§ 3.3 p.m.
§ The Minister of State, Department for Education and Employment (Baroness Blackstone)
My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill
§ Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The CHAIRMAN OF COMMITTEES in the Chair.]
§ [Amendment No. 129 not moved.]
§ Clause 23 [Right of young persons to time off for study or training]:
Lord Tope moved Amendment No. 130:
Page 19, line 8, leave out from ("education") to end of line 11.
§ The noble Lord said: Before speaking to this amendment, also standing in the name of my noble friend Lady Maddock, perhaps I may refer briefly to the serious concerns raised in Committee on Thursday evening regarding the legal basis on which the Government are acting. Over the weekend, my noble friend Lord Russell and myself have taken legal advice. That advice assures us that the information that we were given by the Government—I am sure in good faith—was not accurate.
§ I do not intend to pursue this matter further today—it is not appropriate in relation to this amendment, and I know only too well the maxim in politics: if you are in a hole, stop digging. I do not wish to cause the Government to dig any further today. I intend, instead, to write to the Minister within the next 24 hours, setting out the basis of the legal advice that we have received and give her an opportunity to consider it and no doubt to seek her own legal advice and respond to it. However, because of the importance of the issues raised, I intend today to table a Motion to recommit Part II of the Bill, and we shall consider the matter further in the light of the Minister's response. I apologise that this matter is not strictly connected with the amendment that I rise to move.
§ In moving Amendment No. 130, I shall also speak to Amendment No. 131. This amendment removes the limitation imposed by the Bill which means that only "low achievers" can benefit from the legislation. It has always been the Liberal Democrats' view that all young workers should benefit from such laws, and that is the intention of this amendment. It does not always follow that those who leave school at 16 have a low standard of achievement. Some are offered good opportunities by employers known to them or their school and decide that it is in their interest to take up such opportunities as a means of further training. Now that further and higher education are being made more expensive at the point of use—I refer, for instance, to tuition fees—more young people may well wish to earn and bank money between the ages of 16 and 18 in preparation for degree courses. They should not be excluded from the right to time off for study and training during that time.
§ I hope that the Government will feel able to support these amendments. I suspect, on past precedent, that I have had the only victory that I am going to have at this stage of the Bill, and that they may not—in which case, I hope that, in replying, the Minister will say a little more about what the Government have in mind as the "standard of achievement" (I quote the phrase used in the Bill) which the Secretary of State intends to set as a hurdle in the regulations. Perhaps she will give the Committee a better idea as to the type of youngster at whom this part of the Bill is aimed. I beg to move.
§ Earl Russell
Since I was one of the first who set the hare running, which my noble friend Lord Tope has just taken a little further, and since the matter is of considerable interest to many noble Lords, perhaps I owe the Committee some further explanation. I thank the Minister for the courtesy that she has already shown in this matter.
12 I think it is now agreed that the authority to impose tuition fees on students is a matter of private law. It is to be done by the universities under their own authority and no authority is being conferred by statute to enable them to do so.
Section 1(5) of the Education Act 1962, which was cited by the Minister in her Written Answer to me on 21st January, creates an authority to deal with what has previously been a reimbursement of the fee and deals with the problems created by the Government's concession of last August on the gap year. It does not create any authority to levy money from the student.
That means that we have been considering Part II of the Bill under what is at least a misunderstanding. Following the Government's memorandum to the Delegated Powers and Deregulation Committee stating that this power was to be imposed under existing legislation, we have been looking for some statutory authority behind this. Now that we know that there is none, rather different questions arise from those addressed in the amendments that we put before the Committee. For example, Clause 18(2), which allows the Government to stop the levying of any fee, now becomes a Henry VIII clause, though it was not so brought to the attention of the Delegated Powers and Deregulation Committee in the department's memorandum. Moreover, it now authorises the Secretary of State, by regulation, to deprive the universities at a moment's notice of a major part of their income. That may be of concern to many noble Lords.
It will also be of some concern to discover whether universities have the right not to levy the tuition fee. If they have that right, we shall face the prospect at the end of the year, with unfilled places, of July sales, clearance sales and—God forbid!—closing down sales.
§ Lord Monkswell
I thank the noble Earl for giving way. Can he explain to the Committee the connection between what he is saying and the amendment on the Marshalled List which we are debating at the moment?
§ Earl Russell
I am explaining the point made by my noble friend. There is room for a division of opinion as to whether the discussion should have been on the Motion to go into Committee or now. It is not for me to resolve that but I hoped that it might be for the convenience of the Committee to take it now. If the Committee feels otherwise, I shall desist.
§ Baroness Blackstone
It would be helpful if we kept to the order in which amendments are put down and grouped. I would be happy to speak to Amendment No. 139 when we reach it. We are on a quite different amendment now. I should be grateful if the Committee would accept that it makes more sense to stick to the groupings in the agreed order than to take amendments out of order.
I do not think it matters which order the amendments are taken in. The serious point being made is that we expended our opportunity during the Committee stage of the Bill to discuss Part II when we all had a full understanding of how the law worked. But we are all taking independent legal advice and 13 finding that the basis on which we have been discussing the Bill is different from the Government's basis. We believe that there is a case for re-committal. The point is not on the Marshalled List today in the form of an amendment because it is not an amendment. However, it seems to me to be a subject which must be aired.
§ Baroness Blackstone
I should be happy to respond to the questions that have been raised by the noble Earl. Lord Russell, and the noble Lord, Lord Tope. However, it would be right for us first to deal with the time-off provisions. That is what we are meant to be discussing today. We should do that first and then come to the issue relating to Thursday's business when we have dealt with the issues involving time off, on which a number of amendments have been put down, including the amendment to which the noble Lord, Lord Tope, has just spoken.
§ Lord Monkswell
Before the noble Lord, Lord Whitty, responds to the amendment which we are debating, perhaps I may say a few words. I asked my son a question the other day at which he was flabbergasted. It was a question which I could have posed to workers outside digging up the road, the army of cleaners who come in after we have all gone home, workers in a whole range of industries with production lines and workers in the field. I should explain to the Committee that my son is currently working as a bricklayer's labourer. The question I asked him was: did he need to read and write to do that job? He said: "Of course not".
I am concerned about what might be described as the Weatherill factor in the clause. I should explain that the Weatherill factor is that declared by the noble Lord, Lord Weatherill: the law of unintended consequences. The unintended consequences that I fear as a result of this clause and the way it is written concern, on the one hand, the young people whom the Government rightly seek to assist by ensuring that they get a basic education beyond school-leaving age. I fear that they will not be employed because there will be a penalty on employers if those young people are so employed. Therefore, they will not have the ability to engage in essential, useful and productive work that is an enormous part of the requirements of a decent society.
The other unintended consequence is that those young people who have the requisite educational qualifications may be employed but may not be allowed time off work by their employer for further studies or training. That group may have been dissatisfied with school and education. They may see no benefit from it and feel they do not need further education and training. They will therefore be dissuaded from using the provision.
I hope that the Government will take seriously the concerns that I have expressed, echoing those of the noble Lord, Lord Tope, and reflect on what may be the totally unwitting and unintended consequences of the clause through the way in which it is drafted.
§ 3.15 p.m.
§ Baroness Blatch
It is a rare occasion when I rise with sympathy for what the noble Lord, Lord Monkswell, says. However, I do so because there are unintended consequences in the proposals in the clauses. One is, sadly, that it will not be helpful to the very people whom the proposals purport to help.
I have some questions. I apologise profusely for not giving warning of those questions earlier but I realised only this morning that there are two papers referred to. I have seen neither. One is entitled Qualifying for Success; it deals with England, Wales and Northern Ireland. The other is Targets for our Future which deals with England and Northern Ireland. They are both background papers which would be relevant to our discussions on the Bill.
