§ 8.2 p.m.
§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater) rose to move, That the draft order laid before the House on 29th January be approved [9th Report from the Joint Committee].
§ The noble Viscount said: My Lords, the proposals before you seek authority for the Construction Industry Training Board to raise a levy on the employers in the building and civil engineering industries to finance the running costs of the board and to run a grants scheme. The proposals are the first to be submitted by the board since it was reconstituted last year. They are different to those submitted in previous years in that the levy is now based solely on a payroll basis.
§ The basis of the proposals is a levy of 0.25 per cent. on the payroll of employers in the industry and a levy of 2 per cent. on all payments made by employers for sub-contract labour. Employers with a payroll of £45,000 or less will be exempt from the levy. The proposals have the support of the employers, are required by the Industrial Training Act 1982 and have the full support of the board. Your Lordships will know that the Government thought long and hard about their decision to retain this statutory training board. In principle we believe that independent employer-led arrangements which have the full support of employers offer the best way forward for industrial training. In general the track record of compulsion through statutory levies in raising the quality and quantity of training is not a good one.
§ But in the White Paper, Employment for the 1990s, we recognised that this industry has particular characteristics which create peculiar problems for training. The mobile nature of the work of the industry, the mobile nature of its workforce, both geographically and between employers, together with the large-scale use of sub-contract and self-employed labour produce a unique set of circumstances. Against that background, we consulted widely with the industry about the CITB. There was a widespread and strongly held view that the CITB should be retained but that its management should be streamlined and reformed. In addition the employers in the industry argued strongly for the retention of a statutory levy because of the largely self-employed nature of the labour force.
§ We were persuaded to give the industry a chance to reform its training board, to remodel it as an employer-led body and to alter the basis of levy 1181 collection. The revised basis of the levy proposals before the House this evening is one indication that reform is taking place. I am happy to say that other reforms such as the internal restructuring of the board's management and improvement in financial control are also taking place. The Secretary of State expects shortly to see the board's revised proposals for its grants scheme and later in the year its strategic plan. All this is an indication that the CITB is proceeding in the right direction.
§ We intend to keep a close watching brief on this board. Its powers to raise a levy are exceptional and the Government, like your Lordships, must be convinced that they are absolutely necessary to preserve the basis of training in the construction industry. The Government have resolved, because of the peculiar nature of the industry, to continue with a statutory board for the time being. But they are not wedded to the principle of compulsion. I believe that it is right for 1991 that the House should approve the proposals before it. I commend them to the House.
§ Moved, That the draft order laid before the House on 29th January be approved [9th Report from the Joint Committee].—(Viscount Ullswater.)
§ Lord Carter
My Lords, I am very pleased to welcome the order on this side of the House. I have no points of substance to make, although I am intrigued why it exempts a charity from the levy. With regard to the exemption of small employers as defined by the payroll, I remember that when we were debating statutory sick pay a great deal of time was spent by the Government in saying that that was not the right way to define a small employer. One hopes that occasionally one department will speak to another about the arguments that are used on a Bill or an order. We spent a long time arguing with the Government about the means of defining a small employer only to find that the size of the payroll is used for the purposes of this order. Other than that, we welcome the order on this side of the House.
§ Viscount Ullswater
My Lords, the noble Lord has posed a problem to which I do not know the answer at the moment. I shall write to him. I know that sole traders are not included. It may be that a charity does not fall within the normal employer status. I shall make inquiries and write to him. It is part of the Industrial Training Act that an exemption has to be made for a small employer. It is considered right at this time to raise the exemption to the figure that I quoted.
On Question, Motion agreed to.