House of Commons

Wednesday 11th May 2011 Commons Chamber

Wednesday 11 May 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 11th May 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 11th May 2011 Commons Chamber

The Secretary of State was asked—

[Jenny Willott (Cardiff Central) (LD)]

1. What discussions she has had with the Secretary of State for Work and Pensions and the Welsh Assembly Government on proposals to transfer responsibility for council tax benefit to local authorities.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend the Secretary of State and I have had discussions with Cabinet colleagues and Welsh Assembly Government Ministers on a range of issues, including welfare reform.

[Jenny Willott]

As the Minister may know, there is a great deal of concern that people in Wales will struggle to get council tax benefit if the Welsh Assembly refuses to devolve the benefit to local authorities in Wales, as the Government are doing in England. Will he work with the Welsh Assembly Government and the Department for Work and Pensions to ensure that council tax benefit is devolved to either all local authorities across the UK or none?

[Mr Jones]

Localisation of council tax benefit is part of the wider package of reform set out in the Welfare Reform Bill, which will ensure that work always pays. We are indeed committed to full consultation with the Welsh Assembly Government on the devolved implications of the reforms. The Assembly Government will no doubt wish to consult when they have developed their own policy options, but ultimately it is for them to decide how the delivery arrangements are put in place in Wales.

[Mary Macleod (Brentford and Isleworth) (Con)]

2. What progress has been made on the Government’s commitment to undertake a process similar to the Calman commission on devolution funding; and if she will make a statement.

[Stephen Mosley (City of Chester) (Con)]

4. What progress has been made on the Government’s commitment to undertake a process similar to the Calman commission on devolution funding; and if she will make a statement.

[Andrew Selous (South West Bedfordshire) (Con)]

12. What progress has been made on the Government’s commitment to undertake a process similar to the Calman commission on devolution funding; and if she will make a statement.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

Following the yes vote in the referendum on further powers, we have started to consider the scope and form of such a process. Now that the elections to the National Assembly have taken place I intend to discuss the process with other stakeholders and the First Minister. May I also take this opportunity while I am at the Dispatch Box to offer our congratulations to Carwyn Jones, who is currently considering forming the Welsh Assembly Government and has the largest party in the Welsh Assembly?

[Mary Macleod]

Our priority in Wales and elsewhere right now is to ensure that the deficit is under control. However, now that Ministers in the Welsh Assembly have more power, is it not right that they should be financially accountable for those powers as well?

[Mrs Gillan]

I thank my hon. Friend for that question. There is indeed a body of thought that believes that with the power to spend public money should come accountability, and this is certainly a matter that we will be looking at. However, this is not something that should be entered into in haste, and I intend to engage fully with the Welsh Assembly Government on the matter.

[Stephen Mosley]

The national border between north-east Wales and Chester is almost unique in that it passes through an urban area, with large numbers of people travelling in both directions every day for health care, education and employment. Will my right hon. Friend ensure that the remit of the review specifically includes looking at the impact of devolution on such cross-border services?

[Mrs Gillan]

I thank my hon. Friend that question too, because he knows that we in the Wales Office have been concerned about cross-border issues and their impact on health in particular. I cannot guarantee that that will fall within the scope of the Calman-like process, but I assure him that I will take into consideration any representations that he or any other Member wishes to make to the Wales Office.

[Andrew Selous]

Does my right hon. Friend agree that reforming the thoroughly discredited Barnett formula to take a fair and transparent needs-based approach for the whole of the United Kingdom would help Wales and England?

[Mrs Gillan]

The Government’s commitment to a wider review of the Barnett formula is clear, but stabilisation of the public finances comes first. I think we all recognise that the Barnett formula is coming to the end of its life, but we will consider a change to the system only once we have put the public finances in order. There was a good reason why the predecessor Government to this one made no changes to the Barnett formula in 13 years. It is not something that can be achieved in haste, only to be regretted at leisure.

[Paul Murphy (Torfaen) (Lab)]

May I ask the Secretary of State to take great care when she deals with these issues? As she knows, there is really no appetite in Wales for tax-varying or tax-raising powers—the resource base is not there—and even if there were, we would have to have a referendum in Wales for such powers, as happened in Scotland.

[Mrs Gillan]

I am grateful to the right hon. Gentleman, because I always remember sitting and listening to him give evidence to, I believe, a House of Lords Committee looking at the Barnett formula. He said that there was no case for reviewing it because it had served well. The fact that the last Government repeatedly ruled out reforming the Barnett formula means that any reforms must be looked at carefully. He is quite right that giving tax-raising powers would involve another referendum, which is something that this Government would look at carefully, because I am not sure whether Wales has an appetite at the moment for another referendum.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Calman process in Scotland had a wider remit than merely to consider funding arrangements. Given the Labour party’s opposition to decoupling Westminster and National Assembly constituency boundaries, would it not make sense to base the make-up of the fifth National Assembly on 30 regional and 30 constituency Assembly Members?

[Mrs Gillan]

That is a very interesting thought. Hon. Members are well aware that the Parliamentary Voting System and Constituencies Act 2011 broke the link between Assembly constituencies and parliamentary constituencies. I have agreed that we need to look carefully at the implications of having constituency boundaries relating to different areas and regions for UK and Assembly elections in Wales. I am taking the hon. Gentleman’s question as a recommendation that we have 30 first-past-the-post seats and 30 elected on a list system, and I will look seriously at that suggestion.

[Mr Peter Hain (Neath) (Lab)]

Does the Secretary of State think that the Calman process will be as beneficial for the Tories in Wales as it was in Scotland last Thursday? Will she also congratulate Carwyn Jones on polling Labour’s highest ever Welsh Assembly vote, which included taking Cardiff North—about the safest Conservative seat in Wales—and beating the Liberal Democrats in Cardiff Central and Plaid Cymru in Llanelli? Will she ensure that if any financial concessions or flexibilities are offered to Scotland by her Government, as is now being suggested, Wales will receive equivalent benefits to compensate for the horrendous cuts that the Government are imposing on Welsh citizens?

[Mrs Gillan]

The right hon. Gentleman is on dangerous ground here. I do not want to engage in any sort of triumphalism or tribalism, to use the words of Carwyn Jones. The right hon. Gentleman will note that I came to the Dispatch Box to congratulate Carwyn, because I have worked well with him over the past 12 months. May I just remind him that the Conservative vote went up to 25% in Wales and the number of our seats went up to 14? We are now the second largest party in the Assembly, and the right hon. Gentleman had better think again before he starts taking us on.

[Mr Speaker]

Order. I just remind the House that we are on the subject of devolution funding.

[Mr Hain]

I know that the hon. Members for Cardiff North (Jonathan Evans) and for Vale of Glamorgan (Alun Cairns) will disagree with the Secretary of State on that, because Labour won the Assembly seats in their constituencies with thumping majorities. If, as the Chief Secretary to the Treasury suggested yesterday, Alex Salmond is to get the borrowing powers that he is demanding, as well as the ability to reduce corporation tax, how will increasing borrowing fit with her Government’s preoccupation with reducing the deficit at all costs? Furthermore, is not her Conservative-led Government playing into the hands of separatists by promoting separate economies?

[Mrs Gillan]

I would never play into the hands of separatists; I am a devoted Unionist, as I hope the right hon. Gentleman is. Before the Assembly elections, he and his party consistently boasted that they would win a majority in Wales, and I consider failing to do so a significant failure for him and his leader. On the question of separatism, however, he will know that my door is always open, and I would hope that we could join in common cause on this matter. He and I, and his party, support the United Kingdom and I want to ensure that all steps taken by the Wales Office will reinforce the United Kingdom. I see him nodding, and I am grateful for his acknowledgement that he would join me in that cause. I am sure that we can work well together on that.

[Mr Philip Hollobone (Kettering) (Con)]

3. What mechanisms her Department has used to identify efficiency savings since May 2010.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

Since taking office, we have explored a number of ways to find efficiency savings and we have achieved significant savings, particularly on rail travel and hotel accommodation.

[Mr Hollobone]

Is it the Minister’s intention that the Wales Office should be the most efficient Department in Whitehall? If so, how confident is he that that can be achieved?

[Mr Jones]

We are certainly moving in that direction. Since taking office, we have introduced a rule that no Minister or official should travel first class. That has saved us nearly £92,000 and more than halved our rail costs this year. We have achieved 36% savings under a new Government contract for booking hotel accommodation, and we have halved the number of ministerial cars. From this month, we will no longer have the Jaguar in Wales that the Secretary of State’s predecessor ordered.

[Jonathan Evans (Cardiff North) (Con)]

5. What recent discussions she has had with ministerial colleagues and the Welsh Assembly Government on big society initiatives in Wales.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

I have discussed a range of issues concerning the big society in Wales with the Minister for civil society, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd) and the Welsh Assembly Government Minister for social justice. I am due to have a further discussion concerning the big society bank with my hon. Friend next week.

[Jonathan Evans]

I am grateful to my hon. Friend for that response. Will he share with us his anticipation of when the big society bank will be up and running in Wales?

[Mr Jones]

We are certainly moving in that direction. My hon. Friend the Minister with responsibility for civil society announced this week that the big society bank is being established; £200 million of moneys in that bank will be available on a wholesale basis for charities in Wales.

[Jessica Morden (Newport East) (Lab)]

Many women in Wales who are approaching state pension age are presumably part of the Government’s big society in that they have reduced their hours to undertake caring responsibility for elderly parents and grandchildren. They now find themselves having to work up to two years longer with little time to prepare. Does the Minister understand how betrayed these women feel by this dereliction of public duty?

[Mr Jones]

I am sure that the hon. Lady will also recognise that the economic legacy we inherited from Labour means that it is absolutely necessary that everybody should play their part in contributing to economic recovery. That means, sadly, that there will have to be an extension of the retirement age. I hope that she will explain that to her constituents.

[David Rutley (Macclesfield) (Con)]

6. What discussions she has had with ministerial colleagues and the Welsh Assembly Government on improving broadband infrastructure in rural Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have discussed improving broadband infrastructure across Wales with ministerial colleagues and Welsh Assembly Government Ministers. Indeed, I arranged and hosted a meeting between the broadband Minister and the former Deputy First Minister to discuss joint working.

[David Rutley]

I would like to congratulate my right hon. Friend on the important work she is doing in this vital area. Many studies, including those by the Massachusetts Institute of Technology, the OECD and the World Bank, have highlighted how broadband immeasurably enhances economic growth. In my own local authority of Cheshire East, faster broadband is a key element in the economic development of rural communities. Will my right hon. Friend tell the House what assessment has been made of the economic benefit of enhanced broadband access in rural Wales?

[Mrs Gillan]

I thank my hon. Friend for his kind remarks. I know that he has a great deal of expertise in this area. An independent estimate in 2009 projected that superfast broadband in the UK could create up to 600,000 jobs and add £18 billion to GDP. We are working closely with the Department for Culture, Media and Sport and the Welsh Assembly Government to ensure that Wales benefits fully. Based on the population share, we estimate up to 30,000 new jobs being created and a possible £900 million of additional wealth being generated in Wales.

[Mrs Siân C. James (Swansea East) (Lab)]

I am sure the Secretary of State will join me in congratulating Virgin Media on rolling out in Swansea this week the fastest broadband speeds in the UK. It is not just a rural problem. We have heard about the economic case. How quickly can we roll out these speeds to other parts the Principality?

[Mrs Gillan]

I was particularly pleased that we were able to announce on 10 February £10 million of funding to support the extension of superfast broadband to Pwllheli. I know from working with colleagues in the DCMS and the Welsh Assembly Government that more announcements on this front will be made later this year. The hon. Lady is quite right on this issue, and I am particularly keen because broadband take-up in Wales is at 64% in comparison with 71% in the rest of the UK. Broadband take-up in rural Wales, however, is in excess of that in urban Wales, so I am very pleased to welcome Virgin Media’s announcement.

[Mr Mark Williams (Ceredigion) (LD)]

The Secretary of State will be aware not only that rural areas have slower and less reliable broadband, but that our constituents in those areas have to pay a lot more for it. Ofcom is currently investigating lowering the price that BT can charge internet service providers for wholesale broadband because it feels that prices are too high in rural areas. Will she make representations to Ofcom on behalf of people in rural areas to ensure that they, as well those in urban areas, secure a fair deal?

[Mrs Gillan]

I had some difficulty in hearing the whole of the hon. Gentleman’s question, but I should be happy to meet him to discuss the problems of rural broadband. He has always been a well-known champion of rural areas, and I am sure that if anyone can help me to make a case for bringing down costs in those areas, it will be him.

[Mr Speaker]

Order. I remind the Secretary of State that she must face the Chair. However, she was not alone in her difficulty. Far too many noisy private conversations are taking place in the Chamber in which I have no interest whatsoever. I must tell the hon. Member for Broadland (Mr Simpson) that I want to hear Mr Hywel Williams.

[Hywel Williams (Arfon) (PC)]

7. What discussions she has had with ministerial colleagues and the Welsh Assembly Government on cross-border implications of the provisions of the Health and Social Care Bill.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend the Secretary of State and I have discussed the Health and Social Care Bill with ministerial colleagues and with Welsh Assembly Ministers.

[Hywel Williams]

We do not impose competition on the health service in Wales. What steps is the Minister taking to ensure that patients in north Wales are protected from the potential chaos caused by competition in the health service in England?

[Mr Jones]

As the hon. Gentleman knows, the problem has existed for some time. I remember sharing a platform with him to discuss the issue of the Walton centre. Decisions affecting the NHS in Wales are rightly a matter for the Welsh Assembly, but this Government are committed to working with Ministers in Cardiff and Whitehall when health care provision for Welsh patients is under discussion.

[Roger Williams (Brecon and Radnorshire) (LD)]

Many of my constituents depend on services commissioned from Hereford hospital for the meeting of their medical needs. Will the Minister meet me, and a representative of the Department of Health, to establish how that commissioning will proceed in future?

[Mr Jones]

I think that that would be premature at this stage, but I am pleased about the decision to refresh the existing cross-border health services protocol for a further year, until 31 March 2012.

[Owen Smith (Pontypridd) (Lab)]

The Minister will be aware that one of the other destabilising effects of the Health and Social Care Bill is the abolition of the National Patient Safety Agency, whose job was to monitor patient safety in England and Wales. In England its job will be taken over by the national commissioning board, but what provision has been made for transferring its responsibilities in Wales to ensure patient safety? If the job is given to the National Assembly, will extra funds be made available for the purpose?

[Mr Jones]

As the hon. Gentleman will know, the existing cross-border protocol is supported by an annual transfer of funds—currently £5.9 million—to the Assembly Government, and an additional payment of some £12 million was made in the last two financial years. These matters will have to be discussed with Welsh Ministers once the new Assembly Government has been established.

[Robert Halfon (Harlow) (Con)]

8. What estimate she has made of the number of jobs to be created in Wales as a result of electrification of the Great Western main line to Cardiff.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

The electrification of the Great Western main line will create thousands of job opportunities in the UK manufacturing and service supply chains, and Welsh companies will be well placed to take advantage of those opportunities.

[Robert Halfon]

Does my right hon. Friend agree that the project will be good for jobs, not just in Wales but throughout the United Kingdom? Will she make contracts available to the many first-class English construction and engineering firms, such as those in Harlow, many of which are small businesses?

[Mrs Gillan]

I was very pleased when we were able to announce the electrification, which will indeed help to provide jobs not only in Wales but in other parts of the United Kingdom. I hope that there will be many opportunities for businesses in my hon. Friend’s constituency, as well as throughout Wales, to be involved in the process. Certainly the Wales Office will do all that it can to facilitate that.

[Nick Smith (Blaenau Gwent) (Lab)]

Good transport links are vital to economic success. Will the Secretary of State undertake to deliver electrification of all the valley lines, including the line between Ebbw Vale and Cardiff?

[Mrs Gillan]

As the hon. Gentleman will know, we identified electrification of the valley lines as a key priority as part of the development of the business case for electrification. As he will also know, I have said that I stand ready to work with the new Welsh Assembly Government and the Department for Transport to facilitate the electrification of those lines. I shall certainly examine the case for electrification of the Ebbw Vale line, which he has made to me before.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

9. What recent representations she has received from tourism operators in Wales on Government financing for tourism promotion.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend the Secretary of State and I have met representatives of the Welsh Tourism Alliance and North Wales Tourism to discuss a range of issues affecting the tourism industry, and we have both visited a number of tourism-related businesses across Wales in the last year.

[Mr Llwyd]

As the Minister will know, the tourism sector in Wales is extremely important for the economy of Wales. He will also know that a large part of the sector comprises small and medium-sized enterprises—such firms employ about 90% of the people of Wales. What initiatives is he pursuing to expand this all-important sector?

[Mr Jones]

The right hon. Gentleman is entirely right. The Welsh tourism industry is worth some £3.5 billion to the Welsh economy. Responsibility for promoting tourism in Wales resides with the Welsh Assembly Government, of course, but VisitBritain has established a new £100 million overseas tourism marketing fund, with £50 million being provided by the Department for Culture, Media and Sport. That marketing programme is due to launch to consumers this month and aims to deliver an extra 4 million visitors to the UK, many of whom will, of course, visit Wales.

[Mr Llwyd]

I thank the Minister for that reply, but may I press him on one point? He and the Secretary of State were lobbied on the need for a cut in value added tax on tourism services so that we can compete fairly with our friends in Ireland and France, for example. Please will they engage with the Treasury on this matter?

[Mr Jones]

The position with regard to value added tax was set out amply in the Budget.

[Steve Baker (Wycombe) (Con)]

10. What recent assessment she has made of the future of the nuclear industry in Wales.

[Graham Evans (Weaver Vale) (Con)]

11. What recent assessment she has made of the future of the nuclear industry in Wales.

[David T. C. Davies (Monmouth) (Con)]

13. What recent assessment she has made of the future of the nuclear industry in Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

Nuclear energy is an important component of our future energy security and carbon reduction plans. It will therefore continue to have a future in the UK’s energy policy, and I hope that a new build at Wylfa will play a key role in creating new jobs in Wales.

[Steve Baker]

Will my right hon. Friend join me in lamenting the record of the Labour party, which failed to promote the latest generation of nuclear technologies and thereby put our energy security at risk?

[Mrs Gillan]

As my hon. Friend knows, this Government have said that nuclear could be part of the future energy mix, and he will know personally of my attitude towards Wylfa continuing as a nuclear power station, with new generation at the site.

[Graham Evans]

Does the Secretary of State agree that new power plants in Wales are good news for energy security, industry and job creation?

[Mrs Gillan]

That is an easy question for me to answer. I welcome the work that has been done to enable Wylfa to continue generating low-carbon electricity for a further two years, and I am delighted that the site has been chosen as a future new site for generation. [Interruption.]

[Mr Speaker]

Order. Let us have a bit of hush in the Chamber for the Chairman of the Select Committee on Welsh Affairs, Mr David T. C. Davies.

[David T. C. Davies]

In light of the comments of the Committee on Climate Change, which has said that nuclear represents the most cost-effective way of delivering carbon-free electricity, will the Secretary of State support the plant in Anglesey as a means of protecting future generations of homo sapiens?

[Mrs Gillan]

Once again, this is a very easy question to answer, but I nevertheless thank my hon. Friend for asking it. There is now a growing consensus of opinion right across the board in Wales that Wylfa in Anglesey would be an excellent site for future nuclear generation.

[Nia Griffith (Llanelli) (Lab)]

Given that an enormous amount of time and money has been put into studying tidal energy in the Severn estuary, what efforts is the Secretary of State making to take forward the plans for that and ensure they do not get lost?

[Mrs Gillan]

The hon. Lady knows that throughout the years when I have been both shadow Secretary of State and now Secretary of State for Wales, I have been very supportive of all the work that has been done, particularly on tidal lagoons, as well as in examining the case for the Severn barrage, which has, of course, been put to one side for the time being. I can assure her, businesses in her constituency and our research institutes that we will always consider that option for future generation in and around the Welsh coast.

[Paul Flynn (Newport West) (Lab)]

In addition to the fear of a Welsh Fukushima, the cost of new nuclear is such that the only new nuclear power station in the world is already three years late and £2 billion over budget. Why does the Secretary of State not concentrate on the immense power of the tides in Wales, including the second highest rise and fall of tide in the world, and give us energy that is clean, safe and eternal?

[Mrs Gillan]

The hon. Gentleman has been consistent, but he has asked questions on this matter of the Minister with responsibility for energy, my hon. Friend the Member for Wealden (Charles Hendry), and of my right hon. Friend the Prime Minister, and he knows very well that the Government’s view is that tidal energy has a part to play in our energy programmes of the future, but so, too, has nuclear.

The Prime Minister was asked—

[Mr Philip Hollobone (Kettering) (Con)]

Q1. If he will list his official engagements for Wednesday 11 May.

[The Prime Minister (Mr David Cameron)]

I am sure that everyone across the House of Commons will want to join me in paying tribute to David Cairns, the Member of Parliament for Inverclyde, who, very sadly, died on Monday, aged just 44. I will always remember him as someone who was very quick-witted and sharply intelligent, and as someone who was an extremely kind and compassionate man. Not many people can claim to have come to this House only because legislation was passed to allow them to come here, but as a former Catholic priest that had to happen in his case, and the House was better off for that happening. I am sure that everyone will join me in sending our deepest condolences to his partner, his family and his many friends, and I know that his constituents, like many others, will miss his tireless work very much indeed.

This morning, I had meetings with ministerial colleagues and others and, in addition to my duties in this House, I shall have further such meetings later today.

[Mr Hollobone]

May I associate myself with the Prime Minister’s remarks? David Cairns was a great parliamentarian and a good friend.

On 10 February, this House voted overwhelmingly, by a majority of 10:1, to continue the ban on giving prisoners the vote, since which time the European Court of Human Rights has effectively ignored the will of this House. It still insists that the law be changed and has given the Government until October to bring forward proposals. Will Her Majesty’s Government bend their knee to the European Court or will they stand up and insist that on this issue Britain will not budge?

[The Prime Minister]

My hon. Friend is absolutely clear that the House of Commons has given a very clear view that prisoners should not have the vote and my own view is that prisoners should not have the vote. I think that we should do two things. First, we should be trying to reform the European Court, as we are doing; my right hon. and learned Friend the Justice Secretary is leading this charge to make sure that it does pay more attention to national judgments and national Parliaments. But at the same time we will have to consider our response to this issue, and I want it to be as close as possible to the clearly expressed will of the House of Commons.

[Edward Miliband (Doncaster North) (Lab)]

I want to start by paying tribute to our much-loved colleague David Cairns. His death is a tragedy at such a young age, and we send our deepest condolences to his partner, Dermot, and to the whole of his family. He was what any Member of Parliament would aspire to be in this House: he was warm, principled and independent-minded, even if that was not always comfortable for the leadership of our party. He fought for the causes that he believed in, he was Labour through and through, he will be missed throughout the labour movement, and I know that he will be missed throughout this House as well.

A year into his Government, how would the Prime Minister rate his handling of the NHS?

[The Prime Minister]

I think that the most important thing we have done is increase spending on the NHS, which is something that has happened only because of the commitment we made at the last election. So an extra £11.6 billion will be going into the NHS because of the decisions we have taken. In addition, there is a £200 million cancer drugs fund, so that people get the drugs they need and, for the first time in a long time, the number of doctors is growing very quickly and the number of bureaucrats is actually falling.

[Edward Miliband]

In case the Prime Minister did not realise, it takes seven years to train a doctor, so I would like to thank him for his congratulations on our record on the NHS. I have to say to him, if it is all going so well, why have we seen the number of people waiting for diagnosis rising again this morning? More than 10,000 people are waiting to get their tests, three times the number it was a year ago. I also noticed that he did not mention his top-down reorganisation when he talked about his handling of the NHS. Let me remind him of what he said just a month ago. He said:

“I’ve been involved in designing these changes way back into opposition with Andrew Lansley”.

Will he therefore confirm that the failing NHS plans are not the Health Secretary’s fault, but his?

[The Prime Minister]

The Leader of the Opposition himself has said that no change is not an option. We are seeing the usual empty opposition. I am glad that he mentioned waiting times, because, two weeks ago, at that Dispatch Box, he said that waiting times

“have risen month on month under this Government”.—[Official Report, 27 April 2011; Vol. 527, c. 169.]

That is not true. The figures, which he had at the time, show that in-patient waiting times fell from 9.1 to 9 weeks. For out-patients, they went down from 4.8 weeks to 3.5 weeks, the lowest for a year. It is important when we come to this House and make statements that are inaccurate that we correct the record at the first available opportunity.

[Edward Miliband]

rose—

[The Prime Minister]

Hold on. Would he like to take this opportunity to correct that specific mistake?

[Edward Miliband]

No, waiting times are rising. I notice that the Prime Minister did not even take the opportunity to take responsibility for the health policy. Where is the Health Secretary, after all? Where is he? It is becoming a pattern with this Prime Minister. This morning, in the papers, we saw the Universities Minister being dumped on for his tuition fees policy; we see the Schools Secretary being dumped on for his free schools policy; and the poor Deputy Prime Minister just gets dumped on every day of the week. The Prime Minister must believe that something has gone wrong with his health policy, because he has launched his so-called listening exercise. Can he reassure doctors, nurses and patients that it is a genuine exercise?

[The Prime Minister]

Of course it is a genuine exercise. Let me be clear: the right hon. Gentleman is wrong on the waiting times. The figures are clear and I shall place them in the Library of the House of Commons. Waiting times went down last month and he ought to have the guts and the courage to correct the record when he gets it wrong. He asks about my Health Secretary, and perhaps I can remind him of what his health spokesman has said. He said it this week. He said the general aims of the reform are sound. That is what he said. He said earlier, “I have no problem with the broad aim of the changes,” and went on to praise them. When I look at this, it all reminds me of Labour 30 years ago. They had a leader with the ratings of Michael Foot and he was being undermined by someone called Healey, as well.

[Edward Miliband]

We read in the papers about a PMQs makeover, but I have to say that it did not last very long. Flashman is back. Of course, the thing is that Flashman does not answer the questions, so let me ask the right hon. Gentleman again. Can he explain why the chief executive of the NHS, Sir David Nicholson, wrote to NHS staff on 13 April, after the Prime Minister’s so-called pause had begun, and said that they should “press on with implementation” of the plans? That does not sound like a pause to me.

[The Prime Minister]

I can absolutely guarantee that there will be significant and substantial changes to the reforms because we want to get them right and because we want to guarantee an NHS that is free at the point of use and available based on need rather than the ability to pay. Unlike the Labour party, which is now cutting the NHS in Wales, this Government will put more money into the NHS.

The right hon. Gentleman talks about what is in the newspapers today, but he ought to be looking at the GPs representing 7 million patients who wrote to the papers today to say that this is evolution, not revolution, that it is good for patients, and that it will help some of the “most vulnerable” people in our community. I have to accept that some of the recent cultural references—Michael Winner, Benny Hill—are all a little out of date, but I must say that when I look at the right hon. Gentleman, who told us that the fight back would start in Scotland before going down to a massive defeat, he rather reminds me of Eddie the Eagle.

[Edward Miliband]

Let me congratulate the Prime Minister on getting 42 GPs to write to The Daily Telegraph supporting his plans. The Royal College of General Practitioners represents 42,000 GPs and it says—the Prime Minister said that he would protect the NHS, so I would have thought he would be embarrassed by this—that his plans will cause “irreparable damage” to the core values of the NHS. I do not know whether he even knows about the letter that David Nicholson sent, but the truth is that the Prime Minister’s pause is nothing more than a sham.

[The Prime Minister]

Why does not the right hon. Gentleman for once in his life actually deal with the substance of the reform? The truth of the matter is that he has said, quite rightly, that no change is not an option. We believe that no change is not an option and that is what the overwhelming amount of people in the NHS feel. Let us look at the elements of the reform: GP fundholding started under Labour and is now being improved under this coalition; foundation hospitals started under Labour and are now being taken forward by this coalition; payment by results—so that we make sure that we get good value for money in the NHS—started under Labour and is now being carried forward under this coalition. That is the point. He should be seriously engaging in how we make sure we have a strong NHS for all our people for the future. Instead, we have empty opposition, which got him absolutely nowhere last week.

[Edward Miliband]

In a phrase that the Prime Minister is familiar with, “Calm down, dear.” Calm down. Does not his mess on the NHS tell us all we need to know about this Prime Minister? He breaks his promises, he does not think things through and when the going gets tough, he dumps on his colleagues. On a day when waiting lists are rising, this confirms what we always knew about the Tories—you cannot trust the Tories on the NHS.

[The Prime Minister]

What we have seen is just the product of empty opposition and weak leadership. It is this Government who are putting more money into the NHS; it is this Government who are putting money into the cancer drugs fund; it is this Government who are seeing the number of doctors and nurses grow while the number of bureaucrats shrinks. It is this party that is defending the NHS and it is Labour in Wales that is cutting the NHS. That is the truth. There is only one party you can trust on the NHS and it is the one that I lead.

[Hon. Members]

More, more!

[Mr Speaker]

Order. There is far too much shouting in the Chamber and the Secretary of State for Education should not be shouting his head off—it is a very bad example to set to the nation’s schoolchildren.

[Sir Paul Beresford (Mole Valley) (Con)]

Q2. I have a slightly calmer question, Mr Speaker. I am sure that the Prime Minister is aware that the fatal and incurable human brain disease variant Creutzfeldt-Jakob disease is transferred through prions, blood products and surgical instruments. Recently, Professor Collinge and others at the Medical Research Council prion unit have produced an effective prion-deactivation instrument soak and a blood test for variant CJD, both of which could and should protect the public. Unfortunately, there has been a small financial hiccup in progressing those breakthroughs. Does the Prime Minister accept the importance of preventing this despicable disease, particularly for future generations, and will he meet me and Professor Collinge to discuss potential progress?

[The Prime Minister]

My hon. Friend raises an important point about a very dangerous disease and I would certainly be happy to arrange a meeting, probably between him and Professor Sally Davies, the chief medical officer, to discuss this. He will know that there have been various research studies into the impact of variant CJD on the population. We do not yet have all the answers that we need. Since 1990, there has been funding of the national CJD research and surveillance unit to the tune of £18 million, and through the Medical Research Council we have committed to providing £32 million to the national prion unit between 2010 and 2014. That should be the money that gets the answers that he so badly wants.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

The Protection from Harassment Act 1997 has served its purpose well over the years, but recently there has been a huge increase in incidents of cyber-stalking, sometimes with devastating consequences. Will the Prime Minister, in due course, meet me and a small delegation of Members from across the House who are concerned about the issue?

[The Prime Minister]

I am happy to hold that meeting with the right hon. Gentleman. We are trying to make sure that right across the board we take cybercrime seriously because there is a huge growth in it. Often it is about trying to take people’s money or about espionage, but the point that he makes about harassment is also important. We need to make sure that the strategy dealing with cyber takes full account of what he says.

[Bob Russell (Colchester) (LD)]

Q3. The Labour Government took Britain to the brink of bankruptcy. The gap between rich and poor widened, and nearly 4 million children were left living below the poverty line. Last month, the coalition Government cut income tax, liberally helping millions of people, but I have to ask the Prime Minister this: if we are all in this together, what is he going to do about the obscenity of 1,000 multimillionaires boosting their personal wealth by 18% in the past year?

[The Prime Minister]

One of the things we absolutely will do—and we have put in the money to make sure it happens—is crack down on the tax evasion that takes place so widely in our country. The Treasury has put money into that campaign to make sure it happens. The hon. Gentleman makes a good point. Because of our coalition Government, we have lifted 1 million people out of income tax and, at the same time over the past year, we see exports up, private sector jobs up, the economy growing and borrowing down—all radically different from what would have happened if we had listened to the recipe from the Labour party.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

On the subject of empty opposition, the Prime Minister castigated his predecessor for not proscribing the radical Islamist organisation, Hizb ut-Tahrir, when the previous Prime Minister had been in post for a week. The right hon. Gentleman has now been in post for a year. I would like to give him the opportunity to castigate himself.