My two questions are for information which will help us understand the proposals. The first is fairly straightforward: where an employer is challenged by a young person, taken to a tribunal and loses, Clause 24, new Section 63C(4) gives the penalty for the employer. It is:to pay to the employee an amount equal to the remuneration to which (the young man or woman] would have been entitled under section 63B if the employer or the principal had not refused".
My understanding is that the young person employed is paid by his employer for five days a week anyway, whether or not they go on training, whether or not they are given time off for training. Are we to understand from that penalty that the employer will not only pay for each of the five days worked by the young person but, as a punishment, will also have to pay a sixth day's pay to the young person if the employer loses at the tribunal?
My second question is this. Where an employer gives training on the job within the company which is effective for the purposes of working within that company and which also meets all the requirements of the job and the young person, and where such training conforms to the health and safety requirements but not to a qualification which is awarded externally or which meets the requirements of Clause 23(2)(c), will that company—medium-sized or small—be obliged either to alter the training programme or send 16 to 17 year-olds off site for study or training at the company's expense, even though the training within the company satisfies the company's needs? The employer may have to employ a substitute employee while that young person is off site.
The reason I ask that question is that a great deal of disquiet is building up on the part of industry in negotiating with the Government over the welfare-to-work programmes. We discover that the Government subjectively say: "We don't like your in-house training programmes" when it involves some of the medium-sized and bigger companies who provide effective, on-the-job training for their own employees. The Government are beginning to say that it does not conform. Therefore the employers are faced either with 15 not co-operating with the welfare-to-work schemes or they have to make costly alterations to the existing schemes at their own expense.
§ Baroness Maddock
I wish to add to the words of my noble friend Lord Tope. As has been said this afternoon, the purpose of the amendment is to ensure that we have a provision that is inclusive. The way the Government worded the clause, the provision was exclusive. The noble Lord who spoke after my noble friend made that clear.
I wish to press the Government on this clause. It may be that this is just a beginning for them. We have heard throughout the proceedings on the Bill that it is intended to be evolutionary and that some of the proposals we have made in other parts of the Bill may be taken up by the Government later on. We on the Liberal Democrat Benches believe that all young people under the age of 19 who are not in higher education should have the opportunity while they are at work to get training at work, or to go away to an institution, or to use many of the modern techniques of gaining training and education.
We would be interested to hear whether the Minister sees it as just the beginning and whether the point we are making with the amendment is something the Government hope to see later on. We should very much like to see a timescale put on that if this is the case.
§ Lord Monkswell
I thank the noble Baroness, Lady Blatch, for agreeing with the argument I put forward. Unfortunately, I do not agree with the remarks she later tacked on. I hope that my noble friend will not give in to that kind of argument.
In my experience, even very small employers—good, responsible employers—will be glad to see that any training they give on the job, as she described it, will be externally assessed and accredited and will be part of transferable skills. The noble Baroness, Lady Blatch, may have had responses from a small number of employers with a particular viewpoint. I am sure that good. responsible employers would not push the line that she pushed.
§ Lord Walton of Detchant
The noble Baroness, Lady Blatch, has raised a number of issues of significance in relation to this clause and I can understand and appreciate her concerns. However, one of the most welcome developments we have seen in the field of education and training over the past seven or eight years has been the increasing development of vocational qualifications under the NVQ system, and more recently the GNVQ system, in order to develop that kind of high skill economy on which this country's future economic viability and competitiveness must depend.
For far too long in the United Kingdom we have had a low-skill economy, and far too many young people capable of benefiting from further education and training have failed to take advantage of such training, often for financial reasons, after leaving school at the age of 16. When the National Commission on Education 16 looked at this field it was very concerned to see the development of a mechanism whereby individuals leaving school at 16, for whatever reason, might take the opportunity of having at least a limited amount of time off work in order to acquire such qualifications or to build on qualifications such as NVQ I and 2 in order to achieve NVQ 3 and higher by a process of credit accumulation and transfer.
It may be that there are deficiencies in Clause 23 but I wholly believe that the objective underlying the clause is a worthy one. It is true, as the noble Baroness, Lady Blatch, said, that some of the major employers in this country—I think in particular of the motor industry but there are many others—have in-service training of a very high quality for their employees; and that is not just relating to the development of skills that they need in that industry but often education and training covering a much wider field. However, a large number of employers, particularly small and medium sized enterprises, do not make available such opportunities to their employees in order to capitalise on their skills and the opportunities they would otherwise receive if enabled to undertake such training. Hence, I greatly welcome the clause.
It may be that it needs considerable fine-tuning before it eventually becomes law. But the principle of requiring employers, where necessary, to give time off work, perhaps on the basis of one day per week, to individuals to undertake further education and training in order to work towards other qualifications is very much in line with the proposals of the Dearing Report—not the recent Dearing Report on higher education but the earlier Dearing Report on qualifications for 16 to 18 year-olds. It is crucial that we should develop a system to enhance the quality of the so-called vocational qualifications alongside those such as A-levels, which are regarded generally as academic qualifications. Indeed, many would say that the GNVQ is the vocational A-level. I believe it is right, in order to develop the high skill economy that this country needs for the future, that a clause such as this should become part of the Bill.
§ Baroness Blatch
I am grateful to the noble Lord, Lord Walton of Detchant, for his remarks because I find it difficult to disagree with him in principle about the policy aims of these clauses. There are 4 million businesses in this country. Ninety-seven per cent. of them are companies with fewer than 20 employees. Out of the 4 million businesses, 1.3 million are employers. They employ other people. The rest–2.7 million businesses—are sole traders or consist of the self-employed. They do not employ other people. We shall he imposing on very small businesses the strong arm of the law in order to implement these proposals.
A good deal of progress has been made by the present Government, carrying on from the previous government. in working with business and commerce to encourage them to take training seriously. Then along comes the provisions in this Bill saying, "If you do not comply with prescription set out in the Bill, you will find 17 yourself before an industrial tribunal". It is the method by which this policy is achieved that we take exception to.
§ Baroness Carnegy of Lour
When the noble Lord, Lord Tope, replies, can he tell the House whether he really thinks that employers will continue to take on the same number of 16 and 17 year-olds if anyone who is already well qualified can become even better qualified at the employer's expense, in both time and money? If he could tell us on what grounds he thinks that will improve the situation, I would be more convinced by his amendment.
I wanted to make my next point to the noble Lord, Lord Monkswell, but, sadly, he is not in his place. I listened to what the noble Lord said. It sounded as if you did not need to be able to read and write to be a bricklayer. I say to him—I hope he will read it in Hansard—that it is extremely dangerous nowadays not to be able to read and write. You cannot understand the instructions that are on machinery; you do not understand the provisions of the Health and Safety at Work etc. Act; and you find it very difficult to understand notices from your union. Anyone who has suffered from bricks laid by someone who did not know what they were doing recognises that it is not as easy as all that to be a bricklayer. No doubt the noble Lord's son can read and write and is an excellent bricklayer, but it is nonsense to say that it is unimportant for people who are bricklayers.
§ Lord Monkswell
I am grateful to the noble Baroness for giving way. The point I was making is that my son is working as a bricklayer's labourer and in that context he is just a carrier of bricks.
§ Baroness Carnegy of Lour
He still needs to be able to understand the Health and Safety at Work etc. Act and to follow instructions on the building site.
§ Lord Brooke of Alverthorpe
While many large employers are extraordinarily good at providing on-the-job training and vocational training for their employees, one invariably finds that the focus is on middle management and upwards. If one examines the extent to which there is any training beyond pure vocational training for the job given to people at the bottom end in employment, one finds that it diminishes rapidly. Many of those losing their jobs tend to be at the bottom end rather than in middle management and upwards. They lack skills for wider training beyond on-the-job training.
