have complete parity of esteem. I share, as so many of us do, the recognition that my livelihood depends on those who create wealth. My purpose is to help to contribute, through the education system, to the production of wealth, so that the rest of us can be properly sustained.

Lord GORE-BOOTH

My Lords, before the noble Lord sits down, may I ask him one question which might help to develop his argument? He mentioned that people who are engaged in industry could participate in the process of educating. Would he comment on the fact that those who are most busy, most successful, most enterprising, often have a terribly long day and long week keeping their industry going. Would the noble Lord somehow suggest how they could fit this extra and very necessary job of education into their programme?

Lord ALEXANDER of POTTER-HILL

My Lords, I am not suggesting that those who are actively engaged in industry should undertake the training function themselves. What I am suggesting is that we must recruit to the teaching profession people of experience in industry and commerce, to bring that atmosphere into the work of the schools—and, frankly, I would do it from 14. There are many of our youngsters of 14 to 16 for whom what we now serve up in academic terms makes no appeal at all. Indeed, this is part of the problem of truancy and other difficulties. Work experience can be embodied at that stage; but I think it depends. You see, nobody can teach in a school who is not a qualified teacher, and to be a qualified teacher you must be an academic. This is the reality. We must broaden this concept.

At the moment, young people go into further education at 16, where they can take A-levels and so on—and let us face the psychological problem there. Many of them prefer to do so because of a feeling that they are grown up and want to get away from school; indeed, 100,000 do so. But there, in further education, you do not have to have that qualification. You can teach in further education from industry, from commerce, from whatever your experience may be. I want to get this element introduced into the education of the 16- to 19-year-olds.

6.56 p.m.

Lord ELTON

My Lords, we are all grateful to the noble Lord, Lord Rochester, for the opportunity to debate what is an important subject. I must say that there is a certain atmosphere of unreality in the Chamber. When you consider that we are a people which has taken on a burden of debt so enormous that not only the children of many of your Lordships but the grandchildren will be paying it back; when you consider that we are a people with no natural resources whatsoever to export except those which we urgently need to keep at home; when you consider, therefore, that in order to discharge these debts, let alone feed ourselves or maintain our position in the world—merely to survive—we have to indulge in manufacture and trade; and when you consider, under those circumstances, that we are forced to consider how we can get the means of producing the wealth to do this held in better esteem, the mind boggles at the situation. It is as though the War Cabinet, in 1942, was considering how to raise the reputation of either the Royal Air Force or the Eighth Army.

My Lords, we are none the less in that condition, and we must address ourselves to the problem because it is a real one. It is a real one, as the right reverend Prelate said earlier, which is often seen in distorted moral terms. I think that when you consider the urgent and moving claims that are made on our now sadly diminishing overseas development aid budget; when you consider the rapidity with which the financial Powers of the world rushed to our assistance rather than see us go down; and when you consider that we should be producing the wealth which will sustain, by means of trade and aid, those who will overwise starve on the other side of the globe, it is really extraordinary that it should appear to the nation as a whole, or to those who are on the verge of a career, that a career consisting of the creation of material wealth is anything but important and anything but a service to the community. The noble Lord, Lord Kagan, expressed better than I can, with concrete examples, how this attitude tallies with those across the Channel and across the ocean, and I will not underline that. I hope that his speech is widely read.

I therefore trust that we have seen an end to the denigration of the profit motive, because it is only by gaining profit from foreign countries that this country can survive, to the service of either its own inhabitants or those abroad. Your Lordships have discussed with eloquence and precision many facets of this problem, and I shall therefore be, I hope, reasonably brief. I do not want to tread over familiar ground. Your Lordships have already been aptly and vividly put in mind of the choice which actually presents itself to the school-leaver between the professions, which are gradually giving us a vista of elegant but increasingly impoverished sensitivity, now being sharpened into unwonted militancy; we have seen the Civil Service hedged about with security of employment, as are local authorities, and cosseted afterwards with secure and generous pensions—increasing in number, I may say, by 50,000 during the tenure of office of the present Government, which is not surprising when you consider the image which a career in industry has been given, rightly or wrongly, by the media.

That, my Lords, presents itself as a career of cut-throat rivalry on the promotional ladder where the rewards for ultimate success are large but open only to a few and are snatched away instantly, as to 80 per cent., in taxes, where the background to every day's work is seen as a possibility of redundancy following take-over or commercial retreat, on the one hand, and, on the other, the threat of industrial strife. Industrial strife is something that we have not touched upon too closely today and I think it perhaps has a greater relevance to what we are discussing than may have been assumed. Most of us recall, unless we live in very placid communities, that it is not very agreeable to be constantly at loggerheads with those in whom you are combining in an exercise in which you have a common interest.

There are some people who thrive on emotional strife; many others regard it as a drain on their energies which they would otherwise have used creatively. We have been told, my noble friend reminded us, that there should be more talk about talk-out and less about walk-out. But it is the walk-out that we get in the papers and on the news every day; and that is how people choosing a career see one side of industry. They see it much as the noble and earlier Lord Durham saw Canada when he went there to write his famous report. As he said, he went to see one country and found two nations warring within the bosom of a single State. That must stop. It is not within my province to speak of it this afternoon. It has been spoken of and my experience is limited in the field. But I am concerned to look at the educational implications of what has been said.

The first thing that we must take on board is that the point of decision between a career which can lead to vocational training for industry and a career which fits one's academic progress in the arts is very much earlier than one might suppose; because in schools with a high academic tradition the choice between the arts and science sides must be made in time to determine the "O"-level course. That means that the high-flying child is often seeking counsel on the matter in his 13th year, which seems scarcely credible. The decision may then have been taken which will determine everything that follows. From this, it follows that the counselling of the child must be of a high and sympathetic order. It must be given by people, first of all, familiar with what goes on in industry; second, equipped with the time and the room and the resources to give proper counsel; and, third, intimately familiar with the problems of the child. That brings in not only the crucial figure of the careers teacher but the even more crucial figure of the parents. We, on this side, are frequently reminding your Lordships of the importance of the parental role in education. This is a classic example of where the parents must be drawn into the counselling system of the school and learn from it as well as give information to it.

We have also heard that there is a great communications gap between industries and schools in both directions. Industry says that the schools are not teaching the recruits to jobs the skills and numeracy that it wants. In part, this is due to the fact that the teachers, and not just the careers teachers but the teachers of the general syllabus subjects, are not familiar with what is wanted. This should be put right. Industry must say in terms what it specifically needs. It can best do that by getting selected members of the firms who are the principal employers in the area to meet formally and regularly with selected members of the staffs of the secondary schools. The result could be an extension of the successful link schemes set up under the aegis of the Chemical Industries Association and the National Electronics Council. One should not underestimate the great help that this will be in the design and content of curricula so that the actual vocabulary of mathematics, for example, is matched to the problems which it will later be required to solve in the pupil. There are other advantages which will flow: the realisation from the point of view of industry of the help it can give to schools in, say, the loan of equipment.

A particular result which will flow from this and other schemes should be a renewal of the motivation of the children themselves. Often one hears that the pupil in the age of adolescence can see no relevance in what he is doing in school. He has what he needs for what he intends to do. If teaching is related directly to future employment, this objection disappears. Secondly, we must realise that education can never be a closed circuit system. A person who spends his entire life, first as a pupil and then as a teacher, has lost sight of one of the things that he is preparing the children for; and that is the outside world. He has not met that situation himself. Since we have turned our backs on national military service and lack the imagination and money to provide national service of any other kind, a great many teachers are regrettably destined to go straight from school to college, to school again, unless we take steps to avoid it. I agree with the noble Lord, Lord Annan, that something must be injected into their career cycle to make good this deficiency—fellowships or secondment to industrial employment would be one way. Another would be such a scheme as the noble Lord, Lord Alexander of Potterhill, recently spoke of.

