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Baroness Blatch: Before my noble friend responds, the noble Baroness said that the amendment does not make it clear on whom the costs would fall--the principal, the Government or the employer. That may be a problem with the amendment. However, if this scheme is to go ahead--and, with the Government's majority, the chances are that it will--the problem has to be resolved, if not by my noble friend, then by the Government. Unless that happens the young people who fall into this category could be left outside the scheme because neither the employer, nor the Government, nor the principal, would have an obligation to meet the costs. It is something that the noble Baroness and her Ministers should consider and then come back with an amendment.

Baroness Blackstone: The noble Baroness is absolutely right. This would have to be resolved. As I indicated earlier, we will be looking at the question, among other issues which arise from acceptance of these amendments, and we will, if we can, bring forward amendments in another place to deal with them.

Lord Jenkins of Roding: I am grateful for the care with which the noble Baroness responded to the three amendments. It is clear that the Government regard this as an important part of the new provisions in Part III of the Bill. It is good to know that they take on board the need to make provision for the support costs. I shall wait to see what happens. We are becoming used to hearing of reviewing this, revisiting that and examining the other. It all sounds very sympathetic and friendly but not a lot appears to come out at the other end. Hopes are raised only to be dashed. I hope that that will not happen in this instance.

I, for one, have always been hugely impressed by the determination of people who suffer from considerable physical or sensory handicaps to make something of their lives. They are prepared to make efforts that people more fortunately placed would perhaps not feel it necessary to make. They deserve every encouragement and support. I hope, having heard what the noble Baroness said, that the review is seriously intended. Otherwise I fear there will be great disappointment.

These are probing amendments. I was about to withdraw them. Does the noble Baroness wish to address the Committee again?

Baroness Blackstone: Before the noble Lord withdraws his amendment, may I reassure him that I

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would not have said what I said just now if I did not seriously mean that we will be looking at these amendments and hoping that we will be able to come up with something at a later stage in the Bill's course through Parliament. He was a little unfair in saying that sympathy is expressed and then nothing comes of it in the sense that it is too early to say whether nothing will come of it.

Lord Jenkin of Roding: I take some comfort from that and the fact that there is someone looking over the noble Baroness's shoulder who has every possible reason for having sympathy with these amendments. I hope that she is justified in what she says and I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 131 and 131A not moved.]

Baroness Blackstone moved Amendment No. 132:

Page 20, line 30, at end insert--
("( ) References in this section to study or training are references to study or training on the premises of the employer or (as the case may be) principal or elsewhere.").

The noble Baroness said: I am pleased to introduce Amendment No. 132 which makes it absolutely clear on the face of the Bill that the phrase, "time off for study or training", which is required to enable young people to access the new right, does not necessarily mean time away from the workplace. The effect of the amendment will also be to re-emphasise that the Bill does not accord greater status to any particular route.

Members of the Committee will recall from Second Reading that some noble Lords raised the concerns expressed by the Confederation of British Industry about the perceived lower status of study or training undertaken at the workplace. We have listened to those concerns through our regular and very positive contacts with the CBI.

Amendment No. 132 sends a very clear message. The study or training can be undertaken in the workplace, whether actually on the job or elsewhere on site and, for example, via national vocational qualifications. Or it can take place in a college, or with an approved training provider, or elsewhere.

As I made clear at Second Reading, the time that a young person can have will be what is reasonable in all the circumstances, with account taken of the requirements of the study or training as well as the circumstances of the employer's business. This will be especially important for small and medium-sized businesses.

Amendment No. 132 confirms that this is a listening government, willing to work to accommodate the concerns of employers, to ensure that arrangements can be both sensible and flexible. This amendment has been warmly welcomed by the CBI and has its strong support. I commend the amendment to the Committee.

Turning now to Amendment No. 138, noble Lords will note that this is a technical amendment to Section 58 of the Employment Rights Act, which sets out the right to time off for occupational pension scheme trustees. The amendment is not intended to change the

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meaning of that section in any way. It is included solely to ensure that the amendment to Section 63A, Amendment No. 132, does not have any adverse effect on the interpretation of that section. Amendment No. 138 is a minor but important amendment which I now also commend to the Committee.

Lord Tope: I rise merely to say that we warmly welcome and support this group of amendments.

On Question, amendment agreed to.

4 p.m.

On Question, whether Clause 23, as amended, shall stand part of the Bill?

Baroness Blatch: If it will help the Committee, in opposing the Question that Clause 23, as amended, shall stand part of the Bill, I should like also to oppose Clause 24. This is the same argument and may save time.

In order to warn any spin doctor who may wish to interpret otherwise, I make it clear at the outset that we entirely support the Government's policy aims that young people should have adequate education, training and skills with which to enter the workforce. We also support the setting of education and training targets to be achieved by young people as they leave school. The Government have our support in encouraging young people to remain in education and/or training to equip them for entering the workplace. Much of what the present Government are doing builds on the achievements of the previous Conservative Government, which were opposed root and branch by Labour Members of Parliament as those measures went through both Houses.

