PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Third Standing Committee on Delegated Legislation

TRAINING FOR WORK (SCOTTISH ENTERPRISE AND HIGHLANDS AND ISLANDS ENTERPRISE PROGRAMMES) ORDER 1995

Tuesday 19 December 1995

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1

The Committee consisted of the following Members:

Chairman: Mrs. Gwyneth Dunwoody

Atkinson, Mr. David (Bournemouth, East)

Bates, Mr. Michael (Lord Commissioner to the Treasury)

Canavan, Mr. Dennis (Falkirk, West)

Connarty, Mr. Michael (Falkirk, East)

Galloway, Mr. George (Glasgow, Hillhead)

Hunter, Mr. Andrew (Basingstoke)

Jessel, Mr. Toby (Twickenham)

Kynoch, Mr. George (Parliamentary Under-Secretary of State for Scotland)

Macdonald, Mr. Calum (Western Isles)

McFall, Mr. John (Dumbarton)

Maxton, Mr. John (Glasgow, Cathcart)

Michie, Mrs. Ray (Argyll and Bute)

Peacock, Mrs. Elizabeth (Batley and Spen)

Robathan, Mr. Andrew (Blaby)

Stanley, Sir John (Tonbridge and Malling)

Trotter, Mr. Neville (Tynemouth)

Wolfson, Mr. Mark (Sevenoaks)

Wray, Mr. Jimmy (Glasgow, Provan)

Mr. E. P. Silk, Committee Clerk

2
3 Third Standing Committee on Delegated Legislation Tuesday 19 December 1995

[MRS GWYNETH DUNWOODY in the Chair]

Training for Work (Scottish Enterprise and Highlands and Islands Enterprise Programmes) Order 1995

4.30 pm

Mr. John Mcfall (Dumbarton): On a point of order, Mrs. Dunwoody, I should like to move that the Committee do now adjourn in the light of the report from the Joint Committee on Statutory Instruments which notes that the order, which came into force on 1 August, is defective.

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): Further to that point of order, Mrs. Dunwoody, I refer the Hon. Gentleman to the memorandum—

The Chairman: Before the Minister begins, I should say that I am prepared to consider such a motion.

Mr. Kynoch: I refer the hon. Gentleman to the memorandum submitted by the Scottish Office to the Joint Committee on Statutory Instruments which clearly states that we intended the 1995 order to apply when the 1993 order ran out and that its application should start on 7 August. We believed that the 1993 order would apply until that date. I have received legal advice to the effect that the 1995 order revokes the 1993 order with effect from the application date of 7 August. It would be for the courts to dispute that, but I have no reason to expect that there will be any problem.

The Chairman: In view of what the Minister said, does the hon. Gentleman still wish to move his motion?

Mr. McFall: Yes, I do, because the joint committee, has stated that it is not persuaded and that article 5 is not made subject to article 2 but stands on its own. As such, it must come into force as stated in the order on 1 August.

The Chairman: I have accepted the motion and the matter is now open for debate.

Motion made and Question proposed, That the Committee do now adjoum—[Mr. McFall.]

Mr. Kynoch: I probably said everything during my comment in response to the hon. Gentleman's point of order. My opinion is that the 1993 order applied until the application date of the 1995 order. I am surprised that the hon. Gentleman wants to frustrate the means by which people on training schemes obtain the benefits to which they are entitled and which we intend that they should receive. Legal advice is that there is continuity and I have no reason to believe that the hon. Gentleman should be concerned.

Mr. McFall: Far from wishing to prevent young people from obtaining allowances for training, I am 4 concerned that the legislation covering the matter should be sound. Is it not typical that the order came into effect in August, yet we are discussing it in December? In the light of the sound judgment of the joint committee, I should like the Committee to adjourn.

Question put:

The Committee divided: Ayes 3, Noes 5.

Division]
AYES
McFall, Mr. John Michie, Mrs. Ray
Maxton, Mr. John
NOES
Bates, Mr. Michael Robathan, Mr. Andrew
Kynoch, Mr. George Wolfson, Mr. Mark
Peacock, Mrs Elizabeth

Question accordingly negatived.

