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Industrial Training Boards

Volume 13: debated on Monday 16 November 1981

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4.34 pm

With permission, Mr. Speaker, I should like to make a statement on the future of industrial training boards. These boards at present cover just over half the work force. The system has been under review for some considerable time and it is now important to announce decisions so as to end the uncertainty.

In the light of the extensive consultations that have taken place and the recommendations made to me by the Manpower Services Commission, I have decided to retain statutory boards in six of the seven cases unanimously recommended by the Manpower Services Commission and in one other case. The six are the boards for clothing, construction, engineering, hotels and catering, road transport, and rubber and plastics processing. The additional case is a board for the offshore sector only of the petroleum industry. I propose that the other boards should be abolished.

My proposals will therefore reduce the number of boards from 23 to seven, excluding the Agricultural Training Board, which is responsible to my right hon. Friends the Minister of Agriculture, Fisheries and Food, and the Secretaries of State for Scotland and Wales. Where statutory arrangements are to be removed, I am satisfied that the training requirements of the sector concerned can be met effectively on a voluntary basis with less cost and bureaucracy. I plan to make several changes in the scope of the boards that are to be retained.

If the hon. Gentleman will listen for a moment, he might learn what the changes are to be.

I propose to take the rubber industry out of the scope of the Rubber and Plastics Processing Board and to take road passenger transport, warehouses, agricultural machinery, driving schools and security transport out of the scope of the Road Transport Board. I shall be considering further whether the latter board should be split into two, with one board for road haulage and another for motor vehicle retail and repair. I intend to leave the foundry industry within the scope of the Engineering Board, but to propose to the board that it should revoke its delegation of functions to the foundry industry training committee. I do not propose any change at present to the Hotel and Catering Board, although I intend to review the position early in 1983. I also propose, as a result of abolishing the Ceramics Board, to bring the brick and pre-cast concrete industries into the scope of the Construction Board. I am still considering certain possible small changes in the scope of the latter board and shall be asking it to consider giving a greater degree of autonomy to individual sectors in its scope.

I am asking the Manpower Services Commmission to take forward the process of abolition or reduction in scope urgently and in parallel with action to establish or develop effective voluntary arrangements, so as to bring about an orderly transition. I intend to time the making of orders accordingly. I wish to ensure that the winding-up process is completed as quickly as practicable for each board in the course of 1982–83.

Where boards are to be abolished, the industries concerned will bear the costs of the alternative voluntary arrangements. The Government will therefore continue to meet the operating costs of these boards as necessary until the end of the financial year 1982–3, together with any net costs of winding them up.

Where boards are retained, they too, in future will be funded by the industry concerned. Exchequer support for operating costs was planned to cease at the end of this year, but I have decided that it would be right to extend this support until the end of March 1982.

In making these decisions the Government have had very much in mind the objectives of the new training initiative, to which I am firmly committed and on which I hope to make a further statement before the recess. We are confident that our decisions on the sectoral arrangements for industrial training are consistent with those objectives and will provide industry with a framework in which it has confidence and within which it is able to meet its training needs in the 1980s.

Is the Secretary of State aware that there is not a shred of industrial or economic justification for the main decision that he has made, to destroy the majority of industrial training boards? Does he realise that, at a time of unparallelled technological change, it will not only damage training in Britain but undermine our competitive position even further? When unemployment overall and school leaver unemployment in particular stand at record levels and output has already been reduced by 17½ per cent. since the Government came to power, what possible reason can there be to demolish a large section of our training arrangements?

Is the right hon. Gentleman further aware that at the end of every recession there has been a chronic shortage of skills, and that this recession will be worse than any we have experienced for 50 years? At a time of skill shortages, when apprenticeships are falling and when the need for training opportunities for adults has never been more urgent, is not the path that the right hon. Gentleman has chosen one of great folly? How does the Secretary of State intend to implement this blow to Britain's jobless? Will he lay separate orders for each of the 16 boards that he is abolishing? We shall expect separate orders if he wishes to follow such a course.

Will the right hon. Gentleman confirm that he has ignored the advice of the Manpower Services Commission, the members of which have, by a majority, recommended the retention of a strong statutory system? How does he intend to get overall support for the Manpower Services Commission's objectives contained in its document "New Training Initiative"? Will he inform hon. Members of the true costs of winding up the boards?

Is he further aware that today's decision is not only a shabby, little, mean-minded public expenditure cut, but that it is also a cut at the expense of Britain's jobless, a cut at the expense of school leavers and a cut at the expense of Britain's industrial competitiveness? We shall oppose the orders when they come before the House and, in time, do everything we can to repair the damage on which the Secretary of State is now engaged.

