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Skill Shortages In Manufacturing

Volume 474: debated on Thursday 1 May 1986

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My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what steps they are taking to remedy the shortage of skilled workers in manufacturing industry.

My Lords, recent evidence on skill shortages in manufacturing industry shows that some skills are in short supply in a limited number of sectors. It is primarily for industry itself to resolve this, but the Government are investing some £1·4 billion this year in the Manpower Services Commission's vocational education and training programmes in order to create a more positive environment for training and make some direct contribution to the supply of skills in most demand.

My Lords, is the noble Lord aware—I am sure that he is—that just last month, in a joint report between the CBI and the Manpower Services Commission, it was stated that one in seven manufacturing firms in this country has had to reduce production because of a lack of skilled workers? Do the Government accept no responsibility whatever for training workers in this country in the skills necessary to sustain our manufacturing industry?

My Lords, I should have thought that expenditure of £1·4 billion—an all-time high—would show that this Government are very concerned indeed to ensure an adequate supply of skilled labour.

My Lords, is the Minister aware that yesterday his reply when he was asked about the number of firms applying for adult training schemes was very sad? The vast majority of firms are not making any attempt to carry out adult training. Is it not therefore ironic that the firms that need skilled workers are not taking part in the adult training schemes that are available? Will the noble Lord elaborate on what the Government intend to do to get these firms which need skilled workers to go in for the simple matter of training them so that they become available?

Yes, my Lords, but these are two distinct matters. I can express some satisfaction with the Government's efforts towards meeting the demand for skills in short supply but at the same time dissatisfaction about the view taken by employers towards their responsibilities for carrying out training.

My Lords, is the Minister aware of the shortage of skilled engineers and draughtsmen, particularly in Lancashire? What proportion of the money is being allocated for training such people?

My Lords, the usual question I am asked in relation to Lancashire concerns the high level of unemployment. I was not aware until this moment that draughtsmen were in short supply there. I shall look into the matter.

My Lords, is the noble Lord not as disturbed as the rest of us that every time in the postwar economic history of Britain there has been a resurgence of economic activity, and in particular new prospects for our exporting abroad, we seem to come across the same problem? May I mention that I have just come back from visiting an exhibition held by GEC at Wembley, where I was speaking to its executives about problems over the recruitment of trained engineers? I was told that the company was extremely short of people in this category.

Yes, my Lords, but that has been a symptom of postwar experience in this country alongside the decline of the enterprise culture. We have somehow not bothered about training or about the provision of engineers. We have looked more towards other skills. That is changing today. I only hope that we have time to make up the shortage.

My Lords, is the noble Lord aware that whereas there are 600,000 apprentices in West Germany there are only 40,000 in this country? Is he further aware that whereas 94 per cent. of 17 year-olds in Japan are at school or in full-time education, the figure is only 30 per cent. in this country? Is he also aware that between 1981 and 1984 the university population of this country was cut by 10,000? There were 10,000 fewer university students in 1984 than in 1981. Is this not a government responsibility?

My Lords, it is, I believe, safe to say that, ever since 1982 when I went to the Manpower Services Commission, and, indeed, for years before, I was aware of the woefully inadequate measures of training for young people. However, it is unfair to compare apprenticeships which are a formal part of the German education and training system and apprenticeships in this country which have been limited in the main to the construction and engineering sectors. Today, we have the national two-year YTS. We have training for young people on a scale unparalleled in our history. We shall see as the years go by that we catch up with our principal competitors. As to universities, that is another question.

My Lords, does my noble friend agree that the comparatively high wages that it has been necessary in the past to pay apprentices have been one reason why firms have been loath to take on youngsters for training?

My Lords, in 1983, the electricians' union agreed a national deal under which it halved the level of apprentice wages. As a result, the number of apprentices in the electricity industry more than doubled. The engineers refused to do the same, and the decline continued. There is a great correlation between the level of young people's wages and the opportunities for work.

