Shipbuilding (Industrial Training Levy)

– in the House of Commons at 12:00 am on 24th November 1966.

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10.10 p.m.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I beg to move, That an humble Address be presented to Her Majesty, praying that the Industrial Training Levy (Shipbuilding) Order 1966 (S.I. 1966. No. 991), dated 8th August, 1966, a copy of which was laid before this House on 17th August, be annulled. The Order proposes to raise the contribution from 0·55 per cent. to 1·25 per cent. of the emoluments of all those employed in shipbuilding in the coming year, the rate for the previous year being 0·55 per cent. I move this Motion in an inquisitory rather than a critical frame of mind, not knowing what is covered by the figures and wondering how far the training board intends to employ the money which it raises for the purposes with which it is charged.

I am glad that the levy is raised on total emoluments. This seems a useful precedent, when we have so many taxes on a poll tax basis. To have instead a levy based on total emoluments is a step in the right direction and I wish that we could move further in that direction with industrial levies of this sort.

There is a great need for the Shipbuilding Industry Training Board, as for all training boards, to eschew extravagance. Shipbuilding now is in the doldrums and any expense of the training board which was not strictly justified and applied to training trainees would be misplaced. If the Board is to have power to levy sums on the numbers of employees in the industry at a time when the industry is in financial difficulties, it is only right that these sums should be spent with the greatest of care and after great scrutiny.

How will the money so raised be spent, particularly in relation to the training of apprentices in the shipbuilding industry? The problem is a great one, because there are so many different trades and types even of metal worker that it is a vital function of the Board, through its training policies, to try to break down the demarcations between these many trades.

Many ideas are canvassed about amalgamating unions, which it would not be in order to discuss on this occasion, and which I believe are totally impractical, but I suggest that it is necessary to provide a combined training for welding, drilling, burning, caulking, riveting and all the different metal trades, so that we can get a metal workers' training rather than training based on each of the different trades.

I understand that the Board's plan is to have one year of basic training off the job, followed by three years' specialised training in different spheres of metal working. I congratulate the trade unions concerned, which, so far, have given progress in this direction their support, but this still leaves a four-year training period for metal working. Although we hope that the scheme will come about it is a pity that the length of the apprenticeship should still be so long. I know that it is a reduction from five years, but most countries can produce metal working tradesmen after a three-year apprenticeship.

Apart from the very specialised and expert skills which some tradesmen have to learn, it is clear that three years would probably be adequate for basic training in metal working. There are certain types of skill for which extra training would be necessary, but the greatest mistake would be for "he Board to use the money which it is raising to allow long periods of training which are not justified solely from the point of view of what the apprentices have to learn but from the agreement of unions and employers to keep the period of training long, so that the entry into the trade may be restricted on the one hand and, on the other, the employers do not have to pay full wages to trained men before they have been in training for four years.

To help the training boards in their work, there is need for an improver's rate of pay—a rate between that for apprentices and that for full-time skilled men. Are the Government satisfied with the progress that is being made towards the worthy objective of reducing the length of apprenticeship for ordinary-metal working tradesmen?

I come to the question of payment for courses of instruction in technical colleges and other training colleges which, hitherto, has fallen entirely on the rates. The industrial training boards—not least the shipbuilding Board—received an administrative memorandum from the Ministry of Education dated June, 1966, stating that from now on the cost of college education for apprentices would not be borne on the rates but would be reimbursed by the training boards. The shipbuilding industry must, presumably, take into account the extra expenditure when it fixes its levy rate at 1·25 per cent.

Was there any consultation with both sides of industry and the training boards before this change of policy was made? As far as I am aware, the House of Commons was not informed of the change. Why has the cost of this education been shifted from the rates to the industrial training boards? Are the Government possessed of authority to make this change, and, if so, under what Act or Order do they have power to direct that the boards shall pay the cost of these courses in public educational establishments?

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

Order. It is difficult to see how that sort of question arises on this Order, which, of course, is related to the imposition of a levy and the manner of collection.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

With respect, Mr. Deputy Speaker, the levy has been greatly increased, from 0·55 per cent. to 1·25 per cent. For every student at a technical college, the industrial training boards must now pay £264 a year, whereas previously they did not have to pay anything. Before agreeing to the increase, hon. Members should be told how this very large sum of money has been transferred to the debit of the boards.

I am not sure that the decision is a wise one because many forms of training—training for the professions, the Civil Service, the classics and all nontechnical subjects—is a direct charge on the rates, or the State in the case of universities. In this case training for a particular skill, notably shipbuilding, is being transferred from the rates to the industry itself. It would be analogous if training for the Civil Service were from henceforth to be paid for entirely by the Government. That reform would be necessary to bring it into line with what has been decided here.

