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Baroness Sharp of Guildford: My Lords, from these Benches, I rise to welcome the orders. We strongly believe that these training boards have successfully run the levy system for the past 20 years. They want the system and we believe that it is appropriate. Labour in the construction industry is casual and flexible, moving from one employer to another. Training is vitally important if we are to maintain standards on construction sites and we do not want the quality of labour to be let down by the bad employers.

That said, I want to ask the Minister several specific questions. First, he said that his colleague in another place would soon meet representatives of the Learning and Skills Council. Can he say what they see as the future relationship between the construction industry training board and its engineering counterpart and the Learning and Skills Council?

Secondly, can he indicate what the relationship with the University for Industry would be? What would be the relative role in relation to the training boards? Thirdly, I cannot find in the order an indication of its length or why it is being brought before us. Is it that it comes before the House on an annual basis or is it because there are changes in the rate of levy?

Finally, has the department monitored the order? This is the only industry which uses the levy grant system, the others being phased out by the

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Conservative government in the 1980s. It would be useful to know how far the Government believe it has been successful in raising standards of training in the industry. It is not an industry in which the levels of workmanship are always high; the ordinary citizen suffers greatly from many cowboy operators within it. There are also considerable skill shortages in the industry. On London building sites all construction industry skills are considerable. Given that, one wonders whether the system has been monitored in any way by the department. Has it thought of other ways of raising skills?

Lord Davies of Oldham: My Lords, I am grateful for the general affirmation of support from both noble Baronesses and I recognise that we need to cover some points of detail. In answer to the noble Baroness, Lady Seccombe, the number of appeals to tribunals is limited. Out of 59,000 companies registered with the board, thirty-five cases were referred to employment tribunals. Any reference to a tribunal indicates friction and the fact that people are less than satisfied with their treatment, but that is a healthy record and should allay concerns about the operation of the order.

The noble Baroness also asked whether the levy drove companies into receivership or bankruptcy? Neither of the boards is aware of any such cases. Without analysing in detail the accounts of every insolvent firm it would be impossible to determine exactly what part the levy demand played on the overall solvency. Boards want to accept payments in instalments from companies with cash flow problems--it is not the business of the boards to see companies go out of existence. There is therefore an understanding of the problems. These are industries in which there is great fluctuation of employment and many small companies. That is why there is also a significant exemption for the very small companies. We are dealing with industries which are fluctuating, fragile and seasonal and it is a tribute to the boards that for more than 20 years they have worked with a degree of success.

The noble Baroness, Lady Sharp, asked several specific questions. If the boards propose to impose a levy of 1 per cent or more, the primary legislation obliges the orders to be tabled before the House after full consultation with the industry and subject to the affirmative procedure. The orders will not come before the House annually if the levies are below 1 per cent. However, they are frequently before the House because the levy is more than 1 per cent. That is the reason why the orders are being moved tonight.

The noble Baroness asked an interesting question about the relationship between the industrial training boards and the two new actors on the scene; the Learning and Skills Council, which is of the greatest significance given its substantial budget, and the University for Industry and Learning Direct. There is a great deal of scope for co-operation. Learning Direct in particular is seeking to make substantial progress

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with the small firms who are not within the framework of the levy for the boards. They are too small and fall into the exempt category.

As to the broader issue of the relationship with the Learning and Skills Council, I am aware that for many months very substantial consultations have taken place on the establishment of that body. I am not in a position to give a detailed outline of progress, but there is not the slightest doubt that the success of that body will depend on the way in which it relates to the industrial training boards, national training organisations and every other category of training supply, skills enhancements and learning in the country. The noble Baroness probably signals the need for a much more substantial debate once the Learning and Skills Council comes into operation on 1st April.

I hope that I have answered most of the questions raised by noble Baronesses opposite. I commend the order to the House.

On Question, Motion agreed to.

Industrial Training Levy (Engineering Construction Board) Order 2001

Lord Davies of Oldham: My Lords, I formally move the order.

Moved, That the draft order laid before the House on 21st December 2000 be approved [3rd Report from the Joint Committee].--(Lord Davies of Oldham.)

On Question, Motion agreed to.

Pig Industry Restructuring (Capital Grant) Scheme

8.12 p.m.

Baroness Hayman rose to move, That the scheme laid before the House on 1st February be approved [6th Report from the Joint Committee].