[The Prime Minister]

It is very kind of the right hon. Gentleman to give me that opportunity. We are clear that we must target groups that promote extremism, not just violent extremism. We have proscribed one or two groups. I would like to see action taken against Hizb ut-Tahrir, and that review is under way.

[Tony Baldry (Banbury) (Con)]

Q4. What estimate has my right hon. Friend made of the comments this week by the director general of the CBI on the Government’s deficit reduction plan?

[The Prime Minister]

In its history the CBI has not always supported action to tackle deficits and to get on top of bad public finances, but on this occasion it is four-square behind the action that the Government have taken. When asked what would have happened if we had followed the ideas of the Labour party, the CBI said:

“The economy would be weaker because of the impact of a loss of confidence in the markets.

If we did not have a clear programme to reduce the deficit over this parliament we would have seen a significant rise in our interest rates, and growth would have been eroded rather more than it has been”.

That is the view of the CBI—the experts at the heart of British industry, who say that one cannot trust Labour with the economy.

[Mr Wayne David (Caerphilly) (Lab)]

Last week we had an excellent result in Wales for the Labour party. Given the Prime Minister’s general election manifesto commitment, and the commitment of the Liberal Democrats, what progress has he made so far on reforming the Barnett formula as it applies to Wales?

[The Prime Minister]

We will look closely at a Calman-like approach for Wales. If those results are the hon. Gentleman’s definition of success, I suppose he will be a happy man. He should spend a little time studying what his colleague, the hon. Member for Glasgow South (Mr Harris), said about Labour’s performance in Scotland:

“Labour deserved to lose. We insulted the intelligence of our voters by peddling a myth”.

That is what happened. I know the hon. Member for Caerphilly (Mr David) does not want to hear about Scotland, but he ought to think about it.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Q5. Conservative-controlled Shropshire council has managed to make savings of £30 million while protecting front-line services. That has been achieved partly by a reduction in salaries for councillors and senior managers. Will the Prime Minister join me in congratulating Shropshire council on this achievement, and is it not a shining example for other councils up and down the country to follow?

[The Prime Minister]

My hon. Friend makes a very good point, which is that up and down the country councils have been able to reduce back-office costs, bureaucracy and the pay of chief executives and crack down on council allowances and all those things in order to protect front-line services. It has happened in Shropshire and many other parts of the country and it is an example that should be followed.

[Mr Tom Watson (West Bromwich East) (Lab)]

The Prime Minister told me that the hacking inquiry should go where the evidence leads. It leads to the parents of the Soham children and to rogue intelligence officers. He knows of more sinister forms of cybercrime. Lord Fowler is calling for a judicial inquiry. Will the Prime Minister please order one now, before the avalanche of new evidence forces him to do so?

[The Prime Minister]

I think there is a real problem with interfering, which that would effectively do, with the criminal investigations that are taking place. The most important thing is to allow the criminal investigation to take place and, as I have said to the hon. Gentleman before, make sure that the police and the prosecuting authorities can follow the evidence wherever it leads. That is the most important thing that needs to happen.

[Robert Halfon (Harlow) (Con)]

Q6. Does my right hon. Friend agree that the story of Robin Hood has parallels with a Government who are taxing bankers to build the big society, City fat cats to fund tax cuts for lower earners and oil barons to cut fuel prices? Will he invite disaffected Opposition Members to join a Government who help the poor and take away from the rich?

[The Prime Minister]

My hon. Friend makes a good point. It was this Government who introduced a bank levy and used the money to help some of the poorest in our country. It is this Government who have taxed the oil companies at a time when the oil price is so high in order to cut petrol duties and help millions of people in our country. What a contrast with the Labour party; the action it took against the banks was to give Fred Goodwin a knighthood.

[Liz Kendall (Leicester West) (Lab)]

The Prime Minister knows about the real pressures faced by London’s emergency services, including those they will face in the run-up to the Olympics next year. What risk assessment has he made of the London ambulance service’s decision to cut 20% of its work force, including 560 front-line NHS staff?

[The Prime Minister]

I have discussed with London’s emergency services some of the challenges they face, not least the Olympics and the terrorist threat. All organisations in this country are having to make savings and efficiencies and try to concentrate on the front line. That is what is happening in the police and elsewhere. The point about ambulance services and the NHS is that we are protecting spending on the NHS. There was, frankly, only one party that proposed that at the last election. If we had not proposed that, it would not be happening. We listened to the Labour party, including the former health spokesman, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), who spoke earlier, and they were going to cut the NHS. That would have affected the London ambulance service like everything else.

[Julian Sturdy (York Outer) (Con)]

Q7. Does the Prime Minister share the shadow Chancellor’s view that the Government should adopt the Obama Administration’s pace of deficit reduction?

[The Prime Minister]

My hon. Friend makes a very good point. For months the Opposition have been telling us that we should follow the American approach. It now emerges that the Obama deficit reduction programme will go exactly as fast, as quick and as deep as the proposals in the UK, so one of the planks of the good ship Balls has been completely holed below the waterline.

[Sammy Wilson (East Antrim) (DUP)]

Q8. May I associate myself with the Prime Minister’s tribute to David Cairns? David served with distinction as a Minister in Northern Ireland during the period of direct rule, and many people there have great respect for the work he did in Northern Ireland.The UK’s contribution to the bail-out for eurozone countries that find themselves in financial difficulties amounts to half the savings made in the deficit reduction plan in the UK this year, a fact that will stagger and appal many people in this country. Can the Prime Minister give an assurance that the UK will make no further contributions to the bail-out of those countries that have got into financial difficulties—

[Mr Speaker]

Order. I think we have the thrust of it and are grateful.

[The Prime Minister]

I congratulate the hon. Gentleman on his re-election last week to the Northern Irish Assembly. The point that I would make is this: the only money that Britain has lent directly is to the Republic of Ireland, and I think it is actually in our national interest and, I would say, in the interests of Northern Ireland that we do not see a collapse in the economy in the Republic. That was a difficult decision but the right decision to make.

The other contingent liabilities on Britain flow through the finance mechanism in Europe, which we did not support the establishment of and have negotiated to get rid of when the new arrangements come in in 2013, and we will do everything that we can to safeguard Britain’s finances.

[Mr Laurence Robertson (Tewkesbury) (Con)]

Q9. Can the Prime Minister confirm that, if any part of the United Kingdom decided to leave the Union, although part of the national debt would follow them, a continuation of subsidy from the remaining British taxpayers would not?

[The Prime Minister]

Of course I can confirm that, but I believe that everyone in this House who believes in the United Kingdom and the future of the United Kingdom should join together and make sure that we fight off the threat of the idea of breaking up our United Kingdom. I do not believe that we will achieve that by threats, or by saying that small countries cannot make it; I believe that the way we will make that argument is by saying that being part of the United Kingdom is good for Scotland, and that Scotland being part of the United Kingdom is good for the rest of the United Kingdom. I want us to make an uplifting and optimistic case for why we are better off together. That is what all of us who support our Union should do, and I for one will certainly play my part.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Q10. Now that the referendum is out the way—incidentally, nobody asked for it and nobody wanted it, except for the Liberals, or Bob, Rag and Ragtail here—[Interruption.] I did not want it—[Interruption.] I did not want it. Yet, Prime Minister, a survey done a few weeks ago said that 70% of the British people wanted a referendum on Europe. It is in the Liberal manifesto, although that does not mean much, and more than half your Back Benchers want a referendum as well. When are the people going to get the referendum on Europe?

[The Prime Minister]

The hon. Gentleman says that the referendum on the alternative vote was something nobody wanted, but I have to remind him that it was in his manifesto. I know that it was a pretty turgid document, and he might want to have a word with the author about how to improve things next time, but I would recommend reading the manifesto before you stand for the party.

[Caroline Nokes (Romsey and Southampton North) (Con)]

Q15. Given the high demand from the public to attend the consultation events on the future of children’s cardiac services in Southampton, will my right hon. Friend the Prime Minister join me in calling for additional events so that the maximum number of people in the wider Southampton area can participate?

[The Prime Minister]

I certainly agree with my hon. Friend, and in the review of child cardiac services—this affects my constituency as well as hers, and people are talking about how Southampton and Oxford should work together—I think that there should be as many events as people want to go to, as much transparency as possible and, if specialisation is necessary, as much explanation as possible about why it is necessary and why it is good for patients. In the end that must be the test of everything we do in the NHS.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Q11. We know what a number of the right hon. Gentleman’s Ministers think about the adoption of the fourth budget proposed by the Committee on Climate Change, but what does he think about it? Will he press for the adoption of that budget when the Cabinet meets to discuss it, as we are reliably informed it will?

[The Prime Minister]

We will respond in full to the House on the fourth carbon budget. It is very important that we get that right. We have strict timetables and targets laid out in terms of our carbon reduction, and this Government are committed to making sure that we meet those.

[Mr Speaker]

Closed question, I call Mr Richard Bacon.

[Mr Richard Bacon (South Norfolk) (Con)]

Q12. What discussions he has had with the Minister for the Cabinet Office and the Secretary of State for Health on the performance of Computer Sciences Corporation in installing Lorenzo software within the national programme for IT in the NHS.

[The Prime Minister]

We are very concerned that the NHS IT projects that we inherited were of poor value for money, an issue we raised repeatedly in opposition. According to the National Audit Office, even in 2008, delivery of the care records system was likely to take four years more than planned. Since coming into government, we have reviewed the projects with the intention of making the best of what we have inherited. In part, as a result of our work, the Government have cut £1.3 billion from the cost of the national programme for IT in the NHS, including planned savings of at least £500 million from Computer Sciences Corporation.

[Mr Bacon]

Does the Prime Minister agree that the NHS IT programme will never deliver its early promise, that in particular CSC has failed with Lorenzo and that, rather than squandering £4.7 billion that is still unspent, the solution is to negotiate a way forward that frees up billions of pounds for the benefit of patients?

[The Prime Minister]

I agree with my hon. Friend that we are absolutely determined to achieve better value for money. Let me reassure him that there are no plans to sign any new contract with Computer Sciences Corporation until the National Audit Office report has been reviewed and until the Public Accounts Committee meetings and the Major Projects Authority reviews have taken place. The Department of Health and the Cabinet Office will examine all the available options under the current contract, including the option of terminating some of, or indeed all of, the contract.

[Sheila Gilmore (Edinburgh East) (Lab)]

Q13. Will the Prime Minister investigate why his much-trumpeted Work programme will be delivered in Scotland by private companies with only an 8% voluntary sector component—or does his big society not apply in Scotland?

[The Prime Minister]

While I accept that the figure the hon. Lady gives for the lead number of voluntary bodies is right, if she looks at the details of who in Scotland is going to be providing the voluntary sector projects—the subcontracting arrangements—I think she will see bigger and better opportunities for the voluntary sector. If she is saying that we should be doing even more to open up public services to voluntary and other providers, then absolutely yes—and perhaps she can persuade her Front Benchers to make it Labour policy too.

[Tom Brake (Carshalton and Wallington) (LD)]

One year on after the coalition was formed, would the Prime Minister like to update the House on the progress that has been made in tackling the economic and financial wasteland that was left to us by the previous Government?

[The Prime Minister]

The point I would make to the hon. Gentleman is that not only are exports growing and manufacturing growing, but we have 400,000 more people in work than there were a year ago—[Interruption.]

[Mr Speaker]

Order. I apologise to the Prime Minister. There is far too much noise in the Chamber. I heard the question; I want to hear the Prime Minister’s answer.

[The Prime Minister]

The fact is, Mr Speaker, that Labour Members do not want to hear what this Government have achieved over the last year, because it is this Government who have cut the deficit, who capped immigration, who froze the council tax, who have linked the pension back to earnings, who have taken a million people out of income tax, who have reformed welfare, and who have created more academy schools in 12 months than that lot managed in 12 years. That is a record, with much more to do, that I think the coalition can be proud of.

[Dr William McCrea (South Antrim) (DUP)]

Q14. Last week the widow of Captain Mark Hale, who died serving in Afghanistan, was elected to the Northern Ireland Assembly as a member of the strengthened Democratic Unionist party team. Brenda is a leading campaigner to have the military covenant enshrined in law. Will the Prime Minister recognise the public support for the campaign by Brenda and other folks, and will he give our heroes the support that they deserve?

[The Prime Minister]

First, I congratulate Brenda Hale on her election. It is excellent that someone who is going to speak up for the military and for their families is going to have a seat in the Northern Irish Assembly, particularly when Ireland, both north and south, has given so much to Britain’s armed forces over so many years. I do want to see a very strong armed forces covenant set out clearly, debated in this House, and clearly referenced in law. I want to see us make bigger steps forward on the things we do to help our armed forces’ families. We have made some steps over this last year, doubling the operational allowance, giving more money to schools where forces children go, and helping in ways including health and scholarships for those whose parents have sadly fallen in battle. But I believe there is more we can do, and this Government will not let up in making sure that we have an armed forces covenant we can be proud of.

[Mr Speaker]

Order. We now have a statement from the Foreign Secretary. I appeal to Members who are leaving the Chamber to do so quickly and quietly so that we can hear the statement from Mr Secretary Hague.

Future Diplomatic Network

Wednesday 11th May 2011 Commons Chamber

12:33

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

With permission, Mr Speaker, I will make a statement on Britain’s future diplomatic network.

Our embassies and high commissions are the essential infrastructure of our country’s influence overseas and of our economic recovery. They provide an early warning system for threats to our security and to wider peace, and assist British nationals in times of crisis. They support our economy and help British businesses to access markets abroad. They promote our values of democracy and political freedom across the world, and help to craft vital international agreements from nuclear proliferation to climate change. We could not do without them for a single day.

I promised in our first week in office as the coalition Government that there would be no strategic shrinkage of Britain’s diplomatic influence overseas under this Government, and that instead we would strengthen Britain’s diplomatic network. Today I want to set out how we will achieve this while saving money overall.

The spending review settlement for the Foreign Office requires a 10% real-terms reduction in the budget. That is, of course, on top of years of unplanned cuts after the last Government stripped the Foreign and Commonwealth Office budget, more than half of which is spent in foreign currencies, of its protection against exchange rate fluctuations in 2007, just before the sharp fall of sterling. In the last two years before the general election, the Foreign Office experienced a 14% real-terms reduction in its budget, resulting in the sudden loss of personnel and training in many embassies. The Foreign Affairs Committee has done much to sound a warning about these matters, and I have been unable to find any other major Foreign Ministry in the world that raises and reduces its diplomatic activity on the basis of movements in exchange rates. I promised to put an end to that ludicrous situation, and the protection is now being restored under a new foreign currency mechanism agreed with the Treasury. That means that the Foreign Office can once again plan properly for the future.

Fortified by that ability to plan, we will find £100 million per year of administrative savings by the end of the Parliament, on a carefully planned basis. We will save over £30 million by simplifying procedures, removing bureaucracy and ensuring that administrative work overseas is done by locally recruited staff or in regional centres. We will save over £34 million a year from our annual estates and security costs, for instance by moving to a single site in London. We will reduce our annual staff costs by £30 million a year by 2014 by reducing to a minimum the number of junior staff posted overseas from London, by removing or reorganising their positions or recruiting locally. We will do so in consultation with staff to mitigate the impact on individuals and their careers. Those savings are not easy but they are essential. They will allow us to live within the necessary financial constraints and to provide the diplomatic network we need for the future.

We will now reverse the previous Government’s policy of closing embassies and reducing our diplomatic presence in key parts of the world, as a result of which 45 UK posts were closed after 1997, including six in Africa, seven in Latin America and eight in Asia, and the overall number of UK posts in the world fell by more than 30.

We will embark on a substantial reinvigoration of the diplomatic network to make it ready for the 21st century, to expand our connections with the emerging powers of the world, and to signal that where Britain was retreating, it is now advancing. The case for a strengthened network is utterly compelling. The only way to increase our national prosperity and secure growth for our economy is through trade, and our embassies play a vital role in supporting British business. The emerging powers are expanding their diplomatic networks. Turkey is opening many new posts and Brazil already has more posts in more countries in Africa than Britain has. Given that political influence will follow economic trends in the world and increasingly shift to the countries of the south and east over the long term, we need to plan ahead and create the right network for the future.

Although we are working closely with the new European External Action Service and ensuring that talented British candidates enter it, there is not and will never be any substitute for a strong British diplomatic service that advances the interests of the United Kingdom. We can never rely on anyone else to do that.

We will therefore significantly increase our presence in India and China, the world’s two emerging superpowers. We will strengthen our front-line staff in China by up to 50 officials and in India by 30, and will work to transform Britain’s relationship with their fastest growing cities and regions. We will also expand substantially our diplomatic strength in Brazil, Turkey, Mexico and Indonesia. We will add diplomatic staff in the following countries and places: Thailand, Burma, South Korea, North Korea, Taiwan, Mongolia, Malaysia, Nigeria, Angola, Botswana, Chile, Argentina, Colombia, Panama, Peru, Pakistan, Vietnam and the Philippines.

We will maintain the strength of our delegations to multilateral institutions, such as the United Nations in New York and Geneva, NATO, and the European Union in Brussels, all of whom have done an outstanding job in recent months. We will maintain our active and substantial embassy in Washington and our network of consulates general across the United States, which remains our indispensable ally in defence, security, foreign policy and commerce.

We have a strong network in the middle east and north Africa, on which the demands have been so great in recent months. Although there is no need to open new posts there, we have frequently and substantially reinforced our diplomats there in recent months and have sent a special mission to Benghazi. Over the coming months, we will review the need for additional deployments.

This expansion does come at a price. In Europe, there have already been significant savings in our diplomatic network. I am determined not to hollow out our embassies there, but we will need to find further savings in recognition of the fact that only three of the world’s 30 richest cities in total gross domestic product terms are in Europe, and the fact that our embassies there still cost more than elsewhere. So although we will fully maintain our embassy network across Europe, we will also find additional resource for our expansion elsewhere in the world from the network of subordinate posts in Europe outside capital cities. We will withdraw diplomatic staff from some subordinate posts, while retaining UK Trade & Investment and consular staff in many cases. That will lead to there being fewer subordinate posts in European countries.

With those additional resources we will be able to open new British embassies, including in places where they had previously been closed. We will reopen the embassy in El Salvador, closed in 2003, as part of a major diplomatic advance in Latin America after years of retreat. We will open a new consulate general in Brazil at Recife, which will be one of approximately seven new consulates general that we will open in the emerging powers. We will open a new embassy in strategically important Kyrgyzstan, and another in July in the new nation of South Sudan.

I always doubted the last Government’s decision to close the embassy in Madagascar, to which I know many Members of all parties objected. I am delighted to say that we will reopen that embassy as soon as the local political situation is right. I will also consider upgrading our political office in Côte d’Ivoire to a full embassy. I have made provision within our budget to open a new embassy in Somalia when the security situation has improved sufficiently. It is vital for our security that we are present in the horn of Africa, so I have made that decision now so that we will be ready to open the new embassy as soon as possible.

In addition to those new embassies, I give the House a commitment today that whereas the previous Government shut 17 sovereign posts in their time in office, we intend to retain all 140 existing British embassies and high commissions throughout the life of this Parliament. Other savings will be found as we reduce, over time, our diplomatic footprint in Iraq and Afghanistan, which is very large relative to the rest of the network. As the nature of the UK military involvement in Afghanistan changes, we will redeploy staff elsewhere.

The strength of our embassies is a signal to the world of our engagement and our role in international peace and security. They are the platform for the strong bilateral relations that are increasingly vital in a networked world, and indispensable to success in multilateral diplomacy. Our decisions will mean that our reach when British companies need assistance or British nationals are in danger will go further and be stronger. That is why the maintenance, extension and strengthening of our global diplomatic network is a central objective of this Government and will be a priority for the use of Foreign and Commonwealth Office funds over the coming years.

Although I have increased programme funding in the FCO to £139 million this year, our financial constraints and the priority that I am placing on retaining and improving our diplomatic network for the future mean that it will have to fall in future years, although it will remain above £100 million. I am sure it is right to give priority to long-term relations and the reversal of Britain’s strategic shrinkage.

This development of our network should be seen alongside the diplomatic excellence initiative that I have instigated in the FCO, which began six months ago. That places a renewed emphasis on policy creativity, in-depth knowledge of other nations, geographic and linguistic expertise and the enhancement of traditional diplomatic skills in a manner suitable for the modern world. A combination of strict savings in administrative spending, reductions in our subordinate posts in Europe and the other savings that I have set out will allow us, for the first time in many years, to mount a diplomatic advance. For the first time in decades, our diplomatic reach will be extended, not reduced. That is the right use of public money, and it is the right course for Britain in this century.

This Government will work to build up Britain’s influence in the world, to forge stronger bilateral relations with emerging giants and some old allies that have been neglected for too long, and to seize opportunities for prosperity and advance democratic values. We will maintain and enhance the Foreign and Commonwealth Office as a central Department of State leading an ambitious and distinctive British foreign policy, and we will expand and use Britain’s diplomatic network to the very full, in the interests of the United Kingdom and in support of the wider peace and security of the world.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I thank the right hon. Gentleman for advance sight of his statement. I first join him, of course, in paying tribute to the work of all Britain’s diplomats around the world. Their work often goes unrecognised here at home, but Britain’s prosperity and influence would be hugely diminished were it not for their considerable efforts.

The Government are right to assess where best to deploy the Foreign and Commonwealth Office’s finite resources. In particular, I welcome the decision to expand Britain’s diplomatic presence in China. UK exports to China were worth £5.5 billion in 2007—by 2009, that had grown by more than 40% in cash terms—and 17,000 British nationals are permanently resident in China. Next week, I will visit Britain’s embassy in Beijing. I am conscious that it is playing a hugely valuable role in supporting the promotion of Britain’s values and interests in the world’s most populous country.

The FCO should not, of course, be exempt from the need to reduce the deficit, but in making cuts to a relatively small budget that has a global impact, there is a need for particular care and clarity. The Foreign Secretary spent a great deal of time in his statement criticising Foreign Office expenditure decisions under the previous Government. Will he therefore confirm that it was under his leadership of the FCO that it was fined £20 million by the Treasury for its attitude to

“getting money out of the door”

before the end of the financial year?

The Foreign Secretary placed a great deal of emphasis on trade in his statement, but will he set out in greater detail the position on the headcount and resourcing of UKTI in the years ahead?

The Foreign Secretary briefly mentioned cuts in programme expenditure from the current level of £139 million to a figure, he said, that would be retained above £100 million. Perhaps, in the spirit of candour, he will share a little more of his thinking on which programmes he is contemplating cutting to make the reduction of which he spoke. He has already announced real-terms reductions in programme spending on counter-terrorism, and a £2 million cash reduction in spending on counter-narcotics and rule-of-law programmes in Afghanistan. Will he therefore confirm that the decisions announced today will mean no reduction in the levels of staffing dedicated to counter-terrorism and counter-narcotics, either in Afghanistan or across the whole diplomatic network?

The right hon. Gentleman is right to highlight the fact that as we draw down our forces from Afghanistan, greater resources will be freed up. However, given the repeated and urgent calls from both sides of the House for a diplomatic surge to match the military effort, will he set out precisely what will happen and when in relation to FCO staffing in Afghanistan for the remainder of this Parliament?

There is much to study in today’s announcement, and the Opposition will scrutinise in detail the specific changes in each country. I welcome the Foreign Secretary’s re-announcement of his commitment to ensuring that there is no strategic shrinkage of Britain’s influence under this Government, but such shrinkage cannot be prevented through diplomats alone. Many commentators saw the Government’s initial plan—to step back from foreign affairs and ensure that a quiet period on the world stage took place, reinforcing a domestic austerity agenda—as a profound error. Perhaps for the pre-Tahrir square era, such a plan seemed appropriate, but the Government’s passivity and lack of ambition for a bilateral, mercantilist approach to foreign policy has been found badly wanting by recent events in north Africa.

Will the Foreign Secretary therefore provide the House with more detail on Britain’s staffing of those multilateral institutions of which he spoke so warmly? Ours is the one country that can operate simultaneously through the EU, the Security Council, NATO and the Commonwealth. Will he therefore clarify what will happen to staffing in each of those institutions?

Is the Foreign Secretary really telling the House that, after the seismic political changes that have swept north Africa and the middle east in recent months, with protests from Morocco in the west to Iran in the east, the review makes no fundamental changes to the diplomatic distribution of assets in the region? That is what the Opposition heard him say, but many will think that that is unsustainable. I suggest that he commits now to a more fundamental review of diplomatic coverage in the region in the months ahead.

The review must not be a means by which the Government once again choose bilateralism over multilateralism, and trade over wider influence, and thereby, however inadvertently, sleepwalk into strategic shrinkage.

[Mr Hague]

I welcome some of the right hon. Gentleman’s comments, including his tribute to the diplomats who serve all Governments loyally and well, as, of course, they will continue to do in the future. I also welcome his welcome for the expansion of our presence in China; it is the largest of all these expansions of our diplomatic presence in the world. Relations with China have been built up and improved under successive Governments, and I welcome the fact that he is visiting it next week. This trend has been continued across parties.

I wish, however, that the right hon. Gentleman had felt able to welcome some of our changes to the previous Government’s policies, particularly the reopening of embassies they closed. The embassy in Côte d’Ivoire was closed not only under the previous Government, but while he was a Foreign Office Minister. Trade offices in Brazil were closed, which I hope Labour Members will now recognise was a short-sighted mistake given the expansion of the Brazilian economy, and posts were withdrawn from Latin America, which was a mistake he chose not to dwell on in his questions. Furthermore, consulates general were closed in Frankfurt, Stuttgart and elsewhere across Europe. Taken together, the closure of more than 30 posts under the previous Government was a fundamentally mistaken policy that we are now changing. The withdrawal of the overseas pricing mechanism, which led to so many unplanned and rather chaotic Foreign Office spending reductions, was also a mistake, and it is time that Opposition spokesmen acknowledged that and said, as I said when I was in opposition, that in the future there will be no changes to the Foreign Office budget according to exchange rate fluctuations.

All those things were missing from the right hon. Gentleman’s response to my statement. He asked about various other details this year. The Treasury has not fined the Foreign Office, which now has a much better relationship with the Treasury than it did under the previous Government. Last night my right hon. Friend the Business Secretary and I launched the new UK Trade & Investment strategy and the FCO charter for business. Like all parts of government, UKTI has to manage with expenditure reductions and will have to produce more for its budget, which, like that of the Foreign Office over time, will fall by 17%. However, it will be able to do more with its budget by running it well.

Our programme spending decisions this year have already been set out in detail, but obviously what happens in future years will depend on how the situation develops. I am simply sounding a cautionary note today that some of those programmes may have to be reduced. However, it is far too early to make decisions about that. Furthermore, reductions in Afghanistan are not immediate. I am merely foreshadowing changes, given that we have said that by 2015, our troops will not be engaged in combat operations, or in anything like the numbers they are now. It follows that there will be diplomatic changes as well.

The strength of our diplomatic presence in multilateral institutions will not be affected. As I said in my statement, our diplomatic team have done a great job. However, it is also time for the right hon. Gentleman to recognise that success in multilateral institutions often comes from strong bilateral relations, as well as a great diplomatic team in those multilateral institutions, which is one reason why we place such emphasis on bilateral relations with many of the leading world powers. In many cases, those relations need to be restored. I do not know where he got the idea that the Government planned to step back from foreign affairs and think the world peaceful, or that we planned to be passive. After all, I keep finding myself going to countries that no Foreign Secretary visited during the entire 13 years of the previous Government, whether they be rather troublesome spots such as Yemen or old allies such as Australia. The passivity was in the previous Administration, rather than the current one.

[Chris Bryant (Rhondda) (Lab)]

I went to Australia!

[Mr Hague]

Neither the Australians nor anyone here thought that the hon. Gentleman was the Foreign Secretary, even if he thought so.

Of course we will have to keep under review our diplomatic strength in the middle east, but our diplomats have done a great job. We often reinforce them, as we have done in recent months, and we will need to do so again in the coming months. However, we have sovereign posts in the key nations concerned, so it is not necessary to introduce new ones in the countries directly affected so far by the Arab spring. Ours is a real plan for engagement in the world, with the right level of resources and the right arrangements with the Treasury, and with a vision of where we need a diplomatic presence in the future. There was no evidence of any of those things under the previous Government.

[Richard Ottaway (Croydon South) (Con)]

May I give a warm welcome to every aspect of this statement? To be opening new embassies now is highly symbolic and sends an important signal to the rest of the world. Can my right hon. Friend assure me that in the focus on trade and consular activity, there will be equal emphasis on diplomatic skills, which many feel have shrunk in recent years, and which he seems to be addressing in the diplomatic excellence initiative? On a more practical note, what percentage of the extra overseas posts will be recruited locally?

[Mr Hague]

As my hon. Friend knows, some of what I announced reflected the work and opinions of him and his colleagues on the Foreign Affairs Committee, and concerns expressed by the Committee under his chairmanship and that of the hon. Member for Ilford South (Mike Gapes). Those have been well-founded concerns, such as over the loss of the exchange protection and so on. My hon. Friend is right that alongside and accompanying our emphasis on trade goes the important diplomatic skills that I feel have been undervalued in recent years in the Foreign Office. It is important for diplomats to have in-depth knowledge of their countries, geographic and historical expertise built up over time and the diplomatic skills of influencing events in other nations, not just of internal management. Those things are all being attended to in the diplomatic excellence initiative launched by the Foreign Office. I shall illustrate the proportion of UK-based and locally engaged staff: I envisage, for instance, that about one third of the additional staff in China will be UK-based, and that about half in the emerging powers outside China and India—in countries such as Brazil, Turkey, Mexico and Indonesia—will be UK-based.

[Mr Jack Straw (Blackburn) (Lab)]

In welcoming the Foreign Secretary’s statement, may I say that it would have been all the stronger had he not found it necessary to parody and seek comprehensively to trash the record of the previous Government? I accept that the budget under the previous Government was insufficient. I also accept, and thought at the time, that the Treasury’s decision in 2007 to impose this foreign exchange regulator was utterly irrational, verging on the mad—[Interruption.]

[Chris Bryant]

He was not Foreign Secretary then.

[Mr Straw]

No, I was Leader of the House—just so that we are clear.

I am delighted, therefore, that the Foreign Secretary has restored that protection. However, I hope that on reflection he thinks about some of his other criticisms, which were wholly misplaced, including the suggestion that we—I and other previous Labour Foreign Secretaries, and my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander)—were not as committed as him to the quality of traditional diplomacy, which is of fundamental importance. On that I hope that there is a bipartisan approach. What more is he doing to ensure that the posts and the work of the Department for International Development are brought under the broad umbrella of our overall diplomatic effort? Will he also comment on reports of a request to increase the budget of the European External Action Service, which, at a time of spending restraint across Europe, is unlikely to be justified?

[Mr Hague]

Some interesting confessions are being produced by this statement. I am delighted to hear that the right hon. Gentleman objected to the previous Government’s withdrawal of the Foreign Office exchange rate protection—although he might have wanted to say that at the time. However, I am grateful that he is now well ahead of his Front-Bench team in agreeing with me that it was a mistake. It is time for the right hon. Member for Paisley and Renfrewshire South (Mr Alexander) to say the same and dissociate himself from this foolish policy of the previous Government.

That has got me back on to that partisan theme again that the right hon. Member for Blackburn (Mr Straw) does not like—he must forgive me. I am not a very partisan—in the party sense—Foreign Secretary, but on this issue I think that the previous Government made some serious mistakes, so I make no apology for going on about it. The closure of embassies and the chaotic state in which Foreign Office finances were left were mistakes—they were messed up by the previous Government—and I want to make it clear that under the coalition there is a very different approach. Today, therefore, I will be a little partisan, although of course I always have great respect for him.