There is a further point about the levy in connection with this switch of training costs which is even more odd. It is that industries which are members of an I.T.B.—an industrial training board; the shipbuilding industry, for example—are to pay the cost of these new courses to local education authorities straight away. Industries which do not yet have an industrial training board do not have to pay them. Apparently, the reason for this is that industries which have a board, such as the shipbuilding industry, can expect to get the money back from the I.T.B., whereas those which have not would have to put up their prices and would therefore be incited to breach the prices and incomes freeze.

If this is really the reason why the Government are extending their action over this, it would seem to be naive. In actual fact, the result of making those firms pay which have industrial training boards, such as shipbuilding firms, is that they have to pay a much greater levy, and in the end they have to put up their prices just like any other firm.

The levy is paid by the shipbuilding firms and they are being asked to pay more at this time. On the other hand, industries which do not have a training board are not being asked to contribute any more. The whole question is one which we should like the Minister to tell us about, because it represents a major change of policy which has not been discussed in this House.

There is one further point. I should again like to congratulate the unions in the shipbuilding industry on making progress towards amalgamation and shortening of the apprenticeship periods for young trainees. However, this method may take years or decades to succeed in overcoming the demarcations in the industry, and it is quite clear that we must do more than this. We must have a considerable amount of adult retraining. How much of this levy is allocated to cover adult retraining within the shipbuilding industry?

There is a wealth of stories about those who have been trained in skills in shipbuilding being refused entry by the trade unions. There is the story of the shortage of joiners at Burntisland Shipyard, which nevertheless was unable to take a large number of miners who had been retrained at the Dunfermline Government training centre, because of opposition from the local and the national branches of the woodworkers' union. This is one story which shocks us all, when skilled workers are short, when they are trained and made available to fill those jobs, and the union refuses them permission to be accepted into a firm. No doubt other examples can be given by hon. Members.

This is the sort of thing which is doing great damage to the Government's policy of redeployment and stopping the movement of people from those jobs where they ate not wanted into jobs where they are. What planning has the Board made for retraining men in this industry? The real shortage in the shipbuilding industry is of skilled men. Skilled men of all sorts are in short supply even now, when we read in tonight's Press that unemployment has risen to 541,000. There are still plenty of vacancies for skilled men in shipyards. What plans does the Board have for retraining these men, whatever may be their background in the industry, so that these gaps can be filled?

Some firms are, on their own account, retraining people who are already in their employ, upgrading them in the skills they possess or equipping them with a new skill. I think that Connells on the Clyde are pioneering in this direction.

I do not know whether an extension of that is planned by the Board. It is clearly not enough. What have the Government asked the Board to do? Is it to increase its levy for the current year by more than 100 per cent.? We want an assurance that the problem in the shipbuilding industry—which is one of shortage of skilled workers—will be tackled by the extra levy which is going to be placed on the industry. I understand that the Government have made some vague request to the Board that redundant motor car workers should be retrained for semi-skilled jobs at high speed, to ease the problem of the present unemployment situation. With respect, this is by no means sufficient, even if it would help the shipbuilding industry, which it will not because it is not semiskilled people who are in short supply but skilled men.

Again, therefore, we come back to the Government training centre. How many vacancies are there in shipbuilding for skilled men? How many are being produced by the Government training centres to fill those vacancies? Why have not the Government expanded the programme to take advantage of the large number of people who will spend a bleak winter looking for jobs, and who would be willing to be retrained as skilled men to work in shipbuilding? It is not only within the industry that this can be done, but because there is the resistance of the trade unions it must also be done by the Government training centres. This is vital.

One thing that makes it difficult for skilled training within the industry to take place is the employers' fear that if they do a lot of skilled training within their own firms the trade unions will continue to object to the dilutees, as they are called. This is a serious problem, and we must be told what the Government have in mind for solving it. There is no point at all in retraining large numbers of skilled men if they are not to be accepted into the industry.

We have a Board that is now beginning to gather momentum. We on this side wish it the very best of good fortune, but we also expect it to admit that it has to face as many serious problems as any training board in the country. I have tried to recount some of the problems tonight. I believe that the Shipbuilding Industry Training Board needs assistance from the Government, and the problems I have mentioned are certainly relevant to this.

It appears from what I can discover about the Shipbuilding Industry Training Board that the Government have not given it any help or guidance, or tried to use this valuable Board either to help their own redeployment policy or to deal with the shortage of skilled men in the shipyards or to do away with the barriers of demarcation. From all I can find out, I suspect that this is another failure of the Government's redeployment policy, and that they have not used the vital structure in the Industrial Training Act to increase the mobility and flexibility of labour.

10.28 p.m.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I do not wish to delay the House, but I must speak because I am so astounded by the abysmal ignorance shown by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) of retraining in industry and the rôle of the unions. I appreciate that he may not be very well informed on industrial questions, but if the Opposition are to permit official spokesmen to put their point of view on industrial training, they should at least provide them with a decent brief from which to speak. To talk as the hon. Gentleman has done of demarcation disputes without any knowledge at all of the trade union policy on dilution is an absolute insult to hon. Members—

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

What is the policy?

