Vocational Training: ECC Report

HL Deb 11 December 1990 vol 524 cc419-64

5.6 p.m.

Baroness Lockwood rose to move, That this House takes note of the report of the European Communities Committee on Vocational Training and Re-training (21st Report, 1989–90, HL Paper 78).

The noble Baroness said: My Lords, the committee's report is based on Commission proposals for a Community action programme for continuing vocational training and re-training, known as the FORCE programme. The aim of the FORCE programme is to improve vocational training and re-trailing in the Community.

The four specific objectives of the programme are: to encourage greater investment in continuing vocational training; to support innovation; to promote the planning and design of schemes which take account of the completion of the internal market; and to contribute to the greater effectiveness of training mechanisms. In common with most witnesses, the committee agrees with the objectives of the FORCE programme. We also share the concern of many witnesses about the poor performance of the United Kingdom in the field of vocational training compared with many other countries both in the Community and outside. This concern was reinforced by the visit of Sub-Committee C to Paris to learn about the excellent French system of vocational training and by the copious evidence which we received on the German dual system of vocational training.

During the course of the sub-committee's inquiry the Commission's proposals were adopted by the Council. Therefore, the report concentrates on the United Kingdom's ability to meet the requirements of the now adopted FORCE programme. In the light of the Commission's proposals to member states to submit a strategic framework for achieving the objectives of the FORCE programme, the committee considered whether the United Kingdom had an adequate framework to fulfil the requirement.

We concluded that the United Kingdom does not have a clearly articulated national strategic framework for training. The committee shares the view expressed by the CBI, the TUC and several other witnesses that such a strategic framework is needed in the United Kingdom. We believe that as far as possible this framework should be based on consensus between the two sides of industry—the so-called social partners. In accordance with the FORCE programme the framework should be promulgated by means of annual reports to be laid before Parliament and discussed with the two sides of industry. The reports should include past achievements in the field of vocational training and set clear targets for the immediate future.

Six years ago the Select Committee's report on Youth Training in the EC concluded: in the United Kingdom there is an urgent need to bring together the whole education, training and employment of young people in a coherent framework which can he understood by employers, parents, educators and trainers, and above all by the young people themselves". The committee endorses that conclusion which it feels is very relevant today. It believes that such a framework is needed to encompass the provision of vocational training for all age groups in the United Kingdom.

The committee accordingly proposes that a comprehensive national strategic framework for training should include the following 10 points: the analysis of future national training requirements, particularly those resulting from technological change; clear objectives and detailed targets for improving training performance; plans for installing and maintaining a single national system of vocational qualifications and standards; the provision of individual records of achievement prepared for all young people; arrangements for providing individuals with access to the information they need to make informed training and career choices; proposals for monitoring and improving training quality; ways of improving access to training, including policies designed to ensure equal opportunities; specific proposals for increasing women's access to training, particularly for returners to the labour market; specific incentives to be used to encourage employers and employees, including small businesses, to improve training; plans for monitoring and evaluating national training performance.

Each aspect of this framework and the legislative underpinning necessary is considered in the report, which states that in each of these areas the respective responsibilities of the Government, employers and employees should be clearly defined. The strategic framework should also specify who will be responsible for payment.

Vocational training in the United Kingdom has been criticised for more than a century. Given the scale of the gap between the United Kingdom and its main industrial competitors, and given the long history of failure which has marked the voluntary approach to training in this country, the committee considers that some form of statutory underpinning is needed to act as a catalyst for change. The committee is convinced that the right place to start is to increase the access of young people to training, as 30 per cent. of young people currently go straight from school into jobs with little or no training.

We conclude that legislation should be introduced to ensure that all 16 to 18 year-olds are provided with education or training. Any employer employing a 16 to 18 year-old full time should be obliged by law to arrange an appropriate programme of training leading to a recognised qualification. Individuals aged 16 to 18 would have the freedom of choice to remain at school, to undertake full-time training or take up a job with training.

Such provision would require a minimum amount of legislation and would not entail a heavy handed bureaucracy. The legislation would ensure that all young people in the United Kingdom could start their working life with a basic grounding of training along the lines which operate in the Federal Republic of Germany and in France. The committee welcomed the introduction of training credits but felt that such credits on their own were not enough and needed legislative underpinning. The committee noted the Government's repeated opposition to Community measures which could add to employment costs. The experience of the United Kingdom's main industrial competitors led the committee to conclude that effectively managed vocational training should be viewed as an investment rather than as a cost. We are convinced that a substantial increase in the quantity and an improvement in the quality of training in the United Kingdom would result in increased productivity and industrial competitiveness.

The Government have already issued a very full response to the committee's report. I am most grateful to the Department of Employment for the effort which it has put into that response and for its co-operation with the sub-committee's inquiry. Nevertheless, there are two important aspects of the response which I feel are inadequate. I have given the Secretary of State notice of my intention to raise these points during the debate and I hope that the Minister will cover them in his reply.

First, I have already mentioned that one of the committee's principal recommendations was that legislation should be introduced to ensure that all 16 to 18 year-olds are provided with education or training. The Government's response does not directly comment on that recommendation, though on the penultimate page the response states that the Government do not believe that worthwhile and effective training can be guaranteed by legislation and compulsion, with all the associated bureaucracies and inflexibilities. As it was not the committee's intention to recommend a bureaucratic, inflexible system, Sub-committee C agreed that I should raise this matter during the debate. I hope that the Minister will respond.

Secondly, the report suggested that a personal income tax allowance should be considered as a further incentive to individual investment and training. The Government's response to that point relates principally to employer funded training. I would welcome the Minister's reply to the specific subject of tax incentives for individuals.

The committee and the Government are at one in recognising the need to change attitudes to training, but we diverge on how this might be done. The Government's main strategic approach is through the locally based TECs, which they claim will know best how the problems of their area can be dealt with and are therefore the best means of bringing about an improvement in skills. The committee's opinion is that there must be a much stronger lead from the Government. I do not want to expand on the role of TECs as I know that the noble Baroness, Lady Flather, intends to do that in her maiden speech, to which we all very much look forward.

At paragraph 61 of the report we refer to the evidence of the then Minister, Mr. Tim Eggar. He considered that while society thought it right that children should stay at school up to the age of 16, there was not at present the same degree of consensus that young people should either stay on at school until they were 18 or should have to undergo training.

In the previous paragraph of the report we refer to information provided by the Ministry of Education and Science in the Federal Republic of Germany. The Ministry stated: It would imply the renunciation of economic potential, the acceptance of future unemployment and associated social problems as well as the non-fulfilment of the educational mandate if not all school leavers were given full vocational qualifications after compulsory schooling. This is why there is a national consensus of all social and political forces in the Federal Republic of Germany to the effect that all school leavers should receive as qualified a vocational training as possible".

That presents a tremendous contrast. If Mr. Eggar is right about the state of opinion in this country, surely that makes it even more important for the Government to mount a persistent attack on those attitudes.

The committee was impressed by the training targets set by the CBI. It felt that a previous Secretary of State for Employment, Mr. Norman Fowler, had been going along the right lines when he mentioned stretching targets in a speech made in December 1989. Regrettably, those targets have not been endorsed by the Government, though in his response to the committee the Secretary of State welcomed the setting of targets by the CBI.

Finally, I should like to underline the committee's conclusions on equal opportunities and the training needs of women in the light of demographic factors. The report draws attention to the high cost of child care provision, which, if paid for out of taxed income, provides little incentive for women either to re-train or to return to work. The committee concluded that the lack o child care facilities and the high cost entailed when care is available remain major obstacles which prevent women enjoying the benefits of training. To encourage women in this respect, the committee recommended the extension of tax relief to the cost of child care in all cases.

I should like to extend my warm thanks and appreciation to members of Sub-Committee C for their support in this inquiry. I should like to put on record our particular thanks to our specialist adviser, Mr. Quentin Thompson, and to Dr. Philippa Tudor, the clerk to the committee, for the excellent way in which she assisted us.

Moved, That this House takes note of the report of the European Communities Committee on Vocational Training and Re-training (21st Report, 1989–90, HL Paper 78).—(Baroness Lockwood.)

5.22 p.m.

Baroness Flather

My Lords, I am conscious of the honour accorded to me by Her Majesty's Government in making me a Member of your Lordships' House. I am grateful that it was seen fit to choose one whose origin lie in India. As a British citizen married to an Englishman, I have spent all my working life here and also obtained my legal qualifications in this country. In addition to my other interests, I hope that I may in some small measure contribute to a better understanding of the concerns of minority groups living in this country.

I should like to congratulate the noble Baroness, Lady Lockwood, for producing an excellent report. It bears all the hallmarks of a good report: it is short; it is to the point; and, it is readable. I should like to begin by quoting the conclusions of a Royal Commission. It stated: Neglect of training is a key reason for Britain's lack of competitiveness". That Royal Commission on Technical Instruction sat in 1884. Sadly, it has an all too familiar ring to us even today. For well over a 100 years we have been aware of our national shortcomings over skill levels in the workforce, especially when compared to that of Germany. Its widely admired "dual system" has ensured that the great majority of its younger people enter the workforce with a proper vocational qualification. That covers not just 16 year-old or 17 year-old school-leavers, but also graduates. The learning culture in that country is strong enough to motivate people, even in their mid to late-twenties, to accept reduced pay while building their personal skills and qualifications.

This year Germany accepted an unprecedented challenge. At the historic moment of unification, resources will have to be found to tackle the neglect and demotivation of the past 40 years. Having just returned from Eastern Germany, I know that the people will need all the support and goodwill that they can obtain. In the United Kingdom, we have had a history of neglect in this whole area. Governments have gone for deceptive short-term benefits of minimal public investment. Too many employers have claimed that when business is bad they cannot afford training, and that when it is good there is no time.

During this year, at last, the Government have made an imaginative and significant effort to get to grips with the situation by drawing in business leaders on a massive scale, to take charge of a revitalised training structure. I refer to the rapidly evolving network of training and enterprise councils of which there will be about 80 in England and Wales by next year. We can already see significant benefits flowing from the first few to begin operation. For example, in the training and enterprise council in my area, the Thames Valley, we have increased the number of young people studying for a qualification while employed by about 25 per cent. over last year. Like us, other training and enterprise councils are working ever more closely with educationists to reinforce industrial links and encourage more young people to stay on in higher or further education.

As has already been stated, in their response to the Select Committee's report, the Government highlighted the role of the TECs. They said: We believe that the formation of employer-led TECs is a key to meeting the challenge". However, the launch of the TECs earlier this year was accompanied by a reduction in the money available for training. I understand that a further reduction is planned for next year. We cannot afford to let our investment slide just at the moment when we have a most hopeful initiative before us.

There is no getting away from the fact that world class results will cost money in the short term, even though in the longer run it will be cheaper than our past policy of hopeful drifting. It is no good politicians hoping that the transfer of public spending to private sector spending will cover all aspects of the matter. I urge the Government to think again on that point.

In a truly British way, all this depends on a great deal of voluntary action. For example, TEC directors are unpaid and give a great deal of their time, as I know to my cost. There will be 80 TECs all over the country and it is inevitable that they will function in a variety of different ways, as indeed is the intention. Moreover, no doubt they will also have a variety of different standards. I believe it is essential that they should operate within the framework of nationally agreed targets and that their performance should be measured against objective criteria set by the Government. That will not make them any the less responsive to local needs or less flexible; on the contrary, it will help in concentrating the mind and will achieve clarity of purpose. A rigorously defined quality standard, with emphasis on results, will ensure an evenness of purpose across the country.

In this drive for qualifications we must not forget those with special needs, whether that means the ethnic minorities, the disabled or any other disadvantaged group. I am deeply concerned that in the European context equal opportunities have come to cover only the opportunities for women. The report takes no note of the needs of any other group. We are the only member state in the European Community to have enacted legislation to protect minorities from discrimination and to encourage special training and educational programmes to remedy past disadvantage.

