HL Deb 15 February 1989 vol 504 cc220-55

5.51 p.m.

Viscount Hanworth rose to call attention to the case for more trained engineers and technicians and to the steps which should be taken to achieve this aim; and to move for Papers.

The noble Viscount said: My Lords, all noble Lords will be sorry that some Members of this House who have great experience in the engineering field and who would like to speak tonight are unable to do so.

The wealth and influence of this country in the 19th century was founded and produced by its engineers. Somewhere along the line that has been forgotten. It was never a gentleman's profession and, in spite of the respect accorded to such engineers as Brunel and others, the "muck and brass" image prevailed, deterring all except the most dedicated from our universities joining the profession. Even during my time as an officer in the Royal Engineers a long civil engineering course was quite desirable for promotion. That was not so in respect of an electrical and mechanical course. In those days it was "mud pies, yes; oily hands, no".

Today in England an engineering background is not the best route to the boardroom. For accountants, marketing men and even scientists, yes; for engineers, it is still difficult. On the Continent, particularly in France, almost the reverse is the case. Their grandes écoles, which were created outside the traditional university stream, concentrate on engineering, applied science and management studies. Their prestige is immense. Those who can gain a place and become qualified are almost assured of high positions in industry later.

From that observation we can draw at least one useful conclusion. All university engineering courses and most courses at polytechnics should include management studies, an appreciation of accountancy and so forth. Already, there is a severe shortage of able and highly qualified persons in several disciplines required by the engineering profession. The recent fall in the birth rate means that in the 1990s there will be approximately 25 per cent. fewer young people from whom engineers can be recruited.

If noble Lords agree that there is a problem, it must be considered from two angles which are of course interrelated. First, we must try to raise the status of engineers in everyone's view. Only then can we expect to recruit into the profession the young at A-level standard and below. I shall not mince my words: our greatest need is to attract more of the really able people into the profession, particularly from universities. Quality is even more vital than quantity.

In that respect we should consider the unexploited numbers of really able girls. In many respects engineering today is well suited to female talent. It does not require an amazon to work on design, computers, administration and much else. Unfortunately, some firms put unnecessary obstacles in the way of young women who might decide on an engineering profession. Such obstacles include working in a hostile environment and the rigidity of employment conditions.

What can be done further? In the short term firms must try to raise the status and salaries of their engineers and give those capable of filling higher management positions an opportunity to attend business staff college courses, so enabling them to make good any business skills they may have been unable to acquire earlier. Salaries are not comparable with those in Germany—according to one analysis, by a factor of two. I hesitate to think what may happen if we start to lose to the Continent those with high qualifications whom we may at last have managed to recruit.

The Engineering Council and the Engineering Industry Training Board, to mention only two organisations, are doing everything they can to help. I wonder however whether bodies such as the CBI could do more. It must know the importance of engineering. I quote two statistics. In 1987 the industry provided 11 per cent. of our GNP; but over 50 per cent. of all our exports are manufactured goods. We are not balancing our export-import budget. With decreasing oil and gas production the situation will soon become critical.

The attitude of the public is important. Parents can have an influence on the subjects their children study and the careers they follow. In spite of all that modern technology gives us, somehow the glamour of engineering has not come across. For example, do we produce enough good videos and ensure that they are shown to the right audiences? A dull title, such as "A Career in Engineering", could at once limit the audience. A more subtle approach may be needed.

I turn to the second area; our schools. In the longer term they are vital. The overriding problem is the present and what will become even greater shortage of maths and science teachers. It has been estimated that at best by 1995 there will be a shortage of over 4,000 teachers in those subjects. A more pessimistic view quotes a catastrophic shortfall of over 12,000. Inevitably, the shortage, even if partially met, is likely to reduce the time allocated for teaching maths and science. What a frightening prospect that is in this technological age.

What can be done to alleviate the situation? The Engineering Council makes a number of suggestions, such as developing the use of learning systems and providing financial incentives for those actually entering the classroom rather than those undertaking post-graduate studies, desirable as the latter may be. Once again, there is surely an untapped resource of women who have left the profession but who could return at least part-time if the terms were more attractive and took into account their particular needs.

The situation is potentially so serious that if the Government cannot raise teachers' pay to adequate levels all round they must make the invidious decision of giving additional pay to maths and science teachers or accept those without full teaching qualifications. Bearing in mind some of the very unpopular measures the Government have recently taken for what many consider to be only political motives, they should not shrink from such action where the nation's very future is at stake.

I have said that more must be done to convince children at school that engineering is the exciting and challenging profession which it surely is. I believe that our engineering firms could do much more. Apart from videos, provided free, they should arrange more visits to their premises both during term time and in holiday periods for parties accompanied by teachers. There remains some prejudice against engineering as a career, certainly among art teachers. I vividly remember when I was 15 or younger being invited to the London Hospital and being shown round for most of the day. The idea was to recruit young people to the medical profession. That would have had a profound effect on me had I had any idea of going in for medicine.

Nowadays many organisations have ways of attracting schoolchildren. For example, I believe that banking houses run clubs for quite young children so that they will be thinking along what are, to those banks, the right lines. Do engineering firms promote their industry in that way? I agree that they make enormous efforts to attract first class graduates from the universities, usually just before they leave. It may be even more useful if they do the same for younger persons. To a great degree they should also support relevant courses in higher education.

Of course, I am aware that many useful steps are being taken to help. I should like to believe that previous inertia is being overcome and that the stone is starting to move. However, it is not yet rolling. More effort is required and time is not on our side. Let us remember 1992. I beg to move for Papers.

6.2 p.m.

Lord Orr-Ewing

My Lords, I believe we owe a debt of gratitude to the noble Viscount, Lord Hanworth, for raising this subject. I cannot help but be interested in the vast number of people the railway debate attracted. They were limited to seven minutes each. We have rather more time to develop our arguments and more time for intervention and the courtesies of debate in this House, which I believe is desirable on a subject of this sort.

I agree with so much that the noble Viscount said and I liked his courtesy in sending me a copy outlining what he would say to help me to reply. I am a member of the Institute of Electrical Engineers as a chartered engineer but I am also grateful to other institutions because they have provided very valuable information to help all of us in this debate, particularly the Institute of Mechanical Engineers.

I very much agree with one point made by the noble Viscount, Lord Hanworth. Time must be made in the curricula of scientists, engineers and mathematicians for management of people and management studies. After all, by the time the students are 27 they will probably have three junior engineers and six technologists under their supervision all helping as a team under their leadership. Therefore, it is not too early to start in the first year of the degree course or at the polytechnics learning the fundamentals of man management and to gain some experience, because that will be needed very early in their careers. I also make the point that they should learn to speak. It is no good being an extremely good engineer and producing abstruse papers if one cannot argue one's case. It is the persuasive people who can persuade others to take up the issue who will win out. I should like to see speaking as one art which needs to be developed by engineers.

In a short debate one has to pick out one or two aspects of the problem. First, I cover Britain's need and something about the progress of our competitors. Secondly, I should like to say something about our schools and the need to provide incentives to attract teachers who will motivate and inspire children from the ages of seven and eight upwards. Lastly, I should like to speak about some tax incentives which I hope may be included in the forthcoming Budget and which could play a useful part in stimulating the growth of engineering.

Perhaps I may turn to the need. I take Japan as an example because very soon after the war it understood the need to produce engineering graduates and to attract them into industry. One can see the immense progress made with its exports in almost every field and the ability and flexibility it had to expand the whole of the huge shipbuilding industry. When that collapsed it happened without much trauma when Japan had to hand over the leadership first to Formosa and then to South Korea and others. However, it has an amazing ability and built-in flexibility which one must admire. That does not mean that I am in any way complacent because I believe that we are a long way behind Japan; but we are also a long way behind West Germany, France, Switzerland and the like who are now our major trading partners.

An independent survey—I believe that this is the same survey mentioned by the noble Viscount—showed that the extra number of teachers needed by 1995 is 2,300 physicists and 4,400 maths teachers. That means that it is not too early to start recruiting now, seven years before they are needed in our schools and universities. Those extra teachers need to be caught now because we should remember that there is also a diminishing population problem. There are a million fewer people in our schools than there were ten years ago.

In regard to students who become graduates or gain polytechnic qualifications, a study was carried out by the Institute of Manpower Studies at Sussex University. It alarmed me considerably. It said that an additional 140,000 scientists and engineers were needed by 1995 to make up past losses and the like. As regards teachers, those figures do not allow for teachers re-entering the profession, which one hopes will be encouraged to a maximum degree. That source may assist in solving some of the problems.

I now turn to incentives. First, I make the point made by the noble Viscount, Lord Hanworth, that prestige and rewards are equally important. Japan is now attracting and producing on a per capita basis two and a half times the number of engineering graduates that we produce in this country. In Japan the principal requirement for gaining the most senior management positions in major companies is to have been educated as an engineer and not as an accountant, a lawyer, in a finance house or even a bank. Engineers are needed to head their companies. Industry must surely pay proven, qualified and experienced engineers more generously than it does today. That must be a leading need, particularly in a diminishing population.

Perhaps I may turn to schools, where it all begins. In the teachers' pay award in 1987 there was a massive reward for teachers and in the agreement eventually reached there was an allowance for an extra incentive to be provided in shortage subjects. Those subjects obviously include science, physics and mathematics. Therefore, one can reward those who are so badly needed more generously than others.

The Interim Advisory Committee for Schoolteachers' Pay has been instructed to look at this problem immediately. Perhaps the Minister can tell the House when we may expect this report. It will then be up to local education authorities. They must be convinced that that is where some of the money must be diverted. That is where the local education authorities must take steps to achieve results and have all the encouragement available.

Industry is making valiant efforts, but to some extent the National Union of Teachers has been a little slow to accept the flexibility and incentives necessary to attract teachers needed for these subjects. I hope that teachers will not continue to take a Luddite attitude because that would be absolutely devastating to the future of our country.