I must confess that I am not surprised by what the right hon. Gentleman said, but there was very little in it. The right hon. Gentleman said that there is not a shred of reason for what I am doing, and shows thereby that he treats the opinion of the employers concerned with contempt. It is in large measure in response to what industry has requested that I have acted. The right hon. Gentleman may not give a fig for the opinion of industry and the employers in this country. I think, however, that they have something to say on the matter. I regret the fact that the right hon. Gentleman, as ever, distorts what is happening in order to seek to find divisions where divisions do not exist to the extent that he pretends. He knows perfectly well that industrial training boards have only ever covered 50 per cent. of the work force. He must know perfectly well that my proposals reduce the figure to about 30 per cent. There has never been any agreement—[Interruption.] I should be grateful if the right hon. Gentleman, having had his say, would listen to what is said to him.

The right hon. Gentleman puts an entirely false gloss on the situation by suggesting that the country's training system is being demolished by these proposals. That is simply not true. If I had even wanted to pursue a vendetta against the training boards, I would not have left—as I have—seven boards in being. The right hon. Gentleman referred to the MSC recommendation. He knows that the recommendation was to retain the seven and to consider further the others. Even the latter was a majority decision and not, I understand, an overwhelming majority decision. The right hon. Gentleman says that the training system is being dismantled and destroyed. I have to remind him that expenditure on training in 1979–80 was £683 million, that in 1981–82 it will be £904 million, and that there will continue to be substantial expansion.

I congratulate the Secretary of State on his realistic approach to the needs of training for jobs in the future. Will he bear in mind that the 16 boards that he is abolishing have cash reserves of £40 million? Will that money be returned to those in industry who have contributed? Will he try to ensure that the remaining boards operate and report to him in a standard manner that can be understood, not only in those circles involved in the training boards but in this House that is responsible for their administration?

I take note of my hon. Friend's comments. The amounts of money held in cash and in reserves by the training boards are quite substantial. The largest sums are held by two of the boards that will remain in being, the construction industry and the engineering industry boards. It is important to bear in mind that in future the employers' side in the boards will set the level of the levy. If it believes that the cash holdings are larger than necessary, it would be sensible for it to take this factor into account in its considerations.

Order. As the House can see, a large number of hon. Members wish to ask questions. I am prepared to allow supplementary questions to run until 5.10 pm—that is another 25 minutes. If hon. Members cooperate, all those wishing to put questions should be able to do so.

When the "New Training Initiative" shows that 50 per cent. of young Germans go into apprenticeships compared to only 14 per cent. of young British people, and when it also shows that 600,000 unskilled jobs were lost between 1971 and 1978, is it not a criminal act to remove any training facilities without provision being made for the replacement and expansion of those facilities in current circumstances? Will the right hon. Gentleman say how he intends to achieve discussions between the CBI and the TUC in particular to expand and improve training, especially the apprenticeship scheme?

I hope that the hon. Gentleman understands that the number of apprentices supported by the Government has risen from 21,000 in 1979–80, to 25,000 in 1980–81 and to 35,000 in 1981–82. That is a measure of the Government's concern. I hope that when the hon. Gentleman refers to the German experience he will bear in mind the robust way in which wage negotiations are conducted in Germany, the sensible settlements and the fact that in Germany first-year apprentices earn about 25 per cent., I believe, of the adult wage, whereas in Britain the figure is perhaps nearer to 60 per cent. This has a significant influence on the number of apprentices who can be trained in any year. I take note of the German experience. I hope that the hon. Gentleman will have something more helpful to say when I make my statement on the new training initiative later.

Recognising the commitment to serious training and improvement in training if it is to play a part in our industrial revival, may I welcome the retention of the core of seven statutory training boards? My right hon. Friend says that the rest are to be replaced by effective voluntary arrangements. Will he explain the criteria by which he judges these voluntary arrangements to be effective? What reserve powers does he intend to keep in any sector that proves not to be effective?

The criteria will be whether these arrangements, at the end of the day, convince myself and my hon. Friend the Under-Secretary of State, who has done a great deal of work examining each of these cases with great care, that there will be an adequate supply of trained personnel for the needs of that industry. Training boards in general do not do much training. It is important to remember that. In regard to sanctions, I shall not lay orders until I am satisfied that the voluntary arrangements are satisfactory. At the end of the road, the powers even to create statutory training boards remain on the statute book.

Will the Secretary of State bear in mind that his announcement will be found deplorable in industry generally, and especially on the trade union side? Will he recall that the training boards were introduced by a Conservative Government because voluntary methods had failed? What he has done is an act of political prejudice based on folly. Will he give some assurance that the specialist teams in the training boards that have done so much good work will be kept in being in the interim and that they will be found employment in the voluntary system that he says will be set up in the future?