I must express disappointment that the Commission for Racial Equality was not invited to give evidence to the committee in this area of concern. It is to be hoped that the TECs will use the provisions of the Race Relations Act to set up special programmes. But, so far, only the Leeds TEC has announced firm plans to provide courses in managerial training. There are some other notable examples of employer-led schemes. They include the BBC, the TSB and the West Midlands Police access training which is open to all under-achievers.

We need to tap the unused potential of ethnic minorities, and ensure that they do not end up as second-class citizens of the new Europe. We stand at the threshold of a most monumental development for Europe. On 1st January 1993, all our young people will be free to seek their future in a Community of 12 nation states. We must not sell them short by denying them the best preparation possible, whether in languages or in skills. They will not thank us if they lose out to others better prepared because we have not had the far-sightedness to invest in their future.

5.30 p.m.

Lord Rochester

My Lords, it is a great privilege for me on behalf of the House to congratulate the noble Baroness, Lady Flather, on her maiden speech. I found it convincing and incisive. Somehow, the quiet way in which it was delivered added to its authority. The noble Baroness has considerable experience of law, education, local government and other matters. I have no doubt that she will prove to be a most valuable Member of your Lordships' House, and we look forward to the many further contributions that we hope she will make to our debates.

I was not a member of the committee which produced the report. I am therefore all the more delighted to welcome its contents from these Benches. The noble Baroness, Lady Lockwood, dealt with the report so comprehensively that I can perhaps best contribute to the debate by concentrating on just a few key points. First, I support wholeheartedly the committee's conclusion that there is a need for a clearly articulated national strategic framework for training in the United Kingdom, and that that training should, so far as possible, be based upon a consensus.

In April last year, I was privileged to introduce a debate on training in your Lordships' House. On that occasion, I acknowledged that the Government's White Paper entitled Employment for the 1990s, outlined a new structure for training nationally, but not a policy involving the Government, employers, training producers and others. The extent to which that paper relied on rhetoric suggested a command model altogether inappropriate for its evident aim to effect cultural change in the nation's approach to training. In contrast, the new training initiative of 1981 was widely seen as a national training strategy, and employers, trade unions, and educational and training organisations were all involved in its formulation.

Within the existing framework, as we have been told, employer-led TECs are being established at local level to plan and deliver training. I welcome that emphasis on local delivery, and know from experience that training is often at its best when it is provided by employers, especially by large companies.

I am also convinced that if we are to compete successfully within Europe and outside the Community, training must be regarded as a long-term investment secured by political stability and the involvement of all those elements in society which have a stake in the problem. I therefore regret that, in the absence of a lead from the Government, it has been left to the CBI to arrange for representatives of the TUC, chambers of commerce, TECs, local authorities and educational organisations—almost everyone except the Government—to meet in an effort to draw up national training targets.

The CBI hoped to achieve a consensus on training by the end of next March based on qualifications and standards set by the National Council for Vocational Qualifications. Its initiative, as the noble Baroness, Lady Lockwood, said, follows the Government's decision not merely to withdraw support from targets previously set for the 1990s by Sir Norman Fowler when he was Secretary of State, but to abandon any further attempt to set such objectives. Since the Government are apparently unwilling to take any responsibility for establishing national targets, I hope that they will at least accept the recommendations contained in the report, and that they will endorse those set by others as United Kingdom training objectives.

The second major matter upon which I should like to speak is the problem which has bedevilled this country's training effort for the past 30 years or more —who is to pay for it? The committee observed how many witnesses indicated that exhortation alone was unlikely to be adequate to achieve the major change in cultural attitudes towards training needed in the United Kingdom.

The levy grant system has been tried and widely found to be wanting in terms of the bureaucracy and inflexibility that accompanied it. Various suggestions were made to the committee designed to provide more positive incentives to help solve the problem. The CBI, as the noble Baroness said, proposed a personal income tax allowance of, let us say, £1,000 per annum, for anyone working towards a nationally recognised qualification in their own time where a training credit was not also being used.

The committee supported that recommendation, but it would of course cost the Exchequer money. In that connection, the Institute of Personnel Management made a challenging proposal in its recently published discussion paper entitled A national development agenda. In that document the institute has elaborated upon the principles put forward in its evidence to the committee that there should be access to continuous development in the form of self-directed learning throughout an individual's career; and that the learning needs of the individual should be integrated with those of the employing organisation.

Against that background, the institute proposes as a further principlethat the cost of learning should be shared among those who benefit from it—the state, the employer and the individuals concerned. The proportion of the cost to be borne by each beneficiary would vary according to the type of learning, the stage at which it occurred in the learner's experience and its cost in relation to factors such as time, method and personal opportunity. For example, it argued that since the state would benefit from the general education of young people to the age of 18—on a full or part-time basis—that education should be paid for by the state. It further makes the bold suggestion that because the training individuals receive should enhance their job prospects, those individuals should themselves be prepared to contribute towards its cost. Thus young people might be expected to accept a trainee-level wage in exchange for high quality education and training. I recall that as long ago as 1982 your Lordships' Select Committee on unemployment recommended in its report: Because … the wage earned by school leavers who do obtain employment is often too high in relation to the adult wage (especially where there is no training), the gap between school leavers' and adult wages should widen, as new wage agreements are made". In my view, the IPM's proposal merits the discussion that it suggests with the Government, political parties, employers, trade unions, education and training professionals and other interested parties.

Surely the need for continuity is just as great in national training policy as in matters affecting the finance and structure of local government. If consultation concerning the future of local taxation is thought desirable—and I commend the Government for the initiative that they have taken in that respect —the constant changes affecting the organisation and funding of training that we have experienced since the 1960s point just as clearly in the same direction.

It is sad, as the noble Baroness, Lady Flather, said, that just at the time when we are discussing the adoption of a community action programme for the development of continuing vocational training the Government have seen fit, without warning, to cut expenditure by the Department of Employment in real terms by £150 million in 1991–92 and £216 million in 1992–93. Like the noble Baroness, I very much hope that the Government will have second thoughts about that.

However the vexed question of payment is viewed, I am convinced that the committee is justified in its conclusion that some form of statutory underpinning is needed as a catalyst for progress and that the right place to start is to increase the access of young people to training. On these Benches we have for years advocated that there should be legislation to ensure that, as elsewhere in Western Europe, all 16 to 18 year-olds should be provided with education or training.

The noble Baroness, Lady Lockwood, told us that the committee concluded that this could best be achieved by obliging any organisation employing someone in that age group full-time to arrange an appropriate programme of training leading to a recognised qualification. The report rightly says that this would require a minimum amount of legislation and would not entail a heavy handed bureaucracy.

Perhaps the most telling conclusion from the committee comes in the penultimate paragraph of its report. There the Government's opposition to Community measures which could acid to employment costs is noted, but the committee affirms its belief that effective vocational training is and should be viewed as an investment and not as a cost. It is convinced that a substantial increase is needed in both the quantity and quality of training. It considers that without it there is a severe risk of a steady and accelerating relative decline in the UK economy which will become increasingly difficult to reverse. In its view there is not much time left for action; I agree. That conclusion is given all the more urgency by the evidence recently supplied to the Engineering Industry Training Board that with the onset of a recession, expenditure on training in manufacturing industry in some parts of the North has dropped by 20 per cent. and that in areas of chronic skill shortages traineeships are being reduced.

Finally, I wish to revert to a matter that I raised in the debate last year on training, to which I referred earlier. At that time, I said that the White Paper Employment for the 1990s was written as though the only people in need of training were those in industry and commerce. It seemed to ignore the fact that the wealth spending public services could and should contribute to our prosperity just as much as the business sector by becoming more effective. I suggested then that we are all part of a complex, inter-dependent society in which the public services, including national and local government, should promote a training culture, like everyone else.

Yet, the White Paper contained hardly a mention of what still needed to be done in those services. Indeed, at one point it specifically stated: Developing training through life is not primarily a government responsibility". In my view it certainly is. Credibility is lacking if in any strategy for change there is no acknowledgment that its originators are also in need of reform. The Government are the initiators of the policy which training and enterprise councils have been asked to implement. The Government are at least as much a part of the problem as wealth creators.

Against that background, I should be grateful if, when the noble Viscount, Lord Ullswater, replies to the debate, he would give me some indication of what progress has been made during the past 18 months in promoting training in government departments. In my view it is in that way that the Government can best demonstrate the extent to which they practise what they preach.

5.46 p.m.

Lord Brain

My Lords, it gives me great pleasure to follow the noble Lord, Lord Rochester, in congratulating the noble Baroness, Lady Flather, on her maiden speech. I shall not give a curriculum vitae as he did; I shall keep my comments short. Hers was a challenging speech; she challenged us in the committee over an omission. She challenged the House and the Government slightly on one or two points. But it was not controversial. I look forward to hearing her speak in the House as well as assisting us in future in the committee. I am sure she has a great contribution to make to all our debates.

I thank the noble Baroness, Lady Lockwood, for reporting so fully on the discussions we held in the committee and especially on the 10 points that were the framework of our findings and what we felt so strongly about in the committee. The theme through it all was that the committee felt that the Government should give a stronger lead and perhaps also more finance. I shall come to that later.

The noble Lord, Lord Rochester, dealt with matters industrial so comprehensively that I shall be able to reduce my speech considerably. He made many of the points I was going to make, and in a debate with so many speakers it is pointless repeating them. I support many of the points he made.

In our report we draw attention to the great importance of the National Council for Vocational Qualifications. It is a key to training especially for young people and also, I hope, as the years go by and they are able to develop their Levels Four and Five, for older people. The committee noted —and I emphasise our note on this point—that the Government have pump-primed the NCVQ well, but it is taking a long time and a tremendous amount of work needs to be done in setting up vocational qualifications. The committee felt that there was still a need for continuing funding because the NCVQ will become self-supporting only when it starts granting certificates of vocational qualification. These depend on the qualifications being set and on people spending two, or perhaps three or five, years obtaining the qualifications. I do not believe that the cash flow exists; there is a need for more funding.

The TECs can contribute a great deal to our future. There were some comments—and I shall not divert on them—that perhaps there was a need for greater union participation. We may need to examine that.

I wish to draw on the evidence that we received from France, partly because I was there to take the evidence. We went to France 20 years after the French equivalents of the TUC and the CBI had got together and decided to do something about training. Much has been made of this point. A joint agreement on training was reached. The CBI is trying to reach such an agreement at the moment. Those French organisations told the government that their initiative on training would not work unless it was underpinned by government legislation. They stressed that the legislation need not be complicated or bureaucratic. French companies now spend about 1.5 per cent. of their gross salary bill on training. That situation is regulated and there are tax penalties if that sum is not used. That position is being improved upon. I have a feeling that this country would like to see that kind of underpinning legislation here. There are complaints that some small and large companies do not spend money on training but poach trained individuals. After 1991 it will not just be a question of this country poaching individuals or having individuals poached; there will be a European dimension to the problem. I believe that we require not just British legislative underpinning but rather European Community legislative underpinning. We need Community legislation on the amount to be spent on training and the way it is funded.

This is a complicated matter. I realise that one way of underpinning this legislation is through taxation. Taxation and the giving of training credits to companies, which they have to use or pay for other people's training, may be an answer. The Government have produced a good initiative on training credits for young people. However, I suggest that training credits should be given to companies where they do not have training facilities. The training credits could perhaps be managed by the training and enterprise councils. They might be useful as a means of funding the TECs. This matter needs to be considered.

I now wish to turn to a current problem. We shall hear a lot this evening about the training of young people. However, I believe that the training of older people is also important in this time of recession. Such people need to be re-trained, perhaps because the company they work for has gone out of business or perhaps because it is looking at its own internal workings as a result of the recession. Perhaps the company has decided that it must turn either left or right. I hope the House will pardon the political gestures. In other words, it must divert from the path it is following at present. Such a change will require new skills on the part of the workforce. Unfortunately two things happen in such a situation. The staff are possibly on short-time working and therefore they are available for training. However, the accountants of most companies decide that training must be cut as their companies are facing difficulties.