Mr. McFall: I beg to move, That the Committee has considered the Training for Work (Scottish Enterprise and Highlands and Islands Enterprise Programmes) Order 1995 (S.I. 1995 No. 1752). As I understand the explanatory note, the order provides that any payments received by trainees are to be treated as payments made in respect of training if they are with an employer. I should like the Minister to deal with several points that arise from that. If a trainee is to be considered as employed, would any payments received count towards the earnings rule and so affect any income support or housing benefit entitlements? Do the same rules apply in England and Wales? Does the order reflect a change in policy, or does it merely bring Scotland into line with England and Wales? Has the Minister any comment to make on the order's effect on training? In The Herald this morning, I read an article about training by Mr. Alf Young. As the Minister knows, we occupy a low place in the league table in terms of skills and training. The article referred to Professor John Ward, who is the chairman of the Advisory Scottish Council for Education and Training Targets—a Government body which considers training targets. According to Mr. Alf Young, when Professor Ward gave a presentation at the Scottish Office last Friday, everyone unanimously accepted how far down the league table we were, and no one—not even the Minister, who was present at that meeting—dissented from that view. Given our poor showing in the training league, will the order have any effect on the quality and quantity of training available? The Minister knows the views of organisations such as the Confederation of British Industry and the Scottish Trades Union Congress. Indeed, in its document "Manufacturing Matters", published last year, the CBI (Scotland) stated baldly that Scotland had no training champion. It would be unwelcome were the order to have an adverse effect on training, especially for young people. The Minister is also aware of the concerns of the Select Committee on Scottish Affairs, which considered the question of training in 1994. The Committee noted that, although Scotland should be competing with the best in Europe, we were falling behind in international 5 comparisons. Given the capricious remark made by the Secretary of State during lunch with the chief executive of Scottish Enterprise at the Royal Horseguards hotel—

Mr. Kynoch: It was dinner.

Mr. McFall: I should have known—what a terrible mistake. I believe that £33 million was offered before the starters arrived. Scottish Enterprise is being denuded of vital money that should be spent on training, yet the effects of the order before us today could be still worse. The Minister must deal with those issues in his reply.

Mr. Kynoch rose

Mr. John Maxton (Glasgow, Cathcart): The Minister should remember that members of the Committee may speak at any time.

Mr. Kynoch: The hon. Member for Glasgow, Cathcart (Mr. Maxton) seems keen to intervene from a sedentary position. If he wants to speak, I shall happily resume my seat and allow him to make an intervention so that I can respond to it. Nobody is more committed to training than me. My background is in industry and I am well aware that businesses often need to be cajoled and encouraged to provide training. It is important that training should be appropriate to the needs of industry. I welcome the close liaison between Scottish Enterrpise, the local enterprise companies and local business people in tailoring training programmes. The hon. Member for Cathcart shakes his head, but I have visited several local enterprise companies during the past month. I was particularly impressed by a training establishment which was part funded by Lothian Enterprise and part funded by several electronics companies, including Motorola and NEC, which were tailoring a training programme specifically to their industry. That is a tremendous help to indigenous industry and to the creation of a skilled work force, which enables us to maintain our remarkable record of success in attracting inward investment.

Mr. Maxton: I understand the Minister's argument and, in part, I accept it. However, there is a grave danger that such training is based entirely on the interests of the companies rather than the interests of those who are trained. Training should cover more than the specific skills required by a single company. Too often, modem training schemes lack breadth.

Mr. Kynoch: I agree with the hon. Gentleman. Training and education establishments ensure that programmes are balanced. Funding is given by local enterprise companies on the clear understanding that proper training programmes are implemented and payment is made only when progress on a full programme has taken place and results are seen.

Mrs. Ray Michie (Argyll and Bute): The Minister has said that nobody is more committed to training than him. I accept that, but why has the training for work budget for Highlands and Islands Enterprise been reduced by 13 per cent. of last year's figure? The Minister is aware of the difficulties involved in providing training for youngsters in that area. What does he have to say about that cut?

6

Mr. Kynoch: The resource settlement for 1996–97 for adult training for work in the highlands and islands reflects the improvement in the economy and the decline in long-term unemployment, which has reduced throughout Scotland by 16 per cent. That success has reduced the need for adult training. I hope that the hon. Lady accepts that we have had some success in reducing unemployment and that training is contributing to that.

Mr. McFall: The Minister will be aware of the comments of the select Committee on Scottish Affairs in 1994 on training. Paragraph 96 says: "SCVO complained that under the Training for Work (TFW) scheme, training providers were penalised for non-attendance by trainees on schemes for the long-term unemployed. But failure to achieve 'positive outcomes' was not necessarily due to poor provision on the part of training providers." Although it is impossible to measure the extent to which the output-related funding regime encourages training providers to exclude difficult trainees at the point of selection, the Scottish Council for Voluntary Organisations believes that the regime caused the exclusion of those who needed training most. Has the Minister considered that?

The Chairman: Order. Before we proceed, I must encourage members of the Committee to address me, as Chairman, and to make reasonably short interventions. If they do so, I will be astonishingly grateful.

