TRAINING IN INDUSTRY

HL Deb 19 December 1979 vol 403 cc1701-39

4.18 p.m.

Debate resumed.

Lord BROWN

My Lords, we on this side of the House are grateful to the noble Lord, Lord Mottistone, for giving us the opportunity to debate the subject of industrial training. In the presence of what one might call current Government euphoria for levying cuts in expenditure without any apparent consideration of priorities we are indeed very alarmed that the axe may well fall on industrial training. Indeed, the debate last week in this House on the indiscriminating treatment being handed out to the universities gives us justifiable cause for alarm. This debate is therefore an opportunity of finding out what the immediate future holds for the industrial training boards, and I am sure that we are very grateful to the noble Lord, Lord Mottistone, for the information that he has given us about their operations and for his proposals for, if I may put it this way, amelioration of their situation. I found myself largely in agreement with his remarks so far as they related to the industrial training boards.

It is, and has been, an extraordinary aspect of our country that, whatever the level of unemployment, we are always short of skilled people. One would have thought that the obvious security of employment which, through the years, has resulted from the possession of trained capability would have resulted in an overcrowding of all the institutions of further education, but of course that has not happened.

I propose to tackle the subject of this debate from an unusual and, perhaps, a surprising angle. I want to deal with the subject very broadly indeed, because industrial training is, I think, a fairly narrow facet of something much bigger that of fitting people at all levels, in all walks of life, for creative ability at work. Industrial training is the tip of an iceberg, and what lies beneath is the attitude of parents, school experience, apprenticeship, what happens in Government training centres, in technical colleges, in polytechnics and in universities themselves. The fact is that a large sector of our society has literally turned its back on education itself, because it has not had what I would call education for capability.

My Lords, a group of people met last year—and I must declare my own interest, for I chaired their meetings—and they produced the following statement on this issue: We …believe that there is a serious imbalance in Britain today in the full process which is described by the two words ' education ' and ' training '. Thus, the idea of the ' educated man ' is that of a scholarly, leisured individual who has been neither educated nor trained to exercise useful skills. Those who study in secondary schools or higher education increasingly specialise; and normally in a way which means that they are taught to practise only the skills of scholarship and science; to understand but not to act. They gain knowledge of a particular area of study; but not ways of thinking and working which are appropriate for use outside the education system. We believe that this imbalance is harmful to individuals, to industry and to society. Individual satisfaction stems from doing a job well through the exercise of personal capability. Acquisition of this capability is inhibited by the present system of education which stresses the importance of analysis, criticism and the acquisition of knowledge and neglects the formulation and solution of problems, doing, making and organising, the constructive and creative activity of all sorts. The resolution of this problem in Britain has been vitiated by discussing it in terms of two cultures: the arts and the sciences. It is significant that we have no word for the culture that the Germans describe as 'Technik' or the mode of working that the French describe as a 'Metier'. We consider that there exists in its own right a culture which is concerned with doing, making and organising. This culture emphasises craftmanship and the making of useful artefacts; the design, manufacture and marketing of goods and services; specialist occupations with an active mode of work; and the creative arts; and the day-to-day management of affairs. We believe that education should spend more time in teaching people skills and preparing them for life outside the education system; and that the country would benefit significantly in economic terms from this rebalancing towards education for capability ". That statement was offered to 400 people for their signatures in support. My Lords, 170 signed. They included 20 professors, 8 heads of polytechnics, 7 vice-chancellors of universities, 6 local authority directors of education, 47 chairmen or chief executives of our very large industrial companies and 22 noble Lords from this House. Since then, the Royal Society of Arts has taken over this initiative and is now planning publicity and awards for schemes which meet the aims set out in the manifesto which I have quoted.

Education for capability is one of the pillars which support the future wellbeing and wealth of our society: yet millions of people are alienated from education and, through that process, from daily work itself. In Germany, Switzerland, Holland, Sweden, Norway and Denmark, and in other countries, education tends to be regarded by most as the route to interesting, creative work and promotion. This difference between our country and some others is one of the sources of our own decline. For two decades politicians and Governments have been debating education largely in terms of its structure—comprehensive education or not comprehensive education. I have taken little part in that debate, but I have been amazed at the stubborn defence by the Conservative Party of a system of privilege which was largely abandoned by our competitor countries more than 50 years ago. Have they suffered as a result? I think not. But, leaving all that argument aside, I think we should have been concentrating on overcoming the deadening effect of much education at all levels (excepting, perhaps, at primary school level) on the minds of so many young people.

My Lords, how we can go on teaching, say, French to tens of thousands (it may be hundreds of thousands) of our children, largely in terms of French grammar, when we know perfectly well that not 5 per cent. will be able to converse in that language when they leave school, I do not know. Are we not all aware, from our own experience, that the moment when some item of important knowledge becomes fixed in our minds is when we discover its importance by usage? What I have said could too easily be construed as advocacy of narrow vocational training, but that is not the case. It is neither desirable nor, indeed, I think possible to prepare people to carry out specific work jobs either in school or in technical college, in polytechnic or in university. That is the task of Government training centres, apprenticeships and training courses run by employing institutions. But if we fail in education to stimulate that thirst for knowledge and its creative application to work, then training itself largely fails.

I have here a quotation from Sir Alec Smith, who is head of the Manchester Polytechnic. I quote it to your Lordships: It seems to me that there are real educators in the primary schools. Thereafter, the process changes. The emphasis shifts so that it becomes more a process of teaching subjects. There are fewer educators in the upper reaches of education: they are mostly teachers of subjects. Within this process of the teaching of subjects, there is a very debilitating hierarchy of esteem of subjects which stands to the discredit of education. Subjects which are really valuable in the development of the young—subjects like moral education, health education, practical education—are more likely to come their way if they are deemed to be less able, the more able being fully committed to the classical academic subjects of high prestige ". That is what I have been trying to say, but, having found that quotation, I think Sir Alec Smith says it much better than I have said it.

If one looks at the history of Government training centres one sees that by 1951 the number had fallen to 23, and by 1962 there were only 13 left. Then, under the stimulus of unemployment, the figures rose to 52 in 1972 and 64 in 1975. I have no later figures, but I hope that the Government spokesman will, if possible, tell your Lordships what the figures are today. These figures suggest that there is too little endemic thirst for training at all levels of employment—yes, in the boardroom, also. It means that too many are relying on the strength of their trade unions in bargaining to increase their material standards of living, instead of opening up fresh careers at higher levels by further education and training.

In a very small Scottish town in which I spend a few weeks every year, there is a dearth of joiners, electricians and mechanics; but the young unemployed reject grants which would take them to training centres. This is largely because their school education failed to excite them into learning and doing. I do not know how many noble Lords have read the report of Professor Archer of the Royal College of Art, a report which he made to the Department of Education and Science on the status of and the time spent on doing and making and creating in schools. It covers the theme which I am pursuing much better than I can. He points to the excitement created in children by allowing them to formulate their own problems and to seek solutions to them instead of always working on problems formulated for them in the creation of artefacts, drama, music and projects. He points out that this sort of activity takes much too small a part in our schools and that the teachers or those who instruct in these more practical arts are of lower status.

Another indication of the way we are heading is that, in the Department of Industry's design award scheme for schools, which is an excellent arrangement, out of 6,000 schools pupils from only 200 entered exhibits for this year's awards by His Royal Highness the Prince of Wales. They were magnificent and inventive exhibits but there were only 200 school entries out of 6,000 schools. This is to some extent a commentary on our schools. Many of the pupils who entered stated that their own headmasters and other staff were not interested in the pupils' contributions. For many years I have been associated with a small university whose four-year courses are based on the condition that every post-graduate spends three periods of five months in full-time employment during the course, whatever the discipline he studies. This year 72 per cent. of its graduates immediately entered employment—and largely into industry. That 72 per cent. is a higher figure than for any other university. I think that this is because they have experience of the application of knowledge as well as of absorbing it.