My Lords, we welcome the allocation of money for training. Can the noble Lord say precisely how this money is to be spent and through which agencies it will be channelled by his department? Can he say how many skilled workers over the next years will be trained as a result and in what branches of skill they will be trained?

Of course, my Lords; up to about 400,000 young people a year will be entering YTS. They will be coming out of a two-year YTS well on the road towards vocational qualifications. That is unparalleled in our history. In a year or two's time, there will be up to 700,000 young people engaged on vocational skill training. In addition, we shall be helping up to a quarter of a million people each year on adult training schemes. There has never been such a concerted effort towards training by government at any time in our history. Ten years ago, when the problem of youth training first came up, the then government looked at the principle of YTS and discarded it because of cost. That speaks for itself.

My Lords, is the Minister encouraging girls as well as young men to go into engineering? I understand that many girls are interested in pursuing this line.

Yes, my Lords. During my time as chairman of the Manpower Services Commission we gave total backing to WISE and towards programmes helping young women and young girls to go into engineering. Indeed, the principle of all Manpower Services Commission schemes has been no discrimination on grounds of sex or, for that matter, on any ground.

Is the noble Lord aware, as he has mentioned the position 10 years ago, that unemployment was then at less than a million? Will he also take account of the serious complaints emanating from the universities and the polytechnics at the Government cutback in the very important work of producing scientists and engineers?

My Lords, 10 years ago was the time when we should have laid the foundation for training young people and perhaps then the outcome would have been better. That is, however, a different question. As for universities and polytechnics, the Government have to ensure that the amount of research and training done helps to play a part in the economic life of the nation and is not research done simply for its own sake.

My Lords, in relation to the question asked by the noble Lord the Leader of the Opposition, is my noble friend aware that there are well over 1,000 places in engineering unfilled at British universities because the schools are not turning out people qualified to enter upon these courses?

Yes, my Lords, and a further cause of concern is this. The Government have entered upon a programme to give additional resources to the universities for the provision of more electronic engineers. I hope very much that the schools system will respond by providing enough people with suitable qualifications for those courses.

My Lords, will the noble Lord not agree that after seven years of a Conservative Government it is a disgrace that there are 1,000 places unfilled?

My Lords, all I will say is that the responsibility for education in this country is vested in local education authorities and not in central government. That is something that everyone in your Lordships' House would do well to remember.

My Lords, the noble Lord told me that reductions in university places was "another matter". It should not be just "another matter" for the Government that 10,000 places were lost between 1981 and 1983. Is this not reducing essential research and training for our manufacturing industry by reducing the number of undergraduates within the universities, and is that not the Government's responsibility?

My Lords, it is another matter because that is another question. But if the noble Lord was asserting that the places lost have a direct relation to manufacturing industry, I venture to disagree with him. If he would care to put down a Question on the subject, I am quite sure that we shall provide the answer.

My Lords, following the replies of the noble Lord, may we take it that he utterly rejects the old fashioned capitalist idea that when labour is in short supply better wages should be offered?

My Lords, I believe greatly in the market principle. I am sure that wages rise to increase supply, and eventually supply will rise to fill demand.

My Lords, has not the shortfall to which the noble Lord, Lord Hatch of Lusby, referred in the universities been partly taken up by the vacant places in polytechnics, and is not the polytechnic level in engineering one that we badly need to improve? Will the Minister consider making representations to his right honourable friend the Secretary of State for Education that more universities should be urged to go over to sandwich course degrees? It is only through sandwich course degrees that we shall get close co-operation between industry and universities.

My Lords, I shall gladly do that. There are some who feel that an unsatisfactory outcome of Robbins was the conversion of many very good polytechnics to universities. But we should be looking at our centres of excellence and ensuring that they conform more closely to the needs of industry and commerce and to the life of this country. But I shall convey that message to my right honourable friend.

My Lords, if the Minister believes so much in the purity of supply and demand, why is he spending £1·4 billion in this area?

My Lords, the reason is that I believe in lubricating supply and demand, and that is a very good lubricant.