We, on this side, have already made it clear that there must be greater provision for in-service training for teachers. This is the other side of the same coin. A return to employment outside the school for brief periods, possibly only a matter of weeks, would be a necessary part of this to keep teachers up to date with conditions in employment and the attitudes and assumptions of employers and employees alike which evolve rapidly over the years. Much work of this kind has been done in the CBI "Introduction to Industry" scheme for teachers and in other schemes run by the Mathematical Association, the ISCO and chambers of commerce. When economic circumstances permit, provision should be made for these and similar schemes to be grantaided by Government; but those days are not with us. In the meantime, I think that service in this kind of experience-gaining work by teachers can be taken into consideration when fixing the incremental point on the pay scale of a teacher—his seniority, in other words. It is a real qualification which will be of use to the children and to the community at large.

It is not only a question of keeping teachers in touch with industry; if there is to be a proper dialogue between teachers and employers, employers, too, should go from time to time among the schools. This was done successfully in Sheffield in 1970, with the result that the employers knew more of what to look for and to expect of their recruits and, more particularly, how to find out what it was that the schools had put into them that was relevant to what they were going into but which was not apparent in the circumstances in which they had been testing entrants before.

The idea advanced by the noble Lord, Lord Tedder, that industry should follow the example of medicine in establishing an academic pinnacle to the career as well as a commercial one, I think deserves close study. I see considerable problems, some of which have been alluded to, about the ownership of the fruits of their academic work which do not arise under medicine; but these could be overcome. It is very reassuring that the CBI is now actively encouraging the flow of information between industry and the schools without which there must be a good deal of misdirection of effort in a great many science and mathematics classrooms and in a good number of careers rooms. Their "Understanding British Industry" project is an admirable undertaking. I would merely pause (because it has been discussed already) to hope that they will spread the resources available under it beyond their own resource centre to the teacher centres and resource centres, as they are variously called, now springing up in local education authority areas throughout the country. This is an effective and economical means of promoting the use of material, of which I have some experience, and it is to be commended.

We are not concerned only with high flyers at school or with leaders in industry. As I said before, one of the chronic difficulties in teaching adolescent children is that of the loss of motivation which can be restored by making the thing evidently relevant. In the great debate which erupted during the course of our own debate on the Education Act, we have seen a gradual move towards the recognition of the need for flexibility in teaching. My noble friend Lord Polwarth alluded to the need for people to realise that it is not necessary—and here we are again on the central theme—to regard academic advancement as the touchstone of success in life. There is no harm at all in going into industry instead of going on to further education, particularly if the system is such that you can always come back and take more education later on. This is a recurrent theme in the thinking about the future of the organisation of education. With the development of technological advances at the present rate, the need for retraining is going to be not merely constant but growing.

Another element of flexibility is the present system of CSE examinations. Thought should be given to getting employers to assist in designing Mode 3 courses directly related to the predominant local industrial activities. There is no reason why this should reduce the educational value per se of the course, and it will result in a considerable multiplication of interests in the pupils who feel that they are already embarking on the adult life for which many of them look so wistfully through the classroom window. I should not like to give the impression that interest and motivation should always be paramount in teaching. They are of enormous importance and of enormous assistance to the teachers. There is one lesson that we are in danger of forgetting that we must teach, which all of us have had to learn without exception at some stage in our life; that is, that a good deal of one's life consists of setting down and getting on with something which is boring, repetitive, dull and disagreeable, but it has to be done. If you set about it right you have a feeling of achievement and you have achieved something. That must be remembered by teachers. If they send children out into the world expecting that they will always be entertained, and they will always enjoy what they are going to do every day, all the day, they are setting people on the road to personal defeat and in the end mental instability.

There is one respect in which the lack of esteem in which industry holds education is not based upon vague suspicions, the media or anything else. That is the question of numeracy, I could merely recommend your Lordships to read again the contribution of my noble friend Lord Eccles, and one or two others, to the debate on this subject in the Report stage of the Education Act rather than dilate upon it again. If Her Majesty's Government are not now urgently turning their attention to resolving this crucial weakness in our system, then they are failing in their duty.

In summary, if we do not hold industry in high esteem, we cannot survive. This is the folly of a man in a snowdrift who despises the use of skis. The skis may not be very smart, and may be they should be brought up to date, but if we do not use them as they are, we shall merely go under. If it is to be esteemed by those who should be its best recruits, we must promote an exchange of information and experience between industry and schools. This will enable the content of curricula to be properly adjusted to meet the practical requirements or its application at work, and it can do so without in any way damaging its purely educational properties for other purposes. This exchange can be promoted by link schemes, by consultation on CSE 3 examinations syllabuses as an example, by teacher secondment and by the maintenance of proper careers and guidance teaching strength in all secondary schools.

Different opinions have been advanced about the local authority careers officers this evening. It must be borne in mind that the person who understands the child is the teacher, and that is the person who has to understand industry, and that is also the person upon whom the local authorities careers officer is going to have to rely for his vital first introduction and assessment of the pupil who is leaving school. Something which might be done soon is the early introduction of mandatory training requirements for local authority careers officers. This will help to ensure a uniformity of qualification and a uniformity of excellence in those who come into the profession. Careers guidance in schools is a skill which is acquired; it is not an act which is picked up or inherited, and there should be proper provision for it on a proportion of the courses in the diminishing number of training institutions for teachers and in service courses as well.

If we do not hold industry in proper esteem, we shall not get the right men and women to lead it or to serve it. Our regard for it will then sink lower and so will our standard of living. We shall be trapped in a vicious circle. The remedy is for the Government to reward its successes and to permit those rewards to remain in a sensible proportion in the hands of those who have won them; and to see to it by a proper understanding of its role and a proper communication through the schools, colleges of education, polytechnics, and universities, that industry gets the recruits that it deserves and we desire it should have.

7.16 p.m.

Lord ROBBINS

My Lords, I believe that every speaker this evening has begun by expressing gratitude to the noble Lord, Lord Rochester, for introducing this debate and posing the problems associated with it. I should like to join in expressing that gratitude. We have had an enormously stimulating discussion and I conjecture that it has put new ideas into the heads of nearly all who have listened to it. At the same time, it must be recognised that it is in a way a peculiar debate. I cannot believe that a debate posing this particular question could take place in the United States which doubtless has intellectuals who decry the bourgeois habits of life, and so forth, but which on the whole, as the noble Lord, Lord Annan, said, has the greater part of the population blithely continuing to ignore them. I cannot conceive it taking place in Germany; and I certainly cannot conceive it taking place in France. But, none the less, it is right that it should take place here. The figures which the noble Lord, Lord Rochester, adduced at the beginning and the startling figures mentioned in an earlier debate by the noble Earl, Lord Gowrie, regarding the proportion of first-class people leaving universities and institutions of higher education to go into industry are truly alarming. The trend shows no clear sign of that being reversed.

To start with the down-to-earth causation operating here and now, needless to say the noble Lord, Lord Bowden, is completely right. Any parent, taking into account of course the idiosyncrasies of the child, looking at the comparative rewards, ab initio in different careers, must put industry very far down the list, and if the parents or the young person takes into account the comparisons which the noble Lord, Lord Kagan, brought to your Lordships' attention as regards prospects later on of rewards for success and the bearing of responsibility, can one wonder that wherever one turns in this field one hears stories of people whom one would most like to retain in this country, to preserve its sweetness and intelligence, are more and more thinking of making their careers abroad.

The glaring disparities to which attention has been drawn by the noble Lords to whom I have just referred are a comparatively recent development. The trend in our society goes back many years—certainly it has been there for most of my lifetime and, I fancy, before that—and I think it is interesting to ask what have been the long-term influences tending against the entry of a greater proportion of first-class intellects into industry.

I will begin with the academic influences. I have listened with intense interest to the observations made by the noble Lord, Lord Alexander. It may surprise him to find that in many respects I echo his sentiments. With him, I deplore the attempt of the part of the technological colleges, which were colleges of technology, to transform themselves into imitation "traditional" universities. I deplore, too—though I am not quite sure that I shall carry the noble Lord with me in this—the intense academic orientation of English university specialisation. They order these things better North of the Border, and it is really no accident that where the British system of education has been followed in the rest of the world, it has been the Scottish system, rather than the "hot house" systems of Oxford and Cambridge and other universities in England, which has been followed. Indeed, perhaps Oxford and Cambridge are not the main sinners nowadays.