A case can be made for greater opportunities for people working for large employers. They should have greater opportunities to undertake further education than exist at present. The proposed legislation will assist greatly in those areas by providing more mobility, greater skills and greater employment opportunities in future.
The number of small employers is growing. They need every possible assistance. They are the employers of the future who will provide greater employment opportunities than in the past. I could share some of the 18 views expressed by the noble Baroness, Lady Blatch, if the reality was that we had a high incidence of good quality training and high skills in those areas. Regrettably, the facts point to quite the opposite. It is in those areas that we, as a competitive nation, have been falling behind what has been happening, particularly in Europe. We need more training and opportunities than we have at present. We have to provide them for the growth area, particularly for those people who do not have such skills; for example. those in the lower end of employment. The way forward is to give them a chance to obtain training under arrangements of this kind. One would hope that the growing number of small employers would be prepared to embrace these new provisions and see the benefit for their companies. They will provide them with the opportunity to skill people so that there will be greater flexibility in future. Those whose jobs have disappeared will, if they have been retrained and re-skilled, be better equipped to look for jobs elsewhere.
§ 3.30 p.m.
§ Lord Whitty
I trust that the Committee will forgive me if I do not pursue the initial points made by the noble Lord, Lord Tope, and the noble Earl. They will be dealt with later. Before I begin my reply, the two documents to which the noble Baroness, Lady Blatch, referred are both public consultation documents. If she does not have access to them, we shall certainly make sure that she does. They should be available to all Members of this House.
The effect of these amendments needs to be clear. The effect of Amendment No. 130 would be to remove a most important power which the Secretary of State would need in order to make regulations. It would remove the key concept of standard of achievement and thereby undermine the most important effect of the Bill. To delete the phrase, "an academic or vocational" in Amendment No. 131, which comes from Section 24 of the Education Act 1997, would call into question the legal backing for controlling qualifications in the present context. Again, it would damage the quality assurance of the provision that we propose.
In considering Amendment No. 130, it is important to recall the wider context. The noble Lord. Lord Walton of Detchant, referred to the extension of training opportunities. As several Members of the Committee have said, there is a large number of young people who do not have the opportunity of training in their first jobs after school. We must turn to those young people. In particular, Members of the Committee may recall that our Investing in Young People strategy sets out our long-term aim that all young people who are able should achieve qualifications at least at Level 2 and thus improve their employability. That is the central intent of this clause. As I recall, at Second Reading noble Lords did not appear to be at odds with that primary intention. Indeed, I recall that the noble Lord, Lord Tope, said that it was an aspect of the Bill to which he gave "an unqualified welcome". I believe that is right.
We need to ensure that as many of our young people as possible stay on in education and training, including those already in jobs. We want them to achieve qualifications at Level 2. That is in reply to the specific 19 point made by the noble Lord, Lord Tope. They should achieve higher qualifications if they can, but Level 2 is our primary objective. Many young people have taken advantage of the opportunities provided by modern apprenticeships, which have been devised and developed by employers who do provide decent training. We are also introducing national traineeships as a further high-quality work-based route to NVQs at Level 2.
But there is still a very large number of 16 and 17 year-olds who left school without any qualifications and who are well short of Level 2 qualifications. I understand the points made by my noble friend Lord Monkswell and others, but we have to prioritise. We must focus our measures on those who did not get much out of school. At worst, some of these young people end up in dead-end jobs for a few months with little prospect of anything better. The focus of this measure, and of our time and that of employers, including the prioritisation of resources, must be to bring those young people up to Level 2.
Amendment No. 130 could seriously undermine the way in which that is done. It would remove altogether the concept of the standard of achievement, and would remove key safeguards for both the young person and the employer. After all, the young person must be able to know what he or she is entitled to expect. Employers need to be able to plan ahead and take account of any implications in employing young people. They should not have to bear the burden of unreasonable demands.
At present only 70 per cent. of 16 and 17 year-olds have achieved Level 2 qualifications by the age of 19. As the noble Lord, Lord Walton, pointed out, the achievement of that level is the basis on which all future qualifications can be built. But if the young people have not achieved even that level by the age of 19, then their long-term employability is extremely suspect. Therefore, our priority is at Level 2.
The noble Baroness, Lady Blatch, raised the question of sanctions and what would happen were an employer brought to a tribunal for failing to provide time off in order for a young person to achieve Level 2. Clearly, there has to be a penalty if there is a breach of the requirement under this law. Obviously, we would hope, as far as possible, that the law was setting a standard and that industrial tribunals would rarely be brought in. However, undoubtedly a penalty would be involved were the employer to fail to carry out his legal obligations. The precise penalty is a complex issue and will depend on the particular circumstances. If the noble Baroness wishes, we can return to this in more detail and I can write to her as to the exact form the penalty will take.
As regards training provided short of Level 2, clearly much of it—and reference has been made in the debate to good companies providing quality training—would contribute to the achievement of Level 2. However, if the level of training was judged not to be sufficient to enable young workers to achieve Level 2, clearly that would not qualify under this clause.
20 I now turn to Amendment No. 131. It is helpful to bear in mind that the quality of provision is an important part of the legislation in general. Indeed, at Second Reading I gave an assurance to my noble friend Lord Ponsonby, who is not in his place today, that we would have,a proper method of certification".
The regulatory authorities, such as the Qualifications and Curriculum Authority, will work within the provisions of the relevant legislation, such as Section 24 of the Education Act 1997, which defines the range of qualifications that may be authenticated. This definition encompasses the majority of qualifications offered both at work and outside it. If we were to open up the definition in the way suggested by Amendment No. 131, by deleting the words "academic or vocational", that would have adverse implications for the necessary quality assurance processes which, I believe, Members of the Committee would wish to see in place.
Clearly, some young people exercising their right to time off for study or training will at present have no qualifications at all. The qualifications that they would need span both academic and vocational qualifications. They would need to be included in the authentication process mentioned earlier. It is vital that both employers and young people have confidence in the quality of the qualifications available. Amendment No. 131 would undermine that intention. Therefore, I hope that Members of the Committee will reject this amendment, but, preferably, that the noble Lord, Lord Tope, will withdraw it at this stage.
§ Lord Tope
I am grateful to the noble Lord, Lord Whitty, for a very helpful reply. I reassure him straightaway that we still warmly welcome this part of the Bill. It was certainly not the intention of either of these amendments to undermine its provisions, but to extend them to a wider section of people. I shall consider what he has said and see how better we can achieve that at a later stage.
The noble Baroness, Lady Carnegy, asked me whether I thought that smaller employers really would employ 16 and 17 year-olds. I acknowledge that there are many employers, perhaps mostly larger ones but by no means only those, who already make very good and proper provision for the further education and training of young employees. But that does not apply to all. I acknowledge that there are difficulties particularly for smaller employers. But if progress is to be made towards achieving a better educated, trained and skilled workforce for the flexible markets that we talk about there must be some stick as well as carrot. Those are the employers whom we should encourage.
I acknowledge that there are difficulties and understandable concerns, but I hope that we shall be able to make faster progress than is envisaged in the Bill. I do not believe that in his response the noble Lord, Lord Whitty, referred to the timescale of the evolutionary process envisaged by the Government. We strongly support this part of the Bill and have no wish to undermine it. We shall consider the response received from the noble Lord. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.21
§ 3.45 p.m.
§ Lord Jenkin of Roding moved Amendment No. 130A.
Page 19, line 14. at end insert ("and, if he is disabled, is entitled to be provided with appropriate support to ensure access to such training").