About a year ago it was reported in The Times that the Association of Teachers of Engineering in Universities had come to the conclusion that too much time was spent in teaching the theory of engineering and too little on its application to work. I merely comment: At last!—would that those involved in every discipline in our polytechnics and universities would come to a similar conclusion. Perhaps we are overcoming, at last, the widely-held but false view that practice in design or in devising solutions to problems of manufacture is a lowering of the level of university education. My view is that only by offering what the medical profession calls clinical experience can the level of education in universities and polytechnics be raised. Only by doing that will we attract into industry-orientated courses a higher proportion of the brighter school leavers.

I want to raise a special problem and to plead with the Government to take note of it. I need not dwell on the immense need for re-education and training of industrial specialists, as well as managers, already in employment, The growth in the field of micro-electronics alone is sufficient to point to its necessity. One of the ways in which this re-education need can be met is by post-graduate courses at universities and polytechnics. Such courses take two forms: full time and part time. Full-time courses usually involve a grant from one of the science research councils of about £2,000 a year as support for the student and something like £600 a year to meet the university fees. It also means release from employment, usually without cost to the employer. Part-time courses involve the student in paying his own fees—which the universities have to keep at a very low level, for otherwise there would be no part-time students. These fees generally come out at something between £150 and £200 a year. There is no recognised route by which the candidate or the employer can recover from the science research councils, from the Government or from local education authorities, even part of the cost of study of part-time students. Nor do the industrial training boards support post-graduate education as part of their function.

But that is not the end of the story, for the number of part-time graduate student enrolments are not taken into account by the University Grants Committee in determining the sums of money to be provided to each university each year. Thus, in the case of a university which has a large number of part-time students, the amount of money it gets per full-time student educated in the university is lowered by that amount, and it becomes poverty stricken. So the full-time candidates cost the Exchequer (by all the round-about routes through which you reach the Exchequer) about £2,600 a year; while those highly-motivated employees who are able to persuade their employers to release them for one day a week and who are willing to pay their own fees will cost the Exchequer nothing, except for some trifling expenses on travel and cost of books.

One of the courses at the university with which I am associated, just one of them, on digital micro-electronics—a field in which there is a desperate need for retraining managers—has about 400 student applications each year for this course of 30 places. They can take only 30 students because the university is in enough financial problems already without taking more of these people who cost them money. It is already clear that we must rely on the universities for part of this vast re-education which is now so necessary and, if this is so, greater funds must be routed via the research councils; and their terms of support will have to be changed if we are to use this particular route of part-time students to meet the crucial necessity. I commend this to the Minister who will respond to the debate. It is interesting as a last comment on this that the performance of part-time graduates in these post-graduate courses is, on average, better than those who attend full time.

I turn to industry itself. Some pretty discreditable instances have recently been reported in the Press of people who take to their beds on night shift and so on. There has been constant comment for years about over-manning in industry. These and other apparently intractable problems have much to do with the subject of shop-floor management—yes, and of office management, too. In too many British factories one finds a plethora of roles variously called charge-hands, leading hands, supervisors, assistant foremen and foremen. In short, there is an organisational mess and it is very widespread in British factories.

Two years ago I was invited to run separate seminars for five Irish industries. I defined the term "manager" in terms of the minimum authority with which he must be endowed if he is to be able to be held accountable for the work carried out by his subordinates on the shop floor. All agreed that the definition of managerial authority was strictly logical. All agreed that, in those terms, real managers were too far removed from the shop floor; that there were not any shop floor managers in immediate contact with the rank and file. But all said it was impossible to institute shopfloor managers with real control because the Irish unions would never allow it. I conducted a similar seminar for about 40 Irish trade union officials and shop stewards and went through the same argument. They all agreed that it was logical; they said that it was about time that this mess on the shop floor was cleared up; but they added, "You will never do it in Ireland because Irish managers will never undertake to accept it."

That is the situation. It is a matter of training. If one looks, for example, at the German situation, one finds that the brightest of the apprentices are selected to go through special training courses and are set special examinations which they must pass before becoming craftsmen for short periods and eventually being appointed to the post of "Meister ". That is a very significant word. As a consequence, shop floor management really exists in most German factories and is a potent factor in productivity and in quality. It would be salutary if the trade unions, CBI and Government got together to tackle this. No doubt the Government in their present frame of mind will respond by saying that it is not their problem. But such an attitude is entirely inconsistent with their other stance that they are reliant on the improvement of dynamism and productivity in industry for the whole of their policies. If they reject the right to stimulate training of this sort, then they are willing the ends but abdicating from helping to achieve the means.

I now return to the somewhat narrower topic conveyed by the terms of the Motion before us by asking a number of questions of the Minister. What is the current number of places available in Government training centres? If these cannot be given in this debate, I shall quite understand; but I should like to have these figures later. What is the current number of trainees? What is the target number of places for next year? From the speech of my noble friend Lord Wallace of Coslany in April 1978 in this House I learned that the then Government had spent £135 million to maintain apprentice intake into industry. Maintaining apprentice intake is vital. What is probably happening at the moment is that the reduction of demand and the stringency which industry is feeling is probably resulting in next year's intake of apprentices being reduced by most industries. If this happens, it will be a tragedy. Maintenance of that intake to me seems very important indeed. Are the Government going to maintain a similar or expanded rate of expenditure? I hope so.

The industrial training boards are now, I understand, generally very worried about Government plans. I did not hear the noble Lord, Lord Mottistone, refer to this, but I am told that there has already been a cut of £9.8 million made in the budget of the Manpower Services Commission which the industrial training boards fear may be a cut for them. What are the plans of the Government regarding the finances of the Manpower Services Commission and the future financing, apart from the levy, of the industrial training boards? Their establishment was a Conservative initiative, as has already been pointed out, and an excellent initiative too.

My last subject is this. One investigating body after another has called for Government action which would ensure that all young persons in employment should have the opportunity for day release to attend technical college or other institutions for training. I regret that the Labour Government did not introduce legislation on this matter while in office. The fact is that something like one-third of those approximately 700,000 school-leavers who enter employment each year do not get day release. A large proportion of these youngsters are employed in the services industries and do not get day release. Industrial practice with regard to day release is more enlightened than is the case in regard to distribution and office work.

Great changes in methods are now hit ting this service sector of our economy. The case for more training in that sector will get stronger every year from now on. For example, I have heard it stated that we already require 20,000 computer operators and analysts each year. That is one example of the need for training in that sector. Have the Government a policy about increasing day release? Will they do better than the Government of my own party in this respect? The prospect before the country today is a ghastly rise in unemployment stimulated by the Government's ideological commitment to the theories of Professor Friedman and Hayeck.

Out of that sad situation there does nevertheless arise the opportunity for a scale of training that has never before occurred in our country because of these unemployed. This opportunity coincides with a bigger need for training and retraining because of the acceleration of technological change which is upon us. Taking these two factors together, opportunity and need, makes the case for much increased Government support for training in industry today. Indeed, the present Administration's expressed reliance on the revival of industrial efficiency makes it totally illogical if they fail to give that increased support. But the question is: Are they going to follow the logic of their own expressed policy?

4.46 p.m.