The other problem is that if companies are not profitable the fact that training is a cost that can be set against corporation tax means, unfortunately, that government funding through negative taxation, if one wishes to call it that, is not available for training. There is a need to look again at how training can be funded in this time of recession. I am not talking necessarily about a training levy. Perhaps the Government will have to pump-prime and pull the money back subsequently from companies by charging higher fees. After all, courses have to be set up and the TECs need capital to enable them to move forward. At the moment there is a problem as companies do not have the necessary capital.

I wish to pick up a point made about training in the Government's response to the committee's report. The Government stated: The first rule of setting objectives is to have the capacity to ensure they are reached". I quite agree with that. The Government continued: While the Government can and does influence the training investment decisions of businesses, it patently cannot control the amount employers invest or the type of training purchased". I believe that the Government need to take a much stronger lead in this matter. I believe that the CBI and the TUC should get together to produce a report, and that more input should come from government departments. The noble Lord, Lord Rochester, referred to that point. What are the Government doing about training? How can they feed people in and out of the training situation? Can they advise people in industry how to work better with government departments, on exports for example? A lot of cross-boundary flow exists as regards training that has not yet been tackled. The Government should give a lead in this matter. I support the noble Baroness in proposing that the recommendations of the report be accepted.

5.55 p.m.

Baroness David

My Lords, our chairman, my noble friend Lady Lockwood has given the House an admirable summary of the FORCE programme and the committee's response to it. Therefore I believe that the job of other speakers should be to highlight the points they consider important or the points which need emphasis. There is overwhelming evidence that in terms of training and the numbers of young people staying on in education, the United Kingdom lags far behind not only most countries in Europe but also Japan, South Korea and Thailand.

Our vocational training system has developed in an ad hoc, piecemeal way. There have been constant changes. Now there has been a change in attitude. In 1989 the CBI and the TUC produced papers entitled Towards a Skills Revolution and Skills 2000. The degree of consensus between the two organisations was remarkable. They agreed on the need for a massive expansion of training to attain a skills revolution and so combat existing skills shortages; they agreed too on the need for continued learning throughout people's working lives.

In their response to our report, the Government agreed with the committee that sufficient and appropriate training of the right quality was essential for future competitiveness. They stated: Well directed and effective training is a vital investment". There is a great deal of agreement on the need for training. But there is disagreement on how it is to be achieved. The Government have opposed on principle any Community measures that could add to employment costs. The Community social charter declares that, every worker of the European Community must be able to have access to vocational training and to receive such training throughout his working life". The charter gives people the right to training. However, it has not been signed by the UK. The UK is the only member state not to have signed it. Behind the Government's refusal to sign is the belief that however necessary it is to increase vocational training and however much an investment by a company in vocational training would he a remunerative investment, any burdening of employers with legal requirements would be counter-productive and would increase costs. The committee believes that without some compulsion little will be done. The committee further believes that it is hopeless to rely on companies to act voluntarily.

The CBI believes that any employment of under-18 year-olds which does not involve structured education and training leading to recognised qualifications should be eliminated. The CBI argues that this could be achieved through voluntary means if young people, educationalists, the Government and the two sides of industry come together to make it happen. On the other hand Sir John Cassels, a former Permanent Secretary at the Department of Employment and author of Britain's Real Skill Shortage, thinks it implausible to believe that such a major change could be effected by voluntary means. He points out that young people can earn relatively high wages on leaving school at 16 and that these earnings provide a strong disincentive to undertake training. Employers are tempted to view 16 and 17 year-olds as cheap labour. Sir John proposes contracts of employment for 16 to 18 year-olds which would include an obligation to train and would lead to a recognised qualification. He believes that the Secretary of State should regulate the pay of young people.

That brings me to the question of legislation. The committee came to the view that some kind of statutory underpinning was needed to act as a catalyst for change. I endorse that view strongly. The voluntary approach has failed. As my noble friend Lady Lockwood remarked, the committee concluded that legislation should be introduced which would ensure that all 16 to 18 year-olds were provided with education or training, and that every employer who employed a 16 to 18 year-old full-tune would be obliged by law to arrange an appropriate programme of training.

It is a mistake to refer to "education or training". Young people, and indeed older people, need both. By saying "or" we are in danger of continuing the disastrous division in this country between the academic and the vocational. If we want to get on we must put a stop to that.

This leads me to comment on our educational system, which has been so unsuccessful in keeping 16 year-olds in education. The total is now about 50 per cent. of the age group, a slight improvement over the past year or two. I believe that tertiary colleges are a better bet than sixth forms or sixth-form colleges as they provide both academic and vocational courses in the same place. The students can take a mixture of both and need not be confined to one stream or another.

There should be much greater freedom to take exams such as BTEC in schools and colleges working under school regulations. Incidentally, I believe that it would be a very good thing to get rid of school regulations altogether. I believe that there is some movement regarding BTEC; I hope that the Minister can give further information. It is a type of exam that appeals to certain children very much more than A-levels. BTEC provides an attractive alternative for many and a different route to higher education. It could help to keep young people in the educational system.

The FORCE programme proposed a framework for vocational training. My noble friend Lady Lockwood quoted the sub-committee's report, which asked for a coherent framework. She quoted from the sub-committee's report on youth training in the EC, which appeared in 1984, and which asked at that time for a coherent framework. Six years have gone by since then: we still have no framework. There was hope of one in Mr. Fowler's statement in December 1989 when he announced a number of admirable objectives for young people and adults. They would have given the right to training by the end of 1992; also, targets were set for certain qualifications, which appear in paragraph 50 of our report. Mr. Fowler said: Unless we set ourselves those kinds of stretching targets we shall not meet the need for upgrading and multi-skilling in a decade of continuing rapid change, nor shall we adequately meet the rapidly growing need for re-skilling of older workers or of those returning to the job market". Unfortunately Mr. Fowler went. And the objectives were withdrawn by Mr. Howard.

One cannot help but be suspicious of the Government's commitment and therefore of their understanding of the need for urgent action. When Mr. Eggar was tackled by the committee there was a certain amount of ambiguity in his response. I thought that he was a bit shifty.

Our committee proposed a comprehensive national strategic framework which included 10 points. My noble friend Lady Lockwood quoted them. I should like to mention a few. Plans for installing and maintaining a single national system of vocational qualifications and standards are well under way with the National Council for Vocational Qualifications. Provided it has enough funds and is not expected to be self-financing, as the Government seem to want, good progress should be made.

Points VI and X relate to proposals for monitoring and improving training quality and monitoring and evaluating national training performance. I should like to know from the Minister what plans the Government have for undertaking that monitoring. To what extent will the TECs and the training standards advisory services be involved?

Points VII and VIII refer to improving access to training. What specific measures have the Government in mind? To what extent for example, will distance learning be involved? The careers service could be of great help here. It should be extended to include the entire workforce and there should be increased funding. The committee said that it was for consideration whether the service needed to be independent of LEAs as a result of that extension. I believe that it would be a pity to remove it from the local authorities. There is a very good background of knowledge and experience there to build on. As usual, it is resources that are lacking.

In the internal review of the careers service which the ACC and the AMA undertook and discussed with the Department of Employment, there is a paragraph which is worth quoting: The Careers Service is central to the delivery of information, advice and guidance … It also needs to be recognised that the Careers Service … is involved in wider activities than these. Within local authorities the Careers Service often has important links with economic development departments, library and information services, housing, and social services departments. Within the education department it has an important input to the planning of further education and training and is often employed as an agency to assist in the delivery of various Training Agency programmes. It also … has a role in projects related to educational advice and guidance specifically directed at adults and adult literacy and basic skills schemes". I hope that before decisions are taken those points will be borne in mind. If the Minister can give any up-to-date information on the review I should be grateful.

I trust that the Government's quite warm reception of, and agreement with, the report will mean action and that the TECs, on which the Department of Employment places such reliance, will achieve the success which is hoped for. Once again, they will not do so without adequate resources. The South and East Cheshire TEC, when it gave evidence, clearly felt that more money was needed to do an effective job—for transport and travel, to take one example.

The Government's cutting of expenditure on training, which the noble Baroness, Lady Flather, mentioned in her excellent maiden speech, at this time, makes one both doubting and despondent. That and the negative response to suggestions for various tax incentives and the objections to legislative underpinning make one fear that the commitment to real change in vocational training and re-training is much less than it should be and that the urgency that the committee felt was essential—in its words, there is not much time left for action— has not been recognised by the Government. I hope that when the Minister replies he will dissipate some of those fears.

6.6 p.m.

Baroness Faithfull

My Lords, with other noble Peers I pay tribute to my noble friend Lady Flather on her maiden speech. She and I served on the Swann Committee for seven years looking into the question of the education of children from ethnic groups. I therefore know how much she has to offer to your Lordships' House. I also congratulate my friend the noble Baroness, Lady Lockwood, and her committee on the report.

I wish to ask only one question. Part II of the report deals with vocational training in two member states —Germany and France. Paragraph 5 reads: Activities to be initiated by the Commission could include the following: support for innovation in continuing vocational training, such as: exchange schemes for staff involved in training". I appreciate that the report deals with Europe. Howe%er, I wonder whether my noble friend the Minister could let me know whether the scheme could be extended to countries outside Europe. I have read and representations have been made to me that young people in Russia aged 16 to 18 at the moment are feeling somewhat bemused by the political changes in their country, which we all welcome. Would it be possible for there to be an exchange between young people and those who train them in Russia and those involved in training in this country? It is only a small question but I should be grateful if my noble friend could let me have a reply.

6.8 p.m.

Lord Bonham-Carter

My Lords, first, I have an apology to make. If the debate continues much later than 7.45 p.m. I shall have to slip away owing to a previous engagement.

I too should like to congratulate the noble Baroness, Lady Flather, on her maiden speech, which I listened to with great interest. I accept her mild rebuke that in the course of our consultations we did not take evidence from the CRE. I also appreciated the importance which she attached to the training of ethnic minority groups, who are obviously particularly vulnerable to the absence of training facilities.

I should also like to thank our chairman, the noble Baroness, Lady Lockwood, who looked after us so effectively and summarised the conclusions of our report so comprehensively and fairly. That makes it all the less necessary for those of us who were on the committee to spend time rehearsing the outlines of what vie discussed. That has already been done. I shall do my best to be brief in addressing myself to some of the problems with which we are confronted.

One cannot very well start speaking about this whole important topic without introducing one's remarks with the depressing conclusion reached by the committee. It has already been referred to but it needs repeating: a substantial increase is needed in both the quantity and quality of training in the United Kingdom and unless that is achieved there is a severe risk of a steady and accelerating decline in the United Kingdom's economy. That has been said before and events have proved it to be correct. I suggest that the absence of vocational training in this country is one of the major factors that lie behind our relatively poor economic performance.

Not one single witness who came before the committee denied that in today's world training is the key to productivity. In connection with this debate I would add that for the purposes of our discussion to distinguish between education and training is somewhat unnecessary and unhelpful. Both are part of one process. I feel that the Government's responsibility extends beyond education to training. To pretend that when people leave school suddenly the Government no longer have any responsibility for training them seems to me to be untrue as well as extremely unwise. Training is merely a specialised form of education and should be recognised as such.

In the course of this debate the deplorable situation in this country compared with other countries has not been made quite as starkly evident as it should have been. It is the case that by the end of this century South Korea hopes that 80 per cent. of its young people will reach university entrance standard and France expects that 75 per cent. of her young people will do so, whereas the United Kingdom's ambitious target is 30 per cent. To take another indicator, today 95 per cent. of Japanese stay in education until they are 16 or 18; over 80 per cent. of young people do so in the United States; at best only 50 per cent. do so in this country.

One-third of the British workforce has received no training of any sort whatever. To take one trade in particular—the furniture industry—nine-tenths of the people in that industry in Germany will have had three years' vocational training and have a qualification. Only one-tenth of comparable persons in this country will have received such training. It is in the face of those intractable facts that the Government's approach to the crisis must be judged. If we continue along the route on which we are set at the moment, we are bound to slip behind our competitors in Europe and elsewhere.

No one denies that state of affairs and the Government accept the FORCE proposals; but they do not will the means to put the FORCE proposals into effect. I find that profoundly disappointing. The Government have no strategic plan. They refuse to set targets. They are reducing the money that they offer for training. They persist in relying on the voluntary system. They assert that there is no consensus to the effect that young people should either stay on at school or undergo training to the age of 16 or 17.