On the right hon. Gentleman’s other questions, the EAS should not get the proposed budget increase. We are all having to manage within budgetary constraints, and so should it, which is why the proposal in recent days is unacceptable, as the United Kingdom will make clear.



We are working closely with the Department for International Development. Together with my right hon. Friend the Secretary of State for International Development we are bringing about a cultural change in relations between the FCO and DFID, which has always been difficult in the past. We are co-locating more and the teams in each country are working together well. My right hon. Friend and I are in daily consultation about the policies that we are pursuing—an approach that is working much better.

[Mr Brian Binley (Northampton South) (Con)]

The Secretary of State put emphasis on UKTI, saying that, in effect, it would be able to do more with less. May I suggest that he could achieve that outcome by ensuring that more people with genuine business experience are involved with UKTI? If he agrees with that premise, will he tell us how he might proceed towards achieving that objective?

[Mr Hague]

My hon. Friend is quite right that we need people with good business experience working for and with UKTI, but in a way we have gone above and beyond that. The Prime Minister has appointed Lord Green—Stephen Green—as the new Minister for Trade and Investment working in both the Foreign Office and the Department for Business, Innovation and Skills. He comes with enormous business experience and has put together the new strategy for UKTI, which is very impressive and will set many new and demanding targets. Right at the head of that strategy will be somebody who is steeped in business experience and the private sector.

[Chris Bryant]

Just for the avoidance of doubt, I am thoroughly aware that I was not the Foreign Secretary, because nobody ever listened to a word I ever said. I am sure that people listen to everything that the Foreign Secretary says, and act upon it.

May I ask the right hon. Gentleman about an omission in his statement? There may be others, but one country that he made no mention of at all was Russia. We closed a post in Russia, but that was because the Russian Government insisted that we do so, because of the relations between our two Governments and, I believe, the harassment and corruption in the Russian system. I wonder whether he can update us on relations with Russia. I believe that he will be visiting soon, so will he ensure that he always underlines human rights and the need for doing away with corruption in the Russian system?

[Mr Hague]

We are much reassured to know that the hon. Gentleman did not think that he was the Foreign Secretary. We are also reassured to know that nobody took any notice of what he was saying. That is an enormous relief to us.

As the hon. Gentleman knows, we have a strong diplomatic presence in Russia, with one of our major embassies in the world in Moscow. I do not think that it is necessary either to increase the size of that embassy from the current level of activity or to reduce it. That is why the embassy did not feature in the statement. Given that we have 260 posts altogether, there are many nations around the world that I did not mention in the statement. I am highlighting changes today.

Relations with Russia have improved in recent months, and we have made an effort to improve them. I visited Russia last October and my counterpart, Sergei Lavrov, came here in February. The Prime Minister intends to visit Russia later in the year. Both sides have been working at improvements in relations, but I do not think that we are at the point yet where we can reverse decisions that were taken under the previous Government about this. I make no criticism of the previous Administration on this issue, because the difficult relations with Russia were not their fault. [Interruption.] Yes, that is very generous of me, isn’t it? We will always continue to raise the difficult issues that the hon. Gentleman mentioned.

[Martin Horwood (Cheltenham) (LD)]

I welcome the statement’s much needed strategic vision of a diplomatic network that is stronger in a changed world, and the Foreign Secretary’s commitment to working closely with the European External Action Service. Does he agree that working in close collaboration with the External Action Service and supporting it offers a cost-effective and efficient way to strengthen our diplomatic connections, to protect more Britons abroad and to increase Britain’s voice in world affairs?

[Mr Hague]

I very much welcome the hon. Gentleman’s warm welcome for the statement and the input from him and his colleagues among Liberal Democrat Back Benchers, which has been valuable. We must work with the European External Action Service and have good people going into it. I am afraid that I am going to offend the Opposition again, but that will be part of rectifying something else that went awry under the last Government, which is that the number of British people going into European institutions was too low. We are putting that right, including in the External Action Service. It is right that it can be an extension of our influence in the world, but it is not a substitute for it, as I made clear in my statement. The External Action Service does not mean that we do not need British diplomatic posts or a British diplomatic presence, which are the only way to be sure of advancing the interests of the United Kingdom.

[Keith Vaz (Leicester East) (Lab)]

I warmly welcome the Foreign Secretary’s statement, especially the increase in diplomatic activity in India and Pakistan. I am on record as being delighted that the right hon. Gentleman was the first Foreign Secretary ever to visit Yemen—although he did not manage to get to the city of my birth. As he knows, the embassy in Sana’a has been closed since 2010. There is limited consular access, visas are not really being granted, and unfortunately the previous Government closed our consulate in Aden. Does he have the flexibility where necessary to increase diplomatic staff in areas that need attention, and will he be able to reopen the consulate in Aden once matters are resolved?

[Mr Hague]

The right hon. Gentleman has been a long-standing champion of the interests of this House in Yemen. I am sorry that I did not get to the place of his birth—where I presume there is a statue and all kinds of other tributes to him; I look forward to seeing that one day. I might have misheard him, but I think he said that the embassy in Sana’a had closed. I can assure him that it has not closed; it is functioning. I visited it in February and it was working, albeit in difficult security conditions—there is no doubt about that. As he knows, two attempts were made last year on the lives of our diplomatic staff in Sana’a. The embassy works in the most difficult security conditions of any of our embassies abroad, but it is still functioning and has an important influence on events in Yemen. In the current security situation it is not possible to open additional diplomatic posts in Yemen. However, we have the flexibility in our plans to open further consulates and reinforce our presence in the middle east. That remains a live issue for the future.

[Margot James (Stourbridge) (Con)]

I congratulate the Foreign Secretary on strengthening our diplomatic network at a time of such economic austerity. I strongly agree with his view that embassies play a vital role in world trade. In that context, I congratulate our embassy in Japan on its sterling work on behalf of British business, which I observed on a recent visit to Tokyo last November. Could he advise the House on the workings of his Department with the Department for Business, Innovation and Skills, which is essential to our country’s ability to maximise trade opportunities in the newer markets that he mentioned?

[Mr Hague]

I am grateful for my hon. Friend’s reference to the great work of our embassy in Japan. At the UKTI strategy launch last night I met someone from a very innovative new business who was immensely enthusiastic about the support that it had received from our embassy in Japan, so I can absolutely confirm what my hon. Friend says—[Interruption]—although I have slightly forgotten her other point.

[Margot James]

About relations with BIS.

[Mr Hague]

Relations are very good. As I have said, the Business Secretary and I launched our UKTI strategy together last night. Lord Green works equally—half and half—in the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office, to ensure that we are absolutely in step on pursuing the strategy, and he is already doing a great job.

[Angus Robertson (Moray) (SNP)]

The Secretary of State has announced that an embassy will open in South Sudan when it becomes an independent state shortly, joining the international community of nations in the United Nations and the African Union. Will he confirm that Whitehall has the most experience of any capital in the world when dealing with independence issues? The normal procedure is: recognition of the right of self-determination; the acceptance of independence referendum results; the establishment of diplomatic relations; and the maintenance of close co-operation between friendly sovereign nations.

[Mr Hague]

Of course Whitehall has experience in all those matters, but the hon. Gentleman will also see from my statement that running the necessary network of sovereign posts and consulates around the world is very expensive for any Government. Any newly independent nation with any hope of maintaining its diplomatic strength in the world would have to come up with the several hundred million pounds in additional costs that would be necessary.

[Mr William Cash (Stone) (Con)]

The Foreign Secretary makes an excellent case for bilateral relations. I am sure he will understand if I point out that under the Lisbon treaty, the External Action Service creates circumstances in which there could be conflict between our own national interests and those promoted by the European Union. Does he therefore accept that it would be far better if we were to retrench, and abolish the External Action Service by renegotiating the Lisbon treaty?

[Mr Hague]

I think that if my hon. Friend had his way, all our relations in Europe would be bilateral. He and I both opposed the Lisbon treaty and the creation of the External Action Service, but we have to work with what we have. As we are in this situation, and as we respect the fact that we are a coalition Government, our approach is to make the best of this and to ensure that there are British people working in the External Action Service. I hope that we shall not reach a point of conflict, as my hon. Friend puts it, between the External Action Service and the United Kingdom’s approach to foreign affairs, because decisions on foreign policy are taken by unanimity in the European Union, and in the event of a direct conflict arising, the British Foreign Secretary would be able to veto any such proposal in the EU.

[Ann Clwyd (Cynon Valley) (Lab)]

May I ask the Foreign Secretary to look carefully at any proposals to reduce the number of staff at our embassy in Iraq, because I believe that we have a certain responsibility towards Iraq? There is no dedicated human rights officer at the embassy. A human rights report was recently produced by Amnesty International about conditions in detention there. I always said that we should not hand over the detained prisoners until the Iraqis had the capacity to deal with them, which they do not have. It is therefore vital that we continue to have a considerable presence in Iraq, possibly with a dedicated human rights officer.

[Mr Hague]

I will look at the point that the right hon. Lady raises about a human rights officer. I can certainly reassure her that we will retain a very considerable presence in Iraq; there is no doubt about that. I should point out that it is one of our most expensive diplomatic operations, partly because of the security that is still required. The embassy in Baghdad and its associated posts amount to one of our five most expensive embassies in the world. At the moment, that is out of proportion with the strategic and economic importance of Iraq, although that remains considerable. That is why we have to look for savings there, but I fully take the right hon. Lady’s point and we will retain a very considerable presence.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I am delighted to hear that our growing diplomatic network is committed to playing such an important part in promoting UK business. Can my right hon. Friend advise me on how small and medium-sized enterprises, especially those in my constituency, can make the best of that commitment?

[Mr Hague]

The new strategy of UKTI, which Lord Green has taken the leading role in putting together, places the greatest emphasis on small and medium-sized enterprises. Only one in five of the SMEs in this country are exporters on any significant scale. If we could raise that to one in four, which is the European average, the extra exports from Britain would more than cancel out the trade deficits that we have experienced in recent years. This is a central goal, and UKTI’s work in the United Kingdom will reach out to those businesses in particular over the coming months and years. I will write to my hon. Friend with the details of what we announced last night.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Foreign Secretary has already referred to the reports produced by the Foreign Affairs Committee in the last Parliament and in this one. He will be aware that just before the general election the Committee made a number of serious recommendations. I congratulate him on announcing the implementation of several of them in the statement today, particularly those relating to the embassy in Kyrgyzstan and to the scrapping of the overseas price mechanism to bring back some form of stability. Will he take a similar attitude to the Select Committee reports produced during this Parliament, and particularly to our recommendation that he reverse the cuts in the BBC World Service?

[Mr Hague]

As the hon. Gentleman can see from the statement, I always attach great importance to the Foreign Affairs Committee’s reports and to its work. I thank him for his support for some of the decisions that I have announced today. We have discussed the World Service on other occasions, and we will be able to discuss it further. I will just point out that the reduction in the World Service’s funding over the period from 2007 to 2014 is roughly the same as the reduction that will have taken place in the Foreign and Commonwealth Office as a whole, yet the Foreign and Commonwealth Office, through administrative savings and the changes that I have set out, is able to expand its network. That is not to make a direct analogy with what can be done with the World Service, but it is necessary for all public sector organisations to work out how to do more with less funding.

[Joseph Johnson (Orpington) (Con)]

I echo the right hon. Member for Leicester East (Keith Vaz) in welcoming the announcement of an additional 30 diplomats for the network in India. They will play a valuable part in creating the enhanced partnership that the two countries are seeking, and in reversing the decline in our trading relationships that we witnessed under the previous Government. In 1999 the UK was India’s fourth most important source of imports, but by 2009 we were its 22nd most important. I urge my right hon. Friend to ensure that the 30 new diplomats put trade representation at the top of their priorities.

[Mr Hague]

As my hon. Friend knows, we already afford great importance to the links with India. In July last year the Prime Minister led our largest ever ministerial and trade delegation to India, and we are continuing to build up those links. I am grateful to my hon. Friend for his welcome for the additional staff in India. I hope that that addition will allow us to open new consulates general at various locations, although we have to discuss that matter with the Indian Government to ensure that they are happy with the locations.

[John Cryer (Leyton and Wanstead) (Lab)]

May I press the Foreign Secretary further on the question asked by my hon. Friend the Member for Ilford South (Mike Gapes)? The arguments that the Foreign Secretary has presented for the expansion and maintenance of the diplomatic network seem pretty sound, but do not many of the same arguments apply to the BBC World Service, especially in the light of the events in the various Arab nations? Will he look at that matter again?

[Mr Hague]

The argument is that all parts of the public sector have to make the best possible use of reduced resources. I hope that the way in which we are now running the Foreign Office budget is a good example of that, and that it can be used as an example to other organisations, including the World Service. None of us enjoys making reductions anywhere, but it would clearly be impossible to do all the other things that we are committed to doing if we had maintained the World Service’s budget at exactly the level that it was before. We are putting the World Service on a long-term sustainable footing by moving it so that its funding comes from the BBC licence fee and enabling it to work together with the development of BBC World television. For the medium to long-term future, the World Service is on a much sounder, more sustainable footing.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The Foreign Secretary’s statement is very welcome, and I particularly welcome the expansion of our missions in countries whose citizens are represented in large numbers here as students, residents and business people. Those include China, India, Turkey and the countries of Latin America. Will he also assure us that in parts of the world where there are tensions and conflicts—where he also wants us to be properly represented—the work of conflict prevention and the upholding of human rights is a key priority in all our missions, just as it is in the United Nations, where we have international responsibilities?

[Mr Hague]

My right hon. Friend makes an important point. The work that we are doing in Yemen is conflict prevention. In particular, the very active work undertaken by the Foreign Office and the Department for International Development in Sudan during the referendum there earlier this year has so far made a material difference in preventing new conflict. That is part of the rationale for establishing a new embassy promptly in South Sudan. Conflict prevention saves many lives, and it is much cheaper and much more effective than having to intervene in conflicts when they arise. That will remain an important plank of our policies.

[Yasmin Qureshi (Bolton South East) (Lab)]

I welcome the Foreign Secretary’s statement about additional diplomatic staff. I have visited a few British embassies around the world, and I recently visited our embassy in Pakistan and met the staff there, including the high commissioner, Adam Thomson. I was incredibly impressed by the work that they, and our diplomatic service in general, do. In extending the number of posts and members of staff, will the Foreign Secretary consider sending people from different backgrounds out to those missions? There is still a tendency for many of the people who work for the Foreign Office and the diplomatic service to come from certain backgrounds and certain universities. Is it perhaps time to open this up and to allow a much wider variety of people to serve as our diplomats?

[Mr Hague]

The hon. Lady is right about the outstanding work of our high commissioner and his staff in Pakistan, and I will relay what she said to him. I agree that our staff should come from many backgrounds, speaking as a Foreign Secretary who went to a comprehensive school—and there have not been many of those before.

[Chris Bryant]

The one before you did!

[Mr Hague]

I did not say that there were not any; I said that there had not been that many before. If the hon. Lady had met the new intake of graduates into the Foreign Office, as I did a few months ago, she would have seen a great diversity, and been completely reassured. I think we are set on the right course for the future, but we are always ready to do more.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome the Foreign Secretary’s statement, particularly his emphasis on upgrading and developing diplomatic skills. Does he agree that Britain’s national interest in the future will be highly dependent on our ability to build relationships with emerging economies, so that we need to develop the appropriate diplomatic skills to achieve that?

[Mr Hague]

I absolutely agree. That is what the diplomatic excellence initiative is all about. It is the main subject we discussed at the FCO leadership conference taking place this week for all our ambassadors and high commissioners from around the world. It is necessary to know countries in detail—to know them geographically, to know personally their leaders and potential leaders, to know their languages and to understand their history—in order to be able to influence events. Those skills now need accentuating again. That is the clear and constant signal that I am sending out from the Foreign Office.

[Sarah Newton (Truro and Falmouth) (Con)]

I very much welcome today’s announcement, particularly the comments about Russia. I would like to move on to other European countries and our representation in them, and ask my right hon. Friend to reflect on the fact that not all capital cities in Europe are the centres of commerce and industry. When he is thinking about our representation, will he consult British businesses—our trade with Europe will remain vital in the years to come—to ensure that we have the right representation in the right places?

[Mr Hague]

Yes, my hon. Friend makes a very important point. One commitment in the FCO charter for business that I published last night is to consult business about the work of UK Trade & Investment. That will, of course, continue. Let me reassure her that the changes I am announcing for Europe do not necessarily mean changes to UKTI deployments and consular work around Europe. We believe that it is possible for diplomatic work in European countries to be centred on those nations’ capitals, but it will also be important in many cases to retain our commercial functions and presence in many other parts of those countries.

[Mr Robin Walker (Worcester) (Con)]

I congratulate the Foreign Secretary on this truly internationalist statement, especially on the significant expansion of the UK’s diplomatic presence in Latin America—a region of great potential, where we have many friends. Will my right hon. Friend comment a little more on the opportunities for UK business in that region and the extent to which any expansion of our presence will be focused on promoting trade?

[Mr Hague]

Trade is an important part of it. We need to be aware that the whole of Latin America is an economy bigger than China, and that it is growing at very substantial rates. That is why it is important to strengthen our diplomatic presence. In many Latin American countries the trading opportunities are, as my hon. Friend says, enormous. Making the most of the trading opportunities is important not just for economic reasons, because in the long term this also bolsters our relations with those countries and helps to improve our security and our influence in the world. I do not view it as a choice between trade and other aspects of our foreign policy goals, as advancing trade helps us to advance our other goals as well.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the Foreign Secretary’s statement and ask him for clarification. Where countries have shown high levels of brutality and oppression—this applies to Syria, and not just now, because in the 1980s President Assad senior killed thousands during a similar uprising—will our diplomatic relations be kept to the bare minimum?

[Mr Hague]

Our views on such outrages will be very clear across the House. This country stands for human rights, for respect for minorities and for democratic developments, and we have made our views about Syria very clear in recent days. I would, however, depart from the thrust of my hon. Friend’s question in one respect, in that it is sometimes necessary to have an enhanced diplomatic presence even for countries with which we have difficult relations—in order to do more work with them, to try to influence them more effectively and to understand what is going on more fully. Diplomacy is about talking to people with whom we disagree, as well as about developing good relations with friends. That is why North Korea appeared in the list of countries for which I announced an increase in the number of our diplomats. Despite the difficulties of our relationship with that country—in fact, because of those difficulties—we need to do more in order to influence what is happening there.

[Jonathan Evans (Cardiff North) (Con)]

I am very impressed by the approach my right hon. Friend has articulated today to the European External Action Service and the need to encourage British candidates not only to participate in that service but to get more widely involved in European institutions. Apart from simply promoting British applications, could he do more, for example, by expanding the number of time-limited secondments as a special initiative? It is very important that the skills acquired are then brought back to bear on the bilateral relations about which he has said so much today.

[Mr Hague]

Yes, we are reintroducing the European fast stream for UK civil servants so that they can experience working in European institutions and then bring that experience back with them. The fast stream was discontinued—for about 10 years, I believe—after eastern and central European countries joined the European Union and the opportunities were reduced. Now that there can be more of an equilibrium in the intake into the EU, it is time to encourage the fast stream again. We are restarting it, and British civil servants will be able to spend part of their careers in European institutions.

Points of Order

Wednesday 11th May 2011 Commons Chamber

13:27

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker.

The shadow Foreign Secretary said earlier that he was grateful to the Foreign Secretary for advance sight of the statement. Unfortunately, however, the whole House, and indeed the whole country, had advance sight of it because it appeared in The Guardian this morning. In some respects, the newspaper provided greater detail than appeared in the Foreign Secretary’s statement. Furthermore, the Secretary of State for Transport’s announcements in a written statement were all broadcast on Radio 4’s “Today” programme this morning. I understand that everyone thinks that this happens all the time, and that it also happened under the Labour Government and all the rest of it, but I urge you, Mr Speaker, to take action. It is not enough to say every time this issue is raised that you deplore it and you want it to stop. Action needs to be taken to find out how frequently Ministers ignore the House and make announcements in other places before they make them here.

[Mr Speaker]

The Procedure Committee has been looking into the matter, and its thoughts will be shared more widely with the House. I accept the importance of the point that hon. Gentleman has made. At this stage, I would point out that the Foreign Secretary is here and is free to respond if he so wishes. Also, it can be difficult to identify a specific breach. Where such a breach is identified, culprits have been asked to apologise to the House, so it is not just a question of making general denunciations. Specific requirements have been imposed on Ministers. Before I hear the Foreign Secretary, let me say that I know of no parliamentarian or member of the Government who has greater respect for the House than him. I believe we will hear from him.

[Mr Hague]

Further to that point of order, I hope that you think, Mr Speaker, that the Foreign Office does a good job on the whole of making sure that announcements are made to this House. I have lost count of the number of times I have resisted the temptation to appear on the media before making a statement here. In this case it was necessary, because of the staffing implications, to make announcements about these changes yesterday at a private meeting of our ambassadors and high commissioners. That might have affected the media coverage.

[Mr Speaker]

I note what the Foreign Secretary has said. We will leave it there for today.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

On a point of order, Mr Speaker. I apologise for not giving you notice of it, but the matter has arisen literally since I left the Chamber a few moments ago.

Yesterday, Mr Speaker, you gave a very clear indication of your view when my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) raised a matter concerning my right hon. Friend the Member for Yeovil (Mr Laws) and an inquiry by the Parliamentary Commissioner for Standards, after reports concerning the commissioner’s report had appeared in a national newspaper and on one of the television channels.

In the last hour, Sky News has reported on not just what appears to be the commissioner’s report, but a meeting of the relevant Committee of Members of the House of Commons. That is clearly in breach of rulings that you, Sir, have made in the past, and of all the principles guarding both the confidentiality of and respect for the proceedings of, in particular, our very important Committees. May I not just alert you to what has happened, Mr Speaker, but ask you to state—as you have on previous occasions, in the most strident terms—that it is clearly a breach of the rules of the House, and that everyone who has breached the rules must understand the implications of that when the matter is examined both by you and by the relevant Committees?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. I hope that I made clear in the most uncompromising terms, on behalf of the House, my view of unauthorised disclosures in response to the point of order raised yesterday by the right hon. and learned Member for North East Fife (Sir Menzies Campbell). On that occasion I made the point—which I must reiterate today—that at this juncture what has been raised is not specifically a matter for me, but a matter for the Committee itself to investigate.

The Committee may wish to establish how this came about, because I think that all Members who care about this place would unite in deprecating it in the strongest terms, because of the unfairness to the Member concerned and the rank discourtesy to the institution of the House of Commons.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

On a point of order, Mr Speaker. I wish to raise with you the extraordinary conduct of 10 Downing street in relation to correspondence from Members of Parliament.

On 26 April, I wrote to the Prime Minister at the request of a constituent. During the last half hour I have received a reply from 10 Downing street, signed “Mrs E Adams, Direct Communications Unit”, saying that my letter has been diverted to receive a response from a Minister in the Treasury.

When I telephoned Mrs Adams to ask why the diversion had taken place, I was first transferred to someone in the correspondence unit, who told me that Mrs Adams did not speak on the telephone. I said that as she had written to me, I assumed that she was capable of speaking to me on the telephone. I was then transferred to someone who described herself as “head of the correspondence unit”, who said that Mrs Adams did not exist and that hers was a computer-generated name. Presumably, hers is also a computer-generated bogus signature.

It so happens that I have been a Member of the House of Commons for nearly 41 years, and that in the past whenever I wrote to a Prime Minister, that Prime Minister replied to me personally, whichever party was in office and whether I was a Back Bencher or a Front Bencher. During the past year, this Prime Minister has not once replied directly to any letters that I have sent him, but has diverted them to other Departments.

I ask for your guidance, Mr Speaker. Can you tell me first why the present Prime Minister does not answer letters as his predecessors have, and secondly what extraordinary events are taking place in 10 Downing street as a result of which it sends letters from someone who does not exist and expects people to accept that?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. First, I must confess that during my 14 years in the House it has not always been my experience, having written to a Prime Minister, to receive a reply from that Prime Minister. Sometimes it happens, and sometimes it does not. Secondly, let me say that in general—as Members will understand—the way in which letters are dealt with by Departments is principally a matter for those Departments. Thirdly, let me say to the right hon. Gentleman and to the House as a whole that I consider it to be of the utmost importance for Members to be treated with courtesy by the Departments or agencies to which they write.

It seems peculiarly unfortunate that the right hon. Gentleman’s inquiry has been handled in this way. If it is possible to imagine a Member who would take such treatment lying down, that Member is certainly not the right hon. Gentleman.

If there are no further points of order, I think we will leave it there for today. Let us proceed to the ten-minute rule motion, for which the hon. Member for South Thanet (Laura Sandys) has been waiting very patiently.

Planning (Grade 1 Agricultural Land Protection)

Wednesday 11th May 2011 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:35

[Laura Sandys (South Thanet) (Con)]

I beg to move,

That leave be given to bring in a Bill to prohibit local authorities granting planning permission involving the development of Grade 1 agricultural land other than in exceptional circumstances; and for connected purposes.

The Bill aims to reinstate the protection that was in place when food production was one of our national security considerations and was seen as a strategic asset. Although there is guidance on development on agricultural land, it does not provide a sufficiently robust defence of what I believe is a national asset. However, the Government have an excellent opportunity to include the objectives of my Bill in the forthcoming national policy planning frameworks. I hope that, unlike the previous Government, this Government do not see the countryside as merely a public amenity space or an aesthetic experience for urban dwellers to enjoy. Grade 1 agricultural land is important and has strategic implications for all our constituents, urban and rural.

Let us be clear that once highly productive land has been built on, there is no going back—it has gone for ever. Some might ask, “Who cares?” The reason why food production should be of interest to everyone is that we are increasingly vulnerable to global food price rises that have an impact on each and every one of our constituents. International protectionism, climate change and increased global population are all resulting in significant volatility in the food sector. We must therefore do what we are doing in the energy sector, and regard national food production as part of our national security agenda. An essential part of that agenda is ensuring that we do not reduce our ability to produce food domestically, and land use is at the heart of the issue.

Agriculture, food production and land use are distant concepts to many of our constituents. I myself was brought up in London, far from anything to do with the world of farming. Do the majority of our constituents worry about whether a farm is turned into a golf course or whether some fields are sold for development? That does not affect us, and if we gain a new business park or some new houses and the farmer can retire to the Caribbean on the proceeds, good for him.

Our lack of appreciation of food production is due to the fact that our capacity to produce food is not seen as a strategic asset. It is no longer considered to be important to our economy and the well-being of our population. As a result, the amount of arable land in the United Kingdom has decreased by 30% and food imports have increased to 47% over the past 20 years—of course, no one has been on the streets protesting.

The ideal combination of globally sourced food and reasonable prices was shaken in 2008. There was a perfect storm of bad weather conditions, crop failures, a change in global consumption patterns, a 50% leap in the cost of a barrel of oil and some speculation, and commodity prices rocketed by 66%. The food price spike was further compounded by a new phenomenon, food protectionism. Global variations in food prices fluctuated dramatically. Countries that withheld exports, such as Indonesia, were able to keep their domestic prices down, but those that did not experienced a much higher rate of food inflation, which created real political instability. Unfortunately, that experience revealed the short-term benefits of protectionism, and it has created a new political and economic reality that might lead to further protectionism and exacerbate food volatility. Much of this has passed us by, however. Food security and food prices are rarely, if ever, raised in the House, and few of our constituents are particularly concerned so long as the supermarket shelves are full of what they want to buy at a price that they are prepared to pay.

The price of food should be making the future of productive land an important concern for us all. The Foresight report on food security stresses that

“the past century of low food prices is at an end.”

Agricultural production will become a much more important industry sector, and at this time when food production is so important, we have no restrictions in place to stop developers tarmacing over our own highly productive food-producing land.

Price is starting to impact on my constituents. In my constituency, the average wage is just £17,000 and therefore more money as a percentage of income is spent on food than in many other areas. My constituents are noticing prices. I had a gentleman in my surgery this weekend who said that he had had a heart attack and was told by his doctor that good fresh food was essential to his health. As he is on jobseeker’s allowance, he cannot afford to eat good food and is now reverting to buying cheap junk food.

Supermarkets are extending their promotional offers, as they know more than anyone the extent to which prices are rising, but for how long will they be able to resist passing on the increased commodity costs to the consumer? Prices are increasing, nutritional standards will fall, the vulnerable in our constituencies will have to revert to the cheapest food possible, and—following on from those who have protested about fuel price increases—we will receive more post from people on the subject of food prices. There is a good reason for that. Commodity prices in April were 4.7% higher than in the same period last year. I hope the Treasury is looking into the impact that that will have on economic growth and inflation; the Bank of England certainly is. Kraft Foods has announced that it will be raising its food prices, which will hit every one of our constituents. The cost of food is also increasing, because of the high reliance on energy in agriculture, while the British Chamber of Shipping calculates that sea transport costs are increasing due to piracy, and the degradation of land due to droughts, flooding or urbanisation will put further stresses on existing productive land, yet we have no statutory defence against those who might want to build on our most productive land.

We must start to approach food security with the same zeal that we approach energy security. Domestic energy supply is seen as critical to our long-term energy security. We seem to understand that reliance on volatile suppliers of energy is bad for economic growth, stability and consumers, and for food security, too, we need to start to put in place the measures that will give us further certainty in terms of price, production and vulnerability of supply.

As the Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), will know, according to the Campaign to Protect Rural England, by 2030 Kent will lose 10% of its productive land due to sea level rises, so we will be losing productive land in any case due to climate change and sea level rises. It would be mad at the same time to lose additional productive land when we have the powers to stop that happening.

I urge the Minister to take on board the genuine importance of this Bill for wider economic and social needs, to recognise that the protection it offers grade 1 agricultural land must be incorporated into the national policy planning frameworks, and to ensure that food production is seen as an increasingly important part of our domestic security. I realise that protecting grade 1 agricultural land is not the sole answer to food insecurity and price increases, and I am not proposing food sovereignty, but land use protection is one of the mechanisms that we must put in place in order to reduce our exposure to the volatility of the international market. Therefore, we must, at the very least, not lose more productive land than we have lost to date.

Question put and agreed to.

Ordered,

That Laura Sandys, Zac Goldsmith, Mr Tim Yeo, Mr Roger Gale, Caroline Lucas, Rebecca Harris, Bill Esterson, Elizabeth Truss, Richard Drax, Priti Patel and Mr Dominic Raab present the Bill.

Laura Sandys accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 14 October, and to be printed (Bill 187).

Education Bill

Wednesday 11th May 2011 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee.

New Clause 20

Financing of pupil referral units

‘(1) Section 45 of SSFA 1998 (financing of maintained schools: maintained schools to have budget shares) is amended as follows.

(2) In subsection (1A), omit “or” at the end of paragraph (b), and after paragraph (c) insert “, or

(d) a pupil referral unit in England.”

(3) In subsection (3)—

(a) in paragraph (a), after “pupil referral units” insert “in Wales”;

(b) after paragraph (a) insert—

“(aa) references to the governing body of a maintained school or of a school maintained by a local authority shall be read, in relation to a pupil referral unit in England, as references to the management committee for the unit (in spite of paragraph 1 of Schedule 1 to the Education Act 1996);

(ab) references to governors shall be read, in relation to a pupil referral unit in England, as references to the members of the management committee for the unit;”.’.—(Mr Gibb.)

Brought up, and read the First time.

13:47

[The Minister of State, Department for Education (Mr Nick Gibb)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Government new clause 21—Charges at boarding Academies.

New clause 1—Tackling educational underachievement—

‘(1) The Secretary of State may, by order, in circumstances where an existing school has for the preceding two years or for three of the preceding five years failed to meet or exceed the “National Floor Standards”, disapply any provisions of the Academies Act 2010 to facilitate the making of an academy under section 4 of the Academies Act 2010 (Academy orders).