The noble Lord, Lord Elton, drew our attention to a circumstance which I fancy he deplored, and which I regard as absolutely outrageous; namely, that in the present education system as practised South of the Border in most universities, with most grammar schools and comprehensive schools trying to lift themselves to that level, it should be necessary for children, at the tender age of 13 or 14, to decide in what subject they will specialise, whether they will be Humanists or scientists. Surely, that is a disgraceful state of affairs and we should bend all our efforts to bring about the necessary structural changes, because—I will not say at the graduate level—even at the undergraduate level, that degree of intensive concentration is not in the best interests of the country or of industry. If we come back to industry, I would simply say that at this moment a prime need, quite as much as the need for a specialist (which no one but a fool would question at that level) is versatility; and versatility is not one of the qualities which the present system of education fosters, at any rate South of the Border.

In the time remaining to me, I should like to venture on even more controversial ground. What is the influence of teachers and tutors in producing the deplorable state of affairs to which the noble Lord has drawn our attention? I am sorry to say that here I have little doubt that some influence is adverse. I hasten to say that I cannot quantify. I certainly do not want to do an injustice to innocent people. I am proud to have been an academic during a considerable part of my life; and probably the larger number are innocent of the adverse influence to which I am alluding. But we should not be realistic if we failed to realise that in many university circles there is far too much of the "holier than thou" attitude, especially as regards industrial occupations. Which one of us, mixing in such circles, has not heard the phrase: "Oh, but he is just a businessman"?

In this connection, I should like strongly to support the suggestion which was thrown out by the noble Lord, Lord Tedder, and referred to by other speakers, that the system of higher education in this country has an enormous amount to gain by following the example of Continental Europe and employing a certain number of part-timers imported from industry. That is an arrangement which I suggest is one of mutual benefit. It is good for the universities in that it brings them in touch occasionally with what is going on in the real world, and it is good for industry in that they are brought into contact with what is going on in the universitis—not all of which is inimical from their point of view.

In this connection, I cannot help recalling a conversation that I had some years ago when the Committee on Higher Education was in being, with the head of the electrical engineering department of one of the greatest Continental technological universities. I said to him—at that time I had personal reasons for inquiring into the matter—"What is your opinion concerning the use of part-timers?". "Well," he said, "perhaps we may have overdone it in the past, but I fancy that we have got it about right now." I asked him what "about right" meant in his context, and to my surprise he said, "Roughly speaking, about 50-50". It may well have been, because of the proximity to his technological university of one of the greatest electrical engineering enterprises in the world, that such a proportion was exceptional. I myself should not ask for anything like that, but I think there is a lesson to be drawn from that answer, especially when one thinks of the almost zero rate of employment of qualified part-timers in any faculty, except the medical faculty, in this country, and when one thinks of the positive hostility to such an idea of many of the snobs who are influential in academic quarters.

Be that as it may, my Lords, there are wider influences than the academic ones which combine to bring about the reluctance of the young, which I fancy would persist even if the salary disparities were to some extent to disappear, to entry into industry. Someone said that industry had not cultivated the media. That is one of the most remarkable examples of understatement that I have heard in your Lordships' House. I wonder how many of us have ever witnessed a programme on radio or television in which industrialists, landlords or property owners in general have not been represented as "baddies" in contrast with the virtuous rest of the world; as people who are grasping and bullying and untrustworthy in both personal and financial relations. No doubt, from time to time, there may be programmes of an opposite kind, but in my experience they are in a great minority compared to the programmes which are definitely pejorative in this respect.

The so-called bourgeois virtues of hard work, imagination, willingness to take legitimate risks and give leadership are not fashionable among the producers of programmes of that kind. This goes to form a climate of opinion which is averse to employment in such industries, and the degree of aversion varies—which is surely deplorable—with the sensitivity of the young person in question. Of course it is all wrong. I need hardly say in this House that it is an absolute travesty.

Speaking as one who has had the good fortune to have had at various times in his life a foot in academic life, in public service, in business and in the artistic world, I would say that while in these other worlds—the academic world and the artistic world—there are noble and dedicated figures who are an example to all, speaking generally, I should expect to find in profit-making industry fewer intrigues, more personal give and take, than in the rather hothouse atmosphere and the highly strung personal relations of the academic and artistic worlds.

But, of course, as the noble Lord, Lord Annan, said in his extraordinarily brilliant speech, the trouble goes back farther than that. After all, writers of popular fiction and producers of plays, films and so on are, for the most part, rather small fry. The fact is—and we must face it—that among the more considerable literary and artistic figures of the last 100 years or so there has been a tendency—not universal, but so widespread as to be very noticeable—to go to extremes, either to the Right or to the Left, and to regard the ordinary workaday business of the world as something that you look down upon, something that in some cases is regarded as inherently despicable.

Think, for instance, my Lords, of Ruskin or Carlyle—semi-Fascists; or of Morris or Bernard Shaw—definitely far to the Left; or, among the poets whom the noble Lord, Lord Annan, mentioned, T. S. Eliot, Yeats or D. H. Lawrence. I do not think the influence of such persons on the spirit of the age can possibly be overestimated. Shelley, who was a bit of a crank himself, said that poets were the unacknowledged legislators of the world. Of course they are not the unacknowledged legislators in the short run. We know that the legislation which comes up to us from another place is not the work of poets, or even, sometimes, if I may venture to say so, of thinkers. But the long-run prejudices which influence contemporary legislation, and the distaste for industry, which is the subject of this debate, are very considerable.

What a pity it all is, because industry and technology are not unexciting, not matters which leave unutilised the best energies of superior minds. The poet and thinkers are quite wrong in this respect, and it is very much to the credit of the cultures of America, Germany and France that, although poets and thinkers are articulate there, their advice is not always taken. Think, for instance, my Lords, of the progress of industry in a large way over the lifetime of those of us present—the development of the aircraft industry and of computers, the development of new techniques for the discovery of oil in deep waters, the immensely beneficial developments in the pharmaceutical industry and so on.

How often, when I have had the privilege of inspecting installations of that kind or examining the organisations which run them, has the thought occurred to me: "How interested the really great minds of the past would have been—Leonardo da Vinci, for instance, would have been interested in all that—and how they would have admired it! "In one way or another, we have created an atmosphere in this country in which many of the brightest and the cleverest among the young have a disinclination for all that, and I have no doubt at all that part of our very indifferent economic performance in the years since the war is due to this. How one longs for the good sense of Samuel Johnson; how one longs for a satirist of the talent, plus the good sense—which he had not got—of Bernard Shaw, to offset the influences that we are talking about!

7.38 p.m.

The Earl of VERULAM

My Lords, I should like to add my thanks to the noble Lord, Lord Rochester, for introducing this very timely debate, a debate that will continue to be timely until the day that we all hope for when there will be no point in introducing this subject. I asked to speak in this debate as I hope I can give your Lordships a recent worm's eye view of how some students view industry and approach their career planning.

I came down from Oxford in 1973 going straight from university into industry, having been an industrial scholar while at university. There is a natural tendency in the media for bad news to be the only newsworthy news, and nowhere is this more apparent than in the media's coverage of industry and industrial news. A student contemplating an industrial career, if his only source of news was television, might be forgiven for imagining that a career in industrial management would be one long series of confrontations with intransigent union officials, and with wildcat strikers when union officials happened to agree with him. Nothing could be more misleading, as my noble friend Lord Carr of Hadley pointed out earlier when he mentioned that union officials probably spend much more time preventing strikes than propagating them. With an uncensored Press, I do not think there is anything we can do on this matter. They will always tend to regard bad news as newsworthy news. So we can only hope that students will realise that one rotten industrial apple does not make a rotten basket, any more than one swallow makes a summer.

When my contemporaries and I were applying for university places we spent some time studying the Directory of Industrial Scholarships. The best offers gave the student approved fees, paid for by the firm, as local education authorities pay approved fees, and also a generous living allowance, and made no preconditions regarding what the student should do once he graduated. No strings at all were attached. At the lower end of the scale there were some truly miserly offers which had attached to them, on graduation, employment for five or seven years with the firm. It will not surprise your Lordships that the best offers were the only offers that anyone applied for. In the whole of the engineering and economics faculty at Oxford I cannot remember meeting one person who admitted even to applying for one of the more miserly offers, with contracts of employment tied to the deal. It may also not surprise your Lordships that the best offers tended to come from major private industrial firms, while many of the worst offers came from the nationalised industries. The exceptions were British Petroleum—nominally publicly owned—which gave the most generous offer without strings attached, and also the Armed Forces who were the only people, with strings attached to their offer, to realise that there must be sufficient financial inducement to make the pupil forgo three or five years of his life after graduating.