I do not know where they are looking for such consensus. There was universal consensus among those who gave evidence to us that this was desirable. I have not heard anyone say that it was not desirable. Does anyone solemnly suggest that it is a good thing that young people should leave school at 16 and not receive further training or education? Is that the Government's view about the attitudes in this country? If so, how can we change the situation? That is the task that confronts us. How can we get out of a situation of rather smug inertia in which we do nothing?

I hope that in reply to the debate the Minister will not simply repeat what was said in evidence before the committee, which we have read and heard. Having read and heard that evidence, it is not unfair to say that the committee came to the conclusion that the Government did not quite measure up to the needs of the moment. I hope that they will reconsider the need for a strategy and the need to set targets. I hope that they will explain why, unlike other countries in Western Europe, they have chosen this moment to decrease their financial contribution to training; or perhaps we should regard that as just part of their general neglect of infrastructure which appears to be a policy that they pursue in many areas of our life.

Given the gap which exists and which I suggest is growing between the United Kingdom and its competitors, and given the long history of failure which has marked the voluntary approach, the case for a statutory approach starting with the 16 to 17 year-olds, as recommended by the committee, seems overwhelming. If the Government intend to reject that recommendation, they must produce some very substantial arguments as to why.

At another inquiry conducted by one of the sub-committees of the Select Committee on the European Communities which is taking place at the moment members were told that for every £1 invested in the reform of the economies of Central and Eastern Europe £2 ought to be invested in training. That figure is significant. It indicates that the key to economic performance lies in training. If that is what we tell the people of Central and Eastern Europe, we should practise what we preach to them.

6.18 p.m.

Lord Hunter of Newington

My Lords, I should like to add my congratulations to the noble Baroness, Lady Flather. The House will not be surprised to learn that she has already put her imprint on the next report of the sub-committee which is to be considered tomorrow morning. The principal recommendations have been eloquently set out by the chairman and discussed by many other noble Lords. I shall be very brief and will confine my remarks to one important issue. In doing so I refer to the report published in October this year by the Save British Science Society. That organisation and many others, in particular the Royal Society and the research councils, have drawn the attention of government to the deficiencies in our scientific training programme, which of course begins at school.

I believe that that is the key to our problem in a science-based society. All children at secondary school should be taught science by teachers who have an appropriate degree. When I was at school it was reasonable to decide whether to join the science stream or the arts stream. I do not believe that that is any longer the situation. All children must be taught about science in the same way that all children should be taught at least one language at an early age. One has only to see children from several different countries playing on the beach to realise that they are teaching one another French, German or English as they are playing together.

Another aspect which must become the norm rather than the exception—it has been referrd to several times already—is the period of post-16 training with the aim of increasing full-time participation levels to about 70 per cent. to 80 per cent. Everyone should be able to achieve some recognised qualification. The Save British Science organisation also recognises that tertiary education should be available to the majority with at least a 50 per cent. increase in science and engineering graduates.

I entirely support the view that if we are to cope with the new European situation we must produce technically trained people with qualifications which are of an international standard. It would seem perfectly possible that if we do not do so those in Europe, in particular from Germany and Italy, with such qualifications will require to be appointed to industrial concerns in this country because our people will be unable to fulfil that need in a competitive sense. That is quite a thought.

The contribution of the noble Lord, Lord Perry of Walton, to the debate on investment in education on 21st November is of great relevance to the problem. He said that the broadening of the school curriculum introduced by the national curriculum left the A-levels unchanged. He regarded that as a grave mistake. That is highly relevant to what we are discussing. A-levels force those who stay at school to study in depth rather than in breadth and that discourages many from remaining at school. Attention must be given to those matters.

The noble Lord's careful study of the national curriculum in science revealed—this is difficult to believe—that few 16 year-olds are expected to reach beyond level 7 of the 10 levels of achievement under the curricula. One extraordinary result of that is that few 16 year-olds taking science will have been told anything about DNA, the genetic code or genetic engineering because those subjects appear only at levels 8, 9 and 10. In the debate he stressed that it is a matter for grave anxiety that more than 70 per cent. of our children will be turned out into the adult world at 16 with no training or education in subjects such as genetic engineering. The broader approach to education training is, I believe, the right one.

The view of the noble Lord, Lord Perry, of the development in technology was even more depressing. Apprenticeships have virtually disappeared. Further education has had to cope with students who are ill-prepared in the basics of maths and physics. The shortage of teachers has been a problem for decades. It is not a new crisis. It has been with us for many years. But the disastrous situation in this country has been very clearly revealed to the European Committee of your Lordships' House as it compares the situation with other Common Market countries, in particular Germany and France.

In their reply to the report of the Select Committee, the Government stated that they believe the formation of local employer-led training and enterprise councils forms the key to meeting that challenge. From what I have said, noble Lords will gather that I wonder about that.

The Government stated that TECs are based on a new concept. Although we have learnt from private industry councils in the United States, TECs have more money, greater scope and more senior industrialists with which to fulfil their missions. The Government are convinced that their ability to sustain the interest of top executives will be crucial in the re-skilling of Britain. It is right that employers should take a leading role. I do not disagree with that.

I believe that we must heed what the noble Lord, Lord Perry, said. The crisis is in the schools. The systems that are suggested by the Government will not work, at least not fully and to our satisfaction, unless we deal with an output of school leavers whose basic education in maths and science has been almost entirely neglected.

Where are the resources to come from to provide pupils at school with the hardware necessary to establish work stations? Let us take the simple example of a personal computer, a video disk player and a cable connection to a central library of learning materials. That is what teenagers should be exposed to. If that is provided the situation in schools will be transformed. The noble Lord, Lord Perry, said that, and I believe that in the light of his enormous experience the matter should be urgently examined.

6.25 p.m.

Baroness Turner of Camden

My Lords, I too should like to begin my comments this evening by congratulating the noble Baroness, Lady Flather, to whose maiden speech I listened with great appreciation. I am also serving with her on one of the Select Committees. She has already made a contribution and I look forward to hearing what she has to say on this and many other subjects in the future.

I was a member of the Select Committee whose report is now before your Lordships. With the leave of the House, I therefore speak from the Back Benches instead of from my usual place on the Front Bench. I should like to commend the report, which has been so adequately and comprehensively summarised by our chairman, my noble friend Lady Lockwood. As she indicated, the committee was conscious from the very beginning of the importance of the task that it had been given. It devoted much time and attention to it. We heard a large number of witnesses and looked at much evidence. That is included in what I consider to be a very good report.

We were in no doubt when we started that the issue of vocational training is crucial to future economic success. Our Continental neighbours—those with more successful and productive economies than ours —have devoted a great deal of time and attention to training. They have rightly regarded it as a long-term investment and it is paying off.

Perhaps I may quote from a talk given recently to the third training and enterprise college conference this year by a Berlin academic. It appears in the current issue of the Employment Gazette. She told the conference that in Germany productivity per worker is 60 per cent. higher than in the UK and wages 70 per cent. higher. Some 65 per cent. of German workers have completed two years of vocational training compared with 25 per cent. in Britain. About one-third of young people stay in full-time education at the age of 18 compared with only one-fifth in our county. About 70 per cent. of German school leavers take apprenticeships. Reference is made in our report to the training and re-training programmes undertaken in both Germany and France. We were often told in the course of our investigations that Britain lacks a training culture. Yet years ago we had a skill and craft tradition in this country. What has gone wrong?

As our report indicates, the Government have embarked upon a new initiative. They seem to have concluded that the old structures are too bureaucratic and do not work. Hence industrial training boards —with the exception of the construction industry training board, and that for only a limited three-year period—have become non-statutory bodies. The Manpower Services Commission was first transformed into the Training Commission and now has been discontinued altogether. The Government are pinning their hopes on a voluntary approach which they believe must be employer-led and for which employers will largely foot the bill.

The Government seem to have a rooted objection to anything tripartite. Does that stem from a deeply-rooted hostility to trade unions? In the Community the co-operation of the social partners—its name for employees' organisations—is actively sought and encouraged. However, unions in the UK have always been willing to play an active part in encouraging training initiatives.

I recently received from the TUC a document entitled Joint Action over Training. It contains details of a number of joint agreements reached by unions with employers. For example, I refer to a joint union agreement at Fords, an agreement a t British Gas, agreements about transferring skills—training women for jobs previously regarded as career jobs for men in the finance industries—and, interestingly, an initiative at European level between unions and employers to provide qualifications for employees in the retail industry, such qualifications to be recognised throughout Europe. That is a European-based initiative. So although cold-shouldered by the UK Government, unions in the UK have been getting on with the job which their colleagues on the Continent have been doing for some years.

I referred earlier to the disappearance of industry training boards and their substitution by non-statutory bodies. Although we have not dealt with it specifically in the report, I believe it is important to strengthen the role of industry training organisations. The industry/sector level features in both the French and the German training systems. However, following the abolition of the statutory boards, the industry training organisations are in the main small organisations without much in the way of resources, and of course they are entirely employer-led.

The statutory boards were specifically charged with the task of raising the quality of training within firms and had statutory powers to achieve this. The new ITOs do not have that task and it is not clear that the TECs are to assume that role either. ITOs should be asked to set training targets for their sectors, and research and monitoring functions should receive adequate public funding.

I still have the concern that I have voiced in this House from time to time that the special projects undertaken by the Engineering Industry Training Board—with specific reference to projects for women —will not be carried out by the successor body or indeed by anyone else. What, I ask again, is to happen to the money that used to be obtained from the European Social Fund? With that money the Engineering Industry Training Board was able to embark upon such projects as training for women, and so on.

Our report makes reference to the importance of training for women, and it is hoped that all concerned with training will take this objective very seriously. I am very anxious about the reports of training problems arising from the beginning of the recession, because it seems to me that women's training always suffers if there is a recession. I hope that steps will be taken to ensure that this simply does not happen this time around.

Your Lordships will note that in our report we say that the Government should play a more prominent role in encouraging access to training, particularly for women and women returners. In that area, support services—childcare, parental leave, and so on—are particularly important. Your Lordships will note that we have argued in the report for legislative underpinning, and this has been referred to by a number of speakers already.

Far too many people leave school and go directly into unskilled dead-end employment, and employment without any regulations to protect them either. We believe that young people between the ages of 16 to 18 should either be in full-time education or on an approved training course. That would give young people here the same grounding as that provided in France or Germany.

I am very glad that the noble Lord, Lord Brain, raised the whole question of the older worker, because the resources available in the older work force are often ignored and all too many of them some years ago were given early retirement or redundancy—again, at a time of unemployment. But they have skills and experience to offer and they should not be ignored in training programmes either.

Our report emphasises the need for very much more to be done, and in the main is in support of the commission's proposals. In particular, we want to see a national strategy. With the abolition of the training agency, there is no national body with overall responsibility and with a clear and authoritative national voice. Personally, I believe that that is necessary. Although there have been some developments in recent years that we can all applaud—the establishment of the National Council for Voluntary Qualifications, for example; and I was extremely impressed by the evidence we received, oral and written, from the NCVQ—it is quite clear that a great deal remains to be done in that area.

I hope that our report gives a lead and that what we have said will be taken very seriously by the Government. We have had a great skills tradition in former times in this country. After all, we sit in this marvellous Chamber this evening surrounded by evidence of the work of the skilled craftspeople of previous generations. There is no reason why, given the resources and the will, we should not once again be able to say that our skill—the Made in Britain label —is something of which we can all be proud. But I emphasise that there is the need for resources.

I note that the Vice-President of the Institute of Personnel Management recently voiced the view that more money had to be available and even raised again the prospect of some form of training levy. In the same newspaper, on the same day, there was a report about the need of TECs for more resources and concern about the cutting of resources that has taken place. We are simply not spending enough and, as we have said in our report, it should be looked upon not as expenditure but as investment—an investment that we simply cannot afford not to make. I commend the report to your Lordships.

6.35 p.m.

Lord Gisborough

My Lords, I too should like to add my congratulations to the noble Baroness, Lady Flather, on her excellent maiden speech.