Incentives for teachers in shortage subjects must be a priority. Rapid pay increases for proven engineers are necessary. Incidentally, they are necessary for proven teachers as well because, after all, it is the teachers who start selling the subject, attracting students, and lighting up people with the imagination they can bring to teaching. It is desperately important that they should encourage and inspire their pupils.

What should the Government do? I hope to be constructive. First, I see no reason—the DTI is always launching campaigns—why the department should not, as part of its 1992 preparation programmes, launch an awareness campaign which will extol the virtues of the many schemes started by various sectors of our engineering and other industries. Secondly, could not tax allowances be more generous and be introduced for continuing education? When individual engineers pay for their own attendance at education conferences and seminars they are funding the cost from their net salaries, after tax. They have to pay out of their own pockets. In contrast, employers can set such costs against corporation tax. We know how important is the growth of small companies. Surely one should encourage people to go on refresher courses as new technologies develop. To that end, tax allowances should be available.

Thirdly, there should be financial support for activities introducing schoolchildren to engineering. The noble Viscount referred to being taken round hospitals. I know that people are hunting graduates from both the independent and the state sectors and seek to attract them. I was impressed by the Institute of Mechanical Engineers' scheme called the Leonardo da Vinci series of lectures. Until recently it ran a teacher fellowship scheme. Under the scheme individual teachers spent periods of three months in industry, working alongside professional engineers.

I have always wished that we had sufficient stretch in our elastic to allow people, before becoming teachers, to spend at least a year working in industry instead of staying in the education cycle from the age of five so that the whole of their lives is spent in education. Teaching must increasingly grow closer to local industry and to industry in general. That was an imaginative scheme. The experience periods were preceded by an induction course and at the conclusion of their term in industry each teacher fellow was required to report on the experience and state how he or she would introduce engineering-related subjects into his or her school.

All that seemed to be running well but after 10 years of operation the scheme was dropped through lack of funds. It needed funds to provide for supply teachers in LEAs to take the place of the teachers while they were away on the course. It is a shame that the Government could not find some money to bridge the gap and encourage such schemes.

I have sought to draw attention to one or two areas where I believe the Government could and should move. Unless we go on hammering away at this subject and unless, as grandparents and parents, we sow the seeds of enthusiasm among the young with whom we talk and play we will never get the recruits who are so badly needed to maintain standards and support our balance of payments as the oil begins to run down.

6.15 p.m.

Lord Dean of Beswick

My Lords, first I join the preceding speaker, the noble Lord, Lord Orr-Ewing, in expressing appreciation to the noble Viscount, Lord Hanworth, for introducing this subject for debate in your Lordships' House. It is relevant to our survival as a manufacturing nation, which is the historic basis for all our wealth. If we fail in this facet we fail for all time.

Of course, we have been subjected to changing patterns. There are now identifiable skill shortages. The nature of skills and of shortages has changed since the 1970s when the difficulties of most firms lay in recruiting traditional engineering craft workers and draughtsmen or draughtswomen. Craft and technician skill shortages are still reported in some areas. However, the engineering industry's most serious recruitment difficulties now concern professional engineers, scientists, technologists and computing specialists.

Demand for graduate level knowledge and skills in engineering and computing has sharply increased in recent years as a result of both technical change and rapid output growth in sectors which have always been leading employers of graduates; in particular, electronic data processing equipment, telecommunication equipment, electrical instruments and control systems and electric consumer goods. Shortages of graduates, particularly experienced graduates, is an unwelcome constraint not just on output in these sectors but also in research and development and the ability of companies to undertake new capital investment.

The negative effect of skill shortages should not be underestimated. Even if they do not lead to actual loss of output, firms may incur extra costs as a result of paying for additional overtime work, for subcontracting work to outside organisations or, one could say, on contract work where penalty clauses apply. In the long term skill shortage constraints on innovation and the rapid development of new products and processes may cause British companies to lose market share to foreign competitors.

Present shortages at craft and technician level can be largely explained by cutbacks in apprentice recruitment in the early 1980s. However, shortfalls at graduate level reflect the inability of the education system to date to increase the supply of engineering graduates in line with the increased demand for high level engineering skills both within and outside engineering.

That of course deals mainly with what we call the trained engineer; the higher level person coming from the universities, colleges and so on. But there is another side. In engineering they are the people who will extend the frontiers. However, we have to recruit an army as well in order to carry out some of the functions and processes to make them increasingly available so that we can retain or increase our share of the world markets.

I was interested to hear the noble Viscount, Lord Hanworth, say that firms should be encouraging school children to visit factories to see what engineering is all about. I can recall just after the war when I had become a skilled engineer being periodically involved with youngsters coming round our factory to see what was happening. Sad to say, there has been a diminution of such visits. Often, if the children visit factories they are not conducted properly. Full explanation is not given and some of what they see happening can well frighten them off.

I go down to the bottom end and explain what I mean. During my stewardship as a Member of Parliament for West Leeds a few years ago, I had occasion to visit a factory in my area. It was busy because it was involved in producing a speciality commodity—ornamental drainpipes. Why was it so special? The reason was that money was being found to refurbish some of the historic buildings in London and various other parts of the country. The manager said to me: "I have vacancies for eight to 10 boys. But they come in, have a look round and then go away". I said: "With all due respect to the way the factory is organised and what it looks like, it is the worst looking foundry I have ever seen. It is worse than the pre-war ones that I used to go into to bring work out for the machines. Would you expect a son or a daughter of yours to want to learn an engineering skill in such a place.?" He had to say no. That is perhaps the extreme of the argument but it is very often indicative of what can take place.

I was interested to hear the noble Lord, Lord Orr-Ewing, speak about people from the universities and colleges going into management and so on and being acclimatised and made familiar with management in the factories. I had first-hand experience of this some years ago when I worked at Trafford Park. It became the vogue to bring in highly qualified people from the universities and to introduce them at a rather high management level, but they had no practical experience whatever. It was a total disaster because they could not talk the same industrial language as the foreman or the chargehand upon whom very often a company depended. If these people do not operate efficiently, do not know the job and cannot guide people, the whole business is a failure. No matter how clever the engineer, the draughtsman, the technician or the research people, the organisation will fail if things breaks down at that point.

Lord Orr-Ewing

My Lords, I so much agree with what the noble Lord is saying. But is it not true that the sandwich courses overcome this difficulty? I know of a number of companies that take only sandwich courses. They overcome the difficulty and they know where to slot in a person when he comes back to the company.

Lord Dean of Beswick

My Lords, I totally agree with that practice, and also the training of apprentices to go into skilled trades in a factory. There is no substitute for at least a considerable part of training being on site in the factory learning the skills and having them instilled into people. People have to earn a living; no one owes them one. All my life I worked on piece work and I made a reasonable living because I made sure than I knew the job and could carry out the various functions. It is essential in the interests of the operative even at factory level that he is trained in the best skills. That should reflect itself in the wage packet; otherwise the system will not work.

In some of the larger companies a young boy can go in as an apprentice and get right to the top. I believe that we have an example in your Lordships' House—the noble Lord, Lord Gregson. I think that he started as a boy at Fairey Aviation and became an internationally known figure in certain sections of engineering. Such achievements can happen.

What saddens me is the devastation that has taken place over the years. I am not going to make a political point because the process has been going on since 1967–68. In my trade union, the AEU, at that time its list of craftsmen was 700,753 and 123,319 apprentices. I am not going back just to 1979 to suit my argument because it was happening before that under a variety of governments. That part of it is not a political argument.

I got in touch with the AEU today to ask what the present figure is when industry is supposed to be on the upswing. A percentage of the kids now coming in through the training schemes will, we hope, be the managers, technicians and research people of industry in only a few years' time. For the year 1987–88 the figure for craftsmen was 318,711 as against over 700,000 in 1967–68. That is an absolutely tremendous and appalling drop. The AEU figure for the total number in training in industry is 32,500, compared with the 1967-68 figure of 123,319 apprentices. They are not all apprentices. I hazarded a guess and asked, "Would it be reasonable if I used a figure of 30,000?" The AEU said "Yes, that is about the figure".

At present we are training only a quarter of the number that we were in 1967–68 and that gives room for some very serious thought. In the past there have been debates in your Lordships' House where from all sides of the Chamber it has been said that we were destroying our seedcorn. It is a phrase that I and other noble Lords have used. It is sad that that is so. A previous speaker mentioned the rate of training in Japan, which is about five to one in comparison with what we are doing.

I can remember about 12 to 13 years ago going on a visit to Venezuela in a parliamentary delegation led by the noble Lord, Lord Mellish. As noble Lords know, that is a country which is sitting on a mountain of wealth. It has so much oil that it does not know what to do with it; it has so much coal that it is hardly using it; and it has the biggest iron ore deposits in the world. When we spoke to the equivalent of our Cabinet Ministers, who were young men, they did not talk about producing lawyers and economists; they spoke about producing engineers and builders. They said, "Those are the people we want; we do not want people to lecture us on the arts. That is no good to us at our stage of development". That is the kind of competition that we have to deal with.

Attracting young people into engineering has to be undertaken as a public relations exercise. I do not know whether any of your Lordships has time to watch the quiz programmes on television where the participants are young men and women of 16 to 18. Often the person controlling the show will ask of a competitor, "What do you hope to be?" I have never yet heard one say that he or she wishes to be an engineer. Something is wrong. I am speaking of women as well. During the war women were recruited into factories in large numbers and they were employed not only in repetitive work. Some of them developed skills equivalent to those of fully skilled men. I believe that there is room for encouragement to make the career attractive.

Once again I do not wish to make a political point. But because of the way our economy is run, very often in the private sector when a company hits a bad spell it cannot be cushioned against the future, and it may pick up in two or three years' time. The company has to unload the very people that it should be retaining. There have been numerous such cases. I do not wish to quote particular ones, but there have been special design teams working on certain products which have been broken up. They cannot be replaced. I believe that some of the points made by the noble Viscount, Lord Hanworth, in his opening speech and by the noble Lord, Lord Orr-Ewing, need looking into. We cannot rely only on training in our manufacturing industry such as it is. That is what we are talking about. We cannot rely simply on market forces.