I can thoroughly recommend the industrial scholarship system. The firm which puts up the money to sponsor a student through university cannot force that student to work for the firm after graduating. Therefore, in the case of one of the better offers, it is entirely up to the firm to excite the student as to the possibilities, challenges and satisfactions which can be obtained from working in industry. The firm will have, perhaps, a total of only three months in which to persuade the student of this—one month, probably, in each of the long vacations. The onus is on the firm. The best firms pull their finger out and make a good effort.

The proof of the pudding is in the eating. In 1972 and 1973 it was not uncommon to find that the firms which were running the best schemes were retaining 75 per cent. of the graduates whom they sponsored. This was in the days when it was slightly easier for bright graduates to pick up jobs anywhere they chose. Of the other 25 per cent. of graduates who did not continue with those firms, a proportion went either to other industrial firms, benefiting the economy as a whole, or to a totally unrelated sector of the economy. However, because they had been exposed to industry in a way in which their fellow students had not been exposed, automatically they became ambassadors for industry against this trouble spot mentality that the media puts over.

I must now say that there are some major industrial firms which do not make the effort. On learning that I was an industrial scholar, a director of one of the largest publicly quoted firms in the United Kingdom told me: "We don't bother with that sort of thing. We buy good men when we need them". I do not think that this is good enough, because the country as a whole will benefit only if all major firms put in an effort; then there will be cross-fertilisation between them and nobody will lose out. It is up to the CBI to have a word in the ear of the chairmen involved.

While the media may sway a few floating voters and, with industrial scholarships, can hand-pick a few bright students, the lure of industry has traditionally been the prospect of high rewards for the successful man. I think that many of the speakers before me would like this to be the future situation. Let us imagine that a bright student is planning his career. With characteristic modesty he assumes that in 30 years' time he will be at the top of British industry, the Civil Service, or employment overseas. At the moment he can see that the top industrialist might earn twice the wage of the top civil servant. The top civil servant, on the other hand, has greater job security and possibly a better pension.

This might be a reasonable balance, with the more ambitious, thrusting student going into industry and the more cautious student going into the Civil Service, if it were not for one major factor; namely, the graduated tax structure in this country which means that the top civil servant takes home just about the same as the top industrialist. This is 1977. Our student is thinking of the position in 30 years' time. Inflation, even at a modest level, combined with a fixed graduated tax structure will mean that in 30 years' time there will be no incentive to work at all, as I shall show a little later.

Exactly the same applies to the school-leaver of 16 who is considering whether to apprentice himself and learn a skill, accepting rather low wages for four years in return for the prospect of higher wages later on. That is one alternative. His other alternative is to take the full manual wage straight away. This school-leaver of 16 sees that his skilled father pays basic rate tax at the moment and has every prospect of paying 50 per cent. tax when free collective bargaining returns, and he considers 35 per cent. tax to be something of a liberty, 50 per cent. to be incredible and the prospect of paying 75 per cent. tax in 10 years' time, if the tax structures are not changed, to be some kind of a joke. He sees the prospect of working for four hours and being paid for one.

Then we take social security. My local social security office tells me that for an average married man with two children the social security payment is £31 a week at the moment. In 30 years' time, assuming an annual inflation rate of 10 per cent. per annum, the social security payment to this man, if his standard of living is to be maintained, will be £28,000 a year, tax free. This will be a poverty line income. Under our present tax structure, a man in employment will need to earn something like £150,000 a year to be on the poverty line, and he will need a rise the next year of over £16,500 to stay on the poverty line. I have played with figures, as can any student with access to a pocket calculator and a minute to spare. But unless a clear undertaking is given by the leaders of all political Parties that this situation is recognised for what it is and will not be allowed to continue, then the student is not going to opt for a career in British industrial management. The school-leaver may train as an apprentice but it will be to use his skills somewhere else, because as your Lordships will know the immigration qualification of many countries is that a man should possess skills.

Therefore, I am asking the leaders of all political Parties to pledge that the top rate of taxation will be brought down as soon as is practicable to the level of 50 per cent. and will never be allowed to rise above 60 per cent. It is no good having Governments popping tax up a couple of percentage points two years ago and then, amid great excitement, planning to bring them down a couple of points this year. What we need is a pledge on the part of all major Parties on which a student may plan his career. Unless such a pledge is given I think the wise student will assume that the drift of the last 30 years will continue for the next 30 years, and the wise student is not going to stick around to see it. My Lords, all political Parties have pledged to remove the stick, in the stick and carrot analogy that is known so well. Please can all political Parties agree to give us half a carrot? If you give us half a carrot then I think the students and school-leavers of this country will take up the challenge of British industry, and this debate will have been a very useful one.

7.53 p.m.

Lord BROWN

My Lords, I should like to start my contribution by commenting on the speech made by the noble Earl, Lord Verulam. I was really most concerned about his speech. If it is a characteristic of the attitude of those who have recently left our great universities, the grossly materialistic vein running through his speech would indeed distress me. I wondered why he had not long since departed for America, where I can assure him that all the calculations he made would probably need to have another "0" on the end of them.

The other point I want to take up is in connection with the speeches made by my noble friend Lord Kagan and the noble Lord, Lord Robbins. I firmly believe that the current rates of direct taxation are much too high, but to suggest in a debate of this kind that the level of taxation is a major factor in the problems from which we suffer is not tenable. This point of view takes some defending. For instance, I might have argued that Mr. Heath and his Government in 1971—or may be in 1970—actually made a very substantial reduction in taxation of about £1,000 million, and if I had been arguing in the same vein as the noble Lords, Lord Robbins and Lord Kagan, I should have pointed out the failure to regenerate industry, because there was a sharp fall in industrial investment immediately following that.

I do not use that argument, because I can go back to a time when the general feeling in society was that the Civil Service was a very poorly paid occupation; that teachers were certainly very poorly paid; that the universities were poorly paid and that relatively industry was rather well paid. Yet how much good did it do industry, which was in a very severe decline at that time? I am not saying that a revision or a lowering of taxation rates will not help a great many people. I do not want to be misconstrued in my argument, but I do not think it is a major ingredient of a solution to a problem which goes right back into history.

One could recite all sorts of historical stories about the decline of industry. I was going to give the House a quotation from that famous letter written by Lionel Playfair, who later became Speaker of the House of Commons, who wrote from the 1851 Exhibition in Paris, drawing attention to the fact that almost none of the British exhibits had gained prizes. He went on to explain that this was because our whole technical education was almost nonexistent, whereas in Europe it was a budding form of education.

One point that I will make, which is not often made, is about the contribution of the Church to this industrial failure. It was only on the passing of the Test Act of 1871 that Oxford and Cambridge finally became universities where anybody could enter, given the necessary scholastic levels, whether they were Roman Catholics, Jews, Nonconformist, or anything else. Prior to that, one had to be a member of the Church of England to enter those universities, and indeed if one taught in the universities one had to be either celibate or to take Holy Orders. At that time, most of the industry in this country was in the North and was being run by Nonconformists. One does not find among the Telfords, Watts, Stevensons, Arkwrights, Wedgwoods and others, who were the inventive geniuses of our industry, men who had been to the university. Why? Because they were not allowed to go. I think this is part of the reason for the tradition in this country over the last one hundred years whereby the graduates of our great universities predominantly did not go into industry. One could cite many other causes of this kind which led to a decline which probably started about 1850 relative to the industries of Europe and has steadily gone on ever since.