Viscount SIMON

My Lords, I am grateful to the noble Lord, Lord Mottistone, for his Motion. We have heard two most interesting speeches from him and the noble Lord, Lord Brown. I have to confess that both noble Lords are very much closer to this problem than I am. Any suggestions that I can make will be only of a minor nature. It is particularly disappointing to me that my noble friend Baroness Seear is unable to be present, because, as your Lordships know, she has taken a tremendous interest in this subject over the years. I am also sorry that we are not having a contribution in this debate from the noble Lord, Lord Bowden. I do not know how many of your Lordships will remember the spendid maiden speech that he made on the occasion of the Second Reading of the Industrial Training Bill in about 1968. I am sure he will not mind my saying this in his absence: it was not an ideal maiden speech. It had quite a bit of controversy in it and it lasted for 28 minutes. But it was a really spendid speech. T recalled it and refreshed my memory by reading it again last night. I recommend it to anybody who wants to read about that.

He doubted the adequacy of proposals that were then before Parliament. That was the Industrial Training Bill. He felt that it was not going far enough. Yet at that time the Government of the day were aiming for a four per cent. growth in the economy. Even with that great figure he did not think that it was going far enough to meet what the need would be. It is hard, looking back, to believe that such a figure was being considered at that time, about 15 years ago.

As the noble Lord, Lord Mottistone, reminded us, the Employment and Training Act came along in 1973. The noble Lord seemed to consider that this perhaps was something which put an undue brake upon the work of the industrial training boards by interposing the Manpower Services Commission. He may well be right in that point. The Manpower Services Commission, as he says, has other duties as well. It has the two executive arms, if I remember rightly: the Employment Services Agency and the Training Services Agency. Perhaps the noble Lord's view is that it would be better to take the Training Services Agency out altogether. At any rate, we are entitled to say that, as today, with unemployment at the horrific level that it has reached, there are still reported to be shortages for skilled workers. In that condition, I am led to the inescapable conclusion that our present arrangements are inadequate. If we are short of trained manpower now, what desperate position are we going to be in when business revives? The machinery is there. It may be that it is not working correctly. At any rate it is not delivering the goods.

I may say that I have joined in this debate more to listen than to speak, because I want to hear the combined wisdom expressed by those who are speaking in this debate, so that I can find out what lies behind this failure to get enough skilled workpeople. I liked very much the phrase used by the noble Lord, Lord Brown: no thirst for training."

What has caused the situation? I feel we must not overlook one fact—and I think this was referred to by the noble Lord, Lord Lee of Newton, in a recent debate—which is the effect of the erosion of differentials. Many people perhaps do not think it is worth while going in for training which involves extra work and, generally speaking, also a drop in earnings while it is going on, in order to qualify for what they think are inadequate awards. One reason for that which always occurs to me—and I have never been engaged in manufacturing industry—is the arrangement which is very fundamental to the thinking in the trade union movement: namely, that once a man is a qualified tradesman he gets the rate for the job, and that is that. But surely a man who has acquired the necessary skills through an apprenticeship and has qualified as a skilled worker will increase his skills with experience.

While I recognise that it must be very difficult to pay people entirely according to the extent to which their skills has developed, it seems to me that justice done would be slightly less rough if the skilled tradesman were paid a little less than the going rate in his first five years and perhaps a little more than the going rate after 10 years. After all, in management that is what happens. A manager, if he shows himself especially skilful, will be able to earn himself an increase; and if he does not get it from his present employer he will find another employer who will give it to him. They get a certain gradation as they gain experience and prove that they can use the skill they have acquired. It has always seemed to me that it would be much more intelligent for people to go in for skilled work on the shopfloor if there were some gradation in the rewards they got as they gained experience and hopefully improved their performance.

Another factor which undoubtedly has affected people, though not so much at the present time, I am afraid, is the fact that until recently young people have had opportunities to earn good money to a much greater extent than they would ever have dreamed of, doing unskilled jobs without any difficulty. Then their friends of the same age, who perhaps have some ambition to go further, have to show great strength of mind and a maturely balanced judgement to undertake any apprenticeship, with its low earnings over quite a long period for the sake of the skills to be reached later. I recalled this when I read the debate on the 1968 Bill: it was mentioned by the noble Lord, Lord Diamond. The noble Lord, Lord Brown, spoke about the school-leavers and the desire which he had, with many others, that there should be an absolute right for people in first employment for day release. This is a matter of which I know my noble friends are very much in favour, and I strongly support what was said by the noble Lord, Lord Brown, on that subject.

Then again—this is all part of the same picture—I should like to ask, what is the current attitude of the trade union movement and of individual trade unionists to maturer workers gaining skills? At one time I think I am right in saying that this was very much frowned upon. Unless a young man went through an apprenticeship at an early age and qualified, it was impossible for someone who had been working for five or 10 or 15 years to acquire those skills and to be recognised as a tradesman. Is not this rather like the very much criticised 11-plus system? Why should it be impossible for someone, once he has been on the shop floor for 12 or 75 years, to qualify as a tradesman? As I said earlier, I know so little about this subject that I do not want to detain your Lordships. Instead, I want to listen to the combined wisdom of those who are going to speak after me.

It is a vitally important subject. It is one where clearly we have gone wrong. I do not know whether the noble Lord, Lord Mottistone, would think it is all due to bad organisation: he seemed to speak rather in that way. If the organisation of the training boards can be improved, well and good; but I am sure there are other and much more deep-seated questions. Indeed, I think we must all have been fascinated by the noble Lord, Lord Brown, who really criticised our whole education system. The unhappy thing about approaching it from that direction is that it will take a tremendously long time to get it altered. Nevertheless, it is something which could be the subject of a debate itself on one occasion, and no doubt your Lordships will have the opportunity to discuss it.

4.57 p.m.

Baroness GAITSKELL

My Lords, I should first like to thank the noble Lord, Lord Mottistone, for introducing this debate and for his excellent speech, which made me understand the working of the industrial training boards, which I could not understand when I read about it. So I speak on this subject from a certain amount of ignorance, though with much interest, and I wish to make some rather general remarks.

There have been several debates recently bearing on this subject, and I shall confine my opening remarks to the effects of the education cuts, which I think have had an enormous effect. The short, sharp, shock slogan—presumably to kill all known economic germs—cannot deal with such issues as encouraging training in industry. The cuts, in real terms, in Government expenditure on education, including the universities, are very large indeed. The proposals to cut the number of teachers, despite the falling numbers of pupils, are not good; but some of the most serious cuts concern non-advanced further education for the 16 to 18-year-olds, on vocational courses. The possibilities for training opportunities depend, I believe, on the availability of resources, the response of employers, the trade unions and the ability of the industrial training boards, and on the whole of the further education system to develop and provide trainee-ships.

When we learn that each year 200,000 young people are leaving school at 16 and taking jobs where further education is not available, and when we know that they do not receive or have access to any vocational training preparation, that is a sad reflection on a free, advanced country like ours. Many workers in this country are not as well trained or educated as workers in Sweden or Germany. So it seems to me that in this debate we have to establish ideas on a universal scheme for education and training opportunities.

Whatever I have read on this subject has stressed the voluntary approach, and I noted that the noble Lord, Lord Mottistone, did not think so much of the voluntary approach alone. Is there no place for Government planning or intervention in industrial training? Of course there is, and it should be larger than it is at the moment. There is a great place for Government action to give help in education and industrial training to young people who are taking up jobs for the first time. Surely the personal development of our young people is crucial for our economy.

We know that schools are not equipped or adequate to meet the needs of young people starting work in life. Here we need the co-operation of both the employers and the trade unions. We know that the 16 to 18-year-old group, who continue in full-time education after 16, benefit by this longer period of personal development before they take up their greater responsibility. Apprentices in craft industries have been shown to benefit greatly from training support. But I believe that we could upgrade our polytechnics in this field and give them far greater possibilities for training in industries, thus benefiting them and ourselves.