§ The noble Lord said: I beg to move Amendment No. 130A and to speak to Amendments Nos. 131A and 132A. These amendments address the same point. It is the experience of the voluntary organisations who represent disabled people and work for their benefit that employers of disabled people who want to undertake part-time courses are frequently ready to find the course fees. They regard that as a very proper way of helping their employees to advance themselves. However, it is also their experience that employers are reluctant to find the appropriate support necessary to enable a disabled person to take advantage of a course that he or she proposes to take. It appears that the Disability Discrimination Act has not changed the situation to any marked extent. Therefore, perhaps this part of the Bill may provide a means to air the problem. These are probing amendments. I hope that the noble Baroness can provide me with some comfort.
§ I take as an example a deaf employee. He or she will require some form of sign language, which implies an interpreter or some other means of communication if he or she is to take advantage of the course. The National Deaf Children's Society, which has drawn my attention to this matter, informs me that some deaf people face barriers in gaining access to training because their employers are not prepared to help in this regard. The society quotes the case of a deaf woman who attends evening classes twice a week and is studying a foundation course in psychology without any communication support. Her employer found the course fees, for which she was very grateful, but not the necessary support. She has been struggling to follow the lectures and is considering withdrawing from the course. It is supposed to be a two-year course, and she continues to work full time. One may ask why she has not applied for a disabled student's allowance. It appears that part-time students are not eligible under that scheme.
§ For some years I was on the council of the Guide Dogs for the Blind Association. I chaired a committee of that body which received applications from blind people, principally but not exclusively guide dog owners, for help to undertake training. The primary objective was and is to supply guide dogs. (I say "was" because I am no longer on the council, having been superannuated as a result of reaching a certain age.) In some cases we were able to help with grants so that blind people could take advantage of the educational opportunities available. Often what is required is new technology, whereby with the use of amazing machines with voice recognition patterns blind people can hear the spoken word when documents are inserted into those machines. The machines do not sound like Daleks but like real people. That is a remarkable technology but it has a certain cost. People require help if they are to take advantage of it.22
§ Do the Government have any intention of extending the disabled student's allowance to cover part-time students on higher education courses? If so, these bodies seek clarification from the Government as to who will pay the cost of communication support for deaf and blind people or those who are otherwise disabled and find difficulty in gaining access to courses and are doing non-higher education courses. If disabled employees cannot claim the allowance for non-higher education courses, who will be responsible for paying the high cost of communication support? Often there is disagreement between employees and employers and the course provider about payment. My attention was drawn to a case in which an employer paid the course fee of £150 but the communication support cost £900 to enable the employee to undertake the course. That appeared to be an astonishing figure, but the employer felt that it was unreasonable to ask him to pay it.
§ There is a real problem here. If, as the Government have made clear, there is to be an extension of the right to time off to enable people to pursue educational training courses leading to higher qualifications, the provision for disabled people must include everything that allows them to take advantage of that opportunity. It is certainly not the case at present. I should like to know from the Government whether they envisage that that will be the case in future. I beg to move.
§ Lord Walton of Detchant
I support the spirit underlying these amendments. Perhaps I may ask the Minister whether she is aware of the fact that some years ago the Department of Health established a series of communication aid centres throughout the country in different areas with the objective of producing and supplying communication aids to those in just the kind of situation referred to by the noble Lord? One wonders whether those aid centres are still in existence and whether they can help in the situations to which he has referred.
§ Baroness Blackstone
I am sympathetic to all the points raised by the noble Lord, Lord Jenkin. It is important that all young employees take advantage of the education and training opportunities that are available to get the skills and qualifications that they need. This is doubly important for young employees with disabilities.
In considering Amendment No. 130A the Committee may wish to be made aware of the considerable range of existing provisions that can help young disabled employees to participate fully in education and training. In particular, some Members of the Committee may already know that the Further and Higher Education Act 1992 places a statutory duty on the Further Education Funding Council to have regard to the needs of students with disabilities when determining what provision to make. One of the key ways in which the FEFC has satisfied this duty is through its funding methodology. Colleges may claim additional funding units from the Further Education Funding Council for the direct costs associated with the support needs of individual students with disabilities.
23 More generally, access to work is available for anyone in paid employment, including 16 and 17 year-olds, to assist them to train for, or to retain, employment. Access to work helps towards the extra costs of practical support that disabled people need to overcome work-related obstacles caused by disability. It is available to people who are disabled within the meaning of the Disability Discrimination Act 1995, who are in or about to enter paid employment, and who incur additional costs because of their disability. If training is undertaken as part of a young person's employment, then support provided under the access to work arrangements would cover that activity.
In addition the Disability Discrimination Act provides that employers are under a duty to make reasonable adjustment if their premises or employment arrangements place the disabled person at a substantial disadvantage compared with non-disabled people. Members of the Committee will be aware that these provisions do not relate to an employer who has fewer than 20 employees, but they will also know that we are currently consulting on, and reviewing the question of, lowering this threshold.
The second amendment, Amendment No. 131A, calls for the provision of funding for appropriate support to ensure access to such training while the young person is for the time being not working for the employer but under contract to another person, "the principal." But it is not wholly clear whether it is intended that this should be an obligation on the principal, for whom the young person may be currently working, or on the employer, or on the state. The Committee may also recall that costs of this nature were not included in the regulatory appraisal assessment of overall costs either as costs to employers or as costs to government. So they would be new costs.
Turning to the third amendment, Amendment No. 132A, I can fully understand the wish of the noble Lord, Lord Jenkin, to ensure that all young disabled employees are able to take full advantage of the education and training opportunities that are available to them. The amendment would provide for enforcement through industrial tribunals and, until the earlier issues have been carefully considered, it cannot be clear whether a new individual employment right is being considered and, if so, whether the Employment Rights Act 1996 would be the appropriate place to locate such a right. If the entitlements proposed earlier by the noble Lord took a different form, then a different enforcement procedure altogether might be required.
The noble Lord, Lord Jenkin, also asked about the extension of disabled student allowances to cover part-time students in higher education. That is not relevant to this part of the Bill, which is about 16 and 17 year-olds who are not in higher education. I can say to the noble Lord that we are looking at the position of part-time disabled students. No decisions have been made because further work needs to be done in order to assess the numbers who might be involved and the costs that would arise. I hope it is helpful to know that the matter is very much on the agenda and that it is being looked at.
24 We are committed to ensuring that all young disabled people can play their full part in the labour market and therefore in society more generally. I am grateful to the noble Lord for raising these important issues. However. the amendments need further careful consideration in the light of existing provision. We wish to ensure that young people with disabilities are able to take full advantage of what is to be made available. In particular we will look at ways of ensuring access to training and will say more on this important matter when the Bill reaches another place. I hope, in the light of that, that the noble Lord is able to withdraw the amendment.
§ Baroness Blatch
Before my noble friend responds, the noble Baroness said that the amendment does not make it clear on whom the costs would fall—the principal, the Government or the employer. That may be a problem with the amendment. However, if this scheme is to go ahead—and, with the Government's majority, the chances are that it will—the problem has to he resolved, if not by my noble friend, then by the Government. Unless that happens the young people who fall into this category could be left outside the scheme because neither the employer, nor the Government, nor the principal, would have an obligation to meet the costs. It is something that the noble Baroness and her Ministers should consider and then come back with an amendment.
§ Baroness Blackstone
The noble Baroness is absolutely right. This would have to be resolved. As I indicated earlier, we will be looking at the question, among other issues which arise from acceptance of these amendments, and we will, if we can, bring forward amendments in another place to deal with them.
Lord Jenkins of Roding
I am grateful for the care with which the noble Baroness responded to the three amendments. It is clear that the Government regard this as an important part of the new provisions in Part III of the Bill. It is good to know that they take on board the need to make provision for the support costs. I shall wait to see what happens. We are becoming used to hearing of reviewing this, revisiting that and examining the other. It all sounds very sympathetic and friendly but not a lot appears to come out at the other end. Hopes are raised only to be dashed. I hope that that will not happen in this instance.