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

The policy is demonstrated every day of the week by trade unions in the metal-working industries—

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

Perhaps the hon. Gentleman would like to explain how the trade unions are adapting the new policy to dilution. I have not heard of it.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

There is no new policy—we have had it for years. It has been going on since 1946, when the revised dilution agreement was signed. Throughout the whole of the engineering and shipbuilding industries shop stewards are ready every day of the week to agree to dilution in particular trades as long as it is in keeping with the general employment policy of the company by whom they are employed. The hon. Member for Dorset, West (Mr. Wingfield Digby) shakes his head, but the evidence is there for all to see. It is the official policy of the trade unions to accept and even to encourage dilution in some places. In very few well organised factories in the country where trade unions have a dominant view is there no dilution. The whole purpose of trade union structure today is designed exclusively to accommodate the question of diluting. This has been practised by my trade union, the Amalgamated Engineering Union, in all factories where it has any degree of influence. Anyone who disputes this should look at the figures which are there for all to see.

The trade unions have permanent committees to discuss the question of demarcation between one job and another. Because of their flexibility and willingness to co-operate with employers, this has solved many problems which existed a few years ago. It is the responsibility of the official spokesman of the party opposite to recognise the degree of cooperation and to pinpoint this as something which can be achieved. It is something which the party opposite should support.

The hon. Member talked about shortening the period of apprentice training and training in adult life, but does he believe that it is possible to produce skilled men in industry in four years?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

The hon. Member will be aware that all our competitors in shipbuilding do this in three or four years and that the majority, including our most successful competitors, have a three-year period of apprenticeship.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I take it that that is apprenticeship before 21 years of age. To adopt systems of that sort when a man must be paid the full rate when he comes out of his apprenticeship means that he must start at 18 and come out at 21. That is all right if there is adequate technical school training beforehand.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

What is to prevent him coming out of school at 16 and finishing earlier, at 19 or 20? The hon. Member should not assume that hon. Members on this side of the House have no experience of the industry. I was in this industry and was concerned with training in it for a number of years in the north of England. The hon. Member should be careful when he says that we on this side have no knowledge of this matter. My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) is in a similar position. Probably more hon. Members on these benches know about the industry than hon. Members opposite.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

That may be so. I accept that, but the hon. Member for Cirencester and Tewkesbury made a number of generalisations which were insulting to the industry. I have yet to hear of an employer who will pay a worker the full rate as a journeyman when he is under 21. I hope that it is recorded and that employers throughout the country will accept this advice—that they will be prepared to look at this matter and be flexible about it.

For adult trainees the period is often very much under three years. There are dilution agreements in existence where men have taken on partly skilled jobs or skilled jobs limited to a particular operation and trained to do that job in 18 months, or even a shorter period, and are then expected to do the skilled job for the rate with so little training.

It is necessary to set standards of the highest skilled men in industry. One cannot have various grades of skill, because that would complicate the wage structure to such an extent. It would be absolutely impossible to say, "Here is a series of grades in industry, and this is the sort of system we want to operate." We cannot do this, and we must therefore say that apprenticeship or training for skill is based on the highest denominator, which is the most highly skilled men in the factory. Invariably, they are the tool room operatives or people working highly complex machines needing a great deal of skill and technical "know-how". There are such machines today, and for many of the operations now taking place the operatives could not become fully skilled in less than six years or so.

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

I must point out to the hon. Member that he is travelling very far outside the rather limited scope of the Order, which relates to the imposition of a levy.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I must apologise, Mr. Deputy Speaker, but I was encouraged by the sweeping statements of the hon. Member for Cirencester and Tewkesbury. For the sake of getting the trade union case put right, let us have a reasonable attitude to these things. Therefore, I intervened in the debate for that reason. I shall not detain the House any longer, having, I hope, succeeded in pointing out that Opposition spokesmen must be much better informed if they are to lead debates of this sort.

10.37 p.m.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

The hon. Member for Tottenham (Mr. Atkinson) spoke some very bold words about dilution agreements, and I hope that he will stick to those remarks about his general support for dilution agreements when he travels the country. When I was at the Admiralty, I was involved in discussion on dilution agreements and had great difficulty in getting the hon. Gentleman's union and the Boilermakers' Union to go any distance of the way with me. They may have changed their views since then, but I rather feel that if the hon. Gentleman had been with me yesterday, speaking to shop stewards in shipbuilding yards on the Clyde, he might have sung a somewhat different tune. It would be difficult to put over to many of those people the need for dilution agreements in the present circumstances.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

Of course, that is so. If one had an industry or a particular factory where there was an excess of recognised skilled labour, the lads in factories of that kind will not willingly accept dilution agreements in those circumstances.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

That brings me to my next point. It seems to me that the Order is extremely untimely, and I hope that the Parliamentary Secretary is ready to explain it to me. I find it difficult to understand why this extra imposition should be put on the shipbuilding industry at this moment. We read in the newspapers daily of the industry's difficulties. We read that a famous yard on the Clyde, Stephen's Yard, has made a serious loss and that Yarrow's Yard can hardly make a profit.