Our education system makes little provision for those young people whose confidence is undermined by lack of success at school and lack of academic qualifications. Their job prospects are not rosy. Too many of them become unemployed, and all of them could be helped by vocational preparation in all kinds of ways which we have not thought about enough. These young people are our social responsibility and it makes hard practical sense to expand their opportunities, especially in this technical and scientific age when new courses in education and skills are increasingly needed. So I deplore Dr. Rhodes Boy-son's remark that not many new courses will be approved. Why not? They are not outrageously expensive. This is a defeatist attitude, especially for the polytechnics. New courses are in the hands of local authorities and here, again, all the cuts which local authorities have to bear have a bad effect on education, too. Cuts in education expenditure will have a severe effect on our young people, and the divisive effects of these cuts will leave deep wounds on the next generation—the worst effects on our country for the 'eighties.

5.4 p.m.

Lord JACQUES

My Lords, I congratulate the noble Lord, Lord Mottistone, on having introduced this important subject and for giving us an opportunity of discussing it. I want to speak briefly on one aspect alone—the shortage of skilled workers on the workshop floor. I am confining myself to that aspect, because it is second in importance only to the need for improved industrial relations.

This problem has persisted during the whole of the post-war period and we have had it in depression as well as in boom. We have it at the present time, with 1.3 million unemployed. For example, in the City of Portsmouth which, persistently, has an unemployment percentage higher than the regional average and somewhere near the national average, and which has a very high proportion of skilled labour because of the excellent apprenticeship scheme in the dockyards, we have a Government training centre which has no problem whatever in finding places for all that it can train. That is the extent of the shortage of skilled labour.

While the problem is primarily in engineering, it is not confined to that industry. Even though we are supposed to have a depression in construction, in various parts of the country there are shortages of plumbers, electricians and joiners. I can speak from practical experience in retailing, where there has been a shortage in such skills as butchery during almost the whole of the post-war period. It is almost impossible to get skilled butchers.

I should like, first, to look at some of the reasons for this shortage and to suggest possible remedies. Some of the reasons we can probably do something about, but there are others which perhaps we can do very little about, although it is just as well that we should know them. First, there are employers who regard apprenticeship as too costly or too troublesome, and they are quite content merely to poach when they want skilled labour. That is an accepted fact. Secondly, a shortage tends to perpetuate shortage. When there is a shortage of skilled labour, the employer is reluctant to allow that skilled labour to be used for training. He wants to use it to solve his immediate problems of production. He takes the short-term view rather than the long-term view. Consequently, a shortage perpetuates shortage.

Thirdly, the employer is very often afraid that he will be unable to absorb the apprentice when he reaches the journeyman stage. He believes that he may have trouble with the trade union if he wants to discharge an apprentice as being redundant. Another problem is that in the past—but I think the fairly distant past—the trade unions took a very considerable interest in apprenticeships, because they wanted to safeguard their members' cocupations. They limited the number of apprentices to the number of what they called journeymen, with some good reason. But I am advised by those on the side of management who should know something about this problem, that so far as the trade unions are concerned they have no great difficulty. I can say to the noble Viscount, Lord Simon, that earlier this year I visited the Government training centre in Portsmouth, where they can find places for all that they can train. They have no problem whatever with the trade unions; and I was relieved to hear that.

On the supply side, there is the problem that, although there may be youngsters who want to train for a certain occupation, there may be an absence of facilities or of a particular kind of employment in the area and, as we know, parents are reluctant to allow their children to leave home at a tender age. It has been suggested that, whenever the demand justifies it, there should be a training centre which trains on condition that after a certain period, probably two or three years, a youngster will be prepared to leave home and go to employment a reasonable distance away—perhaps within 100 miles—from which he will be able to get home quite easily at week-ends.

Next, we live in an era in which the great majority of our youngsters prefer labouring or monotonous repetition to learning a skill. That is largely because of the rise in the standard of living. The standard of living has increased, so people can get sufficient money for their needs without the mental trouble of learning a skill. That is the core of the problem.

Also, we live in an era in which employment is changed frequently, sometimes for the slightest reason—not because people do not like the master or the immediate supervisor, but because they do not get on with the person they are working next to. For the slightest reason there can be a change of employment. When that is the practice, people leave employment when they have only partly completed their training, and they may be lost completely. Next, I believe that the differentials for training have been completely eroded by the incomes policies of successive Governments—Conservative as well as Labour.

Next, we have important industries—the car industry is a good example—in which, although there is a great need for skilled workers, the vast majority do not need to have a skill. They are on the assembly belt; they are the majority. So they are in a position to use their representatives in the negotiations to favour the wishes of the unskilled majority against the wishes of the skilled minority. I believe that the un- skilled majority help to keep down the wages of the skilled minority. Those who leave their skilled occupation and go elsewhere because of redundancy or because they want a change of employment, very often do not go back to it; they find that they can have an easier life elsewhere with little or no loss of money.

I come now to a reason which is generally overlooked. I think it is a major reason why we have a skilled labour problem. During the last 50 years there have been vast improvements in educational opportunities. I have fought all my life for that and I shall continue to do so. I am glad that educational opportunities have improved. I am pleased, for example, that my children have had better opportunities than I had. But they have created problems and we should not overlook them; we should be prepared to face up to them. We should bear in mind that the strata of young people from which we used to get the best apprentices for manufacturing industry now go to university and completely bypass manufacturing industry. They are now to be found in service industries of all kinds. That is the major problem, and it is one which we have to live with and face up to.

How would I face up to that problem? I should do four things. Some of them are, in part at least, already being done. I think that it should be accepted, if it is not already accepted, that we cannot afford to leave training entirely to the individual employer. We know that this has failed in the past and we have to do something about it. It is not peculiar to this country; it has happened in all Western countries. It does not happen in Eastern countries because they have dictatorships and they can direct.

In every industry there should be a central authority which keeps a check on training, an authority which has a continuous record of apprenticeships and can make an estimate of the number of apprentices who are needed and the locations of that work, and, having made that estimate and having determined that there is a deficiency, can do something about that deficiency. I suggest that in any industry the best body for doing that is the training board. I believe that our training boards should give top priority to what I call real skills—that is, the skills which can be acquired only after years of training, not the skills which can be obtained after a few weeks of training. Those can be left to the employer. The training boards should concentrate on the real skills, which are largely apprenticeships

. Where the employer is willing, has the facilities and accepts the programme of training, including day release, he should be subsidised according to the number of apprentices he is prepared to train. And if need be, the levy upon the industry should be increased in order to meet that subsidy. So far as the Government contribute to that subsidy, this expenditure should be a priority. It is of so much importance to our economy. It is even more important than education itself.

When that method of increasing the number of apprentices is sufficient, well and good. When it is not, we should use the existing Government training centres and, where need be, we should have additional training centres. From past experience we know that the unproductive part of the training of apprentices is the initial stage, the first year or the first two years. After they have done a year or two, they are able to practise the skills they have already learned and can do productive work. Consequently, if one has apprentices in Government training centres it is possible after a very short period—say, after one year—for them to go into part-time employment and practise the skills they have already learned, but for the rest of the week to be in the training centres learning new skills. In due course, it would not be difficult to find them full-time employment within the factories, outside the training centres altogether. This kind of training, partly in the training centre and partly in the factory, is wholly practicable and is welcomed by many employers. It is already being followed in some of the training centres.

Secondly, I should like polytechnics to give more attention to the needs of industry and less attention to their desire to be universities. We have universities. In their desire to be universities, the polytechnics offer university courses. I have no objection to their doing so, provided university courses are not their first priority. The first priority of poly technics should be the training of people for manufacturing industry.

Thirdly, if we want an adequate pool of skilled labour in this country to service any boom, we have to be prepared to pay for it. The present differential between monotonous work and skilled work is not sufficient. In fact, there is evidence that we are prepared to pay for monotony but that we are not prepared to pay for skill. I am advised that people on the assembly belt in the motor car industry can earn far more money than the skilled men. I am advised that the toolmakers at British Leyland have a very strong case, despite their militancy.

