Welsh Affairs

Part of the debate – in the House of Commons at 8:06 pm on 28 February 1991.

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Photo of Mr Gareth Wardell Mr Gareth Wardell , Gower 8:06, 28 February 1991

Let me give my hon. Friend the Member for Ogmore (Mr. Powell) the same reply that I give to anyone else who asks the Select Committee to examine a specific subject. I shall put his request to the Committee at its next meeting, but I must tell my hon. Friend that a whole range of issues are currently before us, including the writing of a report on Cardiff Wales airport, the future of opencast coal mining in Wales, affordable housing in Wales, salmonella, and the future of the health service, particularly in elective surgery.

I intend to concentrate on the economy, unemployment and, in particular, training, much as my hon. Friend the Member for Ogmore has done. It is a tragedy for Wales that unemployment rises should again be in the headlines. Last week, the South Wales Evening Post reported that 4,200 Welsh jobs had been axed. Three thousand people a day are now losing their jobs. Alan Walters—once an eminent professor at the London school of economics where I was proud to be a student—claims that unemployment will have risen to 3 million by the end of the year. Our work force is now one of the least skilled in Europe.

In Wales, the growth in service-sector employment has failed to keep pace with the continuing long-term decline in manufacturing employment. I noted with interest the comments of my right hon. Friend the Member for Llanelli (Mr. Davies), who, in his usual expert way, pointed out that the expansion of the high-wage service industry is always doomed unless the manufacturing base is fundamentally healthy. Evidence throughout the world attests to that.

Between June 1979 and June 1990, the number of people in work fell by 24,000. According to research carried out by West Glamorgan county council, 30 of the biggest manufacturing companies in Swansea employed 41,000 people in 1979, but by 1990 only 20 of the companies remained, and the new list of the 30 largest companies shows that they employ only 19,000 people.

Britain has increased manufacturing investment by only 5 per cent., whereas Italy has increased such investment by 30 per cent., the Netherlands by 50 per cent., France by 57 per cent., Germany by 60 per cent. and Luxembourg, Belgium and Ireland by more than 100 per cent. Manufacturing investment in Wales has fallen by 19 per cent. in the past decade. It is estimated that, if investment in Welsh manufacturing had remained the same as in 1979, £1,833 million more would have been invested. That is what the economic miracle did for Wales.

The chamber of commerce survey for the fourth quarter of 1990 shows that employers are much less optimistic about the economy and their contribution to it. They have sharply reduced the number of people they think they will employ. The Government's long-standing policy of reliance only on interest rates to beat inflation is crippling Welsh industry and Welsh people. Last year, business failures in Wales increased by 4 per cent., and they are accelerating. The chamber of commerce reports that more than half of manufacturing companies and almost half of service companies have recruiting difficulties.

As our European competitors invest in equipping their work forces with skills and ongoing training to ensure that they are ready to seize what 1992 offers, and as Japan, South Korea and Singapore invest in ensuring that their work forces stay ahead of new ideas and applications of technology, what are the Government doing to give us the edge? They are taking £300 million from the budget for training unemployed people. They are cutting the United Kingdom training budget by more than a third. Between 1987 and 1992, they will have cut almost £1·5 billion from training expenditure.

At a time when everyone recognises the need for improved training, when the CBI and trade unions are working together to promote the kite mark award for employers who operate good training schemes, when employers are concerned about skill shortages causing blockages in the economy, when labour is being shed and when high interest rates inhibit companies from investing in plant and equipment, let alone training employees whom someone else will poach within months, what is the Government's contribution? They have decided that, as everyone else will have to do more training and as employers are starting to do more, they can do less. Their view is that, as TECs have found their feet, the Department of Employment can walk away. That takes some vision.

In July 1990, the West Wales training and enterprise council, a new private enterprise scheme with a Government-provided budget of £110,000, was launched. It was described by the Secretary of State and the local chief executive as the engine that would help regenerate the west Wales economy by providing high-quality training. How short-lived that has proved to be.

The West Wales TEC, like all the other TECs, is facing a cut of 60 per cent. Instead of the 4,200 places that are currently available for trainee placement in West Glamorgan and Dyfed, only 1,700 training places will remain after April. That means the decimation of training managers' programmes. The classic example of that in the West Wales TEC is at Swansea and Afan colleges. The number of trainee places available at the former will fall from 340 this year to zero next year. At Afan college, the number will fall from 140 this year to zero next year. In addition, 32 skilled trainers employed at those colleges will lose their jobs. I am pleased that my right hon. and learned Friend the Member for Aberavon (Mr. Morris) has tabled a parliamentary question asking what that will mean for Afan college.