The noble Lord, Lord Orr-Ewing, mentioned Japan. In certain countries cheap labour is available, for instance, South Korea. We shall never be able to compete with those countries. They are even undercutting the Japanese. If we compare like with like in relation to our competitors in Europe we will find that we are at the bottom of the league. We are well down on France, Germany and perhaps even Italy. If the economy is to pick up—and it is doing so—and we are to make the advances into the sunrise industries that we have to, it is essential that somebody grasps the nettle. It cannot be left completely to the firms.

I do not know what form of encouragement can be given, but if we do not do something the upswing being enjoyed by our competitors will not take place here. In 1992 there will be a market of more than 300 million people. It will be the largest single market in the world. Unless we solve the problem, we shall miss that opportunity. I am glad that I have had the opportunity to speak and I should like once again to thank the noble Viscount who initiated the debate.

6.30 p.m.

Lord Rochester

My Lords, the case for increasing the quantity and quality of trained engineers and technicians has been so well presented already that there is no need for me to dwell on it for long. The most serious aspect of the shortage is the effect it is having on the capacity of an increasing number of companies to develop new products and to raise manufacturing output. Demand for graduates in engineering industries and other sectors is, I am told, on a strong upward trend. On the supply side, the outlook is worrying. Additional places provided on engineering courses are not being filled. Applications for them have been going down and wastage from some university courses has been estimated at 20 per cent. or more, twice the average for university courses generally.

The shortage of technicians is equally serious. The Institute of Employment Research has forecast that demand for technicians will increase to such an extent over the next five or six years that the present level of recruitment will clearly not suffice to meet future needs. Overall, the problem looks like getting worse, as a result, as has been said, of the scarcity of maths and physics teachers in schools and especially of the forthcoming decline in the number of school leavers. This will bring a corresponding increase in competition between employers to recruit the most able and the best qualified of those young people.

The reasons for the sorry state in which we find ourselves are many and varied. They lie deep-seated in the history of the past 150 years, in popular attitudes and misconceptions, in ecological and even ethical constraints and in an education system that is still less closely linked to industry than the systems in, say, France or Germany. The most fundamental factor is the relatively low esteem in which industry in general and engineering in particular continue to be held in society as a whole and especially among students. For me this is all the more disturbing because I recall from first hand experience that industry in fact provides opportunities for trained engineers to apply their skills and knowledge in complex situations involving human relations and interaction between technical, financial and commercial considerations.

That is enough from me about the problem and its causes. The question that matters most is what is to be done about it. I should like first to pay tribute to the action that has already been taken by bodies such as the Engineering Employers Federation and the Engineering Industry Training Board. These two organisations together with the Department of Education and Science have launched simultaneously two surveys designed to help explain the shortfall of young people qualifying as engineers. One is looking at the factors which influence young people studying for or holding maths and physics A-levels in deciding whether or not to study engineering. The second is inquiring into why so many engineering students in higher education—up to 20 per cent. or more—fail to complete their courses.

The results of the surveys should be available this summer, and in my view they cannot come too soon. I am told too that to alleviate the shortage of maths and physics teachers the Engineering Industry Training Board has initiated a bursary scheme. It is aimed both at increasing the number of teachers and at establishing working links between the teacher under training and a local engineering firm. The teacher is thus able to see for himself or herself what is actually being done in industry to maintain the link. He or she can thus give students real examples of the use of maths in practice.

The board also recognises the significance of the increasing proportion of women in the labour market and the consequent need to attract more of them to engineering jobs and to encourage firms to employ them. A relevant project is the Technician Engineering Scholarship Scheme, aimed at 18 to 25-year old women and now successfully established at five colleges. This is a good example of a course which combines academic education with on-the-job industrial training. Apparently, it has an excellent record in placing women in jobs where their skills are needed.

The chemical industry, in which I once worked, is also playing a leading part in seeking to recruit more women. For example, one major chemical company has introduced a comprehensive policy which includes provision of career breaks, improved maternity leave arrangements and a female support network. So far, so good, but clearly much more needs to be done. I was once responsible for training, including management training, in a large industrial organisation. At this point I should like to say how much I agree with what the noble Viscount, Lord Hanworth, and the noble Lord, Lord Orr-Ewing, said on the importance of that subject in the education and training of engineers. The best definition of management I have ever heard is "getting things done through people". 1 t cannot be put better than that. Because of my experience in that field it is on the subject of training that l should like to concentrate in the rest of what I have to say.

Whatever may be thought of the Government's White Paper Employment for the 1990s—I know there is to be a fuller opportunity next week to debate the White Paper—it is encouraging at least that in the preface to the document the Secretary of State for Employment has written: Above all, we must invest in the skills and knowledge of our people and build up industry's skill base through a strategy of training for life". I am sure he was right to add that the prime responsibility for this investment lies with employers. That being so, it is cheering also that the Director General of the CBI said recently that training must be at the top of the agenda for all businesses.

The question remains whether the new framework for training envisaged by the Government in the White Paper will in practice achieve its purpose. The Government's declared aim is to establish the system in a new partnership with employers. Because in my experience training is best done where it is work based, I am all in favour of involving employers to the maximum extent possible. However, I am sorry that in seeking to establish such a partnership the Government have been so dismissive of other interests having a stake in the enterprise.

The new framework is to operate on three levels: national—to develop policy and promote training; industry—to set standards and monitor the quality of training; and local—to ensure that employers' training is of the scale and quality to meet the needs of the local labour market. At the same time the seven remaining industrial training boards have been told to plan to become independent non-statutory training organisations as soon as possible. As such, they will no longer be empowered to raise levies, but will instead be free to obtain income from charges for services. I only hope that that policy will work because, before their jobs were brought to an end last year, the chairmen of what was the Manpower Services Commission and then became the Training Commission expressed concern about the performance of many of the non-statutory organisations that were established in sectors where training boards were abolished in 1981.

The Engineering Training Board is concerned that the benefit to engineering of widely understood common training standards is threatened by the Government's proposals. It advocates that the non-statutory successor to that board should be enabled to provide a service of standard-setting and qualification across all sectors employing engineering skills. It feels that there is otherwise likely to be fragmentation of the existing system among different sectors and a reduction in training for core engineering skills with consequent damage to labour mobility, particularly in craft and technician occupations. On this point I should be grateful if the noble Earl, Lord Dundee, could provide the engineering industry with any reassurance when he winds up the debate. I must confess that I failed to give the noble Earl notice that I was going to make that point and therefore I shall understand if he is able to give only limited information in reply.

At local level the White Paper contemplates the establishment of training and enterprise councils to meet local skill needs. I am sure that that is the right approach, but in my view it is vital that under those arrangements there should be adequate crosssectoral links. That is because in practice the needs of local labour markets apply across sectors rather than being identifiable only in respect of individual industries.

If, for better or worse, so much responsibility for training is now to be vested in employers alone, there seems to me to be a stronger case than ever for providing more incentives to employers than there are at present, so as to encourage them to give the training throughout working life that it is the Government's aim to achieve.

I very much agree with the remarks made by the noble Lord, Lord Orr-Ewing, about the present contrast between individual engineers who have to pay for their own attendance at educational conferences and seminars, with funding coming from net salary after tax, and employers who can set such costs against corporation tax. Clearly the noble Earl cannot commit the Government on that point at present. However, I hope that he will at least undertake to pass on to his right honourable friend the Chancellor of the Exchequer the suggestion made by the Institute of Mechanical Engineers—to which the noble Lord, Lord Orr-Ewing, also referred—that individuals attending conferences and seminars which are run by professional institutions should be allowed to set the costs of such attendances against their personal tax demands.

I have spoken for long enough, but there is one last point I should like to make. I speak as someone who was, until recently, chairman of a university council. I must say that I strongly support the reaction of the Committee of Vice-Chancellors and Principals to yesterday's announcement about the grants which universities are to receive next year from central government. The committee is reported to have said: It is very hard to imagine what the education Ministers must be thinking when they say they would like to see an increase in the number of graduates, but cut our budgets". I welcome the Motion which the noble Viscount, Lord Hanworth, has introduced today in such a timely way and I trust that in some measure it may help to solve the problem to which he has so rightly drawn our attention.

6.45 p.m.

Lord Lucas of Chilworth

My Lords, I greatly admire the persistence of the noble Viscount, Lord Hanworth, in this subject area; but I have a feeling of déjàvu,. 1 have not prepared a speech, but I have read in Hansard the report of the debate which took place on 27th February 1980 in your Lordships' House. On that occasion we discussed engineering and the Finniston Report and we took five-and-a-half hours to discuss the matter. Indeed, the noble Lord, Lord Howie of Troon, was a member of Sir Monty Finniston's committee. I must say that if I were to précis the report of those proceedings to, say, three hours and rewrite it, we would then have a rehearsal for tonight's debate because, essentially, nothing very much has changed.

In his report, Sir Monty Finniston emphasised the need for an engineering authority. However, that concept did not quite get off the ground. Incidentally, it is interesting to observe, as did the noble Lord, Lord Gregson, in the 1980 debate, that: We cannot have an increased engineering dimension in industry without somebody paying for it, and at a time, as the report points out, when industrial profitability is at an extremely low level, and from the squeeze of 18 per cent. inflation and 20 per cent. interest rate, and the very high exchange rate, profitability is being squeezed even smaller".—[0fficial Report, 27/2/80; col. 1350.] He wondered how we would pay for what we want. However, things have changed an awful lot in that regard.

My noble friend Lord Orr-Ewing said that he wanted to point out some of the things which the Government should do. Indeed, other noble Lords have also suggested what the Government should do. I start by asking: what is industry doing? Why should it he the Government? Perhaps I may return to that point in a moment.

From the great idea of the engineering authority, we ended up with the Engineering Council. That was supposed to draw together all institutions. But the institutions have boldly sat down in the street, as learned institutions, paying lip-service to the idea of the principle of engineers and engineering being the keystone of our prosperity. When the council started, it was funded by the Government. That lasted for three years; it is no longer the case. However, the council is rich. I ask again: what is the council doing about it? Why do we keep asking what the Government are doing about more funding in universities, in schooling, and so on? The question is: what is industry doing about it?