If we are to get skilled labour, we have to be prepared to pay for it. If the trade unions, because the majority of workers are unskilled, are using their bargaining power against the skilled and in favour of the unskilled, then it is up to management, in its own interests, to use its influence to correct the balance and make sure that skilled people are paid an adequate differential. That is the only way in which we shall get an adequate supply of skilled labour.

Finally, so far as the development areas arc concerned, I agree that our first priority should be to take industries to the development areas. That is the best way of tackling the problem because it saves a great deal of social capital. But I do not believe that we should concentrate on that. I believe that the time has come to give more emphasis to the movement of skilled labour from the development areas into the areas where the skilled can get employment. I believe that can be done by facilitating interviews; I believe it can be done by making offers of housing to rent. It is much better that skilled people should be working in a prosperous area than that they should be wasting their time and their skills by remaining in a development area and being paid the dole. That is the kind of programme which I should like to see from any Government, whether it is a Tory Government or a Labour Government. It is a programme which we need regardless of politics.

5.21 p.m.

Lord LUCAS of CHILWORTH

My Lords, it is always a pleasure to follow the noble Lord, Lord Jacques, and if I had no single contribution of my own to make this afternoon I could do no better in fact than to repeat what he has said to us. The noble Lord, together with other noble Lords, has emphasised the differential between craftsmen with skills and those without, and certainly in the industry about which I wish to speak this afternoon this is very much evident. If one is going to encourage youngsters, either boys or girls, to take up skilful employment as distinct from just getting a job somehow when they leave school, one must get them to see right at the start what the opportunities are for acquiring skills which will last them and benefit them in the years ahead and not only in the immediate future. I believe that many of our young people give this matter some thought at 15 or 16 years of age, and where they cannot see an advantage they give up and say, "I will take a job "—or not, as the case may be.

Perhaps in the road transport industry, with which I have had some little dealing over the years, I could point to another failure. I think the failure has been adequately described in the road transport industry training board's publication of last year which they entitled Managers in road transport: a study of who they are and the jobs they do. Out of this 240-page document there came a mass of statistics, only a very few of which I wish to put before your Lordships. In my view they were absolutely staggering, in an industry which is so important.

This study showed that of all the companies in the scope of the board there were 52,850 managers. Incidentally, there were only 1,585 women among that number. I think that is rather a shame and I would remind your Lordships, and particularly my noble friend on the Front Bench, of the great difficulty which was fairly widely reported, that the young lady at school had in taking up a metal work course. It must be a devastating failure on the part of the education system that an opportunity cannot be found for a girl to take up this kind of training. There must be some place within a mile or two from where she goes to school—or one could be found. Out of the 52,850 managers only 25 per cent. belong to any kind of professional body. Thirty-three-and-a-half per cent. of them had no qualifications whatsoever and only 6.2 per cent. had a qualification above HNC. So the vast bulk of managers really had an appallingly low qualification.

How does one really expect to attract into the industry skilled, well-qualified people when management itself is unqualified? If in fact the training boards can identify this need and persuade managers and their employers to release them, not for the statutory holidays, whether two, three, four or five weeks, but for four or five weeks' educational leave to get qualified, these young people will make better employees, and the rest follows. Indeed, my experience in industry is that much of the trouble comes not from the shop floor, who are, in terms of 50 years ago, better educated and less afraid; there is a demand for higher and better skills of their masters also, and unless the industries and the employers make due provision we shall not get that. I think it is a condemnation that in 1980—in a couple of weeks' time—we shall arrive at a major industry in which there are so few managers who are reasonably qualified.

Turning to the point which the noble Lord, Lord Brown, and my noble friend Lord Mottistone both made, speaking about the intervention of the MSC, I may say that I noted in the industry training board's report and statement of accounts for 1978 that they say in their introduction: Apprentice intake was encouraged by a further special measure scheme and an all-time record of over 13,000 recruits was achieved by the industry. Unfortunately the board was unable to obtain approval for schemes similar to that for 1976–77, and the final scheme offered by the MSC, supported by £4.65 million from public funds, led to an excessive demand for places which could not be satisfied ". It seems to me, my Lords, that there is a difference of view and possibly a difference of approach between the MSC, through its two arms, and the industrial training board, and I should think that it is fairly reasonable to suppose that that difference follows through other industrial training boards. Their record since 1966 has been very good. When they started out they were opposed by employers, largely because of the levy. Now most employers derive greater benefit, both by grant and the return of trained personnel, than they do in paying the levy. So it would seem to me that in any review of the activities of the training boards there should be some emphasis, or some re-emphasis, on their role within their own industries, which they seem to serve better than by the intervention of a central body such as the MSC. I think it is quite reasonable that the employers invited to pay the levy should know more directly how their levy is going to be spent so that it comes back into the industry which they serve.

My Lords, there is only one other point which I should like to make, and it arises out of the very telling point raised by the noble Lord, Lord Brown, on education for capability. I paraphrase what he said. Under that heading he spoke of the thirst for training and the thirst for training from the boardrooms, and the part trade unions could play in this. I do him an injustice by embracing all these together. If education in the earlier stages is to play any important part then there has to be a much greater dialogue between industry, whether manufacturing or service industry, and the teachers. It is sad, to my mind, that there are so many teachers who have no idea, no experience of practice, and certainly no conception of what it is that industry wants or what it is like to be in industry.

Furthermore, the boards of companies for whom I have worked are, alas, singularly ineffective in selling their own employment opportunities; that is, via apprenticeship or other skills. They do not seem to mind; they seem to leave it to a personnel officer, who sets out a job specification and that is that. It is not that at all. They should be going to the schools, as indeed the banks do, and the accountants and other professions; they are always to be found at careers afternoons and evenings. They know so much better what it is they want than do, unhappily, very many of the careers teachers.

So far as the trade unions are concerned, many boards in the smaller service industries are afraid of trade unions. I believe that they are afraid of them as a result of their own ignorance. It would be better if the trade unions would encourage higher skills, not only through trades and craftsmen but through management personnel accepting that there are to be greater rewards, accepting that throughout a company those who have qualifications which offer the opportunity to enter the institutes and associations and societies of the trades should be and could be rewarded better. I do not see this problem as being at all one-sided. There are three arms to it; there is the governmental agency, there are the employers and there are the employed, as represented in most cases by trade unions, and there should be a body that can identify the needs and work together to achieve them.

5.33 p.m.

Lord KALDOR

My Lords, I was not intending to intervene in this debate, but some of the speeches I have heard I have found highly stimulating, and I should like to refer to one or two aspects of this problem which I do not think have received adequate consideration. There is a shortage of skilled labour in this country. I believe that the shortage is by no means confined to this country; I have heard much the same complaint in other countries of Europe, despite the fact that in these other countries the systems of vocational training through education were traditionally much more highly developed than they were in this country, where we relied mainly on apprenticeship for the training of skilled workers. Moreover, the shortage is not confined to skilled workers. There is also a shortage of workers willing to do dirty jobs, unpleasant jobs. I believe most of these shortages may have a common cause which is not always realised, and it is not an easy one to see.

The traditional doctrine of Economists dating back to John Stuart Mill had been that earnings differentials must reflect the net advantages of different types of work. These net advantages offer a complex idea; it includes pleasantness, unpleasantness, danger, hazards, et cetera; it includes also loss of earnings during the years of training and the effort involved in training and so on—what the Americans call investment in human capital which should be rewarded by additional income in later years. When we look back on the pre-war world, one thing is clear, the earnings differentials were not in accordance with the net advantages of different types of work. It may be that in some cases these differentials have been eroded since the war—I am not saying that they have not—but clearly even before the war it is true to say that the least pleasant jobs were not the best rewarded but the worst rewarded, and that people did not choose between skilled and unskilled work or between this and that occupation freely according to where they expected the highest net advantage relative to rewards.

