Education and Training for New Technologies

HL Deb 25 March 1985 vol 461 cc787-838

4.19 p.m.

Debate resumed.

Lord Rochester

My Lords, it may be for the convenience of the House if we now return to the debate on education and training. I am sure that I speak for the whole House in thanking the noble Lord, Lord Gregson, for initiating this debate, and, indeed, for presiding over the committee which considered the problem of education and training, whose report we are now considering and of which I was privileged to be a member.

Let me say at once that I subscribe fully to the central finding of the report that in the United Kingdom technological progress and competitiveness are being impeded by our failure to educate and train enough people of the necessary quality; that educational provision should be more closely related to employment needs, and schools, colleges and universities given more guidance on the skills required by industry. To that end, as has been said, the committee proposed the establishment, not of an entirely new body—that way, in my experience, the solution of intractable problems is usually made harder—but of an education and training board which would be an adjunct to an existing body, namely, the Science and Engineering Research Council, having the functions of which, the noble Lord, Lord Gregson, has already told us.

I was party both to the aims of the committee in determining those functions and to the means proposed to achieve them. But now it has been reported that the Prime Minister herself has asked 30 leading industrialists to support the funding by Government of 4,000 extra student places in engineering and technology at a cost of £43 million over the next three years. The arrangement appears to have the support of all the relevant government departments, of the Engineering Council, and presumably of the University Grants Committee.

It seems to me that in this matter the end to be attained matters much more than the precise means to be used for its achievement. Therefore, for my part I am prepared to back the approach of the Government to the problem, subject to an assurance that I very much hope the noble Lord, Lord Young of Graffham, may be able to give me when he comes to reply to the debate.

Along with other members of the Select Committee, I endorsed the intention of the Secretary of State for Education and Science to bring about a shift in the number of higher education places from the arts to science and engineering. However, the support of the committee for that shift was conditional not only on maintaining the quality of intake but on what for me was a crucial section of paragraph 6.27 of our report. I quote: Science and technology places cost more. It would be unacceptable to fund the switch wholly from within existing resources since this would involve disproportionate cuts in arts places. The morale and quality of those in the humanities must be maintainied in spite of reduced numbers. The Government must accept that the provision of more science and technology places will require new resources as well as the reallocation of existing ones". In my view, it is not simply a matter of morale and of quality. It is also of vital importance that in educating more people in science and engineering those people should themselves be capable of articulating clearly what it is that they have learned. In a recent debate in this House I took leave to say that one of the most relevant aims for this country in the 1990s should be an experience of higher education which leads to comprehension and communication between the scientist and the non-scientist. I believe it is essential that in our enthusiasm for the sciences to prosper we do not allow the humanities to suffer unduly.

My straight question to the Minister is therefore this. Can we take it that the injection of these additional Government funds is an indication that the Secretary of State now accepts the advice given to him by the University Grants Committee last August, that a significant increase in the number of places in science and technology can only be provided if the necessary resources are made available and that it is neither desirable nor feasible to find them at the expense of the arts? Alternatively, are we to understand from the statement made last week by the chairman of the UGC, as reported today in The Times, that in his judgment Sir Keith has rejected the advice of the UGC that universities should receive level funding and that the best guess that can be made is that for the rest of this decade the increase in grant will be 2 per cent. below inflation? I should be grateful if that question can be answered by the noble Lord.

Now I turn to industrial training. In doing so, I should like first warmly to welcome the decision of the Government to expand the youth training scheme by offering, from April 1986, a second year's training to 16 year-old school-leavers and a one year's place to 17 year-old school-leavers, thus giving everyone aged under 18 a chance of a job, education or training. That is a policy which, along with an expanded community programme to help the long-term unemployed, we on these Benches have long advocated.

I welcome also—and this is highly relevant to today's debate—the review which the MSC have now been asked to undertake of vocational qualifications with the aim of ensuring that there is a system which young people can join at any stage, which is based on achieving recognised standards rather than time serving, and which provides adequate opportunities to progress to higher skills that are relevant to industrial and commercial needs.

More generally, in paragraphs 7.34 and 7.35 of the report of the Select Committee there is this key passage—again, I quote: In the UK the link between training and commercial profitability is not recognised sufficiently to encourage a widespread investment in training. Nor is there any effective national training policy. The Committee believe"— and the noble Lord, Lord Gregson, has already referred to this— that such a policy is called for, together with a clearer allocation of responsibility for funding training. … They recommend the introduction of a national training levy—with remissions to those who carry out training, as in the levy-grant system—across all sectors of industry and commerce". I should like strongly to support that recommendation.

Indeed, in keeping with the findings three years ago of your Lordships' Select Committee on Unemployment, chaired by my noble friend Lady Seear, on which I was privileged to serve, I should go further. That committee noted that, following the 1981 Employment and Training Act, the number of industrial training boards was being reduced from 24 to seven, and that in the sectors where boards were to be abolished training arrangements were to be organised on a voluntary basis. While the disappearance of some ITBs was regretted, it was recognised that their objectives might be achieved in other ways. As long as training was provided for each sector, we were not then concerned to press for a particular framework, but we were certain that some statutory framework was necessary, based on industrial sectors and geared to local needs, and that the achievement of the ITBs must be continued.

The unemployment committee also favoured a remissible training levy but in their proposals remission of the levy to employers was made subject to a significant qualification, namely, that training should meet certain specified standards. Ever since, under the Education and Training Act, so many industrial training boards have been abolished that I have been troubled by the absence of any adequate national standards for industrial training. Indeed, it was with that consideration in mind that in this House on behalf of my noble friends I moved an amendment, without success, to insert into the Act a provision under which, in all sectors of industry, irrespective of whether or not statutory boards continued to operate within them, there would have to be training arrangements which conformed to certain criteria. The introduction of such arrangements was to be preceded by wide consultation and the criteria were so framed as to encourage an approach to training of an organic problem-solving kind focusing on objectives and achievements.

The most important feature of the means proposed to achieve these aims was that they sought to ensure the maintenance of adequate local and cross-sectoral links and thus recognised that, in practice, training needs are related to local labour markets and apply across sectors rather than being identifiable only in respect of individual industries. I do not see how, without the kind of statutory arrangements then proposed, we can in this country guard against a return to the situation that obtained 20 years ago, when the state of our industrial training was generally regarded as unsatisfactory.

The report now before us does not go as far as that. It does not advocate statutory enforcement of such a policy. But it does recommend that, now the Government have asked the Manpower Services Commission to act as a national training authority, criteria of the kind to which I have referred should be introduced and monitored by the commission. I should therefore like to ask the noble Lord, Lord Young, when he replies, whether he accepts this finding of the report and if so, whether, with all his knowledge and experience of the operation of the MSC's area organisation, the commission is, in his view, adequately staffed and capable of delivering training and vocational education that are sufficiently responsive to employment needs at local level. More specifically, is he satisfied that the commission's field staff have the training and particularly the management experience required to determine with employers, and then to achieve, agreed objectives?

In that connection, there is indeed one positive suggestion which the noble Lord, Lord Young, may recall that I made at the time that he himself gave evidence to the Select Committee when he was still chairman of the MSC, and that I would now like to renew. It is that to assist area board chairmen a really first-class general manager or chief executive—it does not matter what he is called—should be appointed in each area, drawn perhaps from among those now retiring early from large companies and having training and, more important, management experience that would make it easier for the kind of things I have advocated actually to get done.

Understandably, the noble Lord did not respond to that suggestion when I made it a year ago. But, in the light of what has happened or, often, I am afraid, not happened since then, I should be grateful if he would make some comment on it now treating it perhaps as a small contribution to the views that I know that the MSC is now seeking on all aspects of area manpower boards before they are reconstituted at the beginning of next year. In the same constructive spirit, I should add that it was heartening to read the article by the present chairman of the commission, Mr. Bryan Nicholson, which appeared in the insert in The Times last Thursday. I welcome particularly the aim to set up local collaborative projects to be funded jointly by the MSC and the DES and bringing together local employers and training providers, mainly colleges of education, to identify what local employers' problems are and how education services can help. I was pleased to learn also that research has started into the link between business success and training and that results so far show a very positive connection between high performing companies and investment in adult training.

Lastly, on this point, I gladly concur with Mr. Nicholson that the onus in initiating adult training lies with employers and that unless managers—and line managers, at that—are willing to identify training needs, very little can be achieved by the commission or, for that matter, let me add, by the Government or any of the rest of us. In conclusion, may I say from these Benches that we are greatly looking forward to the maiden speech of the right reverend Prelate the Bishop of Durham, which we are about to hear. I should also like to express the hope that the report that we are debating will play a significant part in improving education and training for new technologies and in meeting what in my view is the most basic need of all—to increase the esteem in which industry, particularly among students, is held in this country.

4.35 p.m.

The Lord Bishop of Durham

My Lords, I feel sure, as has already been very graciously indicated, that I may rely on your Lordships' forbearance as I feel my way forward into sharing in the business of your Lordships' House. My very real nervousness is checked only by my conviction of being able to rely on your collective graciousness and also by a sense of the importance of the matter we are now considering. I should like to add my gratitude to the noble Lord, Lord Gregson, for giving us an opportunity to consider this very important matter.

My own approach to these things was, I think, first formulated when I was working for the World Council of Churches, based in Geneva, when I found myself to some extent in contact with various of the technical agencies of the United Nations and such organisations as the WHO. I found this very encouraging. Whereas, at the level of the official, shall we say, confrontations of the United Nations, one very often thought that the world would be almost certain to blow up tomorrow, the fact was that various persons who knew their subject well were getting together on common problems and possibilities of the human race and were working together, whatever their particular international, national and political commitments, because here were pressures put upon us by technological developments, by problems of human living and so on.

Therefore, much of the work, it seems to me, of sustaining the present and building a humane future lies with such groups, where there is common humanity addressed to common problems which are specific and set by the way things are developing. It seems to me that the steady development of working together on the problems and possibilities which are surveyed in this report on education and training for new technologies fits into this broad and hopeful human context. It is not simply a specialised interest although it must be pursued by specialists and it will need, as the noble Lord, Lord Rochester, says, specialist institutions and plans to promote it. But the report addresses matters which are of basic importance, surely, in our society. I am sure that its concerns and proposals should be given very high priority by way of education, by way of investment and by way of practical development.

I would even dare, my Lords, to venture a little further into an even deeper and broader reason for taking up this report and its proposals. In this country, we seem to me to be in some danger of a failure of nerve about what we can do and what we might do.

Risks which arise because of innovations in science and technology seem constantly to be given more publicity and emphasis than the possibilities that are opening up. A possible example here, although this may be straying too far in a controversial direction, is that of nuclear fuel and the third world. There is much panic because people. for some reason or other, do not seem to trust experts. Yet the great hope of feeding people probably lies along these lines as well as others.

The changes that are forced upon us are seen so often to be more threatening than promising. With this there goes a great suspicion of experts and specialists. I am sure, my Lords, that we are all experts in something. We all know that apart from ourselves we have a normal suspicion of experts. This is very right and proper. However, at the moment I think that we are confronted with a positively abnormal suspicion of experts, because people have not become used to the way in which the possible developments are being worked out—they are mysterious, and so on.

I am sure that this fear of change and this loss of nerve about what we can do is both faithless and inhuman. There are problems; risks will sometimes exact costs; and dangers may sometimes be very grave. But surely if we think that a perpetual optimist is some sort of happy lunatic, equally we should be clear that a perpetual pessimist is some sort of unhappy lunatic. Those of us who believe in the reality of the God who is reflected in the Bible and worshipped in at least the Jewish and Christian traditions need to join with other realists and insist that we have the powers to do what we can do or shall find out how to do, for very good reasons and with very good hopes.

Therefore, it seems clear to me that the proper development of technology, of education for such a society, and the careful working out of the interaction between these technologies—industry and commerce and society at large—are a necessary part of building a humane future and, above all, it is a hopeful part. Therefore, we need to be very clear about the importance to society of the concerns and the proposals of this report. It is not a sideline; nor is it a mere technical matter.

It is against that background that I venture to draw attention to one or two questions which arise from a consideration of the report's proposals. First, it is clear that the concept of numeracy and literacy linked together is a very central one. For far too brief a period, while I was Dean of Arts at the University of Leeds. I was part of a small group drawn from the faculties of arts, social science, science and applied science, which had been convened at the instance of persons from the applied sciences and the pure sciences. It was clear to them, as it is surely clear to all of us, that, for example, engineers in business and in industry need to be clear and articulate about what they are doing and what they are contributing. Many of these new technologies will raise great questions of human values, and it is necessary to be able to think about these matters clearly. It is clear that if we are constantly to retrain, we must be able to think in an articulate manner about what we are basically doing and what we hope to do. Therefore, in order to develop from the numeracy a humane literacy is required.

However, it is equally clear surely that in order to have the necessary collaboration between the arts, the social sciences, the applied sciences and so on, we must be able to develop in the artist a sense of what it is to be numerate, so that there is sympathy for what is involved in these matters. I am delighted that the report suggests that this approach of mingling and interacting numeracy and literacy must be fed into education throughout. Surely it is right to welcome the suggestion in the report that early specialisation is bad, but that there should be a general insistence on literacy and numeracy as an essential part of what we can rightly call humane education.

It is clear that it will take a great deal of work to build this into our system in such a way that it is exciting, which I believe it is. Then there will have to be considerable shifts of priorities in universities and polytechnics. Speaking as an ex-Dean of Arts, I believe that this will unquestionably be painful. But I hope, as has already been suggested, that it will not be a war to the death and, if possible, not a war at all. There is a great possibility of collaboration here.

In this connection it is important to be quite clear that space must be bought for innovation and experiment. The small group of which I was a part began to build up a very interesting idea about a literacy-numeracy course which might be a component of all first-year courses. We could take the idea no further because we were all so busy, then we were moved on, and there was no time to buy the space for innovative experiment, When the issue is urgent you still have to buy time so that it can happen, and there must be no doubts about the demands of expense and investment.

Further, I would hope that the arts and social sciences will discover the immense growth area in working out, as did the early universities, how to meet society's need so that the whole broad range of interests can be maintained. I would also venture to suggest that, in working this further, we need to be careful about how we apply the very important concept of relevance. Perhaps those who will be following this up should pay attention to the tensions between what I might call immediate relevance and long-term relevance. It is possible to make courses so relevant that they become useless within five years. I believe that the report is aware of that.