I recently visited a factory which, 10 or 12 years ago, took in 600 apprentices. Last year's intake was 25. However, they are there: these are boys and girls wanting apprenticeships. I believe that the Engineering Council could and should do more. It is up to industry, which now funds it, to ensure that the council does more in that area.

Perhaps I may quote from the maiden speech of the noble Lord, Lord Scanlon, in February 1980. At the time he was chairman of the Engineering Industry Training Board. 1 shall select just one or two sentences, although I would have liked to have read the speech in its entirety. It merits re-reading. The noble Lord said: We must not consider the training of professional engineers in the abstract". and referred to, the need for academic training to be associated with practical training". He then talked about general education and the three "Rs". My right honourable friend the Secretary of State for Education and Science has dealt with the three "Rs" in the new core curriculum and syllabus. I congratulate him. We start from a good sound basis at an early age.

The noble Lord, Lord Scanlon, was talking about the three "Rs". He went to a further "R"—the question of resources. I wish to turn to his last "R". He said, at col. 1364: My final 'R' is on the question of remuneration; and here I wish not so much to make a reservation, but to put forward a reminder of what Finniston had to say about remuneration or rewards. I quote from the report itself: 'Industry must establish the rewards and prospects for good engineers which will attract more of the country's most able young people into a lengthy and demanding engineering formation and thence into manufacturing industry'.". The Government, universities and schools cannot do that.

I recall my time as a junior Minister in the Department of Trade and Industry. We had the 1986 Industry Year. I went around the country every week talking about the need for industry to persuade young people and teachers, in a variety of ways, that engineering was a good thing to come into. My noble friend Lord Orr-Ewing and the noble Lord, Lord Dean of Beswick, asked, as everyone asks, "Why don't they come in?" We had a survey during Industry Year. Engineers came bottom of, "The job that I should like to come into when I grow up". Surprisingly, teachers came high. Politicians came higher than engineers. How odd! Engineering is much more fun than being a politician, and it is better remunerated, if I may say so. We do not have that part of it right. The Government can do little more than set parameters. Taxation is one element, but industry is making good profits. It must fund its own investment in people.

In higher education we have Cranfield Institute of Technology linked with the University of Compiegne in a dual degree, mostly of course for first and second degree postgraduates, where it is mandatory to take an arts course so that one is a more com olete person. I like to claim that I am an engineer, although I admit that I am not chartered and do not belong to those institutions to which some of my noble friends and noble Lords opposite belong. One can join a company and be a good engineer. One begins to move, but to reach the highest echelons one has virtually to abandon one's craft and move to another—management, finance and so forth. But the fundamental difference is that an accountant or lawyer going into industry advances until he reaches the top, still practising commercial law and accountancy. Engineers have to abandon engineering.

The chap at the beginning of his career says, "Well, look, there is a block at about age 37. I am not going to get to £30,000 a year. That is not for me. I shall go into accountancy or law and do company accounts". That deals with that type of person. There is another type of person, the type about whom the noble Lord, Lord Dean of Beswick, was talking. I know that he has a great deal of affection for them. They are those who are perhaps more blessed with being able to do things with their hands to expand their minds rather those who have broad minds and who then make their hands do things. I am talking about the average apprentice. Why does he not come into the engineering business? He does not see a great deal of future in it. The RSA and the Government put some millions of pounds into Industry Year and made some impact. What has industry done since then? It has done a lot, but not nearly enough.

We must look much wider to harness the talents and to bring boys and girls and men and women into engineering. If industry knew what it wanted and talked more generally with education, the courses and the basic teaching could be designed o meet that need. Again I ask; does industry know what it wants or does it just say, "I do not have enough engineers"?

I cannot disagree with anything that has been said. The noble Lord, Lord Rochester, talked about esteem. The noble Viscount, Lord Hanworth, mentioned status. My noble friend Lord Orr-Ewing talked about the prestige of the engineer. It does not matter what word we use. It will not come like the rain in winter or the sun in summer, it has to be earned. But it must be earned within an environment that industry itself provides for its expression and then for its reward to filter down. Notwithstanding the demographic situation in 10 years' time, we shall be able to face the problem and make so much better use of that human resource if we treat it properly from the beginning. That is the way that I should like to see industry start.

6.57 p.m.

Lord Howie of Troon

My Lords, I must join other noble Lords in thanking the noble Viscount, Lord Hanworth, for giving us the opportunity to discuss this important subject. There is something which he and others might have said but did not say. It is that engineering is difficult. It is as demanding and as intellectual a discipline as any. The mathematics and physics necessary for engineering are complex. They must be allied to organisational and management skills of a fairly high order. Because of the difficulty and off-putting nature of mathematics and physics—the point has been made over and over again during the debate—something must be done to secure a higher level of teaching of maths and physics in the schools. There is no question about that. It is the most important thing we can say tonight. It is the aspect which the Government should do most about to overcome the shortage of engineers.

The paradox about engineering skills is that they underpin the kind of industrial society in which we live. A modern industrial society is an engineering society. It is not an accounting society or a lawyers' society or an actors' society; it is an engineering society. The physical infrastructure in which we live and which we see every day—the roads, the railways, the harbours, the airports, the canals, the buildings, the sewerage systems, water supplies, electricity and communications are all aspects of engineering —seems to pass unnoticed by the public eye. Almost everything that we see is an aspect of engineering with, possibly, a little help from architects and in the country from farmers, foresters, and perhaps landscape environmentalists.

This is little understood in society and in the media. Engineers, quite rightly I think, become irked and irritated when, for example, they land a man on the moon and find that that is described as a wonder of science. It is not a wonder of science at all: it is an engineering feat. Then there was the good designer who was responsible for designing the nose of the 125—what Peter Parker calls "the nose job"—and who was described as the designer of the whole train, though we know that he designed the bit that you see at the front and engineers designed the rest of it.

It is little wonder that engineers get a bit irritated. In fairness, though, I must say that that designer tries to put the record straight whenever he gets an opportunity. In the face of that kind of lack of recognition and lack of appreciation, allied to the relatively low salaries which engineers command—that was mentioned earlier—and the difficulties of the discipline itself, it is not surprising, at any rate to me, that there is a shortage of engineers.

What can be done to reduce that shortage? Nothing can be done to make engineering easier: if anything, it will get more difficult. However, it is not as difficult as all that because quite a few of us have managed to handle it reasonably well; but there are difficulties. The Government have done something about recognition in a minor but quite important way. During the passage of the copyright Bill the Government agreed that the author of a building could be not only an architect but an engineer. That is a piece of public recognition, which, if engineers use it properly, should bring a certain amount of honour to the profession. So that is a small step but a step in the right direction.

However, if the Government deserve praise for that modest step, I do not think they deserve any praise in relation to salaries—not that engineering salaries are the Government's direct business. However, there is little doubt that the Government's policies in relation to fee competition in consultancies will have the effect of reducing the incomes of consultants and consequently the salaries of the staff they employ. So the Government's policies will have an ill effect on salaries which are already too low.

It is the employers, of course, who are responsible for salaries, and the message to engineering employers is really quite simple. They should pay more, and if they have to charge more they should charge more. The employers will argue that they pay what the market demands they pay, but they should realise their responsibility to raise the level and quality of the staff they employ. They can only do that by attracting people into the profession by paying them properly.

Despite what the noble Lord, Lord Lucas, said a Moment ago, I think the Government should be brought into this at least as much as industry. There is one thing the Government can and should do—and in this comment I am really following what was said by the noble Lord, Lord Lucas. The Government should reread the Finniston Report. It was perhaps before the day of the noble Earl who is to reply to this debate, because it was published nine years ago last month and I question whether he would remember it in great detail. Indeed, I will not ask him to reply in detail.

In the report Sir Monty Finniston and his committee wrote the following—and I fear that this quotation is quite a lengthy one: Among those manufacturers in this country and overseas who have prospered in world markets, we found a common characteristic in the way they had built upon excellent engineering, integrated into enterprising and forward-looking market and product strategies. Management in these companies clearly regarded engineering as the common factor linking the inputs of the various specialist functions within the organisation to its overall objectives. Engineers were involved in each stage of the manufacturing process, from the technical appraisal of world market opportunities and the translation of those appraisals to the design of products and systems to exploit the opportunities through to the development, manufacture, sale, delivery and service of the products. There was thus achieved a continuous interplay between marketing, design, research, manufacturing and selling, with all concerned seeking to ensure that the company's products met the demands of world markets". The committee said a little later in its report: To convey the interaction of engineering with non-engineering factors in determining manufacturing performance, and to emphasise the importance of considering the whole manufacturing system and not just aspects of it, we have adopted the concept of the 'engineering dimension'. The committee went on to say this: The engineering dimension is understood and well developed in successful manufacturing companies, but there are too few such companies in the UK to produce sufficient wealth to match the social and economic expectations of the nation". In order to attempt to galvanise the economy and the engineering profession into an understanding and an application of the engineering dimension the committee said: Our most important single recommendation"— I emphasise that— linked to very many other proposals in various sections of the report is that the Government should establish a new statutory organisation —a national Engineering Authority—with powers granted to it by Parliament to advance the engineering dimension in national economic life and particularly in manufacturing". That report was debated in February 1980, as the noble Lord, Lord Lucas, has said. I cannot remember whether I spoke in that debate, so little has changed; but if I did I could probably have made the same speech again tonight—and perhaps I am making the same speech, for all I know. The Government did not implement that recommendation. Instead they set up the Engineering Council without statutory powers, and left it in a somewhat uneasy relationship with the great engineering institutions. The great weakness was to set it up without statutory powers. That is an unsatisfactory state of affairs, since the work of the council and the institutions often overlaps and their ambitions are not always the same. Nevertheless, they have both done a good deal in their respective ways, especially in relation to raising standards of engineering training and education. I think it is fair to say that the Institution of Civil Engineers, of which I am a fellow, is in the lead in this respect, but the others are not far behind and neither is the Engineering Council.