The answer to this problem is, I think, that up to the Second World War we had except in wartime, an unemployment economy. In an unemployment economy it is generally difficult to get jobs of any kind. A youngster's problem is mainly where he can find work; and this business of finding work or of securing a livelihood is a primary one and an oppressive one. Under that system net advantages, or earnings differentials in relation to net advantages, do not matter, or do not matter very much, because people automatically sort themselves out in different types of jobs according to the demand for labour. You get enough skilled workers because if you train yourself you know you will get a job in the end, whilst without the training you get no job. You get enough navvies or people who have to work very hard in dirty surroundings because you know that unless you take that work you get no work at all.

So in economy with mass unemployment there is a far more primitive form of market selection, shat some economists call the stock adjustment mechanism, which means that stocks get automatically replenished from a pool. That ensures that skilled and unskilled workers, navvies, assembly line workers or building workers or engineering workers, sort themselves out in the proportion in which they are required in the economy. It was not relative earnings which did that job; it was a far more primitive mechanism of selection; that is, they had to take the job where they could find it. So long as the demand for labour overall is so much less than the supply, or the potential supply, this mechanism works. In a full employment economy it does not work, or it works much less well. Therefore, earnings differentials become much more important. Therefore I would put less emphasis on the fact that earnings differentials are eroded, and more emphasis on the fact that the pre-war differentials which were sufficient in an unemployment economy, may be quite insufficient in a full employment economy.

Let us look at another aspect. Since 1973 there has been considerable unemploy ment in a number of countries—not only our own. There are 1.5 million unemployed in France, which is a unique phenomenon in French history; it has never happened before. There are 1 million unemployed in Germany. Despite this fact, they did not, by any manner of means, send home all their foreign guest workers. I believe that there are still 2 million guest workers working in Germany, and at least as many or more foreign workers working in France.

The reason is—and I am sorry to say that this is equally true in our own country although people do not like to speak about it—that the post-war foreign immigrants took over the dirty jobs which the local people were no longer willing to take when they had other, more pleasant employment opportunities which had not existed previously. I mention that last fact as an example, showing that in a full employment economy we are up against the problem of how to secure adequate numbers for jobs requiring different degrees of skill and different types of labour, which does not arise in an economy where jobs are hard to find so that people automatically take the jobs they can get.

5.42 p.m.

The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie)

My Lords, I think that when my noble friend Lord Mottistone looked at the list of speakers for his debate today, he might initially have had some feeling of disappointment at there not being rather more speakers on what is obviously an immensely important topic. He may have thought to himself that the proximity to Christmas and so on would account for that fact. My noble friend need not be in the slightest bit disappointed, because, as is very often the way in your Lordships' House, the shorter debates are more succinct in material as well.

We have had extremely good, acute, analytical speeches about the whole range of training across the economy at this time, at the end of the 1970s, and I, as a Minister, with direct responsibility here, have found it extraordinarily interesting and useful. I have not found it pleasurable for one reason only; namely, that the normal course of events is that the Minister makes a general statement on the Government's position, and then later he, or an associate, winds up and tries to deal with the individual points made in the debate. I now somehow have to concertina the two together at what is a reasonably late hour, with other business to come, and I shall therefore have to go at a bit of a gallop and somewhat "transistorise ", if I may put it that way, my remarks.

I should like to try to get out of the way one misapprehension that was expressed most clearly by the noble Baroness, Lady Gaitskell, when she spoke about cuts and also gave, in her courteous and subtle way, the air that in some way matters of training were to be left to the free market, voluntarism, this, that or the other.

The Government are in some considerable economic difficulties—as your Lordships know—because they have not, in fact, cut public expenditure in this year: they have increased it. They have succeeded with considerable skill and courage in stabilising it over the programmes that were planned for last year, and it is an essential part of their counter-inflationary policy that there should be progressive stabilisation of public expenditure.

When we look, as the noble Baroness drew our attention, to the world of education which is, of course, intimately involved—and we should all like it to be even more involved—with the world of training, we find that the cuts taking place even adjusted for rates of inflation, are simply not there. What has happened is that we are not adjusting expenditure to take account of this year's or the next year's round of pay claims, and that is why there is a conflct between people's claims as regards wages, particularly in local authorities, and the services that can be given. That is an inevitable consequence of any counter-inflationary activity and would be a consequence even if alternative methods involving, say, a pay policy, were involved.

I am happy to give way to noble Lords, but it would be better if, having made that general counter-inflationary point, I went on and perhaps later in my speech the noble Lord or the noble Baroness would like to intervene.

Lord BROWN

My Lords, I wish to ask just one question. Is the noble Earl's claim to have increased public expenditure in real terms or in money terms?

The Earl of GOWRIE

In real terms, my Lords. The noble Lord has touched on the exact point. It has actually been increased in real terms and that is why we are in such thundering trouble.

Baroness GAITSKELL

My Lords, has it really been increased in education?

The Earl of GOWRIE

My Lords, as the noble Baroness is well aware the educational budget comes out of the local authorities' rate support grant. The rate support grant has been stabilised—in fact, it has marginally increased in real terms and not in inflationary terms. What has not been built into it is provision for increased wages on anything like the scale which looks like happening. That is where the money crunch and the wage crunch will be felt. That is an inevitable consequence, as I say, of any counter-inflationary policy. It does not matter whether it was the counter-inflationary policy of the last Government or of this Government.

The noble Lord, Lord Brown, quite fairly—because his general remarks, as was appropriate to this subject and this debate, were very bipartisan and very sensible in the main, and I shall come to them in a moment—teased me about Milton Friedman or Hayek in these counter-inflationary matters. As I have made clear to noble Lords during many debates on the economy, the people I follow in counter-inflationary policies are not Dr. Friedman or Mr. Hayek, but Mr. Healey, the noble Lord, Lord Lever, and Mr. Joel Barnett during the one period of their tenure of office when we felt that they met with considerable success. But pressures of another kind unfortunately from their point of view and also from the point of view of the economy—led them to abandon those policies. With that out of the way, I should like to say that I welcome very much the subject chosen for today's debate and am most grateful to my noble friend.

In the manpower field few issues are more important than the development of adequate arrangements for industrial training—important because of the need for a system able to respond rapidly to changing needs at a time of great technological change; and because of the need to tackle skill shortages which can stand in the way of industrial growth. I say can ", but I should say which" are "standing in the way of industrial growth. They are also important because training enables individuals to improve their employment opportunities and develop their talents to the full and find fulfilment in the world of work.

I should like quickly to explain how our present statutory arrangements for encouraging training in industry have developed, and to outline the work that the Manpower Services Commission has in hand at the moment to improve the effectiveness of the arrangements. To put this in context I must first say a word about the labour market and the role of training policies generally.

It is the labour market which brings together the diverse needs of enterprises and employees' needs to have their skills used and rewarded. Good policies can help to reconcile those two sets of needs, but the question of what skills are required or are in demand at any time is decided by the interplay of many factors, most of which are not under the control of the Government, but which include technology and the supply of labour in areas where jobs are available.

At any time there are in the labour market imbalances between supply and demand for skills. This is a cry that has gone up continually since the start of the Industrial Revolution. Indeed, one could say that it was a sine qua non of an industrial society. Nevertheless, the labour market is in a constant state of adjustment through the action of employers in bringing their labour force size and structure into line with production requirements, and workers who move as their work needs change. As a result, most labour force imbalances are temporary and easily accommodated and have no substantial effect on production.