I, for one. have always been hugely impressed by the determination of people who suffer from considerable physical or sensory handicaps to make something of their lives. They are prepared to make efforts that people more fortunately placed would perhaps not feel it necessary to make. They deserve every encouragement and support. I hope, having heard what the noble Baroness said, that the review is seriously intended. Otherwise I fear there will be great disappointment.
These are probing amendments. I was about to withdraw them. Does the noble Baroness wish to address the Committee again?
§ Baroness Blackstone
Before the noble Lord withdraws his amendment, may I reassure him that I 25 would not have said what I said just now if I did not seriously mean that we will be looking at these amendments and hoping that we will be able to come up with something at a later stage in the Bill's course through Parliament. He was a little unfair in saying that sympathy is expressed and then nothing comes of it in the sense that it is too early to say whether nothing will come of it.
§ Lord Jenkin of Roding
I take some comfort from that and the fact that there is someone looking over the noble Baroness's shoulder who has every possible reason for having sympathy with these amendments. I hope that she is justified in what she says and 1 therefore beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 131 and 131A not moved.]
§ Baroness Blackstone moved Amendment No. 132:
Page 20, line 30, at end insert—
("( ) References in this section to study or training are references to study or training on the premises of the employer or (as the case may he) principal or elsewhere.").
§ The noble Baroness said: I am pleased to introduce Amendment No. 132 which makes it absolutely clear on the face of the Bill that the phrase, "time off for study or training", which is required to enable young people to access the new right, does not necessarily mean time away from the workplace. The effect of the amendment will also be to re-emphasise that the Bill does not accord greater status to any particular route.
§ Members of the Committee will recall from Second Reading that some noble Lords raised the concerns expressed by the Confederation of British Industry about the perceived lower status of study or training undertaken at the workplace. We have listened to those concerns through our regular and very positive contacts with the CBI.
§ Amendment No. 132 sends a very clear message. The study or training can be undertaken in the workplace, whether actually on the job or elsewhere on site and, for example, via national vocational qualifications. Or it can take place in a college, or with an approved training provider, or elsewhere.
§ As I made clear at Second Reading, the time that a young person can have will be what is reasonable in all the circumstances, with account taken of the requirements of the study or training as well as the circumstances of the employer's business. This will be especially important for small and medium-sized businesses.
§ Amendment No. 132 confirms that this is a listening government, willing to work to accommodate the concerns of employers, to ensure that arrangements can be both sensible and flexible. This amendment has been warmly welcomed by the CBI and has its strong support. I commend the amendment to the Committee.
§ Turning now to Amendment No. 138, noble Lords will note that this is a technical amendment to Section 58 of the Employment Rights Act, which sets out the right to time off for occupational pension scheme trustees. The amendment is not intended to change the 26 meaning of that section in any way. It is included solely to ensure that the amendment to Section 63A, Amendment No. 132, does not have any adverse effect on the interpretation of that section. Amendment No. 138 is a minor but important amendment which I now also commend to the Committee.
§ On Question, amendment agreed to.
§ 4 p.m.
§ On Question, whether Clause 23, as amended, shall stand part of the Bill?
§ Baroness Blatch
If it will help the Committee, in opposing the Question that Clause 23, as amended, shall stand part of the Bill, I should like also to oppose Clause 24. This is the same argument and may save time.
In order to warn any spin doctor who may wish to interpret otherwise, I make it clear at the outset that we entirely support the Government's policy aims that young people should have adequate education. training and skills with which to enter the workforce. We also support the setting of education and training targets to be achieved by young people as they leave school. The Government have our support in encouraging young people to remain in education and/or training to equip them for entering the workplace. Much of what the present Government are doing builds on the achievements of the previous Conservative Government, which were opposed root and branch by Labour Members of Parliament as those measures went through both Houses.
The previous government, for example, introduced the national curriculum, with concentration on the core subjects of literacy and numeracy. Our government also saw the introduction of formal assessments and testing; the introduction of a systematic rolling programme of inspections with a requirement for schools' governing bodies to produce follow-up action plans; the introduction of national education and training targets; the introduction of performance tables, the publication of which provides much of the information which this Government are now finding useful in focusing attention on areas of concern within the education service; the introduction and development of vocational qualifications, GNVQs and NVQs; an improvement in the school staying-on rate and an expansion of participation in further and higher education.
The number of young people entering higher education rose from one-in-eight in 1979 to one-in-three by 1997. Despite what has been said about funding, funding also rose throughout those years. We also secured all-party support for commissioning the Dearing report to address the issue of the financing of higher education into the 21st century. Therefore, that some young people aged 16 and 17 should leave or. in some cases, drop out of education is deeply regrettable and is a cause for concern.
27 However, the proposals contained in Clauses 23 and 24 do not address the problem. They have certainly not been thought through, just as so much of the Bill has not been thought through. One has only to recall the confusion over gap year students, and the Scottish Office concession over tuition fees to Scottish, Southern Irish and continental European students which disadvantaged students from England, Wales and Northern Ireland.
My two main reasons for opposing Clauses 23 and 24 are, first, that they represent yet another burden on business and, secondly, that the proposals will work against the interests of 16 and 17 year-olds. Therefore, my argument is that the proposals are well intended, but misplaced.
The balance is tilting quite significantly away from employers in favour of employees. European social legislation, as a result of the Government's signing up to the social chapter at the Amsterdam Summit, will create great tensions for all employers, public and private. I refer, for example, to the introduction of the minimum wage; compulsory recognition of trades unions; compulsory European works councils and the possible extension of works councils from large companies to much smaller companies; the introduction of maternal and paternal leave when a baby is born; equal rights for part-time workers; and to the shifting of the burden of proof in sex discrimination cases which will mean that in future an employer will be deemed guilty unless he can prove innocence. There is so much more—and this plethora of regulation represents additional costs and additional bureaucracy, together with a loss of freedom; a loss of choice; and a loss of competitiveness and of flexibility for all employers in the United Kingdom.
The Prime Minister's hectoring and lecturing of the other European member states about competitiveness and flexibility in employment has a very hollow ring. Having abandoned the opt-out of the social chapter and the veto on social legislation which was secured by my right honourable friend John Major, the Prime Minister has opened the door to policies which will destroy the very competitiveness and flexibility which is so critical to a prosperous future for Europe.
Many companies—large, medium and small—provide training and regard it as essential to the success of their businesses. Some provide formal systems of training which dovetail very well into further and higher education qualifications and which are regarded as compatible by many of the accredited awarding bodies. Some, however, provide skills training but on a much more informal on-the-job basis, which serves the needs of both the company and the employee, and which is also consistent with all the workplace health and safety regulations but which may not conform specifically to the regulations and the bureaucracy which will be set out under Clause 23 in new Section 63A(2)(c), the details of which we have yet to see.
Paid time off will cost employers up to £130 million even if only 50 per cent. of 16 and 17 year-olds take up places. Businesses could be disrupted; substitute 28 employees may be needed to cover for absences, and productivity could be affected. Moreover, these proposals will impact disproportionately on smaller businesses which, according to the Government's own estimates, are the very companies most likely to be approached by this group of young people.
I believe that the proposals will work against the best interests of 16 and 17 year-olds who have no qualifications and who have dropped out of education and training. I should like to give to the Committee three examples of young people who could present themselves for work to an employer. I shall call the first John. He is aged 17 with five GCSEs and an NVQ level 2. Tom is my second example. He is aged 18 and on a New Deal welfare-to-work scheme. Tony is our third example. He is aged 17 and has only one GCSE. My first example, John, aged 17 with five GCSEs and an NVQ level 2, could be employed full-time at the cost to his employer of his salary. Tom, aged 18, on the New Deal welfare-to-work scheme, comes to the employer with a weekly bounty, paid for by the Government, of £60 plus £700 upfront costs to cover training. On the other hand, Tony, who is aged 17 and has only one GCSE, comes to the employer at full salary cost, but with a right to have time off regularly for education and training which could last for over a year at the employer's expense.
