§ 5.53 p.m.
§ Lord McCarthy rose to ask Her Majesty's Government what steps they intend to take to ensure that training and enterprise councils are provided with sufficient resources to support the investors in people scheme and other initiatives.
§ The noble Lord said: My Lords, in asking the House to consider the state of our training provisions the Unstarred Question focuses on the present failure of the investors in people scheme and other initiatives. However, I do not want noble Lords to feel that they must focus only on that scheme —indeed, it would not take us very long. We should focus on the 17 other programmes and initiatives in the field of training in which the Government are involved. I wish to ask the Government a number of questions about the schemes and about the institutional arrangements. That is a vital element of what is wrong with government provision for training, especially as regards the investors in people scheme.
§ I take it that we are all pro-training and that we accept that we need more and better training in this country. I also take it that we agree that it is had that 52 per cent. of industrial workers have no training; that 20 per cent. of establishments offer no training; that we have about one third of the volume of training of Germany and less than half of that of France; and that that deficit in and low quality of our training provision is bad, should be remedied and is the key to our economic progress and survival. I take it that that is agreed by all noble Lords and that we do not need to debate those issues.
§ The question is, therefore, whether we have the right arrangements, resources and programmes. The Government do not appear to be confident about the arrangements which we have in general for training in this country. If they were confident they would not have made so many changes. During this Government's term of office almost every year, and perhaps four or five times a year, they have made changes in the training arrangements and in their involvement in them. They have abolished the MSC, the training commission, the training agency, virtually all of the ITBs and have given the rest very little to do. They have abolished one third of the skill centres and have privatised the rest. The Government are always 641 changing the training arrangements, so perhaps I should first ask them why they ask us to believe, and whether they believe themselves, that the present training arrangements are right.
§ It strikes me and many others that the training arrangements are extremely fragmented and decentralised. We appear to have an indeterminate number of TECs with an indeterminate number of businessmen and other people serving on them. The latest figure I saw showed that one in 20 of those serving on the TECs were trade unionists but now the figure may he different. Therefore, perhaps I should ask the Government how many TECs there are. Exactly what the TECs do is also unclear, as is what their providers of training do and how they sub-contract down to different levels. The system is vague, imprecise and indeterminate.
§ During the previous debate the noble Baroness, Lady Cumberlege, said that we want to move from secret to open Government. Had the bundle not been too large I should have brought to the House some of the reports of the Manpower Services Commission. It was responsible for training in this country and it produced more significant data than is available now. Today training is largely a mystery. Questions about the numbers, the volume, the policies and the programmes arise from the evidence given to the excellent Employment Select Committee of the House of Commons, and as a result of Parliamentary Questions and so forth.
§ There is no equivalent data as regards our training policy and strategy to that published in the annual report of the Manpower Services Commission. Instead we have a series of rumours and leaks to the press about dissatisfaction with the provision for training. The group of the 10 leading chairmen of the TECs leaked to the newspapers that they were confused and exasperated and that there was overlap. The latest leak threatened that businessmen were about to walk out. We do not know whether that is true but it is the kind of article that one reads in newspapers. From time to time the voluntary bodies write letters of protest stating that they have no money to carry out their responsibilities under the training programme. They also complain about the quality. National firms such as Dixons, Whitbreads, Habitat and Woolworths have withdrawn from the scheme because they state that they cannot deal with up to 100 different TECs.
§ We say that there is a general requirement, which has never been argued away by the Government, for a national strategy and body, whether it be bipartite or tripartite. There should be a national body for training which reports on strategy, monitors its own performance and is subject to parliamentary review in the way that most of the major bodies are in that field.
§ We also say something about resources. Again, the figures are extremely vague. We calculate that there has been something like a £1.5 billion cut in the provision of training from 1987 to 1992 but those figures are informal; they are not official figures because we do not have official figures of that kind.
§ One is forced to make informal contacts in order to discover how much and in precisely what way in 642 different forms of training provision there have been cuts. The Shadow Secretary of State for Employment, Mr. Blair, in June of this year, in an effort to find out more information, got on the phone to three-quarters of the TECs. As a result of his calculation, he considers that this year, over last year, there has been a £17 million cut in the youth training budgets and a £47 million cut in the TECs' budget. Is that right? Are there official statistics to tell us how the 17 or so training programmes are spending their money and whether they have as much money as last year? If they do not, is that because there is not the demand for the various provisions made or have the Government cut the budget anyway?