The Select Committee's report on training makes sombre reading when one reads the extent to which this country appears to be lagging behind our competitors in Europe and elsewhere. In 1987 in Germany, 93 per cent. of school-leavers started further education, and 88 per cent. gained qualifications. Despite the fact that UK employers spent £18 billion on training in 1986–87—that is 2 per cent. of labour costs—plus a further £3 billion by Government aimed at the young and the unemployed, no less than 52 per cent. of the workforce had received no training. I ask your Lordships to compare France, with 35 per cent. of school leavers reaching university standard, and 30 per cent. in Germany, with a paltry 15 per cent. in Britain.

The CBI task force, we are told, has found the UK workforce to be uneducated, undertrained and underqualified—a very serious indictment. Only half the employees had O-levels. That is an astonishing figure if it is true. British children seem to achieve fewer and lower educational levels and qualifications than most member states. British adults have fewer vocational qualifications and at lower levels than our trading partners—little wonder when seven out of 10 British school-leavers leave school at the minimum leaving age.

The same proportion have only the shortest training before starting their first job or have no training at all. Meanwhile, nine out of 10 of all German employees have vocational qualifications based on a three-year apprentice-type course. In Britain, only one-tenth come near to that category. I find these figures difficult to accept, and I hope that I have misread the report.

There have been various initiatives in the UK, ranging from industrial training boards, the Manpower Services Commission and now to the Training Enterprise Council. Those who have seen the operations on the ground cannot fail to have been impressed by the dedication and valuable work done at these training workshops.

The most important of the programmes have been the YTS, the ET and now the YT. ET is quoted as being the biggest training programme for the unemployed in the world. Youth training has cost around £900 million and has been a great success, with 89 per cent. of completers gaining jobs or going into further education.

We have often heard how the young have been made to sweep the floors when on training secondment to employers and how they are used as cheap labour. No doubt there have been cases where this has happened. But I know from experience and from talking to other employers that the vast majority of them go to great lengths to do their best to give the youngsters in their charge as interesting and as varied a time as they can within the confines of their business operation. It is a great pity that some of the schemes have been given a bad name due to the thoughtless conduct of a very small minority of employers.

The White Paper, Employment for the 1990s, states that radical reform of the training system is needed. All the witnesses, including the CBI, the ACC and the TUC, agree about the need for more training and for further training throughout a man's working life. Yet while other governments both in and beyond the Community are increasing their expenditure on training, the UK Government are decreasing their funding from £2,661 million in 1987–88 to a planned £2,399 million in 1991–92. I shall be interested to hear whether the Minister can say how this drop can be justified.

The paragraphs on training targets are interesting. South Korea aims by the year 2000 to have 80 per cent. of its school-leavers reaching university entrance standard. France aims at 75 per cent. It seems that our aim, according to page 15 of the report, is only 30 per cent.

We must set ourselves targets that are similar to or better than those of our competitors, and we must go all out to achieve them. It is no good for labour to claim wages equal to those of Europeans if the quality of their work, through lack of education, disallows them from earning as much per man in output. That is the way to national decline, eventual low wages and low standards of living. If we believe in competition, we must compete.

What are the targets for school-leavers in terms of qualification by the year 2000? It is refreshing to read about the TECs. They are undoubtedly making a major contribution to training, and there is every indication that they are going to be highly successful. We have a TEC in my county. It is interesting to see where the school-leavers first go on leaving school: 10 per cent. went straight to a job; 40 per cent. went to youth training; 30 per cent. went to 6th form; 12 per cent. went to further education, and only 3 per cent.

went to unemployment. Those figures are a great improvement on the main figures contained in the report.

Of some 3,000 people in youth training on the two year course from April to December, 333 received NVQ at the 1–2 level and only 23 on the 3–4 level. At the higher levels that is a small amount.

There is a national consensus in Germany that all school-leavers should receive vocational training, with a year's free vocational training for those who are backward or who are late developers. There is not the same support in the UK where there is a tendency for some parents to want their children to go out to work at the first opportunity to bring in a wage, regardless of the long-term damage to their earning ability. That is particularly true of some of the poorer families where the need to supplement the family income is highest but where the need for education is also the highest. Some of them oppose education and encourage their young to do likewise. Exhortation is not enough; there must be a change in the cultural attitude to training with incentives that will appeal to those poorer families.

There is a host of youngsters who have opted out of education, who are perhaps playing truant or who are late developers. There are 900 truants in my county. They are all heading for a wasted life on social security; yet many, if not most, of them have great potential, if only they could be "switched on" at the right point in their lives. I mentioned in debate recently the case of Osmond House in Birmingham which is run by Barnardo's. It seems to have found a way of attracting tearaways into the classroom. Perhaps there is something to be learnt from their methods. Adolescent resource centres also pick up a number of them.

There is a great potential of talent that is being wasted. It is essential not only for them but for the nation that they should be tempted back into the classroom or the workshop in order to fulfil themselves and make their contribution to the future of the nation.

6.45 p.m.

Lord Northbourne

My Lords, I should like to thank the noble Baroness, Lady Lockwood, for the skill and courtesy with which she has led us through this inquiry.

The noble Lord, Lord Bonham-Carter, in a very good speech, if I may say so, referred to the unanimity of opinion between the TUC and the CBI, within the committee and on behalf of the Government that we as a country are disastrously behind our competitors in vocational training. Various suggestions have been advanced to explain that state of affairs. The Government in their reply to our report state that no amount of government activity can make an impact unless employers view training as an investment essential to business success. Similarly, individuals need to perceive how training will benefit them. Fundamental changes in attitude are necessary.

In wondering why attitudes to training are as they are, I am very much seduced by the opinion of Adrian Wooldridge as expressed in the pamphlet Education and the Labour Market. He states: The performance of a sophisticated economy is increasingly dependent not on its fund of physical capital but on its capacity to mobilise the brain-power of its citizens. Shortages of properly-trained brain-power will prevent economic growth in the next century just as surely as did shortages of raw materials in the last. This is hardly good news for the United Kingdom. Britain has proved singularly bad at training and mobilising the brain-power of the mass of its citizens—not least because the intellectual Mandarins who created our educational system in the mid-nineteenth century and the radical academics who reshaped it in the mid-twentieth shared one belief in common: that the world of commerce is beneath consideration". I should like to refer to a couple of points raised in the report. First, there is emphasis on the fact that vocational training will work only if it leads to higher productivity. I have the privilege to be a director of a company called Center Pares. We build and run holiday villages in Holland and in this country. Some of the properties are look-alike and they are structured and managed in the same way. I regret to have to tell your Lordships that in the case of certain jobs the productivity of the Dutch workers is 60 per cent. higher than for those doing the equivalent job in this country. My Dutch colleagues look at me across the board table and ask how it can be that British workers are so much less productive. The only explanation that I can give them is lack of training.

Higher productivity is essential because it creates viability within an enterprise, enabling it to pay for training and to have some reward for carrying it out. It is also tremendously important because it enables the employee to get more job satisfaction and more money out of the job.

If I may go off at a tangent, I should like to refer to the training programme which is carried out at Disneyland in America. I believe that it is an extremely well run company. All employees, whatever their jobs will be, whether sweeping the streets or cleaning the toilets, are given at least a week's inductory training. The theme of the training is "Your job is making people happy". Therefore, one hopes that the members of that workforce get job satisfaction.

As a result of training there is also a need for better management, and that in itself requires training. We always come back to the question of training.

One point which concerned me and which is a demotivating factor to many employers in relation to training is the fear that employees having been trained will be poached by competitive enterprises. There is the possibility of intercontinental poaching, which is a terrifying prospect. I raised that matter with every witness that I could. I was surprised that the witnesses to a man or a woman said that this was not a problem. In the better businesses the training ethos and the fact that they actually offer training create an environment in which employees tend to stay; they perceive a training culture within the enterprise that gives them the opportunity to better their position and gain increasing job satisfaction. Therefore, it would appear that poaching is not a problem if career development is linked with training in a well managed business.

The final point that I should like to raise relates to the type of training. There is the specific type of training; for example, teaching somebody to make widgets, how to lay a table or whatever the job may be. Those skills must be taught within the industry and they are job specific.

However, we are now told by the experts that during their lifetime young people growing up today are likely to have two, three, four or even five different job activities because of technological change. Therefore, it is extremely important to give them the necessary portable skills, particularly in the early part of their lives, which apply to every kind of activity and industry in which they are likely to find themselves.

The most important of those is interpersonal skills and being able to relate and communicate with other people, whether one wishes to sell something, buy something, get along with people, work with them and so on. The most important person to understand is oneself. I should like to ask the noble Viscount whether he can give me an assurance when he replies that interpersonal skills are part of the national curriculum and of the syllabus of all national vocational qualifications.

6.50 p.m.

Viscount Caldecote

My Lords, I add my congratulations to my noble friend Lady Flather on her excellent and well-balanced maiden speech.

I very much welcome this report on vocational training relating to the European Community proposals, with its constructive recommendations which are almost all relevant to the United Kingdom. European Community interest on this subject adds extra urgency to the need to set our own house in order. I shall quote no figures because other noble Lords have done so and the case is very well documented. However, as regards training and further training, we are behind most of our main competitors. I have had first-hand experience of that in Japan and Germany.

It is quite true that the Government have been active in implementing new programmes of training over the past few years. This year government expenditure was £2.5 billion, which should be seen in the context of some £18 billion spent by industry. However, we cannot be complacent. We have a very long way to go to meet industry's needs in the highly competitive markets of today. Already the shortage of skilled people is a bottleneck in improving innovation in design, manufacturing and marketing, and so we are prevented from keeping ahead of competition over a broad front.

I believe that a necessary condition for success, as suggested in paragraph 89 of the report, is to regard the cost of training as an investment and not a cost. That expenditure should be disclosed in company accounts, just as it is now necessary to disclose expenditure on research and development under the new standard accounting practice No. 13.

As I have said already, the Government have put forward many constructive initiatives on training. I believe that NCVQ is one of the most valuable. However, there have been too many changes. There have been the community programme, YTS, ET, TECs and many others over the past few years. That makes great difficulties for those involved in providing training. There have also been changes in funding which create further problems. I am a trustee of a training organisation based mostly in the North. There are six or seven centres around the country with an excellent record. One centre has been given an award for a high standard of training. However, we now find it very difficult to operate with the reduced funding levels. Almost inevitably that will result in the curtailment of the scale of our training programme. That seems to be extraordinary when there is an enormous unsatisfied demand for training places.

Another problem is that programmes, although excellent, are somewhat fragmented. I very much welcome the recommendation endorsed in paragraph 92 of the report that, in the United Kingdom there is an urgent need to bring together the education, training and employment of young people in a coherent framework which can be understood by employers, parents, educators and trainers and, above all, by the young people themselves. There is much common sense and importance in that.

I welcome very much the emphasis at paragraph 91 on the need for consensus between employers and trade unions as regards training. It would be better still if there could be consensus among political parties. Is that too idealistic an aim? Is it too naive to suggest that? I hope and believe that it is not. If we in the United Kingdom are divided, how will it be possible to compete with our European competitors who will be united in a common purpose on the importance of training?

I should like to see a more Cross-Bench approach to training and continuation training. That would be a very constructive approach to these important matters where the objective is in no way a party matter. We may disagree somewhat on the method of funding and the priorities, but the ultimate objective of increasing the skill of the workforce in industry is not a party issue. It would also help towards continuity of policy. It is very encouraging to see evidence of that consensus in our debate in your Lordships' House today.

Paragraph 94 suggests that more emphasis should be given to forecasting future skill shortages and training requirements. I am rather doubtful whether that is wise if taken too far. It has been tried before. Surely it is better to provide a very wide range of good training programmes and opportunities because that would be more effective in achieving a broad level of competence and flexibility in the workforce, as is recommended in paragraph 99.