I wish now to refer to a more recent educational decision, and here I join with the noble Lord, Lord Alexander of Potterhill. I believe it was in the mind of the noble Viscount, Lord Eccles, when he was encouraging the progress of the colleges of advanced technology, to introduce a second system of university education in this country under the control of the Ministry of Education. I was not privy to his private thoughts, but I met him on many occasions because I was chairman of one of those CATS. If this had happened, I think those eight or ten new universities would have gone on teaching, as I think two only did, on the sandwich basis. But what happened? Edward Boyle—now Lord Boyle—called us together one day and announced that these new universities were to be handed over to the tender mercies of the University Grants Committee. They needed more resources in their early days than the average university. I think they had less, although I do not know, because the University Grants Committee will not publish the distribution of their capital funds as they are divided between various universities. I asked a Question on this in your Lordships' House some years ago, and I was told that they did not publish those figures. These new universities have been starved and at least seven of them have ceased to be what I am sure the noble Viscount, Lord Eccles, intended them to be. That is just a recent event, which shows that this kind of trend continues.

I am not an educationist in any sense of the word, but recently I read a report by Professor Archer of the Royal College of Arts. I mention it because I recommend every noble Lord to read it. As a result of a great deal of research in our schools, he has made a profound point. It is this. He says that there are currently two types of core subject in education. I will not try to say what they are—they cover the conventional matters which are now taught in our schools. He said that there is a third core subject which is more or less missing, and he described it colourfully in one part of his report, as "wroughting and wrighting". He meant those subjects which have the use not only of the brain but of the hands.

I believe one of the great tragedies of educational policy since the war was the abolition of the secondary technical colleges. What he is saying is that we have got to interest children more by letting them learn numeracy and language and everything else by using those in some occupation at school where not only brain and eyesight and hearing is used but hands, making things, doing things. This has received scant support from the schools, although there are noble exceptions to that comment.

May I turn to another cause of our current problem. It has been mentioned by others. It is the Press. I can remember—and it has stuck in my mind—a particular series of comments by the Press in, it must have been, about 1967. This country had just launched the Q.E.2. It was completing its trials. It developed vibration in its turbines. I think we can all remember the scandalous series of comments on the failure of British shipbuilding, the failure of John Brown, the builders, and all the rest of it. I happened to know a little about turbines at the time and I knew that one out of every 12 steam turbines built developed vibration, because the mathematics of avoiding that vibration are so complex that that is what happens. I also knew that at that time a British firm had six ships building in Germany and every one of them suffered from turbine vibration. I said to a number of Press people I met at that time, "If any one of you had gone into Imperial College and asked about this vibration they would have told you what I am now telling you. You knew that those six ships being built in Germany were suffering from an exactly similar complaint and yet you did not mention it. You damned a matter of national pride, because the Q.E.2 is a magnificent ship."

I will give your Lordships one other example, because they abound. I was listening to Michael Parkinson, not on his BBC television programme but on a radio programme he runs, I think, on Saturday evening. He threw off this remark, "Of course anybody in charge of a business is a non-creative person". It so offended me that I wrote a long letter to him chiding him courteously and gently, appreciating his programme, but saying, "This must not be; you must do something to retract from that remark". I would have expected a man who treats those he interviews with such sycophancy to at least treat somebody who had written a long letter with a little courtesy, but I never got a reply. These are instances culled from my own experience, and noble Lords have many more, of what the Press is doing to industry. I am very glad to note, however—and it is fair to say it—that there are recent signs that this attitude is changing. I have noticed in the Sunday Times half a page of success stories about industry, and I have noticed that the BBC have set up a special committee to consider the way they treat industry in their operations. So one can perhaps end on a slight note of optimism about that aspect of the matter.

Now I come to the point I want to make most of all in this debate. Again I am likely to be misunderstood. The thing that puts students off industry, that gives it a bad image, is the firm which has perhaps poorly designed products, poor technology, a low record of investment, bad industrial relations, poor marketing. There are such firms, as we know, who could be accused of all these things. If one looks carefully, I think one will find in most cases that in charge of that firm is a poor managing director. I think if you look further you will find it has a poor managing director because it has an inadequate board of directors; they have not taken the trouble to run that continuous assessment of the way he is doing his job which is the prime function of the board of directors. If you look a little further, you will find that the composition of many of our boards of directors is bad. They contain too many people who could not discern a bad managing director from a good one, because they have not had that kind of experience; too many people put on the board because they are apparently felt to add status, glitter to the board. Perhaps it is a title; perhaps he has been a soldier or a sailor, or perhaps he is a retired trade union man. I am not objecting to any of these categories as long as they have the experience to make that contribution in judging the chief executive which I believe is the main function of the board. I believe, and I have said so in many quarters, that about a third of British managing directors are not any good. I have said this in the boardroom recently of a major merchant bank, and the reply from them was "Brown, that is an understatement". By the same token, I am bound to add that I think about one-third of our managing directors are on the whole much better than anything you will find in other countries. I think our best are superlative. The remaining third get by fairly well. One of the major things we could do would be to ensure that we have fewer duds, because it is that minority which allows the Press to portray industry as the poor thing that many people think it is. They focus on failures because to them that is news. They do not focus on the success stories, of which there are many.

I end with one possibly helpful comment on this problem. Since the war there have been a growing number of very bright young men and women going from the universities into industry, admittedly too few. One finds today rising in industry men and women, of the ages of 30 up to 45 perhaps, who are very bright. I have had a lot of contact with industry over the last few years, in seminars and visits and so on, and one keeps seeing very bright people in second level positions. One sees on occasions that the men in charge, the managing directors, are people of a much lower calibre than they themselves. I wonder whether industry could not get together and state their requirements for new board members so that they obtained better boards; get firms who have these bright people and allow them to spend half a day a month joining the boards of non-competitive companies. Those younger men could get experience of sitting on boards, could look at how other non-competitive industries were operating and would have a frame of reference for criticising what took place on the boards they join. They could improve the boards, and in the course of so doing improve the leadership of industry. There is a throwaway suggestion of cross-fertilisation between industries of these bright young men, who, I fear, in some firms will get no further. I end on that possibly hopeful note as a means of improving the image of industry in our society.

8.9 p.m.

Baroness SEEAR

My Lords, the hour is late and we have had a great range of very interesting speeches. I will be as brief as possible. I must first, however, with particular pleasure thank my noble friend Lord Rochester for persuading us to use this Liberal day for this very important subject. Indeed, I should like to see this debate published as a small pamphlet, because I really believe there has been so much said today which it would be useful to circulate in many quarters, to give new ideas where new ideas are badly needed. It is important because the time is running out. We have got to act quickly. The difficulty is that this problem is very deep-seated. The noble Lord, Lord Brown, was quite right to insist that the decline goes back a very long time. The reasons for that are to be found in history and in very deep-seated attitudes. These are not easily changed. On the other hand, the need to deal with it now and not to delay is of the greatest importance.

Let us look at what is happening. Skilled men cannot be found. We are unable to staff jobs that require skills. The recent "Neddy" report shows that skilled men are moving out of industry. This is a danger mark which is of the greatest importance. We have heard in the speeches today how managers are looking overseas for jobs because they cannot find satisfaction here at home. The university appointments boards have figures showing—and this also applies to the institutions for which I work—that very recently rather more people have gone into industry. However, the figure certainly is not high enough to call it a trend. Even if there is an increase, it is an increase from such a low base that it cannot be a matter for any great confidence whatever. Therefore, time is not on our side but the problem is deep-seated and difficult.

The problem can be summed up by saying that in English society at any rate—and I am sure that the noble Lord, Lord Robbins, is right when he says that Scottish society is different—there has been a conspiracy of the Right and the Left. Whenever that happens some of us, particularly those of us on these Benches, know that we are in deep trouble. On the Right we have had the social prejudices against industry which in the past kept so many people from going into industry. It was particularly dangerous in those days when education was restricted to those who found their way to the older universities. On the Left we have had the contempt for industry—the belief that this is something which decent, honourable and intellectual people do not do. We have been caught in this pincer movement between the Right and the Left. These beliefs are very deep-seated indeed. They come out in all sorts of ways in people who are not even aware of what they are expressing.

What can be done about it? Three major groups of people are concerned. There is industry—both employers and trade unions; there is the whole educational world; there is the Government and the Civil Service. Those are the three major groups which are concerned in so many matters in our country. Each could do something straight away. The important tasks cannot be done straight away. There is a good deal that industry could do. The noble Earl, Lord Verulam, advanced a suggestion. Industry should make a much greater effort to communicate to other people what it is doing. It has been far too private in its affairs and it needs to put its own house in order.