§ Perhaps the best catalogue of disaster which we have is that relating to the employment training programme. That has been catalogued year by year by the excellent House of Commons Select Committee on Employment which has a Conservative majority. The record laid out in the various reports regarding ET is that of a continual reduction in the provision for ET. When the programme began in 1987–88, the Government were talking about 600,000 places to replace the community programme. We are now in a position in which we really do not know what is happening. I ask the Government how many people are undertaking ET and whether they think that there will be more or less next year. If there will be less next year, what is the reason for that? Is it that, as most people seem to think, employment training has become very largely a useless programme?
§ Your Lordships will remember that it was established because it was said that the community programme did not provide training and ET would provide training for the long-term unemployed. We now know that half the people who sign up for ET do not turn up and something like 70 per cent. do not complete it. The Government have cut back the provision for ET. As I understand it, they say that they have done so because the long-term unemployed do not need training. Yet, the Government do not find any alternative. They cannot really argue that the employment action programme provides an alternative to ET or any across-the-board provision for the long-term unemployed.
§ I turn now to the investors in people scheme. That suffers from much the same kind of structural and resource problems as the other programmes; at least that is how it looks. It appears to be in a bigger mess than YT, more unpopular than ET and less visible than employment action. The House will remember that the idea behind the scheme was that we should award a kind of training VC, a Rolls-Royce mark. If a company did virtually all that it should do in the field of training, if it provided lifelong training for all its employees and had that training independently validated and if the authorities were satisfied that the company was a Rolls-Royce firm as regards training, the company would receive a kite colophon which it could put on all its publicity to say that it had won the training VC.
§ We understood that that was intended to be an encouragement to everybody else so that they too would wish to become superior firms from the training 643 point of view. At the beginning most of us said that we did not see the incentive and why firms—and many excellent companies spent a considerable volume of their funds on training—should go in for that competition. However, in November 1990 the Government said that the immediate target was that they hoped that there would be some 6,000 firms entering—they were not quite clear when—and qualifying under the scheme. Again, I do not have up-to-date figures because we cannot get them these days, unless one culls one's way through the very small print of the Employment Gazette where they may be found. As far as I understand the figures which I have, 38 firms have the kite colophon which means that the Government have 5,962 to go. If that is the case, what is the point of the scheme?
§ The chairman of the East Lancs TEC, Mr. Tony Cann, giving his explanation as to why the scheme has been a non-starter said that in his opinion it was an extremely expensive scheme. If firms sought to meet the targets set out under the kite scheme, it would cost them over 3.5 per cent. of their pay bill. What is happening to that scheme and what are the accurate figures?
§ I conclude with seven questions which I should like the Government to address either this evening or in the near future. Looking at the training problem, the criticisms of the training providers and participants in the schemes as well as the problems which individual firms find in operating with the highly decentralised, overlapping system which we have now, surely it is obvious that we need some kind of national training body. Surely that is so. We should have a representative national body with a publicly stated strategy monitoring the attainment of training targets.
§ Secondly, what is the Government's answer to those companies which say that they cannot deal with the 80 or more TECs? Why can they not deal with a national institution?
§ Thirdly, what is the present level of government spending on training and how does that relate to last year and the year before? Fourthly, can the Government say whether that money will be protected or cut next year? Do the Government expect to have another 5 per cent. or 10 per cent. cut next year? Fifthly, is Mr. Blair right to suggest that the cuts this year in respect of YT are worth a reduction of 7 per cent. and for ET 15 per cent. in real terms? Sixthly, what is the long-term replacement for ET? If the main reason that the numbers on ET are declining is that it is regarded as inappropriate and wrong, what is its replacement?
§ Finally, what is happening to investors in people, that Rolls-Royce programme? Is the problem that it is so costly to support the scheme and, therefore, firms cannot afford to become investors in people? Is it the case that large numbers are about to sign on or have signed on under the scheme and that my figures are grossly out of date? In the last general election the Labour Party said that investors in people should be the qualification mark for exemption from the training levy. The Government do not want to do that. What kind of incentive do the Government provide for good 644 companies to reach the necessary international targets in training provision? What are the Government proposing to do?
§ 6.10 p.m.
§ Baroness Seear
My Lords, I am extremely glad that the noble Lord, Lord McCarthy, has given us the opportunity to talk on this subject and to raise the level of consciousness in regard to the seriousness of the training position or the lack of adequate training in this country.