I believe that the most important text here is that in paragraph 1.8 of Chapter 1 of the report which says: the all-important new technologies of the future, which are by definition unknown". If we are to train for the unknown, we must be very careful about being over-relevant. Having been involved through being a CNAA chairman of a panel with at any rate the documentation of the national advisory body exercised in trying to impose some order of priorities on further and higher education in the public sector, as a philosopher as well as someone who wishes to practise, I was very alarmed at the way in which this exercise was carried out, because the criteria of "relevance" in the end seemed to be bureaucratic organisation and saving the necessary money. This caused a grouping of subjects which could well be quite disastrous for the very aims which were to be pursued. So I think that the business of relevance wants watching with care by all sides.

Finally, I should like to suggest that all this needs to be taken into account in the setting up of any monitoring, promoting and reflecting body. Of course, it will need to be drawn mainly from the relevant areas—industry and commerce, technology and Government. But I would venture to suggest that, in view of the very problems we have, the excitement and the uncertainty of them, it would be extremely valuable to add to any such body what I might call two or three non-homogeneous but sympathetic disturbers—people who have sympathy with what is going on but who do not look at it quite from the point of view of those who are experts in it and committed to it; people who can stir matters up, so that others may notice one more fact and therefore become more efficient. The other day, when I was discussing with people who wanted to set up small businesses in what I may now dare to call my part of the world, I was presented with a fairly well researched figure: that 60 per cent. of businesses are small businesses (that is, if we define a small business as employing under 200 people).

Therefore, in setting up this body, I hope that not only people from large businesses will be members of it. It needs to be broadly based. I hope that these many other details will be worked out urgently and persistently, because if the proposals of this report are followed up on the broadest possible front, there is no doubt that they will contribute greatly to helping us develop the sort of society we need for a creative and imaginative future.

4.48 p.m.

Baroness Elles

My Lords, I have the most pleasant and enviable task of congratulating the right reverend Prelate the Bishop of Durham and, on behalf of all your Lordships, thanking him most warmly for a most constructive and valuable contribution to this debate and, perhaps above all, for giving hope to this country on a matter on which the future of our country and its prosperity depends. I know that noble Lords in this House will always look forward with great attention and interest to any speech that the right reverend Prelate may care to make in this Chamber.

Turning to the report, first, I should like to join with other noble Lords in most warmly congratulating the noble Lord, Lord Gregson, both on his speech today and on the content of his report. I should also like to congratulate all the members of the committee who have obviously served him so well in producing this excellent and valuable document. As the noble Lord has pointed out, it is of course impossible to go through its many recommendations. So in a few words I should like to concentrate on certain aspects of the report which are relevant to a part of the United Kingdom which I now have the honour to represent in the European Parliament, and that is Thames Valley, which is of course the silicon valley of the United Kingdom. All industries in that area, as was confirmed in the Butcher Report, recognise a shortage of skills not only in graduate engineers but also lower down at the level of technician and technologist.

This shortage is not only hindering the work of these larger firms but it is clearly hindering the expansion, or possible expansion, of small businesses, particularly those concerned in what one might call mono- products in the high technology field. They come to the end of one type of product and they do not have the facilities to send their people to retrain quickly to get on to the next generation of product. This is becoming a serious problem in this area.

To give one example, only the other day, in talking to a director of a firm, I asked him, "Do you sell these products now on the market?" He said, "No, unfortunately I have had to close down that sector because I cannot get the engineers to guarantee the repair, maintenance and service which I would expect to be able to give should I continue to market such a product". There is a specific example of failure of a business to be able to expand, and indeed to be able to employ people because there are simply not those people able to fulfil the job at the right level and quality required.

On reading the report—and many of us have our own pet theories—possibly paragraph 4.26 goes to the kernel of some of our problems: that is, possibly a failure of our educational system. It is not put in so many words, but this is one of the implications of that paragraph: the educational system today (and I do not just mean the subject matter, but the education system as a whole) is not providing children who are leaving school and who are able to take on even the vocational training which is available to them. If I may again refer to the area which I have the honour of representing, there are colleges of technology where there are perhaps 120 vacancies. So with 120 jobs, and with a spin-off of perhaps another five, there are 600 vacancies in the area, and the system is failing because there are not children coming out of the schools who feel themselves qualified or are qualified to take on these courses.

We need a fundamental reassessment of not only the teaching profession. I know that the noble Lord has identified certain problems where those who are teaching (and this is no disrespect to them) are being given jobs to do for which they are not qualified. When I was young I used to be a mathematician and I know how important it is that people should be qualified to teach mathematics. It is a difficult subject to teach to young children and young teenagers. This is a special qualification which is lacking in the educational system today.

I would also refer to the attitude of parents to their children. I was horrified recently to meet a young family who had a nice young girl, aged 16 or 17. I asked the parents, perhaps foolishly on my part, "What does your daughter do?" They said, "Oh, she is unemployed". I said, "What qualifications does your daughter have? Does she have any exam qualifications?" The reply was, "Oh, no, her teacher said it was not worth having a qualification because she would never get a job."

That to me is an indictment of the system which we are offering the young children of this country. I hope that it is only an isolated incident, but I fear that it is not. Here perhaps the message of hope which came from the right reverend Prelate will be passed on to parents to encourage their children to take exams, to work, and to believe that there is a hope and a prospect for them at the end of their school years.

I know that statistics are sometimes difficult to relate to each other, but the figures that I have from Japan are that 94 per cent. of children in school stay on to the baccalaureate level. That is basically 18. A corresponding figure—though I do not claim it is the corresponding figure—for the years 1982–83 is that school-leavers in this country with two or more A-levels, which would roughly equate, is something like 11.3 per cent. This is a staggering difference. It may not be the exact equation, but it gives a picture where in our country we are way behind the Japanese and even South Korea in having a higher standard for school-leavers.

I should like to draw attention to the programme which is not only being envisaged but is being introduced by the French Socialist Education Minister, M. Chevenement, who is now insisting that by the age of 11 children should be literate, numerate, have neat handwriting—on that I am afraid I would certainly fail!—and must also have some knowledge of geography and history. As he put it, he does not want any more to put questions to young pupils, such as: "and what do you think of the hundred years' war, and when was it?" and be answered: 1914 to 1918". These are the kind of answers which obviously a Minister of Education does not expect to get from his pupils.

Therefore, I think that we can take heart that this is not just a British problem, it is a European problem that over the past years there has been a decline in the standard of teaching in our schools, there has been no competitiveness, and there has also been a decline in the standard of exams. I would certainly agree with both the noble Lord, Lord Rochester, and the right reverend Prelate that early specialisation is undoubtedly a danger. There is no more danger than the fact that because of the rapid development of technology, as the noble Lord, Lord Gregson, pointed out, even if you do specialise, in 2.7 years you are out of date. Therefore what you need is a good grounding, and to be able to adapt quickly to new situations.

So far as education is concerned clearly this is a challenge. That is a commonly used word, but it is a challenge to the education authorities particularly, and to parents, to see that their children are being educated for the 21st century, and that attitudes and a sense of achievement will be given to them. One of the reasons why so many jobs have been created in the United States and in Japan is that during the 1970s at least—and it is now higher—35 per cent. of all young people up to the age of 20 were receiving some form of higher education. In Japan it was 25 per cent.; but in Europe—and I talk now roughly of the Western European democracies—it was something between 11 per cent. and 17 per cent. Surely we have a lesson to learn there.

Now may I turn to the matter of industry. Industries, so far as I can make out—and noble Lords may be able to confirm this—are themselves not aware of either their short-term needs or their long-term needs in the form of training, or quality, or quantity of young people that they need now let alone what they are going to need in five years' time. This failure to identify need also falls back on the small firms who must rely to some extent on the co-operation of major firms to give them a lead as well as for tuning-in to universities.

There is no doubt that the industrial expenditure on training is disgraceful. The recent survey produced by the Industrial Society showed that something like 0.3 per cent. of annual turnover was spent by industry as a whole. I know that it is dangerous to take averages, but that average is an absolute minimum compared with other European countries who average something between 3 per cent. to 5 per cent.

However, this is the only point on which I would beg to differ humbly with the conclusions of the report. I do not believe that a national levy is the answer to this problem. Recently discussing this with industrialists, they referred to the disaster of the Industrial Training Act 1964 where there was some payment in advance and then re-credit after training. My belief from observations throughout the country is that different regions have totally different needs. Different firms need to spend different amounts of money. I should like to see something like what one could call a voluntary imposition on industry. In their annual accounts companies should state the amount they spend on training every year. The objective should be something like 2 per cent. of turnover.

Of course this will not apply to all firms, and this is why a national levy is not the right way to go about it, because different firms, different industrial sectors, and different regions have different needs and we have to recognise this. It is for the industries to decide what they need and not to have a national plan in the way, as I understand was envisaged. For my part, I would not support the recommendation to have a national levy.

I now turn to research and development and Government funding. Over the last 20 years it has become a frequent habit of mine that whenever one needs anything one turns, first, to money and, secondly, to the Government. I am reminded of a famous statement of Lord Rutherford when he was setting out to split the atom and he was planning a laboratory. He sent the hat round and got no money. He said,"Well, gentlemen, we have no money, so now we must use our brains." It sometimes seems to me that we do not use our brains often enough however much we may have them.

I should recall to your Lordships that we are members of the European Community. A programme has been set up recently known as the ESPRIT programme for the development of information technology. There is £500 million sitting in Brussels waiting to be collected by those who wish to have it. Universities doing cross-studies with other universities in the Community can have some of these funds. I know of universities and businesses which have already applied and they are receiving some of this money. This is something at which we should be looking very much more closely because although in the member states of the Community we spend unilaterally much more on research and development than does Japan, we only have to look at the results to see that it is not economic. We fail to use what would be known as economies of scale throughout the Community, to put our brains together and not duplicate some of the very expensive experiments which are now being undertaken. I am not talking only about information technology, but about other new technologies which are coming on stream. We should not be too blinkered about being only 21 miles from the Continent, but try to see whether we cannot do rather better.

I should like to say a word about a seminar that the Member of the European Parliament for Oxford and Buckinghamshire and I, as MEP for the Thames Valley, held recently. We were both faced with shortages in the firms in our areas and we wanted to know how to deal with that. For the first time we invited chief education officers from the three counties, representatives or heads of three universities, local education authority representatives, the heads of some of the leading technological colleges of the area and senior representatives of industry, including the chairman of Ferranti, Racal, Beechams, ICL, Rank Xerox, and so on, as well as representatives of small businesses. It will not surprise your Lordships to know that this was the first time these people—who were all interconnected within an area in the United Kingdom—had met and sat down over a weekend to identify their problems and to discuss together what measures they should take. I am happy to report that immediately—this was their reaction, not ours—they set up a small regional grouping (I will not call it a committee) under the aegis of the local chambers of commerce, which also attended, to sort out the needs of our industries within our area for the next few months. We hope that by the end of six months we shall have some kind of interim report. I should like to inform your Lordships that this was entirely supported by the European Commission, which funded the seminar and hopefully will fund the investigation that we shall be carrying out.

It is at regional level, where there is a tendency for firms to be of a similar type, that one can isolate and identify some of the problems on the ground. That is not to decry or denigrate any of the other what might be called macro-policies, but there is a need at regional level to get people together. The result has been that already within 10 days the head of one of the colleges of technology has spent three hours with the training manager of one of our leading high technology firms. They discovered that they were only 500 yards away from each other in Slough, which was apparently a new discovery. We have also had people recognise that industry must be in direct touch with schools. We have had reports that already local firms are in touch with local schools to see what they can do together to inform headmasters of the kind of people they want and to see whether they can fit them into their future training programmes.

This is a small local initiative, but I am sure that this might be a way in which to proceed to encourage young people to come into industry. It is no good having many television films and much propaganda unless they can see what opportunities are open for them so that they can understand what the real world of modern industry is. So far, we have failed to make that possible.

There are one or two points in conclusion. Let us not forget the peripheral problems in training and educating young people. Let us realise that throughout the country the opportunities are not the same. One of the serious problems in the Thames Valley, for example, is the lack of suitable accommodation for young trainees to benefit from the opportunities of training in the bigger, more highly developed firms, or going on as part-time trainees in other firms. Therefore I suggest that when we are looking at this problem, your Lordships should kindly look at the question of accommodation, which should be produced by the industries themselves. This happened in Turin, as some noble Lords will remember, with Fiat, which wanted to bring people from the south of Italy. The company went to the mayor of Turin and said, "Can you build us some houses for these young people?" The mayor said, "No, you need the people. You are going to put them to work: you provide the accommodation". Fiat did, the scheme worked well, the young people were well housed and well looked after. One cannot expect young people at the age of 17 in today's climate to move across the country to what to them is sometimes an entirely alien environment without coming into some place where they are received and looked after. I mention this as one of the factors affecting movement of labour which is relevant to the results of any training scheme.

The other point, and something which rather horrifies me, concerns the standards of courses. Each technological course seems to have different qualifications for entry. We are all in favour of flexibility, but when it results in rigidity of admission, flexibility defeats its own objective. If colleges, universities and higher education establishments set their own courses and standards they deny entry to these courses to a large number of young people who would otherwise wish to attend such courses. The same is true at the European level. One of the problems that we want resolved as a result of our recent seminar is the need for some kind of guidelines if we want students to exchange and have the benefit of working in other countries, perhaps in France or Germany, in some of the high technology institutions which are well prepared and well organised. There must be some norm by which these young people can be allowed to attend courses without many bureaucratic difficulties.

In conclusion, I should like once again to thank the noble Lord, Lord Gregson, for this report. We all recognise its importance to the future prosperity of our country and, above all, it will give hope to the young people who will benefit from the educational and vocational training systems arising from it.

5.8 p.m.

Lord Kearton

My Lords, may I offer my congratulations to the right reverend Prelate the Bishop of Durham on his eloquent and very thoughtful speech. I was also most impressed by the deep understanding he showed of the aims of science and technology and of his sympathy with those aims. The optimism he brought in his conclusions was most welcome and, like the noble Baroness, Lady Elles, I trust that we shall have the pleasure of hearing from him many times on a variety of subjects in this House.

The thanks of the House are due to Lord Gregson and his colleagues on the Select Committee. In their inquiry they received evidence from nearly 200 sources and made many visits at home and abroad. They have produced a report on education and training for new technologies which is comprehensive and thorough. It is a masterly report which will long stand as the definitive investigation of the subject which comes up with the right analyses and the right answers.