Although the noble Lord, Lord Houghton of Sowerby, is not present, I would point out that it is not really fair to compare the kind of career planning that can be done within the public service with what industry can offer. The public service does not face the problems that arise when markets fall away. Industry is at the sharp end of these changes and has to bear the burden of what happens when changes take place. This is in no way comparable with what happens in the public service where, if a department does not balance its budget, it can receive a supplementary budget from the Government. There is no such supplementary for the private sector which is faced with markets that fall away, with currency changes and, indeed, with changes in Government policy which have put many a company in the construction industry into the bankruptcy court. What good is it to say to companies of this sort that they should have nicely planned career structures? Many of us have preached for years that industry should develop career planning and where possible have career structures. However, industry is subject to totally different pressures from those in the private sector.

When the noble Lord, Lord Houghton, makes such a feature of the good industrial relations in the public sector and the poor industrial relations in the private sector, I would ask him whether he has forgotten the very large number of firms in the private sector where there have been no strikes at all. This brings me back to our friends in the Press who highlight, and rejoice in highlighting, the troubles that occur in industry, but who never give publicity to the many firms which do not run into industrial troubles and which have developed far beyond the Whitley Council practices, to which the noble Lord referred, in developing consultative practices within their concerns. Indeed, in which industries have industrial relations been worse in terms of strike records? Is it not in many of the public sector industries? I cite, for example, the steel industry, the coal industry, and civil aviation, particularly the engineering base at Heathrow Airport. Those situations were not the faults of private enterprise.

I do not say that private enterprise should not do a great deal in order to put its own house in order and to offer something to those looking for a career. However, it cannot offer them security. It is not in the nature of industry to be able to offer security. If it can offer security, in many cases it would not be doing its job. It must offer people the opportunity to take a risk—and that is what has gone wrong at present. It can offer them doubtful prospects if things do not go well, but it cannot offer them great rewards if the risk is taken and succeeds. However, it is not only for industry to change.

I turn to the educational sector. I echo what the noble Lord, Lord Robbins, said, that whereas there are many exceptions inside the academic world, the general ethos in the academic world to a large extent is one of, at best, condescension and patronage towards industry. It is the searing asides, the jeering superiority that one hears so often floating around the corridors of an academic institution. Of course that rubs off on students. It is not direct propaganda against industry; it is the creation of an atmosphere which is highly infectious and which the students absorb into their skin without realising what is happening. Therefore, very often even the best students think that it is almost a trial to go into industry. The same happens in schools. I was in industry for 10 years and when I was trying to recruit a girl from a grammar school and asking for a testimonial, a typical comment from a headmaster was, "She is rather a fool but she will do for you". That was said in so many words, and it is an extreme case of the kind of comments that one so often receives.

At one time I had a conversation with someone who had been in industry but who was thinking of going into the public sector. He had been in the export trade, travelling overseas. He said that he wanted to go into the Civil Service because he thought it would be of greater public importance. In particular, he wanted to go to the Board of Trade. I said that if he found himself urging his present company to do better in trade overseas, would he feel that he was contributing more to the wellbeing of the nation. His answer was "Yes". That is the kind of attitude which has spread subtly from the educational system into people's outlook towards industry. It is partly caused by sheer lack of information, and this is an area where something could be done fairly quickly.

I am not critical of the Careers Advice Service in either schools or universities. With the resources it has, it is doing the best it can. However, it should be run quite differently. It is not brought into the schools anywhere near soon enough. It does not have contact with the youngsters until, to a very large extent, they have made up their minds what they want to do—certainly until after they have made up their minds as to what subjects they are going to take. Careers advisory people seeing youngsters a couple of terms before they leave is far too late. We have to take the business of careers advice a great deal more seriously and spend a lot more money on it, and maybe do it in a rather different way than the way we are doing it at present.

I should like to urge from this debate that this is a high priority, and that we look at the way in which both school-leavers and university graduates get information about industry. We want some kind of work experience in that last year at school. We want to get rid of the ridiculous distinction between training and education. These are not two quite different things. Training can be highly educational, and education can contribute what is needed vocationally. It is the way you teach that matters; it is not whether you label the thing training or education. Work experience should be included in this in the last year at school—perhaps even earlier, I do not know—and in some way for students during their university careers. That is one of the things of greatest importance.

I know that we shall be told from the Front Bench that the Government fully appreciate the importance of industry; that they greatly believe in the mixed economy; that they want industry to nourish and that they have the greatest respect for management. But people are not very interested in words, because what they listen to is deeds. What they look at is what the Government do; that is what carries conviction and not what Governments say.

The other night I queried the term Social Contract, saying that it was really a trade union agreement, and I was told that that was semantics. I do not wish to make Party points tonight, but it is highly relevant to this debate that it is not semantics. The managers of industry know that these arrangements have been made with no regard to them whatever. So long as that goes on, the Government can say that they believe in management as often as they like and they will not be believed.

I agree that taxation is by no means the whole of the question, but the British Institute of Management reckons that in the last two years the real living standards of managers have fallen 19 per cent. That is too drastic for any people, even if they are not very materialistic, to take without protest. If that stays, then managers are not going to believe that the Government want the private sector to flourish and believe that management is doing a good job.

I do not want to stray into the area of the Bullock Committee tonight, but how can managers really believe that the Government respect the job of management when the very terms of reference bore no relationship to considering what management was doing; when that great band of middle-managers, who to a large extent have to make industry run, were in no way represented on that Committee; and when the report from that Committee pays no regard whatsoever to the position of management inside industry? If the Government allow that to stand, then they can say again and again that they believe in the private sector and that they value management, and they will not be believed; and they will not deserve to be believed.

These are some of the things that can be done straight away, or within a short period of time, to begin to make things better. But something much more fundamental than this is needed to deal with what is a very fundamental issue in this country. It has come out in other speeches. We are different in this country from other countries in the Western World—from America, Germany, France. The problem is not the same here. One of the things at the root of our problem is that we are divided. It was considered that it was a matter of class. I think it is much more difficult than this.

People in Government, in the Civil Service, are a cadre on their own; industry is on its own; education is on its own; there is no real interaction between these three vital elements. We do not organise to bring them together. You will change attitudes only when the people from these three sectors get into the habit of learning together and working together, and of a real exchange of experience. Our educational system does not do it, as other speakers have said, and the whole way people build their careers in this country makes it extremely difficult for this kind of real understanding, which comes from genuine, shared experience, ever to happen. They stay inside their own camp. We need to bring them together in the education field. We need to have the kind of centres in this country where you get | (and not just for a weekend), as is done in France as others have said, people from the public service, from industry, and from education, getting together and going through common learning experiences of the kind which will make a lasting effect on them. That is one thing.

The noble Lord, Lord Tedder, was moving in this direction, but I think we want to go much further than this. We want it to be possible for people, and not just from the public service who feel themselves to be civil servants—knowing they are going back into the Civil Service at the age of 35, 40 or 45—to move out of the public service and the academic world and go into industry and then back again.

In my experience nothing has been of deeper significance to me than that I should have spent 10 years in industry and then have come out and have moved to a quite different kind of job. This is a formative learning experience of a totally different order from just having a few months out, sitting at somebody else's job. This cannot be done easily, but I believe it is fundamental to the whole matter. Unless we have a real exchange, a real movement from one kind of career to another kind of career, we are so hard shut in into our own particular area. The Civil Service is the Civil Service; industry is industry; academia is acedemia. You cannot get a manager out of industry to teach in the university. Every difficulty is put in your way. What would be said of bringing permanently into the Civil Service people who have been successful in industry, and putting them in not low down but high up as is done in other countries?

It is through this kind of development that we will really make progress at beating the deep-seated attitudes which are at the very root of the problem we are talking about. The other things that we have discussed will make some contribution. They are superficial. It is this real mingling of careers and personal experience which would make the whole difference. I have spoken much longer than I meant to.

8.28 p.m.