(2) For the purposes of this clause the term “National Floor Standards” means standards of educational attainment and progress of pupils established from time to time by the Secretary of State and in place at the time of the order and which may be applied retrospectively for the purposes of this section.’.

New clause 13—Schools Causing Concern and disapplication of the Transfer of Undertakings (Protection of Employment) Regulations 2006—

‘(1) The Academies Act 2010 shall be amended as follows.

(2) In section 4, at end insert— “The Secretary of State may by order disapply the Transfer of Undertakings (Protection of Employment) Regulations 2006 when making an academy order under this section if the school is eligible for intervention (within the meaning of Part 4 of the Education and Inspections Act 2006).”’.

New clause 19—Purchase by academies of places for pupils aged 14 at a private school—

‘(1) An Academy may apply its funds for the purpose of purchasing a place at a private school for a relevant pupil for the whole or part of the pupil’s remaining school career.

(2) For the purposes of this section, a relevant pupil—

(a) is a pupil on the school roll of the Academy; and

(b) is aged 14.’.

Government amendments 34, 35, 38 and 39.

[Mr Gibb]

I shall also speak to Government new clause 21 and Government amendments 34, 35, 38 and 39.

It is a delight to return to scrutinising the Education Bill after 22 pleasurable Committee sittings.

[Mr Iain Wright (Hartlepool) (Lab)]

And innovative ones.

[Mr Gibb]

Yes, and innovative sittings.

New clause 20 seeks to give pupil referral units in England greater autonomy, to enable them to provide vulnerable children with high-quality education and support. In the schools White Paper, “The Importance of Teaching”, we announced that we would give PRUs control over their budgets and staffing. We had intended to use PRU regulations to achieve the financial control aspect of that objective, but although we could do that, the regulations would become very complex and difficult to understand and use. The easiest and clearest way to achieve the objective is to amend section 45 of the School Standards and Framework Act 1998, so that the provisions on school finances apply to PRU management committees. That is what new clause 20 does.

This is a small change, but its effect will be significant, and we believe that it will be an important driver for further improvement in the PRU sector. In common with our other education reforms, it is based on the trust that we place in the teaching profession and our desire to give schools of all kinds the freedom and autonomy to run their own affairs.

[Kevin Brennan (Cardiff West) (Lab)]

Will the Minister explain how each PRU’s budget share will be calculated?

[Mr Gibb]

The finance regulations will apply to PRUs in the same way that they apply to maintained schools, and, of course, we are currently consulting on the entire school funding arrangements.

The purpose of new clause 21 is to ensure that rights enjoyed by pupils in boarding academies are the same as those in maintained state boarding schools. Under section 458 of the Education Act 1996, local authorities are required to remit boarding fees for pupils from their area who are attending state boarding schools in certain circumstances. Those provisions apply solely to maintained schools. When section 458 was enacted, there were no academies, and as a number of boarding schools are taking the opportunity to convert to become academies, we want to ensure that the pupils at those boarding academies continue to have their right to be considered for a remission of boarding fees safeguarded. So the new clause mirrors the provisions in section 458, with the exception that we are not mirroring subsection (1), which enables local authorities to charge fees for boarding. That provision is unnecessary in the case of academies, because the funding agreement allows academies to charge boarding fees. It must be right that on the remission of boarding fees we have a level playing field in our treatment of pupils at maintained and academy boarding schools.

Government amendments 34 and 35 are being introduced so that some of the pupils who would most benefit from good alternative provision—AP—can be referred to AP academies.

[Kevin Brennan]

Will the Minister give way?

[Mr Gibb]

I am happy to give way to the hon. Gentleman.

[Kevin Brennan]

I am grateful, again, to the Minister, and I think that it sometimes saves us time if we do things in this way.

On new clause 21 and amendment 38, what safeguards are in place to ensure that excessive fees cannot be charged to the state in relation to independent boarding schools that become academies?

[Mr Gibb]

Ultimately, it is up to the local authority as to whether it remits boarding fees. These powers are rarely used and apply only in two very limited circumstances. The first is where no other educational provision that is needed for the particular pupil is available in the area. The second, as an alternative, is where the parent is suffering financial hardship, and in those circumstances the local authority can take into account how much it remits. So it is very much up to the local authority to make the decision, and of course it would not be persuaded to pay unreasonable figures in those circumstances.

On Government amendments 34 and 35, the current wording of clause 51 means that an AP academy would be restricted to taking a majority of its pupils as referrals by local authorities under section 19 of the Education Act 1996, which places a duty on local authorities to make arrangements to provide education for children who, because of illness, exclusion or otherwise, would not receive suitable education unless those arrangements were made. That restriction arises because of the definition of “alternative provision”, which is why there is a restriction on the amount of children that can be taken as a result of other referrals.

We know that, in addition to those children, the AP sector also provides education and support for pupils referred to it by schools for early intervention to tackle behavioural problems. We want to encourage greater use of early intervention, which can re-engage a child and address behavioural problems at an early stage and, thus, reduce the risk of permanent exclusion. That type of intervention benefits both the child, whose education is less disrupted, and the school, which can ensure that other pupils’ education is not disrupted by poor classroom behaviour. The trial that we will run of a new approach to exclusions will help us to understand how schools can most effectively use early intervention in this way.

We want AP academies to be responsive, and it makes no sense to restrict the proportion of children that they can take from school referrals. Alternative provision academies will be assessed against rigorous criteria in order to obtain academy status, and they will be accountable through their funding agreements or grant arrangements, and through Ofsted inspections. The high level of accountability should mean that they are among the best providers, and we want them to be able to accept the children who most need their provision, regardless of whether they are referred by schools or by local authorities.

[Kevin Brennan]

Will the Minister confirm that full data and statistics will be kept on the number of pupils being referred in this way, just as they are for exclusions?

[Mr Gibb]

Local authorities will, of course, keep records. Our trial is being run precisely to tackle the problem that the hon. Gentleman is hinting at. We want to make sure that the responsibility for what happens to pupils once they are excluded is retained in the system, which is why we are running the trial from this year to see whether we can move that responsibility to the schools where the pupils are originally registered.

[Kevin Brennan]

Clearly, if pupils are no longer being excluded as an alternative provision referral is being made, it is important that that is properly monitored and followed. Will the Minister confirm that we will have a clear picture, across the board, of what is happening on referrals to alternative provision, just as we do on exclusions?

[Mr Gibb]

I will write to the hon. Gentleman to make sure that I am giving him an accurate response on the data collection issues to which he is referring. Of course the funding for places at an AP academy will come through the system, where a record will be kept to make sure that that funding is properly allocated. He is referring to the national collection of data, and I will write to him about that to make sure that we have the case precisely summarised.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

This discussion is important. The Minister will know that many Labour Committee members were particularly concerned about vulnerable children, so will he explain why we are discussing this now, why these provisions were not introduced earlier and why we have not had a proper chance to debate at length these fundamental issues, which he knows to be of great concern to Committee members?

[Mr Gibb]

The issues were raised in Committee, and these are technical amendments—they are about getting the wording of the provisions right. These things could have been done in a more cumbersome way, but we decided to deal with them in the Bill, so that the provisions are made simpler for people who read it. There is no policy difference between what we discussed in Committee and what is set out clearly in the White Paper.

Government amendment 39 is even more technical. It seeks to correct a missed consequential amendment in the Bill. It removes a reference in section 77(3) of the School Standards and Framework Act 1998 to section 77(4) because, if the Bill is passed, paragraph 17(4) of schedule 14 to the Bill will remove subsection (4) from section 77, so we do not want any references to section 77(4) in the Bill. I urge hon. Members to support the Government amendments and new clauses.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Mr Andy Burnham.

[Andy Burnham (Leigh) (Lab)]

Thank you, Mr Deputy Speaker.

Labour’s main objection to this Bill is with how it takes power off parents and pupils—[Interruption.] Have we moved on to the amendments about admissions, Mr Deputy Speaker?

[Mr Deputy Speaker]

No, we are dealing with the whole of the first group.

[Andy Burnham]

Then I think that you should have called Kevin Brennan instead.

[Mr Deputy Speaker]

I did ask the Whip to check. I call Mr Kevin Brennan.

[Kevin Brennan]

Sorry about that, Mr Deputy Speaker. Of course I would never interrupt my boss in mid-flow—we know the consequences of that sort of thing.

The Opposition do not have any fundamental objections to the Government amendments and new clauses. We merely seek to question, as my hon. Friend the Member for Sheffield, Heeley (Meg Munn) has done, the late stage at which they have been introduced, because we are now on Report.

I have asked the Minister some questions about how each PRU’s budget share will be calculated, and he has given half an answer. I wonder whether that calculation will be done on the same basis as that for a special school, where the majority of funding goes on the basis of places and not on occupancy, unlike in mainstream schools. When Labour produced a White Paper on this very subject, we gave more examples of where that is already happening.

The Minister has confirmed that new clause 21, to which he has referred, will not give a blank cheque to independent boarding schools seeking to become academies that will enable them to charge excessive fees and that it will be up to local authorities to decide whether it is appropriate to support pupils in such a way. He is absolutely right that there are circumstances in which it is appropriate for pupils to be supported in boarding provision by the state. In some cases, that is entirely appropriate, but it is important that we should have safeguards in place to ensure that there is no blank cheque for independent schools that are seeking to become academies, and the Minister sought to reassure me on that.

14:00

[Mr Gibb]

Of course, boarding academies will not be permitted to make a profit on the boarding elements of their provision, so there are double safeguards in place.

[Kevin Brennan]

I am grateful to the Schools Minister for that answer, which is very helpful.

On amendments 34 and 35, I would be grateful if we could have an assurance that there is no risk that pupils will be referred unnecessarily under these provisions or that there will be a huge increase in the volume and therefore the cost of alternative provision. What safeguards are in place to ensure that pupils are not simply referred out of mainstream schools and into alternative provision because, for example, their academic performance is not up to scratch as regards hitting their English baccalaureate targets or because schools want a way of dealing with pupils with special educational needs? I would be grateful if the Minister could assure us that strict safeguards will be in place to ensure that the new alternative provision approach cannot be abused in such a way by any schools that are seeking to hit any particular targets on special educational needs and academic achievement. Who will pick up the bill in such cases? Will it be the referring school or the local authority?

Finally, the Minister mentioned the technical Government amendments, and I am grateful for his explanation of them.

[Mr Frank Field (Birkenhead) (Lab)]

I rise to support new clause 19, which stands in my name. I can do so briefly and I am sure that colleagues will be grateful for that, but I must explain that the new clause comes not out of the ether of theory but out of practice. I will happily declare an interest, in case I have to, in that I chair one of the two new academy schools in Birkenhead. The governors have made no decisions on the new clause, if we were to be successful, or on some of the other options about which I shall speak. We are testing the ground to see the best forms of education we can offer some young people in Birkenhead. The new clause is very simple and states that as an academy we will be able to buy any places anywhere we want for our pupils, including in private schools, but that we should not be able to do so until pupils have spent three years with us—that is, until they are 14. The governors are seriously considering how we can start to reinforce once again the idea of life chances for our pupils by giving them a range of options that they might wish to choose at 14.

I know that this is the responsibility of the Minister's colleague in the Lords, but I am anxious that we should be successful in bidding for moneys from the new tranche of finance that the Chancellor announced in the Budget to establish what I might call a Baker academy. We would like some of our pupils to be able to consider that as one option. We have a first-class metropolitan college and we would like pupils to be able to choose—perhaps at 14—to transfer their talents and prosper even more in those circumstances. We will, of course, have some pupils of high academic attainment and it would be good to be able to fast-track them and their education in a local private school. This new clause is about giving not just our academy but academies in general that power.

I asked our brilliant experts in the Library whether the academies had such a power now and, more importantly, whether the law would prevent us from exercising it now. The answer was that, on the face of the record, we do not have that power now, but it is certainly cloudy whether any provision in statute would prevent us from using it. As the Bill moves to the other place, where we will try to move this clause in all seriousness, I am anxious that we should clarify the position beyond any doubt.

I do not know the views of Tory Back Benchers on such a new clause, but I imagine that the Liberal Democrats would insist that it should be part of the renegotiations of the coalition agreement, as it ticks every box in the Liberal vocabulary. If we felt that they were dragging their feet, in Birkenhead we would know who was stopping us increasing life chances for some of our poorest pupils. If the Liberals made this provision a key part of their renegotiations, they would get the credit.

The new clause moves the focus of the debate from buildings to pupils. I know we love the cant in this place and to pretend that we have moved in such a way, but everything we decide is really about buildings and institutions. The clause takes the debate beyond institutions and schools, and centres it on pupils. What can we buy that they most need at a certain point of time? I hasten to add—in case this disappoints any Tories—that this is not a subsidy to the private sector. We would buy provision at less cost than that spent in a state school on the very small group of pupils whom we might wish to give the opportunity of going to a local public school. If the Liberals opposed us, they would be saying that they were not in favour of our having this freedom and that we would have to spend the money in the state sector, even though that would mean spending more and not getting the sort of education that we want for the small minority of pupils who might benefit from such choice.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

As someone who benefited from the assisted places scheme, I can perhaps understand more than most the right hon. Gentleman’s argument about what his provision might do for pupils’ life chances. I have no concluded view on the new clause, which I shall consider carefully—I am sure the rest of the House will do so, too—but why would an academy that purchased a place at a public school for one of its pupils spend less on that pupil than if it maintained them in the academy?

[Mr Field]

For the simple reason that the average payment that we get from taxpayers to educate would be less than the marginal cost that the school might wish to charge us for allowing pupils to attend it. Its costs would be covered, we would make a profit and we would be doing what we would wish for the small number of our scholars who might want to move into a public school.

Let me emphasise that such a reform is not just about changing institutions and breaking down the terrible, crippling divide in this country between public schools and state schools. The new clause is an attempt to begin a reform that would allow us to spend our budget in the best way possible to give the greatest advantages and life chances to pupils, whoever they are. It is not the only option we wish to develop; we will not be prevented from developing the others and we will develop them. In this area, however, there is some doubt about what the law says.

[Dan Rogerson (North Cornwall) (LD)]

First, I hasten to clarify that it is not the coalition agreement that is under renegotiation. There are many matters outside the coalition agreement that arise, which the two parties will need to deal with.

An interesting question occurs to me about funding levels per pupil across the country, which vary greatly. Has the right hon. Gentleman considered that variation in comparing the costs of local independent schools? Pupils in some parts of the country would have less resource going to them than is currently the case in a London borough, for example, where they are very well funded.

[Mr Field]

I was doing the calculations without the pupil premium, which is a terrifically important innovation. I understand the difference between the marginal cost in the north-west compared with going to Eton. I do not have any wish for those pupils to go to Eton, although I have nothing against Eton or the education it produces.

As I have said, this is a probing amendment; we hope to bring back the new clause in another place. I hope that the Minister understands that whatever we in Birkenhead decide—we have made no decisions about this as governors yet—we want to know the range of possibilities that we could develop for our young pupils at the academy school. This new clause is not going to go away. This is where the debate is going and the Government have a choice between joining us or opposing us until they have to give way. On that happy note, I have said what I want to say about this probing new clause, which we will try to push more seriously in the other place.

[Richard Fuller (Bedford) (Con)]

It is a great pleasure to follow the right hon. Member for Birkenhead (Mr Field) for the second time in succession. It has also been a great pleasure to participate in proceedings in Committee on the Bill. I am still relatively new to the House and I found it encouraging, compared with the spectacle that we see at Prime Minister’s Question Time, to see parties on both sides coming together to put their experience and best interests at the forefront of trying to improve education in our country. I pay tribute to all the parties for doing that.

I should like to comment mainly on my new clause 1, but first I shall make a couple of points about special educational needs, which the hon. Member for Cardiff West (Kevin Brennan) has mentioned. It was a great pleasure, a week ago, to welcome the Secretary of State for Education to Bedford to talk to the head teachers of our three special schools, the Grange, Ridgeway and St Johns, and to talk about the Green Paper. The coalition Government have moved forward significantly in understanding what is required for children with SEN not only while they are at school but when they are preparing to go on to the work environment. That is a record that the Government can build on over the next five years and which will be a tremendous success and tribute to them. The Secretary of State’s discussion with the head teachers in Bedford and Kempston was most illuminating. Two of those three schools are outstanding and one is good with outstanding features, so they are already providing excellent education to children, and their knowledge and experience is most valuable.

It is important to consider the particular impact of the Bill on exclusions. The Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), knows how important this issue is, particularly for children with autism and the impact on them if they are later excluded. I hope that he will take into account the recommendations of the special educational consortium about future decisions so that he can make sure that the issue of exclusion does not have an undue impact on children with autism.

New clause 1 would pay particular attention to schools with a history of educational underachievement, by which I mean achieving below the minimum national floor standards for a number of years. It would give the Secretary of State the powers that he or she might require in such circumstances to intervene to support change and to provide educational opportunity to the children in those areas. The new clause is not about passing comment on teachers; indeed, the teachers who go to poorly performing schools are sometimes the most inspired and capable teachers in the country.

14:15

The new clause is not about resources either. Too often, when we look at educational underachievement we think that throwing money at it will solve the problem, but often it does not tackle the problem directly. Indeed, it can hide the problem or provide an excuse for continuing with underachievement while the benefit of the additional resources comes into play. That is all very well when one is looking at a five-year investment to do something as a business, but the critical urgency is that every child gets only one chance at each year of their education. Every year of delay in overcoming educational underachievement is a year lost to a whole cohort of children that will not be recovered. In those circumstances—I will go on to explain how they arise—it would be a mistake for the Secretary of State not to have the opportunity to intervene to provide hope to that cohort.

My concern is with providing the opportunity for fast action to be taken to remedy a legacy of educational underachievement, because, as we have rightly heard many times, educational underachievement compounds social separation. Hon. Members on both sides of the House recognise that a good start to education in the early years leads to better educational attainment in later years and greater chance of success in later life. When educational achievement is combined with catchment areas, the problem of social separation is compounded, with housing stock and rental prices around underachieving schools going down and with parents flocking to areas where schools perform well. I see that happen in my constituency and my borough. That effect compounds the view taken by parents that particular schools are bad. I do not know whether there is such a thing as a bad school or a good school—a school is a school—but we have a responsibility to ensure that parents do not have to make the terrible sacrifices that many make. Some parents put enormous effort into getting their child into a school other than the local, “bad” school and then they have to spend an hour or so driving their child to that “good” school to avoid the other school. That is precisely because we have this tyranny of catchment areas, which may be compounded despite the best efforts of my right hon. and hon. Friends on the Front Bench to improve educational performance if they do not have more power to be more radical than they are providing for themselves in the Bill.

The Government have made substantial progress, particularly, as the right hon. Member for Birkenhead mentioned, with the significant advance of the pupil premium. I would add to that the potential advance of free schools, which should be embraced on both sides of the House as part of an effort to get our teachers to address educational underachievement. If I have one criticism of my right hon. Friend the Secretary of State it is that he listens too much to those who believe he is too radical in that area; there is plenty of scope for him to be more radical.

The problem that the new clause seeks to address is the situation that arises when members of a local community combine to frustrate those who would challenge the existing orthodoxy. However, it focuses only on areas where that orthodoxy is failing children by maintaining a standard of education that is below the national minimum accepted standard. In those circumstances, which I know from my own area can persist, a local authority may not take action with a school and the school may have absolutely no interest in taking action itself. The school will always seek to have more time and the local authority will always want to maintain its influence and control over the school. Such a system might not be failing the local authority or certain teachers, but by heavens it is surely failing the children whom our educational system is supposed to be serving.

Let me give an example that comes readily to mind: the efforts in my constituency to establish a new academy, the Kempston free school, in an area of educational underachievement. I shall not use this opportunity to talk specifically about the teachers or the actions of particular teachers in those schools. They work extremely hard to get improvement for the pupils, but over the past five years satisfactory results have not been achieved overall. What has the borough council done about that? It has asked for more time. What have schools tried to do? They are trying to do their best, but the results have not yet met the national minimum standards.

One teacher resigned his job, worked with local parents and wanted to take up the freedoms that this Government have permitted to establish a free school in his area. He had a passion for education and directed that passion at an area of economic and educational disadvantage. That is what everyone who has a passion for education should seek to support. The reaction of the local authority was, essentially, to kick the scheme into the long grass, pretend that it cared, go along with the process, make sure that it checked the boxes that the Government said it must check, but in reality to stifle and seek to eradicate the effort and initiative of those volunteers.

What was the reaction of the schools? They made some good points. What would be the impact on their budget? What would happen with falling rolls when children decided to go not to the existing schools but to the new school? Those are valid points and ones that I wanted to raise with the Secretary of State, but I needed a free school there to do it. It is far better for that discussion about how best to allocate resources in areas of educational underachievement to take place among establishments than to maintain the line that continuing to put funds into a school that is failing is a sign of one’s commitment to education, because it is not.

Educational commitment is what motivated Mark Lehain and the parents and volunteers who supported the Kempston free school. They were inspired to help children in their area, and they were stymied by a local authority and by the efforts of local schools. They wanted a site. The local authority had plenty of sites that it could have made available. Did it welcome the group with open arms? No. It did the minimum required to ensure that it accommodated the Government’s process.

Let us look at the other side. Whereas the local authority can pull its whole local bureaucracy full time to the effort, and the educational establishment can use its incumbency and the loyalty that parents naturally have to their school, regardless of its overall educational performance, what could the free school people draw on? They could draw on their inspiration. They could quit their job to demonstrate their passion. They could get parents and others to say, “Yes, we really want to do it,” but that was never going to be a match for the combined resources of the local authority and the local teaching establishment.

What was worse were the actions of our teaching unions and the Anti Academies Alliance and its fellow travellers in the Local Schools Network, who will crush anyone who threatens the orthodoxy of our teaching establishment. It is a disgrace that those unions flood local meetings to make political points, rather than allowing local meetings, which are part of the consultation process, truly to represent the interests of local parents and teachers. It is disgraceful that people will attack others for their passion when they have an inspiration to provide education for children, albeit not through the established ways, but through a free school. Those people are teachers and care about education just as much as any other teacher. Why is it legitimate for those teachers to be attacked for trying to find an alternative way to serve their local community?

In all these efforts, when the only thing that the people who wished to set up these schools in areas of educational underachievement have is their own inspiration and voluntary effort, I say they need extra help from a Secretary of State who can say, “Here we have the evidence. You have had years of educational underachievement. Here we see that you are not fulfilling your overall mission to educate people in your area. You have an opportunity to do so by providing another academy and I, the Secretary of State, will intervene, disapply all the things that stand in the way and all the tools that can be used to stop people making that advance, and provide that lifeline of support so that children in areas of educational underachievement will have fresh hope and opportunity.”

That is what parents in such areas expect from a Conservative Government and a coalition Government. That is what they were hoping for when they got the pupil premium. That is what they are looking to the Bill to provide—an extension of power from the Secretary of State to local areas. I hope the Minister will listen and seek to embrace that vision as he moves forward. In a few years we will look back on this period, with the current Secretary of State, as a great opportunity to help many who are suffering severe economic and educational disadvantage. New clause 1 seeks to achieve that.

[Stephen Phillips]

I am grateful for the opportunity to address, albeit briefly, new clause 1 to which my hon. Friend the Member for Bedford (Richard Fuller) has just spoken. I was not intending to do so and I therefore hesitated to rise. The charge that he levels at the Secretary of State is essentially that my right hon. Friend is not being sufficiently radical. May I respectfully say that, if that charge is right, the new clause that my hon. Friend moves is itself not sufficiently radical?

The new clause identifies only one set of circumstances—the circumstances of underachievement—in which the Secretary of State should have the ability to disapply the provisions of the Bill in order to ensure that an academy comes into being. I have little doubt that there are many other circumstances in which it might equally be advocated that the Secretary of State should intervene to disapply provisions of the Bill in order to ensure that an academy comes into being. I have in mind an issue that has recently arisen in my constituency which affects many other rural constituencies where there are village primary schools with insufficient places to meet the demand of local parents in the village, with the effect that children from villages sometimes have to travel a great distance for their primary education, often at the cost of being separated from their peers with whom they spend the remainder of their time. One might seek to argue that the Secretary of State should equally have the right to disapply the provisions of the Bill should it be passed and receive Royal Assent. The problem to which I refer is particularly acute in a village called Witham St Hughs in my constituency.

I wonder, therefore, whether the charge which my hon. Friend perhaps rightly levels at the Front Bench could be levelled at his own new clause. He might like to consider whether it should go much wider, in giving the Secretary of State the power not just to disapply the provisions where there is underachievement, but to disapply the provisions that stand in the way of the creation of an academy in other circumstances as well. He may wish to consider amending his new clause in due course. That rather depends, I suspect, on whether he presses it to a Division today.

I should like to hear from the Minister that there is to be some action from the Government on the problem that I have outlined, which affects rural communities and villages in rural constituencies such as mine, as it does in Witham St Hughs. The lack of sufficient primary places is a problem that the Government will need to address, not necessarily because their immediate predecessor did not address it, but because successive Governments across a number of decades have failed to recognise the needs of village communities in constituencies such as mine.

[Stephen McPartland (Stevenage) (Con)]

I, too, had not intended to speak, but I would like to do so in defence of new clause 1, tabled by my hon. Friend the Member for Bedford (Richard Fuller). He is very radical when it comes to education and desperately keen to ensure, as am I and many Members across the House, that children from deprived backgrounds get the education that they deserve and that would allow them to be educated out of poverty. He is concerned that that is not happening because we are not being radical enough in providing the Secretary of State with powers to help those schools that are trying to move forward and improve the benefits they offer.

14:30

New clause 1 suggests that local authorities have some powers to take on the task of getting rid of some of the poorer head teachers or dealing with those aspects in schools that cause the problems, but that they seem unwilling to use them. My constituency is in a neighbouring authority to that of my hon. Friend. In that authority, more than half of the secondary schools have applied for academy status, but none of the schools in my constituency has applied because, apart from one, they are all rated as satisfactory. Our concern is that all those schools should have the benefits and opportunities that come with academy status and that allow them to take forward the aspirations of poorer children.

I support the new clause and believe that we must be radical. The Government are pushing huge sums of money at helping poorer children. I support the Bill because in my constituency the pupil premium will be worth nearly £1 million this year for poorer children. I believe that my hon. Friend is being radical enough in probing the Government to ensure that poorer children in more deprived areas have the opportunity to benefit from academy schooling.

[Mr Sam Gyimah (East Surrey) (Con)]

I wish to speak to new clause 1, tabled by my hon. Friend the Member for Bedford (Richard Fuller), which I wholly support. It suggests that we should be able to disapply the provisions of the Bill, especially when we are trying to help very disadvantaged children. I think that all Government Members, including those who were involved in Committee, agree that that is ultimately our purpose, although we may not always agree on the means.

The arguments that my hon. Friend has put forward are right. On being radical, I think that the Government can go forward in helping poor and disadvantaged children. Currently, there are more than 1,000 failing schools across the country. Less than 35% of children get five GCSEs at grades A* to C, including in English and maths. Less than 55% of primary school children reach the expected level at key stage 2. All we can say—most Government Members agree—is that too many children are being let down.

If we are serious about reforming our education system so that it has a bright future—and most politicians talk about that in their election literature when they say that they are committed to education—we have to do it now. We have the opportunity and we must take it now. That is why I urge the Minister in my new clause 13 to consider disapplying the Transfer of Undertakings (Protection of Employment) Regulations in the case of failing schools. Some might consider that an unusual new clause. I firmly believe in employment rights, for people who work in the private sector as much as for people who work in the public sector, but when a school fails, it is often because the teachers have let the children down. We should consider whether all those terms and conditions should be transferred across.

I wish to make two further points. First, we must consider the cost involved in transferring across all the terms and conditions, which can add up to about £100,000 for the local authority and the Government. Secondly, we must also consider the bureaucracy involved in doing that. Of course we have to go through a consultation process, unless that has been agreed with all the staff before the academy opens, but I think that it is important that we give the Secretary of State the power to disapply those provisions when they think it necessary to do so. That is because there is only one objective here: we want to ensure that our duty is not to the teachers who may have failed the students, but primarily to the children. This is a probing new clause, and I urge the Minister to consider it seriously.

[Mr Gibb]

I will speak first to new clause 1, tabled by my hon. Friend the Member for Bedford (Richard Fuller), and new clause 13, tabled by my hon. Friend the Member for East Surrey (Mr Gyimah), who both served, alongside my hon. Friend the Member for Stevenage (Stephen McPartland), on the Bill Committee. I welcome the strong support for the Government’s expansion of the academies programme that lies behind both new clauses. There are now more than 650 academies, more than two thirds of which have opened since September 2010, and that is equivalent to more than two every working day. I am proud that the coalition has achieved this pace of expansion in its first year in office. I believe that it is vital to ensure that the benefits of academy status are used to address underperformance in our education system.

As my hon. Friends will know from their scrutiny in Committee, the Bill includes measures to strengthen the Secretary of State’s power to intervene in underperforming schools. We are strengthening those powers to ensure that we can take the necessary action to invite an effective academy sponsor to transform a school where children are receiving an unacceptably low standard of education and the governing body and the local authority are reluctant to intervene.

My hon. Friend the Member for Bedford mentioned exclusions, special educational needs and, in particular, children with autism. I welcome his support for the Green Paper on special educational needs and disability. He is right to raise those issues. I, along with officials, recently met the Special Educational Consortium to discuss the matter. I look forward to continued discussion with it on the Bill as it progresses through the House and another place. He rightly highlighted the fact that even with the Bill’s new provisions, many schools will still not be eligible for intervention, despite performing below the minimum floor standard. Ofsted’s inspection judgments in recent years have not always paid sufficient attention to the quality of teaching when identifying schools that require special measures or a notice to improve. I welcome the fact that the changes to the inspection framework proposed by Ofsted start to address that issue.

I share my hon. Friend’s concern that no excuses should be made for low standards. He may be right that the current proposals do not go far enough in allowing my right hon. Friend the Secretary of State to intervene swiftly in schools that perform below the minimum floor standard. However, we need to be sure that, in any changes we make, there are appropriate safeguards in place for schools to ensure that the Secretary of State is not left open to legal challenge that might continue to frustrate the conversion process.

On new clauses 1 and 13, I sympathise with my hon. Friends’ desire to ensure that unnecessary hurdles do not get in the way of the efficient transformation of poorly performing schools. However, there is a need to ensure appropriate safeguards. We have been convinced by the weight of opinion across both Houses that appropriate local consultation should inform conversion to academy status. The ability to disapply such requirements when converting poorly performing schools, as proposed in new clause 1, is not something we are seeking. For those reasons I cannot accept the new clause.

[Mr Mark Field (Cities of London and Westminster) (Con)]

Does the Minister not recognise some of the concerns felt by Government Members? One of the fundamental problems is that often there are not articulate parents who can make the difference in those failing schools and provide the safeguard to ensure that children’s need are properly looked after. It is for that reason alone that we would like some additional powers in the hands of the Secretary of State, along the lines of those outlined new clause 1.

[Mr Gibb]

My hon. Friend makes an important point, and I am not unsympathetic to the views he expresses. I know how concerned he is about educational standards, and the Government are committed to raising standards throughout the system, particularly in inner-city districts, such as those he represents, where there are areas of deprivation that are not well served by schools.

We believe, however, that we do have significant powers. It is always open to argument that more are needed, but we believe that there are sufficient powers, and the Department, headed by my right hon. Friend the Secretary of State, is determined to raise standards and is actively seeking sponsors to take over the leadership of schools that do not provide the necessary quality of education. The pressure, help and assistance coming from the Department means that people will be able to make proposals—more articulately than I am being at the moment—locally, but that does not mean that, at the same time as an academy proposal is going forward, there should not be a consultation process enabling all local people to put their views forward.

[Richard Fuller]

Does my hon. Friend agree that a consultation process that requires and comprises a public meeting for local parents, but which the teaching unions, the Anti Academies Alliance and the Local Schools Network flood with activists who have little or, in many cases, no adherence to the community in which that school would be located, is hardly public consultation?