Yesterday, looking at the new "Queen" being built, we discovered that there is no order to follow her on the slipway. That is not very encouraging to the men to indulge in dilution, and it is not very encouraging to the management to be asked to pay a new impost. It is so strange about the Government that when it comes to the imposition of a new tax they are always there on time, but when it comes to what is necessary for the reorganisation of the industry, the implementation of Geddes, they are already slipping behind the timetable. I hope that the hon. Lady, in imposing this fresh levy on the industry, will have a word with the other Department, which seems to be changing from day to day, which is responsible for the shipbuilding industry, to try to persuade it to get a move on so that the industry is in a position to pay these new charges.

I am sure that we are all agreed on the need for training in shipbuilding. We are all agreed that one of the reasons why profits are not higher is that our foreign competitors have much more interchangeability of labour and fewer unions. We all want to do something about that. But it is not an Order like this, putting a further charge on the industry, that will do it. That can only be done in other ways by co-operation of trade unions, by co-operation of managements who are already beginning to arrange a merger on the Clyde—and by co-operation of the Government in carrying out the task assigned to them and accepted by them in introducing the necessary legislation giving the powers to the new board under Geddes.

It is a little untimely that the hon. Lady comes along with this Order now. In the first place, I believe this needs quite a lot of justification. Only the other day we were reading of the difficulties with the boilermaker apprentices. Of course, we all recognise the difficulties of the various trades which have grown up in the shipbuilding industry, but this subject is fraught with difficulties. It is not simply and solely a question of training. I would yield to nobody in believing in the best training for apprentices. Just outside my constituency, at Winfrith Heath, is one of the finest apprentice schemes I have ever seen.

Certainly, that must be done, and certainly dilution and adult retraining for getting into new trades are needed, but this is a difficult moment to ask the industry to accept this in all honesty, when men can see perfectly clearly that the management is not making a profit and that no new orders are coming along as they used to do. Orders in the shipbuilding industry are down to 2½ million tons and not very well distributed, and the men know that, unless they are very careful, they will be working their way out of their jobs. We know of the difficulties in the finishing trades in John Brown's yard at the moment.

This is not an easy moment to ask leaders of the unions to put over to the rank and file this doctrine—although we are delighted that we have an apostle opposite prepared to do it. We all need courage in making such proposals, but I do wonder why the Government have chosen this difficult moment for them, when some firms are already suffering losses and others are having to get along on narrow profits.

10.42 p.m.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

I came here this evening to do two things, first of all to make a brief speech, and secondly, to apologise to the Minister who would be replying to the debate for my having to leave perhaps rather earlier than the conclusion of the debate, because, unfortunately, I am one of that small group of people serving on the Standing Committee on the Iron and Steel Bill and lead a rather separate existence these days.

However, I must say, having heard the speech of the hon. Member for Tottenham (Mr. Atkinson), that I have been rather surprised by the trend this debate has taken, because, first of all, having worked for five years in the Clyde shipyards before I came to this House, and being particularly concerned with labour relations, every word my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said made sense to me and appeared to have a kind of relevance to the situation in the shipyards while the two major points which the hon. Member for Tottenham made seemed to have very little relevance to the situation in the shipyards as it now is.

The question of demarcation was not related to it. When difficulties arise in the industry nowadays, there are joint committees of the various unions involved who are very ready and willing to deal with them. I must say that in my industry on the Clyde the kind of difficulties so often met between the parties involved could often take a very long time and there was no guarantee of the problem being ended.

On the question of interchangeability and retraining raised by the hon. Gentleman, there is great difficulty in getting adult people retrained for skilled jobs, and I must say that I know of only one case in one of the Clyde yards where we have had adults being retrained for a skilled job, and being accepted, in the old craft in the shipyard—and there are many unions in the shipyards today. All I can say, having heard the hon. Member make his speech, is that, apart from the A.E.U., I do not know of more than one case in the whole of the Clyde shipbuilding industry where this has happened. It may be otherwise in other yards, but on the information I have I honestly do not think the situation there is vastly different.

On the other hand, I do not want to give the impression that there has been no movement and no change of thought, because, obviously, this is not the case.

It is unfortunate that, under our rules of procedure, we cannot have, at the same time as the Order, a short statement of the progress made by the Board which is asking for this additional money. For the Government to ask us to accept such an Order with the industry in its present state, there need to be several arguments put to us to justify such a monstrous imposition on the industry.