One of the witnesses from whom the committee took evidence was Mr. Butcher, Under-Secretary of State for Industry. He commented that on the subject of the report Britain had been in danger of becoming a nation of discussion groups as opposed to a nation of activists. He went on to claim that his department, together with the Department of Education and Science, the Manpower Services Commission and the Department of Employment, were getting their act together and moving strongly in the direction of removing past weaknesses.

The claim has considerable foundation. I think that the report is very fair in acknowledging the improvements that have taken place. Nevertheless, the report ends with a chapter of conclusions and recommendations which has 63 paragraphs. Their adoption would be to put the whole effort into a considerably higher gear. Strengthening of recent initiatives are called for and there are numerous important and very specific extra proposals. One does not have to agree with each and every one of them to conclude that the cumulative impact is both striking and convincing.

Much more needs to be done. Some reaction seems already to be taking place. There are, for example, the academea/industry developments in information technology courses sponsored by Salford University and the proposed new offshoot of the Cranfield Institute of Technology, financed by industry. And in the recent Budget there was provision for £43 million over three years to pay for more students in higher education to study engineering and technology, on a basis, rightly, that industry will be expected to offer concrete support. But it seems that the £43 million will not be new money. It is stated that the costs will be contained within existing expenditure programmes. The parsimony is to be deplored.

In his own evidence to the Select Committee, the Secretary of State for Education and Science showed, as one would expect, an acute grasp of needs and indicated, I thought, his determination to change the thrust of the education system in the direction that the committee would like to see. And constructive plans have come, and are coming, from his office. My view is that his task is the harder because he has to operate within the limits and constraints of a departmental budget which is virtually frozen. He is in a financial straitjacket.

It is difficult to agree that the Treasury and the Government have got the balance of their priorities right. To achieve what the Select Committee recommends at the speed that the country needs is not a matter of vast increases in what is currently made available. Could one venture to suggest that £100 million a year would go a long way? The report itself does not quantify; although it does state firmly, in Chapter 6, paragraph 34, that if either Government or industry think that the nation's economic problems can be solved without spending extra money—and they mean extra money in the area of education and training for new technologies—then they are deluding themselves.

Your Lordships have heard before the reasons why some of us—and none more so than Lord Gregson himself—think that the need for action is urgent. But the issue is so crucial that I hope the House will bear with me as I repeat them. The country is running a substantial deficit on trade in manufactured goods. The deficit is largely made up by a surplus on oil trading—a £7 billion surplus last year. The Financial Statement issued with the Budget last week assumes that the deficit in manufactures will increase further in the current year. An overall trade surplus is still predicted because of an even larger balance on our oil trade than last year. But the oil bounty is not everlasting. We have already used up about one-third of the known and probable reserves. The Financial Statement concedes that oil output will be at or near its maximum in 1985.

Tax revenues for instance, are forecast to increase to £13.5 billion against £12 billion for 1984. By 1988–89, three years on, this tax revenue is expected to be down to £8.5 billion. And the export surplus in oil trading will also fall. In not so many years it will disappear altogether. It is salutary to note that oil will be responsible for some 25 per cent. of our visible exports this year. As the oil falls away, we shall need manufacturing to return to its positive trade balance, its historic, positive trade balance. It is clear that an outstanding priority for this country is to restore the vitality of our manufacturing industry and to increase its output.

We need to get to the forefront of the new technological industries and to apply their products and their techniques to that complex matrix of older industries which we need in a rounded and balanced economy. We shall not do it by wishing. The Government's recent actions are all positive steps in the right direction. But they do not seem to be sufficiently seized that the indispensable base for faster progress includes more expenditure on commercially orientated research at our universities and polytechnics. Moreover, these institutions need to have their equipment updated and additional courses need to be established to provide a greater number of highly qualified new graduates and considerably more facilities are needed for re-training of mature graduates. We need trained people both to work at the frontiers of the new technologies and to be capable of applying the more and more sophisticated products which will emerge. These are points which the committee's report argues for so powerfully.

Let me recall that Mr. Butcher in his evidence said that the trade gap in electronic products was heading for £2.5 billion. Trade sources see the gap increasing. It is an indication of our slippage that this section of the trade account was in surplus not so many years ago. I referred earlier to the Treasury's priorities. It seems extraordinary that we can provide hundreds of millions of pounds per annum to support agricultural production in excess of our needs, an excess which has to be dumped on world markets, and yet jib at a relatively modest increase in the budgets for higher education, especially in high technology areas, areas on which our longer-term economic health will be critically dependent. It would seem common sense to re-order our priorities. There are areas other than agriculture where the level of Government spending is difficult to justify rationally or economically. Transfers to the budget for education and science are called for.

Like a number of the Members of your Lordships' House, I one of the elderly elderly. Our age group have increased four-fold in my own lifetime. And yet, compared with any previous time in our history, arrangements for the elderly, state provisions for the elderly, are very generous. As a group we are wealth consumers and not now wealth creators. Unlike the Queen in Alice in Wonderland we can say that it is jam today, even if it was not jam yesterday. But will there be jam tomorrow for those who come after us? I doubt it, if the economic growth is to limp along at the rate of 2½ per cent. to 3 per cent. per annum.

I repeat and maintain that the hope for extra growth and extra wealth depends primarily on the future output of our manufacturing industry. Such output would also provide the wherewithal for extra jobs in the service industries. A rejuvenation of our manufacturing industry depends upon the success we achieve in grasping and using the opportunities of the new technologies. We have no time to lose. I should like to see the Government accept in toto the thrust—not every detail but the thrust—of the Select Committee's report.

Results from the changes that they advocate will not come overnight. It will be a long haul, requiring determination and dedication and additional resources. These resources, our basis for the future, will require extra money. This is why it is necessary, my Lords, so necessary, that action is taken now to release Sir Keith Joseph, the most dynamic and reforming Secretary for Education and Science that we have had for years, from his Treasury-imposed financial straitjacket, so that he can wholeheartedly embrace and act upon, as I sure that he will want to, the recommendations of the Select Committee's report.

5.20 p.m.

Lord Nelson of Stafford

My Lords, I should like to add my thanks to the noble Lord, Lord Gregson, for introducing this report this afternoon. I have been privileged to serve on his committee and I found it extremely rewarding. I would mention to your Lordships that the weight and substance of the evidence that has been submitted to us has indeed been most impressive and the interest shown in the subject has itself been very heartening. Perhaps I may add my congratulations also to the right reverend Prelate the Lord Bishop of Durham, on his maiden speech this afternoon. I hope we shall hear him on many occasions and I am sure he will always be saying something of great interest to us.

I am sure noble Lords will agree as to the seriousness of the position that this report reveals. Clearly, there is an urgent requirement for adjustment—I call it "adjustment" and not "change"—in both our education and our training arrangements. If any emphasis is needed on this problem, may I draw your Lordships' attention (in case you did not see it) to the recent report of the University Central Council on Admissions. The report stated: Admissions for degree courses in electrical and electronic engineering were 10 per cent. lower than they were in 1981". Also, in the last week or so an important engineering industrialist—no less than the Managing Director of BL Technologies—spoke of: the growing dearth of engineers and an educational system which fails to inject new blood into the system". He speaks with the experience of one who works in one of our most important and competitive industries. It is not all gloom, however, because I was very glad to hear on the "Today" programme the other morning the present chairman of the Manpower Services Commission stressing that he and his colleagues recognise the seriousness of the problem.

As an industrialist involved in the new technologies, I must endorse the seriousness of the position with which we are faced in meeting world competitive trading circumstances. It is clear to me, and, I think, to most people that the highest priority must be given to the proper management and development of our human resources—our greatest national asset. This must be the key to our ability to compete in high-tech products, and these are essential to the economic prosperity of our country, as has been pointed out by numerous speakers this afternoon. I may add to that that the emphasis must be on providing more employment for our people; and that can come only from such competitiveness.

I think it is clear from an analysis of the evidence which has been put before us, and from the report, that there is no single solution to this problem. For that reason, a large number of different recommendations has been made to make various adjustments throughout our education and training system. Some of these are long-term and some are short-term. The long-term solution starts in the primary schools and goes through into the secondary schools and finally into higher education. I do not propose to speak on these matters, however, because there are others in this House who are more knowledgeable about our education system than I am.

However, I should like to emphasise three things. First, there is a need in industry for a higher proportion of able people, young people, competent in maths and science, to come forward and to be attracted into the wealth-producing industries. Secondly, the process of change is a long-term one. We are not going to see the effect of the long-term steps for—what?—10 years ahead, so we must start now. Thirdly, I draw attention to the fact that we are attracting so few of our girls into the technological industries. What a waste, and what an opportunity! Here I may say that I hope the adjustments which we are going to make will enable many more of them to be properly equipped so that they can have the choice of coming into our technological industries.

Let us look now at the short term: this is what I want to concentrate on in my own contribution to this debate. There is a great need to update our existing stock of engineers and technologists, to update now those who qualified many years ago and also to retrain those with skills which are no longer required in areas where more people are needed and where trained people are in short supply. I believe that this updating and retraining is particularly urgent because it can have immediate effects on the serious position which has been outlined to us.

The Alvey programme, which the Government have introduced and which has been widely welcomed, is a step in the right direction. It concentrates on the important information technology area. However, that is not the whole of it, and more needs to be done. Here I would draw your Lordships' attention to the fact that the Engineering Council, which is the body recently created, as a result of the Finniston Report, has welcomed this report. In a discussion document which it has just issued—and it is the body just set up by the Government to create the improvement in our engineering industry which is required—it welcomes the recommendations which we have before us.

Many speakers have already emphasised that we live in a period of change. I think we all recognise the days have gone when an initial education and training will last for a lifetime. We are now lucky if it lasts for 10 years: so there is a need for constant updating and retraining to maintain competitive standards in design, technology and methods of manufacture. This retraining in regard to existing technologies is also important from the point of view of ensuring that a technological gulf does not develop between those already in post and young people coming into industry. There is a danger of a lack of understanding and communication, of fear and uncertainty, suspicion or frustration developing if we do not have a rapport between those already in post and those coming in equipped with the new technologies.

During the course of our deliberations, we have heard many comments on the inadequacies of the present situation for training and retraining. Industry does not know what it wants: higher educational institutions are not in touch with industry: industry does not do enough to help itself. Higher education courses are not supported by industry or are too long or do not meet the need, or industry does less training than it did formerly. There is substance in all those, but to my mind it only emphasises the need for action and adjustment.

Reference has been made to the fact that members of the Committee visited the United States and Japan, and I was privileged to be one of those. Our visits were extremely valuable and informative. I think it would be of interest to your Lordships to know that in the United States they have the same worries as we have about their education system, about training enough people in maths and the sciences. about getting enough girls into the technological fields, and the standards of teaching in these fields. So they are faced with the same problems and I do not know that they are making any better progress than we are, although they are aware of the problems. On the other hand, they are doing a lot more than we are on the short-term side, as regards the retraining of existing staff in new technologies. Here I would say how impressed we were with the in-house company training courses being established by many of the major companies, by the relationship between the companies and the local higher educational establishments, and finally, by the use that is now being made of tutored video instruction techniques. This is a system whereby lectures given in the universities by experienced university teachers are video-recorded and lent out to individuals and companies for showing on an organised basis in companies' time and being tutored by selected people from within the organisations concerned, so spreading the knowledge quickly over a wide area. In my opinion, these tutored video techniques are very impressive indeed.

Equally, in Japan we were impressed by the fact that there is a tradition that industry accepts that education will be essentially on formal lines. Industry has always accepted that it has itself to train people coming out of the education system. Here I can only emphasise how impressive in-house training is in Japan. It starts from the time when the people come from the higher education establishments and it goes on continuously throughout their career in the company, up to the age of at least 45 years. It goes on regularly all the time updating management, technological and other skills. This is backed up by great enthusiasm on the part of both the companies and the individual staffs, both of whom recognise that it is in their mutual interests. So we have a lot to do and in my opinion we are some five years behind in these areas.

I accept the view of the committee that industry in this country must do more to help itself. When I say "industry" I mean all industry. I do not just mean manufacturing industry. I mean manufacturing industry, commercial houses and all users of high-tech. They must all contribute to solving this problem. I also accept the need for industry to get closer to the higher education institutions. This is very important. Movements have been made and there is a different atmosphere today, but a lot more still has to be done. In this respect, the committee is right to urge the Government to act as a catalyst to get the parties together. So many parties have been referred to and so many are involved—national authorities, local authorities, local universities, polytechnics, firms in different industries and commerce as well. They must be brought together and a catalyst has to be provided.

Therefore I, too, hope that the Government will act on the recommendation in the report for the establishment of an education training board. I believe that this will act as a focus, as was said by the noble Lord, Lord Gregson, in his opening remarks. It will also help the Manpower Services Commission to do its task. After all, it is the Government's authority for training and it can be of great help in what is to be done. The committee also recommended that the Government should give some financial support to these updating and retraining programmes. I would add, "at least in the initial phases". In the main, they should stand on their own feet once they get established, but to start with they need some initial support and I hope that the Government will agree to do this.

I also believe that the cost of training should be shared equally between those who do the training and those who profit by it. I do not think one can ignore the fact that the short-term advantage of engaging a trained person is very attractive, compared with the long-term commitment of entering into a progressive and sound in-house training programme. It has to be seen that those who do the latter are protected against raiding by those who take a short-term view. Therefore, I strongly recommend that we should look again at the levy grant system.

I do not entirely agree with my noble friend Lady Elles, who is not in her place and who said that this has not worked and is not satisfactory. I think that it certainly worked pretty well in the narrow section of the engineering industry. We want something now which spreads the burden over the broad aspect of all who are involved in the use of high-tech personnel. I do not think my noble friend Lady Elles has put forward an alternative. If she has an alternative, it should certainly be looked at. But there should be some way of sharing the load fairly between those who do the training and those who profit by it.

I have one final point on the tutored video instruction section. Here is a new medium—high-tech to the rescue of high-tech. Why do we not use it more? Why are we being so slow in adopting something which is already proving itself to be of great value? It can do a great job for industry. It can do a great job in the educational field in updating teachers in their own schools and in their own time. They do not have to go away or to be away from the job. They can do it in their place of work. It has a great potential and there is experience in this country.