[Mr Gibb]

My hon. Friend makes an important point. There is no requirement to conduct a consultation in a specified way, and we have been careful not to introduce one, because every consultation should be adapted to local circumstances. We want to be flexible about how local consultation takes place and, before reaching a decision, the Secretary of State will look realistically at the local extent of that consultation in order to ensure that it has been genuine.

I share the view of my hon. Friend that, when meetings are packed with political activists who are not necessarily even from the local community but there to deliver their own ideological message, that is not genuine consultation. When a meeting is held and the overwhelming opinion expressed by those people gives the impression of one view, the Secretary of State will look through that to see what the genuine view is of local people in the community. He wants to ensure that the consultation has been extensive and has included local people, so, when local people have in effect been excluded by such activity, he will take that into account before reaching a decision. There is a need for appropriate safeguards, however, and we have been persuaded by the weight of opinion across both Houses to ensure that there is proper consultation.

New clause 13, in the name of my hon. Friend the Member for East Surrey (Mr Gyimah), explores the possibility of disapplying the TUPE regulations in schools that are eligible for intervention and that the Secretary of State wishes to transform through conversion to academy status. My hon. Friend will know that the Transfer of Undertakings (Protection of Employment) Regulations 2006, which the new clause seeks to disapply, were implemented in response to the European acquired rights directive. In line with European legislation, they set out the circumstances in which they must be applied, preserving an employee’s statutory duty and contractual employment rights through any transfer process. Disapplying those regulations for staff in converting schools would mean that such staff were unprotected when compared with other employees whose employment is transferred from the public sector.

I gave assurances in Committee that the rights of staff when transferring from the employment of a maintained school to an academy trust are protected by TUPE, but the application of TUPE at conversion does not mean that staffing cannot be reviewed and restructured after conversion—just as it can be before. We are clear about the need for school work force reform to improve the quality of teaching. We want to make it easier for schools to tackle poor performance by helping underperforming teachers to address their professional weaknesses or by enabling head teachers to deal more quickly with entrenched underperformance.

I listened carefully to my hon. Friend’s argument, and he will have some support for the views that he expresses.

14:45

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I share the sentiments expressed by my hon. Friend the Member for East Surrey (Mr Gyimah) about the need to put the interests of the children first, but, as he said that it was a probing new clause, it would not be right to weaken the protection of those who teach and work in some of our toughest and most challenging schools. We have to send out the message—I think my hon. Friend the Minister has just done so—that, although we will protect and support the rights of the people who work in the toughest schools, we will ensure that we have a performance management framework that challenges underperformance, and we will not be afraid to restructure when putting new measures in place.

[Mr Gibb]

My hon. Friend is right, and the Government are committed to protecting those employment rights.

The underperformance of teachers is not necessarily the only reason why schools underperform; there is a whole host of reasons, one of which is that schools are burdened by bureaucracy. One key measure that we implemented in the opening months of the Administration was a reduction in the amount of bureaucracy and prescription that has been heaped on teachers over the past 10 years. With those few comments, I hope that my hon. Friend the Member for East Surrey will not press his probing new clause any further.

I turn to the new clause tabled by the right hon. Member for Birkenhead (Mr Field). We welcome the many initiatives in the independent schools sector, assisted by the schools themselves through bursaries and scholarships and by many charities, to support children who would not otherwise be able to receive an independent school education. The right hon. Gentleman may have seen the article in The Times today by Lord Adonis and Anthony Seldon, the headmaster of Wellington college, urging the independent sector to sponsor more academies, and we share the views of those two contributors. That should be happening, and we want to see more independent schools sponsoring academies, but the Government’s priority is to transform the state education system so that all children are able to access a good-quality education regardless of their background.

Our independent schools provide some of the best education in the world, according to the OECD and other commentators, and we are keen to encourage greater collaboration between the sectors so that best practice can be shared and schools can work more effectively together in the best interests of pupils and staff, but the right hon. Gentleman’s new clause is neither desirable nor necessary.

An academy is free to further its education objectives by using any funds it is able to raise through charitable donations or other similar sources, but academy funding agreements regulate the way in which such schools can use taxpayer funding. The general annual grant paid by the Secretary of State can be spent by an academy only on its normal running costs, and we have no intention of changing that. That does not mean academies cannot buy in additional support from independent schools or collaborate with them on joint provision, but the bulk of state funding should rightly be used to raise educational attainment and standards for the benefit of all pupils in the academy.

[Mr Frank Field]

rose—

[Mr Gibb]

I give way to the right hon. Gentleman.

[Mr Field]

I am grateful to the Minister for giving way; I am not too grateful for his comments. Supposing the Government allowed a free vote on my new clause, does he think that we would run him close tonight?

[Mr Gibb]

I have no idea what the view of the House would be. I am not sure that the right hon. Gentleman would have huge support from Opposition Members, or that all elements of the coalition would necessarily support his proposal. I am not sure what the outcome of such a vote would be, but I am not convinced that his proposal is the right thing on which to use scarce taxpayers’ money.

[Stephen Phillips]

The Minister has quite rightly stressed the importance of using the funding for academies to raise academic standards and to deliver the best education for all pupils in them, but the new clause that the right hon. Gentleman seeks to introduce, at least in a probing way, does not detract from that. It says that the most able pupils should be able, at a marginal cost, to go to what the Minister himself has said the OECD describes as some of the best schools in the country. I am sure that the right hon. Gentleman will not press his new clause, which is a probing measure, but will the Minister keep an open mind? At the moment, he has given no principled reason why the proposed change should be rejected.

[Mr Gibb]

I have listened to my hon. and learned Friend with great care, and he makes his case persuasively, but our principled view is that we want to see standards raised across the state sector. With 93% of pupils in our education system attending schools in the state sector, we want to ensure that every school in that sector caters for pupils of the kind that he and the right hon. Member for Birkenhead are talking about. Mossbourne community academy in Hackney serves one of the most deprived parts of this country; 50% of its pupils qualify for free school meals. More than 80%—I think nearer to 85%—of students at that school achieve five or more GCSEs at grades A* to C, including English and maths, and this year they have had 10 offers of Oxbridge places. How many comprehensive schools of which hon. Members are aware have had 10 Oxbridge places offered in one year?

[Mr Frank Field]

I make one last plea to the Minister. My constituents are not interested in a sectarian Government saying that they wish to raise standards in the state sector. My constituents wish to see standards raised, and they are not concerned about which sector is used to achieve that objective.

[Mr Gibb]

I share that view. There is too much sectarianism in education. There should be more working between the independent sector and the state sector. I should like us to look at the methods that are used in the independent sector to see what can be learned from it. Indeed, many of those in the independent sector tell me that they want to learn from what is happening in some of the best schools in the state sector. There should be greater movement between the two sectors, and we are committed to that. We share the views of Lord Adonis and Anthony Seldon in the article that they jointly wrote for today’s edition of The Times.

[Mr Mark Field]

The Minister refers to principles. Does he accept my view that an important academic and educational principle is that it is as important to look after the special educational needs of the most gifted academic children as it is to look after the needs of those who are less gifted? The concern expressed by the right hon. Member for Birkenhead (Mr Field) in his new clause is that all too often the special educational needs of some of the most gifted are ignored.

[Mr Gibb]

My hon. Friend is right. We need to ensure that our comprehensive schools are genuinely catering for children of all abilities, and that those able children are as well catered for in comprehensive schools as they are in schools that specialise in children of that ability, whether in the independent sector or the state sector. The point I was making to the right hon. Member for Birkenhead and to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) is that the state sector has many examples of where such children are extremely well catered for, and that is why some schools in the state sector have very high levels of entrance to Oxbridge and to Russell group universities. It is our view that if it can be done in those schools, it can be done throughout the state sector. We are determined to have a state education system that can deliver a high-quality education for children of all abilities, including the children that my hon. Friend the Member for Cities of London and Westminster (Mr Field) mentioned.

The hon. Member for Cardiff West (Kevin Brennan) asked about unnecessary referrals to alternative provision academies or to pupil referral units generally. There are three routes by which pupils can be referred to a PRU: first, through section 19 of the Education Act 1996 on placements by local authorities; secondly, through section 100 of the Education and Inspections Act 2006, which was introduced by the Government of whom he was a member, under a duty on schools and academies to provide education for pupils on fixed-term exclusions of more than five days; and thirdly, through section 29A of the Education Act 2002, under which a maintained school can direct a pupil to be educated off-site for the purpose of improving behaviour. Each of those routes carries its own safeguards, which will remain in place. That will ensure that alternative provision academies will provide for pupils who can most benefit from that provision.

My hon. and learned Friend the Member for Sleaford and North Hykeham talked about the need to ensure that there are sufficient places in primary schools, particularly in rural areas. We recognise that the large increase in the number of children of primary school age means that more schools are needed. We have made the funding available to meet that increase, and the academy free schools programme will add to that provision. We are very well aware of these issues. The birth rate has been increasing since 2001, and we are absolutely determined to ensure that there are sufficient places.

With those few comments, I commend new clause 20 to the House.

Question put and agreed to.

New clause 20 accordingly read a Second time, and added to the Bill.

New Clause 21

Charges at boarding Academies

‘After section 10 of AA 2010 insert—

“10A Charges at boarding Academies

(1) This section applies where—

(a) a registered pupil at an Academy is provided with board and lodging at the Academy, and

(b) the local authority for the pupil’s area is satisfied that either condition A or condition B is met.

(2) Condition A is that education suitable to the pupil’s age, ability and aptitude, and to any special educational needs the pupil may have, cannot otherwise be provided for the pupil.

(3) Condition B is that payment of the full amount of the charges in respect of the board and lodging would involve financial hardship to the pupil’s parent.

(4) If the authority is satisfied that condition A is met, the authority must pay the full amount of the charges in respect of the board and lodging to the proprietor of the Academy.

(5) If the authority is satisfied that condition B is met, the authority must pay to the proprietor of the Academy so much of the charges in respect of the board and lodging as, in the opinion of the authority, is needed to avoid financial hardship to the pupil’s parent.

(6) The proprietor of the Academy must remit the charges that would otherwise be payable by the pupil’s parent, to the extent that it receives a payment from the local authority in respect of those charges under subsection (4) or (5).”’.—(Mr Gibb.)

Brought up, read the First and Second time, and added to the Bill.

[Mr Frank Field]

On a point of order, Mr Deputy Speaker. I am not pressing my new clause, even though the Minister could have had his speech written for him by old Labour, which I think will be noted. I wish for the proceedings to go forward as expeditiously as possible.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

As amusing as that may be, it is not a point of order.



New Clause 2

Admissions policy of independent schools opting for Academy status

‘(1) Section 6 of the Academies Act 2010 (effect of Academy order) is amended as follows.

(2) In subsection (4) (definition of “selective school”), after paragraph (b), insert—

“, or

(c) it is an independent school with a selective admissions policy converting to an Academy”.’.—(Mr Brady.)

Brought up, and read the First time.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 10—Fair access to education and training—

‘(1) EA 1996 is amended as follows.

(2) In section 10 (General duty of the Secretary of State), at the end insert “and ensure fair access to opportunity for education and training.”.’.

New clause 22—Guidance on draft Regulations on pupil registration and school attendance codes—

‘The Secretary of State shall provide guidance to local authorities for dealing with families who have chosen to home educate their children prior to the implementation of the Education (Pupil Registration) (England) Regulations and the School Attendance and Absence codes.’.

Amendment 40, in clause 4, page 9, line 26, at end add

‘The Secretary of State must lay before Parliament an annual report on the numbers of students at all schools in England and Wales subject to these powers including—

(a) details as to whether these pupils have identified special educational needs or additional learning needs,

(b) the numbers of times these powers have been exercised,

(c) the previous and current status of their schooling provision,

(d) whether their exclusion was referred to a review panel, and

(e) where known the outcome of any review panel action including any financial adjustment of the schools budget share for a funding period incurred by schools as a direct consequence of the exclusion.’.

Amendment 9, in clause 34, page 33, line 4, at end insert—

‘(1A) In section 84 (Code for school admissions) in subsection (2) after “other matters”, insert “which ensure fair access to opportunity for education”.’.

Amendment 10, page 33, line 5, leave out subsection (2).

Amendment 13, page 33, line 14, leave out subsection (3) and insert—

‘(3) For section 88J (changes to admission arrangements by schools adjudicator) substitute—

“88J Implementation of decisions by adjudicator

(1) This section applies where the adjudicator has made a decision (‘the primary decision’)—

(a) under section 88H(4) on whether to uphold an objection to admission arrangements, or

(b) under section 88I(4)(b) or (5)(b) on whether admission arrangements conform with the requirements relating to admissions.

(2) If the admission authority has not amended its admission arrangements within a period of 14 days of being notified of the primary decision, the local authority for the area in which the school is situated may direct appropriate changes to any aspect of the admission arrangements in consequence of the primary decision.

(3) Following the amendment of the admission arrangements by the admission authority following a primary decision, the local authority for the area, if it considers that the changes to the admission arrangements are not consistent with the primary decision, may direct appropriate changes to any aspect of the admission arrangements in consequence of the primary decision.

(4) An admission authority which is subject to a direction under subsections (2) or (3) may ask the adjudicator to set aside the direction on the grounds that the changes to the admission arrangements contained in the local authority’s direction are not consistent with the primary decision.”.’.

Amendment 11, in schedule 10, page 83, line 4, leave out paragraphs 1 to 3.

[Mr Brady]

It is a great pleasure to have this opportunity to participate in this important debate, which has so far been excellent, with colleagues on both sides of the House making points that are focused on the important task of raising standards and extending opportunity without too much ideology and dogma getting in the way.

My new clause 2 is supported by 38 colleagues from both sides of the House—a very broad spectrum of support that reflects the fact that it demonstrates basic common sense in moving forward the educational debate. It is modest, but it would do something quite important. It seeks to remove an anomaly that the Government have themselves created, arising from the fact that in the Academies Act 2010 they legislated to allow state grammar schools to become academies without changing their admissions status, thereby accepting the principle that it is possible to be an academy and a selective school.

The new clause would merely extend exactly the same arrangements to independent schools seeking to become academies and retain their existing admissions arrangements. It would address the point made by my hon. Friend the Minister earlier when he referred to the vital importance of our excellent independent schools and excellent state schools working more closely together, breaking down the artificial divides between them and ensuring that we open up for as many children as possible access to what he describes as some of the best schools in the world, according to the OECD.

New clause 2 makes an important amendment, even though all it would do is remove an anomaly, because it would send the clear message that what matters in education is providing quality and new opportunities, and opening access to the very best schools without dogma getting in the way. At a time when the Government and the Opposition are deeply concerned with raising our performance on social mobility and ensuring that people, regardless of background, can progress in life according to their talents and abilities, the new clause would remove one of the impediments that stand in the way.

15:00

I am sorry that the right hon. Member for Birkenhead (Mr Field) is no longer in the Chamber, because I listened with considerable interest and care to his speech on new clause 19, which he tabled. It is possible to agree with his new clause and mine, but I say to the Minister that it is difficult to disagree with both new clauses. New clause 19 would allow academies in the state sector to use some of the money available to them to buy a place in an independent school for the benefit of a pupil to whom that education would be most suited. If that idea is not to the Minister’s tastes, my new clause takes the other side of the coin. Instead of allowing an academy to buy a place in an independent school, it would make it easier for some of the best independent schools in the country to choose to adopt academy status, thereby opening their doors to all children, regardless of their financial background and their parents’ ability to pay.

[Andy Burnham]

The hon. Gentleman just spoke about schools opening their doors to all children. Will he confirm that under the new clause, those schools would maintain their selective admissions policies?

[Mr Brady]

Absolutely. The right hon. Gentleman is entirely correct. No new selective schools would be created under the new clause. The country would have the same schools that it has at the moment, but those schools would be able to accept people regardless of parental means and the ability to pay. It would bring more excellent schools into the state sector, satisfying the objective of the Minister.

This is not a theoretical situation. I first became interested in this area because many years ago, two independent schools in my constituency did precisely this. They opted into the state sector, in those days as grant-maintained schools. St Ambrose college and Loreto grammar school, which are both Roman Catholic selective schools, were welcomed by a previous Conservative Government into the state sector, and were allowed to maintain their ethos and admissions rules. St Ambrose college is an excellent school, which educated three Members of this House, including my hon. Friend the Member for East Hampshire (Damian Hinds). This could be called the St Ambrose and Loreto new clause.

Not only would the new clause restore the ability for excellent independent schools to come into the state sector in the way that they could under the previous Conservative Government, it would end the unfortunate state of affairs that has pertained since. Again, that is not a theoretical point. Some years ago, William Hulme’s grammar school in Manchester became an academy, but under the previous Government it was forced to abandon its selective admissions policy and become a comprehensive school. It is still a good school, but regrettably, it was required to change its ethos in a way that it had no desire to do. More worryingly, that process is continuing today. As the Minister knows, Batley grammar school is in the process of becoming an academy. Shockingly, under the present Government, it, too, is being required to change its ethos and its admissions policy in a way that would not have been required had it been a state school transferring to academy status.

I am aware of other independent schools that would be interested in pursuing this route if the Minister and the Secretary of State were to open the door to them. That point is important. Typically, these are schools that value their independence and their selective ethos, but have no desire to charge fees that might deny access to some able boys and girls who would benefit from the education that they offer. Frequently, like Batley grammar school, they are not in the most prosperous parts of the country. This measure would clearly extend opportunity to a significant number of children in less affluent parts of the country.

[Mr Graham Stuart]

Will my hon. Friend give way?

[Mr Brady]

I happily give way to my hon. Friend, the Chairman of the Select Committee.

[Mr Stuart]

My hon. Friend paints a powerful picture. It is inspiring to imagine that schools that, because of their economic circumstances, moved away from their original foundation, which was to provide education for some of the poorest scholars in the land, will be able to return to doing that again. The pupil premium will give them the economic incentive to target children from the poorest families and provide them with high-quality education. That is a vision to fulfil the principle that the Minister talked about of ensuring that all areas of education work together to look after the needs of all children, with priority being given to the poorest families.

[Mr Brady]

I am grateful to the Chairman of the Select Committee for his support. As he said, the new clause would simply remove an obstacle that stands in the way of the noble ambition of some excellent schools that are deeply committed to educating children of whatever means. Many schools can do so because they have access to bursary funds that cover the fees for such pupils, but not all can. To give another example from my city, Manchester grammar school, which is a former direct grant grammar school, is a fantastic institution that had the ability to raise a large bursary fund, which allows it to operate its admissions in a needs-blind way. Not all good independent schools can replicate that because they do not all have as many successful and wealthy old boys.

To return to my central point, this is a modest measure that would correct an anomaly, but in doing so would sweep away an obstacle that can only be considered dogmatic. It is entirely in keeping with the existing policy of the coalition Government, who, in the Academies Act 2010, accepted the principle that selective schools can be academies. The Minister is a passionate advocate for the academies programme. He has always made it clear that opportunities should be opened and that good schools, of whatever kind, should be encouraged. I have always welcomed that in our many constructive conversations. This simple measure would open the door to more good schools accepting the principles that he has set out and accepting the hand of friendship to welcome them into the academies programme and the state sector. It would allow more children to enjoy a high-quality education without the threat of fees having to be paid. I hope that he will accept the new clause in that spirit.

[Andy Burnham]

Take two. I will speak to new clause 10 and amendments 9, 10, 11 and 13, which are in my name and those of my hon. Friends. Our main objection to the Bill is that it takes power away from parents and pupils, particularly at crucial moments in the education journey. Decisions about admissions and exclusions can be life-changing for children, and giving parents the power to challenge them is an essential part of any fair school system. Over the past decade, improvements have been made to ensure fair admissions in English schools, and the Bill will take those safeguards away. It will severely weaken parents’ rights in respect of admissions at both local and national level, and it will limit their ability to seek redress both for their own children and for others who come after them. That would be bad in any event, but when we consider that weakening of accountability in the wider context of the education system that the Government are building—a highly competitive free market—we see that it represents a real danger to the life chances of our children, particularly those with the least support.

Let us put the Government’s changes to admissions in that wider context. First, in time, there could be more than 20,000 separate admissions authorities operating in a free market, accountable only to the Secretary of State and able to bypass local checks and balances. Secondly, on top of that free-for-all we will have the polarising effect of the narrow, academic English baccalaureate. In the competitive education market, schools will desperately try to raise their bac scores, and we can see how the risk will emerge of admissions policies being constructed to support that attempt. Now is emphatically not the time to weaken the powers of the schools adjudicator to rectify non-compliance with the admissions code. With the checks and balances gone, there is a real and present danger that there could be more unfairness in the system and that parents will find it harder to get fair access to good schools.

[Mr Gibb]

Does the right hon. Gentleman support, then, our measure in the Bill to extend the right to complain to the schools adjudicator to parents of children in academies? That right did not exist before.

[Andy Burnham]

Yes, we do, but that is not the central point. In making that move, the Minister is weakening the overall powers of the Office of the Schools Adjudicator and taking away its teeth. We hear that he is also about to weaken the admissions code—I will come on to that in a moment.

My greatest fear is that in Gove’s world, less academic children, those with less parental support and those with special educational needs will be the biggest losers. The Secretary of State is creating by the back door what, as we have just heard, his own Back Benchers are today enticing him to create by the front door—an elitist, two-tier system that is good for some children and some families, not all children and all families. We need safeguards for all parents, and I implore the House to vote to keep them. Otherwise, we will leave uncorrected the real flaw that lies at the heart of the Government’s vision for the reform of public services.

In education and in health, if the Government plan more freedom and autonomy for providers, it is absolutely essential that the change is accompanied by a corresponding empowerment of the public and a greater ability for the users of services to hold providers to account. If the Government do not increase people’s voice, they will create a provider’s market, a free-for-all with an accountability deficit. If primary care trusts or local authorities are no longer there to ensure fairness for all, it is crucial that we keep and strengthen the mechanisms that protect the rights of patients and parents.

[Mr Graham Stuart]

Going back to the right hon. Gentleman’s point about the English baccalaureate, does he agree that we need an assessment and accountability framework that gives equal weight to the progress of every child? If he does—I hope that we can get consensus between the Front Benchers on that—does he agree that the current levers and pressures on schools provided by the requirement of five good GCSEs do not deliver that vision, and that Members on both sides of the House need to work harder to create a system that gives equal weight to the progress of every child?

[Damian Hinds (East Hampshire) (Con)]

indicated assent.

[Mr Stuart]

My hon. Friend, who is nodding, has helped champion that issue very effectively in the Education Committee.

[Andy Burnham]

The hon. Gentleman makes an important point. I agree with his emphasis on the needs of every child, and I further agree that the five A to C-grade GCSEs measure had its imperfections. He might, then, agree with what I am about to say.

15:15

I believe that the English baccalaureate will be divisive in and of itself, because it has a narrow, academic focus and will encourage schools not to focus on young people who have a more vocational aptitude. That is essentially the problem with it. There is a prescriptive choice of subjects in the baccalaureate, and where is the evidence to justify that selection? Where is the creativity in the Government’s vision? Where is music, religious education or business studies, and why is Latin in there? The Government have never satisfactorily answered those questions. My fear is that if the Government create that divisive performance management tool and apply it to a free-for-all in education, there could be some very worrying changes on the ground. That is the risk to which I am alerting Members today.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

How does the shadow Secretary of State reconcile his rather jaundiced view of the Government’s commitment to vocational education with our stated and funded commitment to boost the number of apprenticeships for 16 to 18-year-olds?

[Andy Burnham]

That is not the full answer. If schools are being judged by the gold standard of specific GCSEs, does the hon. Gentleman not accept that he is creating a real disincentive for schools to focus on the kids who are not taking those subjects? I know that he cares about vocational education, and I look to him to give us some more convincing answers that show that the Government are committed to those young people.

[Mr Graham Stuart]

Will the right hon. Gentleman give way?

[Andy Burnham]

I want to make some progress, but maybe I will give way to the Chairman of the Education Committee again later.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am sure my right hon. Friend is aware that the latest figures given to the Skills Commission only yesterday by a professor from Southampton university show that 6% of kids in this country leaving school between 16 and 18 get an apprenticeship, and 36% go into higher education. That leaves a darned large number of young people not going to either of those destinations. I am quite fond of the Minister for Further Education, Skills and Lifelong Learning, but sometimes he uses the apprenticeships commitment to hide a lack of activity in other areas.

[Andy Burnham]

My hon. Friend puts his finger on it. I said when I took on this job that I wanted more focus on the 50% or more of young people who are not planning to go to university. Every Member owes that to those young people. Apprenticeships are part of the answer, but as I said a moment ago, they are not all of the answer. Sometimes we hear the Government talk only of kids on free school meals getting to Oxbridge, as though that were the only measure of the education system in this country. I am afraid that in my view, that shows the elitist approach to education that is coming through more and more from the Government.

Our new clause and amendments are intended to put power back in the hands of parents and fairness at the heart of the system at local and national level. First, given that the Secretary of State is taking more than 50 powers in the Bill to run almost every aspect of the schools system, we propose, in new clause 10, duties for him to ensure fair access to education.

Secondly, amendments 10 and 11 would reinstate the requirement for all local authorities to establish a local admissions forum. Those forums are an important part of ensuring parents’ involvement and local accountability. Parents have a right to be represented on them, and parents’ groups can come to the meetings and make representations on particular issues of concern. Parents in all areas should have a guarantee that they will be able to call on a local forum in their hour of need.

On that point, I say to the Minister of State, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), that he missed the point in Committee. It is no help to parents if the forums are optional. If there is to be a postcode lottery, with some local authorities having forums and others not, not all parents will have the right to call on those local independent bodies if they need to. Moreover, voluntary forums would not have the same powers as the current ones, such as the power to object to the schools adjudicator. An independent monitoring body in each local authority to ensure fair admissions criteria and processes should be an entitlement for all parents.

It is also more efficient to deal locally with issues involving local stakeholders, rather than to refer every contentious issue to the adjudicator. Indeed, the chief adjudicator supports the retention of admissions forums, as he told the Education Committee. He said:

“I believe…that admissions forums are good things. It commits all admissions authorities in an area…to sit around a table and talk over their problems.”

That brings me to amendment 13, which would restore the crucial ability of the schools adjudicator to seek early rectification of non-compliance with the admissions code in admissions policies, working through local authorities. The adjudicator is an important guarantor of fairness for parents. As he told the Education Committee, 92% of the complaints that he received last year came from parents. The Government have failed to make any case to support their changes beyond saying, “Trust the schools.” Well, the Opposition trust schools, but we also know that the adjudicator must frequently step in to correct non-compliance with the code. Indeed, the very fact that the adjudicator has that power focuses the minds of schools and local authorities to ensure that policies are fair in the first place. The Government are therefore undermining the office of the schools adjudicator in terms of helping parents when they need it.

We believe that the Bill weakens the adjudicator’s power, but that problem is further compounded by the potential dilution of the admissions code. Yet again with this Secretary of State and his chaotic Department, the House finds itself in the unacceptable position of being asked to legislate on matters crucial to families in this country without all the relevant information before it. I have a simple question for the Minister of State: where is the draft admissions code? Where is it? It is disgraceful that the House does not have access to that code when it is being asked to vote on the Bill.

In Committee on 29 March, the Minister told the shadow schools Minister, my hon. Friend the Member for Cardiff West (Kevin Brennan), that the admissions code

“is certainly imminent and will certainly be available before many of the future stages of the passage of this Bill”––[Official Report, Education Public Bill Committee, 29 March 2011; c. 770.]

Mr Deputy Speaker, is it acceptable that the Minister has not delivered on that promise? I put it to you that it is an affront to the House and to Parliament that the Minister has failed to honour a commitment that he gave in Committee. The code is highly relevant to today’s debate, and it should be available to hon. Members.

[Ian Mearns (Gateshead) (Lab)]

My right hon. Friend puts his finger on the nub of the issue—the Minister promised in Committee on 29 March that the admissions code was imminent. We must reiterate the concerns of the schools adjudicator, because he saw the idea of simplifying the admissions code as a way of giving wriggle room to schools to use covert selection. That is a real concern for my constituents and parents in my area.

[Andy Burnham]

My hon. Friend is absolutely right. The Bill weakens the schools adjudicator and could dilute the admissions code—although we cannot assert the latter as a fact, because we have only media reports to go on. It is a disgrace that the Minister has been unable to give that information to hon. Members, who are voting on life-and-death issues for their constituents: the question for parents is whether they can get the schools that they want. I put it to hon. Members that they will be doing a huge disservice to their constituents if they vote for a weakening of the admissions system without knowing what is in the code, and the full extent of the Government’s intentions.

[Mr Graham Stuart]

I asked the right hon. Gentleman earlier whether he would support the principle of an assessment and accountability framework giving equal weight to the progress of every child in our schools. Does he support that? If we collectively introduce such a system, we would not need such massive bureaucratic machinery to try to stop artificial selection in schools, because there would no longer be an incentive to pursue such measures. Rather, the system would encourage schools to attract more children who come with the pupil premium, and we could have a more equitable education system, along with the outstanding outcomes that we all seek.

[Andy Burnham]

I sympathise with the Chairman of the Education Committee. I am reading into what he says the impression that he fears the effect of the English baccalaureate on the proposed free-for-all system, in which there is no power at local level to challenge what schools are doing, and in which the adjudicator does not have the teeth to rewrite admissions policies. I am sensing that the hon. Gentleman has real worries about that, and I ask him to urge those on the Government Front Bench to sort it out, before we drive real unfairness into our school system.

Yes, we should have a system that measures every child’s progress in the important things such as maths and English—that will be the bedrock of any system—but I fear that the English baccalaureate is a highly divisive tool that will set some children against others and give schools the wrong incentive.

[Mr Gibb]

Is the right hon. Gentleman aware that English, maths and double science are already compulsory up to the age of 16, and that until 2004 a modern language was compulsory up to 16? Therefore, only history or geography are added in the English baccalaureate—and they are compulsory up to 14. What is it about history or geography that he so opposes?

[Andy Burnham]

That is utter nonsense from the Minister, who made, with his Secretary of State, great play of autonomy for schools and teachers when in opposition. They complained about top-down prescription from the previous Labour Government, but will he accept that the English baccalaureate is far more prescriptive than anything we ever did? If so, how does he square that with his previous statements?

[Mr Gibb]

The English baccalaureate is not compulsory or prescriptive. It is also not an accountability measure; the accountability measure remains five or more A to C GCSEs including English and Maths, and the floor standard is 35% of those in a school achieving that. This is not a compulsory combination of GCSEs, but one of many measures that our transparency agenda ensures will be put into the public domain.

[Andy Burnham]

As my hon. Friend the Member for Cardiff West says, this is a nudge with a loaded gun. Of course schools will focus on the English baccalaureate! If the Minister expects us to believe that that will not happen, he is taking us for mugs. The baccalaureate will obviously drive behaviour in our school system. The Ministers know that that is what they are doing, but they are trying to pretend that it will not happen. I am telling the Minister that it will.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

Is my right hon. Friend aware that some schools, including some in my constituency, have already moved existing year 10 pupils—generally the more able ones—off the subjects that they have chosen and on to the English baccalaureate subjects, because they are worried about the new accountability measure?

[Andy Burnham]

Where is student choice in this system? What are the rights of children, particularly those who have creative flair? How does the system look after the interests of those who are good at music or drama? In some schools in my constituency, around 30% are taking the English baccalaureate. Ministers tell us that it is supported by parents, yet when given the choice, many say, “This isn’t what we want for our children, because it’s too prescriptive and doesn’t recognise the breadth of experience that we want them to have.” We hear that music and RE teachers are being made redundant. It is time for another U-turn by the ministerial team that is famous for them.