Finally, I strongly support the vital need for continuation of training throughout the working life. There should be a scheme to fund personal expenditure on continuation training. At present a company can fund such training and obtain tax relief upon it but an individual must pay for his own education in order to keep up to date during his working life. It would also be a help to have in any list of qualified people an indication of those who have maintained their knowledge through continuation training. For example, in the register of qualified engineers maintained by the Engineering Council it would be quite easy to indicate on the list those who had undertaken some re-training at intervals of not less than, say, three years.

This excellent report shows how matters are moving in Europe. In spite of many constructive initiatives by Her Majesty's Government, in many ways we are still well behind our competitors in training an adequate number of skilled people. Therefore, there is a need for continuing pressure to build on the present schemes and to ensure their effectiveness. Both industry and government have a part to play. I hope that the report will act as a valuable stimulant to both, thus ensuring that adequate investment is made in this priceless asset—a well-motivated and skilled workforce.

6.58 p.m.

Baroness Seear

My Lords, my noble friends Lord Rochester and Lord Bonham-Carter have made it abundantly clear how strongly we on these Benches support the main thrust and recommendations of the report. I shall not bore your Lordships' House by repeating what they have said or, indeed, by repeating the points which I seem to have made ad nauseam since I came into your Lordships' House nearly 20 years ago on the urgent need—urgent then and urgent still—to improve the level of training.

I was chairman of the earlier committee on vocational training for young persons in the EC and of your Lordships' committee on unemployment, both of which dealt with the need for training. I must confess that any sponsorship by me seems to lead nowhere at all. Let us hope that this report will have greater success.

Before proceeding, I should like to say how delighted I was to hear the speech of the noble Baroness, Lady Flather. That was a second speech from a Baroness not born in this country, but plainly bringing to your Lordships' house great richness and addition to the debates that we hold.

Instead of covering the ground which has already been so well explored during the debate and in the report, I shall raise one or two points which may have been raised but which have not been stressed to the extent that they might be. The first point is that in the modern world the kind of training we need for the youngsters leaving school will not be possible unless the people doing the training are able to build on a sound educational base. The inability to train adequately is linked to the failures in our schools.

This is not the debate to go into the ways in which the school position can be improved. However, there is a link between competency in schools and training. That involves funding, support for teachers, and all the other matters we have discussed so often that are essential if we are to be effective on the training front.

The days when training meant teaching people to do the limited tricks of a limited trade are long past. What is needed are people who are literate, numerate and have communications skills. Above all, they must be able to learn and be confident that they are able to learn. It is confidence in learning that is lacking in many people, largely because they have not been successful in any other previous educational experience. They believe that they are not capable of learning the things with which they are confronted.

We therefore start with education. I wish to make one particular point; it is a specialised point but not an unimportant one. The report stems from a European Community recommendation. We are talking of industry and training within the context of the European Community and the world of 1992 and beyond. We in this country are also discussing changes in A-levels. That is an important part of the training of people who are coming up for the more responsible and senior jobs in the country. But it is extraordinary that we never speak of the importance of the international baccalaureate. If we are considering revising A-levels, and as we are now seeing ourselves as part of the European Community, we should be making the international baccalaureate available to far more people than at present.

The other day I asked a question of someone working in this field and was told—although it may not be true, and I sincerely hope it is not—that there are only 20 schools in this country providing the international baccalaureate. Yet that is a very important starting point for the increasing number of people who will wish to do some of their training and qualification in universities outside of this country. That is the kind of opportunity and scope which reverts to medieval days—we will leave that on one side for the moment; I agree training would be rather different—but which people would be able to have if they started with the international baccalaureate.

When the Education Reform Bill was being debated, I asked whether the requirements of the GCSE were such that it would enable or hinder people if they wished to do the international baccalaureate. I never received a clear answer then and would be glad to know now whether the Government have any interests in that, in view of the growing importance of European qualifications. If not, are they prepared to look at it and see whether anything can be done on that front?

We move, as many people mentioned, from basic education to the question of the 16 to 18 year-olds. We on these Benches have long advocated that those years should be years of learning rather than years of producing. Therefore we welcome the threefold option that is put forward in the report either to stay on full-time in school, to have full-time training outside school or a job in which the emphasis is on training and not on producing, and which training leads to a recognised qualification.

That scheme is excellent. But there is one possible snag; that arises if the immediate economic advantages of those three options are very different. If one were to be very much worse off by staying at school rather than taking a job with training and the possibility that one will obtain some NVC qualification, I fear a considerable number of people will not stay on at school. On the other hand—to use the boringly overworked phrase—if a level playing field existed between the three options, those people may choose to stay on at school. I am reminded of a student of mine from a working class family who said to me, "There is an awful row going on in our family. My parents want my younger brother to go to university the same as I did. He wants to leave school now as his eldest brother did because his eldest brother now has a Jaguar". As long as there are economic advantages in leaving school and going into a job which provides more immediate financial return, we shall not have choices based on the real value of the three options; they will be based on the immediate rewards to the people concerned.

That means looking at youth payment levels. That subject was touched on in the report but perhaps not explored so far as it might be. I always thought it was a great pity that we brought the adult age for males down from 21 to 18. That was largely a by-product —totally unanticipated—of the Equal Pay Act. I shall say no more about that for the moment. It means that within two years of leaving school, youngsters are entitled to the full adult rate of pay.

One reason why German apprenticeships have been so much more sought after and effective is that the level of pay for apprentices has not been in competition with what they receive if they stay on at school, and is nothing like as much as if they were in full-time work. That is a nettle which will be unpopular in some quarters; but it will certainly have to be grasped if we really mean that there is to be a free choice between those three options.

Youngsters of from 16 to 18 are enormously important. But they are by no means the whole of the population requiring training or re-training. Due to the inadequacy of our training in the past we have a huge backlog of untrained people in our labour force. We need to invest money and resources inside industry where many of those people now are and where training can be given. People could be promoted to jobs where there are vacancies but where training has not previously been provided. Some training could be done in that way; but a great deal must be done by the Government making provision for training of mature and adult people. Needless to say that must include the mature women available to come back into the labour market.

Other speakers mentioned that topic and the particular requirements of that group. I should like to emphasise that a great many girls, when they left school in the past, took training which was a great deal below what they were capable of doing. They did not realise how inadequate that training was in relation to their potential. As they grow older they do realise, and they need encouragement and help to break through from what they did in the past. That does not mean doing a quick training course in shorthand and typing, which they did when they were 16. They recognise that they are capable of doing something far more ambitious provided always that the resources are there to enable them to do it.

The resources include resources for fees for part-time and full-time mature students. They also need some assistance with maintenance. Not all husbands of women who wish to return to work are wildly enthusiastic about it. Their enthusiasm would be enhanced, if not encouraged, from the start if the wives who were going through the training were not a financial drain on their families and were fully able to finance themselves. If we mean business by making the best use of the labour market, we must not be cheese-paring in the provisions and opportunities that we offer to the mature woman wishing to return to training.

Those are not the only groups that we should be considering. There are a number of special needs groups in which investment in the longer run can be very well worthwhile. One of the great problems is that it is so difficult to get this Government to look at the longer term rather than the short-term and the short-term pay-off.

The ethnic minorities have already been mentioned. There is no question whatever that, distributed as they are in industry and commerce, members of ethnic minorities are achieving at different levels of employment way below what they are capable of doing. They need special training and encouragement. After all, the equal opportunities legislation permits of special training provision for people who have been unable to take advantage of training or of the opportunities offered to them in the past.

Because of my particular connection with the training of ex-offenders, I wish to point out that additional financial expenditure can make an enormous difference to people who might otherwise go into a permanent life of crime. They can be diverted into being very useful and productive citizens if they turned their undoubted skills and wits to more socially acceptable activities. They will not do that unless there is adequate finance for training. Very often it takes a much longer time to train people with that kind of disability than it does to train the ordinary school-leaver or young person.

So much for the different categories of people for whom special provision is required. I make no bones about it; it means more government investment. I wish to underline the recommendation made by the noble Viscount, Lord Caldecote, to see the provision as investment and not current expenditure. That is what it undoubtedly is. We have to face how all this expenditure is to be financed. I was attracted by the account of what is being done in France. I recognise that the levy grant scheme got out of hand and became too bureaucratic. It was a very considerable and unnecessary burden in a number of cases.

However, I do not like the idea that we want to encourage every employer to train. A great many of them are incapable of doing so. Modern training is a highly sophisticated business. It is not just a matter of showing a youngster how things can be done. People who carry out training need to know how to do it. A very great many—not only the smaller employers—are not equipped or capable of training. We do not want to encourage just anybody to train.

The old idea of the levy and grant was surely right. Either you train or you pay instead of training. The companies which are training should pay for their own needs. There is no reason why they should pay to meet other employers' needs. However, the companies which train should get some benefit from training in excess of what is required. The French scheme warrants being looked at very closely. A percentage of the pay roll should be devoted to training. If that money is not spent then it should be collected by the Government as a tax which can then be paid to the people who are doing the training. That is a sensible way, but it is only one particular way, although it is very well worth considering in order to meet the costs of training.

I now turn to the question of the TECs and what training should be given. There was reference in the report to a national plan. I am all for a national strategy for training, but I give a word of warning about national plans for meeting labour shortages. There is no such thing as a national labour market except for a very few highly qualified occupations where people move around the country. There is a vast number of local labour markets. When I was chairman of the area board in Buckinghamshire, even within that area there were three quite distinct labour markets; namely, Milton Keynes, High Wycombe and Aylesbury. It was quite useless providing training in Milton Keynes for people intending to work in High Wycombe. The workers would not have gone anyway. There were quite different labour markets.

I do not believe that money spent in studying a national labour market is useful because there is no such thing. What is enormously important is detailed studies of the local labour market. They should be carried out by the TECs but that requires money. For the task to be done properly it has to be done not only once, but it has to be constantly repeated and updated. The TECs should be able to employ people who know about studying the local labour market, studying training needs and constantly revise their plans.

When I was studying what the national labour market board was doing in Sweden some years ago, I was told that the representatives of the labour market went back to the companies every three months in order to discover how their needs had changed. The training was adapted accordingly. That is a continuous and expensive process. It means that training is done for what is required and not for what is not required. I urge the Government to look into this question, and to finance the TECs properly so that they can do this all-important job.

7.16 p.m.

Baroness Blackstone

My Lords, I begin by congratulating the noble Baroness, Lady Flather, on her maiden speech. I completely share her concern about the very important need to train the ethnic minorities in this country. It is a subject which is dear to my heart through my membership of the Fullemploy board, an organisation which has been dedicated for many years to the training needs of the black and Asian community. I welcome the publication of the Select Committee's report on Vocational Training and Re-training. I welcome it because its recommendations are eminently sensible. I hope that we shall hear shortly from the noble Viscount that he too welcomes it and that the Government will accept the committee's recommendations.

I welcome it also because many of its recommendations are completely in line with Labour Party policy. Finally, I welcome it because it is timely. It comes soon after the Government have inexplicably slashed the training budget in the Autumn Statement. Given the widespread concern about Britain's skills crisis, it is extraordinary that next year £300 million, which is about 10 per cent. of the budget, will be cut. Over the next year and the following one training will be cut by about £500 million altogether. These cuts do not come after a period of substantial increases in government spending on training. Over the five years from 1987 to 1992, it is estimated that we shall have seen cuts in real terms of about £1.6 billion, which is a third of the budget.

It is incredible that the Government should have been so shortsighted. It is also amazing that the targets set by the previous Secretary of State for Employment, Norman Fowler, shortly before he resigned—he is referred to in paragraph 50 of the report—should have been so rapidly abandoned by his successor. No adequate explanation has been given for this U-turn by the Government. Perhaps we shall be given one this afternoon.

Many TEC chairmen and members are dismayed, as noble Lords have said this afternoon, with the inadequate resources which will make it very difficult for them to deliver the training that we so desperately need. A number of speakers have made reference to the much better records of our European partners on vocational training, although the noble Lord, Lord Bonham-Carter, said that the starkness of the gap between the United Kingdom and other countries had not been brought out. I believe that my noble friend Lady Turner made up for that. Perhaps I may add to what she said.