Can the Government help? Yes, they can. In a statement last year the Engineering Council commented on the need for a core curriculum at the upper end of school education. It said: The Scottish system and the International and European Baccalaureates, where a core of compulsory subject areas is prescribed, provide valuable models". The Government are going some way in that direction. That is to be welcomed, but are they going far enough? Are they going as far as the Scottish system and as far as the international baccalaureate? I do not think that they are. They should listen to the Engineering Council's advice and follow it more closely than they have.

The Government could do something else: they could fund the Engineering Council. I know that the noble Lord, Lord Lucas of Chilworth, was not too keen on that when he spoke. He thought that industry should help, as indeed it should. When the Engineering Council was founded in 1981 it was given a three-year start up grant, which it no longer has. A good deal of the effort, activities and energies of the chairman of the council, Sir William Barlow, are devoted to trying to drum up funds. I am not sure that that is the best use that could be made of the chairman of the Engineering Council.

The fact that the council has no government financial support is all the more startling when one considers that the Design Council has. If the Design Council is supported in its funding by the Government—it is in part, though I believe that the funding has been reduced lately—why is not the Engineering Council also? After all, a large part of the design profession's work is related to engineering. Without an engineering profession there would be little for designers to design except T sh. rts, corporate identities and suchlike, at which it is very good.

Talking of the design profession reminds me that there is something else the Government could do. They could promote engineering in the same way as they deliberately and energetically promoted design. There was a period of a year or two—and still, in fact—when one could never attend. any design function without a Minister being present. Whether the function was in London or Aspen in Colorado, the Minister would be present extolling British design and saying how important the design profession is. One result is that, from having been a fairly obscure profession a few years ago, the design profession is now a notable one. Therefore, the Government could exercise their energies in talking up the engineering profession in the same way as they talked up the design one.

Engineers could do a lot more for themselves. It is not enough just to ask the Government to do it for them. They could speak up for themselves a bit. I was interested in the comments made earlier by the noble Lord, Lord Orr-Ewing, when he spoke of engineers learning how to speak and then getting up on their hind legs and speaking about the profession and promoting it themselves. They could go into politics, for instance. There are quite a few engineers in this House, but I can remember a time 20 years ago when the noble Lord, Lord Orr-Ewing, and I were part of a tiny group of six chartered engineers. I think that there are only three in the other House. One has retired as a chartered engineer and is the Secretary of State for the Environment, so there is little engineering to be got out of him. Engineers could do a good deal for themselves along the lines suggested by the noble Lord, Lord Orr-Ewing.

This has been a most interesting subject to discuss, if only to remind us how little has been done on the ground—though something has been done—since the Finniston Report was published nine years ago. 1 am grateful to the noble Viscount, Lord Hanworth, for giving us this opportunity.

7.14 p.m.

The Earl of Halsbury

My Lords, I start with an apology, in that I had to leave the House at six o'clock for an urgent engagement in the Peers Guest Room, a fact of which I warned my one time noble friend Lord Hanworth. I was not indulging in the pleasures of entertainment but I was receiving highly technical briefing in the complexities of the Water Bill, which will come before your Lordships' House in due course.

With that by way of apology to the noble Viscount, I turn to the question of engineering supply and demand. Education ought to be a lifetime process that goes on indefinitely. It is true that much is concentrated into one's formative years. After 15 years in retirement I cannot address your Lordships' House without preparatory work that contributes to my self-education in later years. I have never found employers reluctant to release me for the purpose of attending super-specialised courses in my own specialised subject. For many years I was an executive director of Joseph Lucas and its subsidiary companies. When anyone looked like a high flier at middle management level, we sent him off to the Harvard Business School to learn what it had to teach, and he came back a better man for it. A lot of what he learnt rubbed off on his colleagues. Therefore, there are enlightened employers. I have been lucky to have worked for a number of them in the course of my career—Lever Brothers, Thomas Firth and John Brown, Joseph Lucas, the Distillers Company and, in partnership, with BP.

When people are crying stinking fish about the levels of management and expertise in management in British industry, I sometimes ask myself where I have been all my life because I have never come across this at all. If we could adjust the average to the level of the best, as in so many other contexts, we should be very well managed.

There is much abuse of this word engineer. Etymologically it means the exercise of ingenuity. It started in the military context of those who built mines and saps to blow up other people's fortifications or raised fortifications that could not be blown up or sapped. When the canal building boom came in the 18th century and later in the railway age it was felt that transferees from the military engineering side, the Royal Engineers, were not really the right men for building canals on that sort of scale. Therefore, the Institution of Civil Engineers came into being; after that came the mechanical engineers and then any number of institutions of engineering, with the result that the engineering industry is very much fragmented between the chemical engineers, the mechanical engineers—but I will not go through the whole lot, there are too many of them. Every time any one of them tried to get a new chartered status all the others had to be circulated by the Privy Council, because their name contained the word engineer, to find out whether there was any objection. Sometimes they had and sometimes they had not. In the latter case a new chartererd body was brought into existence; in the former case it was not. The Engineering Council was brought in as a sort of godmother for all new institutions that came into existence.

When I was a boy the locomotive engine driver wiping his hands with an oily rag was known as the engineer. This of course was entirely a misapplication of the term. The engineer is the man who designs the locomotive. The engineering technician is the chap who knows how to manipulate it, knows his signal lamps and so on.

In this context I remind your Lordships of an experience I once had as a member of the Council of the National Engineering Laboratory in East Kilbride. We always had an annual meeting up in East Kilbride followed by a lunch in one of the hotels in Glasgow. On one occasion the lift stopped between floors. After pressing all the buttons and finding ourselves unable to get the lift working again we pressed the emergency button and picked up the telephone. In due course we got in touch with the general manager of the hotel, who said that he could do nothing until he got an engineer. Here was the cream of the engineering profession—modesty requires me to say, with the possible exception of myself—imprisoned in the lift. The trouble was that, although he needed an engineer, as he thought, they were inside the lift, not outside. What he really wanted was an electrician—the man who knows which fuse has blown and where it can be replaced—and he is a technician.

This is reinforced by the brief of the Engineering Employers Federation on this debate, which says that the shortage of engineers, both chartered and incorporated, is exacerbated and made worse by the long-standing shortage of technicians. The technician is the man who manipulates what the engineer has designed. Design is always a team effort. Someone has to make a scrutiny of possible alternative starting points for a given design and a decision has to be taken. In the context of nuclear engineering, one possibility is to take a nuclear boiler and put the whole thing inside a huge ferro-concrete and steel barrel with tension rods inside it to hold the whole thing together. But one still has to decide whether one is going to put the barrel on its side or on its end. If one decides to put it on its side, one gets Trawsfynydd, and if one puts it on its end one gets Hunterston-B, Torness and others. Someone has to take that decision and that person must be a man of very great experience.

The status of the chartered engineer is that of someone who, irrespective of which branch of engineering he is in, has taken a three-year degree course, served a two-year graduate apprenticeship and then has two-years' experience in employment. He is then qualified to be an associate, but not a full member of his particular specialised institution. After joining the ranks of management, he can become a full member and put the initials CE, which stand for Chartered Engineer, after his name. It should be the proper ambition of every young engineer to acquire Chartered Engineering Institution status and to take his place not with the man who wipes his hands with an oily rag, but with people such as Sir Tom Sopwith, the late Lord Baker, Sir Richard Southwell, Sir Barnes Wallis, Sir G. I. Taylor and Sir Frank Whittle. Those men gilded everything they touched with the inspiration of their thought.

Incorporated engineers differ only from chartered engineers in so far as they have attended a polytechnic and have acquired an HNC in engineering rather than having attended a university and acquired a degree. But there is nothing to stop the incorporated engineer going on further and taking the examinations of the chartered institute and being qualified to put the initials CE after his name. Let us not in any way depreciate incorporated engineers as second-rate citizens. The designer of the redesigned particle accelerator at CERN built it for very much less than its original redesign cost. That designer was an HNC man who stood beside the giants of the engineering industry.

If we compare the qualifications required of an engineer in this country with those required in France or Germany, we find that they are very much on a parity if we are thinking in terms of the French word "instruction". But our qualifications are somewhat below par if we are thinking in terms of the French word "éducation". The latter word deals with one's general cultural background. French and German engineers would be much better at manipulating their mother tongue than the average graduate engineer in this country. That is entirely due to our habit of premature overspecialisation. I hope that the core curriculum to be introduced under the new Education Reform Act will do a lot to correct that.

There are disciplines auxiliary to engineering. There is applied mathematics, for example, and there is metallurgy. An applied mathematician must know how to turn a differential equation into a finite difference equation ready for computerisation after he has inserted the boundary conditions. He then has to evaluate the stress concentration on things like pipes and flanges and interpret the results in terms of plastic theory and fatigue theory. That is, practically speaking, the whole of chemical engineering, apart from a little thermodynamics, which is really quite kid's stuff for the most part. There is also the design of heat exchangers and fractionating columns.

What is the specification of what we want? Do we want more engineers? The Engineering Council and the Fellowship of Engineers, to which I have the honour to belong, have not yet decided on exactly how many more engineers, if any, we need. However the Engineering Employers Federation says that we need a lot more engineers. It says the situation has been exacerbated by a shortage of technicians.

I have two points of principle here. One of the points is an assertion that I cannot buttress with evidence. But I believe that if we sought the evidence we should find it. All professions in the UK are underpaid compared with their opposite numbers on the Continent. One can compare doctors, engineers or lawyers for example; they are all underpaid compared with their Continental counterparts. Unless we do something about that I can foresee that in 1992 there will be a massive brain drain to Europe. As I have said, that is an impression I have received following remarks I have heard. I cannot lay proof before your Lordships' House.

My next point is that good physicists and mathematicians command a high price in industry. The salaries in industry are higher than the egalitarian salaries paid in schools. The result is that educational establishments only manage to recruit not the best but the second line, as it were, of people available for employment. Those people are less inspiring to children than their high-powered counterparts in industry who earn a premium. However, I hope again that the Education Reform Act will alleviate the problem to some extent.