Training managers have asked me, "How do you tell people who have been on the dole for six months in order to qualify for a training place, who are paid between £29 and £36 for a 40-hour week, that they have just been sacked?" I do not know how they will be told, but told they must be. Who loses and who keeps their training place may seem arbitrary to trainees. The new contracts that are being imposed will make who stays in training and who returns to an ever-lengthening dole queue an economic decision, but not a rational one.

Not only is the number of trainees to be cut, but the TEC payment to training managers for each trainee is to be reduced from £35 a week to £20 or £30 a week, depending on the skill of the training undertaken and on whether the trainee obtains a full-time job after training. Managing agents are chasing points that have been obtained by trainees acquiring non-vocational qualifications at various levels. The more points, the more the managing fee—a reintroduction of the payments by results that we thought the Government had turned their back on.

That will mean that potential trainees who are in special need of a placement, perhaps a long-term unemployed person who shut himself out of school and has found himself repeatedly shut out of the labour market ever since, will be at a disadvantage. That is what the Government are doing.

Those who are seeking a new start through the probation service, where the National Association for the Care and Resettlement of Offenders is the managing agent, are the worst affected in the West Wales TEC area. All the 175 placements and their 16 trainers will go on 1 April. Such groups are likely to provide less income to managing agents than someone who has well-developed skills in one sector, who has been in regular employment, who will retrain for a new career and who will get points for the managing agent. For those disadvantaged people, employment training has provided a bridge into the labour market. That bridge will be demolished on 1 April—truly April fool's day for the Government.

Some of the training routes will be closed, such as the scheme that is jointly operated by Afan college and Lychgate Ltd., which provides training for potential computer programmers, whose highly skilled labour is in demand.

This year, I have been privileged to spend a considerable amount of my parliamentary work experience time with the Royal Navy, and I have seen its training establishments, including the marvellous engineering school on HMS Sultan. I have met the men on HMS Gloucester who did such wonderful work in the Gulf. A fortnight ago, I was in Rosyth, and saw in progress the training for anti-submarine warfare which made an inestimable contribution to the outcome of the horrible war in the Gulf. The training undertaken by the men and women in the Navy has made our Navy, our anti-mine submarines and our submariners the envy of the world. In addition to such necessary training for war, however, we need to prepare our young people for jobs and for the purposes of peace.

Until now, TECs have paid transport costs to trainees but under the new contracts, the costs are to be paid by the training managers. Kenyons in Pontardawe is a refrigeration engineering firm of national repute. Where everything between trainees is equal, to reduce the number placements from the present 30 to 12 on 1 April, it has a choice: it can sack a trainee from Clydach with travel costs of £6 a week or someone from Seven Sisters, placed under the valleys initiative, with transport costs of £27 a week. If the Seven Sisters man does brilliantly and ends up with full-time employment, Kenyons will get only £3 a week for training him. But even if the man from Clydach makes a foul-up, the company will still get £19 a week. Decisions will not be based on economic efficiency or common sense but on luck—on where a person lives.

There is now some uncertainty among Conservative Members. When the Government decided on the cuts, the election was a long way off and the rising unemployment figures were no more than blips or aberrations. Now, however, election dates are firming up for May or June, and more elaborate footwork than cut-and-run will have to be stage-managed.

The Secretary of State for Employment—formerly of Llanelli—did not accept a single amendment in Committee on the poll tax Bill, which became the Local Government Finance Act 1988. He had to do some nifty footwork on Tuesday to try to retrieve some credibility. He announced that he proposed to increase the training budget by £125 million. He did not say that his estimate of the reductions in spending that the training budget could stand had been wrong.

No Minister in this Government seems to have the courage these days to say that he or she was wrong. The Secretary of State for Employment did not say that his cuts in training would be reduced from £300 million to £175 million. He certainly did not say that he needed to get more people off the unemployment register by May so he would have to push them into training schemes and could not afford to reduce the number of places on quite the scale that he had originally planned—until after the election, that is, or perhaps even after the Budget. It seems that, even for this Government, training has its uses.

What Wales is crying out for is an election, and a new Labour Government. It is crying out for a Government who are committed to the modernisation and rebuilding of our manufacturing industry and who genuinely believe that a partnership between people and technology fostered and supported by Government is the way to bring long-term stability and eventual prosperity to our economy. We want a Government under whom training, instead of being a brush to sweep unemployment under the carpet, is a way of investing in the prosperity of the economy, of industry and of individual development and economic freedom. That is why we relish the prospect of an election in May or June.