HL Deb 10 December 1985 vol 469 cc114-9

3.13 p.m.

The Secretary of State for Employment (Lord Young of Graffham) rose to move, That the draft order laid before the House on 12th November be approved. [2nd Report from the Joint Committee.]

The noble Lord said: My Lords, I beg to move that this order be now approved. The order requires parliamentary approval because one part of it—that covering labour-only subcontracting—involves a levy exceeding 1 per cent. of emoluments. Noble Lords will be aware of the importance of the construction industry, and there is a continuing need for the workforce to possess high-quality skills. It is important to ensure that all firms play their part in training, so that we are not hampered by skill shortages as in the past. That is why it is essential that this order should be approved so that money is available to the Construction Industry Training Board to enable necessary training within the industry.

The levy proposals are largely unchanged from those approved by both Houses last year, and are expected to raise about £47 million. The levy is made up of three parts. First, an occupational levy will apply to the main part of the industry. A set amount will be raised for each occupation, but this is subject to an overall limit of 1 per cent. of employers' wage bills. The rates vary according to the type of craftsman trained and reflect the training costs of each craft. Noble Lords will be pleased to learn that, with four exceptions, these rates are unchanged from last year.

Secondly, a levy of 2 per cent. will apply to payments made by firms which employ labour-only subcontractors and which often do not contribute to craft training. This measure has wide support in the industry. For the sectors covered by these two measures, companies with payrolls of £15,000 or less will not be required to pay levy, and this will exclude around 40 per cent. of all construction firms coming within the board's scope. Thirdly, for the smaller brick sector, a levy of 0.07 per cent. will apply—a reduction from last year. All brick manufacturers with a payroll of £100,000 or less will not be required to pay levy.

Noble Lords will know that the board has been retained as a statutory body because of strong support from employer organisations in the industry. Over the past year the board has seen a number of changes. A new chairman, Mr. Derek Gaulter, has been appointed. The entire board was reconstituted in July and the Government welcome the extra representation given at that time to the Federation of Master Builders, an organisation which has an important role in contributing to the board's efforts in training. The board has done good work in the training field, and I wish to pay particular tribute to its youth training scheme, which has helped to give so many young people a sound start in skills training and employment in the industry. We are pleased that the board plans to play an equally important role in the expanded scheme due to begin next year. I am sure that Mr. Gaulter, his staff and all board members, will continue to justify the industry's support by building on these past successes.

Noble Lords will of course remember that at the time of last year's order the Federation of Master Builders expressed concern about the proposed method of calculating levy. At the same time, other employer organisations spoke equally strongly in favour of retention of the current system. Nevertheless, some noble Lords expressed concern that the federation's arguments should be given a fair hearing. I am sure all noble Lords will be pleased to learn that the board has set up a working party, which includes the federation and which has met several times. The Group is still considering the very important and complex issues raised but hopes to make recommendations to the board in April next year. I hope noble Lords will agree that this represents the sensible way to resolve this matter which, we have alway said, is for the industry to agree.

The proposals currently before Parliament are supported by the majority of employer organisations, including the Federation of Master Builders. I believe that the proposals therefore have the necessary level of consensus under the 1982 Industrial Training Act. I therefore recommend this order to your Lordships. The proposals have been adopted by the board without opposition. They have support from the majority of employer organisations in the industry, and have been approved by the Manpower Services Commission. I believe that they are necessary for the board to continue its vital work to sustain and enhance training in its industry, and to play a significant part in the Government's training initiatives. I beg to move.

Moved, That the draft order laid before the House on 12th November be approved. [2nd Report from the Joint Committed].—(Lord Young of Graffham.)

Lord Stoddart of Swindon

My Lords, I should like to thank the noble Lord, Lord Young of Graffham, for explaining the order so succinctly. I have to say that the Labour Party has no reason to oppose this order. Indeed, we welcome it since it continues in operation an industrial training board which, as the noble Lord has said, is essential to the continued training of good craftsmen in the building and construction industry.

The Labour Party is committed to good training in industry and elsewhere and, as the noble Lord knows, we regret the destruction by the present Government of so many industrial training boards. I have to say that when the Labour Party is returned to office we may very well seek to restore those industrial training boards which have been abolished since 1979 by the present Government. It is true that what is needed is better training and more of it. It needs to be properly structured to take account of changing needs and technology and to provide the skills in the quantity needed to keep British industry in the forefront of technological development in order that we can meet the growing challenge of our foreign competititors, not only in overseas markets but in our own market as well.

The scrapping of 16 training boards by the Government has hardly been conducive to providing these skills. That is borne out by the fact that there are many complaints from industry now that in the midst of mass unemployment there is a shortage of vital skills. I think that is altogether bad and, as I have just said, employers themselves are suffering from these skill shortages—many of them acute in some parts of the country. However, we must, I suppose, be thankful for small mercies, and, as I have already said, the Opposition welcomes this order.

Even so, I understand there have been some complaints, and the noble Lord, Lord Young, touched on this. There have been complaints, particularly from small builders, that the levy falls unduly harshly upon them. I sincerely hope that the working party which was mentioned will be able to deal with these complaints and ensure that there is satisfaction all round. If the noble Lord has any further comments to make, we from this side of the House would welcome them.

I should like to ask specifically whether the £15,000 annual payroll exemption limit is fair and reasonable. I do so because I am not quite clear just what the exemption means. Does the £15,000, for example, include the small builder's own salary or is it additional to any wages paid over and above his own remuneration? I hope the noble Lord will be able to clear up that matter for me. If it is one thing, it will not be too bad: if it is the other, then it will be unduly restrictive and will apply virtually only to the small builder and a mate. If the noble Lord can help on that point, I should be much obliged.