Shipbuilding is facing a crisis. It is unfortunate that yards, like farmers, always seem to be talking about bad times and crying "wolf" so often that when a real crisis comes people do not perhaps pay as much attention as they should. It should be accepted now, however, that this industry is having a real crisis.

On the Clyde, seven major yards have been forced to close down in recent years. With one possible exception, every yard on the Clyde at present is not making money on its contracts. This cannot go on for ever and, as new capital is needed, clearly a real problem arises. I have spoken to many shipbuilders on the Clyde and I get the impression that they think good times are bound to come and that it is a question of who can survive. They think that if they can survive until the good times come it will be worth while. In the present situation we have to consider whether this is a fair imposition to make.

The second and perhaps more relevant question is whether the money will be well spent and whether it will serve a useful purpose. I was surprised that the industry was one of the first in which an industrial training board was set up. I was surprised because the record of the industry in training is exceptionally good. Not only does it give an excellent training to ail apprentices in the industry, but in many areas it also seems to do training for most of the local manufacturing industries as well.

It is a tragedy that for every apprentice who stays on in shipbuilding another leaves and gives the benefit of his expensive training to some other industry. This is not something that can be stopped or interfered with, but we must agree that, in shipbuilding, there was not an urgent problem of lack of training. It was already of a high standard.

What we want this organisation that is taking so much money from the industry to do is to solve some of the problems about apprenticeship training which are not basically questions of inadequate training. My right hon. Friend referred to the number of trades, but one can sometimes be misled about movements in the industry when one hears about union amalgamations. It is sometimes argued as though, with amalgamations, craft problems and demarcations no longer exist. That is not so. In the industry we have one steel work union at present—the Boilermakers' Society controls platers, caulkers, welders, burners, riveters, blacksmiths, shipwrights and drillers.

Almost all the steel work trades are in one union, but that does not mean that we have only one craft. All the crafts there before are still there. That is the kind of problem that the Board should overcome. If it did, the shipbuilders would be glad to give a substantial levy either next year or some other time in the future. But the problems have not been overcome.

In some ways, the union representatives—and some have shown themselves to be statesmanlike—have been considering the question of bringing the crafts together, and it is often believed that the employers are desirous of having just a single craft in the metal trades. That is not the case. No shipbuilders would want masters of all trades in their yards, but what is urgent is that various tradesmen should be able to do incidental work associated with their own work. Much time is wasted in the yards.

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

Order. The hon. Member is travelling very far from the scope of the Order, which is concerned with the imposition of a levy.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

I am sorry, Mr. Deputy Speaker. I was hoping to say briefly, in passing, that if this is the kind of problem that could be solved, or some progress made in that direction, I would be less reluctant to approve this levy, which will put a substantial burden on the industry, but in view of what you have said I shall not pursue the point.

I hope that the Minister will be able to tell us something about the progress which is being made. Within the yards themselves, some progress has been made on interchangeability agreements in the Boilermakers' Society, but this is not something stemming directly from the levy or from the Board's activities; it was taking place before the levy was imposed, and it is still continuing.

If we pass the Order, will money be spent on further steps forward in adult retraining? Demarcation in the shipyards is not just something to be deplored. Demarcation exists solely because there is a lack of security in the various trades. Even though there is full employment in shipbuilding and there is a desperate shortage of skilled men, if one small trade feels that there is insecurity, this is an example to all the others. In the Clyde shipyards, two or three years ago, we were desperately short of platers, welders, caulkers and burners, but we had only a very small number of riveters. The riveter used to be the king-pin of the industry. He used to get the highest wages, and he was in acute demand. Then we had the technical change to welding, with the result that only a small number of riveters was needed and there was very little work for them to do.

If there had been arrangements to transfer such men to other skilled trades, after a free period of retraining, not only would this have changed the attitude of the riveters themselves but it would have made a dramatic difference to the attitude of all the steelwork tradesmen towards interchangeability. Not only do we need a change in the attitude of the unions, but we need a change in retraining arrangements for adult workers in the industry. The present arrangements are woefully inadequate. Very occasionally—here I agree with the hon. Member for Tottenham—one finds cases of people being accepted from one trade to another, on a temporary basis, at very low rates of earnings, and with no job security at all. For example, we had some riveters transferred in two yards to do a job of tack welding. They did the job at 2s. an hour less than the time-served welder's rate. They had no security in the sense that, if anyone was to be redundant, they would be the first to go, and they had no long-term security in the sense of carrying their new trade from one yard to another. As tack welders in John Browns, they could not move to become tack welders in Connells, Yarrows or Stephens as time-served men could.

Men who are retrained to a new craft are not fully accepted in the new craft but become, so to speak, second-class craftsmen without the benefits normally available to someone who served his time in the craft.