I find it a little depressing that the hon. Gentleman is so unbearably conservative in these matters and unwilling to accept that circumstances may change over 15 or 16 years. In some cases, industries have declined and no longer justify the statutory arrangements. In other cases, the extent to which training has been improved means that the statutory arrangements are no longer required. When the hon. Gentleman has calmed down a little, he will not use such phrases as "criminal folly", having thought about the proposal. He will accept that many people in industry have asked for this to be done. It has been discussed for the last two and a half years, and it is time that the uncertainty was ended.

The hon. Gentleman is worried about the future of the teams. I hope that many of them will find places in the voluntary systems which are set up.

I warmly welcome my right hon. Friend's statement. However, without wishing to appear unappreciative of what he is doing, may I ask him whether he will consider in future the need to carry out regular reviews at specified intervals of the effectiveness of those boards which remain?

I am not sure how that review should be carried out or how regularly. It is appropriate that some view should be taken of how effective the training arrangements in industry are because, after all, we all agree that without that vital supply of trained manpower industry will begin to look very sick before long.

Is the Minister aware that the Ceramic and Allied Trades Union is disgusted that the recommendation of the MSC that the ceramics board should be kept has been rejected. Is he further aware that it is bitterly disappointed that the federation of employers has misled the Secretary of State in its submission on voluntary arrangements and that the union believes that the employers have enough on their plate at present to save the industry from the Government's economic policies? Does he accept also that the union feels that they should not be diverted from that by attempting to make voluntary arrangements work which never have worked previously?

I note what the hon. Gentleman says, but he has to take account of the fact that the Manpower Services Commission's recommendation to keep the ceramics board did not rule out voluntary arrangements for some of the main sectors. I have made arrangements for the brick and pre-cast concrete industries, which preferred statutory arrangements, to be transferred to the Construction Industries Training Board. We have received proposals for voluntary arrangements from the Glass Manufacturers Federation, Pilkingtons, the British Ceramics Manufacturers Federation, the Cement Makers Federation, the British Quarrying and Slag Federation, the Sand and Gravel Association, the China Clay Association and the National Federation of Clay Industries. There is some support for my proposals, despite what the hon. Gentleman said.

As these new arrangements require the active co-operation of employers and the Manpower Services Commission, will my right hon. Friend confirm that if advances in industrial processes require a more specialised form of training, statutory powers remain to create a new industrial training board should it be necessary?

My hon. Friend is right. I have emphasised that those powers remain. The House will see from the attitude that I have taken in keeping a number of the boards—and even one which was not recommended by the MSC for retention—that I take an open-minded and non-partisan approach to these matters.

Does the Minister believe that current standards of training and the quantity going through training are satisfactory? If it is his view, as I hope, that improvements are necessary, why does he believe that these changes will improve a position which many of us regard as highly inadequate and not necessarily a defence of the current system? Why does he believe that this will be an improvement?

I believe that I share the hon. Gentleman's view. We need to improve our training arrangements. That is what the new training initiative is about, and it is a matter upon which I shall make a further statement, I hope before the recess.

The House must understand, however, that to a considerable extent the boards were not so much about training as they were about bureaucracy. If we can get rid of the bureaucracy and move to voluntary arrangements and maintain the training, that is wholly good. Of one board, for example, the Manpower Services Commission says:
"The board has not been able to influence training very materially either in quality or in quantity by use of its statutory powers."
That does not seem to be a good reason for keeping such a board.

Does my right hon. Friend accept that the existence of a given number of statutory boards is essentially subsidiary to whether there is an expanded training programme? Is he aware that there will be strong support for his commitment to the new training initiative, but that there will continue to be legitimate doubts in some quarters until he makes his statement on the new training initiative and reveals the extent of the Government's commitment?

I am not sure whether I should make the usual reply that I thank my hon. Friend for his remarks, because they contained the implication that the Government might not bring forward an adequate proposal. I assure my hon. Friend that the Government's response to the new training initiative will be a very firm and strong one and that the growth in expenditure on training will continue.

Surely it is an outrageous misuse of language for the Minister to claim that he is merely following the recommendations of the MSC when the origin of these cuts lies with his predecessors in asking the MSC to make reductions and thereby to save money. It was the initiative of this Government which started the cuts which are in progress. What is more, the right hon. Gentleman says that he has the support of employers. Will he name a group of employers which supports the rejection of the statutory system?

