HL Deb 13 March 1992 vol 536 cc1553-6

2.52 p.m.

Viscount Ullswater

rose to move, That the draft order laid before the House on 27th February be approved [15th Report from the Joint Committee].

The noble Viscount said: My Lords, the proposals before your Lordships seek authority for the Engineering Construction Industry Training Board to raise a levy on the employers in the engineering construction industry to finance the board's running costs and to fund a range of training initiatives, including a grants scheme. The proposals do not relate to engineering manufacturing as that part of the engineering industry moved to independent training arrangements in the middle of last year. The basis of the proposals is a levy of 1.5 per cent. on the payroll of site employers in the industry, although no levy will be paid by firms whose payroll is £75,000 or less.

Site employers will also pay a levy of 2 per cent. on all payments made by them for sub-contract labour. For head office establishments there is a levy of 0.4 per cent. of payroll on those with more than 40 employees. In addition, head offices will pay a levy of 0.5 per cent. on all payments made by them for sub-contract labour. The proposals have the support of the employers as required by the Industrial Training Act 1982 and have the board's full support. Your Lordships will know that the Government remain committed, as a general rule, to independent employer-led training arrangements.

However, engineering construction is an industry which 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 in this sector of the engineering industry.

For those reasons the industry argued strongly for the need to retain statutory arrangements, including the power to impose a levy on employers. They argue that that is the best way of ensuring that sufficient numbers of new entrants are trained and brought into the industry and that the skills of existing workers are kept up-to-date.

We were persuaded to accept those arguments and the Engineering Construction Industry Training Board was established in its own right in the middle of last year. At the same time, the engineering manufacturing sector opted instead to set up its own independent arrangements and was taken out of the statutory system.

I am happy to say that since then the ECITB has worked hard in partnership with the industry to meet the manpower and skill needs of this important sector of the economy. Employers in the industry remain firm in their support for the board and clearly this will be taken into account when the next review takes place in 1994.

We were concerned though to ensure that statutory burdens on firms are kept to a minimum and that firms who train appropriately are rewarded. To this end, we asked the new board to replace its head office exemption scheme by a voluntary code of practice based on the Investors in People initiative, to raise the exclusion level for small firms and to review the effects of its grant scheme on training employers.

I am pleased to say that all those issues have been addressed. In the proposals before your Lordships the small firms threshold has been raised for both head offices and sites. Also, the exemption scheme has been replaced by a grant scheme designed to reward those employers who train in key skill areas and those who seek Investors in People awards.

I believe that it is right for 1992 that the House should approve the proposals before it and I commend them to your Lordships.

Moved, That the draft order laid before the House on 27th February be approved [15th Report from the Joint Committee]. —(Viscount Ullswater.)

2.56 p.m.

Baroness Turner of Camden

My Lords, I thank the Minister for his explanation of the draft statutory instrument. We accept it on this side of the House. He will not be surprised, I am sure, to learn again from me this afternoon that we regret the demise of the Engineering Industry Training Board. We still believe that there is a role for statutory provision in the engineering manufacturing industry.

We are glad that the Engineering Construction Industry Training Board has been established, although I have a query about the exclusion of small firms in this context. It seems to me that it is often in relation to small firms that safety issues are most important and are often overlooked. Training plays a vital role towards ensuring safety. The engineering construction industry, like the construction industry generally, does not have a good record when it comes to safety issues.

Having said that, we accept the order and will watch with interest to see how the new board functions.

2.57 p.m.

Lord Mackie of Benshie

My Lords, in the absence of my noble friend Lord Rochester, I have been instructed to welcome the order and wish it godspeed. There is obviously a tremendous case for it in this important industry. It is important for exports to raise the skills of the whole industry. So for once we are able to commend the order.

Viscount Ullswater

My Lords, I thank the noble Baroness, Lady Turner of Camden, and the noble Lord, Lord Mackie of Benshie, for supporting the introduction of the order today. I note carefully the comments that the noble Baroness made. It is important that we should ensure that the training is carried out in this important, albeit small sector of the industry.

I am sure that the noble Baroness will be pleased to hear that the Engineering Training Authority, Entra, has achieved a remarkable number of things in a short time. I know that she was worried that when the manufacturing sector was hived off—if I may put it like that—it would not achieve its objectives. It is the leader in the development of standards in the engineering manufacturing industry and it has developed excellent working links with TECs. It is piloting various training initiatives. However, its most tangible success so far is the support it has been given by employers in the industry. Over half a million employees are now covered through their employers' membership of Entra.

I believe that we agree that the engineering construction industry is different from most, if not all other industries, and needs to be treated accordingly. I know that the proposals before your Lordships have the support of the employers in this industry and have been approved by the board. I believe that they should be approved by your Lordships.

On Question, Motion agreed to.