Lord WINTERBOTTOM

My Lords, like other noble Lords, I must thank the noble Lord, Lord Rochester, for making this debate possible. But I should like to go further than that and congratulate him on the outstanding excellence of the debate which he has brought about. However, it makes my job of answering your Lordships' discussion infinitely more difficult, and I feel that you have put a somewhat impossible task upon me. Two things I can undertake to do: behind me stand two powerful Secretaries of State, at least metaphorically, and I can make certain that your Lordships' debate will be brought to their attention. I hope that this will satisfy the noble Lord, Lord Gore-Booth, who in fact asked for just that; that what we have said today should not be ignored. The other thing I can do is to let your Lordships know, after a few remarks of mine, what we are hoping to achieve in the area of discussion. It may be helpful to pull things together if I could once again repeat the Motion of today's debate. It is: To call attention to the need for agreed action aimed at increasing the esteem in which industry is now held in society, particularly among students… That is what we are talking about.

The noble Lord, Lord Rochester, the noble Lord, Lord Annan, in a most fascinating speech, and other noble Lords have said that the attitudes of our society are very deep-rooted, and of course the attitudes of society as a whole must influence the students who are an integral part of it. My view is that the peculiar attitudes towards industry that exist today are based on the reaction and counter-reaction between the British people and their Industrial Revolution; I think it goes back as far as that. That revolution burst on an unplanned society and created two catch-phrases. One was "Dark satanic mills" and the other was "Where there's muck there's money", and these are the two catch-phrases which are in conflict in our thinking about the problems and which gave birth to the conflict which has lasted until today.

The impact of the Industrial Revolution was demonic. It created and destroyed; it produced wealth and power but it also produced Marx, the Communist Manifesto and Das Kapital. It is strange but true that the para-religious faith of Marxism has permeated our society; it is still proselytising and it is still attracting young people, and indeed people of middle-age, who will not see what 50 years of the Marxist faith has done in countries like Russia. When the noble Lord, Lord Carr of Hadley, in what I thought was a very thoughtful and constructive speech, asked why the British had such a peculiar attitude towards profits, I suggest that he must remember that "profit" to a Marxist is a dirty word.

I have for some years denied myself the pleasure of reading Das Kapital, but I seem to remember that "profit" in Das Kapital is referred to as "unearned income". It is something unclean; the poor, the working people of the world, have been robbed, and for this reason no Marxist holding firm to his religious faith will accept the fact that profit is an absolutely necessary part of industry. "Profit" may be a dirty word, but does that make "loss" a clean word? One either makes a profit or a loss; one either makes sufficient profit to re-create one's industry or one must run with the begging bowl to someone else. These are simple truths which I understand, which I am sure your Lordships understand, but which many young and middle-aged people reject.

All caring people, of whatever Party, have reacted against the dirt and debris of the Industrial Revolution. We have all tried to clear up the mess and, I think we can agree, with a marked degree of success. But those who continue to sing Jerusalem and the Red Flag with full-throated fervour tend to overlook the fact that the mills are becoming less satanic, that capitalists are bringing social needs into their calculations, that trade unionists are peace-makers and not war-makers, and that it is the mills that create the wealth that enables us to enjoy life and have any Welfare State at all.

Having said that, I would say that this century or century-and-a-half of strife have brought about a very strange British attitude of mind which is a peculiar mixture of Marxism, intellectual and social snobbery and uncontrolled idealism, and it is this peculiar mental attitude, which many noble Lords have said today is unique to this country, which we must somehow disperse. Let me say what the Government are trying to do in this area. Lord Rochester stressed the need for agreed action and the Government are fully conscious of their part in this. In taking forward their industrial strategy, the Government have made it clear that the physical and financial needs of manufacturing industry must take the highest priority, if necessary at the expense of our social aims. An essential part of that strategy, which was reaffirmed at a NEDC meeting a week ago, when my right honourable friend the present Prime Minister took the chair, is a shaping of other policies—in education, energy, transport, environmental matters and so on—to accord with and assist our industrial aims. This is a clear affirmation of the importance which the Government attach to the role of industry in our national life, and at least two noble Lords have paid tribute to this statement of intent.

Industrial strategy is a tripartite operation, both at national level (where Government Ministers, CBI and TUC come together in the NEDC) and at the level of individual industries, where individual managers and trade unionists take part with Government officials in over 40 sector Working Parties. This co-operative approach must also be carried out at the level of management and employees in companies and plants.

The noble Lord, Lord Bowden, referred to the need for industry to be assured of stability and of continuous policy. The Government recognise this and will do what they can. The Government have made it clear that stability of the tax environment is a prime objective and, for example, the present system of 100 per cent. capital allowances for fixed investment has now been stable for five years and the Government are committed to continuation beyond the end of 1977. Lord Bowden also spoke about the ill effects of using industry as an economic regulator. The Government, in the context of the industrial strategy, have recognised specifically the importance of stability in direct and indirect taxation and intend to provide as stable an environment as possible. Most noble Lords have mentioned the need for far better financial rewards for managers in industry, although my noble friend Lord Brown stressed, I think rightly, that that was not the only factor. The Government are conscious of this problem. The overriding need for the time being is to contain inflation, and that is in the interests of us all, not only of managers; but my right honourable friend the Chancellor of the Exchequer will doubtless have these points in mind, among many others, when formulating his Budget and in discussion with the TUC about the next pay round.

The points made by Lord Bowden and my noble friend Lord Kagan about differentials were particularly pungent and interesting. I would gladly study any information which the two noble Lords may care to give to me, but I would utter a serious caution. Superficial comparisons of salaries are notoriously misleading, particularly on the basis of the scanty information available in advertisements, and that is why the Government, as an employer—I cannot speak indirectly for local government advertisements—in settling Civil Service pay in normal times on the long established principle of fair comparisons with jobs and pay outside, have the highly experienced Pay Research Unit to make for the negotiating parties the full comparisons between the jobs themselves and all aspects of remuneration; anything less would risk failing to compare like with like.

Lord ELTON

My Lords, I wonder whether the noble Lord could clarify the situation for us, possibly with the aid of his noble friend. It was not advertisements that were in question but specific appointments in sister firms, was it not?

Lord WINTERBOTTOM

I am afraid that I have mixed up two separate points, my Lords. The noble Lord, Lord Bowden, mentioned comparative figures in advertisments in the Guardian on the same day, while Lord Kagan made comparisons between the rates of pay and salary of British firms and their Continental counterparts, and the noble Lord, Lord Carr, pointed out that 200 overseas managers in ICI were paid more than some directors of the parent company. Those were important points, and I am afraid that I rather laid a slight confusion across the argument by introducing Lord Kagan, who was talking about something different. The point made by my noble friend Lord Houghton of Sowerby on the need for an equivalent Pay Research Unit for industry was interesting. If my recollection is right, we had something like that proposed in the Relativities Board; I seem to remember making a speech regretting its demise. Perhaps it may rise from the dead some day.

Baroness ELLES

My Lords, I am sorry to interrupt the noble Lord, but I wonder whether, having referred to the system of comparability—which not all of us agree with—he can tell us how the Civil Service Pay Research Unit weighted the figures to allow for the almost total security of the Civil Service and the insecurity of private industry.

Lord WINTERBOTTOM

My Lords, that is a fascinating point but I cannot possibly argue it tonight. I feel that danger money is required for industry, but that is a purely personal view. We talk about the whole approach having to be a tripartite one, and all parts of industry are in fact playing their part in areas which were mentioned by the noble Lord, Lord Carr, and many others in the course of the debate. One area which is important and which, again, has been touched on by many noble Lords, is the role played by the media in this matter. We are debating a most important issue and it is vital that the problems that this country is facing should receive constant, intelligent and unbiased reporting by the media.

As mentioned by my noble friend Lord Brown, one particular development which very much pleased the Government was the formation by the BBC of a consultative group on industrial and business affairs under the chairmanship of Sir Frank Figgures—a most distinguished man. It includes members from management and the trade unions. Its task is to consider the BBC's activities as a communicator in the public interest of industrial and business affairs, to provide advice and to serve as a forum for the interchange of ideas between the BBC and the worlds of industry and business. I am sure that we all welcome this initiative and wish the new group well. Doubtless, it will become a group to discipline gentlemen like Mr. Parkinson when he makes unconsidered remarks as he did the other night. I expect that many noble Lords will regret the fact that the box upstairs is at present unoccupied, because tonight's debate might have gone to a wider audience if it had been functioning.