In the early 1980s the Government seemed to realise that we were woefully behind in training and that we had done far too little in comparison with our competitors. Although in many cases the apprenticeship schemes had been good, they affected far too small a proportion of people leaving school and entering employment. Only around one-third of boys and one-twentieth of girls received any kind of apprenticeship training. The rest received practically nothing.
In the 1980s the Conservative Government seemed to be coming to grips with the problem. Many of us thought that not enough was being done straightaway. But we on the opposition Benches always think that. However, there was a beginning. The Manpower Services Commission, although one may criticise it on many aspects—and we all criticised it — was a start in trying to tackle the huge problem of training. The discussions we have had so often in this House on the subject do not reflect the seriousness and extent of the problem that confronts us.
The Government then saw fit to abolish the Manpower Services Commission and any kind of national responsibility for the development of training. I repeat that it had been a constructive Conservative Party policy and Conservative Party development. I never understood why they were so determined. The MSC had many defects, of course. There was a huge job to be done and a long way to go. But those of us who worked with it—I believe everybody speaking in the debate tonight worked with the Manpower Services Commission in one way or another—knew that despite its defects, it was contributing something. It was moving, however slowly, in the right direction.
The Government then saw fit to hand it all over to the training and enterprise councils. Whenever we raised a Question in your Lordships' House on training, we were told that it was now in the hands of the TECs. We were told they were controlled by employers, and employers knew better than anyone else what training should be given. We were never able to get past the reply given to us by the noble Viscount, Lord Ullswater, and others: leave it to the employers; they are the people who know and they will see that it is done.
One can make a number of comments about that. In the past those same employers did not do it. That is one reason, though not the only reason, why we had such a huge backlog of untrained people. The employers did not do it. A small number of extremely good employers did a remarkably good job of training. But they found all too often that they were 645 training not for themselves but for other people. Why should they continue to do that? I once made a study of the training carried out by the Hoover Company. It had a first rate apprenticeship scheme; but at the end of it none of those apprentices stayed with the company. They were so good that other employers came along and took the lot. That is not the way in which one achieves an adequately trained labour force.
All kinds of schemes were introduced. They were not perfect. The levying grant scheme introduced by the Conservative Government became bureaucratic and clumsy. But it was an attempt to spread the cost. Many employers are not competent to give good training either because they do not know what it is or because the work that they undertake does not have the scope and depth that makes good training possible. We do not want everybody to train or to pretend that they are training. We want the people who know how to train and have the scope and facilities to do so, to do the training. Other companies can contribute a fair amount to the cost of training the people who they will afterwards employ, and they will benefit from the training given by the original company.
That was the way in which we were moving. All that has stopped. It has been said that employers know best; that employers and the TECs will see that all is well. As I say, we have every reason to doubt whether employers, without any national organisation to prod them along, will do that. One needs only to look at the construction industry. When looking at the history of the construction industry, we see that they stopped training whenever there was a slump. However, one only needs a 1 per cent. increase in GNP and the construction industry finds that it is running out of skilled people. That has happened not once but it has happened after every single recession and recovery.
If employers are the people who know about training, why does that happen with such unfailing regularity in the construction industry? I do not suppose for one moment that the construction industry is the only industry to experience that. We all know that companies tend to cut back on training when they go into a recession. From the point of view of UK Limited, that is the time that they ought to be training. They have the time and the resources—or could have the resources if the money were made available—and if they do not need the people, they can train and upgrade them for when the situation improves. That does not happen. Leaving training to employers does not produce that result.
Even if employers were prepared to do that working through the TECs, the TECs need sufficient money to stimulate and obtain the training that they want. The noble Viscount, Lord Ullswater, has said on a number of occasions that the money is available. That is not what the TECs say. Before the general election, I was in discussion with the chairman of a TEC in Leeds. He said that sadly he had to cut out two whole groups of training, not because he wanted to do so but because the money had been cut back. He had either to cut a little off every training scheme or close 646 down some entirely. That was not because he wanted to or because he thought it was the right thing to do; it was because he did not have the money to continue. In the face of that, how can the Government say that the TECs have the resources and know what they should be doing?
The TECs and employers generally are bound to be thinking of how to fill immediate requirements. The way in which they are paid encourages them to take a limited view in regard to the training needs of the country. We understand that the TECs' money depends on success in the way it is used and success in training. We are told that success is measured by the number of jobs obtained for people and the qualifications that people achieve in training. That means that if the TECs want to keep their resources up and receive the next slice of government money, they are bound to concentrate on the people who are easiest to place and who are brightest. They will be the most likely to obtain qualifications. That leaves little opportunity for the people lower down in the list and whose training needs in many ways are greatest.