These are problems which the yards would like solved, and they want the Government to make a real contribution to that end if they want this Order, with its attendant levy, passed by the House of Commons. The Minister is aware of most of the problems. Like everyone else in the House, she would like to play a real part in trying to solve them. But it must be said at this time that a burden is to be placed on the industry which in itself might not help much to solve the industry's problems. The problems must be solved if the industry is to be viable in the future.

The burden to be imposed, though unspecified in the Order, is expected to be substantial, particularly at this difficult time. If the Order is approved, the Minister should use every power available to her to advise the Board to be as sparing as possible in its expenditure. This money must be paid by the industry, and the industry simply has not the money to spare to be used in this way. Will she, please, make a point of advising the Board at all costs to restrict its spending and allow the industry to carry on and deal with its own problems, as effectively as, in some cases, it is now doing?

10.55 p.m.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

I am sure that it is right that we should debate this Order and pray against it. Our decision to do so has been justified by the speeches made on this side of the House, particularly by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M, Taylor), who is on the record as being someone with a very great knowledge of this industry.

I presume that certain yards and certain companies in the industry will receive an advantage from this Order when there are good training facilities, while yards which do not have good training facilities will have to pay the levy. There is no doubt that the rationalisation taking place in the shipbuilding industry is long overdue and that this rationalisation will help the industry to put its house in order and make it competitive.

Nor do I think that the present time, when the industry is going through a difficult period, is such a bad time to spend extra money on training. I take the opposite view to some of my hon. Friends. When the industry is finding itself up against it and is facing foreign competition is the time when we ought to make sure that the training facilities are of the highest standard.

I also think that there is a good deal of merit in training people in the industry at apprentice level and at retraining level, so that if the industry finds that it cannot employ these people they will be able to get jobs in the engineering industries and some of the newer industries.

There is one important aspect of training which will obviously concern this levy in so far as facilities will be made available. It is that there should be a wider range of training given to the young aprentices. Until now they have been too restricted and there has been a lack of opportunity for them to gain skills in the crafts that run alongside their own. It is very important that the unions should give encouragement in this matter, so that when apprentices emerge as journeymen they can switch from one craft to another so much more easily.

When one thinks in terms of retraining for the older workers, I hope that the Minister will bear in mind those people in the older age group—the over 40s as we have come to refer to them in recent weeks. They will need looking after because they are at an age when it is difficult to change jobs. If the Minister will charge training boards who are to get the advantage of this levy to give special attention to them, he will do something that is worth while.

10.59 p.m.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

May I begin by thanking the hon. Gentleman the Member for Cirencester and Tewkesbury (Mr. Ridley) for letting me know in advance some of the points which he has made this evening, because it has helped me to answer them in a little more detail than would otherwise have been the case.

The first point he made was in some ways the main introductory point. It dealt with the scope of the levy for the second year, which we are considering. The Order establishing the Shipbuilding Industry Training Board was made on 10th November, 1964, and it came into operation on 19th November, 1964. It has therefore been in operation for two years and, during this time, it has established itself as a working organisation and decided on its broad lines of policy. Through the implementation of the grant scheme for the year ended 31st July, 1966, it has already taken steps to influence the training of supervisors, managers, apprentices, training officers, craft instructors and safety officers in the industry. At the moment, the Board's register covers about 1,160 establishments and employs some 136,000 persons. About 600 establishments are in the boat building industry.

From the outset, the Shipbuilding Industry Training Board has followed the policy of consultation with trade union and employers' organisations as the means most likely to obtain co-operation and agreement with the industry in formulating methods and standards of training for the various occupations. The Board has established a number of working parties, and I shall describe their work in more detail in a few moments. The working parties, which are composed of representatives of both sides of the industry, were set up in order to consider training in different occupations.

It may be the case that this policy has resulted in rather slower progress in reaching decisions on training recommendations than would otherwise have been the case, but the Board feels strongly that by using this type of method, it gains the general assent of the industry for the training recommendations that it makes. It is fair to say that considerable progress has been made towards something to which the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) and the hon. Member for Cirencester and Tewkesbury mentioned, which is the need for more basic training in the metal-using trades.

Because of the complex nature of the various trades engaged in shipbuilding, the Board felt that it was not possible to publish training recommendations in time for the beginning of the second training year on 1st August, 1966. Therefore, during the current year, to which the levy now under discussion applies, the Board's policy of paying training grants in respect of training activities will be made in respect of those for which there is a ready assessment, in the Board's view, of their effectiveness and cost. The grant scheme in the second year is considerably more comprehensive than in the first year.

It would be worth giving details of the courses which will be covered by grant. They include such matters as contributions towards the cost of on-the-job training of first-year apprentices. Both the hon. Member for Dorset, West (Mr. Wingfield Digby) and the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) referred to the shipbuilding industry as one which perhaps did not require a great deal of money to be spent on it at this time to improve its training. It is worth referring to the fact that only one in five first-year apprentices got full-time off the job training in this industry, which does not compare too well with a number of other industries.