Let us compare the arts man with the engineer. I shall take as an example an historian. There is only a small amount of employment for historians, as historians, outside universities. They may, of course, go into industry and, being educated men, they will probably do better than uneducated men. But there is nowhere where they can get a premium on employment just because they are historians. The result is that schools can recruit good arts men on that basis. My conclusion is—I am sorry if some people may not like this, but I believe the Front Bench may approve of what I am going to say—that the market mechanism must solve the problem. Let us reject egalitarianism in schools. Let us recruit physicists and mathematicians at the going rate in industry. Engineering will not be taught in schools because it is not a subject that can be taught in schools. But that component common to engineering and physics which is known as mechanics and includes statics, dynamics and mathematics will predispose students to consider studying engineering at university if those subjects are well taught in school. I believe that would be the ultimate solution to the difficulties which the Engineering Employers Federation have put before me.

7.28 p.m.

Lord Whaddon

My Lords, my noble friend Lord Hanworth put his finger on one of the great debilitating diseases in British industry—the low status of engineers, which leads to poor recruitment and indifferent performance, which in its turn leads to poor recruitment again. Britain has a particularly depressing record in this regard, but we are not the only ones who suffer to some extent from this disease. The United States has shown some symptoms. Forty to 50 years ago the production engineer of the United States was king. Yankee know-how was famous throughout the world.

But then there came a time when the engineer was taken more for granted in the United States and the salesman became the important figure in a company. In more recent years as the huge conglomerates were built the accountant became king. By then the performance of US engineers had begun, if anything, to decline. It had become all too common to tolerate 1, 2 or 3 per cent. rejection in production lines. Those levels are completely unacceptable in Japan. Recently America has begun to feel the effects of that in a dramatic drop in its balance of payments position.

It is noticeable that recently the Americans have begun to pull up their socks. In advertisements companies are offering to pay engineers far more and they are recruiting to higher positions, including board level, those production engineers whose reputation had declined. They are taking some action to put the position right.

Many references have been made during the course of this afternoon's debate to the deplorable position of engineers in the United Kingdom. My experience has been in the chemical industry and my acquaintances among engineers are almost exclusively chemical engineers. I must say that they do not appear to have anything like such a depressing record as mechanical and electrical engineers. British chemical engineers are among the world's finest. They are well paid in comparison with their colleagues in mechanical and electrical engineering. It is common for the boards of chemical firms and engineering companies to recruit chemical engineers to the highest positions on their boards. As a result the British chemical industry as a whole is one of the great success stories of this country.

Why is there that difference? Why is it that chemical engineers seem to do so much better than their colleagues in mechanical and electrical engineering? One of the explanations is that the chemical engineer has a broadly based education. The noble Earl referred to the broad cultural base to be found among engineers in Germany and on the Continent. I believe that chemical engineers in this country receive a broad scientific basis to their training including not only chemistry but also physics, biology and the philosophy of science. That produces a rounded figure who can hold his own as an educated man with anyone in the world.

The Earl of Halsbury

My Lords, perhaps the noble Lord will forgive me. if an engineer cannot write good English prose, he will have a problem in expounding his theories to third parties.

Lord Whaddon

I thank the noble Earl.

In addition it is very common for chemical engineers, as soon as they are recruited, to find themselves in an international and cosmopolitan environment. Somebody recruited to a chemical engineering firm is more likely to find himself sent to Venezuela than to Birmingham or to Glasgow.

I wonder whether there is anything to be learnt from that experience which could be of advantage to the other branches of engineering. Should we be thinking of a broader based education for electrical and mechanical engineers, including not only mechanical skills but also management training, some knowledge of finance and accountancy and the wider world of business? We should make sure that they are sent out to visit the customers to whom their products will be sold. Surely it is also essential, since our products must be sold worldwide, that the engineers themselves must have experience of other countries. In the course of his training it should be normal for an engineer to be sent on exchange visits to companies in Japan and America to learn how our competitors abroad cope with problems.

I suggest that if we can introduce a little more glamour into engineering, which it has tended to lack, that would not do any harm in stimulating the prestige of the engineer and the recruitment of the best brains, which we so desperately need.

7.35 p.m.

Lord Peston

My Lords, in his excellent introduction to this extremely interesting debate the noble Viscount, Lord Hanworth, referred to history. It is true that we have all been around this course many times before. I hope that noble Lords will forgive me if I offer the following quotation from a lecture on technical education. Reference was made to: the panic cry that this county is losing her position among the manufacturing nations. I believe this cry to be true and that the industrial supremacy of England is endangered for lack of knowledge, in spite of the practical aptitudes of her people". I could quote much more from that lecture on technical education. It was given by Lyon Playfair in 1870, at about the time of the introduction of the 1870 Education Act. This is not a new problem, as noble Lords have reminded us.

The problem was brought to our attention again at a critical time by the Finniston Report. When preparing for today's debate I looked back at the Finniston Report and was depressed, and even shocked. In those days it seemed that we were optimistic that something would happen. It seems odd that today's debate is not about all the great achievements resulting from the Finniston Report. It seems instead that many people have forgotten the Finniston Report.

The problem is not new, but that does not mean that it is not of overwhelming importance. My contribution to the debate can only be to add a little gloss to all the points that have already been made. I think that it would be virtually impossible for me to add anything new. I hope that noble Lords will therefore forgive me if I do not repeat everything they have said, merely adding that I agree with them, as I do.

The tone of the debate kept changing. We are asked to draw attention to the case for more trained engineers and technicians. I do not want to bandy words about as to what is an engineer and what is a technician, but I must emphasise that the issue relates to skills at all levels. Noble Lords have gone into those aspects of the subject which interest them most, but we ought to recognise that the future of our country depends on the value of improved training from the top—the graduate engineer—to the lower level—the technican.

As a university teacher I do not like to see too rigid a separation made between what is called education and what is called training. I think that they go hand in hand, both in terms of activities but also in terms of relevant institutions. I also believe that there is no substitute for appropriately high academic standards. I should take a very dim view of the lowering of standards at the graduate level. I also strongly believe that one of the errors in this country is to assume that we can train technicians through technical apprenticeships based on the learning of manipulative skills without also offering a scientific and theoretical underpinning. I think that technicians need an appropriate underpinning to what they do, even though their activities may be of a more directly practical nature than those of graduate engineers. They all need an appropriate understanding of the nature of the tasks they are engaged in.

One of our great mistakes in this country over the past century has been to underestimate the value of that fundamental underpinning. We have assumed that we could get by on the practical aptitudes of our people. That is mistaken. Our foreign competitors have demonstrated that many times over.

My noble friend Lord Dean of Beswick referred to apprenticeship schemes. I do not want to decry such schemes; apprenticeship is enormously important. It is a great sadness to us that the number of apprenticeships has dropped so much in recent years. In my view, on the basis of a great deal of research evidence, much of what passed as apprenticeships in the old days was the repetition of inefficiency and obsolete skills. We require, and I hope that we will find a new approach to apprenticeships based on proper, advanced, modern ideas and on a combination—this is my next main point—of the business community, or the firm, and the education sector. The two must go hand in hand. We therefore need to go back to apprenticeships. There must be a close connection between what happens in the firm and what happens in the further education college, just as at graduate level the best courses are the sandwich degree courses. If I had my way, there would only be such graduate courses. That approach brings together the practical and the academic experience that we need.

The education sector has a large role to play in developing general education and training skills. That is also where the Government's role and the use of public money become very important. Equally, however, the individual enterprise has its role as regards firm specific skills. The main point that I wish to make to your Lordships is that we can discuss to some extent where we draw the line, but it is a cooperative effort between the government or education sector and the firm, involving both public and private money. We may differ a little about where we draw the line, but the notion that we should go to one or other extreme is entirely mistaken; it requires a balanced approach.

I cannot resist making the point that, if one looks at the latest public expenditure White Paper, it is disappointing to note that there is a cut in the nominal sum of money available for work-related further education. That is a serious mistake on the Government's part which I hope the Minister will draw to the attention of his ministerial colleagues. It is a serious mistake to cut expenditure in that area when we require expansion.

On the question of skill shortages it is clear that, as the CBI and most other surveys tell us, there are genuine skill shortages in our economy at this time. That is the short-term problem. The noble Lord, Lord Rochester, and other noble Lords referred to 1992, but the time for preparing for 1992 is gone. Nothing we can now do will prepare us for 1992. It might prepare us for 2002, but there is nothing that anyone can do to deal with the lack of skills in the near future. After all—I hate to remind noble Lords—1992 is only four years away. I say that as an economist; an engineer might give a more accurate estimate. The idea that we can do anything for 1992 is simply an error. That does not mean that we should not act, but it emphasises our delay in getting ready.

Our responsibilities do not just concern the relatively short-term future; they concern very much the long-term future. The long-term skill shortages must be rectified. They will place a serious limitation on the scale and quality of any growth in the long run, and on the kind of sectors in which we will find ourselves. I and other noble Lords have emphasised that point on many occasions. I stand second to no one in emphasising that the engineer has a central role to play in rectifying those long-term skill shortages. I say that, although I do not speak as an engineer.

We are told that labour will be scarce over the next relevant growth period. That refers simply to numbers, but numbers do not matter. What matters when numbers are scarce is that we increase the rate of our capital investment to offset that shortage. There must be an increase both in physical capital and in human capital; in other words, there must be investment in people. All those people who despair and say that we have a major shortage of skilled workers do not understand the economics of the problem. It is a great opportunity and the problem is clearly solvable. We must invest in skills, and the sooner we do so the better. I cannot see how the quality of the growth that we require can be achieved unless something drastic is done about engineering education and training at all levels.

