Industrial Training Levy (Engineering Construction Industry Training Board) Order 2020

Lord Hain Excerpts

Wednesday 2nd September 2020 Grand Committee

[Lord Hain (Lab) [V]]

My Lords, I very much agree with the points made by the noble Lord, Lord Bourne, especially on the vital necessity for new skills on green projects. Wales, of course, has many to offer, not least the Severn barrage, which is capable of harnessing the enormous power of the Severn estuary, but also the tidal lagoons and other forms of tidal power and marine energy. Anglesey has developed a marvellous strategy as an energy island. I hope that the skills needed for that will be supported by the Government in the UK, by providing the funding to the Welsh Government. I also welcome the Minister’s acknowledgement at the outset of the vital role of key engineering workers in keeping going the essential infrastructure of the country during the Covid lockdown.

Although the Explanatory Memorandum is candid about the policy background to the order, it is hardly comprehensive in its coverage and it is short on significant detail. It is indeed true that industrial training boards have operated in the UK since 1964—since March 1964, in fact, because industrial training boards were originally set up in the dog days of Alec Douglas-Home’s Conservative Government.

Today’s Tories seem shy about acknowledging one of their party’s more important initiatives aimed at tackling UK skills shortages. We know why: the noble Lord, Lord Tebbit, put 16 of the 23 industrial training boards to the sword nearly 40 years ago. The Engineering Construction Industry Training Board was one of the few that survived his cull. It also survived a more recent review, in 2017, by shrinking its board and taking the nonsensical step of cutting its training levy.

There are several reasons why the Engineering Construction Industry Training Board has lived on where others have been sacrificed; some are identified in the Explanatory Memorandum, and others are acknowledged in the board’s 2019 annual report. The overwhelming reason is market failure, which Ministers never seem willing to acknowledge. There are few incentives for individual employers to train, since the work is often short-term and the labour force highly mobile. This means that long-term skills needs get overlooked, and these are vital, in engineering especially. The board is right to claim that it helps to make the labour market in engineering construction more efficient and more effective.

The board’s chair, Lynda Armstrong, is also right that it faces an emerging skills shortfall as an ageing workforce retires. The 137% rise in the number of recruits starting apprenticeships in 2018—to 1,171—is a positive development, and I welcome the priority that the board is attaching to promoting the recruitment of a more diverse workforce.

I also welcome the fact that the board has an advisory council that includes trade unions and not just employers, trade associations and other stakeholders. However, I note that this falls a long way short of the provision made in the Industrial Training Act 1964 for equal numbers of representatives of employers and employees. Perhaps the Minister will say something about that.

The Engineering Construction Industry Training Board is an example of successful intervention that the Government are reluctant to build upon in other industries. It is a love-child that the Government are too embarrassed to acknowledge openly. Its very success highlights the discomfort that the Tory party feels when its free market ideology comes up against the practical consequences of free market failure. I hope—although I fear my expectations are very low indeed—that the Government will take heed of this story and begin to invest properly in the vital skills we need for the future. They have not done so for more than 10 years.

With not only the green projects of which the noble Lord, Lord Bourne, spoke, but with robotics and artificial intelligence coming up fast, surely the Minister must agree that the Government should start investing massively in skills now, or see Britain continuing to fall behind badly on productivity and the new jobs of the future.