[Steve Baker (Wycombe) (Con)]

The right hon. Gentleman says that the English baccalaureate is too prescriptive, but moments earlier he said several times that there is a free-for-all. Which is it?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The debate may be straying into rather more general matters than the new clauses and amendments before us.

[Andy Burnham]

I am grateful, Mr Deputy Speaker. As I have said before, the Secretary of State is in danger of collapsing under the weight of his own contradictions, and the hon. Member for Wycombe (Steve Baker) has just made that point.

Let me return to the admissions code, which we have not seen. I hope the Minister will give the House an apology this afternoon for failing to produce it. We hear that it will be slimmed down, and that it will allow founders of free schools to leapfrog local families to the front of the queue for places—the so-called Toby Young clause. The Opposition can accept a simpler admissions code, but we will not accept a weaker admissions code.

The Government’s failure to produce the code leaves us asking one question: what are they trying to hide? That is a relevant question given that today we have further evidence, from the hon. Member for Altrincham and Sale West (Mr Brady), of the true Tory instincts on education. His new clause 2 would allow independent schools that cross over to the state sector to continue selective admissions policies, as he confirmed to me, which means that formerly independent fee-paying schools would be fully funded by the taxpayer, but would remain exclusive schools selecting students on the basis of ability. I notice that 35 or more of his colleagues felt free to put their names to this outrageous expansion of selection, presumably because they are being encouraged by his own Whips and Front Benchers.

15:30

At a Friends of Grammar Schools reception in Parliament last year, hosted by the hon. Gentleman, the Secretary of State was asked for his view on whether his free school movement could allow the expansion of selection. He reportedly replied:

“My foot is hovering over the pedal; I’ll have to see what my co-driver Nick Clegg has to say”.

Well, I think we know what the Deputy Prime Minister will do: he will talk about being muscular, but then offer no resistance whatsoever. Indeed, Tory voices today are crowing about the right-wing nature of the school reforms before the House. I urge Liberal Democrats to live up to their recent statements, particularly since Thursday, and to implement the policy passed at last year’s Liberal Democrat conference.

I urge Liberal Democrats, too, to listen to the independent experts. When asked by my hon. Friend the Member for Scunthorpe (Nic Dakin) in the Education Committee whether he would make the changes to admissions set out in the Bill, the schools adjudicator replied:

“I wouldn’t, no. The only changes I would be introducing, as I said to the Chair, is the extension of our role to take on academies and free schools. I don’t think that I would be taking out any of the admissions changes suggested in the Bill.”

The Children’s Commissioner said:

“Reduced accountability in the admissions system also risks increasing the social segregation in schools”.

The Association of School and College Leaders said:

“While we accept the limitations of the Local Authority and Admissions Forums we are concerned that there may now be a void in policing admissions.”

Barnardo’s said:

“As the Bill stands, it is likely that in the future there could be a variety of admission arrangements within local areas—resulting in selection and segregation.”

These warnings could not be clearer.

[Ian Mearns]

The Schools Minister has reiterated that the English baccalaureate will not be an accountability measure. He trumpeted that in the Select Committee on a number of occasions last week. I am terribly sorry but the response is one of complete and utter incredulity. I know what the press will say about the English baccalaureate within the context of the league tables. The headline writers will say, “Of course it will be an accountability measure. How can it be seen as anything else?”

[Andy Burnham]

We know that the measure was applied retrospectively to schools, so the Government were encouraging the media to see it as a performance-management measure. It is so unfair to schools being sent out into this highly competitive environment to have their reputations so damaged, and to have not one but two hands tied behind their backs. The Government have knocked the stuffing out of some schools that have worked so hard to improve in recent years, and it is totally unacceptable.

Experts’ warnings about the admissions clauses could not be clearer. Children’s life chances are at stake here. The Government have failed to convince the experts that we can gamble with those life chances by weakening the admissions system. I intend therefore to press amendment 13 to a vote this evening. In the face of this free-for-all in education, it is vital that the rights of parents and children are protected, and that the House does not sleepwalk today into a return to selection in our schools.

[Mr Graham Stuart]

It is a pleasure to take part in this debate, and to see so many faces from the Public Bill Committee, as well as Select Committee members, including the stellar four or five Labour Back Benchers under the Gallery there.

I want to discuss my new clause 22 on home education. My hon. Friend the Member for Altrincham and Sale West (Mr Brady) has made most of the key points about his new clause 2. This is not about extending selection in our schools; it is about taking existing institutions—in many cases, institutions originally set up to serve some of the poorest in our communities—and allowing them to serve those communities again. I must confess to having been torn before deciding that supporting new clause 2 was appropriate, although there will be differences of opinion on both sides of the House—the shadow Secretary of State failed to note that supporters of the new clause include Labour Members as well as Government Members.

[Stephen Twigg]

The Select Committee Chair says that new clause 2 would not extend selection, but it would involve its extension within the state system. Does he not acknowledge that a number of independent schools, including Belvedere school in Liverpool, have entered the state system and been willing and happy as a condition to become local comprehensive schools? Is that not a better approach, if we are to widen opportunities for as many young people as possible?

[Mr Stuart]

The hon. Gentleman makes a fair point. Where the institution feels that it best serves its mission to improve education by becoming a comprehensive, it would be free to do so. If I have read it correctly, which I hope that I have, the proposal does not insist that schools should retain their existing selection or non-selection criteria, so the tone of what the hon. Gentleman has said is perhaps unfair.

My new clause 22 would impose an obligation on the Secretary of State to issue guidance to local authorities on how they handle families who seek to home educate their children ahead of changes in the regulations. However, my new clause has been overtaken by events. The Government have let me know today that they have decided not to go ahead with those regulations, which would have changed the rules on what happens when a parent deregisters their child from a school in order to home educate.

The Badman review, which many hon. Members will remember, under the previous Government recommended a 20-day period in which a child’s name should remain on a school’s register, so that if the parents had been pushed into home education because of failures on the part of the school or local authority to meet the needs of their child, they would not automatically lose a place at school, but would have time to think through the implications of home education.

That recommendation by the Badman inquiry was accepted by the then Select Committee on Children, Schools and Families. I always thought that that was right, because it seemed to place no restrictions on the rights of parents and families, but seemed to restrict the rights of schools and local authorities, which, according to Badman, if I recollect correctly, were in some cases using home education to push away children whose needs they were failing to meet, finding it easier to push that responsibility on to parents who did not really wish to pursue it.

On the face of it, that recommendation seemed reasonable, which I am sure is why the Government came forward with proposals to implement it, having seen that both Badman and the Select Committee supported it. However, it was not recognised that the Government’s formal consultation on the Badman recommendations had shown that, far from being uncontroversial, the proposal had attracted opposition from 75% of those who responded, with only 13% agreeing. Why would that be the case? Why would families be concerned about having the power to return their children to school within 20 days, with no restriction whatever on their freedoms and no delay forced on the start of their home education? The answer lies in the behaviour of local authorities.

Many home educators expressed alarm and horror at the proposal when it came out recently—those home educators were not formally consulted by the Government, because the proposal was supposedly uncontroversial—because, they said, it would lead to bullying and intimidation of parents who had decided to home educate. Those home educators said that the proposal would serve as another excuse for local authorities to misinform parents and tell them that the local authority would decide on the quality of the education provided by parents and that it should sit in judgment on whether they were fit and proper people to educate their children. That would be an entire reversal of the long-standing legal settlement in this country, which says that it is the parents’ duty to educate their child. Most parents choose to delegate that to the state, through state schools, and some to private schools, with a small number choosing to carry it out themselves. It is a fundamental basis of education in this country that the parent remains the No. 1 decider of how their child is educated.

In case that response was just overly paranoid home educators who felt that properly caring local authorities would be asking them impertinent questions or who had misread or misunderstood what they were doing or saying, I can share with the House the fruits of my labour last night, which I spent on the internet looking at various local authority websites. A colleague texted me at 6 o’clock to say that we were going to be let go unusually early, and that a night of fun and frolics could lie ahead. I had to say, “No, my fun will involve looking at local authority websites.” Tameside metropolitan borough council’s elective home education guidelines say:

“It is up to parents to show the local education authority that they have a programme of work in place that is helping their child to develop according to his/her age, ability and aptitude and any special educational needs he/she may have.”

But it is not up to parents to justify that to the local authority; all too often, it is the local authority that has let down that family and those children through its failure to provide proper education. The local authority should be the servant of the family; the family should not have to answer to the needs of the local authority.

[Lisa Nandy (Wigan) (Lab)]

I absolutely agree that it is important for parents to be involved and in control of decisions about their own children, but I am dismayed that I have heard very little from the hon. Gentleman about the children themselves. The reason that we have frameworks is not to create unnecessary bureaucracy but to make absolutely certain that we are protecting our children and ensuring the best outcome for them. I would like to hear his response to that point, because before coming to the House, I worked for many years with children, some of whom had suffered the most appalling neglect and abuse at home, and for whom the state was a real lifeline.

[Mr Stuart]

The hon. Lady makes some fair points. Certainly the right of the child is central, but I believe that the parent is the best protector of that child’s needs. Of course, the local authority has a role in intervening when there is problem. However, fewer than half the children in this country get five good GCSEs as a result of compulsory state schooling for 11 years, so the state is hardly in a position to lecture parents who make a massive sacrifice to find ways of educating their children themselves. Furthermore, according to all the evidence that I have seen, there is no suggestion that home-educating parents—although they might be rather radical and act in ways that would not fit with my idea of how to educate a child—do a worse job for their children educationally than the state; quite the opposite, in fact.

It is interesting that, although Badman selectively quoted evidence from New Zealand, he failed to mention that, just before he produced his report, New Zealand scrapped the registration guidelines that formed a central part of the report.

[Mr Sheerman]

Will the hon. Gentleman give way?

[Mr Stuart]

Before I give way to the former Chair of the Select Committee, I must deal with the point on which I disagree most with the hon. Member for Wigan (Lisa Nandy). She has done what Badman did, and what the former Secretary of State did under the previous Government, which is to conflate child abuse with home education. Education and welfare are two separate things. Contrary to what Graham Badman stated in his report, and failed to substantiate in the Select Committee, there is no evidence that home-educated children are more subject to abuse than children in general. When there is a risk, local authorities have all due powers to intervene, and so they should. When such evidence arises, the authorities can and should go in to ensure the protection of the child. However, we cannot have the suggestion that home-educating families are linked to a problem of abuse. Nothing could be further from the truth, and it is important to nail that fact. We must not do as the previous Home Secretary did, which was to smear the reputation of home-educating families by suggesting that there is a problem, because there is no evidence for that.

[Mr Sheerman]

I do not think that the hon. Gentleman means to do so, but he is being a little misleading about what happened in the Select Committee inquiry, in which he failed to persuade the majority of the Committee of his views on this subject. Many of us on the Committee took a rather different view and wrote the majority report along those lines. What he gets wrong is the balance. This is not about a balance between abusive parents doing dreadful things to children, on the one hand, and the local authority letting them down, on the other. Rather, we found a lot of evidence to show that what was supposed to be home education actually did not amount to very much at all.

[Mr Stuart]

The hon. Gentleman is incorrect on the central point. Although the report did not take the same form as it would have done if I had written it alone, the central point about the need for registration and licensing of families that want to educate their own children was rejected by the Select Committee—it was Labour-dominated and chaired so ably by him. That point was rejected, and the report said no to the central recommendation of Badman. The previous Government still pursued that recommendation, but it was—eventually and rightly—thrown out by Parliament before the last election.

15:45

[Mr Sheerman]

Of course we rejected that element of policy, and quite rightly, but that is not the case that the hon. Gentleman is making. It is a serious concern if we do not know what kind of syllabus or stimulus children will get in the home education environment. Children’s education, and not just their welfare, is their right. The hon. Gentleman is trying to turn the issue into one of welfare against education, but that was not the line that we took.

[Mr Stuart]

The hon. Gentleman is entitled to his views on how current regulation should be changed. That, after all, was what the Badman report and our Select Committee report were all about.

What I am discussing today—I do not want to take up much more time—is the current law, which is clear, although it is not properly represented by many local authorities. I will not go through all the legal aspects, but I will mention the 2007 guidelines on elective home education for local authorities, which were produced by the Department for Children, Schools and Families in 2007. It is still available on the departmental website, subject only to the need for an update to take into account changes in the rules governing children missing from education. The report stated:

“Local authorities have no statutory duties in relation to monitoring the quality of home education on a routine basis.”

If there is no evidence that education by home educators is inferior to that provided by the state, what is the role of the state? Apparently it is to stick its nose into families that have often been let down by the same instruments of the state and impertinently to try to impose exactly the same kind of regimented approach to education that failed for those children. That is why the parents made the massive sacrifice of taking their children out of school in the first place.

We must defend freedom and a principle that is perhaps even more important than that, which is that the law, as it stands, must be enforced. If the hon. Member for Huddersfield (Mr Sheerman) wishes to campaign to get it changed and is successful in convincing this place, what he wants will then become the law. Local authorities must honour and observe the law as it stands and not overstate it because they happen to agree with the hon. Gentleman. They cannot make the law up as they go along because they do not like the current settlement. The current settlement is clear: local authorities have no statutory duties in relation to monitoring the quality of home education.

I have already dealt with Tameside, so let me touch quickly on Barnsley. Its elective home education information leaflet says that

“the law allows parents to educate their children at home instead of sending them to school, if they fulfil certain conditions.”

That is subtly done. I am not sure whether it is strictly inaccurate, but it is suggestive enough to make it sound as though the council decides whether those conditions are fulfilled. It goes on to make it clear that that is precisely its conclusion:

“Barnsley MBC will need to be satisfied”—

in other words, the council will need to be satisfied—

“that a child is receiving suitable education at home, and the Assessor”—

these people are even called assessors; who do they think they are?—

“will ask to meet with the family in order to talk to the parents and to look at examples of work and learning.”

That is beyond the law. I want the Minister to confirm that he will make sure that local authorities no longer produce misinformation like that and use it in order to abuse their power over families.

Sheffield provides another example. Parents there are told:

“You must show that the opportunities being provided are helping your child to learn and that development is taking place appropriate to their age, ability and aptitude.”

It is fair enough for parents to have a duty to provide suitable education and meet those requirements, but local authorities have no right to interpose themselves and decide that that is not happening. If they have reason to believe that suitable education is not being provided, they have a duty to challenge, but only in that event. They do not have the right routinely to monitor and interfere.

Sheffield city council continues:

“The Children Service Authority (CSA) is responsible for ensuring that the arrangements provide a suitable education for your child.”

That is not true.

“When you have given the CSA a plan stating your ideas an appropriately qualified”—

unlike you—

“Senior Inclusion Officer (SIO) will arrange an initial home visit and make a preliminary assessment”—

in your home—

“of the education provision the child is receiving.”

It is disgraceful.

South Gloucestershire council is advertising for someone who will provide

“information, support and challenge to parents…The service is responsible for assessing the suitability of the education provided to children educated at home”.

The Lancashire local authority, in one of the most egregious examples, states:

“Lancashire Officers will take the lead on this because they have the responsibility to ensure the safety of all children as well as to monitor the quality of education received by children educated at home.”

That is a nice one, neatly conflating the issues of safety and home education. No one has yet arrived at my house during the summer holidays just to check up on the safety of my children, who are, after all, spending months at home with me. Who knows what my wife and I might get up to, or what the younger or older sister might do? Who knows what visiting relatives might do? What we need are visitors from the local authority, just to make sure. I do not want people such as the director of children’s services in my local authority to lose a moment’s sleep because they feel that they are not pursuing every possibility of intervention to cover their own backsides and telling me how I should run things in my own home. That is precisely what the local authority suggests should be done in the case of home-educating parents, who deserve its intervention no more than the rest of us. The document continues:

“Thus, when a practitioner or professional becomes aware that a child is being educated at home, they should use local information sharing arrangements to help the Lancashire Authority to fulfil both its duty to be confident”—

so it has a duty to be confident now—

“of the well-being of the child and its duty to assure the quality of the education provided.”

That, too, is not true.

As far as I can tell from one evening spent looking at their websites, council after council is entirely misrepresenting the legal position, and I hope that the Minister will put that right.

[Ian Mearns]

Will the hon. Gentleman give way?

[Mr Stuart]

I am aware that I have been speaking for too long already, but I will give way to the hon. Gentleman.

[Ian Mearns]

I am very grateful to the hon. Gentleman. For a short time I thought that I was in the back of a bus in Helsinki.

There is a problem with what the hon. Gentleman is saying. If a child becomes unwell or is injured at the hands of parents or other relatives, the focus of attention is often not on the family but on the director of children’s services in the local borough. Will the hon. Gentleman reflect on that? Will he also reflect on the rights of the child who, despite the wishes of their own parents, may or may not receive a good level of education at the hands of those parents? I know that the hon. Gentleman inhabits a middle-class, or possibly upper-middle-class, ideal in which his own children will be extremely well catered for, but that is not always the case. As policy makers, we must provide for the rights of every child in the country, no matter what their circumstances.

[Mr Stuart]

I have a great deal of respect for the hon. Gentleman, who is a distinguished member of the Select Committee and who brings years of experience of education to it, so I hesitate to say what I am about to say. However, he is suggesting, as a Labour Member of Parliament, that working-class families involved in home education should be treated with more suspicion than those in better-off areas, that they are not to be trusted with the education of their children, and that inspectors and assessors and all those other people with acronyms should be wandering into their homes, because of—my God—what they might do to their children.

I have given a great deal of thought to these issues. There are many armchair theorists—I met many of them when we were debating the Badman review—who have not looked at the data and the research, who have not tried to meet home-educating families to discuss their problems and who have not met local authority officers, who deal with difficult cases such as home-educating households where children are abused and are not given an education. There are real difficulties and challenges, but we cannot deal with them from an armchair. If the hon. Gentleman follows that advice, I hope that he will come round to my point of view that the current law is appropriate but should be enforced, and that we cannot allow local authorities to continue to abuse their position and bully parents.

I congratulate the Minister on having listened. He listened carefully to families and to representations from Members both during the passage of the Children, Schools and Families Act 2010 and since then. He listened to representations on the 20-day rule, of which I myself was in favour until I listened to the arguments and was able to follow the evidence and look at the links to the consultation and the response, which I either did not know about or had forgotten.

There is a strong message here. We must listen to these families, and we must support and respect them. We must have challenge that is appropriate, but we must not allow those in power to abuse that power and overstep the mark.

[Mr Sheerman]

I do not quite know how to follow that speech. The hon. Member for Beverley and Holderness (Mr Stuart) was a very good member of the former Select Committee, which I chaired. He was always an excellent contributor, but he always got the issue under discussion out of proportion. There has been a full Select Committee report, and I hope that people will read that as well as pay attention to the hon. Gentleman’s speech today, at one stage of which I thought the men in white coats might be coming.

When the Committee was looking into this matter, I got the feeling that the hon. Gentleman was rather taken over by the home educators. Home educators are very good when they are good, but there is evidence, in the Badman inquiry and elsewhere, that there are all sorts of people who use home education because they do not want to send their children to school yet do not want to be prosecuted. Home education is a right, but if people take up that right they must also accept that they have a responsibility to offer the children in question a coherent and stimulating educational programme, and I believe that local authorities have the right to check on that, in the most sensitive way possible. I therefore hope people make a balanced judgment of his new clause 22.

The previous Select Committee spent a lot of time on these matters. One of the great victories for those of us who work on Committee reports is someone taking notice of what they say. That is wonderful, although normally there is about a two-year time lag before notice is taken. I think our report on admissions policy was one of our best, with recommendations such as giving teeth to the schools adjudicator post and making sure that the code of admissions is obligatory and schools do not merely have to take note of it.

When we conducted our inquiry, I was amazed to discover that really nice people—really nice heads and educators—would bend every rule to get the selection process that suited their school. That was the case even for head teachers who looked as though they came from central casting and seemed to conform to the stereotype of the good, confident head teacher. I remember asking one particular lady, “How many looked-after children do you have at your school?” “None”, she replied. I then asked, “How many children with special needs?” She said: “Very few.” My next question was: “How many children on free school meals?” We found that the school did not have any children in that category. I therefore asked whether or not the school had taken notice of the code, to which she said, “Yes, we took note of it.” That is all anyone had to do; that is why the code was not working. Our Committee recommended that if we were to have a code, people should have to take notice of it, and if they did not, the schools adjudicator could say, “Come on! There is a code and you should obey it.”

16:00

It took some time—about two years—before the then Government made the code obligatory and gave the adjudicator teeth. Why did the schools adjudicator not have the teeth to intervene? It was because it was almost impossible to call him in. That had to happen in a very special way and very few people understood how to get him involved. Very often we would find that a group of schools knew that one or two schools were ignoring the code—everybody knew it. There are communities of schools, and I sometimes think that this Government like to forget how important that is in an area. Schools are not all little citadels that do not want anything to do with each other; they co-operate, meet and share ideas. They share a great deal when the local education system is working well. People knew that some schools were breaking all the rules and not taking any notice of the code, but they were too nice to do anything about it. People were nice about heads and acted in a collegiate way.

All I want to say on this group of amendments is that if anyone rolls back the admissions code from being a fair code to which people have to pay attention, and if we weaken the link so that the schools adjudicator cannot get involved, make an inquiry and put things right, we will take a dramatic step backwards in the education of this country.

[Dan Rogerson]

I am pleased that Labour Members have raised some of these issues, because it is right that we explore them in detail and in depth. We began to do that in Committee and it is right that we continue the process. Given the time available today, I am sure that those in another place will continue the exploration.

It is important for us, as legislators, to examine what the Government are trying to do, which is free up schools to get on with providing the best education that they can. At the risk of boring those who were present at the discussions, I can tell the House that we had an extensive debate in Committee about the level of trust among different members of the Committee for those involved in education, be it head teachers or teachers, and about the extent to which the state or local authorities ought to step in and not trust them to exercise the powers and freedoms available to them.

We have to examine the evidence. I absolutely accept that some of the charities to which the right hon. Member for Leigh (Andy Burnham) referred have concerns and have discussed potential scenarios. However, we are dealing with hypothetical situations and although I very much respect what the former Chair of the Select Committee had to say—

[Pat Glass (North West Durham) (Lab)]

Will the hon. Gentleman give way?

[Dan Rogerson]

Gladly.

[Pat Glass]

I am grateful to the hon. Gentleman, who was a fellow member of the Public Bill Committee. I can remember saying to the Secretary of State that he would get the benefit of my experience and that at the end of the six weeks of the Public Bill Committee he would be sick to death of the benefit of my experience. I do not accept that these are theoretical cases. I have 25 years’ experience in education, many of them in dealing with admissions. Time and again, very good head teachers—nice people—did things that I thought, and which parents thought, were completely unacceptable. They did so because they were driven down the route of targets, obtaining a certain numbers of GCSEs and so on. One hon. Member on the Government Benches said that good people can do bad things and that does happen. It is our most vulnerable children—children with special educational needs, looked-after children and children on free school meals—who will suffer and their parents who will lose out if this code is simplified.

[Dan Rogerson]

The point that the right hon. Member for Leigh raised is that we do not have the code in front of us, and so the hon. Lady is raising the issues that she fears may result. We will have to wait and see the code and examine it then.

[Mr Sheerman]

My hon. Friend the Member for North West Durham (Pat Glass) was actually making the point that she thought she heard the hon. Gentleman say that this was theoretical. May I disclose a secret to him? I was the parliamentary church warden here for seven years and I am a lay canon at Wakefield and what amazed me in the evidence was that Church schools—schools that I thought would have been bending over backwards to look after the poorest children and those from deprived backgrounds—were the best at excluding those children. I am saying that as someone who is relatively active in the Church.

[Dan Rogerson]

I welcome that contribution and the hon. Gentleman has been very forthright in raising the issues that he has mentioned. I am sorry to see that the hon. Member for North West Durham (Pat Glass) has had some misfortune in hurting her arm and I am pleased, of course, that it has not restricted her ability to be present and to put forward her views, which she does forthrightly and in a well-informed way on all education issues. What I was trying to say in response to her is that the key to what the Government are trying to do, not just with the admissions code but with some of the bodies and partnerships in which schools have hitherto been forced to participate, which we have discussed before, will be to trust schools to take decisions. We will still have a schools adjudicator and we will still have a code that will cover such matters. The question is where we should strike the balance. The Opposition clearly feel that the Government are getting it wrong, but I want to see the code. It is unfortunate that we did not have it before this debate, but we will be able to examine it when it comes. I shall give the Government the benefit of the doubt that we are striking the right balance.

[Andy Burnham]

I am disappointed that the hon. Gentleman is giving the Government the benefit of the doubt and I am sorry to hear him sound like a spokesman for the Government today. Let me ask him a specific question: on admissions, does he think that the Bill as it stands is consistent with the policy passed at last year’s Liberal Democrat conference?

[Dan Rogerson]

A number of issues in the policy were passed at the last conference. As a keen student of what goes on at the Liberal Democrat conference, the right hon. Gentleman might perhaps have heard the speech I made there and will have been interested to hear what we had to say.

The question for me on a range of issues concerns where the balance is struck. I am happy, as I say, to give the Government the benefit of the doubt. However, on the question of sticking to key principles, I have a personal philosophical disagreement with the new clause tabled by the hon. Member for Altrincham and Sale West (Mr Brady). I accept that he speaks a great deal about issues arising in areas of the country that have a selective system and that he feels passionately about that. I should possibly have discussed this with my wife before I mentioned it, because she was educated early on in a selective system in Kent and later moved to Cornwall. When she was in Kent, she was not in a grammar school, and in Cornwall she was in the comprehensive system. She went on to get her A-levels, qualified to become a teacher and has taught very effectively. I question whether, if she had remained in the selective set-up—again, this is hypothetical—she would have had the encouragement and support to go on and become a teacher. I have some questions about the effectiveness of the selective system for all pupils, although some prosper very well within it.

I welcome the Government’s commitment not to expand selection and so I hope that those on the Front Bench will resist the hon. Gentleman’s new clause. As far as I am concerned, it is a way of bringing in more selective schools funded by the state. The point I wanted to make when Opposition Members were seeking to talk about their ideological purity is that that new clause is signed by some Members from the party of the right hon. Member for Leigh but by no one from my party.

[Kevin Brennan]

I can understand why the hon. Gentleman feels that he is required to support measures in the coalition agreement, but where in the coalition agreement does it say that the Government will weaken and water down the powers of the schools adjudicator and make fair admissions less available to children from all sorts of backgrounds? Why on earth does he not show some muscular liberalism and stand up for those people?

[Dan Rogerson]

I am delighted that this concept of muscular liberalism has come back. I am sure that we will not hear it very often from Opposition Members! I look forward to its being raised again and again.

[Mr Iain Wright]

Flabby liberalism.

[Dan Rogerson]

That is a personal remark—I resemble that remark.

As I said in an intervention on the right hon. Member for Birkenhead (Mr Field), there are matters across government that go beyond the coalition agreement, and decisions have to be taken about where the balance should be struck. From my point of view, the issue is whether we stay true to the principle that both parties have articulated about looking at what is constraining schools and trying to set them free to move forward, while also looking after particular groups of people who might be vulnerable if schools do not operate in the spirit of the code and what the Government seek to achieve.

[Mr Graham Stuart]

Going back to an earlier point, this is all about the incentives that apply to schools. The head teachers at the Church schools that the hon. Member for Huddersfield (Mr Sheerman) mentioned are not bad, but people respond to the incentives they are given. Although I am not positive about all the moves the Government are making—I have doubts about the English baccalaureate—things are moving forward with the measurement of pupil premium and children on free school meals. If we can move to a system that better rewards and reflects in the accountability measures for schools the performance of every child, we will not need to have this suspicion about every head teacher. Heads have responded in the way they have because of the incentives that were created by the previous Government, which led to this large, unwieldy system. [Interruption.] I should be fair: I am talking about successive Governments. We need to come up with a measure collectively that will improve that: then we will not need a schools adjudicator, because schools will simply have a mission to educate their local children and will be supported and rewarded for doing a good job for all of them.

[Dan Rogerson]

I welcome that intervention from the Chair of the Select Committee on Education, which will be providing more evidence over the next few years as we continue this debate. He makes an important point about the incentives that have pushed head teachers into operating in a particular way that was not envisaged when targets and regimes were set up. As the hon. Member for North West Durham said, good people occasionally do things that are less good or bad. Why do they do that if they are essentially good people who want to look after the educational opportunities of all those in the community they serve? It is because incentives are acting on them and pressing them down a particular course of action. We need to tackle those issues.

[Damian Hinds]

Church schools have come up two or three times now and there seems to be some assumption that it is endemic in denominational schools, which means predominantly Catholic and Anglican schools, somehow to try to get around the code. Is the hon. Gentleman aware that when the chief schools adjudicator came before the Select Committee, he accepted—indeed, volunteered—that problems in Church schools had been greatly exaggerated in the media coverage of his most recent report?

[Dan Rogerson]

It is important to base things on evidence. I went to a Church primary school and my two elder children go to that school. In an area such as Cornwall, which is not one of the most diverse culturally, I welcome the fact that because it is a Catholic school it is attended by Polish, Portuguese and Filipino children, so it has quite an inclusive and diverse mix in what is a fairly white or monocultural area. I say monocultural, because we could otherwise get into an English-Cornish debate. Certainly, in my area there are not the opportunities to engage with as diverse a population as in other parts of the country. However, I am straying a little far from the amendments, Mr Deputy Speaker, so I shall conclude.

I hope that the Government will resist the new clause tabled by the hon. Member for Altrincham and Sale West, because they have a commitment not to expand selection and in my view his new clause would allow the expansion of selection.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I rise to speak in support of amendment 40. I speak also on behalf of several of my hon. Friends who believe the Bill should not pass without some extremely important debate on its implications for children with special educational needs, particularly in the light of the—I do not think that muscular is the right word, so I shall say pre-gym—Green Paper on SEN. I particularly want to discuss the amendments that would help us to ensure that there are some protections for such children.

The amendment is about not just entrance to school, but exit from school. Many of those working with children with special educational needs are gravely concerned that the changes introduced in the Bill will be disastrous for those young people as they are pushed out of the mainstream sector, lost to our systems of accountability and end up the worse for it. It is worth looking at the numbers of children involved before I move to what the amendment might offer and the questions that I would like the Minister to answer in his response.

We know that 6,500 pupils were permanently excluded last year, and that 300,000 children have faced fixed-term exclusions from secondary schools, a further 39,000 from primary schools and 15,000 from special schools. That is a huge number of children facing exclusion under the current system. Many of us have deep fears about the incentives in the new system. I take it that Ministers feel that they can trust professionals not to abuse the system, but Opposition Members consider it important to ensure that there are checks and balances; otherwise the number of exclusions will dramatically increase.

16:15

[Meg Munn]

Does my hon. Friend agree that it is in the Government’s interest to follow the proposals in the amendment? We want the system to work. I believe sincerely that Ministers are honourable gentlemen who want it to work. The amendment offers a way of checking that the policies and procedures that they are pursuing lead to better outcomes for a group of children about whom we are all concerned. Although I understand the Minister’s admirable desire to trust professionals, education is ultimately about children, and if we are not on the side of the most vulnerable children, we are not doing our job.

[Stella Creasy]

My hon. Friend is exactly right. The amendment is about implementation. How do we make sure that as the new policies are introduced, there are not unintended consequences, or perhaps even intended consequences, that we will have to deal with further down the line?

The evidence shows clearly that a large percentage of the children who are excluded from schools have special educational needs—87% of children excluded from primary schools and 60% of children excluded from secondary schools have identified special educational needs. A significant number of those children have attention deficit hyperactivity disorder, autism and mental health issues. Many do not receive the special educational needs provision that would help to keep them in mainstream schooling. For example, a number of children have to wait more than a year to access a mental health counsellor. Clearly, that impacts on schools’ ability to cope with those young people.