Only a small number of employers can be expected to take a long term view in regard to the training needs of UK Limited as distinct from the training needs of their own specific organisations. But unless somebody looks at the training needs of UK Limited, we shall be in an extremely serious position.
At the end of the 1970s, before the YTS schemes were under way—with all their limitations—44 per cent. of school-leavers in this country went into unemployment or a job without training. The comparable figure in France was 19 per cent., and in Germany it was 9 per cent. Those youngsters are now adults in an untrained labour force. They swell the numbers of the unemployed. That is where they will stay unless something is done for them.
We all know that there is no future in this country for the unskilled—people who do not possess competencies that they can sell. We no longer operate manufacturing in this country alone: companies send their work to be manufactured all over the globe. A company with which I used to work has part of its work done in Argentina and part in Portugal. There is much to be said for that. But in this country it leaves the people who do the least skilled jobs with no openings at all.
The huge backlog of unskilled people in this country is going to be a tremendous weight on the community as a whole. What are we to do with them? We have approximately 3 million unemployed now and a large proportion of them are untrained. There is no escape for them. The situation is becoming more and more difficult. This morning I spoke to a person who had been dealing with companies in Korea. He told me about the level of pay and working conditions there. How are we to compete with them? Initially we can have a protectionist policy to keep their goods out but we do not advocate that. We have to compete with such a country. There is no future for the unskilled people of this country. I, and I am sure the noble Lord also, refuse to believe that among the 44 per cent. of school-leavers I have referred to there is not a large 647 number capable of learning something and making an effective contribution in a modern global economy. But that can only happen if they are given training.
It is a much bigger problem than just what is happening to the TECs. It is a matter of what is happening to the whole programme of training in this country for the unemployed and the large numbers of women of very considerable latent potential who are woefully under-trained but who want to get back into effective work. However, as long as they remain unskilled and untrained they will not be able to do so. Although it is not the group about which I wish to speak tonight, there are also the people with special needs who are right at the bottom of the list when it comes to training opportunities. Their opportunities for training are becoming poorer and poorer. It is not enough to say that they are in the group between the ages of 18 and 24 or 25. There are plenty of others who are not in that age group, and even those who are in that category are not getting training.
It is not true that the aim has been met in all areas as regards the people in these groups. I can understand why the TECs and employers take an inevitably somewhat short-term view because of the recession and other problems. Who can blame them? It is not their particular job to solve the problem. If we neglect the training of these people, in terms of unemployment, social problems and the cost involved we are building up for ourselves a very serious problem for the future. Indeed, we have it now but it is going to get worse rather than better.
We are not getting at the Government in this Question but urging them to think anew about how serious the issue is. I believe it is a subject on which an all-party group could do some useful work. In the past we have talked about the possibility of Select Committees in your Lordships' House. A Select Committee on this subject might be very fruitful indeed. I beg the noble Viscount, Lord Ullswater, not to give us the reply that these matters should be left to the TECs because they know best but to recognise that it is a much bigger problem than we have been prepared to accept in the past.
§ 6.23 p.m.
§ Baroness Turner of Camden
My Lords, I am sure that the House is grateful to my noble friend for introducing a debate on this important subject. Both he and the noble Baroness, Lady Seear, said this evening that everyone agrees that training is of crucial importance and that compared with other developed countries Britain's workforce is under-skilled and under-trained. The Government themselves have frequently said so and claim to he spending large sums of money in an endeavour to improve the situation. They also seem to believe that an adequate training programme is by itself the answer to the evil of unemployment. It certainly seems to us that they have been using the schemes as a way of taking people out of the unemployment statistics.
In 1989 the CBI published a report which advocated that Britain needed nothing short of a skills revolution in order to bring the competence of the 648 British workforce up to the levels of our principal competitors. The report emphasised the need to provide a clear framework for all young people's learning from the age of 14 to 18 years. The framework suggested by the CBI drew on the experience of the German system of apprenticeships. In that model most 16 to 19 year-olds would undergo structured training with employers, involving day release at college and leading to vocational qualifications. Others would continue to study full time but with a broader curriculum, mixing academic and vocational courses.