But some imbalances can persist more generally and, when they do, they impose a heavy cost on the economy and on individual firms. One example is, of course, in the jargon of the employment trade, geographical mismatch between people and jobs. Everyone knows by simply looking around that there are more skill shortages in the South-East than in the rest of the country. There are indeed a few other areas where a relatively low level of unemployment co-exists with a substantial munber of unfilled vacancies. Yet worrying rates of unemployment show no signs of easing in places like Merseyside, Glasgow and Wearside.

Another example is occupational mismatch, and these areas were touched on by several noble Lords, including the noble Viscount, Lord Simon. Skill shortages persist in spite of high unemployment and some skills are in short supply even in unprosperous areas like the North-West. These shortages can result in low output or quality, higher costs and a lower rate of economic expansion because the "bottleneck" effect can seriously constrain production.

The reasons for skill imbalances are numerous, often interrelated and not always to do with training. For example, the reasons may be poor employment policies, inflexible use of labour, outdated or rigid manning practices, employment legislation, protective demarcation practices and immobility of labour. It is too late to get into a lengthy debate about housing issues in this country, but the nature of housing in this country has, in my view, been a profound disincentive to the mobility of labour. Over the last few years successive pay policies, whatever their other virtues—and your Lordships are well aware of my scepticism there—have hit the skilled man by squeezing pay differentials. I acknowledge that the noble Lord, Lord Jacques, who is a doughty champion of pay policies, was good enough to admit that defect at least. Small wonder that many craftsmen have left skilled occupations for equally lucrative but less demanding jobs. Now that employers can pay craftsmen according to their market value or according to what wages are agreed through collective bargaining, differentials are beginning to widen again and we can expect rather less wastage of skilled men looking for greater pay elsewhere.

I should like to say a few words about the 1964 Act. The Act had three main objectives: to ensure an adequate supply of trained men and women at all levels of industry; to secure an improvement in the quality and efficiency of industrial training; and to share the cost of training more evenly between firms. Industrial Training Boards—ITBs—were set up to look after the training activities of particular industries. Today there are 24 ITBs covering about half the employed population. Therefore, they are very extensive in their coverage. It was quite right of my noble friend Lord Mottistone to direct the main thrust of his speech and of this debate towards them. In my own ministerial capacity I have visited a number, notably the Construction Industry Training Board's activity at Kings Lynn, which is a magnificent and marvellously equipped centre; in my capacity as your Lordships' energy spokesman as well as an employment Minister, I have also visited the Petroleum Industry Training Board's fire-fighting establishment in Montrose, Scotland. Your Lordships will be aware that if one works on an oil rig and something goes wrong in that highly volatile and dangerous atmosphere, one cannot call out a marine fire brigade, so every single man jack on a rig has to be highly trained in firefighting. I was most impressed by what I saw there.

I should like to direct a few remarks to the impact of these boards. They have important achievements to their credit. They include a much greater awareness of the importance of training, new thinking and new initiatives in many areas of training, and more specialist training of officers and instructors employed in industry. Systematic off-the-job training has also increased substantially, and senior management now recognises more widely the value of training. Whatever the occasional grumbles to which it gives rise, broadly speaking, the levy system has settled down well. Group training schemes of particular benefit to small firms have also been promoted by the boards and we wish to see this continue. But some weaknesses-and irritants in the system did become apparent which generated pressure for further change, and after a review and consultations we had more legislation in 1973. My noble friend spoke about his criticisms of the Employment and Training Act 1973.

That Act brought about a number of changes in the way in which boards operated—mainly related, of course, to levy—but confirmed the authority and responsibility of individual ITBs for securing adequate training within their industries. But as far as the institutions set up by the 1964 Act were concerned, the 1973 Act represented adjustment rather than any radical change. It also established, as the House is well aware, the Manpower Services Commission to take over responsibility for the manpower services, including the training services which were previously administered by the Department of Employment.

I say to my noble friend that it is open to argument whether, with the benefits of hindsight, one would have hived off so much activity if one was starting again now. However, it would be the height of folly for any Government faced with our agreed needs in training, and also with the present economic situation and the need to reduce inflation, now to start looking again at rather massive across-the-board structural changes.

The MSC has done a magnificent job in most areas of its activity. Inevitably there are areas of disagreement between aspects of its work and the views of those who pay for the work. Nevertheless, it is important that the system should continue to settle down in new and often harder circumstances, and I am most anxious to give my support to it.

The first of the MCS's key training programmes was, and remains, to help meet the direct training needs of industry. The main instrument for advancing this programme, as I said, has been the ITBs. The challenge to the Commission has been to co-ordinate the work of the ITBs and at the same time ensure that the boards continued to have the automony necessary to retain authority in their industries, which my noble friend found most important, and to pursue policies suited to the varying needs and circumstances of those industries.

A moment ago I referred to the impact which the 1964 legislation had had and to the improvements which it had set in motion throughout the system. The 1973 Act removed some of the most obvious weaknesses and created a better climate in which improvements already evident could be strengthened. Over the last 15 years much has been accomplished. Perhaps the main advance has been the almost universal acceptance of the need for planned industrial training. Senior management is far more committed to formal training plans and consequently there is far greater acceptance among employees at all levels of the need for training.

In addition, new approaches to training problems have been developed by various Governments and the MSC in co-operation with the ITBs and other training organisations. As time is passing, let me give just two quick examples. First, there are the Special Training Measures. The advent of recession in 1975 once again threatened a severe cut-back in the training opportunities for young people, especially in those occupations requiring long and costly training. The future supply of those skills needed by industry was at risk. The MSC, in co-operation with the boards and other organisations, therefore, introduced a scheme of Special Training Measures to safeguard the intake of young people and to ensure that industry would not be subsequently deprived of the skills it needed. Of course, such a scheme could not ensure that there would be no skill shortages today, but the special measures, which have cost over £120 million in total since 1975, have helped to provide training opportunities for some 140,000 young people, some three-quarters of whom are in craft or technician occupations.

Then there is the Training for Skills Programme. In 1977 a task group, which comprised eminent experts representing the ITBs, employers, unions and the education service, considered a more permanent approach to the problem of skill shortages and the extent to which training measures could alleviate them. The groups' report and recommendations form the basis of the publication Training for Skills, and these recommendations are now being implemented through and with the support of the ITBs and also through other organisations in the non-board sectors.

The essential feature of the programme which has the backing of the present Government is that the ITBs and other training organisations in all parts of industry and commerce, in both the private and the public sectors, should draw up realistic assessments of manpower needs and take appropriate action to prevent shortages. MSC's financial support in obtaining these objectives is provided where needed, but is conditional on the strategies and plans of industry moving—and of course this can only move voluntarily—towards meeting certain criteria. For instance, the need for schemes to take account of how they can be applied both to young people and to adults; what the standards should be; how recruitment for young people should proceed; the length of craft and technician training; the flexibility of age and entry into training, and negotiations with the unions about that; and that there should be opportunities for the later acquisition or updating of skills.

May I now come quickly to some of the individual points made to me during the debate. I would say to my noble friend Lord Mottistone, that it was the view of the Government in 1973 that the users of the employment and training services should be involved in the development of policies and programmes, and so the Commission was primarily set up to provide such a focus by appointing CBI, TUC, and local authority commissioners. Of course, the funding of the MSC is through public money sponsored through my department, and that is where Ministers are daily and intimately involved.

The 25 per cent. of the labour force in nationalised industries and other sectors are not in the scope of the industrial training boards, and that is a matter of concern to us as well as to the commission. The proportion is now about 40 per cent., and the MSC has positively encouraged liaison and co-operation with the organisations in these sectors. It has also encouraged some of the sectors to set up voluntary training boards. For example, in the last 18 months a voluntary training council has been set up in the fishing industry and also in the freight forwarding industry, and I would expect to see that continue.