Reference has already been made to the work that is being done at Aston University. They have their own lecture theatres equipped with video recording equipment. Other universities have similar experience and, of course, the Open University has a lot of experience in producing material of this type. I commend to the Minister that high priority should be given to maximising the exploitation of this medium to help us with the short-term problem. Anything he has to say about that, I shall very much welcome.

We have the Secretary of State's assurance that he recognises the need for continuous education and retraining and that is much to be welcomed. We look forward to the Government's reply to our report in due course. In the meantime, a number of us are rather puzzled by the announcement which was made last week in conjunction with the Budget, that over £40 million is to be spent over the next three years to increase places of higher education for engineering and other technologies. This is much to be welcomed. But what is not at all clear—and I hope that my noble friend the Minister who is to reply may be able to clarify the position—is whether this is new money. If not, where will it come from? That is not clear in any of the reports. I should also like to say that there is considerable concern in a number of places that it will be limited to the universities and that the polytechnics will not get a share of this. This would be a pity because many local firms are working with their local polytechnics on this problem. So I hope that the Minister can clarify that point, too.

In conclusion on these recommendations which are contained in the report of continuous learning, I hope that the Minister can give us some assurance today that the Government will get together at an early date with industry and the higher education establishments to have a look at this problem and to consider these recommendations. Maybe the Information Technology Skills Agency, which is already set up, could be asked to have a look at this and to recommend to the Government what it thinks of the recommendations that we have put forward, so that an early decision can be made. It is clear that the need for short-term action is urgent—long-term, yes, but short-term even more so, because unless we modernise and update our existing stock of engineers and technicians we shall not compete, and if we do not compete the long-term future is indeed gloomy for us all.

5.39 p.m.

Baroness Lockwood

My Lords, I, too, should like to pay tribute to the noble Lord, Lord Gregson, both for his chairmanship of this committee and for initiating the debate this afternoon. It was a most valuable experience to sit on the committee under his chairmanship and to hear and to read the tremendous volume of evidence that was brought before us, both orally and in written form, because it raised a number of very important and essential factors of which we hope the Government will take note.

I want to say, as did the noble Lord, Lord Rochester, that I support the main thrust of this report and its recommendations, and also the sense of urgency which it contains. I hope, too, that the Government will take account of that sense of urgency. I should like to say something about Chapter 7 which deals with technological literacy. But before doing so I should say that it cannot be emphasised too much that the overwhelming body of evidence pointed to two needs; the first was the need for industry and education at all levels to come even closer together; and the second was the need to shift the emphasis of education towards an understanding of and a preparation for technological change. Again, this was at all levels and it was seen as an economic imperative.

The acceptance of this latter fact was quite clearly seen as requiring, first of all, more resources—a new attitude to training, and a new attitude on the part of both government and industry itself, as well as individuals who would benefit from that training. As the report says at recommendation 9.21: If either the Government or industry thinks that the nation's economic problems can be solved without spending money they are deluding themselves". That is a very important conclusion which must be taken into account by the Government.

But the second factor which flowed from the acceptance that we need this shift towards technical education is that we also need a mechanism for continually and continuously identifying the needs of industry, a mechanism which provides an ability to adjust and to respond quickly. I say to the noble Baroness, Lady Elles, who was not in her place when the noble Lord, Lord Nelson, referred to this, that like the noble Lord I do not quite accept her disagreement with and criticism of the committee's recommendation that a levy be imposed across the whole of industry, although of course everyone is entitled to his or her own opinion and to disagree.

Certainly the committee did not have it in mind to put training into a straitjacket, and it took on board and accepted the fact that individual industries, companies and areas have their own problems which should be looked at within the context of the national programme. I would also say to the noble Baroness that the committee is at one with her in suggesting that companies should include in their annual report an indication of how much they spend on training, because this should be part of the whole assessment of the efficiency of the company.

Perhaps I may also say how glad I am that there appears to have been some immediate response from the Government to the report of the Butcher Committee, to this report and to the other reports that have addressed themselves to this very essential question. Again, like the noble Lord, Lord Nelson, I am somewhat puzzled about the £43 million which is to provide additional places in engineering and technology within the universities. I hope that the noble Lord, the Minister, can assure us that this is new money. I hope too that he can assure us that this is just the beginning, because in the evidence that was brought before the committee we were reminded by the director of the Alvey programme, Mr. Oakley, that he had estimated a shortfall of about 5,000 engineers in the whole area of information technology. When Sir Keith Joseph and Mr. Brooke appeared before the Committee they thought that perhaps Mr. Oakley had rather over-estimated the problem, whereas some of the witnesses who appeared before the committee thought that a shortfall of 5,000 was a too optimistic figure. So there is a very essential problem here which must be addressed quickly.

Secondly, I would welcome the extra £20 million in resources for in-service teacher-training for curricula development in the whole area of the Technical and Vocational Education Initiative. Again, I would hope that this is new money and not money that has been transferred from other sources. I should like to say to the Minister that I think this is an important move because there have been some very valuable lessons in curricula development from the whole of the TVEI scheme. But the amount of money mentioned is very small indeed when it is compared with the amount that was envisaged by the advisory committee on the supply of education and training of teachers. Noble Lords will recall that in their advice to the Secretary of State they suggested that all local education authorities should earmark about 5 per cent. of the salary bill of teachers for in-service training. This would amount to about £200 million, which again is indicative of the size of the problem.

I should like to raise another caveat in relation to this matter. In the oral evidence before the committee the Minister, the noble Lord, Lord Young, then chairman of the Manpower Services Commission, said that he saw himself as having some responsibility to the DES, particularly in relation to TVEI. The Select Committee saw education and training as a continuous process. Many witnesses found it exceedingly difficult to identify a dividing line between education and training, and increasingly I think the training function of the MSC is being identified with both the DES and the DTI.

We must look to the Government for some clarification about the place of the MSC in the whole of government structure in particular in its relationship with education. In the meantime, however, I welcome this contribution to in-service training because I believe it is absolutely essential that teachers have a closer understanding of industrial needs and of technological changes if they are to give the right steer to children.

I turn now to Chapter 7 of the report, Technological Literacy. Here I would say that the committee did not see a move towards technological literacy as requiring more early specialisation in schools. On the contrary, all the evidence we received pointed to the need for a more integrated curriculum, but because of the speed of technology, as the right reverend Prelate the Bishop of Durham said in his admirable maiden speech, it is important to give children a broad education and to postpone specialisation as long as possible. This the committee applied also to university—certainly at first degree level.

In fact, I think the committee was saying to industry that it must not expect to have ready-trained personnel from the education system, whether from schools or from universities, but must expect a broadly educated person who is able to apply to industry's needs what he had learnt in the education system, and that industry must top up those skills to meet its own particular requirements. In this respect, the recommendation that instruction in mathematics, sciences and the humanities should be compulsory for all children up to the age of 16 is particularly important.

I think the recommendation in paragraph 9.22 is also important because it refers to the need for the curriculum to include some lessons in basic economics, and the significance of technological and industrial development. It says that the industrial problems should be integrated into the teaching of science and technology. Again, what the committee is saying is that science and technology should be taught not just as an academic or as a practical subject, but in the context of the real world in which we live and in which the children will have to cope when they move into adulthood and employment.

It might be appropriate here if I refer your Lordships to paragraph 7.2 of the committee's report, which gives a very graphic impression gained by the committee of the image of industry held by schoolchildren. This paragraph says: The image of industry is created early within the educational system; the Committee's experience of talking to sixth-form pupils suggested that few yet recognise the importance to society of wealth creation and fewer still regard manufacturing industry as a field in which to make a satisfying career. Many had an image of industry racked by disputes and struggling for a share of the market. Those who were considering taking up electronics options in higher education, with a view to working in the IT sector, did not associate electronics with 'industry'. Among girls the masculine image of industry and technology is still so strong that some thought they would suffer discrimination if they applied for posts in industry". There is a message there for industry as well as for the schools. The message for industry is that they must seek to get closer to the education system. The message for the schools is that they must know more about industry. This also contains a message in relation to the position of girls. Again, I am very glad that the noble Lord, Lord Nelson of Stafford, as an industrialist himself, referred to this question, because it was mentioned by all the witnesses, almost without exception, who appeared before the committee. They drew attention to the neglect of the resource residing in girls and women in this country. They said we cannot hope to solve this problem unless we develop the potential for girls and women.

I am glad to be able to draw to the attention of the House a section of the report from the Select Committee headed "Girls". This section contains a number of very important conclusions and recommendations. Not least is one in relation to initial and in-service training, which the report suggests should concentrate on helping teachers to encourage girls into science and technology. A second recommendation is directed at local education authorities. It asks them to draw up programmes to develop the interests of girls in science and technology. Then the report goes on to say that this will require positive action in favour of girls in the science teaching in schools.

Thirdly, there is praise for the work that the Equal Opportunities Corn mission, the Engineering Council and the Engineering Industrial Training Board have done in encouraging "Insight" courses, the WISE course, about which no doubt the noble Baroness opposite will have something to say, and other initiatives. Yet again they place the emphasis on the need for schools to interest girls in the excitements of science and technology at an early age". Finally, on this question of wasting the potential of girls and women, the committee had something to say about the place of women in continuous education, when they refer to the need for retraining and conversion courses to take account of the needs of women who are returning to employment after a period in which they have been bringing up their children. This is a source of trained personnel which it is extremely important we should not neglect—and I am afraid that in the past it has been very much neglected. But I am glad that it is being taken seriously. For example, the Open University has a special course in engineering and technology to update women seeking to return to their profession. The Engineering Council has a working party looking at this whole problem. So I hope that note will be taken of what is said in the report of the Select Committee about this very essential element, if we are to close the gap that exists in the new technological area.

5.56 p.m.

Lord Sherfield

My Lords, it was a privilege to serve under the chairmanship of the noble Lord, Lord Gregson, during this inquiry. It was one of particular difficulty, first, because it inevitably involved consideration of our whole system of education from primary level; secondly, because it drew forth a voluminous and diverse corpus of evidence, and, thirdly, since the subject has been the cause of such great concern and so many reports, it was hard to draw the threads together into some sort of coherence and then to say anything in the way of comment and recommendation which had not already been said by others.

Furthermore, my Lords, there have been a number of Government-sponsored initiatives directed to dealing with various aspects of the problems. Some of these were started in the course of our inquiry. Without under-estimating what the Government are trying to do—and as the noble Lord, Lord Rochester, pointed out, they are doing quite a lot—the number and variety of these initiatives by different departments and organisations, which are outlined in Section 2 of our report, betray an ad hoc and piecemeal approach and are somewhat confusing. As the noble Lord, Lord Gregson, said, the Committee tried to stand back and look at the problem from a longer-term point of view. They recognised that the urgency and critical nature of some shortages called for fire brigade action, but there was evidently a requirement for much greater attention to be given to longer-term needs and for an organised body to give this attention.

My Lords, as the report says, A response which deals only with short-term needs apparent now is likely to remain one step behind technological change and to become increasingly unsuccessful in the face of foreign competition. Foreign competition being of overriding importance, the committee paid particular attention to it, especially in relation to the United States of America and Japan, not only by obtaining evidence and reports, but by visiting the two countries. Necessarily short and condensed though these visits were, they were immensely valuable as much in removing some misconceptions as in discovering how the two countries put up a much better industrial performance than we do.

Most of the salient points in the report have already been covered in previous speeches by my colleagues on the committee. I agree with almost everything they have said and do not propose to enlarge on those matters myself. Instead it might be of some interest if I were to give a rather subjective view of our overseas impressions, enlarging on the two points which the noble Lord, Lord Nelson of Stafford, has already made.

Let me say at the outset that I do not suggest we should set out to copy or even adapt our educational and training systems to those which have developed in quite different cultures. The question is whether there are practices or specific measures which could be picked up and introduced in this country without upsetting our own traditional system—which in any case, as our report shows passim, is in need of rapid transformation.

The United States have experienced some of the same problems as ourselves and they are already losing out, or have lost out, to the Japanese—for example, in certain manufacturing processes in the field of information technology and in optical fibres—although not, I think, in their application. They are addressing these problems with characteristic energy and determination.

Your Lordships will know that in the United States the educational system is even further devolved than it is in the United Kingdom and is essentially a state matter. It is noteworthy that while the Federal budget for education has been sharply cut, Federal expenditure on research has been sharply expanded and two specific steps have been taken at Federal level to meet deficiencies in the volume and quality of teaching, particularly in engineering, which your committee recommend could be adapted and introduced in the United Kingdom.

These are the Presidential Young Investigator Awards scheme and the scheme for Engineering Research Centres, which are fully described in Appendices 3 and 4 to our report. It is noteworthy that, in agreement with at least one of the teachers' unions, differential salaries are being paid in some parts of the United States to teachers of mathematics and subjects of technological importance.

We were also much impressed by the emphasis on and development of distance learning techniques in the United States. We recommend that more intensive efforts should be made in this area in the United Kingdom. Finally, I am once more struck by the close collaboration of American universities with their local industries, which has long exerted such a strong influence on American performance in high technology. We saw it, on this visit, at Stanford University but of course it is something that is widespread throughout the country. We are, I think, improving in this respect in this country but we still have a lot to learn from the American experience.

Perhaps a word should be said here about scales of expenditure. In the US Federal Budget for 1985–86 it is anticipated that the allocations for civil science—about one-third of the total—will remain about level in real terms, with some marginal increases and decreases in different areas, while expenditure on defence research and development will be further increased. As an example of the scale of expenditure relative to our own, the United States is currently spending 1 billion dollars on civil marine science and technology, including meteorology and oceanography —that is, excluding defence research and development in this area, on which the spending is at least half as much again.

By comparison, the 1983–84 budget for the Natural Environment Research Council allocates about £30 million for comparable research and development expenditure, and that is forecast to decline at a rate of 3 per cent. per annum based on a proposed erosion of the science budget of 25 per cent. over 10 years, with a similar decrease in commissioned research. I am not suggesting that we could match the scale of the American effort in this field but we should certainly sit up and take notice.

In Japan we expected to find the key to their industrial success in their rather centralised educational system. We were soon disillusioned. The Japanese themselves are so dissatisfied with it that they have recently set up the equivalent of a Royal Commission to report on it. The curriculum is thought to be too general in character and the Japanese do not consider that the system as a whole produces enough original thought. They envy us our success with Nobel Prizes.

On a specific point, Japan's programme for the introduction of computers in schools seems to be some way behind our own. Nor, at a higher level, did collaboration between the universities and industry seem to be particularly good—and two or more technological universities are now being developed to fill a perceived gap. Where, then, was the clue to the Japanese miracle?