In 1989 the TUC published its report Skills 2000. That report also drew attention to the failure of training in the UK as compared with our major competitors. It stated:We are failing to meet the tasks of a late twentieth century economy and are soon to be plunged into a twenty-first century economy without the protection of a sound national economy".That is what the report said at that time and it still appears to be the situation three years on.
The main criticism of the TUC report still stands:the Government is content to leave training to the market, and the market fails to train. In some countries, markets are much better at delivering training, although in no developed economy is the market vested with such power over training as it is in Britain today".Until the advent of this Government there was a measure of consensus around the old Industrial Training Act which was itself a product of an earlier Conservative Government. These initiatives resulted in the creation of industry training boards which were tripartite in character and in a national body responsible for overall strategy which was first called the Manpower Services Commission and later the Training Commission. In those days even Conservative administrations acknowledged the existence of trade unions and wanted to involve them and their members in training programmes.
No one, least of all on this side of the House, claims that these were perfect solutions. But certain of the industry training boards, notably the engineering industry training board and the construction industry training board, performed useful functions. Without them the situation would have been much worse. Then along came another type of Conservative Government intent upon tearing up everything that had previously existed by the roots and changing it whether it needed changing or not. The alternatives substituted were based on the assumption that there were no bodies representative of employees worthy to be consulted or involved at all. Training was to be employer-led, despite the fact that this concept had not worked that well in the past and there was still nothing to prevent the employer who would not invest in training from poaching staff from those employers who did. The noble Baroness, Lady Seear, has said a great deal about that this evening and I agree with everything that she said.
So we have had the training and enterprise councils (the TECs). It is not my purpose tonight, nor is it that of my noble friend, to knock the TECs. I accept that many of them are anxious to do a very good job of work and are often led by people who are enthusiastically and energetically pursuing their 649 objectives. But, as has been said, recent reports appear to indicate that all is not well with them. Reports have appeared in the press indicating that TECs lack resources and that they are on a knife edge, according to one report.
Reference is made in the Question—it has been quoted by my noble friend—that initiatives such as investors in people deliberately designed to encourage employers to provide quality training are not meeting with the take-up that was expected. The voluntary approach has brought little fundamental change to the training system that the TECs administer. I shall not go over the ground already covered by my noble friend. Suffice it to say that well-publicised initiatives of various kinds follow one on another in a confusing progression—yet we still do not seem to make the progress in training that we all want to make.
What particularly bothers me is that it is now reported that some TEC leaders are saying that the Government should not have given their famous youth guarantee because it simply cannot be met. That has important consequences for the Government's social security policies. As has been debated quite recently in this House, the Government's policies as regards social benefits for 16 to 18 year-olds have been based on the assumption that such young people will either be at school or be being trained since there would be a youth training place for every young person who wanted one. For that reason entitlement to social benefits has been removed from young people in that age category, although special hardship arrangements have been introduced. As the report of the Social Security Advisory Committee has indicated, however, the procedures for obtaining special hardship arrangements are so convoluted that very few people who are actually in need secure the benefits.
Clearly something has to be done about this. Additional resources must be made available and account should be taken of what the TEC leaders are saying. It is not that they are unwilling to co-operate, but according to their statements something more than government rhetoric is required to ensure that the scheme continues.
Then we have employment training, which is aimed at the unemployed. We are likely to have around 3 million people without work before the end of this year. Opportunities for employment in manufacturing industry continue to decline. I understand that we are to have a debate on the manufacturing industry within the next week, so I shall not go into that dismal subject today. But this is not the time, I should have thought, to cut back on employment training. I understand that the equivalent of 19,000 places are set to be cut from ET this year. If, as seems likely from what my noble friend said earlier, employment training is not fulfilling the purpose, there has to be some alternative to allowing people simply to moulder on the dole indefinitely.
TEC leaders believe that there must be proper public funding to meet the youth guarantee. They also urge tax breaks for companies meeting the IIP training standard. Altogether, as my noble friend has said, the present training system does not appear to be 650 delivering results. Training in the United Kingdom gives the impression of lacking structure and coherence. With the disappearance of the Training Commission—this point was made both by my noble friend and by the noble Baroness, Lady Seear—there seems to be no national strategy. The quality of training is often low. Government expenditure seems to be spread around a wide range of administrative bodies responsible for training and for monitoring training. Manufacturing industry has suffered since the apprenticeship scheme was abandoned. It had many faults, it is true, but it produced skilled craftsmen and craftswomen—although far too few women. Clearly there is a need to revitalise the TECs and to evolve a training strategy based on adequate resources.