The previous government, for example, introduced the national curriculum, with concentration on the core subjects of literacy and numeracy. Our government also saw the introduction of formal assessments and testing; the introduction of a systematic rolling programme of inspections with a requirement for schools' governing bodies to produce follow-up action plans; the introduction of national education and training targets; the introduction of performance tables, the publication of which provides much of the information which this Government are now finding useful in focusing attention on areas of concern within the education service; the introduction and development of vocational qualifications, GNVQs and NVQs; an improvement in the school staying-on rate and an expansion of participation in further and higher education.

The number of young people entering higher education rose from one-in-eight in 1979 to one-in-three by 1997. Despite what has been said about funding, funding also rose throughout those years. We also secured all-party support for commissioning the Dearing report to address the issue of the financing of higher education into the 21st century. Therefore, that some young people aged 16 and 17 should leave or, in some cases, drop out of education is deeply regrettable and is a cause for concern.

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However, the proposals contained in Clauses 23 and 24 do not address the problem. They have certainly not been thought through, just as so much of the Bill has not been thought through. One has only to recall the confusion over gap year students, and the Scottish Office concession over tuition fees to Scottish, Southern Irish and continental European students which disadvantaged students from England, Wales and Northern Ireland.

My two main reasons for opposing Clauses 23 and 24 are, first, that they represent yet another burden on business and, secondly, that the proposals will work against the interests of 16 and 17 year-olds. Therefore, my argument is that the proposals are well intended, but misplaced.

The balance is tilting quite significantly away from employers in favour of employees. European social legislation, as a result of the Government's signing up to the social chapter at the Amsterdam Summit, will create great tensions for all employers, public and private. I refer, for example, to the introduction of the minimum wage; compulsory recognition of trades unions; compulsory European works councils and the possible extension of works councils from large companies to much smaller companies; the introduction of maternal and paternal leave when a baby is born; equal rights for part-time workers; and to the shifting of the burden of proof in sex discrimination cases which will mean that in future an employer will be deemed guilty unless he can prove innocence. There is so much more--and this plethora of regulation represents additional costs and additional bureaucracy, together with a loss of freedom; a loss of choice; and a loss of competitiveness and of flexibility for all employers in the United Kingdom.

The Prime Minister's hectoring and lecturing of the other European member states about competitiveness and flexibility in employment has a very hollow ring. Having abandoned the opt-out of the social chapter and the veto on social legislation which was secured by my right honourable friend John Major, the Prime Minister has opened the door to policies which will destroy the very competitiveness and flexibility which is so critical to a prosperous future for Europe.

Many companies--large, medium and small--provide training and regard it as essential to the success of their businesses. Some provide formal systems of training which dovetail very well into further and higher education qualifications and which are regarded as compatible by many of the accredited awarding bodies. Some, however, provide skills training but on a much more informal on-the-job basis, which serves the needs of both the company and the employee, and which is also consistent with all the workplace health and safety regulations but which may not conform specifically to the regulations and the bureaucracy which will be set out under Clause 23 in new Section 63A(2)(c), the details of which we have yet to see.

Paid time off will cost employers up to £130 million even if only 50 per cent. of 16 and 17 year-olds take up places. Businesses could be disrupted; substitute

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employees may be needed to cover for absences, and productivity could be affected. Moreover, these proposals will impact disproportionately on smaller businesses which, according to the Government's own estimates, are the very companies most likely to be approached by this group of young people.

I believe that the proposals will work against the best interests of 16 and 17 year-olds who have no qualifications and who have dropped out of education and training. I should like to give to the Committee three examples of young people who could present themselves for work to an employer. I shall call the first John. He is aged 17 with five GCSEs and an NVQ level 2. Tom is my second example. He is aged 18 and on a New Deal welfare-to-work scheme. Tony is our third example. He is aged 17 and has only one GCSE. My first example, John, aged 17 with five GCSEs and an NVQ level 2, could be employed full-time at the cost to his employer of his salary. Tom, aged 18, on the New Deal welfare-to-work scheme, comes to the employer with a weekly bounty, paid for by the Government, of £60 plus £700 upfront costs to cover training. On the other hand, Tony, who is aged 17 and has only one GCSE, comes to the employer at full salary cost, but with a right to have time off regularly for education and training which could last for over a year at the employer's expense.

So employers will have a clear incentive to take on either qualified young people or the New Deal welfare-to-work 18 to 24 year-olds in preference to 16 to 17 year-olds with no qualifications and who carry a cost to the employer over and above their salary. Not only that--in the Government's own view, this group of individuals is unlikely to be motivated and is even alien to the idea of education and training. A great deal is being asked of employers.

If an employer provides training which does not conform to the prescribed conditions to be set out in regulations under new Section 63A(2)(c), he will be obliged under the law to adjust the company training programme at his own expense, although it may have been entirely satisfactory to the company, only to conform to a more bureaucratic system which must be monitored and assessed externally by an accreditation body. That applies to a company which may have only two people in its employ.

