HL Deb 26 July 1984 vol 455 cc459-62

7.9 p.m.

Viscount Long

My Lords, I beg to move that the draft Industrial Training Levy (Engineering Industry) Order 1984, laid before the House on 4th July, be approved.

The order is before your Lordships today because levies in excess of 1 per cent. require an affirmative resolution of each House under the Industrial Training Act 1982. Noble Lords are aware of the importance of the engineering industry, which is the largest manufacturing sector in terms of employment. Engineering output rose in the seond half of 1983, and there are signs that this growth will continue. It is important, therefore, to ensure that adequate training takes place in the industry so that economic growth is not hindered by skill shortages, as has sometimes happened in the past. The levy is expected to raise about £130 million before exemption, and will be used for necessary training in the engineering industry.

The levy covers the period to 31st August 1984, and is in two main parts. The first is mainstream engineering establishments—a levy of 1 per cent. of emoluments, of which 0.0625 per cent. is non-exemptible. The non-exemptible levy will be used to meet the major part of the board's operating costs. The exemptible levy will be used for grants and training programmes considered necessary by the board. Establishments employing fewer than 60 employees will be exempt from levy but may still qualify for certain grants from the board.

For establishments in the mechanical and electrical construction industry sector, the levy is in several parts. For off-site employees, no levy is payable by establishments of up to 30 employees. For establishments of more than 30 employees, 1 per cent. of total emoluments is payable, of which 0.15 per cent. will be non-exemptible. For site employees, no levy will be paid on the first £50,000 of emoluments; on emoluments over £50,000 a non-exemptible levy of 1.12 per cent. will be payable. The main product of the levy will be used to finance training initiatives to meet the sector's needs.

The proposals were agreed unanimously by the employer and employee members of the Mechanical and Electrical Construction Industry Sector Committee and were endorsed by the board without dissent. The Board has received letters of support from the two employer organisations in the sector, The Oil and Chemical Plant Constructors' Association and the National Engineering Construction Employers' Association, as well as a number of firms not members of the association. There is thus consensus in the industry for the proposals as required by the 1982 Industrial Training Act. I therefore recommend the Order to your Lordships. It has widespread support and is very necessary to meet the industry's training needs for the future. I beg to move.

Moved, That the draft order laid before the House on 4th July be approved.—(Viscount Long).

Lord Dean of Beswick

My Lords, I am grateful to the noble Viscount for the constructive and informative manner in which he has introduced this order. Before I became a Peer and was sent to this House, when I was a Member in another place, I was a person employed in general engineering. Because of belonging to that particular industry, I am as aware as probably most Peers, and perhaps better informed, on the subject of the rundown in skilled apprenticeships in that particular industry.

Having said that I welcome the order, may I say I have one little worry about it, which is that unfortunately, it does not go far enough. Obviously public expenditure has a great hearing on this. There is no question at all that more apprentices are required for general engineering in this country at present. I am glad to see the proposals have the support of the Oil and Chemical Plant Constructors' Association and the National Engineering Construction Employers' Association. These are very big employers of people and usually operate in some of the better areas for our export performance.

One of the points which worries me is that there does not appear to be any provision in this order for what I would call specialised apprentices' training. If we look into the future of the engineering industry itself, even looking at the general concept or picture, it is obvious that because it is such a broad based industry varying from machine tools to highly technical, modernised equipment, we are dealing with areas that are now becoming almost industries of excellence, industries of the future. I should like to see the Government in their next round of dealing with this particular industry, providing some kind of funding for this. There is no doubt that our seed corn for the future are highly trained youngsters in specialsed industries which are able to compete with our industrial rivals from abroad.

I see the estimates of some of the engineering employers. They are on record as stating that they should like to see a production of 13,000 apprentices annually in training. I understand that the present figure will be 6,000 from the training board scheme itself and 1,500 from the youth training scheme. So this is a step in the right direction. I think this illustrates the point that I am trying to make, that if there is an upturn of a considerable dimension in this particular industry we will be lacking in apprentices needed to train and in apprentices on site to take up these particular posts as they are created. Nothing could illustrate this more than some of the figures that were given in the debate in another place on 19th July when it was stated at col. 5 of the Official Report of the Fifth Standing Committee on Statutory Instruments: A recent NEDO report has confirmed for the Government what the Labour party and the trade unions have argued consistently for many years: that, in comparison with all our major competitors, we have failed to train our work force. The report mentions Germany and Japan… We spend only half of the £8 billion spent by the Germans on training". I think this indicates the kind of targets that we must aim for. If we are going to compete on level terms with the advanced industrial nations, certainly the countries in Europe which are almost on our doorstep—for instance Germany and France—we have to have the input at the bottom end of the industrial scale with highly skilled apprentices who are able to give the industry the benefit of their skills on equal terms with our contemporary rivals in the EEC. But having said that I look forward to future orders of this kind that perhaps may be able to deal more generously with the situation than the present one. However, having said that, I welcome the order.

Viscount Long

My Lords, I am most grateful to the noble Lord, Lord Dean of Beswick, for supporting this very important order. He asked me one or two questions. Before I answer them, I should like to say that I am glad that he, like me and others in your Lordships' House, realises how extremely important it is that we have money in order to train these apprentices. Because when we come out of the recession, if we have not got the skilled labour in the form of a skilled man behind the lathe or whatever machine it is, then we will be hampering economic growth and there will be a tremendous shortage. So I am most grateful for the way that the noble Lord has brought out that point.

He also said that he felt that for the specialised apprenticeships, the Government were not doing quite enough in that direction. I should say to the noble Lord that the Government are at present running apprenticeship schemes for technicians—which is what he was really referring to—and foundry pattern makers, as well as encouraging employers, through the exemption scheme, to train apprentices.

In saying that, I sadly agree that there is at the moment a slight decline in apprenticeships. But we hope, as time goes on and the money is provided for them, to make them come forward. The financial side is agreed by the employers and the unions. So, having said that, then it is up to the employers, whatever their levy is for the year, to deal with it. If more finance is needed, then an agreement must be sought. Having said that, I hope I have answered the noble Lord who has questioned me very kindly on this matter. I beg to move.

Lord Dean of Beswick

My Lords, may I with leave briefly ask the Minister something? Just to illustrate the importance that I and other noble Lords place on apprenticeship training, I was rated as a highly skilled man in my job. I left the industry 12 years ago. If I were to re-enter it now, I would no doubt find it a strange, new world. That is why I think this type of activity is so important.

On Question, Motion agreed to.

Lord Lucas of Chilworth

My Lords, I beg to move that the House do now adjourn during pleasure until a quarter to eight.

Moved accordingly, and, on Question, Motion agreed.

[The Sitting was suspended from 7.20 to 7.45 p.m.]