I mentioned a number of employers when I listed some of the people who advocated voluntary arrangements—for example, those in the glassware industry and others. I should be happy to—[Interruption.] The hon. Member for Tottenham (Mr. Atkinson) must try to contain himself. The statutory system is not being abolished. The Manpower Services Commission was not asked to propose cuts. It was asked to review the system and to make recommendations. Some, though not all, of its recommendations have been accepted. But the Manpower Services Commission was not able to reach a unanimous decision.

Is my right hon. Friend aware that his decision to retain the statutory basis of the Engineering Industry Training Board will be widely welcomed in my constituency, as will his decision to place reliance on levy funding from the industry itself? Can my right hon. Friend assure the House that during the transition period from Government funding to industry-based funding, he will show every possible flexibility?

I thank my hon. Friend for what he has said. I have shown considerable flexibility by extending the period during which the Government will fund the boards from the expected date of 1 January to the end of March. I hope that that will be found to be helpful.

The Minister and his Under-Secretary may like to know that they may receive congratulations from me, even if only for retaining the Engineering Industry Training Board. Having been an apprentice many years ago, I have watched the growth of this and other boards and I have seen some remarkable results. They offer much better types of apprenticeship than I had. They result in much higher qualifications, and are a credit to all those involved with them. However, I have certain reservations about the decision to abolish the Chemical and Allied Products Industrial Training Board. The Secretary of State will have had strong representations from the Chemical Industries Association, but I should like him to know that it is not the unanimous view that the board should be abolished. At some time in the future, will he be prepared to consider alternative proposals for an industry which is also very important in terms of its exports?

I am grateful to the hon. Gentleman. It is especially relevant that he pays tribute to the increased standards of training in the engineering industry. I considered whether that board was required, but I could not see the possibility of an adequate voluntary body being established to deal with the industry's training needs, so I decided that the board should be retained.

There is no doubt that the Chemical and Allied Products Industrial Training Board did good work in the past. Equally, there is no doubt that it has lost the confidence of employers and of late has been ineffective in using its powers to tackle some training problems. I believe that the voluntary arrangements can be made to give a broader answer than the statutory ones.

Is my right hon. Friend aware that his decision to retain the Construction Industry Training Board will be welcomed? Will he now use his influence to try to persuade the other boards to co-operate more closely with the MSC, as the CITB has done, in preparing more tailor-made schemes under the YOP, so that these can be more in keeping with the needs of the industries concerned and, in particular, the work experience on employers' premises?

Given the Secretary of State's apparent commitment to introducing shortly a new training initiative, would it not have been more realistic to make a statement about that before today's statement about dismembering the present industrial training board set-up? Will the Government be monitoring the new voluntary training arrangements, or are we simply to take on trust what industries are telling us they will do when statutory boards cease to exist?

I can assure the hon. Gentleman that the MSC will keep a friendly eye on the training arrangements in the sectors that will be going voluntary in the future, and it will report in the usual way through its reports and to my Department. As for the order in which we do these things, I thought it right that as this uncertainty had gone on for too long, and as it was clear that some of the boards would be going, it was best to get that over and done with and then move on to what everyone will agree are the most constructive elements of the new training initiative.

Is my right hon. Friend aware that no one will cry over the death of some of the boards and that the rearrangements make a lot of sense? However, those of us who are very keen that the provisions for 16 to 18-year-olds in the new training initiative should come into being as quickly as possible, are worried about the commitment and the levels of staff of some of the voluntary arrangements that have been put to him? What does my right hon. Friend have in mind for reviewing the voluntary schemes in this respect? For how long will the parallel system between the voluntary and the statutory be operated? If within a year the voluntary sector has not satisfied him regarding the criteria of the new training initiative, will he give a commitment that he will revert to statutory provisions?

I should like to make it clear that I want to see as smooth a transition as possible from the statutory boards to the voluntary arrangements. That will require a great deal of good will from both sides, and I am sure that that will be forthcoming. This is an appropriate time for me to pay tribute to the staff of the boards, both those that remain and those that will be abolished.

I should remind my hon. Friend that I said that I would make the orders in the light of the progress towards satisfactory voluntary arrangements. I hope that those making the arrangements will listen carefully to those words and consider fully what they mean.

Does not what the right hon. Gentleman has said, combined with the cuts in higher education, mean that there will be many fewer opportunities for young people to receive proper and adequate training according to their various abilities? Does he agree that this will be regarded widely as an act of industrial vandalism, and that the reason which led to the establishment of the boards—the inadequacy of voluntary arrangements—has not changed? What this country needs is more and better training, and our experience as a nation is that voluntary training does not provide it.