It is even more confusing in the area of work and benefits. As I understand it, if you are 16 to 18 years of age and taking part in a course of further education, you cannot claim state benefits; if you are part of the New Deal welfare-to-work scheme you can claim benefit; if you are 18 plus and on a further education course, you cannot claim benefits, and you must pay tuition fees for some courses; if you are 18 plus and part of the New Deal welfare-to-work scheme, you may claim benefits and be exempt from paying tuition fees for six months; if you are 18 plus and part of the New Deal welfare-to-work scheme, your employer will receive £60 a week, and £700 up front to pay for training; and if you are 16 to 18 and in a job your employer will be required to pay you and shoulder the full cost of a day

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release programme. Is it any wonder that employers, particularly small employers, find this whole issue perplexing?

For some years now unemployment has been falling and continues to fall across all age levels. In addition, as the results and benefits of the education reforms over the past 10 years work through to school-leavers--the benefits are now beginning to show--more and more young people will leave with better qualifications. We all say "Amen" to that. But for those who do not, government should consider other alternatives; for example, to revisit Option 2 which was set out in the Government's paper Investing in Young People; that is, to continue to encourage employers without invoking the strong arm of the law against them. This is no way to work with and to win the hearts and minds of the private sector.

There must be a more effective way of achieving the policy aim of improving the education and skills of some of the most difficult young people who see no benefit in remaining in state-funded education or training to the age of 18. To pursue the policy in that way, using the strong arm of the law, especially against the smaller employers who need to use all their energies, talents and resources even to survive, is unacceptable.

I oppose these two clauses standing part of the Bill because of the anomalies created by them; the unbelievable complexity of provision for 16 plus young people, whether in or out of education, in or out of work; the inherent unfairness between one young person who receives bounties and benefits and another young person who represents a burden to an employer; the tensions that will result from unmotivated young people and their employer who will be pursued by bureaucrats, and possibly an industrial tribunal, if the employer fails to satisfy the, as yet, unwritten regulations; and they are ill-thought through. Most significantly, I oppose them because they will work against the interests of the very people that they are designed to help--young, unskilled school-leavers.

4.15 p.m.

Baroness Maddock: I listened with interest to the noble Baroness, and hear what she says about how her points of view will be viewed outside the Chamber. It will be difficult to convince people outside the Chamber that you are in favour of extending training to young people, given that you do not want the clause to stand part of the Bill. I place on the record once again that the Liberal Democrats support the right of young people to have time off from the workplace to ensure that they are properly trained. We recognise that that can happen in a great many other places as well and by many other means, especially with modern technology.

It is hard to believe that some of these arguments were taking place 30 years ago when we were discussing the setting up of the Open University. I have greatly enjoyed the book about Jennie Lee written by the noble Baroness, Lady Hollis. Some of the discussions we have had today and earlier in Committee about higher education and the different ways of learning and using modern technology were being held over 30 years ago. That is dreadful shame.

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As has already been said this afternoon, all the evidence shows that if the British economy is to be competitive in the next century we must foster high quality, high value-added products. That must be part of our economy. We can achieve that only if we have a well-educated and highly skilled population. There must be flexibility within education and training.

We have seen rapid technological and economic change, which means that people will need a wide range of skills. They will need to be able to communicate, assess, adapt and work with others in this fast moving climate. Training in such skills demands a broad education, to which I believe we are all committed. In addition, we must ensure that more specialised competencies are included. That is what we are talking about in this part of the Bill.

For over 30 years successive governments have acknowledged the need to improve the training of our workforce, but our workforce remains poorly trained when compared with most other developed countries. As has already been said, only about one in seven of our employees receive any training from their employers, although we have made some strides in recent years.

In England and Wales--it is probably less true in Scotland--there has been a failure to straddle the gulf between academic and vocational education. Vocational education has been the poor relation. Training has often been short term and not of the highest quality. That has been the case since the country's good system of apprenticeships was dismantled. There must be parity of esteem between academic and vocational qualifications. That is an essential first step if we are to have a properly educated and trained workforce.

One of the other factors which is important, and which has been mentioned, is the funding of proper training. At the last general election I was proud to be able to put forward the Liberal Democrats' proposals for how that is to be achieved. I return to the noble Baroness's opening remarks, because we must engender a change of culture. The only way we will do that is by investing in the training of our young people. That is not happening at the moment. We have proposed that one way to fund it--this may answer an earlier question--is to have a training levy. We have proposed a levy of 2 per cent. on the companies' payrolls. Firms providing training opportunities would be able to make deductions against that.

The noble Baroness, Lady Blatch, is anxious about what will happen to small businesses and the burden which will fall on them. Under a properly constructed training levy small companies employing a few people can be exempt. However, they can provide proper training for their employees. That is particularly important because the small businesses eventually turn into large businesses. Often when the economy is doing well small businesses engage the largest number of new employees. It would be wrong to introduce a system which did not enable small companies to afford to train their employees.

This is an important part of the Bill which we believe can be improved. We believe that all young people under the age of 19 should be included. There is a

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recognition outside the House that we need to move forward in this respect. Despite the arguments explained most eloquently, as always, by the noble Baroness, Lady Blatch, I do not believe that the message will be well received outside this House, and we support the Government.

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