The amendment has been tabled today because of the concern that the Bill will create disincentives for schools to deal with those young people and instead encourage schools to exclude them and so pass them on to somebody else to deal with, rather than taking responsibility for their educational needs. All of us acknowledge that the way in which children with special educational needs are supported in the education system should improve. That is not an issue of contention between parties. The question is how we do that.

In Committee some of us expressed severe reservations about considering the Bill without the Green Paper on special educational needs being available to compare and contrast. The Green Paper was published while we were in Committee, and we are grateful that that was not at 4.55 pm on a Friday, but it raised more questions than it answered about how children with special educational needs will fare under this Government.

[Kevin Brennan]

Perhaps my hon. Friend remembers that I asked the Minister when the Green Paper would be published. He said that it was imminent, and it was published the next day. However, he said that the publication of the admissions code was imminent, and we still have not seen it.

[Stella Creasy]

I am always aware of what we might call the cleansing effect of shadow Ministers on the Departments of State when it comes to revealing information, statistics, Green Papers and, we hope, the admissions code. I hope Ministers will continue to listen to the pleas from the Opposition. We need the admissions code in order to understand what will happen. I fear that at this stage the irrigation will not be as successful as it could be.

I agree with the Green Paper when it refers to the difficulties that many parents experience in accessing support for children with special educational needs. It says that the system is inherently frustrating and confrontational. However, setting the Green Paper against the proposals in the Bill, we can see where some of the challenges may lie. We know that we are dealing with a group of young people who desperately need support to remain in education, and we know that that makes a massive difference to their life chances in the future. Between half and three quarters of children between the ages of four and 18 who are excluded from school have significant literacy and numeracy difficulties. It is incredibly likely that those problems will be compounded when they are excluded, so ensuring that exclusion is the last option and that those children are supported into appropriate provision is vital to turning that situation around.

The Minister has suggested that schools might intervene earlier, but one of our deep concerns is that the Bill’s proposals will create disincentives for schools to do so. The amendment has been tabled to encourage Ministers to take a proactive approach to dealing with the consequences of this legislation for that group of pupils and perhaps put on the record how they will do so.

I have already mentioned my concerns about how the proposals might link with the Green Paper, which mentions early intervention and partnerships a great deal. Members who were on the Bill Committee will be aware of my concern that other clauses in the Bill that unhook the relationships between local authorities and schools will make it much harder for those partnerships to be put together and for schools to build the kind of relationships that they need to be able to support young people.

The amendment also tries to draw on some of the work that is needed for understanding how the policy might affect school budgets. Although I hope that it would be an unintended consequence of the proposals, we should consider what might happen if schools are found to have been misusing those powers. The Minister finds it hard to contemplate any misuse of those powers, but were that to happen, it would obviously cause problems.

Ministers were at pains in Committee to say that schools would suffer a financial adjustment if schools adjudicators found that an exclusion had been conducted wrongly—those of us in the Opposition who like to call a spade a spade would call that a fine. The amendment would encourage the Government to monitor that. As a member of the Public Accounts Committee, I am deeply concerned that there might be severe consequences both for schools in the administration of the financial adjustments, or fines, and for us and the public purse, in trying to compare what happens to those young people. The amendment would enable us to track that.

We know the different costs of provision. For example, it costs an additional £15,000 to send a child to a pupil referral unit or short-stay school, and an additional £50,000 to send them to a specialist residential unit. There are huge consequences for the public purse of failing to deal earlier with children who have emotional and behavioural difficulties and allowing a situation to get to the stage where schools exclude them and they go to pupil referral units or for specialist provision. Ensuring that the use of those powers and their financial consequences are monitored would be extremely beneficial to all concerned in trying to understand whether the policies have provided value for money.

The Government also need to address the real concern about the removal of the relationship between schools and local authorities, which have traditionally monitored what happens to those young people. I hope that the Minister, when he responds, will address how we will ensure that those children go on to alternative provision. In Committee, he was very clear that every young person who was excluded would of course remain in some form of provision, but we have no monitoring process to ensure that that will happen. We have no way of knowing that those kinds of provision will be made, especially when the relationships between the local authorities and schools is broken. A child who behaves so badly that they are excluded from school clearly has difficulties that need to be supported.

The Minister claimed that the Bill will create a stronger incentive to intervene early to support children with behavioural difficulties, but again we are left with no information about how those processes might take place. We have no comfort of knowing what will happen next for those children who behave badly, will need that support and perhaps should be excluded from a school.

[Ian Mearns]

I am very taken with what my hon. Friend is saying and wonder how the Minister will give the reassurances she is seeking given that the Bill eradicates the duty on schools to co-operate on a local basis and look after their youngsters with behavioural problems. The current duty to co-operate means that there is at least a safety net for youngsters, but that will vanish under these proposals.

[Stella Creasy]

My hon. Friend raises an important point. One of the key issues for me is that in Committee the Minister talked about schools triggering an assessment of behaviour, but there is no clarity about how that process might take place. I hope that he will address that point when he responds.

I have a great fear about asking head teachers to become educational psychologists, but that is the implication of putting that power in the hands of schools and making them responsible for trying to work out what provision is best for the children without the support to be able to deliver it. No one is suggesting that head teachers and teachers are not committed to their pupils, but in a system in which they will face only a small financial adjustment of £4,000, in contrast to the cost of supporting a child with emotional and behavioural difficulties and providing special educational needs, it is easy to see where the incentives to act might be.

All Opposition Members ask for is some comfort, assurance and accountability for the use of those new powers, so that we can ensure that young people are not left in the lurch, not left unable to access the appropriate educational systems that they need, not abandoned by schools that are desperate to meet other targets and not abandoned by the professionals from whom they need help because those relationships no longer exist.

The Bill makes putting in place support for children with special educational needs much less likely, not more likely. There might be some wonderful ambitions in the Green Paper, but I am deeply concerned that this Bill means that they will be harder to realise. All of us will be the worse for that, as we see young people in our communities struggle to get the educational opportunities that they need early in life, and are not able to progress later in life.

The new clause and its proposed report would shine a spotlight—a powerful phrase that my hon. Friend the Member for North West Durham (Pat Glass) used in Committee, and on which I hope the Minister has reflected—on those young people, and on what is being done to help them to achieve in life. I hope that the Minister will do more than he did in Committee, when he simply said, “Well, we’ll continue to publish individual datasets,” and bridge the gap between what happens to the data that local authorities previously collected, the data on exclusions and the data on special educational needs. He should commit to bringing to the House those regular updates, so that we might all be confident that young people in our communities are being given the support that they need to achieve. We will all be better for that if he does.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am really here to take part in the debate on the next group of amendments, but I want to refer to one issue in this group in my capacity as the advocate for access, because an access issue arises.

New clause 10, in the name of the right hon. Member for Leigh (Andy Burnham), the shadow Secretary of State, addresses the obligations in the Education Act 1996. The 1996 Act says:

“The Secretary of State shall promote the education of the people of England and Wales,”

and the new clause suggests that it be amended to say,

“and ensure fair access to opportunity for education and training.”

That is an important point, which I recognise and want to flag up. I will rehearse it in the next group of amendments, which I have looked at, have much sympathy with and have spoken to Ministers about, but I hope that the Government will be sympathetic to moving from the current definition of the Secretary of State’s duty to a wider one. If the Government are clear that we have to have better and fairer access to opportunity for education and training, they should recognise that it begins in schools, not in sixth-form and further education colleges. It starts earlier.

I have not engaged in the technical debate, and I guess that there is one concern about the wording of the new clause, but I hope that by the time the Bill reaches the Lords we will have been able to seek consensus and agreement. The lawyer in me anticipates that, if we introduce a duty to ensure fair access, we will probably precipitate people going to court, challenging a decision and looking for judicial review. After the Bill has been through its stages here and before the other House deals with it, however, we might consider whether the Secretary of State will accept a duty at least to promote fair access to opportunity for education and training, moving from the current duty to one that ensures that the fair access point is understood throughout the whole education sector in England, including in schools.

[Kevin Brennan]

What the right hon. Gentleman says is welcome, but is he content to allow for the weakening of the schools adjudicator’s power, which is what this Bill brings about? I cannot imagine that a predecessor Liberal Democrat Front Bencher, someone like Phil Willis, would ever have been content with what the Government are doing in this Bill.

[Simon Hughes]

In my introduction I was careful to say that I wanted to limit my comments on this group to that one issue, not to get into the debate that I have heard across the Floor of the House today, but let me make two points, while trying not to avoid the question. First, the Government’s policy is a combination of ours and the Tories, so not everything—

[Kevin Brennan]

It’s not in the agreement.

[Simon Hughes]

I understand that the policy is not part of the coalition agreement, but secondly, if there are such matters—my hon. Friend the Member for North Cornwall (Dan Rogerson) leads for us on these things—whereby on reflection, or having listened to the whole debate that I have heard today, people think that the adjudicator’s responsibilities are not sufficient, there is a robust team of colleagues at the other end of the building, and I am sure that the matter will be returned to.

May I add a postscript? I chair the school governing body of a Church of England primary school and I am a trustee of a Church of England secondary school. Clearly, there is always an opportunity for abuse of the system if people are not really vigilant and held to their principles. We need to ensure—the hon. Member for Walthamstow (Stella Creasy) made the point well—that those who are potentially the most disadvantaged do not find themselves accidentally or intentionally excluded because the inclusion of everybody works to the disadvantage of other school targets, aspirations, goals, figures and statistics. Eternal vigilance is our duty. We need to ensure that the Bill is robust, and I am sure that further conversations will continue.

16:30

[Mr Gibb]

Several amendments from right hon. and hon. Members relate to fair access to schools, and I propose briefly to take them in turn.

New clause 2 would allow independent schools to enter the state-funded sector while remaining academically selective. The independent sector provides high-quality education for its pupils. We recognise this, as does the OECD; it is recognised throughout the country and, indeed, throughout the world. That is why the Academies Act 2010 enables good independent schools to become free schools so that more pupils can benefit from attending them. Independent schools wishing to become free schools will need to adopt non-selective admission arrangements that comply with the school admissions code. They may, of course, remain selective within the independent sector.

I understand the sentiments and motivation behind the new clause tabled by my hon. Friend the Member for Altrincham and Sale West (Mr Brady). He wants more good school places to be available in the state sector; that is the driving force behind the Government’s free school policy. As he said, independent schools came into the state sector under the previous Government, not least Belvedere school in Liverpool and William Hulme’s grammar school in Manchester. However, I suspect that selection is not as paramount an issue for independent schools coming into the state sector as he believes. I give him this assurance: the Secretary of State and I will talk to any independent school, whether selective or otherwise, about moving into the state sector so that we can increase the number of good school places. Selective independent schools are required to open up their admissions if they come into the state sector, and we have no plans to change that. I would expect that my hon. Friend, in his principled way, will continue to argue his case as effectively as he has today.

[Mr Brady]

I assure my hon. Friend that I will continue to argue the case in a principled way if I can. I take it from his remarks that there is no principled objection to the existence of selective academies, because several of the new academies are selective schools, and no principled objection to independent schools becoming academies. He has kindly said that he and the Secretary of State will be prepared to meet the heads of selective independent schools that may wish to become academies. Perhaps he could help me a little further by indicating that he sees no immovable reason why in future the Department might not change its policy and allow good schools from the independent sector to become academies, opening up places to children regardless of the ability to pay, even if they are selective schools.

[Mr Gibb]

I thought that I had made the position clear. There are no plans to change that approach. We made it clear before the election that there will be no increase in the number of selective schools, and that remains the policy. I am sure that my hon. Friend will continue to argue his case very effectively.

[Mr Brady]

I would hate good people involved in education to waste their time, so I want to be clear about whether it is worth good independent selective schools having the conversations that the Minister has generously offered with himself and the Secretary of State. Do they have open minds on whether those schools might be able to join the academies sector in future without changing their ethos?

[Mr Gibb]

I really cannot add anything to what I have said. We will talk to good independent schools, selective or otherwise, that wish to come into the state sector. However, the admissions code is there, it is clear, the legal position is clear, and there are no proposals to change that position.

[Mr John Redwood (Wokingham) (Con)]

The Minister said that there was an objection to increasing the number of selective schools. Of course, the proposals of my hon. Friend the Member for Altrincham and Sale West (Mr Brady) would not increase the number of selective schools, but merely transfer them from the independent sector to the state sector, meaning that more people from a wide variety of backgrounds would have the opportunity to go to them. I would have thought that that was wholly admirable. The two most popular schools in my area are grammar schools in Reading. Parents want to get their children into those schools, but some of those who do not get in are extremely bright and able, and they get to elite universities from comprehensives, despite the creaming of the grammars. That is a perfectly stable and good system, and I cannot understand why the Minister does not back it.

[Mr Gibb]

I cannot say more than I have said. We gave a commitment that we would not increase the number of selective schools in the state sector. If we were to do as my hon. Friend the Member for Altrincham and Sale West and my right hon. Friend the Member for Wokingham (Mr Redwood) wished, it would contravene that commitment, which we gave before the election.

[Kevin Brennan]

In answer to the question from the hon. Member for Altrincham and Sale West (Mr Brady), surely such schools would be wasting their time, given that the coalition agreement says that all new academies will have “an inclusive admissions policy”.

[Mr Gibb]

No, they would not be wasting their time, because I am not convinced that these issues are deterring good independent selective schools from coming into the state sector. That is certainly not the case with Batley grammar school, and I am sure that it is not the case for other good independent schools, selective or otherwise, that wish to come into the state sector.

New clause 10 would amend the general duty on the Secretary of State to promote the education of the people of England and Wales to include a duty to

“ensure fair access to opportunity for education and training.”

Equity coupled with excellence is at the heart of the schools White Paper, the Green Paper on special educational needs and this Bill. Fair access is about more than admissions; it is about ensuring that every school is worthy of parents’ consideration, that every school is able to raise standards free from red tape, and that every school supports the most vulnerable children. Everything we are doing in the Department is geared to support that aim: the pupil premium allows funding to follow disadvantaged pupils, we are spending £800 million in 2011-12 to meet the pressure for places at good schools, and our behaviour reforms are intended to make every classroom a safe place to learn.

It should be absolutely clear that we do not disagree with the thrust of new clause 10. Of course it is the job of all those involved in education to ensure that all children have the opportunities they need to succeed, but local authorities already have that duty, and that is where the duty is most appropriate. Local authorities have the duty to secure the provision of education for people in their area, and they have the levers to achieve that. Localism is about ensuring that powers are given at the right level, and it is right that duties go alongside that. Fair access is and should be driven locally, not by a Whitehall-focused duty. I therefore urge hon. Members not to press new clause 10.

[Pat Glass]

Surely localism is about supporting parents and their rights. Anything that weakens parents’ rights, such as not allowing them access to the adjudicator or the ombudsman, is not about raising standards in schools.

[Mr Gibb]

I think the hon. Lady and, in particular, the shadow Secretary of State overstate their case. We are not just extending the right to access the adjudicator to parents of children attending academies, who can now complain to the adjudicator about admissions arrangements, we are also changing the rules on which parents and members of the public can complain to the adjudicator about a school’s admissions arrangements. We are saying that any parent from anywhere can make such a complaint. We are widening the ability of parents and members of the public to complain to the adjudicator.

I turn to amendment 9. Although, again, I agree with the aim of ensuring fair access, I do not believe that the amendment is necessary. The admissions code is entirely about fairness, which is why we have an admissions system for schools. I can assure hon. Members that in our work to revise the admissions code and make it more straightforward, we have not in any way removed the focus on fairness.

[Andy Burnham]

The Minister has just mentioned the work to change the admissions code. Will he tell us today why he has not fulfilled his commitment to produce the code in advance of this debate? Will he be honest about the reason for the delay? Is it because there is a row going on about the content of the admissions code, so he cannot bring the issue to a conclusion?

[Mr Gibb]

As I said in Committee, the revision of the admissions and appeals codes is a huge undertaking, and we need to ensure that we produce an admissions system that is fit for purpose and puts trust back in schools and head teachers. We are determined to get the codes right, not just push them out quickly. We will consult on them shortly, and they will free schools of the burden and bureaucracy of the current system.

Sometimes I feel that the right hon. Gentleman overstates his case. If he looks at the Bill, he will see that there is one clause about admissions, clause 34, and it relates to admission forums and one or two of the powers and duties of the schools adjudicator. There is nothing in it about the admissions code, it just happens that at the same time as we are bringing the Bill through, we are revising the code. I would have liked to bring it before the Committee, but the work on it is extensive. As I said, we are ensuring that it is right before it is published for consultation.

[Andy Burnham]

That is just not an acceptable answer. The Minister gave a commitment that the code would be ready for the remaining stages of the Bill’s passage, and he has not delivered on that commitment. I ask him again: why has he been unable to publish a code for the House to consider? What is holding it up?

[Mr Gibb]

It is not right yet. When it is right, it will be published. I want to ensure that the code is right so that it is ready for consultation.

[Andy Burnham]

And we don’t get any chance to look at it?

[Mr Gibb]

Well, frankly, it does not affect the issues in the Bill. There is one clause related to admissions, which is about admission forums and the adjudicator, and as I will explain, the changes that it makes are not as radical as the right hon. Gentleman claimed in his speech. Again, I thought he overstated his case.

Although I agree with the aim behind amendment 9, I cannot agree to it. Admissions policies must be consulted upon with the local community, and every state-funded school and academy in an area signs up to the fair access protocols to ensure that the most vulnerable children are placed without delay. Failing local resolution, objection can be made to the independent schools adjudicator for a binding decision that must be complied with. I therefore feel that we must resist the amendment, which would add little to the practice of admissions or the accountability that is already in place.

I turn to amendments 10 and 11, on admission forums. As I said in Committee, local authorities and the communities that they serve must be allowed to make their own decisions on what systems will work for them. It cannot be right to assume a need in every area, and at considerable cost. Last year, a mere 14 out of 152 admission forums wrote a report, seven of which were too late to be considered by the adjudicator. Only five objections out of the 151 received by the adjudicator were made by a forum, and four of those were from one particularly active forum.

Where they are valued, those admission forums can continue. Seeking to impose a one-size-fits-all system, as proposed in the Opposition amendment, is the wrong approach. In taking the line that he has taken, the right hon. Member for Leigh (Andy Burnham) has overstated his case about what the Government are doing in the Bill. All we are doing is making admission forums non-mandatory. They can of course continue where they are wanted.

16:45

[Pat Glass]

However much the Minister values schools forums, they are the only mechanisms through which parents have any input into their local admissions agreements. Surely it cannot be right that parents in one local authority have access to a forum when parents in the neighbouring authority do not. That will create a postcode lottery. The local authority can effectively cut out the parents whose needs are greatest by not having a forum. Surely that cannot be right.

[Mr Gibb]

There is a philosophical difference between the Government and Opposition. We do not believe that the Whitehall-constructed approach, which means that things are identical throughout the country, is right about how to deal with anomalies that might occur. We think that a more localised approach is better. Of course, parents can object to admissions arrangements via many avenues. They can take part in the consultation or lodge an objection with the independent schools adjudicator, for example. In addition, as I said earlier, we are expanding parents’ right to object via the schools adjudicator to schools that are not within their area. That, rather than the top-down, prescriptive, bureaucratic approach, is the right approach. Those are very real problems, and we want to address them. We want to ensure that parents can comment on admissions arrangements and that those arrangements are fair, but we also want to reduce bureaucratic burdens.

On amendment 13, one perceived problem with making admission forums non-mandatory is that concerns about admissions will go uninvestigated. However, that is not true. In fact, admission forums never had a power to make decisions on admissions. That role remains with the Office of the Schools Adjudicator, and the Bill will extend his role so that in future, he can investigate and adjudicate on complaints about admissions at academies and free schools. The Bill also gives power to schools and local authorities to put things right for themselves when the adjudicator judges that their admissions arrangements are non-compliant.

Amendment 13 would provide for a wide-ranging local authority power of scrutiny and direction over admissions authorities following a binding decision by the adjudicator, and offer a mere two weeks’ grace in which such authorities can act to comply with the decision. When I first read that proposal, which was tabled by Opposition Front Benchers, I was in two minds about it. On the one hand, I was reassured by their acceptance of the principle of allowing schools the freedom to implement decisions—although they would have to do so within two weeks. On the other hand, the amendment completely misses the point about the purpose of that freedom.

I sought in Committee to reassure hon. Members that schools cannot simply ignore the decision of the adjudicator: he is a statutory post holder, and his decisions have the force of law. Schools must implement change to comply with the adjudicator’s decision. Although at first glance a fortnight seems reasonable, on closer examination it looks less reasonable. Admissions policies must be locally consulted on for at least eight weeks to allow all parties to consider proposals or amendments. Many changes subsequent to an adjudicator’s decision can be swift and simple, but others take time, because they are inherently complex or because they seek to address coherently a number of issues.

More often than not, the timing of decisions means that they cannot easily be adopted for the coming admissions round without risking frustrating parents and others. That is why adjudicators try to ensure that their changes can be included when appropriate, and not just immediately.

[Pat Glass]

Local authorities have 14 days in which to comply with the decision of a special educational needs tribunal. Therefore, why is it unreasonable for schools to have 14 days to comply with the decision of the schools adjudicator, who is also a statutory body?

[Mr Gibb]

The example that the hon. Lady gives applies to one individual, but an objection to admission arrangements applies to an entire school, and therefore to a wider range of people, which means that consultation is necessary before those changes are made. That is the difference between the two examples.[Official Report, 13 May 2011, Vol. 527, c. 11MC.]

There is something else wrong with Opposition Front Benchers’ amendment 13. It would give the 152 local authorities a power to direct, but those local authorities are themselves the admissions authorities for about 19,000 schools in England, and it cannot make sense to give them the power to direct themselves, which in essence is what the amendment would do. Nor is the amendment consistent with our general thrust to allow schools the flexibility to put matters right themselves. Adjudicator decisions carry the full weight of law, and any attempt to thwart them through undue delay risks further legal challenge and possible direction from either the Secretary of State or the courts. All admissions authorities, including academies and voluntary-aided schools, must comply with binding decisions, and we believe that exactly how they do so is best judged by the schools themselves. However, when they do so will be just as important in ensuring that we do not create chaos in our admissions system. I believe that we have struck the right balance between national parameters and local pragmatism, so I ask hon. Members not to press their amendments.

I turn to amendment 40, in the name of the hon. Member for Walthamstow (Stella Creasy). She and, through an intervention, the hon. Member for Sheffield, Heeley (Meg Munn) explained that they were seeking to ensure that the impact of the changes made by the Bill to the exclusions process were clearly understood. I agree that it is important to understand what is happening in schools on such an important issue, and as I set out in Committee, extensive statistics have already been published on the number of permanent and fixed-period exclusions, including for each local authority and ethnic group, as too have national and local authority-level statistics on SEN exclusions, both statemented and non-statemented. In collecting information, however, it is important to eliminate the risk of revealing the identities of individual children, and in some instances, numbers are likely to be far too low to deliver the level of detail sought by the amendment. If there are fewer than five exclusions in a local authority area, the numbers are not published.

We collect information on the review panels, and will continue to do so for the new panels, including on how many cases are reviewed, the outcome of a panel’s decision and whether the pupil is reinstated by the school. I can confirm that we will also have details of when an adjustment of a school’s budget share is directed. However, I am happy to meet the hon. Member for Walthamstow to discuss the precise data that she seeks to see whether we can accommodate her request, bearing in mind the fact that we have to ensure that we do not inadvertently publish very small numbers, which could inadvertently reveal the identities of individual children.

[Stella Creasy]

I gladly take up the Minister’s offer of a meeting. But will he still put on the record a commitment to a qualitative review of what happens to young pupils with special educational needs in the next 18 months, to ensure that the exclusion powers are not used by schools to bypass their commitments? Will he also clarify the referral process? I asked him to clarify how young people will be referred for statementing. We need to ensure that schools do not think, “Either we could go through the difficult process of statementing, or we could just exclude the pupil.” Obviously the powers that the Bill gives head teachers will allow precisely that to happen. Ensuring that it does not happen to young people is a key concern for Labour Members.

[Mr Gibb]

We can talk about those qualitative issues when we discuss the quantitative ones in the meeting that I just offered. I am happy to do that.

On assessment, the hon. Lady referred to the special educational needs Green Paper, which states clearly in paragraph 3.55:

“We know that there is a group of children with SEN who are currently excluded on multiple occasions on a fixed-term basis, and there may be other excluded pupils whose SEN have not yet been identified.”

That paragraph also states:

“we will recommend in exclusion guidance that children are assessed through an effective multi-agency assessment for any underlying causal factors. We will suggest that schools trigger this assessment in instances in which a pupil displays poor behaviour that does not improve despite effective behaviour management by the school.”

I quoted that in Committee and I quote it again today, to show that it is the Government’s intention to ensure that those assessments take place.

I think people have heard enough of me—

[Mr Iain Wright]

No!

[Mr Gibb]

Thank you.

Finally, let me turn to new clause 22, tabled by my hon. Friend the Member for Beverley and Holderness (Mr Stuart), the Chairman of the Select Committee on Education. I fully understand his concerns about the proposed change to the pupil registration regulations that apply when parents choose to remove their children from school to home educate them. My hon. Friend now knows that we shall not proceed with the change in its present form, and I hope that I can further reassure him by explaining the thinking that led us to propose the regulation change in the first place, and what we intend to do now. As he said, the change would have required schools to retain pupils on the roll for 20 school days following a parent’s decision to remove their child from school for home education. If the parents change their minds, the child could be re-admitted to the school. I was attracted by that proposition, as was my hon. Friend.

The Government’s policy remains that parents are responsible for their children’s education. They have the right to choose to fulfil that responsibility by educating their children themselves, rather than by sending them to school, and we have no desire to interfere with that right. The proposed change in the regulations was intended to protect any children whose parents had reluctantly decided to home educate against their own better judgment—for example, those who would rather their child went to school, but who have concerns about the school that they feel it has not addressed. That group is not typical of the majority of home educators, who in my experience are determined, committed and passionate people. Having considered the issue further and taken into account the views of home educators and those of my hon. Friend, I am not yet convinced that the proposed change is the best way to address the concern. Therefore, we are considering other policy options. However, I am grateful to the Chairman of the Education Committee for tabling new clause 22, which has enabled me to put that on the record.

[Mr Sheerman]

I think the Minister was here listening to the debate earlier, but the Select Committee’s report on the matter ranged pretty broadly and made some reasonably positive suggestions for change. When home educators were good they were very good indeed, but the Committee received evidence that some people who did not want to send their children to school could legally refrain from sending them—they would not be prosecuted—by saying that they were home educating them, when there was very little evidence that those children were being educated at all.

[Mr Gibb]

The hon. Gentleman makes a good point. Those are concerns to which we are giving careful consideration, but there are strong opinions on all sides of the debate. We want to ensure that we consider the issues carefully and take all those strong opinions into account.

[Mr Graham Stuart]

May I express my gratitude to my hon. Friend for listening to the representations from me and from home educators? That is precisely the way in which the Government should operate, and I know that there is great gratitude out there among home educators who are afraid that there will always be malign forces at work whenever the Government come anywhere near them. As for the local authorities that misrepresent their powers and are, according to home educators, overstepping the mark, can the Minister give any reassurances about what can be done to protect the rights of home educators? Where there is evidence that children are not receiving a suitable education, local authorities should act, as the hon. Member for Huddersfield (Mr Sheerman) said, but outwith that they should respect the right of home educators to direct their children’s education.

[Mr Gibb]

My hon. Friend makes a good point, just as he made a good speech on those issues. Local authorities are public authorities. They should provide accurate information about their powers and duties, and they are open to challenge if they fail to do so. I hope that that reassures my hon. Friend.

[Mr Stuart]

I am extremely grateful to my hon. Friend for giving way again. If, with the help of home educators, I compiled a dossier of evidence about local authorities, would it be possible for me to meet the Minister and talk further with him about ways to ensure both that local authorities are aware of the law and that they observe it?

[Mr Gibb]

I am happy to accept my hon. Friend’s invitation. As he knows, I always take his views on education in general very seriously, and I am always particularly interested in his very well-informed views on home education. He is probably the most well-informed Member of the House on that issue—

[The Secretary of State for Education (Michael Gove)]

He is.

[Mr Gibb]

There you are; you heard it from the Secretary of State himself. My hon. Friend is the best-informed Member of the House on home education, and I will happily have that meeting with him in the near future.

After those rather lengthy remarks, I hope that my hon. Friend the Member for Altrincham and Sale West will withdraw his amendment so that we can press on to the next group.

17:00

[Mr Brady]

I shall not detain the House for long. New clause 2 was a modest but practical measure that would have extended opportunities to children of limited means. I am disappointed that my hon. Friend the Minister feels unable to give it stronger support, but I also hope that the other place will return to this important issue. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 5

Payments in relation to full-time, post-16 education

‘(1) EA 1996 is amended as follows.

(2) In section 518, after subsection (2), insert—

“(3) The Secretary of State must make regulations in relation to the payment of any allowance or bursary to any eligible applicant who is over compulsory school age but aged 18 or under and who attends a full-time further education course in England in a school sixth form or at a Further Education College or at a sixth form college, or who is on a Foundation Education programme or who is on a Foundation Education programme or who is on a ‘Programme-Led Apprenticeship’.

(4) Payments under subsection (3) shall be subject to the eligible recipient attending every learning session in connection with an eligible education course unless the recognised educational institution has authorised every absence.”.’.—(Nic Dakin.)

Brought up, and read the First time.

[Nic Dakin (Scunthorpe) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

New clause 6—Education Maintenance Allowance—

‘(1) EA 1996 is amended as follows.

(2) In section 518, after subsection (2), insert—

“(3) The Secretary of State must make regulations in relation to the payment of an Education Maintenance Allowance to any eligible applicant who is over compulsory school age but aged 18 or under and who attends a full-time further education course in England in a school sixth form or at a Further Education college or at a sixth form college, or who is on a Foundation Education programme or who is on a ‘Programme-Led Apprenticeship’.

(4) Payments under subsection (3) shall be subject to the eligible recipient attending every learning session in connection with an eligible education course unless the recognised educational institution has authorised every absence.

(5) The minimum payments under subsection (3) shall be determined by the Secretary of State, to take effect on 1 September of every year.

(6) Regulations may provide for the eligibility criteria or administration of the Education Maintenance Allowance.”.’.

New clause 9—Requirement to achieve specified standard: suppliers of careers guidance—

‘(1) EA 2002 is amended as follows.

(2) In section 29 (additional functions of governing body), after subsection (5) insert—

“(6) The governing body and head teacher of a maintained school shall comply with any standards prescribed by the Secretary of State in securing that all relevant registered pupils at the school are provided with independent careers guidance under section 42A (Provision of careers guidance in schools in England) of the Education Act 1997 including the opportunity for pupils to meet at the premises of the school the person providing independent careers guidance.”.’.

New clause 11—Enrichment activities for 16 to 18 year olds—

‘(1) EA 2002 is amended as follows.

(2) After section 85A insert—

“85B Enrichment activities for 16 to 18 year olds

(1) A pupil aged 16 to 18 is also entitled to guidance, tutorials and enrichment activities which may include—

(a) learning aims that lead to external qualifications or external certificates of attainment not approved by the Secretary of State;

(b) careers guidance;

(c) sports;

(d) music, dance and drama;

(e) industry-related programmes, including vendor-certificated courses such as those offered by IT companies;

(f) health education;

(g) use of learning resource centres;

(h) activities that support learners to access a progression opportunity and/or employment;

(i) counselling.

(2) The Secretary of State shall take into account the entitlements in subsection (1) when determining funding for pupils aged 16 to 18.”.’.

Amendment 27, in clause 26, page 27, line 21, at end add—

‘(7) The Secretary of State must produce a transition plan to highlight how he will assist schools, colleges and local authorities in the transition from the current system of careers guidance to the new all-age careers service.’.

Amendment 28, page 27, line 21, at end add—

‘(7) Before the commencement of this section, the Secretary of State must report to Parliament on arrangements for the funding of careers guidance between the end of ring-fenced Connexions funding and the establishment of the All Age Careers Service.’.