The noble Baroness said: My Lords, the two Motions standing in my name on the Order Paper deal with specific policy developments in the pig sector which arose in the course of the past year. The Pig Industry Development Scheme 2000 (Confirmation) Order 2001 relates to last year's outbreak of classical swine fever in East Anglia where pig producers whose herds did not have the disease but which were none the less caught up by the movement controls found themselves faced with extremely difficult animal welfare problems. To help deal with these problems the Government introduced the unprecedented Pig Welfare (Disposal) Scheme. In the period between 31st August and 31st December 2000 that scheme cost the taxpayer over £14 million, of which £9 million was direct payment to producers.

As part of the agreement to change the payment structure of the scheme, the industry agreed to provide a top-up payment to those making use of it by way of a levy fund. The Government welcomed the recognition

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that, while movement controls affected the few, their introduction to control the spread of disease was of benefit to the whole industry.

The only mechanism available to introduce a compulsory levy on pig producers is a Meat and Livestock Commission development scheme under the Agriculture Act 1967. The aim of the scheme is to build up an industry fund to be used to provide advice, services, facilities and financial assistance to pig producers to assist them in the prevention and/or limitation of the spread of an outbreak of pig disease. It will be collected in the form of an industry levy, set initially at 20p per pig slaughtered, although the order allows a maximum of £1 per pig to be charged. The first use of the fund will be the industry top-up to the payments already made under the Pig Welfare (Disposal) Scheme to producers faced with CSF movement restrictions.

The scheme is a state aid and, therefore, requires clearance by the European Commission before introduction. While we believe that that clearance will be forthcoming very shortly, as the two-month deadline for Commission comments has now passed, in accordance with the rules we have written to the Commission to say that we intend to introduce the scheme in mid-March when it has passed all its parliamentary procedures.

It will take some time to build up the fund to a level whereby payments to producers can be made. To help remedy that, my right honourable friend the Minister of Agriculture, Fisheries and Food is prepared to look at authorising a loan from the Aujeszky's Fund to the development scheme fund to allow small but nevertheless useful upfront payment to be made. The industry supports such a move, and a formal request from the board of the Aujeszky's Fund has been received and is being considered.

The scheme is for Great Britain only. The SI requires the consent of the Scottish Executive, which is recorded in the SI, and the approval of the Welsh Assembly. The Assembly has approved the scheme, subject to EU state aid clearance.

The House will understand that the complexities surrounding a development scheme have resulted in it taking quite some time to reach this advanced stage in the procedures. Nevertheless, we are now able through the scheme to offer assistance to pig producers, and it is being introduced at the behest of the industry as a whole.

The other statutory instrument with which we are dealing relates to the Pig Industry Restructuring Scheme. This scheme was developed in close consultation with the National Pig Association, the Meat and Livestock Commission, the British Bankers Association and the Central Association of Agricultural Valuers in recognition that the pig sector had faced considerable difficulties in the previous two years and those difficulties needed to be addressed.

Like a number of other components of the action plan for farming, the Pig Industry Restructuring Scheme is a state aid and as such needs formal clearance by the European Commission before it can

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be introduced. To obtain that clearance, the Commission was formally notified of the PIRS on 30th March 2000 and clearance was finally forthcoming on 13th December 2000. The clearance process took much longer than we had hoped, but it remains the case that it was achieved in a little over nine months. I believe that the average time for clearance of restructuring schemes by the Commission is nearer 18 months.

Turning to the details, the Pig Industry Restructuring Scheme consists of two elements: outgoers, which offers aids to those pig producers who wish to end all involvement in pig production permanently, and ongoers, which offers aids to those pig producers who wish to restructure their business to make it more viable in the long term. Assistance under ongoers will be provided in the form of an interest rate rebate on loans linked to an agreed business plan. Pig producers who remain in production and have a commercial loan linked to an agreed business plan are eligible to apply.

The order that we are debating tonight is narrow in focus, in that it allows for the agreed business loan on which an interest rebate will be paid to be used for capital projects. There is a second order passing through this House under the negative procedures which allows the loan to be used for non-capital projects. The outgoers element of the PIRS is a non-statutory scheme.

The Pig Industry Restructuring Scheme is open to applicants from all over the United Kingdom. The devolved administrations have been working closely with MAFF to implement the scheme, and all applications from throughout the UK will be judged equally and on their own merits. The order covers England only. Following devolution, Wales, Scotland and Northern Ireland are proceeding with their own legislation in parallel.

The Government are totally committed to the Pig Industry Development Scheme and the Pig Industry Restructuring Scheme and are determined to make them work. They provide much needed financial support to an industry which has suffered terribly over the past few years and demonstrate our commitment to the UK pig industry. They are particularly relevant perhaps in the difficult days that the whole of the livestock industry faces at the moment. I commend the orders to the House. I beg to move.

Moved, That the scheme laid before the House on 1st February be approved [6th Report from the Joint Committee].--(Baroness Hayman.)


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