Unions are prepared to be supportive. I refer to a booklet entitled Training for Britain's Economic Success which has been produced jointly by the United Kingdom's two biggest unions—the Transport and General Workers Union and the GM B. They say:Our two unions will … stress that trade union bargaining is about building skills as well as about paying bills. We will broaden the emphasis of negotiations from pay to prospects".They urge the Government and the CBI to support training rights for all employees.
It seems that the will is there. It is up to the Government to harness the enthusiasm that exists. So far we appear to have had a series of changing initiatives which seem more designed to remove people from employment statistics than to provide genuine quality training. I believe that there is a training crisis. I look forward with interest to what the Government have to say in response to the submissions made from this side of the House.
§ 6.33 p.m.
§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, we have had an informative debate on a subject that underpins the economy of this country—training. As noble Lords will know, Her Majesty's Government believe that to acquire the skills to compete in a world economy we need all sectors of the community involved in training. It is in effect a partnership between government, employers and individuals, each having an important part to play.
It is the role of government to create the climate and framework to encourage training and direct funding support where it is most needed. It is the role of employers to develop the skills of people at work and to make the necessary investment in training. It is their role to set the standards for high quality training—standards like investors in people. Finally, it is up to individuals to take greater responsibility for their own training and development.
Based on these principles, the Government created a network of training and enterprise councils in which employers have the major controlling interest. That is only right as it is the business community which has the experience and knowledge of what is best for its local economy.
I believe that the noble Lord, Lord McCarthy, knew the answers to all the questions that he posed to me—that is his style of debate—but he knows very 651 well that 82 TECs in England and Wales are now operational. He also knows that more than 1,200 top businessmen are involved in the running of the TECs and that there are 20 LECs in Scotland. He knew the answers very well. I think he also knew the answer to another question which he posed at the beginning of his remarks. He asked where he could go to get the figures. I do not have to tell him because I am sure that he has examined the matter very carefully. The expenditure figures for three years ahead and for the past year are published in January each year in the departmental report. I believe that the noble Lord knows a little about where he can get the figures.
§ Lord McCarthy
My Lords, what the figures do not give is the distribution between the programmes and the number of individuals who are expected to go on those programmes.
§ Viscount Ullswater
My Lords, if the noble Lord studies the report carefully he can glean the figures that he really wants.
The noble Lord and the noble Baronesses, Lady Seear and Lady Turner, said that the Government have changed things from how they were before. Yes, we do make changes because we seek to make improvements. They would expect a government who are interested in the development of their people, and especially the people in the workplace, to seek to make those improvements.
TECs are not just about running training programmes. They have a legitimate interest in all that bears on the development of their local area. That is why they are increasingly seen as the vehicle for bringing together the full range of local interests to work towards the common goal of a prosperous economy. That is why the Government are giving massive backing to TECs. Our provision to TECs amounts to £2.2 billion this year.
The original Question asked about investors in people. The noble Lord, Lord McCarthy, was right to draw attention to that important initiative. Investors in people sets a framework for business. It is a joint exercise. Employers have set the standard and the Government are providing support and resources through TECs. Employer progress against the investors in people standard will provide an important measure of how they are developing and capitalising on the full potential of the people—the key asset for any business and for a healthy economy.
I shall update the noble Lord on the number of people and companies involved. Today we have 63 accredited investors in people and more than 1,000 organisations have now made commitments to their local training and enterprise councils—or to the local enterprise companies in Scotland—to work towards the standard, or the VC as the noble Lord put it. Those involved include major household names such as Unilever and GEC and small businesses, as well as the public sector. My own department is committed, and this morning I opened a conference for schools committed to taking advantage of the initiative. Unilever now has all its UK business working towards the standard; GEC is promoting investors in people 652 internally, building on the achievements of Woods of Colchester, one of the first companies to be recognised as an investor in people. The managing director of another early investors in people—Appor Limited, which employs just 65 people manufacturing soap dispensers—has set a goal of doubling productivity in two years and says that investors in people is the key to unlock the vast hidden potential of British industry and people. That is something I firmly believe.
§ Lord McCarthy
My Lords, does the noble Viscount agree that at the present rate of growth it will take about 95 years to hit the target?