Secondly, the Board intends to make a grant to cover 50 per cent. of the wages and salaries of managers and supervisors attending approved internal and external courses. Again, the result of the Board's survey in 1965 showed that only 9 per cent. of management level people had attended any type of formal course during the whole of 1965. That, again, is something which rather suggests that this is not an industry which has had exactly its fair share of training in the past. In addition, the Board is making available the full wages and salaries of training staff attending approved external training courses, and those hon. Members who know the industry will agree that there is a great need for more trained training staff.

The Board also intends to meet the wages and expenses of boys under the age of 21 and girls under the age of 18 who attend off the job courses for commercial and clerical training. It intends to meet the basic wages and expenses in respect of skilled workers receiving off the job conversion training. That is something which several hon. Members mentioned, and again it is something which is highly laudable.

The Board's survey in 1965 showed that there were a total of 105 adult craft trainees out of a skilled labour force of 78,601; so again it seems correct that the Board should be making a grant towards more off the job conversion training. The Board is also making a grant covering 50 per cent. of the running costs of all off the job training centres providing approved training. Again this is important, because I have already referred to the lack of facilities for off the job training. It will meet a percentage of the wages or salaries of all people engaged full or part time as training staff. It will make a contribution towards the costs incurred by employers in respect of the costs of full-time courses of higher education and further off the job training which will extend an employee's knowledge of the occupation for which he is already qualified. That, of course, is adult training.

I do not think that anyone would quarrel with the matters which the Board's grants are to cover for the second year for which we are discussing the levy tonight.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

The hon. Lady has referred to the money which is to be handed back to industry. Can she say how much money she estimates, in total, will be taken from the industry by this levy which she is asking us to pass?

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

I shall come to that point later in my speech.

May I turn first to the other points made by the hon. Member for Cirencester and Tewkesbury. He mentioned his concern about the need for more basic and flexible training in the metal using trades. The hon. Gentleman will appreciate that it is a little difficult to comment on this in great detail tonight because the Board has set up working parties dealing with training in metal working trades. These working parties have reported—and, incidentally, it is our understanding that they have reported in favour of shorter periods of apprenticeship, namely, a cut from the present 5 years to four years—but since their recommendations have been put neither to the training committee of the Board, nor to the Board, it would be presumptuous of me to suggest that these are recommendations which will be accepted by the Board.

I am sure, therefore, that the hon. Gentleman will appreciate that it is difficult to go into detail on the basis of recommendations which have not been before the full Board. However, I think that it is worth saying that the main objective of the Board in all the trades which they have been discussing is that there shall be a period of basic training and planned experience which could provide a general introduction to shipyard life and shipbuilding, and that this shall be the basis of further skills. I think, again, that most people concerned with the industry will agree that this is a long step in the right direction.

I turn now to the other point raised by the hon. Gentleman, and he will, I am sure, share my regret that my hon. Friend the Minister of State for Education and Science, who had very much hoped to be present, has, for serious family reasons, not been able to come here tonight. I shall therefore answer on behalf of my hon. Friend the point made by the hon. Gentleman about training courses in further education institutions.

In the first place, we should be clear what kind of training we are talking about. We are discussing industrial training provided by technical colleges, usually as part of integrated courses, that is to say, courses provided by agreement with an industry or industries employing students in which further education is combined with practical training, and again which would, in other circumstances, be provided in the industry itself.

Most of these courses take the form of one-year full time courses as combined further education and first-year apprenticeship training. Incidentally, training is also provided in some colleges by arrangement with one or more firms, and these specially designed courses consist of practical training which would otherwise be done wholly in the firms. While it is accepted that local education authorities are responsible for the provision of further education, but not for industrial training, it is also accepted that industry is expected to provide industrial training for itself. The distinctions between further education and training are made explicit in the Act.

Section 2(4, c) of the Act says that a board may pay fees to persons providing further education in respect of persons who receive it in association with their training in courses provided or approved by the Board", and these costs, which are being met by industrial training boards, come primarily under that definition. Although it is true that before the Act came into operation these courses were provided at a cost to the ratepayers, the view now is that, because of the vast multiplication of the work of the boards, it would not be proper to leave this charge on the rates.

In answer to a further point made by the hon. Gentleman, may I say that a decision has been taken in principle that charges for similar integrated courses of training provided for those trades where there is not yet an industrial training board shall be similarly financed. The basic proportion which is being taken for costing purposes, which is the proportion of time spent on industrial training in an integrated course, is about 60 per cent. I should add that no charges are being made for pre-apprenticeship courses for students, nor, normally day or block release courses, and this is an evolution which has developed out of the Act itself.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I am grateful to the hon. Lady for giving way. Her explanation is most helpful, but does not she feel that this important change of policy, which really amounts to a change of taxation policy, should have been made public and laid before the House for it to express its views about it when the decision was taken?