I turn now to the so-called "great debate" on education which is just starting. Last October, in a speech at Ruskin College, Oxford, which will surely come to be regarded as historic, the Prime Minister called for a public debate on a number of issues which have been causing concern. I am glad to say that the response to the Prime Minister's call from many professional organisations has been gratifying; many members of the public, too, have taken the trouble to set out their views and have sent them to the Secretary of State for Education and Science. Some of the comment has been misinformed. I suppose nobody ever gets it all right. It has, for example, been suggested that in recent years there has been a catastrophic decline in standards. There is no evidence at all that this is the case; and one of the purposes of the present debate is to provide an occasion on which ill-founded fears can be put at rest. But it must also provide an occasion and a framework for the constructive discussion of areas of legitimate concern. I believe that today's debate has done just that. It is clear that there is widespread support for a review of the school curriculum, for more attention to the assessment of pupils' performance, and for renewed efforts to ensure that children are given an adequate preparation for working life.

The Secretary of State for Education and Science and the Secretary of State for Wales have set in train a wide-ranging consultative process which has already involved the major educational interests as well as both sides of industry. As the next step, there are to be eight regional conferences in England and Wales in the next couple of months. The four main topics for discussion will be the curriculum; the assessment of standards; the education and training of teachers; and school and working life.

The fourth topic—school and working life—bears closely on the theme of today's motion. If education is to be an effective preparation for life, it must recognise the role played by work in determining the style and quality of life. Among other things, this means that the schools cannot ignore the importance of helping pupils towards an understanding of the complexities of what is increasingly a technologically-based society, and of industry's role in wealth creation. This does not mean that the schools should see their role in terms of vocational preparation in any narrow sense; this is not the function of the schools. What it does mean is that the schools should do everything possible to prepare children to take a realistic and informed view of the world which they will enter after leaving school. They must realise the importance of the basic skills of figure work and language and the need to acquire the habit of learning and to apply this habit throughout their working lives. I seem to have heard that this is an echo of the message sent to the Government today from this debate.

I would also suggest, personally, that among the core subjects that should be taught should be a little basic economics about how wealth is created. There has been an interesting discussion in relation to this about the role of the careers teacher in various schools. The noble Lord, Lord Seebohm, was rather in favour of his abolition, I believe. I think he said that this ought to be taken out of the educational system. He is not here, unfortunately.

Lord ELTON

My Lords, I think he was talking about careers officers, who are officers of the local authority, not about careers teachers, who work in schools.

Lord WINTERBOTTOM

I am sorry, my Lords. This springs from my ignorance. Nevertheless, there has been fairly wide discussion today of how careers are to be brought to the notice of students of various age groups, and that can only be helpful.

As your Lordships may know, I am an inveterate optimist and I believe that tonight's debate is not the first debate on this subject but is a stage in a rumbling discussion that has been going on in this country for the last three or four years, following upon the crisis brought on our country by the use of the oil weapon by the Arab world. In my optimism, I believe that it will be of very great benefit to us because it will break down a lot of entrenched ideas and positions which were destroyed in other countries as a result of the war, but which, because we were successful in that war, have remained with us. We shall, I believe, come out of our present discontents better organised and with a better understanding of our society than existed before the crisis broke. I am, as I said, optimistic because I believe the tide has turned, as the noble Baroness, Lady Seear, and the noble Lord, Lord Gore-Booth, have said.

Baroness SEEAR

My Lords, I said that there was a little tiny sign.

Lord WINTERBOTTOM

My Lords it is no larger than a man's hand, but on the other hand, it is there. I believe that the statistics show it and I do not know what else one can go by.

The statistics are interesting. I turn, first, to the recruitment of students in science and technology, although I believe that the recruitment of arts students and their proper use is a far more difficult subject than the recruitment of science and technology students. However, that is something that has not been much discussed this evening. As noble Lords have said, admissions to university degree courses in these subjects fell in the early 1970s but have recovered since 1974. Within the total, engineering has been doing particularly well. The CNAA degree courses are also attracting more students, and applications to engineering courses increased by 16 per cent. in 1976. Nevertheless, there are still many empty places in science and technological subjects in our universities and polytechnics. There are 27,000 this year, of which 22,000 are at universities and 5,000 in polytechnics.

So many people have expressed concern about this—one or two noble Lords have done so this evening—that it ought to be put into perspective. Recent experience has been such that the students who have already been admitted will fill many of these places as they proceed to the later years of their courses. The places which are not committed in this way but are available forfurther expansion are sufficient to allow admissions to rise by only a few thousands—say, 4,000 to 5,000—above their present level over the next two or three years. There are signs that the admissions will continue to rise. The latest figures from the Universities' Central Council on Admissions show that the applications for 1977 entry to universities are 5 per cent. higher than in 1976 for the pure sciences, and no less than 18 per cent. higher for engineering, which is an indication of a swing from the pure sciences to applied science which I know will satisfy some noble Lords. The most notable increase is in production engineering which is up by 30 per cent.

The picture therefore is encouraging—that more and more students are wanting to take engineering courses likely to be of direct value to manufacturing industry. What is perhaps more important than numbers is quality, however difficult it may be to define or measure. The trend now is for applications to rise rather more quickly than admissions. It is to be hoped that this will lead to an improvement in the general quality of students. This would naturally be a very welcome development. However, even this would not necessarily mean that engineering and technological subjects attracted their fair share of the very best students which, I think your Lordships will agree, they are not doing at present. There is no hope of doing this unless students are offered first-rate courses which are seen to be directly related to the nation's industrial needs and to lead to challenging careers with good prospects of advancement. However, the Government believe that there is also room for financial incentives which will be attractive in themselves and will demonstrate the importance of courses of direct value to industry.

This is where we come to cash incentives. The Government have in mind two kinds of incentive. First, as the Secretary of State for Education and Science announced in the House of Commons on 3rd February, students may in future receive payments by employers of up to £500 a year without any reduction in their awards. This is in addition to the normal "disregard" of £185 at present, which is itself under review for the 1977/78 academic year. Employers may make these payments to students entering higher education in the normal way and taking subjects in which they have an interest, but they will also have an incentive to identify their own "high flyers", who may have entered their firms direct from school, and then to support them through a degree course. The Government hope that they will take full advantage of this change in the awards arrangements.

Secondly, the Government are examining the possibility of a scheme for industrial scholarships. It is not possible to give details at present, but the basic elements would be that it would be run in collaboration with industry and would be intended for especially able students taking particular courses in engineering and technological subjects.

So the picture is not wholly bad. What is happening is that we have found ourselves in a position which satisfies no thinking person in our society. We are finding our way out of our difficulties in the way that has served us so well in the past, which is concerned democratic discussion; and because of this discussion I think that there must come a better understanding of what our society needs to restore its prosperity and competitiveness. I believe that tonight's debate will make an important contribution to a public discussion and a solution of our problems.

8.53 p.m.

Lord ROCHESTER

My Lords, at this time of night I shall be very brief indeed. I want to thank all noble Lords who have contributed to what it is good to know has been generally thought to be—and I certainly share the feeling—an excellent debate. As I think I said at the start, I had hopes first that it might enable us to identify a little more closely this very difficult problem of the relatively low standing in which industry now finds itself in society, and in that I think we have largely succeeded. Certainly as the debate has gone on the problem has shown itself to be even more wide ranging than I for one had supposed.

Secondly, I had some hopes that as a result of the debate there might be some measure of agreement among your Lordships as to what might be done. The debate has shown, as it was obviously bound to show, how very intractable is this problem. Nevertheless, there has been some limited consensus I think, particularly perhaps in relation to the points made by a number of noble Lords concerning the need for something to be done about improving the relative awards in industry, particularly for senior and middle management. It was good to have the assurance from the noble Lord, Lord Winterbottom, who has just replied for the Government, that the points that have been made will now be carefully considered.

For the rest I expect that many of your Lordships will feel, like me, that it will be best to reflect on what has been said and to try to digest it. I hope that in the end the debate will have proved to have succeeded in bringing a solution of the problem a little nearer, and that one day there may indeed be agreed action which will lead not only to an increase in the esteem in which industry is now held in society, but that it will help also to improve the standing once more of our country in the world. With the leave of the House, I beg to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.