One clue obviously lies in the enormous effort which Japanese companies take to educate, train and retrain their staff. They take graduates or high school leavers who have had a rather general education and themselves bring those students to the level of technical and managerial achievement which the companies require—including further study and training in their own institutes of higher education. We only had time to look at two of these educational programmes, of which one—that of Hitachi—is outlined in Appendix 5 to our report, but we understood that these programmes are not exceptional.

The real clue to the superior performance of the United States and Japan (and one can bring in Germany here, as well) lies, in the words of the report, in the, social attitudes which affect the quality of recruits available to education and training institutions", in the United Kingdom and, the continuing social bias against careers in industry and technology". We go on to say that competing countries in Europe, the US and Japan benefit from a greater awareness of the value of wealth creation in society, as well as of technology.

One does not hear in those countries the moaning about the social status of engineers which has, from my personal experience, been endemic here for the past 25 years. These social attitudes differ within as well as towards industry. It is unusual in the United Kingdom to find bodies of workers willing to accept reductions in wages or other sacrifices in order to help a company through a difficult period.

In our report we call for a large-scale increase in employers' updating and retraining programmes. But we say that this will call for a change of attitude on the part of many individuals, who will need to follow the example of the Americans and Japanese, among whom self-help and self-improvement are basic to the retraining process". In the United States there has been a strong response to the President's call for greater national efforts to improve industrial performance. The response to similar calls from the Prime Minister has been lukewarm, to put it at its highest. In Japan, one has the impression that every Japanese manager and worker is not only working for the company (with which, in most cases, he or she is associated for life) but also a little bit for Japan as well. We do not need to copy Japanese industrial management or structure; all we need is some of the motivation which energises their system. I believe that our report deals frankly and fairly with this problem of social attitudes and how they might gradually be changed. This lies at the heart of the matter. No doubt the Government are as well aware of this problem as we were.

6.10 p.m.

Viscount Hanworth

My Lords, broadly speaking, I think the report is excellent, as are most of its recommendations. Unfortunately, our problems in this field have their roots in the distant past and have only recently become so acute that they are obvious to all.

In the 19th century engineers had great status, but if they, and the entrepreneurs who used them, became well-off, they endeavoured to become country gentlemen and their children seldom joined the profession. Gradually, the status of the engineer, on whom the prosperity of this nation depended, declined and it has never recovered. The scientist has taken over much of the glamour which used to surround the engineer. Scientists have served us very well and we remain a highly inventive nation. But—and it cannot be said too often—we fail to convert our bright ideas into hardwear and to market them. Some of this failure is due to management but, as the report emphasises, there are insufficient technologists, technicians and managers of high calibre. Too many of our really able people prefer to make their careers outside our all-important industry, and even less in the engineering profession.

I believe that implementing the Robbins report was one of the biggest mistakes we ever made. Many of our technical colleges which were meeting a real need, and doing it well, converted themselves into universities. They followed, regardless and without thought, the traditions of the old-established universities. In making this change they then established many third-rate arts courses with third-rate teachers and defended the results by thinking and saying that whatever was taught at a university, and however badly it was taught, because it was taught at a university it was self-justifying. Since then there have been many changes and a greater sense of realism, but there is still some way to go. I would not decry scholarship for scholarship's sake in obscure disciplines, were it not that this nation can no longer afford so many of the things which we consider desirable and which the proponents consider essential. I am afraid that with a desperate need for funds—for example, in this area—we must concentrate more on those disciplines which are directly useful to earning our national keep. Engineering and management training are two vitally important subjects.

We should always remember that we cannot now remain leaders in all scientific disciplines and in basic research. It may be that we have to accept that in some, at least, of such disciplines it is sufficient to retain a small team which can exploit the work done by other nations in the same way as the Japanese have done. Yes, I know that they are now concentrating more on their own theoretical research but, nevertheless, it is still directed to practical ends. I remain unconvinced by the arguments of, for example, the nuclear physicists and astronomers that a cut in their funds would have a disastrous effect on this nation.

I should like to emphasise again some of what I said in the debate on 14th March last year. I am sure that the methods and approach to teaching receive too little consideration in our universities. Some teaching training courses for lecturers are long overdue. Furthermore, in all disciplines with relevance to industry, lecturers should not move directly into their posts without first having some experience of the outside world and of industry. In industry, and often elsewhere, judgment is of paramount importance. In some university work there is too much emphasis on simply examining the views of eminent persons for and against some proposition without the student personally considering the practical and commonsense validity of the argument. I was at Cambridge, but in my view the Army Staff College provided far and away the best training of the mind that I ever received.

Finally, returning to the engineering theme, I should like to quote what the Professor of Mechanical Engineering at one of our universities has to say. I paraphrase and take some of his remarks out of their context. For the first time in our history we are importing more manufactured goods than we export and our service industries are increasing at an alarming rate without producing many goods for sale. The time has come when priorities, particularly between science and more down-to-earth technology, must be reassessed. He points out that until recently, and possibly even now, astronomy received more finance for research from the Science and Engineering Council than did all the combined divisions of aeronautical, chemical, civil, electronic, nuclear and other engineering divisions. Moreover, there has been little recognition of the work in these fields by awarding Fellowships of the Royal Society, and never a Nobel Prize.

The professor points out that Japan, Korea and Taiwan are producing, respectively, 10, eight and five times as many engineers as we do in the United Kingdom. He recommends, first, that schools should give at least one-third of the time in their syllabi for physics, chemistry and mathematics to underline and to explain their relevance to engineering. Secondly, the majority of our firms, often employing fewer than 200 people, should be encouraged to have an interface with schools and universities. At present, such firms do not do so. Thirdly, the University Grants Committee should set up a sub-committee of academics and industrialists to review, in practical terms, what are the immediate needs for the training of engineers. He mentions poor staff ratios, obsolete equipment and laboratory facilities, overcrowded space and insufficient funding. I agree with all that he says.

6.19 p.m.

The Earl of Bessborough

My Lords, I, too, should like to thank the noble Lord, Lord Gregson, for his admirably comprehensive report. I think I agree with virtually all of its 63 conclusions and recommendations, although, like my noble friend Lady Elles, not with the recommendation about a national training levy. No doubt my noble friend Lord Young, on the Front Bench, will explain the reasons for not supporting this recommendation.

However, the whole report is very well drawn up. Although I was not a member of the noble Lord's sub-committee, I have worked with him before on other committees in your Lordships' House and know what a satisfactorily pragmatic and practical turn of mind he has.

Apart from that, what I should like to say this afternoon is that, as some of your Lordships know, Sub-Committee F of the EEC Select Committee, which is presided over by the noble Lord, Lord Kings Norton, and of which the noble Lord, Lord Kearton, and I are also members, has been looking into the subject of the European Strategic Programme for Research and Development in Information Technology, better known as ESPRIT, to which my noble friend Lady Elles has also referred. I am glad that she did so.

The European committee's report on this EEC initiative, which also refers to member states' national programmes in advanced information technology, including that of our own Alvey directorate, should go to press shortly and will, I hope, also form the subject of an interesting debate in your Lordships' House in due course. I would not wish to go deeply into the findings of that inquiry. Indeed, most of them may not be relevant to the debate this afternoon. But in the course of the inquiry, the European sub-committee found itself pursuing the subject of manpower availability for the information technology industries, and the evidence received is undoubtedly relevant to this afternoon's debate.

It seems to me that the main point of the report of the noble Lord, Lord Gregson, is that United Kingdom development of new technologies is going to be impaired by a shortage of trained staff, and therefore that certain actions are called for. I feel sure that the European committee's report will say that the same is true of the ESPRIT and the Alvey programmes. We were, for example, told in Sub-Committee F that Europe as a whole was lagging significantly behind the United States and Japan in producing electronics engineering graduates and computer scientists. Companies, so we were told, were forced to hire, as one witness said: anyone who could actually spell 'microprocessor', let alone write 'software'. The explosion in information technology, described in The Times today as a main artery of any efficient commercial body, has apparently led the demand for software engineers to expand at 20 per cent. per annum, and the material to fill that demand is simply not emerging from our universities.

One can speculate endlessly on the reasons for that, including perhaps a failure to assess needs accurately in the early 1970s. But there are other reasons. In Germany, for example, it is not uncommon to see engineers at the helm of large corporations. I have said many times over the past quarter of a century in your Lordships' House that in Britain, by contrast, engineers have not achieved the same social or business standing—the noble Lord, Lord Sherfield, referred to this. too—and engineering has not attracted a sufficient number of ambitious university entrants.

It has also been said that teachers do not have the necessary industrial and commercial experience to direct—or shall I say orientate?—their teaching towards producing the product that the market wants. Indeed, this is often a valid criticism of British industry—the development of products with inadequate market research. Some witnesses on Sub-Committee F went on to cite the failure of the educational system, evidenced by falling educational standards which no longer place emphasis on the pursuit of excellence.

Like perhaps other noble Lords, on Friday night I watched and listened very attentively to the Dimbleby television lecture given by the noble Baroness, Lady Warnock. I was surprised in considering that otherwise wholly admirable address that the noble Baroness did not refer more specifically to the need for many more good teachers in science and engineering. Perhaps she thought that it would not have been wholly relevant in the Royal Society of Arts and in her context. But I think that it would have been desirable had she done so, especially in regard to the training of girls, which was mentioned by the noble Lord, Lord Nelson. A large television audience of that kind would have been the best possible platform to slip in, if only briefly, the kind of messages that the noble Lord, Lord Gregson, and other noble Lords this afternoon have been seeking to put across.

But to refer again to information technology engineering in both its disciplines, hardware and software, I would emphasise that they are exact sciences. The internal circuitry of a microchip has to be exactly right—not more or less right—or it will not work. A single incorrect line in a 10,000-line software program can totally invalidate the whole program. Hence inefficiency is unacceptable.

On the bright side, we have heard that this country now has the highest density of personal computer ownership in the world, even if there has recently been a drop in sales. I fear—and I have seen it myself—that some home computers are recently tending to get forgotten in the cupboard. But, while the vast majority of such computers are used mainly for game playing, it must be hoped that this will lead to a much greater awareness among the young of the implications of information technology.

I would therefore also hope that our seats of learning will be able to provide the facilities to foster that awareness and to provide the adequate production lines for graduates to fill what Mr. Brian Oakley, the director of the Alvey programme, told us he foresaw as a tenfold increase in demand for good quality IT scientists. In that connection, noble Lords should also read page 27 of Lord Gregson's report. Having initiated over a year ago a debate on the Alvey programme, I should like to stress the great importance of the recommendations of this report.

My noble friend Lord Torrington (who would like to have taken part in this debate) tells me that he was recently in the Republic of Kenya and was interested to learn from its vice-president that what Kenya needed most was not ideology but competence. Young people should concentrate on becoming effective administrators and scientists, and Marx and Adam Smith should take second place to Einstein and Pythagoras. If that is recognised in many developing nations, how much more important that we should recognise it here, where only technological excellence will keep us up with, or ahead of, other nations in a very tough and constantly evolving market place.

In her major speech to the United States Congress on 20th February, my right honourable friend the Prime Minister said she firmly supported President Reagan's decision to pursue research into defence against ballistic nuclear missiles, the strategic defence initiative commonly, but in my view not appropriately, referred to as Star Wars. My right honourable friend added that she hoped that our scientists in Britain would share in this research, which is of course mainly concerned with the new technologies.

The Government have certainly done much to fund advanced information technology—and noble Lords may care to see page 18 of The Times today which refers to this—but let the Government continue to do so if we, through our scientists and engineers, are to make our own effective contributions in both the civil and defence fields in new technologies. I thank the noble Lord, Lord Gregson, for his report and also all the members of his Committee who have worked so hard on on it.

6.31 p.m.

Lord Hunter of Newington

My Lords, may I also add my tribute to the noble Lord, Lord Gregson? In recent years there have been a number of Gregson reports. I should be surprised if he does not as many of us do, consider this report to be among the best and the most important. May I also add my congratulations to the right reverend Prelate on his maiden speech?

In many ways this debate compliments the science research debate of the noble Lord, Lord Sherfield. Then we learnt of the disturbing effects of cut-hacks in resources on programmes organised by the research councils. The budget was distributed by the Department of Education and Science on the advice of the Advisory Board for Research Councils. It seems that in the last two years the ABRC has developed for itself a new role and, with a different membership including industrially based scientists, it is making a vigorous attempt to tackle the problems which confront it. Somewhere in the interdepartmental spectrum and reporting directly to the Prime Minister is the Advisory Council for Research and Development chaired by Sir Henry Chilver.

One of the most impressive actions of the rejuvenated ABRC is the joint proposals of the research councils on microbial physiology and plant molecular biology and biochemistry. The reason is manifest from reading the report, Scientific Opportunities and the Science Budget 1984. From this report to the Secretary of State for Education and Science, it is clear that the fundamental work in those fields affects the research and development territories of almost all the established research councils.

The research councils themselves keep changing. For example, the Science Research Council became the Science and Engineering Research Council and the Agricultural Research Council became the Agricultural and Food Research Council. Therefore, the research councils concerned with fundamental research and strategic research find a degree of close collaboration necessary to tackle fundamental and strategic problems.

There is an important lesson in all this for those in the Government responsible for research in government departments. But who is responsible? I understand that recently the status of chief scientists has been reduced and it is very evident from the evidence taken by the Science and Technology Committee, in more than one of its inquiries, that the idea of strategic research being planned and commissioned by departments is a failure. The one exception perhaps might be in the procurement division of the Ministry of Defence where incredibly high standards of strategic research have been achieved in the past, and I believe continue to be achieved.

The reasons why this concept of the promotion of strategic research does not work are several. First, the departments and their responsibilities are defined for quite different reasons in different ways. They are concerned with government in a particular field. Those reasons are quite different from research reasons. The prime responsibilities of the departments are towards their Ministers and the Government, and inevitably topics that are of marginal interest to departments receive low priority in the departments' research and development programme. They perhaps hope that some other department will undertake the venture.

The Natural Environment Research Council has suffered most from this. The amount of commissioned work that it has received from government departments has fallen off very badly. All this is arising from constraints in public expenditure as well as changes in policy in commissioning departments, policy which is increasingly concerned with the immediate problems. The result is that strategic research is suffering.