Mr. Kynoch: I will certainly address you, Mrs. Dunwoody. The Government continue to tackle the problems of long-term unemployment and training. I believe that local enterprise companies have been remarkably successful in dealing with those issues. They have also tailored programmes to suit people in their areas. The hon. Member for Dumbarton referred to a certain dinner that took place at the Royal Horseguards hotel, at which the budget for Scottish Enterprise was discussed. Professor Donald Mackay, the chairman of Scottish Enterprise, discussed its progress and how he might improve efficiency. I have much respect for Professor Mackay, who has achieved remarkable success with Scottish Enterprise and local enterprise companies, which were set up only in 1991. I remember the date because I was a founder director of a local enterprise company in Scotland, and I know how much work was involved. Professor Mackay believes in achieving good value for money, and he recognises that he is dealing with taxpayers' funds.

Mr. Dennis Canavan (Falkirk, West): I am sure that Professor Mackay and Ministers received good value for money at the Royal Horseguards hotel. How much did the slap-up meal cost?

Mr. Kynoch: If I recollect correctly, it was a working dinner.

Mr. Canavan: I have heard that one before.

Mr. Kynoch: I respect the hon. Gentleman, who makes a significant contribution to the House. As chairman of the all-party Scottish sports group, he 7 regularly attends a lunch that is held to lobby Members on both sides of the House. I—and, I am sure, the hon. Gentleman—regard that as a working lunch. I should not be so petty as to ask the cost of that lunch, or who pays for it, because I am sure that it is very useful and encourages a useful exchange of views. It is common for bodies to communicate over some kind of refreshment, and that was a sensible way for Scottish Enterprise to proceed. The lunch that I attended is an annual event that serves to update Ministers, who are incredibly busy and have little time to study progress reports from bodies such as Scottish Enterprise, or to learn of their problems from third parties. It is better to learn of problems directly. The hon. Member for Dumbarton made light of Professor Mackay's willingness to realise a reduced budget. The Opposition are two-faced on public expenditure. In the Glasgow Evening Times of 6 December, the hon. Member for Hamilton (Mr. Robertson), who is shadow spokesman for Scotland, said: "Spending on quangos has doubled in real terms since the Tories came to power in 1979. There is a whole lot of money flying around the system which is being spent by unelected bodies. Some of it is genuine spending on hospitals and homes"— I stress the next words— "but I am quite convinced that there is plenty of scope for real savings to be made." That is just what the Government are doing: we are making real savings and achieving better value for money, but the hon. Gentleman scoffs at our achievements.

Mr. Maxton: As part of the value for money that Scottish Enterprise is giving to this country, have the chairman, chief executive and all other board members taken a cut in salary? They do, after all, work part time.

Mr. Kynoch: I shall have to check whether directors of Scottish Enterprises are paid. LEC chairmen and directors are not.

The Chairman: Order. I hesitate to intervene in this extremely interesting dissertation on the dining habits of Members of Parliament, even Scottish Members of Parliament—those of us south of the border must know our place—but it might be constructive to return to the content of the order.

8

Mr. Kynoch: I stand corrected. The hon. Member for Dumbarton is concerned that we should adequately train our young people and the unemployed in Scotland. I firmly believe that Professor Mackay, Scottish Enterprise and Highlands and Islands Enterprise are determined not only to carry out their statutory functions on training, but to do better and to deliver even more. I shall move on to the order.

The Chairman: Order. I hope that the Minister has been discussing the order.

Mr. Kynoch: I have been trying to respond to the points raised by the hon. Member for Dumbarton. I know that he wanted to air certain issues and I wanted to ensure that they were put firmly in the context of the fact that his party, according to the hon. Member for Hamilton, agrees that we should be getting better value for money. The 1995 order will remove any doubt that could have existed about the eligibility of employed status trainees for family credit. That is what the order is all about. Our intention has always been to ensure that such trainees receive their proper entitlement. The order does not affect any entitlement to benefits. I hope that the hon. Gentleman realises that we introduced the order because there was a question mark over whether family credit could be paid under the terms of the 1993 order. The 1995 order ensures that we can pay family credit to such trainees.

Mr. McFall: I asked the Minister about the earnings rule and whether the order would put trainees who are now counted as employed in the poverty trap. I should like the Minister to respond to that.

Mr. Kynoch: I thought that I had answered the hon. Gentleman. I said that the, order preserved their entitlement to benefit.

Question put and agreed to.

Resolved, That the Committee has considered the Training for Work (Scottish Enterprise and Highlands and Islands Enterprise Programmes) Order 1995 (S.I. 1995, No. 1752).

Committee rose at five minutes to Five o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Dunwoody, Mrs. Gwyneth (Chairman)

Bates, Mr.

Canavan, Mr.

Hunter, Mr.

Kynoch, Mr.

McFall, Mr.

Maxton, Mr.

Michie, Mrs.

Peacock, Mrs.

Robathan, Mr.

Trotter, Mr.

Wolfson, Mr.