The noble Lord made several points about the present industrial training system, including the role of the commission in relation to the ITBs. He said that we must relax the iron grip of the MSC there. We do not have closed minds on any of these issues. In setting up the review of arrangements for promoting training under the 1973 Act, the MSC recognised that the time was ripe for a fundamental review of the whole industrial training system, and since taking office again we have indicated our concern that arrangements in this field need to be related closely to the present and prospective skill needs of industry, and to be cost-effective.

To this end we have set in motion a review, and the commission are aiming to report to us in the summer of 1980 with their recommendations following the review, so that we can then decide with them the future of the training arrangements, including the ITB system. Since I shall myself be involved in this review I shall of course put into it the points raised by the noble Lord.

Apart from his brief and teasing remarks about Dr. Hayek and Dr. Freidman, I found myself in considerable agreement with what the noble Lord, Lord Brown, had to say. Indeed, one of the reasons that I stand here at this Box and work in your Lordships' House is that I was for 10 years a university lecturer, and though I enjoyed that period of my career I found that what I was teaching and, above all, the qualifications that I was, as it were, handing out to the students concerned were increasingly irrelevant and not adaptable to the world of work in which they would find themselves. That is why, with some reluctance, I left that particular and rather enjoyable career and entered a new one. So I am in wholehearted agreement with the noble Lord, Lord Brown, and with the noble Lord, Lord Jacques, that we have to rethink this at the school and educational level. I, even in a difficult atmosphere, have given all the backing I can to the work of the careers service in this context, which provides an admirable link between industry and local authorities, and we are doing all we can in a difficult and restrictive atmosphere to help them. My noble friend Lord Lucas also had things to say about where our educational system might have gone wrong in that context.

The noble Lord, Lord Brown, asked me a particular question concerning figures. At the end of March 1979 there were 69 skill centres and 32 annexes with altogether 22,738 places. In addition, 37,000 or rather more places have been used in colleges of further education, and nearly 10,000 in employers' training establishments. With regard to the noble Baroness, I have to some degree tried to meet the point at the beginning about education cuts, but one of the things that we have maintained and indeed increased in terms of its provision is the youth opportunities programme, which is trying to provide some training and a link with the world of work for particularly disadvantaged or the unemployed young people. I must say to her that of course the Government are massively involved in this area.

About a quarter of a million 16 or 18 year olds in employment receive day or block release. Both the noble Lord, Lord Brown, and the noble Viscount asked me about day release. Most of them come from the engineering and construction industries, which are of course vital to our general industrial regeneration. I am rather sad that the noble Lord, Lord Scanlon, did not use this debate as an opportunity to make his maiden speech because he is so experienced in this area. But most young people in employment are in occupations where organised education and training is not common. This situation, I agree with all noble Lords who made the point, contrasts unfavourably with most of our main competitors abroad.

Our manifesto committed us to a review of the relationship between schools, further education and training. No decisions have yet been reached on the extent of the review, but aspects of it will he undertaken in the MSC's review of the Employment Act and in the recently established Department of Education Joint Working Group chaired by my honourable friend Mr. Macfarlane. This group, which first met on 1st November, and which I have attended, will consider, within the wider context of education, training and employment of young people, those aspects of educational provision for the 16s to 19s for which the Education Department and LEAs are jointly responsible. But anyone who has been involved in the world of education will know that Governments have to tread extremely delicately in questions of syllabus or what is taught. We are going to tread delicately but firmly because the commitment is as strong there as it could possibly he.

May I look forward quickly and finally to the future, and to the skills needed in this next decade. The Government, the ITBs and others involved in training cannot, and must not, be concerned solely with traditional skills. We must all pay attention to the skills demanded by new and changing technologies which will be the key to the wealth-making performance of British industry. In its current plans the commission is giving high priority to training in these areas where shortages are most likely to damage the economy, and these include all skilled computing occupations and training needs for the commercial exploitation of microelectronics. It has been announced that I have become intimately involved in this, because I have been given my own department's remit to look into the application and employment effects of micro-technology.

May I say to the noble Lord, Lord Brown, that I understand a few ITBs support some postgraduate training appropriate to their industry. I had in mind particularly the EITB, which provides support to the advanced technology courses for professional engineers, and these are relevant of course to applications of micro-electronics.

Lord BROWN

My Lords, I assure the Minister that they do not support postgraduate part-time MSC students in universities. The ITBs have stated that it is not in their function to do so.

The Earl of GOWRIE

I was in fact answering another point which the noble Lord has made, my Lords. I recognise he is concerned about postgraduate training and, if I may, I will look into that and see what we can do there.

Last May the MSC launched a three-year programme to boost computer training and help overcome shortages of skilled staff. The programme will provide up to 3,000 training places in each of the next three years; and this is in an atmosphere of considerable financial stringency —so that is quite an achievement. It includes extra computer training under TOPS, the Training Opportunities Scheme. and training under the Threshold Scheme which is administered by the National Computing Centre on the MSC's behalf for unemployed young people.

The bulk of the MSC's programmes were concerned originally with the training needs of industry, but no less important are the training needs of the individual, and that is catered for under TOPS. The scheme provides opportunities for adults who are unemployed or who wish to change their occupations, and that change of occupational training is particularly relevant to the needs of women, which my noble friend Lord Lucas of Chilworth mentioned.

Some 70,000 adults completed training under TOPS last year. Of these, about 18,500 were trained in engineering and automotive skills. Following recommendations of the review, training in the important technician and computer related fields has as I said, been expanded and will continue to expand despite some cuts in the overall programme. Again, when we talk about cuts we are talking about cuts in planned expenditure, not cuts in absolute terms this year. We welcome the MSC's efforts to strengthen TOPS' contribution to immediate skill needs and generally to increase the cost-effectiveness of the scheme.

I come quickly to public expenditure cuts and the training services. Some cuts were made in the MSC's planned expenditure on training in 1979–80, both on TOPS and on expenditure in the running costs and grant expenditure to ITBs. This does not mean any lessening in our concern to achieve an efficient training service. We did consider, however, that the MSC's programmes, which have expanded so rapidly in recent years, could not be exempt from the expenditure reductions we were determined to find in relation to our fiscal and counter-inflationary problems, and indeed pumping more and more public expenditure into the training system is not the answer to the problem of skill shortages. Within the training programmes the cuts were applied selectively. For example, under TOPS the main reductions were centred on courses in commercial and clerical subjects while plans for training for technicians, the main computer-related occupations and the main craft occupations in skill centres, were largely unaffected.

My own view is that what is needed at the moment is not so much money but a revitalising of attitudes which gets more people out of the service sectors, to which the noble Lord, Lord Jacques, and others have referred, and into the manufacturing sectors, which originally made us wealthy and which we would hope, given the new technologies and given getting inflation down, will turn the economy round and, we hope, help us again.

I hope I have been able to indicate the importance the Government attach to making sure we have an industrial training system which is geared to meeting current and prospective demands for skills and which enables individuals to make the most of their talents. Much has been achieved in recent years but much remains to be done, not least to avoid the bottlenecks of shortages of skills which we seem to run into even at times of relatively high unemployment. This is a well-timed debate, as I said at the beginning, enabling me to bring to the attention of the Commission's Review Body the points made in the debate today and to bear them in mind when we receive the commission's recommendations.

Lord MOTTISTONE

My Lords, it only remains for me to thank very much those who have taken part. As I had hoped, their contributions were complementary, wide-ranging and covered the subject as fully as they could in a short afternoon. I thank my noble friend Lord Gowrie for his reply and for undertaking to look at some of the points I made to him. It is perhaps unfortunate that he is still leaving the Manpower Services Commission in the position of examining its own affairs, which is slightly unfair for it, and perhaps he would give another thought to that. On other points, I should be grateful if at some time he would let me know which ones he would particularly like not to do, so enabling me to know which to plug the hardest. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.