So employers will have a clear incentive to take on either qualified young people or the New Deal welfare-to-work 18 to 24 year-olds in preference to 16 to 17 year-olds with no qualifications and who carry a cost to the employer over and above their salary. Not only that—in the Government's own view, this group of individuals is unlikely to be motivated and is even alien to the idea of education and training. A great deal is being asked of employers.
If an employer provides training which does not conform to the prescribed conditions to be set out in regulations under new Section 63A(2)(c), he will be obliged under the law to adjust the company training programme at his own expense, although it may have been entirely satisfactory to the company, only to conform to a more bureaucratic system which must be monitored and assessed externally by an accreditation body. That applies to a company which may have only two people in its employ.
It is even more confusing in the area of work and benefits. As I understand it, if you are 16 to 18 years of age and taking part in a course of further education, you cannot claim state benefits; if you are part of the New Deal welfare-to-work scheme you can claim benefit; if you are 18 plus and on a further education course, you cannot claim benefits, and you must pay tuition fees for some courses; if you are 18 plus and part of the New Deal welfare-to-work scheme, you may claim benefits and be exempt from paying tuition fees for six months; if you are 18 plus and part of the New Deal welfare-to-work scheme, your employer will receive £60 a week, and £700 up front to pay for training; and if you are 16 to 18 and in a job your employer will be required to pay you and shoulder the full cost of a day 29 release programme. Is it any wonder that employers, particularly small employers, find this whole issue perplexing?
For some years now unemployment has been falling and continues to fall across all age levels. In addition, as the results and benefits of the education reforms over the past 10 years work through to school-leavers—the benefits are now beginning to show—more and more young people will leave with better qualifications. We all say "Amen" to that. But for those who do not, government should consider other alternatives; for example, to revisit Option 2 which was set out in the Government's paper Investing in Young People; that is, to continue to encourage employers without invoking the strong arm of the law against them. This is no way to work with and to win the hearts and minds of the private sector.
There must be a more effective way of achieving the policy aim of improving the education and skills of some of the most difficult young people who see no benefit in remaining in state-funded education or training to the age of 18. To pursue the policy in that way, using the strong arm of the law, especially against the smaller employers who need to use all their energies, talents and resources even to survive, is unacceptable.
I oppose these two clauses standing part of the Bill because of the anomalies created by them; the unbelievable complexity of provision for 16 plus young people, whether in or out of education, in or out of work; the inherent unfairness between one young person who receives bounties and benefits and another young person who represents a burden to an employer; the tensions that will result from unmotivated young people and their employer who will be pursued by bureaucrats, and possibly an industrial tribunal, if the employer fails to satisfy the, as yet, unwritten regulations; and they are ill-thought through. Most significantly, I oppose them because they will work against the interests of the very people that they are designed to help—young, unskilled school-leavers.
§ 4.15 p.m.
§ Baroness Maddock
I listened with interest to the noble Baroness, and hear what she says about how her points of view will be viewed outside the Chamber. It will be difficult to convince people outside the Chamber that you are in favour of extending training to young people, given that you do not want the clause to stand part of the Bill. I place on the record once again that the Liberal Democrats support the right of young people to have time off from the workplace to ensure that they are properly trained. We recognise that that can happen in a great many other places as well and by many other means, especially with modern technology.
It is hard to believe that some of these arguments were taking place 30 years ago when we were discussing the setting up of the Open University. I have greatly enjoyed the book about Jennie Lee written by the noble Baroness, Lady Hollis. Some of the discussions we have had today and earlier in Committee about higher education and the different ways of learning and using modern technology were being held over 30 years ago. That is dreadful shame.
30 As has already been said this afternoon, all the evidence shows that if the British economy is to be competitive in the next century we must foster high quality, high value-added products. That must be part of our economy. We can achieve that only if we have a well-educated and highly skilled population. There must be flexibility within education and training.
We have seen rapid technological and economic change, which means that people will need a wide range of skills. They will need to be able to communicate, assess, adapt and work with others in this fast moving climate. Training in such skills demands a broad education, to which I believe we are all committed. In addition, we must ensure that more specialised competencies are included. That is what we are talking about in this part of the Bill.
For over 30 years successive governments have acknowledged the need to improve the training of our workforce, but our workforce remains poorly trained when compared with most other developed countries. As has already been said, only about one in seven of our employees receive any training from their employers, although we have made some strides in recent years.
In England and Wales—it is probably less true in Scotland—there has been a failure to straddle the gulf between academic and vocational education. Vocational education has been the poor relation. Training has often been short term and not of the highest quality. That has been the case since the country's good system of apprenticeships was dismantled. There must be parity of esteem between academic and vocational qualifications. That is an essential first step if we are to have a properly educated and trained workforce.
One of the other factors which is important, and which has been mentioned, is the funding of proper training. At the last general election I was proud to be able to put forward the Liberal Democrats' proposals for how that is to be achieved. I return to the noble Baroness's opening remarks, because we must engender a change of culture. The only way we will do that is by investing in the training of our young people. That is not happening at the moment. We have proposed that one way to fund it—this may answer an earlier question—is to have a training levy. We have proposed a levy of 2 per cent. on the companies' payrolls. Firms providing training opportunities would be able to make deductions against that.
The noble Baroness, Lady Blatch, is anxious about what will happen to small businesses and the burden which will fall on them. Under a properly constructed training levy small companies employing a few people can be exempt. However, they can provide proper training for their employees. That is particularly important because the small businesses eventually turn into large businesses. Often when the economy is doing well small businesses engage the largest number of new employees. It would be wrong to introduce a system which did not enable small companies to afford to train their employees.
This is an important part of the Bill which we believe can be improved. We believe that all young people under the age of 19 should be included. There is a 31 recognition outside the House that we need to move forward in this respect. Despite the arguments explained most eloquently, as always, by the noble Baroness, Lady Blatch, I do not believe that the message will be well received outside this House, and we support the Government.
§ Baroness Carnegy of Lour
I believe that people at large are more practical than the noble Baroness, Lady Maddock, believes and they may well see problems with the plan. Many people who have done well at the Open University left school with no qualifications or just dropped out. The problem is how to motivate such people. I am thinking of those in the area which I know best; that is, north of the Border. The Bill applies to Scotland, too. There are many young people of 16 and 17 who leave school and are not at all interested in further educational training. Their one motivation is to find a job. Nowadays, they are usually successful after a short time. Many begin by working in a small business; for instance, a shop or a garage. They keep the job for a year or two and become motivated and interested. Often the employer suggests that it would be a good idea if they went to college on day release. More likely, they apply for a better job where training is provided. However, the start of the training is simply having a job.
I worry that if the clause is implemented, many of the small businesses in my area will be reluctant to employ young people. They will have to pay them not only for a full week's work—and they will be away for part of that—hut they will have to employ another young person as a replacement. Perhaps in time they will have to be paid for training.
I have devoted a large part of my life to setting up education and training for such young people—my thoughts go back to months spent setting up the youth training scheme. There was enormous opposition from the party opposite, who later destroyed it because it was not good enough. I realise that one must be realistic; we must start with what young people want, which is a job. Once they start work they will want training and we must provide every incentive for that. However, if employers are forced to provide such training, the jobs market for 16 and 17 year-olds, certainly in my area, will diminish. That would be tragic.
§ Baroness Blackstone
Clause 23, as amended, and Clause 24 provide that 16 and 17 year-olds who are in a job but who have not achieved a certain standard in their education and training, will be entitled to appropriate time off to pursue approved qualifications in the workplace, at college or elsewhere. I am grateful to Members on the Liberal Democrat Benches for their support for this part of the Bill. I am surprised by the opposition to it as expressed by the noble Baroness, Lady Blatch, and her party. Let us be clear about the importance that the Government place on the provisions. All young people are important and investing in young people is central to our thinking. The provisions fulfil a commitment made in the manifesto. They are about improving the employability of young people. We want 32 all employers, not just some of them, to provide good quality training for young people and by doing so to invest in the future.