I know of no situation, except the Alvey programme, where Government departments have combined as research councils have done, encouraged by the ABRC. Shortage of funds is the final straw in the departmental support for strategic research. But it is in this area of strategic research for which the universities' MSc graduates are being trained. It is this area in which they want to work. The good graduate is up to date with new technology. He is keen to see the application of this in industry and elsewhere and he looks for the challenge of a stimulating programme. That is what he, or she, wants.

One is gratified to hear that more funds will be provided for this key purpose so strongly recommended in the report of the noble Lord, Lord Gregson. It seems paradoxical that at the very time when strategic research by industry and Government is so vital the opportunities to do it by commissioned research from departments is very substantially less. It will be five to ten years before the neglect of this kind shows, and therefore, two or three years after the restraints have been introduced, nothing very much seems to have gone wrong, whereas the lack of funds in development work is almost immediately evident. The situation so ably examined by the committee of the noble Lord, Lord Gregson, is the product of neglect by governments of both parties and it cannot be put right overnight. For example, would it be appropriate to have an urgent inquiry by ACARD?

The resources required to train MSc students in modern technology are not very large. That is assuming that the staff and the facilities are present in the universities and adequate to provide for undergraduate and research programmes. We are told that additional funds are now becoming available. There need be no problem about student grants. Surely, this is the first and obvious place to give student loans. The undergraduate course has been provided free and students have been given personal subsistence, but when they are trained in modern technology they should be on their own and, with any luck, should be earning a reasonable salary within a year or two and would be able to repay the loans. Some of the proposals of the committee of the noble Lord, Lord Gregson, such as the education and training board, will require careful consideration and substantial resources. The provision of student loans to MSc students in specified categories could be done next week and at minimal cost.

Lastly, at the same time as we are hearing about more resources for training in universities and polytechnics, the chairman of the University Grants Committee, as has been mentioned, tells us the depressing news about future funding at universities. If this is true, the closing of departments or universities, as he said, may have to happen. That is because it is proposed that the future budgets in the next decade should be 2 per cent. less than the inflation rate. I am sure the Minister will tell us about this.

An important recommendation of the committee of the noble Lord, Lord Gregson, was: University research should be strengthened and new opportunities for research in polytechnics created". Which way does the University Grants Committee go in the light of Sir Keith's depressing news? Should they go the way of the ABRC and the research councils and combine voluntarily to create centres and to share knowledge? I think this would inevitably be combined or associated with the closure of some departments.

My Lords, I feel that the need for the injection of new resources into universities is so urgent and vital that some universities should be closed simply to make resources available, so that the moneys saved could be used to refurbish the research base foundation in universities. We have heard a great deal of research bases elsewhere. It is the research base in universities that is doing fundamental research, looking for problems which have not even been defined. The universities, as we have heard from noble Lords and others, have perhaps many faults, like all institutions, but they wish passionately to lay the foundations of the future and are concerned to tackle problems as yet undefined.

6.40 p.m.

Baroness Platt of Writtle

My Lords, it is with great pleasure that I speak in support of this important report presented by the noble Lord, Lord Gregson, our effective and excellent chairman. It is, I submit to your Lordships, a report crucial to the future prosperity of our nation. In any difficult situation—today's situation in our country, in both financial and employment terms, continues to be difficult—the most important resources to help solve that problem will be human. Our technology is only as good as the people who control it. Companies and Government in this country have provided training over a period of years. Greater emphasis was placed on training following the setting-up of the training boards after the 1964 Act. That was especially true of the larger companies, some of which invested considerable resources in putting it into action.

Members of our committee visited Japan for five days. That is a short time in which to gather information. However, our embassy staff planned our visit very well. We had the privilege of frank discussions with influential people in Japan, in particular with Kei-Dan-Ren, the equivalent of our CBI, who said that when they installed new technological equipment, they retrained the workforce to operate it. The employees might have to retrain partly in their own time and might then have to move, but that avoided redundancy, improved industrial relations and ensured that the equipment's use was developed to the full because the workforce at various levels understood its potential. While we were there, we visited Hitachi, as mentioned in the report, and other institutes of higher education. However, my most vivid recollection was of the Fujitsu training school. Its logo was a triangle whose three sides represented research, development, and education and training.

Those of your Lordships who remember the sub-committee's last report on research and development in engineering will realise how close the concept of this triangle is to the hearts of our sub-committee. If the results of pure research only gather dust in a laboratory, they are useless. If pure research at which this country is very good, and at which the Japanese admitted they were less good, is to be valuable to our country, it must be taken into the market place fully developed by designers, production engineers and marketing staff if it is to satisfy and sell to customers. When I was up at Cambridge, a fashionable catch phrase was, "The trouble with Hardy is he's too pure". Hardy's pure mathematics was almost our Bible as young engineers, the source of our knowledge of differential calculus. We admired him tremendously, but we had to go to our engineering lecturer in mathematics for its application to problems in our various engineering disciplines that were besetting us. He was not pure. He was unashamedly applied. We were fortunate to be influenced by him.

As a country we must be far more entrepreneurial at applying our knowledge, as our first report said. We must not be afraid of getting our hands dirty either at the bench or on the production line. We must be positively proud of what that would do for the people of our country in employment and financial terms and many other ways if we can sell our newly developed high-tech products in the markets of the world. Development is the second side of the Fujitsu triangle.

If we are to do that, as I have already said, our most important resources are people. This is where the third side of the Fujitsu triangle comes in. That company was spending billions of yen every year on regular updating and retraining of their workforce at all levels to be competent and efficient in handling their fast developing technological equipment. The triangle that they regarded as of crucial importance to their own development also motivated them to sell their training to satellite and sub-contractor companies for their employees and even to individuals. That was good business, as they naturally trained on their own equipment which was bound to have subsequent commercial spin-off as the recipients of the training wished to continue to use the equipment with which they were familiar. I believe that the large companies of this country could take a leaf out of Fujitsu's book with great benefit to themselves and a ripple effect for smaller companies, but on a sound commercial footing. Training is of fundamental value in commercial terms and can therefore be sold. I believe that it is a principle that we need to develop with far more energy than heretofore.

Returning to this country and to the recommendations of this report, your Lordships will detect the influence of the noble Baroness, Lady Lockwood, the former chairman of the EOC and myself in the major reference to women and girls in the sub-committee's report. It is with great pleasure that I pay tribute to noble Lords who were members of the committee. They were equally determined to see the other half of the population play a far more prominent part in the development of technology in the future, as our chairman emphasised just now.

As the result of a Government initiative to help the war effort in those far off days, I went up to Cambridge to read mechanical sciences in 1941, together with four other girls. There had been only nine other women in that faculty before us. So we were regarded as somewhat of a strange phenomenon. Nevertheless, we were welcomed and helped to get our degrees and all went out to use our new found technological knowledge in war industry or the services. Speaking for myself, I still had a great deal to learn. In those days, there was no induction training. My work had to be very accurate as I was dealing with the flight testing of fast, highly secret, prototype fighter aircraft. I had to persuade other people to help me to learn the relevant facts that I needed. Highly skilled men in the experimental flight test department helped me a great deal and I coped. I do not recommend it as the most efficient method of training.

Today, technology develops even faster. Evidence at all levels in companies demonstrated to the committee the widespread ignorance of the new technologies from board level through all levels of management down to the shop floor. Ignorance breeds fear. Fear results in stagnation. We need the life blood of technological familiarity to permeate our nation, both men and women, so that people are comfortable with technology at all levels. May I encourage your Lordships to re-read paragraphs 5.10 and 5.11 of our report where we call for a sea change in attitudes so that the technological literacy of the whole nation is raised—a move perhaps towards helping to solve the anxieties of the right reverend Prelate the Bishop of Durham, expressed in his thoughtful maiden speech. To achieve that, as we recommend, is going to mean all children, girls as well as boys, being introduced to science and technology, to be fully numerate and literate and able to describe technology throughout the primary and secondary system. That is going to mean initial and in-service training of teachers at all levels to enable them to do this, as our report recommends.

With our history of the non-involvement of women in these subjects in the past, that is going to mean particular concentration and effort to interest, enthuse and inform women teachers so that they pass on the excitement of the new technology. The children at school at present will spend most of their lives in the 21st century, a century essentially dominated by the development of technology. The prosperity of the country—their future—demands that those children, girls as well as boys, can understand and control that technology. There are few years left in this century; time is running out. We have talked about these developments in this country for years. Some pioneering people are working very hard on them, to whom our report rightly pays tribute. We need a national crusade to translate those words into action in our schools and throughout our education system.

We also need our children to see careers in the future allied to science and technology. Whether they will work in the hotel trade, tourism, the banks, the retail trade—everywhere they will need a knowledge of the new technologies. The cashless society is almost upon us, with all that that implies. As the managing director of a retail store said at the CBI conference at Centre Point in response to the first Butcher Committee report on shortage of IT skills: We are all the customers now". Those whose careers are not primarily technological will need sufficient understanding to be able to imagine how the new technologies could be applied to the benefit of their particular activity, whether it be manufacturing or service industry.

With these needs for technological skills developing in the future we start with shortages already at both technologist and technician level, as the two Butcher Committee reports most vividly demonstrate. We were fortunate as a committee in having Sir James Hamilton, former Permanent Secretary at the Department of Education and Science as our adviser, and his encyclopaedic knowledge of our complex education system, especially seen through the eyes of an engineer, shines through our report. A great many of our recommendations are most forcefully directed to the need for change in our schools, colleges and universities. Some of them re-emphasise what we said two years ago in our earlier report, especially the crucial need to attract able young people, girls as well as boys, into careers in industry and especially technological industry, as described in Chapter 7.

Two quotations from the Engineering Council make these recommendations particularly urgent: In 1983 for the first time since before the Industrial Revolution, this country imported more manufactured goods than we exported". The second quotation is as follows: In 1981 there were 900,000 18 year olds; in 1995 there will only be 600,000 18 year olds". In the latter part of this century our oil revenues will fall. Our only way of remaining a prosperous nation is to sell our manufactured goods, and especially those relying on the new technologies for their production. We shall have to do this with dramatically fewer 18-year olds entering industry—our precious human resources. That is why our committee emphasised so strongly the need to encourage girls and women into science and engineering—the aim of the WISE campaign started last year, (Women Into Science and Engineering), which was backed by both the Equal Opportunities Commission and the Engineering Council, and wholeheartedly supported by the Prime Minister, Sir Keith Joseph and by many national organisations: Science and Technology Regional Organisations, the Women's Engineering Society, the National Electronics Council, the Association for Science Education, the Institute of Physics, and many more. Enlightened industry, and especially sunrise industry, also back it. Half the population has so far virtually not taken part and they must be wooed to see an attractive future career in these fields. Many of our recommendations refer to this most strongly. They are the only remaining pool of talent if standards of excellence and ability among technologists are to remain high in the future. It is those technologists' ingenuity on which we shall depend in future.

WISE must continue over the coming decade to be supported by industry, education and Government as they have so generously supported it in its initial year. What happens in schools is important, but updating the existing workforce will be more influential in the shorter term and will have more rapid effect. As we recommend in our report, far more needs to be done in terms of continuing education and training, as they are doing in Japan—the third side of the Fujitsu triangle.

Today the Engineering Council has issued a discussion document on continuing education and training. It is no accident, as they refer to our House of Lords Select Committee report and endorse the view of our report that much more effort in continuing education and training needs to be made by industry, trade unions, Government and others if we are to succeed as an advanced industrial nation. I hope that noble Lords will read this report and comment on it to the Engineering Council. It is literally a blueprint for the future and will formulate an important part of our national strategy. Again, enlightened institutions in our country are pioneering in these fields—the Open University, Aston University and South Tech at Brighton Polytechnic and many others, including many technical colleges and ITEC's in conjunction with BTEC and the Open Tech. It needs to become a habit of life throughout further and higher education.

That also needs to be the case in industry. I quote paragraph 7.34 of the report: In the UK the link between training and commercial profitability is not recognised sufficiently to encourage a widespread investment in training. We must have national, local, educational and industrial commitment to continuing education and training: the Engineering Council also endorses this. Successive witnesses emphasised its importance and especially the need for it to be available outside working hours so that management and key workers can update their knowledge without interrupting their involvement in their companies.

This is necessary for both men and women. However, allowance will need to be made more and more for the involvement of women. Later we shall discuss the need for parental leave throughout Europe to allow parents to reconcile their careers with the bringing up of their families. The Engineering Council, in encouraging WISE, recognises that as the young women encouraged into the engineering profession now become more numerous and are employed there longer, they too will be faced with the often conflicting demands of their families and their careers. The Engineering Council has set up a career break working party chaired by a senior industrialist to formulate policy in this matter, and this is referred to in our document. Young women trained and educated at considerable expense and with the necessary in-house expertise and technological experience must not be left unsupported in keeping up to date with their technologies. Various suggestions are made in Chapter 8 of our report and its ensuing recommendations.

One of the greatest pleasures of my present job is to meet some of these highly efficient, technologically competent, and charming young women. They are highly valued too by their employers, and make excellent ambassadors for their companies. You can see, and video tape, a film going out on the venture programme of Central Television, with the full co- operation of the EOC, at 10.30 p.m. tonight—if we are not still here!—showing young women in one company with the intention of encouraging other girls still at school to follow in their footsteps—an excellent initiative for them and backed by His Royal Highness the Duke of Kent. Those young girls, who are pioneers in their ways, do not want to lose touch with their careers when they have families, and we and their employers must make sure that they keep in touch with their technologies to our mutual benefit.

Industry itself will have a crucial part to play in keeping its workforce up to date with the new technologies, training motivated women without early qualifications in these fields to play their part too. There is no doubt that if the recommendations of our report are rapidly followed up and put into action, it is not yet too late for Britain to develop its prosperity in the coming years in the new technologies. However, deeds are demanded, not just words.

As we left Tokyo airport we saw an advertisement in English: Technology can form the footprints of a dream". If the future prosperity of our country is to be more than a dream for our children, if it is to be a reality, our report must be translated into action by Government, by the education system, by industry and by all the men and women of our nation.

7 p.m.

Lord Monkswell

My Lords, I too should like to thank the noble Lord, Lord Gregson, and his colleagues on the committee for bringing this most excellent report before us. I hope I shall take only a few moments of your Lordships' time to stress a few of the recommendations that they make from my point of view as someone who works, if I can put it like this, in the guts of British engineering; in the guts of a firm in British engineering.

