Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014

Lord Young of Norwood Green Excerpts

Monday 24th February 2014 Grand Committee

Again, I thank the Minister for his opening remarks.

[Lord Young of Norwood Green (Lab)]

My Lords, broadly speaking, I, too, welcome the statutory instrument. I thank the Minister for his introduction. I thank my noble friend Lord Jones for, as usual, giving us a historical analysis and some context for ITBs. I was around at the time, but I must admit that I could not remember all that detail about the wholesale slaughter of the industrial training boards.

[Lord Jones]

I hope my noble friend will allow me to say that the one omission I made in my boring remarks was that I was the opposition spokesman on these matters at that time.

[Lord Young of Norwood Green]

That accounts for it—it concentrated his mind wonderfully.

It was a helpful introduction by the Minister and I thank him for giving us some of the statistics. I was going to ask him about the number of apprenticeships and he gave us that figure, together with completions. Perhaps he could disaggregate that figure a bit further: how many apprenticeships were there in the 16 to 18 age group, and in the 19 to 24 age group? How many high-level apprenticeships were there?

Also, how many apprenticeships are there in this sector in public procurement contracts? I am sure that the Minister remembers the many occasions on which I have berated the Government for their failure to insist on a compulsory requirement for apprenticeships in public procurement contracts. It would be interesting to know how many apprenticeships in this sector are involved with public procurement contracts.

There is one other aspect of the construction industry that is still a matter of concern. The thresholds are based on the number of employees, but, unfortunately, it is still a well known practice in the construction industry—

[The Deputy Chairman of Committees]

There is a Division in the House. The Committee will adjourn for 10 minutes.

--- Later in debate ---

[Lord Young of Norwood Green]

My Lords, to continue, I was making the point that it was interesting to hear the Minister talking about threshold firms. One of the continuing problems with the construction industry, as I was saying, is still the problem of bogus self-employment, especially on large sites where it makes a difference. I know, for instance, that there are some more enlightened managers of some of the large projects who have been trying to encourage companies not to engage in this and, as they should do, to register people for PAYE who are in fact continuously being employed; this would obviously count towards the threshold for the training levy. It would be interesting to hear whether the Minister has any views on that and whether he agrees with me that this is a continuing problem.

With those questions and that slight reservation, I welcome the order.

[Viscount Younger of Leckie]

I thank the noble Lords, Lord Young and Lord Jones, for their contributions to this afternoon’s debate. I would like to address several questions that were raised and, if I may, start with the noble Lord, Lord Jones, who asked how much was paid by the Government in grant to the ECITB. I can reassure him that the funding for the ECITB is raised from the employer levy, so the ECITB does not receive any grant-in-aid funding from the Government. However, all funds are accountable to Parliament, which might give some further reassurance.

The noble Lord, Lord Jones, also raised the history of ITBs and the background to the closure of the ITBs back in the 1980s. It is nice for me to know that he thought that I might have been too young in the 1980s to understand, or to have been around for, the levy system, but it happens that I was employed by a major multinational textiles firm at the time and was working in human resources. I remember very clearly working with my superior to monitor and fill in the levy forms, which were pretty extensive, so I have some experience of that.

Bringing us forward to the modern day, I should say that the training boards continue with the support of employers, and the Government do not want to impose levies on industry but are responsive to employers who can benefit from such arrangements. That is the case for construction and engineering construction, which have mobile and flexible workforces. Who knows, other industries by sector may approach the Government for a similar regime. There are none so far, but the noble Lord makes a good point.

The noble Lord, Lord Jones, raised the issue of how the ECITB is monitored. The Minister in the other place has an annual meeting to review the performance of each ITB. The performance and accounts are for public record and are published annually. The Secretary of State for Business, Innovation and Skills appoints all the board members, and Government officials attend all the board meetings regularly to review performance with the boards.

The noble Lord, Lord Jones, asked about small businesses, with a particular focus on SMEs. It is very much a feature of the industry that the majority of employers are larger. I am happy to have a discussion with the noble Lord outside about my views about how small businesses are progressing.

On apprentices, the noble Lord may well know that we have managed to find 1.5 million apprenticeships since 2010. The noble Lord, Lord Young, also asked about apprenticeships and how many in the 16 to 18 year-old and 19 to 25 year-old bracket were involved in public procurement contracts. Although we do not have a breakdown of the numbers by age group or in public procurement contracts to hand, the nature of the engineering industry is likely to mean that the majority of apprentices will be aged 19 or over. I will certainly write to the noble Lord with any concrete figures that we can find to enlighten him.

The noble Lord, Lord Jones, asked who chairs the ECITB and who its CEO is. It is nice to be able to name names for once. The board is chaired and led by Andrew Collinson, who has extensive experience in the engineering construction industry, and the chief executive is David Edwards. The key feature of such boards is that they are employer led, and all the board members have experience of the industry and can speak on behalf of employers.

The noble Lord, Lord Young, raised the issue of bogus self-employment, to paraphrase his question. That is an issue in the construction industry. The orders cover not just PAYE but labour-only contracts. I agree that that matter needs further consideration, and I am grateful to the noble Lord for raising that point.

The proposal before the Committee relates to the engineering construction industry, and it continues to be the collective view of employers in the industry that training should be funded through a statutory levy system in order to secure a sufficient pool of skilled labour. I commend the order to the Committee.

[Lord Young of Norwood Green]

Before the noble Viscount sits down, I meant to ask this question during my contribution—I apologise to him. Were the figures he cited of 2,500 apprenticeships and 30,000 learners an increase on previous years? If he does not have the answer, obviously I understand.

[Viscount Younger of Leckie]

It may be appropriate for me to help the noble Lord by writing to him, but this might also be a moment to explain that the ECITB supports about 2,000 apprenticeships every year. I think I need to give a more precise and concise answer about the year-on-year figures, which I will endeavour to do.