For example, the report points out that by 1987 in the Federal Republic of Germany 93 per cent. of the school-leavers started an apprenticeship, further schooling or university education and approximately 88 per cent. of those obtained a qualification. The report tells us that in France in the same year, 1987, taking the workforce as a whole, one in four people had undergone some form of vocational training. The situation in Britain contrasts starkly with most of Europe. What is frightening is that whatever the Government may say about improvements, we are continuing to fall further behind day by day. Countries such as France and Germany are making improvements all the time and are doing so at a faster rate than we are.

I shall give a few of the statistics which caused concern to the Select Committee and which are also causing a great deal of concern among responsible employers and those who represent them in the CBI and elsewhere and in the trade union movement. First, 70 per cent. of the British population left school at the minimum school-leaving age. Secondly, 70 per cent. of the British workforce had only a very short training in their first job. Thirdly, 70 per cent. of the British workforce have had virtually no training since. Fourthly, in 1989 a third of the British workforce had had no training whatsoever at any point in their working life. Fifthly, one in five employers still provides no training for its staff. Sixthly, according to the Industrial Society, 58 per cent. of personnel managers had not heard of the NVQ system, let alone taken part in it, four years after the National Council for Vocational Qualifications was set up. Seventhly, according to the Department of Employment's own study, half its sample of employees—it was a large sample—identified their own training needs which were not being met. Eighthly, 40 per cent. of them expected to get no further training for the rest of their lives, so their expectations about what would be offered were extremely low. Ninthly, every year at least 100,000 school-leavers start work without any training. Tenthly, the lack of vocational training for adults is in no way compensated for by a high proportion of the workforce with a high level of educational qualifications. Only about 25 per cent. of school-leavers obtain the necessary qualifications to go into higher education.

My noble friend Lady David referred to the BTEC and argued that this is a way of keeping more pupils in the system by allowing them to gain the qualifications necessary to enter post-school education. I very much agree with her. The noble Baroness, Lady Seear, referred to the international baccalaureate. I suggest that the Government should look at something even more radical than either BTEC or the international baccalaureate. I refer to the document of the Institute for Public Policy Research on the setting up of a British baccalaureate which would be quite different from the international baccalaureate and would allow young people from many different levels of ability to study for the same qualification. It would remove the divisive and muddled nature of qualifications for the 16 to 19 age group. Perhaps I should have declared an interest as I am the chairman of the Board of Trustees of the IPPR.

I have given just 10 indications of the depth of our problem and the steepness of the hill that we have to climb to get out of this unfortunate situation. Is it any wonder that we have staggering skill shortages in our workforce? For example, there is a desperate shortage of technicians and a serious shortage of mechanical and electrical engineers. Various surveys of employers have been carried out in investigating recruitment problems. A Training Commission study in 1989 showed that nearly half the firms in its sample had experienced recruitment difficulties during the year and 40 per cent. of them had reported severe problems.

We now have a huge skills gap, yet the Government calmly slice huge sums off the training budget. What a funny old world, to use the words of the previous Prime Minister. Many of the major skill shortages are in key areas of manufacturing where Britain's balance of payments problem is greatest. The noble Viscount, Lord Caldecote, referred to a lack of skills leading to bottlenecks in relation to better design and other innovations. I agree with him. How in heaven's name will we improve our lamentable economic performance while this continues? Perhaps the Minister can advise us.

The noble Lords, Lord Bonham-Carter and Lord Rochester, suggested that our economic decline will continue unless we have more training. The noble Baronesses, Lady Lockwood and Lady Flather, referred to the value of training in increasing productivity and in industrial competitiveness. That is common sense, yet it seems to have escaped the Government.

I should like to pick out some of the report's recommendations for a comprehensive strategic framework for training. The committee rightly identified the lack of such a framework and the need for one supported by both sides of industry. Achieving such support should not be too difficult, and both the CBI and the TUC are in favour of developing such a framework. Indeed, as my noble friend Lady David pointed out, there is a remarkable consensus between them on what needs to be done. The noble Viscount, Lord Caldecote, wanted a consensus among the parties. I would very much welcome a consensus among the political parties but I fear that it is the Conservative Party and the Government who seem to be out of line with everyone else.

The Government are out of line in Europe too, abstaining on the Commission's FORCE programme when it was adapted earlier this year. In this context the committee was quite right to criticise the Government's failure to recognise that effectively managed vocational training is an investment and not a cost The Government seem obsessed with what they see as the problem of employment costs. As other noble Lords have asked, why do not the Government realise that there is a large return on spending on training?

It would be helpful if the Minister could comment in detail on each of the 10 points put forward by the committee. I should like to focus in particular on three or four of them. First, will the Government restate the national targets which they set earlier, as the noble Baroness, Lady Flather, and the noble Lord, Lord Gisborough, have asked? Surely the committee is right in advocating such targets. There would then be a clear set of goals for which we could all work, and we could monitor progress as we went along. As the committee pointed out, other countries have benefited from a benchmark against which to measure success.

The noble Lord, Lord Brain, mentioned the importance of NCVQ. Will the Government encourage the NCVQ to do more to promote broad-based competence? They might possible link additional government funding, which the council needs, to progress being made in the promotion of broad-based competence, including the interpersonal skills, to which the noble Lord, Lord Northbourne, rightly drew attention.

Thirdly, will the Government consider setting up some kind of inquiry, either within the government machine or involving outside experts, into paid educational leave? The committee suggests that, after over a century of criticism of the United Kingdom's voluntarily based system of vocational training", legislation on this subject may have to be considered over the next few years. Such legislation will almost certainly be needed sooner rather than later because of the poor record of so many employers in releasing people for training. The committee has pointed out the need for further consideration of how to define a statutory right to such leave. Will the Government get to work on this as a matter of urgency?

Finally, can the Minister say how the Government intend to handle the question of providing incentives over and above training credits? On these Benches we welcome the initiative that has been taken in setting up training credits. Tax allowances, which are clearly extremely desirable, have already been referred to in the debate, but the committee also made reference to discretionary maintenance allowances, to which no previous speaker has referred. It was thought that they might be especially helpful to the disadvantaged. On the subject of the disadvantaged, I understand that the TECs can now encourage Re-start interviewers to regard job clubs and Re-start courses as the first option for the long-term unemployed rather than training.

Knowing how the system works, and the huge government incentives to TECs to limit employment training to people who could quickly be placed with an employer with an employment contract to save on training allowances, there must be a fear that training will become increasingly less available to the long-term unemployed, many of whom desperately need it. If that were to happen, they would become one of the most disadvantaged groups in our community, along with some of the other groups which have already been identified by the committee and other noble Lords, such as the least qualified workers, the disabled and women returners, for whom improved access to training is vitally important. The noble Baroness, Lady Seear, referred to special needs groups. But among such groups are the long-term unemployed. I rather regret the fact that the committee did not refer to them.

The committee raised many issues about the current position with respect to vocational training in the United Kingdom. It is justifiably critical of our record in comparison with the rest of Europe. It concludes that legislation should be introduced to ensure that all—I emphasise "all"—l6 to 18 year-olds are provided with either education or training. Many speakers referred to that aspect this evening. The committee rightly proposes that employers should not just provide training for this group but should also be required by law to encourage training which leads to a recognised qualification. That would be a huge step forward and would do a great deal to start the process of catching up with France, Germany and other European countries. It would at least eliminate one of the statistics which I gave earlier: the fact that 100,000 or more young people enter work with no training.

However, as the noble Lord, Lord Brain, and others pointed out, there is a great deal to be done to ensure that adults in this country are both trained and re-trained. A voluntary system is not enough; we also need legislation. I hope that the noble Viscount will be able to respond positively. Not one speaker today has argued against the need for statutory underpinning. It is only when we have this that we shall be able to get the clearly articulated framework identified by the committee which is needed to achieve the FORCE objectives. I hope that that will now be provided by the Government. Better late than never.

7.32 p.m.

The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)

My Lords, I should like to begin by paying tribute to my noble friend Lady Flather for her very admirable maiden speech. Although I detected a note of criticism in her well thought-out remarks, I took them to be entirely helpful. I look forward to many more timely and helpful contributions from her in future debates in your Lordships' House and in the work of its Select Committee.

Throughout history training has often made the difference between success and failure, victory and defeat. Three hundred and fifty years ago, during the Civil War, Oliver Cromwell created and trained his New Model Army. The king did not train his troops. As we all know, Cromwell won; and we all know what happened to the king. Those who do not learn from history are doomed to repeat it. Although today a lack of investment in training is unlikely to cost anyone his head, it may well cost us our competitiveness, our jobs and our economic well-being. That is why I am most grateful to the Select Committee—and especially to its chairman the noble Baroness, Lady Lockwood—whose hard work, experience and expertise have contributed to the extensive and enlightening report before the House today.

However, let us consider the challenges with which we are faced; first of all, a highly competitive world market. Not only do we face the prospect—now only months away—of a Europe with no trade barriers; we also face competition from farther afield: from Japan and North America and the countries of the Pacific rim. Secondly, we are in the midst of a technological revolution on the scale of the industrial revolution which took place 180 years ago. Thirdly, we have fewer young people joining the labour market than at any time since the last war.

A principal answer to each of these challenges is training—training to create and maintain a highly skilled, flexible and well-motivated workforce which is the match of any of our competitors; training to ensure that we exploit to the full the opportunities created for us by new technology; training for all our people at every level—now and throughout their working lives—to equip them to cope effectively with the changing demands of the world of work. In training our people, we must ensure that opportunities exist for all; for women, who will account for such a high proportion of those entering the workforce, especially the so-called women returners, who, having raised their children, wish to return to work; for disadvantaged people and the disabled; and for those from ethnic minorities.

The Government are committed to that aim extending—I hope that the noble Baroness, Lady Seear, will be reassured to hear this—even to former offenders. We therefore welcome in particular the committee's interest in training and the rigour of its examination of the issues. The Government fully agree that ensuring an adequate supply of the skills we need is one of the major challenges which we as a nation face in the decade ahead.

The Government share and have expressed broad support for the aims of the FORCE programme, which formed a major starting-point for the Select Committee's report. We support the approach taken in the FORCE decision to support and complement policies and to continue training activities developed in member states. That takes account of the principle of subsidiarity and recognises that individual countries have training systems of their own which work well.

The Select Committee's central recommendation was that the Government should set the strategic framework within which training activities take place. The noble Baroness, Lady Lockwood, enumerated the 10 points proposed by the committee for that framework. Rather than comment on those points in detail, as the noble Baroness, Lady Blackstone, has asked me to do, I should like to concentrate upon the future as the Government's comments are now a matter of record.

The Government have done precisely that which has been requested: they have provided a strategic framework. This was set out in my right honourable friend the Secretary of State's strategy document entitled 1990s: The Skills Decade which was published in October. Noble Lords will find there a strategy which chimes with the committee's recommendation for the component of a strategic framework; indeed, it goes much further. The noble Lord, Lord Bonham-Carter, should study the document carefully. I believe that he will find in it the strategy for which he has been looking.

The strategy has a clear aim of developing a workforce for the 1990s with skills which meet and beat the standards of the best in the world. It assigns clear responsibilities to the main players on the pitch; that is, government, employers, individuals and the new training and enterprise councils. It sets out six priorities: first, to improve employer investment in skills; secondly, to increase the skills of young people; thirdly, to involve individuals more in their own development; fourthly, to help people at a disadvantage in the job market; fifthly, to raise the quality of provision; and, finally, to encourage enterprise.

The Government's strategy goes well beyond the Select Committee's recommendations. It has a focus, which, if I may say so, is missing from the report. It is a focus on skills, not just on training; on individuals, not just on institutions; on local commitment, and not just on national planning.

On the matter of national planning, let us beware of national target setting that takes no account of how targets will be delivered on the ground. The committee recommended that the Government should set national targets for training. We believe that it would be a mistake for us to do so; it is employers who have the primary responsibility to train their people. In the main it will be employers' training performance which determines whether such objectives are reached. It follows therefore that targets for training are for employers to set and act upon. The CBI is doing just that. It has recently started consulting to secure agreement on targets and how they will be met.

