HL Deb 18 January 1988 vol 492 cc63-6

7.15 p.m.

The Earl of Dundee rose to move, That the draft order laid before the House on 1st December be approved [9th Report from the Joint Committee].

The noble Earl said: My Lords, the order requires parliamentary approval under the provisions of the Industrial Training Act 1982 because one part of it—that covering labour-only subcontractors—involves a levy exceeding 1 per cent. of an employer's payroll.

It goes without saying that the construction industry is of tremendous importance to this country. It provides employment for some 1½ million people, and about 170,000 firms, large and small, are active in the field. That is why the order before us today is so important. The money that it will provide to the Construction Industry Training Board will help to protect the skill base of the industry, to encourage employers to train and to ensure the future of this vital part of our industrial and econmic life.

The levy proposals are in the same format as those approved by both Houses in January 1987 and show only one change from those arrangements. The board forecasts that the levy proposals will raise about £48 million. The levy is made up of three parts. First, there will be an occupational levy on directly-employed construction workers in the main industry. A set amount will be raised for each occupation, but this is subject to an overall limit of 1 per cent, of employers' wage bills. The rates vary according to the type of craftsman trained and reflect the training costs of each craft. It is here that one change has been made from last year's levy proposals—the per capita levy rate for the principal building crafts has been reduced from £75 to £70. This has been made possible by a slightly lower take up of CITB grants in this sector than anticipated in the current year. Noble Lords will wish to know that, apart from this reduction, there are no other changes in this year's levy proposals.

Secondly, the board proposes to retain the 2 per cent. levy on payments made by firms in the main industry for work done by labour-only subcontractors. This rate has remained unchanged since 1981, and reflects the board's judgment that labour-only subcontractors in general undertake too little training, relying instead on obtaining skilled manpower trained by other employers.

For the main industry, covered by these two levy rates, companies with payrolls of £15,000 or less will not be required to pay levy. This will exclude from levy around 51 per cent. of all construction firms within the board's scope.

Thirdly, for the smaller, brick manufacturing sector, the board proposes a rate of 0.05 per cent. of payroll. Employers with a wage bill of £100,000 a year or less will be excluded from the levy. This measure is unchanged from last year.

The levy proposals have been approved by the board and are strongly supported by the employers' associations in the industry. In fact, as the proposals make no provision for exemption and as some employers will be paying levy amounting to more than 0.2 per cent. of payroll, the board is required by the Industrial Training Act 1982 to demonstrate a double consensus of support for their proposals—first, among employer organisations representing all firms, large and small, who will pay the levy and, secondly, among organisations representing firms who between them will pay over 50 per cent. of the total levy. The fact that the board's proposals command this level of support, and have done every year since the need for consensus was introduced in 1973, does I think demonstrate the strong support in the industry for the board's work.

During the past year the board has worked closely with the Government and the Manpower Services Commission to develop and improve training arrangements in the industry. Worrying reports on skill shortages at the beginning of the year led to a meeting between Ministers and the board, and this in turn resulted in the adoption by the board of an action plan designed to tackle the problem both in the short and the longer term. Progress on this plan has been good in many areas, most notably resulting in the board's assessment that nearly 2,000 more young people will enter YTS through the board's own managing agency this year, and at least 1,000 extra training places will have been taken up by adults seeking "upgrading" training.

In the longer term, I am looking forward to the results of two reviews—one of the particular problems of recruitment in London and the South-East, and the other a comprehensive survey of occupational structures in the industry. Both will provide the board with more up-to-date information on the structure of the construction industry and will allow the board to ensure that training provision is tailored to the needs of the industry as they now exist, rather than as they existed in the past. I commend the order to your Lordships.

Moved, That the draft order laid before the House on 1st December be approved [9th Report from the Joint Committee].—(The Earl of Dundee.)

Lord John-Mackie

My Lords, this is the third time since I came to the House that I have been landed with something due to the short-windedness of the agricultural lobby, which evidently has not dawned on some of my colleagues, who seem to be elsewhere. However, I am particularly interested in training and the construction industry, because I have spent my life building farm buildings; building houses for farm workers; and altering houses for farm workers. I have considerable experience of people in construction work not knowing their job. Training, as in every industry, is essential.

I am glad to see that the Government appreciate that training in the construction industry is important. I understand that they have been closing down some training boards, but thank goodness they are not closing down the Construction Industry Training Board. What we shall need in the future, as noble Lords know, are plenty of good new houses in this country.

The noble Earl raised an interesting point as regards recruitment in the South-East. My daughter was adding an extra room to her flat in London but she had to employ builders from Bradford because she could not find builders in London to start the work for several months. When I spoke to the builders I discovered that the exodus from the Midlands and further north to London on Sunday night or Monday morning, and their return journey on Friday, is extraordinary. I think that the Government should look into that matter. I asked the builders why they did not stay in London. They laughed and asked where they would stay and where they would get a house. They would love to bring their families to London but there is no housing for them. I do not think that there is any point in recruiting labour in the construction industry unless there is accommodation for them in the area in question.

We on this side of the House are keen on training. The noble Earl said that those firms with a wages bill of £15,000 or less pay nothing. That eliminates approximately 50 per cent. of the industry. I presume that that figure is correct, but it appears to be very high. I know that in the agricultural industry, particularly in relation to the horticultural levy for training and research, it reaches down to the smallest producer. However, that is merely a point that I noted during the noble Earl's speech.

We on this side of the House agree with the measure and give the order our blessing.

The Earl of Dundee

My Lords, I am grateful to the noble Lord for his welcome to this measure. I was interested in his references to the South-East. I am pleased to report that the research funded by the board and the MSC into the problems is due for completion by the spring. Shortly thereafter recommendations should be made as to how to tackle the shortages of skilled workers in the South-East.

The noble Lord referred to the level of £15,000, which excludes over 51 per cent. of firms. However, that covers only 2 per cent. of the total workforce. In the 1985–86 training year, firms below the exclusion level received grants from the board totalling £766,000, not including YTS. However, although the amount excluded is a small proportion of the total, the noble Lord is right to remind us that some do not pay the levy. I should like to thank the noble Lord again for welcoming this measure.

On Question, Motion agreed to.

Lord Hesketh

My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.23 to 8 p.m.]