HL Deb 21 December 1983 vol 446 cc782-4

2.55 p.m.

Viscount Long rose to move, That the draft order laid before the House on 5th December be approved.

The noble Viscount said: My Lords, almost exactly a year ago the noble Lord, Lord Glenarthur, presented a similar order concerning the Construction Industry Training Board. The purpose of such orders is to enable the board to raise a statutory levy of a certain amount upon employers in the industry. The present order requires Parliamentary approval because one part of it involves a levy of 2 per cent. on payments made for labour-only subcontracting.

Noble Lords are well aware of how important the construction industry is to economic growth in this country, particularly now when output is beginning to rise. This rise in output highlights the need for more and better training in the construction industry, particularly an industry with such a large and skilled mobile workforce.

The levy which your Lordships are asked to approve is expected to raise a total of some £42 million to meet the training needs of the industry. It is important to ensure that these costs are spread among employers and that all but the very small contribute, to pay for the overall training needs of the industry. For small firms there is an exclusion level which applies to those with an annual total payroll of less than £15,000.

The proposals before your Lordships provide for an occupational levy for the main part of the construction industry. This is a set amount for each occupation and is subject to an overall limit of 1 per cent. of employers' wages bill. These occupational rates vary from £18 to £85 according to the type of craftsman trained. This system reflects the extent to which the board has been able to meet the training needs of various categories of workers. I am pleased to be able to say that the occupational rates remain unchanged from last year.

Also proposed is a 2 per cent. levy on labour-only sub-contractors. This levy is to be applied to payments made by firms employing labour-only subcontractors. For their other occupations such firms will pay the fixed occupational levy subject to the overall 1 per cent. limit. It may be helpful to your Lordships if I explain that labour-only sub-contracting is defined as the provision of man and tools to do a job, where the main contractor provides materials, and any necessary plant.

The reason behind the proposal to raise a levy of up to 2 per cent. on labour-only sub-contractors is that there is evidence of the growing use by main contractors of labour-only sub-contractors who are known to do very little, if any, training. They rely on the rest of the industry to produce trained personnel. The 2 per cent. levy on the payments made by main contractors is a means of sharing the cost of training and enabling them to benefit from the supply of skilled labour. It is expected that the 2 per cent. levy rate—over and above the basic 1 per cent. limit—will add about £3.5 million to the board's levy income.

A new element in this year's levy proposals for the construction board concerns the inclusion of the brick manufacturing industry following the abolition of the Ceramics, Glass and Mineral Products Industry Training Board. The Construction ITB has not yet been able to incorporate the bricks sector into the mainstream of its activities. The proposed 0.2 per cent. levy is estimated to be the amount sufficient to cover the brick manufacturing sector's proportion of the board's operating costs.

I commend these proposals to your Lordships. They have been unanimously approved by the board, on which employers, employees and education interests are well represented. They have also been approved by the Manpower Services Commission. In particular, the main employer associations in the industry have indicated their agreement with the 2 per cent. levy for labour-only sub-contractors. I therefore commend the order to your Lordships. I beg to move.

Moved, That the draft order laid before the House on 5th December be approved.—(Viscount Long.)

Lord Ponsonby of Shulbrede

My Lords, I thank the noble Viscount for explaining this order. The order imposes a 1 per cent. payroll levy on construction employers in order to finance the work of the Construction Industry Training Board. This order is to be welcomed as it provides the only way of providing training in a substantial industry of some 1½ million employees which is now in the midst of a recession.

Unfortunately, the work of the Construction Industry Training Board has not prevented a continuous decline in the numbers in apprentice training, which have gone down from over 12,000 in 1980 to just under 8,000 in 1983. It has also not prevented disagreement in public between the chairman of the Construction Industry Training Board and the Manpower Services Commission over the utility of the youth training scheme in construction. I understand that he said he feared that the general training provided by the youth training scheme was not what was required. There is a need for the Construction industry Training Board to widen its functions in relation to apprentice training. It could provide further organisation and registration rather than leaving this whole process to the Building and Allied Industries Training Council. Having said that, we welcome this order.

Lord Rochester

My Lords, from these Benches I should like to join in thanking the noble Viscount, Lord Long, for having explained so clearly the terms of this order. We find ourselves in general sympathy with what the noble Lord, Lord Ponsonby of Shulbrede, has just said about it; but having said that, like him, on behalf of my noble friends I find the terms of the order acceptable.

Viscount Long

My Lords, I am grateful to both noble Lords for their kind remarks about this order. One would like to see more young trainees coming forward, but what it amounts to is more advertising and getting them to come forward to learn a basic skill. This is what the construction industry wants.

On Question, Motion agreed to.