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

The hon. Gentleman will appreciate that it is very difficult for me to answer for my hon. Friend. This is entirely within his responsibility, but I repeat that the original powers under which this is done were laid down in the 1964 Act.

I think that I have dealt with most of the points made by the hon. Member for Cirencester and Tewkesbury, and I turn now to the points made by other hon. Members who have taken part in the debate. I think that there must be a very widespread misunderstanding of what the Act is all about. The 1964 Act, which was not passed by our Administration, makes it clear that the obligations for training rest on industry. The boards are drawn from both sides of industry and have educational experts on them, and the Act very tightly limits the powers of the Minister; indeed if the Minister wishes to amend an order made by the industrial training board he has to take fairly Draconian action to do so. In certain cases he is obliged to dismiss the entire board in order to decide that he is not going to accept a recommendation by them. It is clear to anyone who studies the Act of 1964 that it is not an Act which was meant to allow profound or detailed interference by the Government of the day.

It is made clear that the industrial training boards are responsible for the financing, details and the type of courses they provide under this Act, and it is this Act which the Minister is trying with the greatest possible speed to implement. So I was rather surprised to hear the hon. Member for Dorset, West and the hon. Member for Cathcart sharply criticising this Act which passed by their own Administration.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

The hon. Lady must not twist my words. I never mentioned the Act. I criticised the hon. Lady's being so quick to impose a new charge, while her hon. Friends are slow to implement the levies.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

The Government do not impose this charge. The levy decision in the case of all industrial training boards, unless rejected by the Minister, is in fact made by the board itself. In the case of the levy we are discussing, the levy has the full support of both the employers' and the employees' side of the Board—indeed it is a unanimous recommendation to the Minister. So I was really quarrelling—and I do not want to be in any way discourteous to the hon. Gentleman—with his use of the phrase that the Government was imposing this levy. The Board imposes the levy, the Government only has power to approve or reject it, and this power is extremely Draconian.

The other point made by the hon. Member for Dorset, West, was his reference to what he called taxation being imposed at a very unfortunate time for the industry. I would draw his attention to the reference in the Geddes Report to the shortage of skilled labour in this industry. This has led in many cases to late deliveries and some loss of orders for the British shipbuilding industry. This is not an industry which can be described as being an industry exactly over-abundant with skilled labour. It would be difficult to sustain the argument that there is not a case for training more skilled labour in this industry. There is no question of taxation in the relationship between levy and grant. The bulk of the Board's income is paid out again in grant, and there is no reason why an employer should not gain more in grant than he pays out in levy.

To turn to the financial aspects of the Board's activities, in 1965–66 the amount collected under a levy at the rate of ·55 per cent. was £593,000, of which £408,000 has already been paid out or is about to be paid out in grants, and about £80,000 is being held awaiting claims by employers who are entitled to claim but who have not yet done so. In view of the amount unclaimed the Board have extended the period in which claims can be made up to 31st December this year. In 1966–67 the levy raised will be a total of approximately £1,500,000. The great bulk of this will be payable out in grants, minus only the administration expenses of the Board. This is not a form of taxation. The sums involved in the collection of the levy are, to a very great extent, but a small proportion of the amount available to be paid back to the industry, but paid back only to those employers who are undertaking training of a decent quality as laid down and indicated by the boards themselves.

I should like to make it clear that the Industrial Training Act is not a tax Act. Its purpose is to impose a levy upon industries in order to finance training and to make possible grants to those industrialists who fully share the responsibility for training their labour force. If a firm suffers a direct 100 per cent. loss of a levy, it is bound to be because it has relied on training done by other firms and has refused to take its share of the responsibility.

For these reasons, I suggest that this levy deserves to be accepted. There are serious shortages of adequately trained labour in the shipbuilding industry, and when the Board comes to consider the recommendations of its working parties, I hope it will bear in mind the views of hon. Members on both sides of the House.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Would the hon. Lady make reference to what was said by the hon. Member for Tottenham (Mr. Atkinson), who was somewhat critical of myself—although I forgive him for his ignorance of the subject. Could the hon. Lady say whether she agrees with me that dilution and demarcation do not present problems in the actual shipyards of this country? The case which my hon. Friends and I have put is that to some extent there has been great difficulty through demarcation between trades, and dilution has been objected to on the part of new entrants. This problem is still with us. Although we welcome the fact that it is beginning to improve, does the hon. Lady agree with his views or with mine?

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I was provoked into joining in this debate because the leader of the opposing party on this question started off by ignoring the Act completely and went into a dialogue on the behaviour of the trade unions. It was because of that, when the hon. Member started to say that he did not believe that amalgamation between unions was possible—those were his exact words—

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

Order. The hon. Member cannot make a second speech on this Order. This subject is really outside the scope of this Order.

Question put and negatived.