I should like to put one final question to the noble Lord. As regards apprenticeships in the building and construction industry, how will this order affect the recruitment of young people into apprenticeships, particularly at this time when the industry is going through a lean period, with 500,000 people unemployed? It has to be said that is due to government policies, especially in relation to the swingeing cuts they have made in the housing programme and the continuation of high interest rates.

As I said at the beginning, I thank the noble Lord for explaining the order and I hope he will be able to answer some of the questions I have raised.

Lord Rochester

My Lords, from these Benches I should like to join in thanking the noble Lord the Secretary of State for having explained this order to us. We too are firm believers in the importance of industrial training, but this afternoon I will confine my remarks to this particular order. As the noble Lord, Lord Young, came near to saying, I think, the main point of contention last year when an order similar to this was introduced was whether the levy for the Construction Industry Training Board should be on a per capita basis, as proposed by the training board, or changed to a payroll system, as advocated by the Federation of Master Builders.

These firms are affected adversely as small units, in the sense that if payments were levied on a payroll basis, which I believe is the case in all other training boards that remain in existence, it would result in savings to most members of the Federation of Master Builders while adding to the cost of many large firms in the Building Employers' Federation. In that situation last year I said that at first sight my sympathies lay with the smaller firms, because I suspected they would have less say than others in determining what was ultimately decided. However, I agree with other noble Lords that this problem is best left to the board itself to sort out rather than that people like ourselves, as politicians, should seek to do the job for them.

Since then, as the noble Lord, Lord Young, has said, a further seat on the Construction Industry Training Board has been allocated to the Federation of Master Builders and I believe also an additional place on its building committee. I think, too, that they may be represented on the working party to which the noble Lord referred, but perhaps he can confirm that. Under the present order, as I understand it, the levy is still to be assessed on a per capita basis but there are reasonable hopes that the working party's conclusion might be that a more generally acceptable method of assessing the levy for the future might soon be agreed and that it would be in operation in time for it to take effect when the 1986 order (if precedent is followed) eventually comes before us. In the hope and expectation of that happening, my noble friends and I are prepared to approve this order.

Lord Graham of Edmonton

My Lords, I think the Minister will be pleased and grateful for the reception this order has received from the House. He is entitled to be so. I certainly stand up and give a very warm welcome to the order. As the Minister will appreciate, we have had the benefit earlier of looking at the proceedings in another place. It was in another place, also, as the noble Lord, Lord Rochester, reminds us, that anxieties were expressed last year over certain aspects of the order.

I think the House should pay tribute to and acknowledge—I believe the Minister used the word "sensible"—what I would call the patient and understanding negotiations which have taken place over the last 12 months. Certainly it is quite clear that the Minister and his colleagues have listened to what my noble friend Lord Stoddart described 12 months ago as criticisms. "Criticisms" is not a dirty or inappropriate word to use, particularly when bodies like the Federation of Master Builders genuinely felt they had a grievance. As the noble Lord, Lord Rochester, has said, with the establishment of the working party and, as the Minister has pointed out, with the additional membership of the board which has been given to the small builders, it is quite clear that patience will have its own reward. The noble Lord, Lord Rochester, was frank enough to anticipate the possible outcome of the working party negotiations. I am quite certain that if they turned out in that way they would be well received by the small builders.

I think the Minister ought to say a little word on the point raised by my noble friend Lord Stoddart about the value of apprenticeships. It is clear that the Minister, and the Government indeed, recognise the crucial importance of a training board in this particular industry. Disasters can occur in the construction industry unless we have proper skills deployed to the best advantage: that is clear. There is no doubt from my experience and observation that the small and medium builders tend to be the ones who take on more apprentices and supply the industry with the kinds of people needed in order to make sure that the construction work that is called for is done to our satisfaction.

The Minister has responded very well and very fairly to the representations that have been made. The Federation of Master Builders quite clearly approves the continuation of the order. It, of course, lives in hope. It believes in the basis. As the Minister pointed out, there are three elements at the moment, and it lives in hope that they may change in line with previous views. I think that the Minister and his team are well aware of the anxieties in that quarter and in others and, for my part, I congratulate him on adopting what he considers a sensible approach to these matters. I look forward very much to finding out that progress has been made, and the order certainly has my support.

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Stoddart, for his general support of this order. The noble Lord is a far-sighted man and looks forward to some day when there may be a return of another Government. I fear that I cannot look that far in the distance. But I recollect that, at the time when we looked at the industrial training boards, many were found somewhat wanting and the Government acted accordingly. The important point is that in those areas where training is required, we provide the training. I am happy to give the noble Lord opposite the assurance that the £15,000 payroll limit does not include the employer himself, and therefore the very small builder is excluded from this.

May I assure the noble Lord, Lord Stoddart, and perhaps at the same time the noble Lord, Lord Graham, about apprenticeships. I merely point out that under the youth training scheme the Government paid some £35,800,000 in 1984–85 towards the board's scheme and some 14,000 young people went through that scheme, of which over 90 per cent. have gone into employment, including apprenticeships. Although the number of apprentices has, it is true, declined since 1979–80, by about one-third, if you put the youth training scheme together with apprenticeships I think you will find that many more young people are going into the industry with some form of training, if not the fuller form of apprenticeship, than before.

I am grateful to the noble Lord, Lord Rochester, for his support and I confirm to him that the Federation of Master Builders is part of the joint working party. I think it is wise to wait for the outcome, which will be in April, and I look forward with considerable interest to that. I hope that your Lordships' House will not be disappointed, because I for one greatly appreciated the approval by the noble Lord, Lord Graham, of our actions. It is not always that noble Lords opposite approve of our actions, and therefore I shall endeavour not only to listen and exercise patience but perhaps even to secure their commendation on a future occasion.

On Question, Motion agreed to.