§ Viscount Ullswater
No, my Lords, I do not agree at all. There are more than 1,000 organisations committed to that task. The noble Lord would not expect the figures to be instantaneous. If the figures were instantaneous it would mean that the standard was not difficult to achieve. It is important that the standard should set a high quality so that we are competitive internationally. I believe that the noble Lord and I would agree on that.
Therefore, employers have reacted positively to the standard based upon the best business practice and to an independent assessment system that measures them against that best practice, but which is also sufficiently flexible to recognise that all businesses are different. That says much about the professionalism of the assessors. This year, TECs have £35 million to support employers in working towards the "investors in people" standard. That, coupled with the increasing flexibilities that TECs now have over their budgets and the imaginative approaches that they are adopting, means that TECs have a substantial influence on employer behaviour.
Individuals must also he persuaded that training pays and that they should take more responsibility for their own development. That is one of the Government's priorities. Our approach was set out in the recent White Paper, People, Jobs and Opportunity, which illustrates the range of government action being taken on a number of fronts in partnership with TECs.
TECs are developing high quality information, advice, guidance and assessment services to help people understand their training needs and make sensible decisions. TECs are finding new ways to give individuals the purchasing power to put those decisions into effect. We have a very successful career development loans scheme which helps individuals to pay for training that they could not otherwise afford. TECs are also looking at ways for adults to make a financial contribution to their own training such as credits for training and individual training accounts as a means of encouraging individuals to see training as a lifelong investment. The Government have recently instituted an important tax relief for training, for people who invest in their own training. Since April, people who train towards a national vocational qualification at levels 1 to 4 are entitled to tax relief on their fees. They qualify for that even if they are not taxpayers, and even if the training is not linked to their present job.
The noble Baroness, Lady Seear, asked me how money is given to TECs. She also mentioned the 653 problem about the difference in the number of people wanting to train and the difference in their aspirations. I have already spoken from this Dispatch Box on other occasions and said that it is really based on the contract between my department and the TECs to deliver the training needs of all sectors of the workforce. The funding is adjusted to make certain that those, for example, with special needs are included. The contract is reviewed and enforced as would be expected.
§ Baroness Seear
My Lords, I am sorry to interrupt the noble Viscount but he never answers me on this question. He always tells me that the money is there and that the TECs are doing the job. But how does he explain what the chairman of the Leeds TEC said to me? He said that he had to cut down on all his training schemes or even cut two of them completely because he did not have the money. He did not want to do it; he had to do so because he did not have the money. It is not good enough to tell us that it is all going beautifully. We are hearing the same speech tonight as we have heard over and over again from the noble Viscount: the TECs know what to do, they have got the money and the Government is backing them. That is not the story that we are hearing from the TECs. Where are the results?
§ Viscount Ullswater
My Lords, of course some TECs would welcome more resources. I believe that reflects the very success of our campaign investors in people.
§ Baroness Seear
My Lords, it is not a question of more resources; they are getting less. Of course, the TECs would welcome more, but they deplore receiving less.
§ Viscount Ullswater
My Lords, I have to point out that the figures do not bear out what the noble Baroness has just said. I have indicated that TECs will actually receive more money this year than they did last year. There has certainly been rebalancing between a number of areas in the TECs. Therefore, I can understand that some of them are in a situation where their money has been adjusted. However, more money is going to TECs this year than was the case last year.
Of course, we are reviewing what is needed as part of the public expenditure round. But investors in people is a very important initiative and is, indeed, the subject of the Question tonight. It is about improved business performance and not about subsidised training. I see that the noble Baroness, Lady Turner, wishes to intervene. I give way.
§ Baroness Turner of Camden
My Lords, I am most grateful. Is the noble Viscount aware that it has been reported that one of the leaders of the TECs has estimated that achievement of IIP could add from 3 per cent. to 5 per cent. to a company's wage bill, which is a significantly higher investment than envisaged under a statutory levy?
§ Viscount Ullswater
My Lords, that comment is not necessarily based upon mere fact; it is based upon supposition. I say that because what the investors in people programme and initiative is all about is more effective training related to the needs of a business. Employers spend about £20 billion per annum on training—and so they should. The aim of the investors in people initiative is to make certain that that investment is wisely spent. I see that my noble friend Lord Stockton wishes to speak. I give way.
The Earl of Stockton
My Lords, I am obliged. Is my noble friend aware that as well as an obvious increase in costs, the estimates that have been undertaken to date by the companies that have pledged themselves to IIP have shown that, when it is in place, it will make a difference of between 7 per cent. and 9 per cent. on average to their profitability on the bottom line? That is certainly an experience that I have found in my own company.