Perhaps I may say to the noble Baroness, Lady Carnegy, that some of her comments amounted to reasons for supporting the clause rather than opposing it. Of course young people are motivated by having a job. Building on that motivation by providing them with good training, whether at work or on release to attend college, is a sensible approach to extending employability for all young people.
The noble Baroness, Lady Blatch, listed a large number of provisions which the previous government made. Some of them I support and am pleased they are successful. However, despite the changes, one in three adults have not had a single day's education and training since they left school. It is important that when 16 and 17 year-olds leave school and take a job we start them on the road of training so that they can be prepared for a world of lifelong learning.
As I explained on Second Reading, the measure is a key element of our "investing in young people" strategy. It is not an option. The measure will tackle the problem of under achievement among many 16 to 19 year-olds.
I recall that during Second Reading the noble Lord, Lord Tope, gave a positive welcome for Clauses 23 and 24, which reflected the encouraging mood of the House towards this important legislation. I recognise that the noble Baroness, Lady Blatch, raised a number of anxieties about the effects of legislation on employers, and those are points to which I shall return. But as the government amendment tabled today shows, we take employers' views seriously and we shall continue to work closely with them.
We know that there are many excellent employers across the country who will already meet the requirements of the legislation through their first-class training and development arrangements for young employees. But our ultimate aim must be to change both attitudes and practices so that all employers, not just the good ones, provide quality education and training for their young employees—or if they cannot or will not, allow others to provide it in their stead.
Clauses 23 and 24 stem from one of the Government's manifesto commitments, so I shall take this opportunity to explain why the Government believe the legislation to be essential and why the clauses should stand part of the Bill. In the UK, at the end of 1996 there were an estimated 115.000 young people aged 16 to 17 in employment not qualified to Level 2 and not working towards a Level 2 qualification. While it is pleasing that the unemployment rate for 16 to 24 year-olds in Great Britain—using the ILO definition—fell from about 16 per cent. in the summer of 1997 to about 13 per cent. in the autumn of 1997, that rate remains at twice the national average. That seems to me to provide ample justification for the emphasis, and significant resources, that we are placing on improving the skills and employability of that age group as a whole.
33 I return to the 16 and 17 year-olds, who are the subject of this legislation. We are concerned that large numbers of young people in the UK each year will continue to fail to reach level 2, the very basic level of attainment which is an absolute prerequisite for sustained and future employability. Level 2 qualifications also provide the foundation for further learning and career progression. The consequences of failure for the young people, for employers and for the Government are clear: the likelihood of higher rates of unemployment in the future; a smaller pool of people who have reached the threshold of skill which makes them valued employees; and some young people withdrawing from the labour market altogether. More young people will therefore be at greater risk of being socially excluded. The cost to the individual young person, to the economy and to society would continue to be high and I am sure that all Members of the Committee will agree that no one should be written off as a total failure at the age of 16.
The noble Baroness, Lady Blatch, raised questions about the interaction of those provisions with the New Deal. Those two areas of policy cover different age groups. This legislation covers 16 and 17 year-olds; the New Deal is for 18 to 24 year-olds who have been long-term unemployed and claiming jobseeker's allowance for a minimum of six months and in many cases many months longer. The design of the New Deal—its gateway and assignment to personal advisers—recognises that long-term unemployed 18 to 24 year-olds need in-depth advice so that they may resolve any personal problems, set realistic occupational goals and overcome the many barriers that they face in relation to both self-confidence and motivation.
Another key difference relates to geographic spread. I understand that 16 and 17 year-olds in employment without training are far more geographically dispersed than the New Deal client group, who are much more heavily concentrated in relatively few areas. I understand also that an extensive survey of employers—small as well as large—undertaken by Manchester TEC showed that current employment of 16 and 17 year-olds was not expected to be affected adversely by the New Deal.
The Government recognise that there is a potential issue here concerning the interaction of two important commitments. But we believe that that will be a local rather than national issue. However, we shall monitor closely the impact of the New Deal and will be able to assess its possible interaction with other policies. Of course that is important, but it is quite right to give priority to those young people aged 18 to 24 who have been unemployed for more than six months. But we wish to ensure that that does not put at risk the opportunities for 16 and 17 year-olds, a group who have the benefit of other opportunities such as modern apprenticeships, national traineeships and other government supported work-based training. But it is a group also which does not always take up those opportunities.
We are looking for a culture in which all young people in work, or not, stay on in learning to acquire the skills and qualifications which will make them 34 employable in the long term. The focus of the New Deal is on unemployed 18 to 24 year-olds. The focus of this legislation is on very young employees aged 16 and 17. If we successfully help the 16 and 17 year-olds to achieve the skills and qualifications they need, there should be fewer who, a few years later, will need the help of initiatives like the New Deal. That is part of the focus of these measures.
The noble Baroness, Lady Blatch, has focused on the burdens and cost to businesses. And it is true that we have estimated that the compliance costs to businesses will be between £60 million and £130 million per year. The noble Baroness quoted the higher of those figures. But the House might wish to note that this will vary very much according to the rate of take-up on the part of young people; the time the young people are away from fully productive work and undertaking appropriate education or training; and on any absence cover that may or may not be required.
But it is essential to stress that those costs must he seen against the benefits to employers and to the economy at large of a more highly trained workforce. I am sure that the Committee will agree that training and education are an investment. They are a vital investment for the country's future prosperity, for improved business performance and for giving young people the skills they need in our rapidly changing labour market. The returns on the investment for employers are the higher skill levels of their current young employees and a better trained national workforce from which to recruit in the future.
It is only fair that employers contribute significantly to the investment, given the returns to them from better trained young employees. Wages, of course, will be a matter for the young person and the employer concerned. Time for study or training gives employers the opportunity to raise the skills of their young employees: and, as we have set out in the regulatory appraisal, the Government will also contribute significantly to the overall education or training costs.
The costs of not investing in young people's skills are high, both in terms of the economic costs to businesses and the costs to young people and society from denying some young people the opportunity to improve their skills and employability. And a lack of investment in our young people is felt even more acutely by small employers.
The noble Baroness, Lady Blatch, made quite a lot of the position of small businesses. Small firms need better trained employees to sustain and improve their business performance. Many small firms already invest in training for their young employees. All small firms should seek to invest in training, rather than expect to benefit from training paid for by other small firms. That seems only fair.
The legislation represents an entitlement for the individual. Many young people work for small firms and it is essential that they are covered by the legislation: to do otherwise would carry the risk of denying these young people the opportunity to improve their skills and longer-term employability.
35 Sustainable employment in today's rapidly changing markets for goods and services requires more competitive businesses, with higher productivity levels and higher added value. This, in turn, requires more skilled, adaptable and flexible employees. Better education and training are vital to young people's employability in both the short and long term. Unemployment among 20 to 24 year-olds qualified to Level 2 is 40 per cent. lower than those with no qualifications.
It is surely better to give young people the opportunity to acquire now the skills they need for their longer term employability rather than have to seek to do it later and have intermediate years of young people moving in and out of short-term jobs and unemployment, with no long-term prospects to get the skills and qualifications they need.
On Second Reading, several noble Lords mentioned a letter that they had received from the CBI. I, too, have seen the letter and I should like to quote from the opening paragraphs of the briefing note:The CBI fully shares the Government's ambitious objectives for raising 16 to 18 year-olds' education and skills levels, and we have consistently argued that under 18 year-olds who have left full-time education must continue to receive opportunities for structured education, leading to nationally recognised qualifications. We therefore fully support the idea of a 'right to study' and accept the obligations this places on employers".
