CBI says long-term jobless should be compelled to train

THE CONFEDERATION of British Industry yesterday suggested that the long-term unemployed be required to undertake training or forfeit benefit payments after warning that the hardcore jobless total could remain above 2.5 million for most of this decade.

The proposal will form the centrepiece of a CBI paper on unemployment to be delivered to Gillian Shephard, Secretary of State for Employment, in the next few weeks.

Details of the paper and the training initiative, known as 'Skillfare', were discussed yesterday at the CBI's monthly council meeting in London.

Under the initiative all 18 to 24-year-olds unemployed for more than a year would be paid their benefit plus a little extra to enrol for a 'competence-based' training scheme through their local training and enterprise council. Those not prepared to take up the offer might lose their entitlement to benefits.

Howard Davies, the director- general of the CBI, later disputed suggestions that this meant in effect that the long-term unemployed would be compelled to

undertake training of some sort.

But he said the Government would be perfectly justified in taking a 'pretty rigorous approach' to whether claimants were eligible for benefits.

The CBI's proposals are designed to tackle the increasing blight of long-term unemployment and what it regards as the deeper structural problems in the labour market.

Earlier the council meeting had been told that unemployment was likely to remain at between 2.25 million and 2.5 million for much of this decade, even if higher economic growth succeeded in reducing the jobless total from the present level of more than 3 million.

Meanwhile, Lord Prior, the chairman of GEC, launched a broadside against the Government's record on jobs, saying that the lack of competitive export finance had been a significant factor in the decline of UK manufacturing and employment.

Giving evidence to the Commons Select Committee on Employment, Lord Prior also said that the Government must act to achieve a more regular pattern of manufacturing employment. 'We lurch from having a lot of skilled people to a desperate shortage. If I was the Government I would be looking very strongly to the scarce skills - including manufacturing engineers and software engineers,' he said.

The GEC chairman told MPs that high insurance rates demanded by the Export Credits Guarantee Department, and the relatively low amounts available, put British companies at a disadvantage compared with rivals overseas.

He also complained that the amount available in Britain for 'aid and trade' programmes in developing countries was much smaller than in many European countries, Japan and America.

'Although this is money for aid, it is enormously important for British industry to get established in capital projects in these countries,' he said.

John Lippitt, GEC's director for group exports, said that manufacturing would run into difficulties in the next two decades unless skills at all levels improved.