§ Viscount Ullswater
My Lords, I am extraordinarily pleased to hear from someone who has first-hand experience, not only in running a company but also as chairman of a TEC. Therefore, my noble friend has practical experience whereas many of us, unfortunately, are only talking about what we glean from other sources.
I believe that the noble Baroness, Lady Turner, mentioned YTs. Youth training is a success story. It is unmatched in Europe in its extent. The planned expenditure for this year is the same as it was last year despite the downward demographic trend; for example, the number of 16 and 17 year-olds is down 100,000 in the past two years, and increasing numbers are staying on at school. Moreover, 47 per cent of 16 year-olds were in further education in 1987–88, whereas the figure now is more than 60 per cent. I believe that those numbers demonstrate the value that young people place on YT. The value is also reflected in the outcomes: 300,000 currently on YT—vastly more than in structured training a decade ago; 76 per cent. of those completing the training go into jobs or further education; and 62 per cent. of completers obtain vocational qualifications.
Obviously the current economic climate is causing some difficulties. However, I must tell the noble Baroness that the Government are fully committed to making the guarantee work. No TEC would be prevented through lack of funding from meeting that guarantee. The department keeps in close touch with all the TECs. The speed at which suitable places will be found will vary from place to place and from TEC to TEC. But any problems in the supply of those places will be addressed as soon as we can.
The noble Baroness, Lady Turner, and the noble Lord, Lord McCarthy, also talked about employment training. The planned expenditure for employment training this year is £807 million, offering some 250,000 opportunities. That is a substantial investment. But training is not always the most effective way to help people. The aim of employment training is to help those who are unemployed. The Government 655 now have a wider and more comprehensive range of different forms of assistance such as employment action, with a budget of £178 million and 60,000 opportunities, and the employment services measures such as jobclubs. That is just an indication that the Government take seriously their duty to assist those who wish to keep their skills up to date through employment action or change them through employment training. The Government will of course wish to take stock of any programme that they run. I said a moment ago that the Government always question what they are doing to see whether they are doing the right thing.
The noble Baroness, Lady Seear, tried to show that because of the recession companies are not spending as much on training as they were when economic conditions were better. Of the employers surveyed by the department's Skills need in Britain Survey of 1991, 37 per cent. reported that the average number of off-the-job training days funded or arranged per employer was higher than in the previous year compared to only 6 per cent. who said it was lower. Employers are playing their fair part in ensuring that their employees are trained and upskilled.
§ Baroness Seear
My Lords, the Minister referred to 37 per cent. plus 6 per cent. That is 43 per cent. What about the other 57 per cent?
§ Viscount Ullswater
My Lords, the others will remain at their previous level of training. That indicates that there is a balance of companies increasing rather than decreasing their spending.
The noble Lord, Lord McCarthy, asked me a number of questions. I have answered one or two. He taunted me as to whether there is a national body for training. Of course there is one: the National Training Task Force upon which Bill Jordan, on behalf of the 656 trades union movement, sits with leading businessmen. That offers strategy guidance and gives leadership. It is undertaking key studies with a commitment to publishing the outcomes, where appropriate. I believe that the noble Lord knew that.
§ Lord McCarthy
My Lords, the Minister is well aware that that body has no executive authority. I am talking about a national body with executive authority to give a strategy to planning the country's training needs and to monitor the results.
§ Viscount Ullswater
My Lords, I know exactly what the noble Lord is talking about. He talks not only about what he would like us to do; he talks disparagingly of the TECs' ability to achieve their task of building up Britain's skills. He hankers after an interventionist approach that has already been tried and found wanting.I have seen the future and it works",said J.L. Steffens, writing of the Soviet Union in 1919. We now know that state-managed economies do not work. What is true of the economy as a whole is true pre-eminently of training. Training works when businesses manage it to secure business goals, not when governments intervene to create a straitjacket for businesses. That is why we attach importance to investors in people. The standard for business investment is skills set by business people to meet business goals.
Our approach is working. Training is now higher than ever on the business agenda. Business is investing more in training. Businesses are planning and budgeting for their training better, and people at work are better qualified. Government strategy has contributed to that major change in our training culture. Our investment in TEC programmes alone of £2.2 billion a year is substantial, and it is clear that our investment is paying dividends.
House adjourned at six minutes before seven o'clock.