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Baroness Carnegy of Lour: I believe that people at large are more practical than the noble Baroness, Lady Maddock, believes and they may well see problems with the plan. Many people who have done well at the Open University left school with no qualifications or just dropped out. The problem is how to motivate such people. I am thinking of those in the area which I know best; that is, north of the Border. The Bill applies to Scotland, too. There are many young people of 16 and 17 who leave school and are not at all interested in further educational training. Their one motivation is to find a job. Nowadays, they are usually successful after a short time. Many begin by working in a small business; for instance, a shop or a garage. They keep the job for a year or two and become motivated and interested. Often the employer suggests that it would be a good idea if they went to college on day release. More likely, they apply for a better job where training is provided. However, the start of the training is simply having a job.

I worry that if the clause is implemented, many of the small businesses in my area will be reluctant to employ young people. They will have to pay them not only for a full week's work--and they will be away for part of that--but they will have to employ another young person as a replacement. Perhaps in time they will have to be paid for training.

I have devoted a large part of my life to setting up education and training for such young people--my thoughts go back to months spent setting up the youth training scheme. There was enormous opposition from the party opposite, who later destroyed it because it was not good enough. I realise that one must be realistic; we must start with what young people want, which is a job. Once they start work they will want training and we must provide every incentive for that. However, if employers are forced to provide such training, the jobs market for 16 and 17 year-olds, certainly in my area, will diminish. That would be tragic.

Baroness Blackstone: Clause 23, as amended, and Clause 24 provide that 16 and 17 year-olds who are in a job but who have not achieved a certain standard in their education and training, will be entitled to appropriate time off to pursue approved qualifications in the workplace, at college or elsewhere. I am grateful to Members on the Liberal Democrat Benches for their support for this part of the Bill. I am surprised by the opposition to it as expressed by the noble Baroness, Lady Blatch, and her party. Let us be clear about the importance that the Government place on the provisions. All young people are important and investing in young people is central to our thinking. The provisions fulfil a commitment made in the manifesto. They are about improving the employability of young people. We want

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all employers, not just some of them, to provide good quality training for young people and by doing so to invest in the future.

Perhaps I may say to the noble Baroness, Lady Carnegy, that some of her comments amounted to reasons for supporting the clause rather than opposing it. Of course young people are motivated by having a job. Building on that motivation by providing them with good training, whether at work or on release to attend college, is a sensible approach to extending employability for all young people.

The noble Baroness, Lady Blatch, listed a large number of provisions which the previous government made. Some of them I support and am pleased they are successful. However, despite the changes, one in three adults have not had a single day's education and training since they left school. It is important that when 16 and 17 year-olds leave school and take a job we start them on the road of training so that they can be prepared for a world of lifelong learning.

As I explained on Second Reading, the measure is a key element of our "investing in young people" strategy. It is not an option. The measure will tackle the problem of under achievement among many 16 to 19 year-olds.

I recall that during Second Reading the noble Lord, Lord Tope, gave a positive welcome for Clauses 23 and 24, which reflected the encouraging mood of the House towards this important legislation. I recognise that the noble Baroness, Lady Blatch, raised a number of anxieties about the effects of legislation on employers, and those are points to which I shall return. But as the government amendment tabled today shows, we take employers' views seriously and we shall continue to work closely with them.

We know that there are many excellent employers across the country who will already meet the requirements of the legislation through their first-class training and development arrangements for young employees. But our ultimate aim must be to change both attitudes and practices so that all employers, not just the good ones, provide quality education and training for their young employees--or if they cannot or will not, allow others to provide it in their stead.

Clauses 23 and 24 stem from one of the Government's manifesto commitments, so I shall take this opportunity to explain why the Government believe the legislation to be essential and why the clauses should stand part of the Bill. In the UK, at the end of 1996 there were an estimated 115,000 young people aged 16 to 17 in employment not qualified to Level 2 and not working towards a Level 2 qualification. While it is pleasing that the unemployment rate for 16 to 24 year-olds in Great Britain--using the ILO definition--fell from about 16 per cent. in the summer of 1997 to about 13 per cent. in the autumn of 1997, that rate remains at twice the national average. That seems to me to provide ample justification for the emphasis, and significant resources, that we are placing on improving the skills and employability of that age group as a whole.

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I return to the 16 and 17 year-olds, who are the subject of this legislation. We are concerned that large numbers of young people in the UK each year will continue to fail to reach level 2, the very basic level of attainment which is an absolute prerequisite for sustained and future employability. Level 2 qualifications also provide the foundation for further learning and career progression. The consequences of failure for the young people, for employers and for the Government are clear: the likelihood of higher rates of unemployment in the future; a smaller pool of people who have reached the threshold of skill which makes them valued employees; and some young people withdrawing from the labour market altogether. More young people will therefore be at greater risk of being socially excluded. The cost to the individual young person, to the economy and to society would continue to be high and I am sure that all Members of the Committee will agree that no one should be written off as a total failure at the age of 16.

The noble Baroness, Lady Blatch, raised questions about the interaction of those provisions with the New Deal. Those two areas of policy cover different age groups. This legislation covers 16 and 17 year-olds; the New Deal is for 18 to 24 year-olds who have been long-term unemployed and claiming jobseeker's allowance for a minimum of six months and in many cases many months longer. The design of the New Deal--its gateway and assignment to personal advisers--recognises that long-term unemployed 18 to 24 year-olds need in-depth advice so that they may resolve any personal problems, set realistic occupational goals and overcome the many barriers that they face in relation to both self-confidence and motivation.