The noble Baroness, Lady Lockwood, the noble Lord, Lord Rochester, and others asked whether the Government will endorse that initiative. The Government have welcomed the initiative, but to succeed we must all be clear about our individual roles. Government's role is to set a national policy framework and to create the infrastructure within which success can be achieved. We shall set ourselves targets for putting the framework in place; for example, for reforming our system of vocational qualifications. We are setting clear and specific targets for training and enterprise councils, which provide essential local support for what employers have to do.

TECs are in the front line of training. My noble friend Lady Flather rightly drew attention to their role in energising companies, the education system and others. Perhaps I may reassure the noble Lord, Lord Rochester, that TECs will have as much money to spend on training and enterprise next year as they are spending this year.

The key words with TECs are "local" and "employer-led". No longer will government impose nation al training and enterprise programmes upon local communities. What suits Durham will not suit Dorset. The needs of Cumbria are different from those of Kent. The 82 TECs which serve England and Wales take account of local needs. They will have the money and the flexibility to devise programmes which meet the needs of their local labour markets. They will be directed by people who understand those needs and who know what must be done to meet them: people from the local community, led by local employers who know about training and understand enterprise. The noble Lord, Lord Northbourne, will be reassured that employers understand enterprise and are in no doubt of the value of education and training.

The noble Lord, Lord Hunter of Newington, was sceptical of the value of TECs and the commitment of those currently involved in their direction. The TECs have harnessed a huge tide of enthusiasm which those who believe that employers will train only if compelled to do so would not have believed. Even we have been surprised by the extent of their commitment. Two years ago, when my right honourable friend Margaret Thatcher launched the TEC movement, we thought it would take four years to complete the national network. We were wrong. The network is complete now, two years ahead of schedule.

My noble friend Lady Flather asked that we set demanding targets and performance measures for TECs. She is right to do so. From the outset, we are managing TECs through their business plans in which we expect firm targets. The financing of TECs will depend increasingly upon their meeting stretching targets.

The TECs are the living proof that the Government's voluntary approach works better than any system based upon compulsion. And they have some strong foundations, laid by government, upon which to build. For example, our massive youth training programme is unmatched throughout Europe. We are pushing back the frontiers again by piloting the unique approach of training credits, which put purchasing power and the incentive to train in the hands of young people.

Let there be no doubt that youth training has been a resounding success. In the past seven years it has trained more than 2.5 million youngsters; 90 per cent. of those who complete their training go into jobs, further education or training, and 67 per cent. of them leave with a qualification. I am sure that even the noble Baroness, Lady Seear, will be pleased by that success. It is a far cry from the days of 1979 when such a high proportion of our 16 year-olds left school with no qualifications and went into jobs without training.

That is not the only improvement. Since 1979 there has also been a 36 per cent. increase in the number of students in higher education, a 29 per cent. increase in the number in further education; and 22 per cent. more 16 year-olds are in full-time further education than was the case in 1979—an improvement indeed.

The Government's voluntary approach and our training and education reforms are enjoying real success, which is why the committee's recommendation that employers should be obliged to arrange a programme of training for 16 to 18 year-olds is inappropriate. That is the answer to the first point made by the noble Baroness, Lady Lockwood, in her letter to my right honourable friend the Secretary of State.

The reform of our entire system of vocational qualifications is one often overlooked but vital and radical component of our policy. The noble Lord, Lord Brain, drew attention to that important area in the work of the national council. Since 1986 work has been going on in virtually every sector of industry, commerce and public administration to create simple statements of occupational competence. Those standards, produced by representatives of each industry or occupational group, will then form the basis of national vocational qualifications—qualifications which will measure competence at work, not the ability to pass exams; which clearly state what any individual can do and point the way to the next qualification up the ladder; which encourage individuals to climb that ladder of opportunity by increasing their skills; and which test practical competence and take no account of how that competence was learned, whether through school, college or training course, off-the-job or on-the-job training or perhaps by open learning, in which this country leads the world. It is a system of qualifications which is more flexible than any system owned by our competitors. It is as flexible as the labour market which it seeks to serve.

I should like now to respond to as many as I can of the points raised in a wide-ranking debate. The noble Baroness, Lady Lockwood, pressed the recommendation contained in the report of a personal income tax allowance for people who train at their own expense. Your Lordships will know that tax is a matter for the Chancellor. He is aware of the recommendation contained in the report. I shall of course bring to the attention of my right honourable friend the comments made during the course of the debate. The Government share the noble Baroness's interest in encouraging people to take more responsibility for their own training and development. Indeed, we are developing other forms of encouragement through career development loans and training credits as a way of giving individuals purchasing power for training and open learning systems in which, as I said, we lead the world. I am sure that that will please my noble friend Lord Caldecote who asked for such projects.

The noble Baroness, Lady Lockwood, asked about the provision of child care facilities. Apart from those provided by employers, I can confirm that further child care facilities are available to lone parents on employment training. From next April, TECs will be free to extend that support even further.

My noble friend Lady Flather and the noble Baronesses, Lady Seear and Lady Blackstone, rightly drew attention to the need for equal opportunities for minority groups. TECs are expected to address and meet the needs of minority ethnic communities in their areas. People from such communities are taking advantage of our training programmes in a disproportionate way. I include the comments of the noble Baroness, Lady Turner of Camden. Women too are well represented in our training programmes. The Government are fully committed to providing such opportunities. It is just not the case that TECs have incentives not to help disadvantaged groups, as the noble Baroness, Lady Blackstone, said. On the contrary, they have clear targets to help special needs groups and performance bonuses for exceeding them.

The noble Lord, Lord Rochester, asked what part the Government were playing in youth training as well as employment training. On 7th December this year there were 172 young people occupying a training placement in my department's youth training programme alone. Between January 1988 and June 1990 120 trainees obtained NVQ level two; and five trainees obtained NVQ level three, mainly in business administration. There are numerous YT success stories, of which I give one example. A young woman on a Department of Employment YTS programme in Sheffield obtained an NVQ level two, followed by a BTEC national in computer studies. She has since left the scheme to join the RAF as an air traffic controller. So the Government are playing their part and our department is playing its part in the programme.

It is a mistake to complain about cuts in government spending on training as did the noble Lords, Lord Rochester and Lord Bonham-Carter, and the noble Baroness, Lady David. The Government are making a massive investment. Our spending on training has risen by 60 per cent. in real terms over the past five years. I must take issue with the noble Baroness, Lady Blackstone, on her figures. Unemployment has fallen by 60 per cent. In these circumstances, it is right to see a small adjustment now.

The noble Lord, Lord Rochester, quoted a drop in expenditure on training in some parts of the north. The evidence is that training by employers has increased by 70 per cent. over the past five years. The CBI survey showed training by employers holding up despite the current downturn.

Lord Gisborough

My Lords, my noble friend says that the numbers have increased. Can he say whether the numbers given in paragraph 46 are incorrect? It is misleading.

Viscount Ullswater

My Lords, I was talking about figures over five years. I said earlier in my speech that the money for TECs would be the same in spending power as this year. Contrary to previous experience, employers are spending about 8 per cent. of payroll on training. That figure looks strong against the figure of 1.5 per cent. quoted by the noble Lord, Lord Brain, for France.

My noble friend Lady Faithfull asked about exchanges between this country and Eastern Europe and the USSR. I am pleased to be able to report that the United Kingdom has been able to contribute effectively to the first year of the European Community TEMPUS programme which permits student exchanges between European Community countries and countries of Eastern and Central Europe.

I am also pleased to report that there exist already a number of ways in which young people in the United Kingdom and Russia participate in exchanges. The British Council's youth exchange centre has organised exchanges of young people aged 15 to 25 in schools, training, employment and higher education. This year 650 young Soviets and 597 young Britons were involved in extracurricular exchanges in areas such as drama, the environment and music. The central bureau arranges language and cultural exchanges of 14 to 18 year-old schoolchildren; 62 schools are involved. The central bureau is currently examining the possibility of setting up exchanges between Soviet and British colleges of further education. Noble Lords will see that not only do we take part in the European Community programmes; we have also made bilateral arrangements with Russia which I am sure my noble friend will agree is good.

The noble Lord, Lord Hunter, drew attention to the importance of scientific education and the strengthening of the basic competence of schoolchildren in technical subjects and motivating them to continue learning. That is one of the objects of our reforms of the national curriculum and of the technical and vocational education initiative.

The noble Baroness, Lady David, asked me about BTECs. I agree with her that BTECs can be an attractive alternative to A-levels. Indeed, 8 per cent. of university entrants already come via the BTEC route. BTEC is a matter for the Secretary of State for Education and Science. There has been a proposal to him from BTEC which could make these qualifications more widely available. However, I cannot anticipate the outcome.

The noble Baroness also asked for a response on the committee's recommendation that more be done to improve access to training by offering more open learning opportunities. The Government are spending £6.7 million on supporting developments in open and flexible learning. They have committed £18 million over five years to the Open College. As I said earlier, in this field we lead the world.

The noble Baroness, Lady Turner, raised trade union involvement in decisions on training. The Government believe that employers as both providers and consumers of training have the primary responsibility for ensuring that the workforce has the skills it needs. We also recognise that workers and their representatives have a key role to play. Without their individual and collective commitment to training, we cannot hope to succeed in competitive international markets of the 1990s. That is reflected in practical involvement in individual trade unions, in training developments at all levels: at national levels with the national training task force and the National Economic Development Council; at sectoral level with industry training organisations; and at local levels in training and enterprise councils.

The noble Lord, Lord Northbourne, asked whether interpersonal skills would be taught as part of the national curriculum and national vocational qualifications. The Secretaries of State for Education and Employment have asked the schools examinations and assessment councils and the National Council for Vocational Qualifications to consider core skills in the qualifications. Interpersonal skills are generally regarded as one of the core skills.

My noble friend Lord Caldecote drew attention to the changes in government programmes recently and asked for a period of stability. It is that, I believe, which will now be established with the TECs. We need continuity in policy and I am sure that we now have it in our broad range of educational and training programmes.

The noble Baroness, Lady Seear, asked me to look into the availability of access to the international baccalaureate. The best thing I can do is to undertake to investigate this; it is a rather detailed point. I shall write to the noble Baroness and a copy of the letter will be placed in the Library. It is an interesting and important issue.

I have tried to touch on many of the questions put to me. The Government fully agree that ensuring an adequate skills supply will be one of the country's major challenges in the 1990s. We agree that our continued economic success depends upon our capacity to develop the skills and enterprise of our people to the full. We share the view that the Government have an important role in setting a framework.

In our strategic document, the Secretary of State has set out the framework and identified key objectives for the decade ahead. Those are objectives for the Government, for employers, for providers of education and training—including the TECs—and for individuals. While the Government can establish a framework within which success is encouraged, the Government alone cannot produce the success. Success of that kind depends upon a partnership involving many people.

The framework which the Government have created provides the vehicle. The objectives set out in the strategic guidance provide the signposts. It is now up to the various partners to make the journey together. We all want to reach the same destination —sustained economic success based on a highly skilled, flexible and well motivated workforce. I believe that we are well on our way.

Baroness Seear

My Lords, before the noble Viscount sits down, I hope he will clarify one point. I believe he said that employers were spending 8 per cent. of their labour force bills on training. However, paragraph 19 of the report states that they are spending some 2 per cent. That seems to me a much more likely figure. We must try to get the figures right. We have had arguments about the figures in paragraph 16. The difference between 8 per cent. and 2 per cent. is enormous. Will the Minister say which figure is correct?

Viscount Ullswater

My Lords, I shall certainly investigate what the noble Baroness has said to discover what the figures mean.

Baroness Lockwood

My Lords, I wish to thank the speakers who contributed to this important debate. It has been an informed debate and has added much to the value of the Select Committee's report. It has certainly underlined the urgency which the committee attaches to the subject. I shall read carefully the Minister's response to make sure that that too matches the urgency of the subject. I am not terribly convinced that that is so, but I thank the Minister for his courtesy in responding to the various points that were made. All Members of the House will look carefully at Hansard when it is published tomorrow. The debate is now the property of the House and it is up to all of us to ensure that this important subject of training is taken seriously by all Members.

On Question, Motion agreed to.