§ 7.28 p.m.
§ The Earl of Strathmore and Kinghorne rose to move, That the draft order laid before the House on 18th October be approved [28th Report from the Joint Committee]
§ The noble Earl said: My Lords, the order was made under Section 11 of the Industrial Training Act 1982 and is presented for debate as it involves a levy exceeding 1 per cent. of an employer's payroll. Your Lordships will be aware of the importance of the hotel and catering industry to this country. It provides employment for some 1.5 million people in over 215,000 establishments, large and small, and makes a major contribution to incoming tourism. The Hotel and Catering Board has a number of significant achievements to its credit. Those achievements provide a firm foundation for the new voluntary arrangements that were announced in the other place on 8th November.
§ The levy is the last to be raised by the board in its statutory capacity. It represents a single 1.9 per cent. in place of two separate 1 per cent. levies for 1989–90 and 1990–91 and a delayed changeover. That alternative has the highly desirable effect of reducing the burden on industry and making significant savings on the overheads by removing the cost of administering a second levy.
§ Companies with payrolls of £75,000 or less will not be required to pay levy. That should exclude from levy about 70 per cent. of all employers within the board's scope. The board forecasts that the levy proposals will raise about —2.5 million. That will effectively maximise the contribution to the ongoing asset base for the benefit of the industry. The asset base will be fully protected by the charitable status attached to it.
§ The levy proposals were approved unanimously by the board and are strongly supported by the employers' associations in the industry.
§ The proposals have been approved by the board and by the Training Commission. They will assist the board to continue its work within the industry and sustain its ongoing activities while it moves from statutory to independent training organisation status. I commend them to your Lordships and beg to move.
§ Moved, That the draft order laid before the House on 18th October be approved [28th Report from the Joint Committee.].—(The Earl of Strathmore and Kinghorne.)
§ Baroness Turner of Camden
My Lords, from these Benches we welcome the order, which, as the Minister said, was unanimously approved by the board and the Training Commission. I thank the Minister for his explanation of the order. He is of course right to say that the hotel and catering industry in this country is immensely important and that training in it is also of maximum importance.
However, I cannot help but say that this side of the House regrets the fact that this will be the last 1386 occasion upon which there will be such an order and levy. The House will be aware, because of discussions on the Employment Bill which was recently before it, that this side of the House regrets the passing of boards with a statutory role and an ability to raise a levy. We hope that the new voluntary arrangements will have the desired effect and that the voluntary system will produce the kind of training we consider necessary in this and other industries. Nevertheless, it is a matter of some concern to us that yet again we are hoping to achieve effective training through employer-led arrangements only, as it is our view that in the past such arrangements have not delivered the goods so far as training is concerned. It merely remains for me to thank the Minister again and say that we welcome the order.
§ Lord Rochester
My Lords, from these Benches I join in thanking the noble Earl for the clear way in which he introduced the order. I may have missed something in another place because from what the noble Earl said I am not sure of the significance of the date of 31st March 1990. Will he confirm that that means that the Hotel and Catering Industry Training Board is to be wound up on or before that date? I am not altogether clear why the amount of the levy is as much as 1.9 per cent. I would be grateful if the noble Earl would elaborate on that point.
I share some of the more general feelings expressed by the noble Baroness, Lady Turner of Camden. The House will recall that on Third Reading of the Employment Bill recently, the noble Lord, Lord Strathclyde, said that an announcement about the changing statutory role of industry training boards generally was to be made shortly. Is the Minister now in a position to give us a clear indication of when that may be? I am thinking particularly, but not exclusively, of the construction industry for which, because of the high degree of labour mobility, a strong case can be made for the continuation of statutory training and the retention of a levy system of funding.
It is important that all those employed by the various boards should know as soon as possible what their position is. That applies also to all those affected by the boards' operations. Subject to those comments and questions, I am happy, on behalf of my noble friends, to accept the order.
§ The Earl of Strathmore and Kinghorne
My Lords, perhaps I may thank the noble Baroness, Lady Turner, and the noble Lord, Lord Rochester, for their contributions. In answer to the questions asked by the noble Lord, Lord Rochester, the HCTB is due for reconstitution on 29th March 1990 and is likely to be reconstituted for 12 months to permit an orderly transition to the new voluntary arrangements. I hope that goes some way towards answering that question. With regard to the levy, the proposal is in effect a final levy prior to wind up represented as a single 1.9 per cent. exemptable levy in lieu of two separate levies of 1 per cent. for 1989–90 and 1990–91. The proposals are in essence in line with those already in force. They continue to make provision for exemption and include an 1387 exclusion level for small firms. The proposals were agreed by the board without dissent at its meeting in July 1989 and have the full support of the employers' associations in the industry.
With regard to the noble Lord's final question on industrial training boards, the Government announced on 8th November that the proposals from the six industrial training boards to move to voluntary and independent arrangements had been accepted. At the same time the Government agreed to continuing statutory arrangements for the construction industry and the engineering construction sector. Further to that I can give the noble Lord no accurate date.
When I opened the debate I made it clear that the proposals represented a last levy on the hotel and catering industry. They are required to fund the administration of the HCTB's statutory role and to protect a sound financial base for the future voluntary and independent arrangements. The industry has approved the proposals and the Government accept that they are necessary. They also take account of the Government's policy for the future of industrial training. I commend the order for your Lordships' approval so that the board's work can continue and a smooth transition to voluntary arrangements can be achieved.
On Question, Motion agreed to.