Another key difference relates to geographic spread. I understand that 16 and 17 year-olds in employment without training are far more geographically dispersed than the New Deal client group, who are much more heavily concentrated in relatively few areas. I understand also that an extensive survey of employers--small as well as large--undertaken by Manchester TEC showed that current employment of 16 and 17 year-olds was not expected to be affected adversely by the New Deal.

The Government recognise that there is a potential issue here concerning the interaction of two important commitments. But we believe that that will be a local rather than national issue. However, we shall monitor closely the impact of the New Deal and will be able to assess its possible interaction with other policies. Of course that is important, but it is quite right to give priority to those young people aged 18 to 24 who have been unemployed for more than six months. But we wish to ensure that that does not put at risk the opportunities for 16 and 17 year-olds, a group who have the benefit of other opportunities such as modern apprenticeships, national traineeships and other government supported work-based training. But it is a group also which does not always take up those opportunities.

We are looking for a culture in which all young people in work, or not, stay on in learning to acquire the skills and qualifications which will make them

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employable in the long term. The focus of the New Deal is on unemployed 18 to 24 year-olds. The focus of this legislation is on very young employees aged 16 and 17. If we successfully help the 16 and 17 year-olds to achieve the skills and qualifications they need, there should be fewer who, a few years later, will need the help of initiatives like the New Deal. That is part of the focus of these measures.

The noble Baroness, Lady Blatch, has focused on the burdens and cost to businesses. And it is true that we have estimated that the compliance costs to businesses will be between £60 million and £130 million per year. The noble Baroness quoted the higher of those figures. But the House might wish to note that this will vary very much according to the rate of take-up on the part of young people; the time the young people are away from fully productive work and undertaking appropriate education or training; and on any absence cover that may or may not be required.

But it is essential to stress that those costs must be seen against the benefits to employers and to the economy at large of a more highly trained workforce. I am sure that the Committee will agree that training and education are an investment. They are a vital investment for the country's future prosperity, for improved business performance and for giving young people the skills they need in our rapidly changing labour market. The returns on the investment for employers are the higher skill levels of their current young employees and a better trained national workforce from which to recruit in the future.

It is only fair that employers contribute significantly to the investment, given the returns to them from better trained young employees. Wages, of course, will be a matter for the young person and the employer concerned. Time for study or training gives employers the opportunity to raise the skills of their young employees: and, as we have set out in the regulatory appraisal, the Government will also contribute significantly to the overall education or training costs.

The costs of not investing in young people's skills are high, both in terms of the economic costs to businesses and the costs to young people and society from denying some young people the opportunity to improve their skills and employability. And a lack of investment in our young people is felt even more acutely by small employers.

The noble Baroness, Lady Blatch, made quite a lot of the position of small businesses. Small firms need better trained employees to sustain and improve their business performance. Many small firms already invest in training for their young employees. All small firms should seek to invest in training, rather than expect to benefit from training paid for by other small firms. That seems only fair.

The legislation represents an entitlement for the individual. Many young people work for small firms and it is essential that they are covered by the legislation: to do otherwise would carry the risk of denying these young people the opportunity to improve their skills and longer-term employability.

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Sustainable employment in today's rapidly changing markets for goods and services requires more competitive businesses, with higher productivity levels and higher added value. This, in turn, requires more skilled, adaptable and flexible employees. Better education and training are vital to young people's employability in both the short and long term. Unemployment among 20 to 24 year-olds qualified to Level 2 is 40 per cent. lower than those with no qualifications.

It is surely better to give young people the opportunity to acquire now the skills they need for their longer term employability rather than have to seek to do it later and have intermediate years of young people moving in and out of short-term jobs and unemployment, with no long-term prospects to get the skills and qualifications they need.

On Second Reading, several noble Lords mentioned a letter that they had received from the CBI. I, too, have seen the letter and I should like to quote from the opening paragraphs of the briefing note:

    "The CBI fully shares the Government's ambitious objectives for raising 16 to 18 year-olds' education and skills levels, and we have consistently argued that under 18 year-olds who have left full-time education must continue to receive opportunities for structured education, leading to nationally recognised qualifications. We therefore fully support the idea of a 'right to study' and accept the obligations this places on employers".

I am delighted to have received this enthusiastic support from the nation's employers. I do not know whether today the noble Baroness intends to press her opposition to Clauses 23 and 24 standing part of the Bill. However, I should point out to Members of the Committee that, if they were to decide that these provisions should not stand part of the Bill, the scope of the Bill would be fundamentally altered. The Long Title of the Bill would need to be reworked to reflect the narrower coverage of the legislation.

In practical terms, Members of the Committee should understand that the effect would be that when the Bill comes to be debated in the other place the change in scope would prevent any debate, or tabling of amendments, on "time to study". There would be no opportunity for those in another place to consider this vitally important manifesto commitment. An unelected Chamber would be dictating the topics upon which the elected Government could legislate. That is clearly an issue of some constitutional importance. Therefore, I urge Members of the Committee to consider most carefully the ramifications of their stance on this point.

At present, young people aged 16 and 17 have a very wide range of opportunities to help them to gain qualifications at Level 2, if they are not already there. If they enter into employment, we are determined that they, too, should have the chance to carry on learning. That is why the right to study was a manifesto commitment; that is why we are legislating; and that is why the success of Clauses 23 and 24 is so important.

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I therefore urge Members of the Committee to agree that Clause 23, as amended, and Clause 24 stand part of the Bill.

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