The particular recommendations I refer to are: Recommendation 9.5, specialisation should be deferred as late as possible; Recommendation 9.21, current levels of funding technological education and training are insufficient; Recommendation 9.40, the need for a national training levy; and Recommendations 9.49 and 9.53, which refer to the need for management and other employees to receive training and retraining.

I had the privilege of receiving a good Scots education until I reached the age of 16, which, compared with the English system, is rather broader than that applying in England. But even that I found to my cost was not broad enough. We need to go even further than the Scottish system, which is better than the English system.

That the current levels of funding in technological education and training are insufficient is self-evident. Here we must recognise that the resources at the disposal of our education and training establishments across the country have received their share of the cuts in public expenditure which have been the hallmark of governments for quite a few years now.

Reference has been made to the need to recognise that one of our basic resources in this country is our human resources. Here I would suggest that we need to identify the problems which exist within the education sphere. Today we are in the midst of a dispute with our teachers as a result of the erosion of their remuneration over the years. They have seen the resources at their disposal to help to educate the young people of this country eroded. They have seen their standards of living eroded. They have taken action to try to stem that erosion. We must recognise that there is a need for more resources in this area.

I now turn to the recommendation in the report for a national training levy. The difference between this proposal and the situation which existed in 1964 is that, if I read the recommendations aright, we are looking for a national training levy which goes right across industry and commerce. We are not looking for a specific industry training levy, which applied before. In that respect it is different, and I would hope that the Government would take that point on board.

Some reference has been made to the need for extra funding. We have seen the noble Lord, Lord Young, look to the heavens for this extra funding. There are possibly two specific sources of this extra funding. One is the national training levy which, if it were applied nationally across all industry and commerce, would not be a burden to industry because it would be common to each firm and industry. The other source of finance, I would suggest, is in the contingency reserve which I believe has been increased this year as a result of the Budget and no doubt could do with raiding for this particular subject in front of us today. I am sure that noble Lords gathered here today would join with me in thinking that it would be suitable for the contingency reserve to be used in this way.

I now turn to the need for training and retraining for management and other employees. As I said earlier, I work in the guts of a firm. When I said that I meant that I work neither at the bottom nor at the top but in the middle. I can see around me able young men and women who have, to a large degree, the skills and the expertise in new technology but unfortunately to a large degree they are subordinate to managers who have grown up, shall we say, in a different level of technology.

One of the key things we need is to ensure that our senior managers and—dare I say it?—the directors of firms have retraining in the knowledge of new technologies so that they can harness the resources they have already at their disposal in terms of the young men and women who are coming out of our universities, our technical colleges, and our schools at a level of technology which is not now being harnessed.

In conclusion, I should like to make a couple of points about women in science and engineering. They need to be made because of some concern I have heard expressed in my work in industry—that is, that this will be used as a source of cheap labour driving down the wages and salaries of those currently working in industry. I should like to make the point, both to those people who are concerned about that and to the people who might seek to take advantage of women coming into science and engineering, that there is no future for that supposition. I would hope that enlightened employers will not permit it, and I know that the unions involved in that sphere of activity will not permit it. In conclusion, I would say, yes, we welcome women and girls into science and technology on the basis that they can help us as equal partners, with equal remuneration, to build a better future for all of us.

7.8 p.m.

Baroness David

My Lords, like every other speaker, I should like to welcome this important, timely and powerful report and the opportunity my noble friend Lord Gregson has given us to debate it and to hear the maiden speech of the right reverend Prelate the Bishop of Durham. His speech I found extremely thoughtful, encouraging, and it brought a real message of hope. I should like to thank him for it.

The picture the report paints is neither pretty nor comfortable. The accounts by speakers today—the noble Lords, Lord Gregson, Lord Kearton, and Lord Nelson of Stafford, particularly—of the state of the nation should shake this shortsighted Government out of their complacency, and let us hope stir them into action. The report is a strong attack on Government. In fact, it hits hard, if politely, in every direction, but it is the Government which come in for the fiercest blows. Of government departments which have responsibility for education and training, it is the DES which comes in for the harshest criticism. The noble Baroness, Lady Elles, referred in her speech to the failure of the education system. It is chiefly on the DES that I wish to concentrate today, but I will say a few words on industry first, which is not let off lightly either.

Industry has its obligations to train and re-train and it has not been fulfilling them. Invidious comparisons are made with our competitors, particularly with Japan.

Low levels of initial training, and especially the inadequacy of continuing training, are causes of concern and must be corrected. Correction of skill shortages lies mainly in industry's own hands"— says Recommendation 9.39. A national training levy is the committee's solution. I should like to know from the Government whether much research has been done upon the effectiveness of the old levy. What were the administrative costs? If, say, they were 20 per cent., were the companies 20 per cent. more efficient? It seems that the abolition of 16 of the ITBs has certainly not led to companies training voluntarily, as was optimistically prophesied by Mr. Tebbit. On 16th November 1981, at column 30 of the Official Report, he said: the training requirements of the sector concerned can be met effectively on a voluntary basis with less cost and bureaucracy".—[Official Report, Commons, 16/11/81 col. 30.] He got it wrong.

We go along with the recommendations made in the industrial training section of the report. I was staying with an industrialist on Saturday and gave him the report to read. He said he would think of the adoption of technical audits in his own company, so let us hope that that bears fruit elsewhere.

I should like to draw attention to the last two recommendations which deal with management education. Sir Kenneth Corfield said in his evidence: I have to say that the gulf between the technological understanding of the management and its engineers is huge and apparently insurmountable". So these last two recommendations are of very great importance, and particularly the suggestion that the use of distance learning for managers be extended. It has to be remembered that industry cannot spare its top managers and key personnel for lengthy courses. Their time is very precious to the company.

Dr. Nicholson, chief scientific adviser to the Cabinet, stressed this in his evidence. I quote: Industry just does not want to lose its best people for a whole year". The Open University, of which I shall speak later, and distance learning which can be used at weekends, in the evenings and early mornings, makes new ideas and processes available and attainable. If even that does not work for senior people in industry, individual methods must be tried. Tax credits could well provide further incentives for industry to train more vigorously. So much for industry and its obligations. As I said, I believe the main thrust of the report is against the DES. I quote Dr. Nicholson again: I think that generally within Whitehall the DES is regarded as being in the lead on most of the matters which you have under consideration—indeed, if not all of them". There seems agreement that there is, and will continue to be for some time, a shortage of trained people for the new technologies. There is not always agreement on the reason, but I think it goes right back to the schools. I was amused in reading Sir Peter Swinnerton Dyer's evidence when he was asked why the potential of women was not used and at what stage one has to start to win their minds. He said: In the kindergarten, I think; but you have to complete the process of persuasion by 13, 14, 15". That is certainly true for girls, almost certainly for all children. It is attitudes that have to be changed, in every connection and at every level and the start should be made at school.

HMIs in a discussion document on the curriculum from 5 years to 16, produced only last Wednesday, say that all children, even in primary schools, should learn about technology. The document reads: They should learn how to handle materials such as steel and glass, they should learn about energy through torch batteries, inflated balloons, rubber bands, plants, falling objects and human muscle". So perhaps change is on its way. Clearly the narrowness of our school curriculum is a basic fault. We would support the report's recommendation for a broad grounding and a good general training at both the school level and the higher education level with specialisation not coming too early. The inflexibility and rigour of the examination system have a lot to answer for. I am afraid I have no very great confidence that the introduction of A S-levels will be a cure for the ill at sixth form level.

At the school level the problem is an insufficiency of teachers in physics, mathematics, craft and design. I am wary of differential salaries as a way to attract and encourage them, although the possibility of using the discretionary allocation of points on the Burnham scale to provide more Scale 3 and 4 posts and more senior and principal lecturers may be a feasible idea. But I must make the point that teachers' salaries are too low, full stop. We have the present dispute to remind us of that. If, after a four-year training, a teacher earns about £2,000 a year less than someone starting in industry, or a police constable, it is not surprising that market forces make themselves felt. The Government who accept and approve those market forces, ought to take action to improve the pay and status of teachers if we are to give credence to Sir Keith Joseph's protestations that his priorities are the improving of standards in schools and of teacher quality.

I can hardly endorse Recommendation 9.37 which aims to raise the level of in-service training. I am aware of the new offer of £20 million, but as my noble friend Lady Lockwood said, that is really a very small percentage of the £200 million which was suggested earlier. I understand that the £20 million is to go to the MSC. I should he glad if the Minister could explain that when he winds up.

With an older and static workforce, resulting partly from falling rolls, the need to re-train teachers so that they can cope with new technology subjects is very great indeed. That means resources. The success of some of the TVEI programmes—I was much impressed when recently I visited Stevenage schools, where there is a very successful programme—shows that when there is the money, the environment, the equipment and the teachers can be produced and one can get results.

But it is in discussion of higher education that the criticism of the Committee is strongest. The report concentrates on the shortage of graduates who can provide the manpower resources for new industries—or indeed for reviving old ones—and it really damns what has been happening in and to our higher education institutions. I quote: The erosion of funding for technological research should cease. University research should be strengthened, and new opportunities for research in polytechnics created". That is Recommendation 9.11.

The provision last week of £2½ million for research in 21 polytechnics seems chickenfeed—a totally inadequate response. The Engineering Council was asking for £200 million of Government funds to he redirected to help finance engineering training in industry. There have been repeated warnings in report after report debated in your Lordships' House that research can only be neglected at our peril. Are the Government going to heed this time? I hope that in this context Ministers at the DES and the DTI will take note of a book, The Cambridge Phenomenon, published last month. The Vice-Chancellor of Cambridge University in his introduction to it says: What makes this book so important is that at a time when long-term research is under increasing financial pressure, it is an empirical study of the processes of research-based invention and innovation and their commercial exploitation". Twenty-five years ago there were 30 high technology firms in the Cambridge area; 10 years ago there were 100; by the end of 1984 there were 322. And there is the example of the micro-electronics lab on the Cambridge Science Park, a part of the University Department of Engineering, jointly financed by British Telecom, GEC and the University, in the charge of a university reader. In this laboratory research students and people from industry work in collaboration. These developments are a striking demonstration that university research, even when it does not actually generate it, certainly encourages scientific and technological enterprise, a spin-off that is likely to be of the highest value to the nation, economically and socially. The Government should learn that lesson; and I think that the noble Lord, Lord Sherfield, was also preaching that.

The reduction in numbers at the universities is absurd. The Secretary of State took panic decisions on both the numbers of students and the numbers of teaching staff. He then very soon had to change course. The "new blood" scheme has been only partially successful and it came in for a good deal of criticism from a number of witnesses. Some 5,000 extra places, we know, in IT-related subjects were announced in 1982, and only last Tuesday Sir Keith launched a new plan making £43 million available over the next three years—I understand 470 places for 1985–86. Like many other noble Lords, I should like to know where this money is coming from. Is it new money or is it just money collected from various other sources? We hope that we will have an answer about that.

Let us also hope that there will be the staff there to teach them; I understand that even now there is a shortage of trained people in IT to train others. Any influx of students over the next three years will not prevent the decline in the number of students graduating in electrical/electronic engineering in the next two years to which the Engineering Council has drawn attention. Sir Peter Swinnerton-Dyer's evidence as chairman of the UGC was very revealing. He said that the cuts in 1981 were a mistake. He did not want the places for science and engineering students to be at the expense of students in the humanities; and I would agree with him very much on that.

Now, just last week, on 21st March, we have had a further speech from Sir Peter outlining the worsening financial position of the universities. Mr. Maurice Shock, chairman of the CVCP, speaking after the meeting, said: Sir Peter has painted a very bleak picture for the universities. Compared with the sudden and traumatic cuts of 1981–84, our future funding prospects are more like a lingering and painful terminal illness". I had thought that perhaps the Government had begun to see the light and that there was going to be a change of heart; but, from this latest information, it appears that it is not so. We had hoped that now that the universities had done some rationalisation and had taken a hard look at themselves, there would have been a let-up and sensible policies would have followed, with a proper injection of resources, so that proper planning could be done over the next few years. That, it seems, is not to be so.

The committee devotes a section of its recommendations to continuing education, saying that there should be a large-scale increase in its provision and in employers' updating and retraining programmes. The pressing, short-term needs of industry can be met only by increasing further the amount of retraining and conversion courses, particularly for women reentering employment. The noble Baroness, Lady Platt, has spoken so eloquently about the position of women and girls that I shall not repeat what she said; but I should like to say that I endorse everything she said.

Industry should contribute substantially to continuing education, but we have the ideal method of delivering it in the Open University. The short-sighted, even suspicious, treatment by the DES of the Open University leaves one gasping. The OU provides a very cheap and economical way of retraining and updating; and the more inventions there are to aid distance learning—videos and cassettes—and the cheaper they become, the more it will be able to do and the more people it can help. It has been inventive and quick to respond to needs. Sir Keith set up a committee to look at it, the Visiting Committee, which reported a few weeks ago. The report was very supportive of the Open University and its financial needs. But, at the same time as the report was published, the department announced the grants for the next two years. They continue the downward trend. This is gross folly.

The Government, too, should relax their insistence that all courses should be self-financing. It is ridiculous that the OU should be the only educational institution that is borrowing money from the DES, paying interest on it and having to repay it over five or six years. The arrangements with the DTI, whereby money is put up for a course and the OU pays a levy from the fees of the courses that they sell seems both fairer and more sensible. The DES is putting obstacles in the way of improving a trained and up-to-date workforce when it ought to be facilitating the process. One further thought: the DES could ease the difficulties that some people have because of courses being interrupted for whatever reason—perhaps moving from one part of the country to another, child hearing, and so on—by making credit transfers possible between institutions and also by enabling transfers to be made between the OU and other higher education institutions.

The conclusion that one is forced to come to after reading the evidence put before the committee is that there is no coherent education and training system in this country. What can be done to co-ordinate, control and finance one? The committee proposes an Education and Training Board from industry, the academic world, and Government, a national body which can review the country's needs over both the long term and the short term. This has been described by other noble Lords. We would support the proposal. I admire the way that the committee has avoided being accused of creating a new quango by making it a part of the SERC. That has been criticised in some circles as taking away from their prime function of research. But, on reading the evidence that SERC gave to the committee, it is clear that they already take on a number of things that, in their words, are "on the edge of our remit".