I am delighted to have received this enthusiastic support from the nation's employers. I do not know whether today the noble Baroness intends to press her opposition to Clauses 23 and 24 standing part of the Bill. However, I should point out to Members of the Committee that, if they were to decide that these provisions should not stand part of the Bill, the scope of the Bill would be fundamentally altered. The Long Title of the Bill would need to be reworked to reflect the narrower coverage of the legislation.
In practical terms, Members of the Committee should understand that the effect would be that when the Bill comes to be debated in the other place the change in scope would prevent any debate, or tabling of amendments, on "time to study". There would be no opportunity for those in another place to consider this vitally important manifesto commitment. An unelected Chamber would be dictating the topics upon which the elected Government could legislate. That is clearly an issue of some constitutional importance. Therefore, I urge Members of the Committee to consider most carefully the ramifications of their stance on this point.
At present. young people aged 16 and 17 have a very wide range of opportunities to help them to gain qualifications at Level 2, if they are not already there. If they enter into employment, we are determined that they, too, should have the chance to carry on learning. That is why the right to study was a manifesto commitment; that is why we are legislating; and that is why the success of Clauses 23 and 24 is so important.
36 I therefore urge Members of the Committee to agree that Clause 23, as amended, and Clause 24 stand part of the Bill.
I should like, first, to say how grateful I am for the amazingly detailed and carefully thought-through reply that the Minister has given to the point. I shall repeat what I said in my opening remarks when I expressed my opposition to the fact that these clauses should stand part of the Bill. I agree with almost 70 per cent., 80 per cent. or 90 per cent. of what the Minister said about the importance of improving the skills, education and training of this group of young people. They are people who already have a right to stay in education; they have a right to stay on at school; and they have a right to move into further and higher education.
I should like to narrow down my concerns about the clauses. They relate to the unfairness of the sharing of the burden of cost. It is interesting to note that the burden of cost is much less on the Government. For example, the Government, who already have an obligation to meet the financial costs of any young person staying in sixth form education or moving into further education, are bearing only £40 million of those costs for the education and training provision, with £12 million for the careers service and—Heaven forfend!—£700,000 for industrial tribunals to come down on those employers who do not conform. On the other hand, £60 million to £130 million represent the compliance costs if only 50 per cent. of young people take up the places. Therefore, I make no apologies for going to the upper end of that figure because when 60 per cent., 70 per cent. or 80 per cent. of young people discover that they can get a full-time job with pay for five days a week, together with a day out, it may well become an attractive option.
As I said, I am concerned about the whole matter for different reasons. I am sorry that neither the Minister nor the noble Baroness, Lady Maddock, are concerned about a most important point that I made in my opening remarks. What worries me is the following: an employer may be faced with the possibility of a young person coming to him with a bounty paid for by the Government; he could also be approached by a young person with all the qualifications, certainly beyond the minimum qualifications which will be set out in the regulations; but he could also be confronted by a young person with an obligation not only to pay him full time but also to give him time off at the company's expense, with the proviso that if the company does not comply it will be breaking the law. I believe that that would act against the best interests of 16 and 17 year-olds.
Neither the Minister nor the noble Baroness, Lady Maddock, referred to the sadness of these young people, probably among the most difficult, who have not seen the benefits of staying on at school in education; the ones who are the most recalcitrant when it comes to going into any kind of formal scheme; and indeed the ones who will be the most difficult to handle. Employers will be required to give them paid time off. However, what do they do if these young people end up, as is so 37 often the case, wandering the streets of the local town? There is nothing in the Bill which confers anything other than a right to the young person; in other words, there is no responsibility imposed upon him in that respect.
Moreover, there is no ending to the time off for these young people taking such a course. In fact, it says in the paper, Investing in Young People, that they can even go into their 18th year as regards such courses if the stated level of education has not been achieved. Therefore, it could actually be a very long-term commitment for an employer. I have already mentioned that 97 per cent. of employers in this country employ fewer than 20 people and that 2.7 million of 4 million employers employ no one; indeed, they are self-employed, sole traders, and so on. We are talking about putting a very considerable burden on small businesses.
The Minister made a most important point and one which I actually support; namely, that what is needed is a change of culture. However, I believe that that is already coming about. I was very heartened both in my time at the education department and during my time at the Home Office by just how much businesses are now working with "Business in the Community", and taking part in many voluntary schemes. They are also introducing mentoring schemes and allowing people from their companies to twin with other young people in the community who have difficulties either in the mainstream education system or as they leave it. Indeed, they are doing so much to improve the lot of the group of people who are the subject of these clauses. As I said. 1 believe that that change in culture is already taking place. It is a great pity that the Government have chosen this time to use the strong arm of the law to enforce this particular proposal.
The noble Lord, Lord Tope, made a point earlier with which I absolutely agree. He said that there will be difficulties for small companies but that it is only right to encourage them. I entirely agree with that view. However, this is not encouraging them: it is using the law to make them comply. There is no flexibility and no allowance for understanding the difficulties of small companies. If the small company does not comply, it will find itself before a tribunal. That is another of my concerns.
As I said, I do not disagree with the issue which needs to be addressed here, but why should the cost of education and training for the most difficult of our young people be a responsibility predominantly placed upon the employer? Whenever the Government talk about business, commerce and consultations they refer only to the CBI. Indeed, the Minister did so today, as she has on many previous occasions. However, I have to tell the noble Baroness that the Institute of Directors is decidedly unhappy about these proposals. Moreover, I spoke only this morning to the Federation of Small Businesses which is most concerned about the matter. They have said what I have been saying; namely, they want to co-operate with the Government and they understand that there is a problem. They believe that the more young people who are better equipped, better trained and better skilled to enter the workforce the better it will be for everyone—for companies, for families, for communities and 38 for the country. But they are worried about the circumscription and compulsory nature of the clause. It may well be that some bureaucrat's interpretation of what is equivalent to NVQ Level 2 is not complied with.
I shall watch the end of the consultations. Some reputable, large companies in this country are in consultation at present with the Government on welfare-to-work schemes. Those companies have good in-house training schemes which serve the company and employee well and send young people out as well adjusted, trained young people. However, the training by those companies does not confirm specifically with the bureaucratic interpretation. In other words, external assessors will be allowed to insist on a change of those programmes in order to secure the co-operation of those companies with the welfare-to-work schemes. It would be deeply unfortunate if the outcome of these well intentioned proposals is that employers refuse to take on 16 to 17 year-olds simply because they come not only with an obligation but with a retinue of bureaucrats who will crawl all over the training and employment systems and job programmes. Those employers are doing a thunderingly good job in creating work and trade for this country and for the young employees.
I refer to the compulsory nature of this scheme and the unfair spread of costs to the employer, in particular as regards small employers. The proposal will surely promote discrimination against young people. Three young people come before an employer, one with no obligations other than for the employer to employ and pay him; one comes with a bounty from the Government; and one comes with a real obligation to the employer and, if it is not fulfilled, the employer will find himself on the wrong side of the law.
I conclude with these two questions. How many long-term unemployed 18 to 24 year-olds are there at present? How many 16 to 17 year-olds have a training or education level comparable with or below NVQ Level 2?
I take seriously the constitutional arguments put forward by the noble Baroness about this House removing a provision from the Bill which will mean that another place cannot debate the issue. It is right that the other place should debate it. It is right that the Government continue to justify this heavy-handed approach to small businesses in this country. The same ends could be achieved by working with industry and commerce, so that they co-operate with the Government on what we agree is an important policy.
I hope that the points are well made. The arguments relate to unfairness and discrimination against young people aged 16 and 17.
Clause 23, as amended, agreed to.
§ Lord Haskel
My Lords, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.