In that regard, I must raise a slightly controversial matter. We have mentioned engineering salaries and status, but reference was also made to what I believe is called the market mechanism. There is a paradox here because, if one believes in the market mechanism—in which I do not believe à outrance; I believe that it has its place, but the notion that it is perfect is quite preposterous—one must accept that the present status and salaries of engineers, are exactly right and that the present demand for and supply of engineers is right. The only basis for a debate is to say that the market fails. I do not believe that the market fails in the sense that we should abolish it and adopt a totalitarian system, but those who say that we can rely on the market mechanism to solve this problem have misunderstood the problem. The mechanism is part of the problem.

People say that we need to enhance the position of engineers. We must persuade those who operate the market—the decisionmakers—to raise their own expectations of what can be done. On the basis of those expectations, they may then perceive the value of engineers to be higher and may therefore offer them higher salaries. I simply throw in that idea. It is a standard economist's point, but it is not a trivial one. It takes me back to my central point of the combination of government and private enterprise action and my true belief in the mixed economy.

However, I do not believe that the market mechanism has no role to play; quite the contrary. We must produce engineers that industry can use and, equally, we must persuade industry to use them. As we have been round this course before, I am in one sense quite pessimistic because there is nothing new. The noble Lord, Lord Lucas of Chilworth, pointed out that there was nothing new. One might say that, if we have known about the problem for so long and have done nothing about it, why should we believe that we will do anything about it now? Nonetheless, many noble Lords have pointed out what we can do to solve this engineering problem. We can specify the problem clearly—this takes us back to Finniston again—and we and others have said a great deal about possible solutions.

Perhaps I may refer to one or two of those solutions. I agree with all noble Lords about the importance of the schools in this matter, but we should not underestimate how difficult it is to change the atmosphere in schools. Mention has been made of the aspirations of young people. Certainly, when I was at school, I do not think that I knew anyone who would have owned up to wanting to be an engineer. As I understand it, that still seems to be the case. The obvious reason is that most young people base their expectations and aspirations on the people. who teach them, though of course there are not many people in schools teaching them. Even if, as the noble Lord, Lord Orr-Ewing, and others have said, we employ physicists and mathematicians, we shall still not have engineers teaching in schools. That is a great pity.

Another point that has often troubled me is that we find in our schools people who have left industry. However, I am not sure whether they are the best ambassadors for industry or engineering because they will have often left industry, having become disaffected as it were, and they will not do the job that we want.

The schools have an important role to play, but we must realise that this will be a slow and difficult task. Nevertheless, it is a task with which we must proceed. I believe that the national curriculum helps to some extent in this regard. I belonged to the school of thought that would have had only a core curriculum, but my wish was defeated during debate on the Education Bill. Nonetheless, the national curriculum compulsorily includes science and technology. What worries some of us a little is that there are already signs that it may not be quite as compulsory for most people as we were originally led to believe. Again, that would be a great pity. I believe that it is enormously important.

Let me say a little about the curriculum. Of course I accept the importance attached to the ability to communicate. There seems to be a correlation between the success of those who do relatively well in the world and the ability to communicate. I stand second to none in seeking to enlarge the educational experience of young people who take up engineering but I hope that it would never be to the detriment of the academic quality of work within their own field. That would be a great pity. One hopes that the two aims are not in competition with each other.

Equally, I should certainly like to see included in the course a management element—this important point has already been raised, though I do not for the moment remember the name of the noble Lord who mentioned it—which would also cover management of personnel. I believe that room to do that can be found for engineers.

Again, I do not think that this element should be so expanded as to detract from the fundamental work. Noble Lords will recall the old joke, though it never applied to me as an economist. When a bridge is built I like to believe as I drive over it that it has been built properly by an engineer and that it is safe. In my own field one is never put to the test of having to do anything to make sure that something works. Clearly we want all engineering work to be of high quality. I believe, however, that within that discipline we can enlarge the range of experience offered to engineers in the field of English language, management, and so on.

The time I have to speak is running out. On such subjects one can speak for a long time, but I promise noble Lords that I shall not go on and on. However, I must say a few words about the role of women. The fact that we do not train women engineers on the scale that we need clearly has nothing to do with the intrinsic abilities of women but is entirely a sociological and socio-psychological phenomenon. But it is a problem that can be solved, and we are beginning to see signs of a solution.

The Equal Opportunities Commission takes an interest in this matter and there have been many initiatives undertaken in this area. We return to the point about governments and statutory bodies at least beginning to give a lead to others in determining the values that are possible. Women are an untapped well of ability in this area. In these days engineering is not about lifting heavy objects; it is not about performing crude tasks; it comprises serious analytical work. We must not neglect the contribution that women can make in this field. Again, I blow hot and cold. I see good signs of that happening even though they are not on as big a scale as I should like.

There is little I can add; or rather I could say much more, but must not if the Minister is to have a chance to reply. As I said earlier, this debate should end on one of two notes: all the evidence is that we shall fail in this regard because we have not done enough in the past; alternatively, that we do know enough to succeed. We know what to do.

I think it will be a pity if ideology gets in the way of solving the problem by putting emphasis uniquely on one or other side of our lives. On the other hand, I should like to make one final comment. I do not disagree with noble Lords who referred to the importance of industry, and so on, but in the end the Government of the country must take responsibility for something which is so fundamental. For there to be a new climate of opinion and a new determination, I am convinced that in the first place leadership must come from the Government, though the more that the rest of us respond the better—and I mean all of us.

Lord Rochester

My Lords, before the noble Lord sits down, may I ask him to accept for the record, since he mentioned me in this context, that I had nothing at all to say about 1992. In fact, I very much agree with him that it is skill requirements for the long term rather than the short term that are important.

Lord Peston

My Lords, always in these debates one comes prepared with an elaborate set of notes to which one refers in the course of the evening. I apologise to the noble Lord. Certainly one of your Lordships raised the issue of 1992. Nonetheless, I was not seeking to be acerbic or difficult. I intended to be helpful.

7.55 p.m.

The Earl of Dundee

My Lords, I should like to join your Lordships in thanking the noble Viscount, Lord Hanworth, for introducing this important debate on the subject of the availability of skilled manpower in the engineering industry.

It goes without saying that engineering has always been extremely important to every age and between centuries we have of course the wonderful memorials and links provided by works such as the famous stepped pyramid at Saqqarah near Memphis, built in 2550 BC by Imhotep, who was the first engineer to be known by both name and achievement. Then in the ancient world there were all the marvellous civil engineering works of his Egyptian, Persian, Greek and Roman successors. And in the Middle Ages we find the fantastic technical accomplishments of building work demonstrated in Gothic architecture.

The respective levels of human ingenuity in engineering throughout the ages are obviously immeasurable and incomparable. It is certainly fitting, as the noble Earl, Lord Halsbury, reminds us, that the word "ingenious" and the word "engineer" share the same Latin derivation: ingenerare—to create. One difference in today's engineering is that there is a proliferation of branches including mechanical, electrical, electronic, vehicle and aircraft manufacture and engineering construction. Perhaps another distinction is the greater stress that is now placed on cost and competitiveness. Indeed, I have heard the definition of an engineer given as someone who will make for £5 what anybody else will make for £50.

On the theme of competition, today Britain is of course competing in global markets and with countries which view investment in skills as the linchpin of economic growth. By comparison as a nation our workers are too often under-trained and under-qualified, as my noble friend Lord Orr-Ewing and the noble Lord, Lord Dean, observed. But at a time of rapid technological change, when we have to keep up with and ahead of competition, the skills of employees become the employer's competitive edge.

But what just now are the proportions of engineering in the economy? Engineering employs 1.9 million people in 21,600 firms and represents 10 per cent. of total domestic economic activity. Output per head has risen by 25 per cent. between 1983 and 1987, which compares with a rise of 20 per cent. in manufacturing as a whole. The past 10 years in particular have seen an increased demand for highly skilled people which has come about through the pace of technological innovation, the use of microelectronics in products and processes and the rapid development of new materials technology.

So far as the demand for skilled people is concerned, a paradoxical trend has shown itself over the past 10 years. On the one hand, and despite the difficulties focused upon quite rightly in this debate by your Lordships, there are now more professional engineers than ever. Nevertheless, manufacturing companies continue to report to the CBI training agency and others that they expect that a shortage of numbers when recruiting professional engineers will limit the potential of future output. These fears are certainly not imaginary. The simple reason why they are valid is that, while the number of those qualifying as professional engineers has increased greatly over the past 15 years, demand has also grown rapidly; in other words, we are dealing with the problem of success.

The noble Lord, Lord Whaddon, and the noble Earl, Lord Halsbury, mentioned the problem of overspecialisation. The engineering council has recently consulted industry on the proposal to develop a more broad based first engineering degree, which may go some way to mitigating this problem. There are certainly a number of factors which weigh against good recruitment prospects. In referring to them the noble Viscount, Lord Hanworth, and other noble Lords have mentioned that part of the problem lies in attracting young people to study engineering. It is a worry that so many young people remain reluctant to take maths and science subjects at A-level and to enter engineering courses at higher education level.

Another recruitment setback which has already been debated is that in the coming years there will be far fewer young people entering the workforce any way. It then becomes all the harder to secure the right number of entrants. However, we must try to achieve this number and if we fail to do so the sector's efforts to remain competitive in world markets will be seriously undermined.

How should we react to the problems of recruitment and to the threat that they present to the industry? Nobody would argue that a focus on training for new recruits is bound in itself to detract from the endeavours of industry to invest in its existing workforce. Yet having said that, to focus on training for new recruits is the first and most obvious thing that one thinks of doing. What is rather less obvious is to remember to invest in the adaptability of established employees. After all, they have already learnt some of their trade, and as an employer one might think it unnecessary, or might even fall shy of the idea, to spend money on doing something which may simply be, one fears, teaching one's grandmother to suck eggs.

In engineering as in all other sectors, prosperity and growth depend on our ability to prepare and maintain a well-trained, adaptable workforce. Industries which neglect this factor of adaptability are bound to lose out to their competitors. The reason that they will do so is that competition worldwide is now far more between workforces and their competence than between products and services.