Professor Kingman suggested that some of these things could perhaps have been done by the DES itself—but they were not. He acknowledged: The need for a channel of communication which gets the signals of the shortages back into the educational system". He added that, of course, nobody can work effectively unless there are adequate funds. He appeared willing to take on the board if it were funded properly and did not interfere with the council's main role of providing funds for basic research. Where the board should belong perhaps requires further discussion, but anyone reading the report cannot remain in doubt about the need for a co-ordinating and all-embracing body of some sort to control and forecast the production of a trained workforce adequate in numbers and the right skills. Considering the remit that the noble Lord, Lord Young. has at the moment, he would seem to be the person to applaud this suggestion and we wait his response with great interest.

What is going to happen? Are we to remain a nation which is better at spending wealth than creating it? I should like here to dispel some misapprehensions about the attitude of the Labour Party. We believe in the creation of wealth and we do not think that "profit" is a dirty word. It is only by using our brains and skills and innovatory powers that we can provide the prosperity that will generate the jobs, new jobs, that are so desperately needed. If the recommendations in this report are followed, we might make a start on capitalising on the talents that are undoubtedly there and that often have not shown themselves before introduction to the new technology. Experience at the ITECs has shown this. If the recommendations are implemented, it would mean a U-turn in what has been Government educational policy over the last five years, and that would be no bad thing. Dr. Miller of the Engineering Council said: The Government needs to take the issue by the scruff of the neck. The Government also has to put money in, but this will take some political courage". I ask: Have the Government got it?

7.29 p.m.

The Minister Without Portfolio (Lord Young of Graffham)

My Lords, I am grateful to the noble Lord, Lord Gregson, for enabling us to have this most interesting and important debate this afternoon. If I say that the debate today was up to the standard of the report, I am sure that your Lordships will take it that we found this a most interesting and thought-provoking report. I should like to congratulate the noble Lord both on his speech and on the speed with which he produced the report itself. The Government would wholeheartedly endorse much that the noble Lord has said this afternoon and just as much as is contained in the report itself.

The fact that we as a nation have to create the wealth first has come through as a theme during this afternoon's debate. But, leaving such matters aside, I think that the House would agree in particular with the noble Lord's statement that science and technology lie at the very root of our endeavours. As he reminded the House, the pace of technological change is staggering, and our job, whether we be in Government, or whether we are employers, educators or trade unionists, is to ensure that collectively we respond to that challenge.

If I may, I shall deal with some of the noble Lord's more detailed points a little later in my speech, but perhaps I might take this opportunity of welcoming the right reverend Prelate the Lord Bishop of Durham, who made his maiden speech this afternoon. I feel peculiarly qualified to welcome him, being one of the newest of new boys in your Lordships' House. May I say that I appreciated greatly his remarks on literacy and numeracy and particularly his warning about relevance, because in many ways in the world we are discussing this afternoon we are embarked upon a journey without maps. He did, very sagely, point out the difficulty of indulging in too detailed training at too early a stage when the pace of technology is changing as it is. He also drew attention to the difficulties which small firms must experience if they are to accommodate training for the future.

The Government will respond to the report by the summer recess. Indeed, they would not be giving sufficient attention or weight to the report if they did so before then. It crosses many departmental boundaries; but the debate, apart from being a learning opportunity for me, will help my colleagues in formulating our views. The one thing I should like to assure all your Lordships this evening is that we recognise the immense economic importance of these technologies. It is in training and, in particular, training for tomorrow's world, that we must concern ourselves. It affects the quality of our workforce and the ability of our nation to compete in world markets, and ultimately of course it affects our employment prospects.

I have just returned from a journey in China, where the standard of our current technology was admired and all encouragement was given to us to enter into joint ventures with the Chinese. But the quality of that technology will not last if we do not ourselves indulge and continue to indulge in what I see today as our own cultural revolution, for anyone who goes regularly into schools and colleges as I do will have recognised the remarkable changes that are now taking place. It is not so much the new programmes and courses: I must tell your Lordships that with TVEI and CPVE and all the other new initials, the changes are formidable and so is the very attitude to change itself.

It was not always so. It is now well over 100 years since a Royal Commission warned us of the dangers of ignoring the vocational and the technical in our school system. We would, they said, run the risk of losing our dominant position in the industrial world. We did, my Lords. As little as three years ago few secondary school pupils followed any form of vocational curriculum; yet in only two more years about one in 10 of all pupils between the ages of 14 and 18 will be pursuing technical or vocational studies. And I believe that this is just the beginning.

For those who choose to leave school at 16, the world has changed even faster. At the beginning of this decade only 30 per cent. of young people leaving to start work received any kind of proper training, and by the end of this decade I expect the proportion to be nearer 80 or 90 per cent. Nor are we just concerned with those under 18, because in the universities and polytechnics the same process continues. In this decade alone the number of students taking first degrees in science and technology will have increased by over 40 per cent. I believe that we have seen an historic and, I very much hope, an irreversible shift. Our educational system has begun to realise the needs of industry and commerce and to appreciate that we need to inculcate enthusiasm and enterprise, that we must prepare young people for a life that includes work, even one that includes self-employment, and that attitudes and behaviour in the world of education have begun to recognise that we must prosper as a trading nation, for our most lasting resource is the skill, energy and the sheer enterprise of our people.

But all this did not happen by chance. The process has been gathering pace throughout this decade, and the Chancellor's Budget last week, in signalling three important changes, marked a further stage forward. These changes affected people both under and over 18 and together they represent a major packet of reform. First, we are going to expand the youth training scheme so that it can be a two-year scheme. It will be available to all who leave school at 16 and it will, I hope, lead to recognised vocational qualifications. The Manpower Services Commission begin to discuss the scheme this week and the precise shape will depend upon them. The Government will make available an extra £125 million in 1986–87, and an extra £300 million in 1987–88. By that year the whole scheme will cost some £1,100 million.

Then we can truly say that unemployment need no longer be an option for anyone under 18; and that is a claim that few if any, other nations can make. However, that is not its purpose. Rather, I hope that we shall be creating a kind of national apprenticeship based on qualifications rather than on time serving. It will go well beyond the limited range of occupations covered by the traditional apprenticeships, and although we might be heading towards the philosophies practised by Germany and Japan, I hope that the very basis of the youth training scheme will encourage flexibility and allow for the changing circumstances of the world to come.

Next, the Chancellor found extra funds, amounting to some £20 million, to increase in-service training for teachers; and I can assure the noble Baroness, Lady Lockwood, that this is indeed new money. The TVEI programme has been very popular with pupils; it has been very popular with parents and also with teachers. But there is a shortage of trained teachers and we must have the right skills available in the schools. We must take good teachers and give them the skills to teach the subjects of tomorrow.

Finally, we are giving an extra £43 million over the next three years to provide extra places in higher education for the science and technology students which industry so badly needs. In this connection, I can certainly assure the noble Lords, Lord Rochester and Lord Kearton, and also the noble Baroness, Lady David, that the greater part of the £43 million (some £31 million) represents additional expenditure in the higher education sector. Some £12 million is redeployed from the UGC grant.

But this is not new for in other ways in the past few years there has been a significant shift in higher education away from the arts. The output of engineers and technologists is already planned to increase by 2,000, or some 12 per cent., from now until the end of this decade. The new programme will add a further 4,000 or so places on engineering and computer science courses.

However, if we are to meet the challenge of our competitors more urgent and vigorous action is needed. Our policies, and particularly those which the Secretary of State for Education and the Secretary of State for Employment are pioneering, are essential ingredients. However, we cannot do it alone: we need the active support of employers, both to meet their own immediate training needs and to take an interest in what is going on in schools and colleges. I welcome the increasingly close links that are being forged between schools and industry. Both have much to gain. We must look to employers to exert an even greater influence in the future. We must further develop the links between technology and training; and I agree wholeheartedly with the importance attached to this by the noble Lord, Lord Gregson. I sometimes think that we have more young people today who understand BASIC than French. It was the Micros in Schools programme that gave them their start and we must build on it. We have over 170 information technology centres—ITECs—in the youth training scheme alone. We have an Open Tech programme which will shortly be providing training for some 50,000 people a year, both at home and at work. We have the PICKUP programme in the colleges, offering a selection of courses tailored to individual manufacturer's needs, and we have the MSC's adult training strategy. I promise your Lordships that the next century will not be like the last.

The noble Lord, Lord Gregson, and all the members of the Select Committee, will know that it does not fall to me today to reply to detailed recommendations in the report, and the Government will in due course and before the Recess do that. However, there are some matters upon which I should like to comment. I agree wholeheartedly with the noble Lords, Lord Gregson and Lord Sherfield, about the need for a broadly-based curriculum. Our policy is to ensure that young people are not forced into far-reaching choices too early and we must maintain and keep that flexibility. One of the difficulties, which I suspect we are now facing as a nation in accelerating the production of electronic engineers, can be seen when we look back through our educational system and realise that choices have to be made at 14 years of age which ultimately affect the output from the universities nine years later.

If I may comment on what the noble Lord, Lord Sherfield, said, and on the statements made this afternoon about the differences in the educational sector between Japan and this country and even the United States, it was noticeable to me during my visit to Japan how few individuals change their employers, and how Japan has evolved an educational system which reflected this. It was an intensive general education until the age of 18 and then a detailed training and retraining programme throughout the working life within the great companies. But employers trained with confidence because individuals never changed jobs, while I suspect—and perhaps this over-simplifies the position slightly—that in the United States individuals train because they always change jobs. Till now we have possibly suffered from the worst of both worlds.

I agree very much with what the noble Baroness, Lady Lockwood, and the noble Baroness, Lady Platt, said about the need to get more girls to study science and technology. I believe that the achievement of a broader-based curriculum and TVEI will go far to secure this. I think I should remind your Lordships that of all adults of employable age in the United Kingdom today, 66 per cent. are in employment. The comparable figure for Germany is 61 per cent.; for France it is 60 per cent., and for Italy it is 54 per cent. The explanation is that many more women work in our society than in our continental neighbours. What we must be concerned about is that their work within our society covers all grades and all occupations. I believe we shall now see that as the education system evolves. Certainly, in the TVEI programmes that I have seen, there has been little difference between the activities of young boys and girls.

I agree very much with your Lordships about the importance of continuing education and of updating. Education is no longer a rocket which you fire off at the beginning of your career and on which you coast through the rest of your working life. It changes, and will continue to change, and a three year degree cannot be the beginning or the end. To coin a phrase, it might be the end of the beginning, but it must be clearly seen and recognised that there is no limit to the amount of training and retraining which individuals will need.

Finally, I have noted what was said about an education and training board. I assure your Lordships that this recommendation will be carefully considered by the Government, which only last year asked the Manpower Services Commission to adopt the functions of a national training authority. We have to look very carefully at the interface between training and education and at where education and training merge.

I also listened very carefully to what the noble Lords, Lord Gregson and Lord Rochester, as well as many other noble Lords, said about the training levy. Of course, the Government will look carefully at this, as they will at all the recommendations. But if I may express a personal view, I very much doubt the value of a compulsory training levy. It was tried before, and it was felt by the vast body of employers and many training boards at that time, that a levy did not serve a useful purpose. It would reverse the direction of Government policy which is aimed at putting responsibility for training where it lies, with individuals and with individual employers. The training levy would, I suspect, mean more bureaucracy and perhaps would take away the sense of individual responsibility. On that matter, I agree most strongly with my noble friend Lord Bessborough.

Noble Lords asked about the level of university grants between now and the end of the decade. Provisional indications of this up to 1987 were given by my right honourable friend the Secretary of State for Education in November 1983. They represent an increase in cash terms of about 2 per cent. a year. That reflects my right honourable friend's view of the scope for economies and the better use of existing resources. I regret that I can say nothing today about the position beyond 1987, save that proposals will be made in a Green Paper on higher education which my right honourable friend will publish later this year.

However, I feel that I should remind your Lordships that we are currently investing somewhat more than £3.8 billion a year in higher education and research, which is scarcely a starvation diet or parsimony, as the noble Lord, Lord Kearton, reminded us. Indeed, rather than limping along at 2½ per cent. the United Kingdom this year shares the highest growth rate in Europe and is forecast to do so next year.

The noble Lord, Lord Nelson, asked for the Government's view on the use of technologies such as videos to enhance the learning process. In my previous incarnation within the Manpower Services Commission, we pioneered the use of distance learning techniques through the Open Tech. Even in my present job I have had many meetings with the Open University and have seen much that they have done. I hope and believe and anticipate that there is a great future for distance learning techniques within the Open University and within the methods pioneered by the Open Tech. Indeed, may I remind the noble Baroness, Lady David, that the Department of Education and Science did what the visiting committee recommended with the Open University, including postponing the loan to which the noble Baroness referred—

Baroness David

My Lords, will the Minister give way? When he talked about postponing the loan, did he mean that the Open University does not have to pay it back, or just that it is getting a little longer time to pay it back?

Lord Young of Graffham

My Lords, I believe that it is going more on the practice of the Department of Trade and Industry, which is postponing the time for paying it back. I agree very much with the noble Baroness, Lady David, about the shortage of university teachers in engineering and technology. This is a problem which the Government have to solve and they are asking industry in the short-term to loan qualified staff in order to help with this very real problem.

Finally, last Friday the Government issued an important statement on the teaching of science in schools. This set it as an objective for all our primary schools to introduce all their pupils to the elements of scientific methods, and for all our secondary schools to provide a broad education in science, physics, chemistry and biology for all children up to the age of 16. I regard that as a very great step forward.

We have had a very interesting debate this afternoon. This is a very real problem. I do not have to remind anyone in your Lordships' House that the young people leaving school this year will retire in the second third of the next century to a world which is unimaginable today. However, what is imaginable today to the Government is the need and the desire to do what is necessary to ensure that we will hold our rightful place in the world. Technology changes and the Government will ensure that we can provide the tools.

Lord Gregson

My Lords, I do not intend to delay the House this evening, as another debate has yet to come on. Perhaps I may first of all say "thank you" to everybody who has taken part in the debate tonight. I believe that this is the House of Lords at its very best, a demonstration of the real value of your Lordships' House. I wish to congratulate the right reverend Prelate the Bishop of Durham on a most interesting and apposite speech. I look forward to many more contributions from him in the future. I thank the Minister for his reply this evening and I look forward with great interest to the eventual reply that we shall receive before the recess. I hope that in that reply the Government address this problem of the provision of excellence, because I believe that it is absolutely fundamental to our staying in any part of the forefront of technology. It is a problem which has not been addressed in this country for many, many years, and the sooner it is addressed, the better.

On Question, Motion agreed to.