The short answer to the hon. Gentleman is "No." I think that he misunderstands things, and he must believe that it is the industrial training boards that do most of the training in this country. That is simply not true. They covered only half the work force and they did not do most of the training. A great deal of the training was conducted by employers. The hon. Gentleman says that my proposals will be widely condemned. He is wrong. They will be narrowly condemned by those with narrow minds.

Is my right hon. Friend aware that many of us are glad to hear of the urgency with which he regards the new training initiative? Can my right hon. Friend tell us how much money these changes are likely to save the taxpayer?

Not offhand. That was not the prime consideration in these matters. I have looked at them more in terms of the needs and the best way of satisfying them, rather than in terms of the cost. However, if my hon. Friend would care to table a question, I shall write to him with the answer.

As regards the footwear and leather industry, will the right hon. Gentleman accept from me that there will be no congratulations from Norwich and other footwear employer cities on his announcement? If he insists on having such a limited number of industrial training boards, will he now consider bringing these industries, especially footwear, within the scope of the Clothing and Allied Products Industrial Training Board, as I suggested to him in a letter to him last week?

I know the right hon. Gentleman's concern for this industry. I have received his letter. It was a matter to which we had given consideration, but we decided against that course. The Footwear, Leather and Fur Skin Industrial Training Board had given some consideration to slimming itself down in order to achieve a better operation, but, on consideration, we decided that it would be best to move to an entirely voluntary arrangement.

In tackling the enormous task that will be involved in setting up the new training initiative, on which my right hon. Friend's statement is so widely welcomed, will he be astute and cull from the former employees of the industrial training boards all those with the practical expertise to help himself and his hon. Friends in the major task of getting the new training initiative off the ground?

The short answer to that is "Yes." I think that those who were concerned with training, and not the administration of matters about training, will find a ready welcome in future in other parts of the training system.

Is the right hon. gentleman aware that the unions concerned with the Printing and Publishing Industrial Training Board will be very disappointed at his statement, serving, as they do, an industry with rapidly changing technology which is leaving this country very quickly? Will he tell us a little more about the guarantees about new voluntary schemes? Is he making an absolute pledge that he will not bring forward an order until there is complete agreement about a new voluntary scheme?

It would be a very unwise Minister who ever pledged that he would not do anything until absolute agreement was reached, because absolute agreement is extremely rare in this imperfect world. I could not therefore, give that assurance. However, I am glad that the hon. Gentleman, like me, shares the view that what we need is to get the new technology in being in the printing industry. I hope that he speaks for the trade unions concerned in giving that pledge, particularly those in Fleet Street.

Does my right hon. Friend agree that the experience of the training boards and the work of employers, trade unionists and educationists since 1964 has made the boards operate successfully in some areas, but that many individuals, such as myself, who have been working within these boards since 1964, have progressively come to realise that the boards were just bureaucratic monsters and were not in the main getting on with the job? We welcome the retention of some of the boards and are delighted about the non-retention of some of the others.

I thank my hon. Friend for what he has said. I think that the boards have varied a good deal in their quality and effectiveness. We have taken that into account in our decisions. Again, even those boards which were not as effective certainly had most loyal and hard-working staff, even though I had to conclude that that work was not, perhaps, directed as well as it should have been in some cases.

Is the right hon. Gentleman aware that the decision announced today will set Britain apart from its competitors in leaving training mainly in voluntary hands, and that that is bound to worsen Britain's economic performance in relation to its competitors? Is he further aware that with the fall in apprenticeships last year and this year in many industries, notably the printing industry—which is at the House on its lobby today—and with the changes in technology in such industries, the abolition of the statutory boards is viewed with alarm? If the Minister insists on abolishing such statutory training boards, he should give an undertaking to consult the trade unions in each industry involved to ensure that the voluntary arrangements are satisfactory to them.

The hon. Lady should not expect me to give her an undertaking, particularly in relation to some of the unions in some sections of the printing industry, that they should have a veto on proposals designed to improve the take-up of high technology. She has perhaps chosen the worst example that she could.

The Minister of State will accept that when the Government's promised economic upturn arises—some of us wonder when that will be—it will be essential for industry to be poised to accept the advantages that that will offer. One of the ingredients for being able to accept that with some success will be the way in which young people have been trained in industry.

Far from not shedding tears over some of the boards which will be abolished, many in industry believe that the work of those boards should have been extended further. Furthermore, for the future there seems to be very little argument against the proposition that the Government must establish the idea of training in industry to the benefit of all.

I am sure that there is no opposition to the idea that the Government should do all they can to improve training in industry. That is common ground. What is not common ground is that the only way to do that is through the statutory structure, which in some cases has been extremely ineffective.