No doubt the ideal would be to maintain a well-trained, adaptable workforce and also to attract an increase in the number of recruits. But employers can no longer rely on school-leavers to provide the raw material for their industries. By 1995 the number of 16 to 19 year-olds will have fallen by almost a quarter. Equally, competition and technological change will demand even more skills. Clearly we cannot reverse demographic trends nor stop competition from abroad. What we can do is to increase our investment in people's skills as our most valuable national asset.

When you make an investment of this kind in workforce adaptability, either you update people's existing skills where necessary or provide them with completely new ones. It may often be a quite tricky commercial decision to make. However, one thing is clear. It is a decision which only the employer can properly make.

On that theme, I now turn to the White Paper, Employment for the 1990s, which seeks to emphasise that the best way of achieving desired retraining is through a partnership between government and industry. Inevitably any government's role in training, while important, will have to be subject to clear priorities.

I am grateful to my noble friend Lord Lucas for the support that he gave to the essence of this way of thinking. The noble Lord, Lord Peston, referred to the reduction in funding for vocational further education. I note what the noble Lord says. I shall pass on his remarks to my right honourable friend. I would also say to him in the context of what we see ourselves able to do as a government, governments can create the right climate. We can establish a policy framework and a delivery system for training and vocational education. We can give young people and those with few skills the backing they need to continue learning on the job. For example, through employment training, the training agency supports 300,000 places of which 14 per cent. are in engineering occupations. Nevertheless, business must accept an equal responsibility for upgrading and retraining its own workforce. Employers must be prepared to invest boardroom time, money and management expertise in their most valuable asset.

Underlying the proposals contained in the White Paper is the belief that as the system's foremost consumer, employers are best placed to specify their needs and to ensure that the type of training available and the level of its quality reflects what is going on in the market. Therefore we look first to industry and employers to analyse manpower needs and to define standards based on competence. Employers must also take the lead in developing training through life. What the Government can and are doing, however, is to support their efforts. At the moment the Engineering Industry Training Board is responsible for giving a lead to companies within the sector on setting standards and investing in the training and development of their employees.

The noble Lord, Lord Rochester, questioned the advisability of future non-statutory organisations. The White Paper indicated that the Government would enter into consultation with the training boards and organisations representing employers with a view to drawing up a programme for becoming non-statutory bodies. These discussions are now taking place.

I should like to say a word about the activities of the EITB. Since 1984 some 6,000 technician trainees have registered into EITB schemes. Almost 300 centres offer technician training to EITB recommendations. We have a diversity of trainees in the training programmes run by the EITB which cover graduates, managers, technicians, craft skills and training for women. Updating in new skills has also been addressed, as over 60 per cent. of training directly carried out by the EITB is geared towards the training, retraining, coverting and updating of existing employees. We can see the application of new technology in the 20 per cent. of funded projects concerned with this.

On the broad issue of the image and perceived status of engineers, I agree very much with what noble Lords have said. There is a need to raise the status in the minds of the public at large. The noble Lord, Lord Dean, and my noble friend Lord Orr-Ewing focused on this point. The noble Earl, Lord Halsbury, also referred to the risk of a brain-drain and the need to attract the right kind of teachers. To this end, the EITB's engineering careers information service runs programmes through which it encourages employers to forge links with primary schools in order to give some idea of engineering to young people. It also distributes videos to schools, colleges and career services, their purpose being to define and illustrate roles in the industry.

Another key issue is the number of women in engineering. I was interested in the examples of current schemes which the noble Lord, Lord Rochester, gave. Women certainly need to be encouraged to take up a wide range of engineering jobs. There has been a slight growth in the number of women involved, in particular at professional levels, and a joint campaign by the Equal Opportunities Commission and the Engineering Council in 1984 aimed its activities towards encouraging increased numbers of women into engineering.

On the promotion of careers in engineering, the EITB runs week-long courses aimed at first-year A-level students of maths and physics to assist them to make informed decisions about engineering as a career. It also provides grants to encourage the retraining of women operatives and clerical staff to technician level.

Research shows that there is a lack of information about engineering careers. It is often difficult to explain to people what engineering is about. More effort is now being made to let people know what can be done in engineering while still at school. The Government have helped through a number of measures: the national curriculum, the technical and vocational education initiative, new ideas in further education and the enterprise and higher education programme. All these contribute to the quality of our information and education.

The noble Lord, Lord Orr-Ewing, highlighted the issue of teacher supply. I am glad to say that this Government take teacher supply shortages very seriously. We have introduced a bursary scheme for trainee teachers of maths, physics and computer design technology. This will be extended to chemistry in September of this year. We have also established the Teaching as a Career Unit. Support for training for converting and updating skills of existing teachers is also being embarked upon. These and a few other actions have reversed the trend of decline in recruitment. We have also made provision in the new teachers' pay agreements introduced in 1987 for incentive allowances to be awarded to teachers of shortage subjects. This has given local authorities flexibility in recruiting and rewarding such teachers. The Government have recently asked the Interim Advisory Committee on School Teachers' Pay to consider what changes in incentive allowances would be needed to deal with subject shortages in the context of the national curriculum. We await with interest the Committee's report which will be published shortly.

My noble friend Lord Orr-Ewing also asked me when the report of the interim committee on teachers will be available. I cannot give him a specific date for that because it is not known, but it will be reported on shortly. My noble friend Lord Orr-Ewing and the noble Lord, Lord Rochester, also talked about tax allowances. They gave the example of individual engineers who attend conferences and thus give rise to the case for putting their costs against taxable income. As the noble Lord, Lord Rochester, indicated, this is a matter for my right honourable friend the Chancellor of the Exchequer, but I shall pass on his remarks.

Lord Dean of Beswick

My Lords, I am grateful to the Minister for giving way. He has talked about the highest structure of engineers, the civil engineers and so on, but I was mainly concerned with manufacturing engineers. Is he aware that in the past most engineers equipped their own toolbox and bought their own micrometers, scribing blocks and so on? Is he aware that it would now be almost impossible for a youngster starting in the trade to produce those instruments because of the tremendous costs that a nought-to-one micrometer or scribing block have risen to? He would be quite unable to finance it. I hope that when the Minister brings the debate to the notice of the Minister in another place he will also include this matter.

The Earl of Dundee

My Lords, I am grateful to the noble Lord and I shall pass on his remarks similarly.

The noble Lord, Lord Peston, referred to the Finniston Report, as did the noble Lord, Lord Howie. The Engineering Council sprang from that report. The Government's philosophy is that employers must take the lead in ensuring an adequate supply of skilled labour.

Lord Peston

My Lords, I hope that the Minister will bear with me. Does he intend to say anything on the point made by the noble Lord, Lord Howie, on the role that the Government could have in enhancing the image of engineers? The noble Lord referred to what had happened with design and how it has been brought much more to the public attention through Ministers taking a great interest in it and by their presence on certain occasions. His point on engineers applied a fortiori. I was wondering whether the Minister intended to say anything about that and, more to the point, whether he intended to convey that idea to his right honourable friend.

The Earl of Dundee

My Lords, I was coming to that theme and will certainly pass on the remarks of the noble Lord, Lord Howie. I should also like to refer to some other themes raised by the noble Lord, Lord Howie. He talked about status and pay. The issues of pay and status are essentially for employers. The Government do not have a role and believe that market forces should determine such matters. I believe that this might meet with the approval of the noble Earl, Lord Halsbury.

The noble Lord, Lord Howie, also wondered whether the Government should give financial support to the Engineering Council. The Government's policy towards professional bodies is that they should be or should become self-financing. It is difficult to draw comparisons between two bodies—for example, the Design Council, which has been mentioned—without knowing more of the circumstances.

At the level of more highly qualified engineering manpower, we are acting to help overcome identified skill shortages. Such actions include offering engineering experience to degree students prior to their making career decisions, and initiatives to help increase access to engineering at higher education level for students who possess non-traditional pre-entry qualifications.

During 1988–89 we are supporting over 700 places on high level courses such as computer-aided engineering, electronic engineering, mechanical and production engineering and control engineering. All these lead to qualifications at HNC, HND and postgraduate level.

Turning now to the problems of recruitment, I have already touched on the shortage of young people coming into the industry and the Government are well aware of the importance of this issue. Through YTS we are supporting over 2,000 engineering programmes offering some 50,000 places (this represents 13 per cent. of all YTS places) and 1,100 of these programmes offer craft/technician vocational qualifications. YTS now supports the majority of apprenticeships in engineering occupations. Much is being done to ensure that the industry secures the right numbers of trained engineers and technicians.

Nevertheless, I can assure your Lordships that there is no complacency on our part over the endeavour to encourage the right number of entrants.

However, we should not assume that all shortages are a direct result of a failure to train. There is evidence to suggest that employers may not be making the best use of the skills which their employees have. Companies need to consider carefully the way in which tasks are divided between groups like technicians and graduate engineers. They must also look to improving career development structures and policies in order to reduce turnover among their existing employees.

The noble Lord, Lord Dean, made the point of how important it is to ease the path from shopfloor through to the boardroom and to make this more feasible and flexible for everybody. That is very much something which needs to be done.

Clearly there is a need for continued effort from all quarters. But the lead must come from industry and employers. The most effective incentive for companies to train is the knowledge that people's skills are the key to profitability. Statutory regulation is not the answer.

The Government have made it clear that they can and will help. I have briefly outlined some of the ways in which we are doing so in engineering. But nothing we can do is a substitute for employers' commitment to training. To secure this we believe that a new infrastructure is required. At the national level we need employer-led organisations to set standards, identify skills required and mobilise commitment of senior management within their sector. At the local level we shall have training and enterprise councils which can plan, oversee and promote local training and enterprise.

Each industry and occupation has problems that are in some ways unique to it, and that is of course true of engineering. But many of the issues we are debating today go beyond one industry, and, as the White Paper makes clear, the Government are now establishing a framework at national and. local level in order to make education and training more relevant to working life—a framework for all industries which provides new and exciting opportunities for employers and a way ahead toward national prosperity.

Viscount Hanworth

My Lords, I should like to thank everyone who has spoken and I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.