Amendment 19, in clause 27, page 27, line 36, at end insert—

‘(d) an Academy School.’.

Amendment 29, page 28, line 3, at end insert ‘by qualified careers professionals’.

Amendment 18, page 28, line 5, at end insert—

‘(ba) involves at least one guidance session that is delivered in person by a qualified careers professional, and’.

Government amendments 36 and 37.

Amendment 17, in clause 76, page 57, line 9, at end insert—

‘(2A) Section 68 will come into force on 1 September 2013.’.

[Nic Dakin]

I want to cover three areas. The first relates to education maintenance allowance and the direction of the Government’s programme. One of my former students, Emma Donaldson, reminded me recently of the Prime Minister’s words just before the general election. He could not have been clearer when he said:

“We have looked at educational maintenance allowances and we haven’t announced any plan to get rid of them”.

Well, that didn’t last very long, did it? Emma wrote:

“The Tories claim that the younger generation should not pay for the mistakes of the past generation, but with these slashes in allowances and the raising of tuition fees we are being asked to do exactly that.”

We can add the disappearance of the future jobs fund to that list, and it is easy to understand why young people feel badly let down by this Government.

The EMA is about far more than just boosting participation. It is also about attendance, achievement, motivation and welfare support. Giving evidence to the Select Committee, David Linnell, the principal of Cornwall college, warned:

“If EMAs are reduced, and if the money is severely reduced, we will see two things. We will see a reduction in those students who come, stay and actually succeed.”

He was talking about students not only coming to the college, but staying and succeeding.

New clause 5 relates to one of the conditions for young people gaining an award of the EMA, which is the motivational aspect of the award. I welcome the fact that the Government were taken kicking and screaming to listen to young people and their families, and that they improved the offer of money available. Even so, the amount available for young people in the new scheme has dropped from £560 million to £190 million, and recipients will receive significantly less in normal circumstances. Furthermore, 68% of colleges recently surveyed believe that recruitment to colleges will be severely affected as a result of these changes.

My concern is about not only recruitment, but ensuring that, once recruited, the students are retained and that the motivational aspect of the EMA is retained in the new award, so that it can have an impact on motivation and achievement as well as on welfare support. The current consultation seems to look both ways, talking about national benchmarks as well as saying that all those matters can be decided locally. It is therefore unclear to what extent there will be a postcode lottery and to what extent the motivational aspects will be retained through certain conditions. It is clear that the most important condition relates to attendance, because it is easy to measure and maintain.

Those are my comments on my first topic, so let me move on to new clause 11, which deals with my second topic—the provision of enrichment activities for post-16 students and the appropriate funding of the same. The cut in entitlement funding from 114 guided learning hours to 30 guided learning hours, which was made earlier this year for the coming year, has resulted in significant detriment to the funding of post-16 learning—it is essentially a 75% cut in entitlement, which translates into a 12% cut in overall funding.

The new clause refers to the range of activities that benefited from that enrichment funding. It is ironic that on the day after the Government got into a muddle over the ill-thought-out idea to sell places at university, they should go out of their way to undermine the funding arrangements for post-16 and the development of the broader person that is necessary to allow young people from the state sector to compete on equal terms with those from other sectors. I hope that the Government will look carefully at those proposals on funding post-16 education.

In April this year, the National Union of Teachers and the Employer Contact Unit conducted a snapshot survey on the impact of cuts on further education and sixth-form colleges. It found that the overwhelming majority of colleges—96%—had been told that their budgets would be significantly cut for 2011-12. Of those, more than nine out of 10 said that the cuts would have a negative impact on teaching and learning in their colleges. That survey highlights the immediate effect of the cuts to enrichment funding on young people now. That is a matter of huge concern—to me and many others—and it needs to be looked at. The new clause provides an opportunity for Ministers to do so.

I have had conversations with Ministers and taken delegations to see them about what is happening on the front line of education, so I know that they have been surprised by the impact of the changes to enrichment funding. Those Ministers are sensible and serious people who will think about how best to make an adjustment as we go forward, so that the education system can continue to be robust and successful.

My final point concerns quality careers guidance, which is covered by amendments 27, 28, 19, 29 and 18. The amendments are designed to ensure that the Bill’s suggestions are improved, so that we have high-quality, face-to-face careers guidance and do not let it wither away. Life is already much harder and more competitive for Emma, whom I quoted earlier, and her generation. University is expensive and to get a job after studying many young people are expected to work for free to get their foot on the ladder, which is not a good thing. Young people might need well-connected parents to arrange an opportunity, but the young people whom I represent do not always have those advantages.

By this Government’s actions, the careers service, the EMA, the future jobs fund and tuition fees—the ladders of support to help young people get on in life—are being systematically kicked away. Good quality personalised careers advice is essential to help young people make the best choices for their future. It is too important to be left to a postcode lottery.

The concept of a postcode lottery is a theme running through my three main points. If we are not careful, we will have a postcode lottery on the education maintenance allowance; we will have a postcode lottery on enrichment activities; and we will have a postcode lottery on careers advice. That is not what we owe to this country’s young people. That is why our amendments are designed to secure proper conditionality around the EMA, a commitment to enrichment activities along with the proper funding necessary to put them back in place, and a commitment to secure a high standard of guidance in every school and college.

[Mr Graham Stuart]

It is a pleasure to speak again in the debate, and to follow the hon. Member for Scunthorpe (Nic Dakin), who is a fellow member of the Education Committee. He made a powerful speech, but he rather overstated the case. References to the wholesale kicking away of all the ladders of opportunity do not befit the hon. Gentleman, who is knowledgeable and who also tends to speak in a reasonable and balanced fashion. Similarly, attacking postcode lotteries is always an easy way of resisting any form of localisation aimed at ensuring that need is met appropriately in a rural area.

As one who represents a rural constituency and rural further education colleges, I am aware of the need for a more appropriate use of limited funds. I will not go into the details—I am sure that Ministers will do that—but we know that the last Labour Government made it clear that, if they were re-elected, they would look again at the EMA and seek to make savings. If savings are to be made, what better way of making them than to put the funds into the hands of those on the front line who have the closest interest in, and the best understanding of, provision for young people? The hon. Gentleman should not overstate his case, let alone suggest that Government Members, particularly Ministers, have any motivation other than to try to improve ladders of opportunity. It is possible to believe that measures are not going in the right direction without suggesting that they are all calamitous or driven by the wrong motives.

Although I did not table amendment 27, its wording is exactly the same as an amendment that I tabled in Committee. It emphasises the need to ensure that the transition to the new all-age careers service is handled properly, and that in the intervening period we do not indeed see a postcode lottery with some areas not receiving appropriate care.

[Ian Mearns]

That is already happening.

[Mr Stuart]

The hon. Gentleman has a point, which is why it is important for us to be reassured about the interim period. It is worth saying—I wish that the hon. Member for Scunthorpe had been able to say it—that the Government’s vision of a higher quality of careers advice than we have seen in the past is a good one, but, like the hon. Gentleman, I want more reassurance about exactly what will be delivered.

It is all very well to paint a picture of a fantastic service that will be genuinely independent and give people a better overview of all their options—not just the academic options delivered by institutions in their own interests—but we need to see what incentives are provided for the actors in the system to ensure that they deliver that. We do not want someone to tick the box by simply shoving a young person in front of a website, with the result that that young person never receives the information that they need about local provision. I will not rehearse all the arguments, but I have heard evidence about further education colleges being barred from going into schools to advise young people.

There is a clash between institutional interests and what I want to see, which is a truly independent service with highly trained staff who have an extensive knowledge of all the local options—I know that that is also the vision of the Minister for Further Education, Skills and Lifelong Learning. It is difficult to imagine that anyone, however clever and hard-working, has an encyclopaedic knowledge of those options, but we need staff with as much knowledge as possible who can give advice as well as, perhaps, signposting young people in the direction of online resources. Such a combination could bring real change, ensuring that young people follow pathways that lead to satisfaction, personal development and economic success. I know that the Minister entirely agrees with that.

I am pleased to note from Government amendment 36 that Ministers listen. I said in Committee that the Secretary of State’s right to withdraw the apprenticeship offer was not appropriate given the new circumstances, and that if employers were prepared to take young people on, the last thing that we should do is introduce a provision allowing someone in the Government to prevent them from doing so. I am delighted that the Minister listened to that, as he said that he would, and has already returned with a Government amendment.

If the Government continue to be firm in purpose and clear in vision, but prepared to listen where the argument is sufficiently strong, we will further improve both the Bill and, most importantly, the education of young people in this country.

17:15

[Lisa Nandy]

First, I associate myself wholeheartedly with the comments of my hon. Friend the Member for Scunthorpe (Nic Dakin) and the amendments standing in our names. One of their key aims is to preserve the conditionality principle that was such an important aspect of the EMA, and I ask Ministers to give a commitment on that. The beauty of EMA was that students had to attend and attain in order to get it. In effect, the state said to the student: “If you work hard and try hard, we will back you regardless of your background. We think you deserve the same opportunities as your peers.”

That was very important. Before entering Parliament, I worked with children and young people for seven or eight years, and I was always struck by their strong sense of the importance of fairness. If young people are going to buy into whichever scheme replaces the EMA, it is essential that they see that it is fair. The aspect of the EMA that I have just highlighted was one of the main reasons why young people thought that it was fair, because those who were working hard and trying hard were assured by their Government that they would get it and be supported.

Following the chaos and insecurity caused by the shambolic way in which the cancellation of the EMA was announced, I was very pleased that Ministers listened and made some commitments in relation to students who have already started their courses. I was also deeply disappointed that the scheme for existing students was altered so that the maximum payment that they receive was reduced. Young people in my constituency rely on the EMA not as an extra or a perk, but as an essential part of their household income.

One of the reasons why my hon. Friend and I are seeking to ensure that there are clear national eligibility criteria for the EMA is that students in our constituencies rely on knowing that they will get the EMA in order to make the decision to go to college in the first place. Those students absolutely need to know whether they will qualify. The key issue in respect of the concern that has already been expressed about the possibility of a postcode lottery and about discretion appearing to be the direction of travel is that under those circumstances such students simply will not be able to make an informed choice on whether to go to college.

[Ian Mearns]

It is also a concern that the decision to abolish the EMA in the first place was based on flawed evidence from a survey that was conducted in school sixth forms but not in further education colleges. That fact in itself shows that Ministers got the whole message wrong. In 2009-10, 567,000 youngsters received the EMA at the higher level—£30 a week—yet Ministers have decided to do away with it, based on evidence from youngsters in sixth forms but not in FE colleges. In my area of Gateshead, 67% of youngsters attending the local college were entitled to the EMA at the higher level.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I just point out that we are running close to time and interventions should therefore be brief, so as to give as many Members as possible the chance to speak?

[Lisa Nandy]

I agree with my hon. Friend. Despite everything that has happened and the anger that many of us have expressed on behalf of young people in our constituencies, it is important that we proceed on the basis of evidence. Another concern that has been expressed to me is that if there is no clear guidance, eligibility criteria or national standard in respect of who will receive the EMA, it could leave colleges open to legal challenge under equalities legislation, if students are left disadvantaged as a result of not receiving it. I would be grateful if Ministers were to take that into account in their deliberations and as part of the current consultation.

All Labour Members have concerns about the impact of the funding cut to which my hon. Friend the Member for Scunthorpe has referred and about the reduction in the number of students who will be able to receive support. I would be grateful if Ministers were to make a commitment today that they will monitor the impact of the withdrawal of the EMA and if it is found that fewer students can participate and achieve in education, they will reverse their decision.

As my hon. Friend has said, one of the reasons why Labour Members feel so strongly about this issue is that we have seen a triple whammy: the Aimhigher initiative, which got 40% more students in my constituency going on to university in just six years, has been abolished; the EMA, which enabled students to get to the stage where they could go to university, is going; and tuition fees have been raised beyond the level that many young people in my constituency can afford. At the same time, 1 million young people are unemployed. So, if those students are going to endure significant hardship, which is what many families—in particular, those containing several siblings—will face, to stay on at college without much hope of going on to university, it is imperative that they have a guarantee of not only the level of financial support that they will receive, but the quality of education that they will get.

That brings me to enrichment funding. My hon. Friend the Member for Scunthorpe has tabled a proposal on that, which I support.

[Mr Graham Stuart]

I cannot let what the hon. Lady has just said pass. People from lower-income families can afford to go to university, as they pay nothing up front. People pay only when they earn £21,000; they pay 9% above that, when they are earning the money. Do not send the message to young people from lower-income families in your constituency or mine that they cannot afford to go to college—they can, and they should if they want to. Do not scaremonger.

[Lisa Nandy]

First, it is absolutely clear who is sending a message to young people in this country that we do not value them, will not support them and will not back them, and it is the hon. Gentleman’s party. It is an absolute disgrace that on the things that we are discussing today—Aimhigher, the EMA and tuition fees—all the progress that has been made is being unravelled, with very little humility or apology from the Government. On the hon. Gentleman’s accusations that my hon. Friend the Member for Scunthorpe is overstating his case, I simply ask where on earth the hon. Gentleman has been for the past 12 months. The outcry has not just come from young people in Wigan and Scunthorpe, because there has been a national outcry at the removal of the EMA, which is one of the most successful things introduced by the previous Government. I simply ask him to spend a bit more time outside this place listening to young people who are experiencing serious hardship and a bit less time trying to support his Front-Bench team.

That brings me to the subject of enrichment funding, on which my hon. Friend and I have tabled a provision as we are seeking to protect it today. The withdrawal of enrichment funding will have an astonishing impact in my constituency—my local college, Winstanley college, is losing £200,000 of its funding next year, which represents a 10% cut—yet we have heard so little about this. Over the past year, I have heard Ministers talk a lot in the Select Committee about trying to improve the situation of the most disadvantaged young people, but the withdrawal of enrichment funding is doing a great deal to widen the gap between the haves and the have-nots. Winstanley college is being forced to say that only students whose parents can afford to send them on trips will be able to go on them as part of their course. That is just one of many examples that the college gave me and is distraught about. The withdrawal of this funding will have a real impact, and I urge Ministers to think again.

The withdrawal of enrichment funding will clearly hit hardest those schools that already have a disadvantaged intake. St John Rigby college, which is just down the road from me in my constituency, will take a funding hit next year, because of the withdrawal of £300,000. Half its students receive the EMA and only 2% of the students who come into that college average an A-grade at GCSE. Its very hard-working and talented principal has told me that enrichment funding is not an optional extra, but an essential part of giving its hard-working and talented students the chance to reach their full potential. It cannot replace that enrichment funding, so it must do other things. It is planning to halve the tutorial hours for all students, so that it can ensure that it protects those essential services. Like Winstanley college, which I mentioned earlier, class sizes will go up, which will disadvantage all students but will have a particular impact on the most disadvantaged.

I join my hon. Friend the Member for Scunthorpe in supporting the new clause because unless the Government think again, sports, arts, drama, counselling and career opportunities will be denied to precisely those young people who need them most. Surely that is not the intended consequence of the Government’s policies. I urge the Minister to think again.

[Esther McVey (Wirral West) (Con)]

I, along with Opposition colleagues, have tabled amendment 27 to require the Secretary of State to

“produce a transition plan…from the current system of careers guidance to the new all-age careers service.’.

How that transition is handled—all of it—is vital. First, I want to welcome the Government’s plans for an all-age careers service, but I emphasise the importance of careers advice. It is the bridge from education to work, fundamentally signposting the match between an individual and a job or a journey into education and fulfilment. As those choices become ever more sophisticated, an accompanying sophistication of knowledge and know-how is needed to enable a student to navigate their way, so that all young people—this is what makes me want to speak today—from all backgrounds and of all abilities, interests and ambitions can achieve their goal in life.

I believe that this transition has come at a critical and crucial time. We know that youth unemployment is particularly high, covering 1 million people across the country aged between 16 and 24 and 160,000 in the north-west, the highest in any region. In Wirral, 16.8% of those aged between 16 and 19 are not in education, training or work. At a time of incredibly high youth unemployment, opportunities and changes are opening up, too. There are changing opportunities in apprenticeships and what they have to offer, in tertiary education, in voluntary work, in work experience, in setting up a business or even in travelling around the world and doing something with charities elsewhere—so we have the double impact of high unemployment and changing opportunities.

On a personal note, I meet approximately 400 schoolgirls every week from all backgrounds and not only are they confused about their options and what they want to do, but they have an inner confusion, too. They do not know what is out there or whether they have the confidence or ability to do it, and they now need to ask whether they can get direction to help them. Those young girls tell me that they need role models and that they need to meet people who have done a job for real. They need to be able to choose a job and to get interested in it, and a person will need to tease out that interest and to show them those opportunities.

This transition must be right. People leaving school at a vulnerable time need the right options to be put in front of them and that must be delivered through proper careers advice. It is also a vulnerable time for people working in the profession and giving out careers advice. This is not just about their knowledge and know-how—this is a subject they love and about which they are passionate. We must not lose the knowledge on the internet, but we must also not lose those people and their personal knowledge. We cannot let something so vital slip through our fingertips when it was within our grasp and when we had the ability to save it.

17:29

[Mr Iain Wright]

I shall be brief, given the time constraints, and speak specifically to new clause 9. I agree with every word that was said by my hon. Friends the Members for Scunthorpe (Nic Dakin) and for Wigan (Lisa Nandy) as well as by the hon. Member for Wirral West (Esther McVey). Their amendments are eminently sensible and would go a long way toward repairing the damage that in 12 short months the Government have inflicted on young people through their policies on the education maintenance allowance, enrichment activities and post-16 funding.

The Minister for Further Education, Skills and Lifelong Learning and the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) will recall that we had considerable debate in Committee about clauses 26 and 27 and the changes to the careers service that was provided to young people. It became very apparent when the Minister for Further Education, Skills and Lifelong Learning was questioned in Committee that no real work or thought had been given to the transition plan between the ending of Connexions and the establishment of the all-age careers service. The Minister conceded the possibility of having a careers summit to discuss the matter, which might be imminent, but it is probably about nine months too late and should have been designed into a clear transition plan. I know that he is genuinely and passionately committed to this issue, but his eye has been worryingly off the ball regarding the transition. This is inept.

Although some services may be available in September, others will not be operational until April 2012. There is confusion about commitment to funding and there is a real risk that vital professional expertise will be lost; indeed, that is borne out by what is happening. A Unison survey of local authorities has shown that 97.5% of councils that responded were cutting the careers service in their area. In central Bedfordshire, personal advisers were being withdrawn at the end of the last autumn term and there is a lack of staff to cover statutory duties. In Essex, no one-to-one advice is being provided at all. Unison concludes that the survey confirms that

“the level of cuts and the lack of clear transition guidance from central government are leading to the decimation of the careers service”.

As the hon. Member for Wirral West and my hon. Friend the Member for Wigan have pointed out, expertise is being lost precisely when the country’s young people need it most. Students leaving school in a matter of weeks after doing their exams will be going out into a world in which conditions are the harshest they have been for a generation, with youth unemployment running at record levels and educational options for over-16s narrowed with the scrapping of EMA. It is becoming clearer by the day that Government policy seems to be moving us towards a higher education system that benefits the well-off rather than the more vulnerable.

In those circumstances and in that economic context, it is vital that before young people leave school they receive the best possible information, advice and guidance about their prospects and options. The manner in which they receive such advice will vary according to their personal preferences. In this modern age, they might wish to view things online or to interact with others in an electronic version of social networking. We can and should use technology in innovative ways to raise aspiration, to show young people what is available and to demonstrate how they can achieve their ambitions.

[Mr Hayes]

I know that the hon. Gentleman would not want anything to remain on the record that might, however unintentionally, appear as a calumny. On his last point, he will know that we have rolled out the Next Steps IT project, a sophisticated IT interface on precisely this subject, and that the careers taskforce has been working under Dame Ruth Silver, followed by the Careers Profession Alliance under Ruth Spellman, to develop for the first time a coherent set of professional standards, accreditations and training for careers advisers. That did not happen under Labour, but it is happening under our Government.

[Mr Wright]

The Minister will recall the information, advice and guidance strategy that I published, “Quality, Choice and Aspiration”, which put in place precisely those measures—Next Steps and the careers taskforce—so he has basically implemented what I personally put in place when I was at the Department.

[Mr Hayes]

That was ungallant of me, so let me qualify what I said. The hon. Gentleman is absolutely right. Some progress was made and he was a very diligent Minister, but in the same spirit I think he would want to acknowledge that we have carried that through in the two respects I have mentioned.

[Mr Wright]

Let me concede that the Minister has been the best Minister for Further Education, Skills and Lifelong Learning that I have ever seen in this Government. He has been exceptional in that regard.

The Minister talked about online and electronic information, advice and guidance about careers. That has its place, but this is my point and the point of new clause 9: a central part of any successful careers advice system is the face-to-face personalised and tailored interaction between a young person and a careers professional, preferably not on a one-off basis on a wet Wednesday afternoon, as we discussed in Committee, but repeated time and again so that trust can be established between the student and the careers professional, and a relationship built up where the professional can know about the student’s wishes, skills, ambitions, potential and limitations, and accordingly challenge, motivate and provide good tailored advice about their prospects.

In Committee, the Schools Minister did not provide huge reassurance on the matter. He seemed to believe that face-to-face information, advice and guidance was not appropriate for all students. I asked him whether he thought such face-to-face access should be the cream of careers advice, available only to a select few students, and he said in Committee that it would depend on the school, which might think it was appropriate for some students, but then again, might not. That is worrying.

Steve Higginbotham, the president of the Institute of Career Guidance, said that as a result of the Government’s plans and the incompetence regarding the transition scheme and because face-to-face advice has not been prioritised,

“The likely reality is that hundreds of thousands, and possibly millions, of young people will never get access to personalised impartial career guidance, having to rely on the national telephone helpline or website and school staff”.

Young people deserve better than that. I believe very much in allowing the professional judgment of teachers and head teachers to flower, but more than anything else I want the potential of the young person to be nurtured. For a Department that states that it trusts the judgments of professionals, Ministers seem remarkably reluctant to allow careers professionals to meet pupils at the school.

The purpose of new clause 9 is to ensure that that would occur. The clause would help to ensure that relevant and personalised advice could be provided for every single student, rather than just a select few in a school. The school governing body—the Minister will recall that I have always believed that school governors have a positive and largely untapped role to play in the provision of first-class careers advice—would have the responsibility to ensure that careers professionals had face-to-face meetings with pupils. It would make sure that, as my hon. Friends the Members for Scunthorpe and for Wigan mentioned and as the hon. Member for Wirral West alluded to, there was not a postcode lottery or even a school lottery for careers advice, with pupils from disadvantaged backgrounds being disadvantaged still further by a lack of resources to fund face-to-face services. If the Minister and the Front-Bench team are serious about wishing to help every child fulfil their potential—and I think they are—I cannot see how they would have a problem with new clause 9. I therefore hope that the Minister will accept it. I give notice that I wish to test the opinion of the House by pressing it to a vote.

Finally, I hope that the hon. Member for North Cornwall (Dan Rogerson) did not take offence earlier when I commented from a sedentary position about flabby liberalism. I was speaking about his policy position, rather than any personal appearance. On careers advice, I think the Liberals are like Joe Bugner rather than Muhammad Ali or the late, great Sir Henry Cooper, whom we lost earlier this month. I wish they were more like Ali and Cooper, and it is disappointing that they have not been so in debate in Committee and in the House today.

[Simon Hughes]

I, too, am conscious of the time so I shall be brief. I welcome the debate, as I welcome the co-operation and exchanges that I have had with the Minister responsible for these matters. I know he has been listening to Opposition Members in Committee, colleagues in both parties and those outside.

On new clause 6 moved by the hon. Member for Scunthorpe (Nic Dakin), and his comments and those of the hon. Member for Wigan (Lisa Nandy), they are right about the need for the new system for EMA, for those who will continue to receive it, to be subject to the two criteria of attendance and punctuality. That is extremely important. That was seen to be a discipline, and in one of the reports I gave to the Prime Minister and the Deputy Prime Minister I made the point that EMA should be continued for those who have started receiving it and that it should be subject to eligibility criteria.

I am sure that the Government will have noticed the equality impact assessment on the EMA plans. In my recommendations to Ministers, I made it very clear that entitlements were better than general localised discretion, because knowing how much they will receive is a consideration for young people, just as knowing what the score is for university costs is a consideration for students. I hope that the Government’s response to the consultation—there are a few days remaining for anyone who has not yet responded and wishes to do so—will not be so prescriptive that it is burdensome and that it will make it clear that certain things will, in effect, be entitlements for young people so that from this summer they will be able to say, “Yes, I’m going to college next year. It will be a good thing for me.” I hope that there is a favourable response. The wording of the proposed new clauses as they are given might not be accepted, but we have more opportunities during the passage of the Bill to get to the same place.

[Mr Iain Wright]

Under the existing provisions for EMA, around 600,000 young people were helped to continue their education. Under the Government’s new plans, 12,000 people will be helped. Does the right hon. Gentleman seriously think that that is good enough?

[Simon Hughes]

Again, the hon. Gentleman would not want to mislead people. The scheme proposes that everyone who this year is in their first year of receiving EMA at the top rate—£30 a week—will next year receive £20 a week. We are talking about hundreds of thousands of people, not 12,000. The figure he refers to relates to the additional agreement, which was never there before, that those with special needs, such as those on income support, those who have been carers and those who have been in care, will be entitled to a minimum of £1,200 a year. I welcome that. The Government will have to keep under review whether that is enough for that cohort of young people and whether the figure might have to be adjusted in years to come.

New clause 9, which was tabled by the hon. Member for Cardiff West (Kevin Brennan) and his friends, makes an important point that was also raised by the hon. Members for Scunthorpe and for Wirral West (Esther McVey). I am in the process of finishing my report for the Government on the careers service and the implications for access to further and higher education, and I am very clear not only that there should be a careers service available for every secondary school child, but that it should include a personalised service. It is not enough that everyone should have access to a telephone service or an online service or be given a book. I know that the Minister understands that point and is sympathetic to it. I hope that we will arrive at the situation in which everyone knows that they will be able to engage with someone who knows about careers and can assist them. It should certainly be one session, but more may be needed.

Those careers advisers also need to be professionally recognised. The six main groups that have provided careers guidance are getting their act together and hope to be together in one organisation this summer. When that is done, they can be recognised, which I think will give us the basis for a good service of general careers information, advice and guidance. I welcome that and hope that Ministers will be sympathetic to the fact that that service must be offered by recognised professionals.

There is obviously a concern in the House, which the hon. Member for Wirral West expressed, about the transition from the current Connexions service, which was good in parts and less good in others, to the all-age careers service, which is generally welcome and could be very good when it is up and running. Ministers understand the need to ensure that a year’s worth of young people do not fall through the gap between the old and new services. We must ensure that resources and arrangements are in place to prevent that.

I want to make one last pair of suggestions for Ministers to consider. I have been across the country talking with school students, and students in sixth-form colleges and universities, and some very unfortunate evidence has come out of that. Some young people, of course, say that their careers advice was excellent, but the majority say that they did not get good enough careers advice or work experience. This was a clear majority, probably about 80%, whether on Merseyside, in Cornwall or anywhere else, and we really have to improve those things.

At the end, I hope Ministers will accept that, in every sixth form, college and school, somebody should have responsibility for the careers service and careers advice, and that another person should have responsibility for the access arrangements—for making sure that people are shown the life opportunities that will come to them after school or college.

17:45

We need to build on where we are and to do much better. I hope that the Minister will be sympathetic to the intention behind this group of proposed changes, but, if we cannot agree to them tonight because we might not be at that stage just yet, I hope that we will have an opportunity to do so before the Bill becomes law. I know that Ministers are keen to get it right, and I welcome the fact that the Minister before us is determined to do so.

[Bill Esterson (Sefton Central) (Lab)]

I want to speak to the amendment in my name, on the careers service and Connexions, and to the proposed changes suggested by my hon. Friend the Member for Scunthorpe (Nic Dakin), to which I have also put my name.

Contributors on both sides of the House have made very well the point about the importance of a professional careers service, and they have dealt with the all-too important issue of transition. The shadow Minister, my hon. Friend the Member for Hartlepool (Mr Wright), referred to putting the transition plan in place, and he noted the great concern about the cuts that have already gone through, the loss of staff and, in some places, the total breakdown of services. The proposed changes seek to ensure that the transition is put in place, and that there is proper professional staffing of the future careers service. I hope that Ministers will take full account of all those points, because they are incredibly important.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) made very well the point about the importance of getting the careers service right, and how long it has been an issue. At a time of growing youth unemployment, that point is timely, indeed.

[Julie Hilling (Bolton West) (Lab)]

Is my hon. Friend aware of the Department for Education and Skills survey of 5,000 young people, which found that 90% were satisfied with Connexions, and that Ofsted reported the qualitatively positive impact of the service on the careers and other choices of young people?

[Bill Esterson]

My hon. Friend makes the case very well for the success of the existing careers service and the importance of a professional careers service. The Government need to take account of that evidence base, but so far they have been in such a rush to push through these proposals, I fear that in their planning they have missed such evidence.

We are short of time, so I will make some brief comments about the education maintenance allowance. There have been some well-made points, but I want to mention Hugh Baird college and Southport college, which students from my constituency attend. Up to 90% of the learners at those colleges receive the EMA, and listening to Government Members, who now seem to recognise the importance of linking attendance and attainment to the payment of its replacement, I wonder why we are getting rid of it. As my hon. Friend the shadow Minister said, if only 12,000 people receive the replacement, the number really will be a drop in the ocean. We have already seen one step in the right direction, with the U-turn on providing an allowance to existing learners, but I hope that the Government will go much further on the subject of EMA’s replacement.

My evidence from the colleges that I have mentioned is that students who receive EMA have considerably higher attendance and attainment than those who do not. They are also unable to work out which students will continue to attend without receiving EMA or to determine which students are young carers and from other vulnerable groups and therefore very dependent on EMA. These issues have not been sufficiently taken on board, and that is why the amendments tabled by my hon. Friend the Member for Scunthorpe are so important.

[Mr Hayes]

I will speak to Government amendments 36 and 37 and deal with the remarks made by hon. Members on the other amendments in the group.

Let me first say a few words about EMA. The hon. Member for Scunthorpe (Nic Dakin) always speaks in a reasoned way. I appreciate that he brings expertise to this House because of his prior experience. I share his commitment, and that of the hon. Member for Wigan (Lisa Nandy), to fairness. It is important that we deliver a fair outcome. It is also right that we set out clearly our expectations of how the new bursary fund will operate, and we mean to do so.

As the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) said, we are engaged in a consultation. I can give the commitment today that following the consultation we will publish short, focused guidance on the new system for schools, colleges and training providers. We certainly do not want a system that is not coherent, consistent or fair. As has been done previously in respect of EMA, we will publish details of the arrangements that we intend to make for provision of financial assistance under the new scheme. On 28 March, we announced additional transitional arrangements to help those who are part way through their studies. The hon. Member for Sefton Central (Bill Esterson) paid tribute to that. On whether conditions should be attached to receipt of the 16-to-19 version, we expect, subject to consultation, to set out in guidance that schools, colleges and training providers should consider doing just that.

I hope that those comments will go some way towards assuring those who have had understandable doubts about this that we intend to do this in a proper, measured and considered way. In the past few months, they have told us that conditionality, which was a feature of EMA, was an important factor in encouraging positive attitudes to learning. I believe it is right that these conditions should be set locally, as they are now for EMA. As we discussed throughout the Committee proceedings, we are seeking to reduce, not increase, the regulatory burdens on schools and colleges. The administration of 16-to-19 bursaries should be at the discretion of individual schools and colleges, supported by guidance from the centre, giving head teachers and principals the power to make decisions that are in the best interests of students.

Let me give some examples of that. Members of the House will know that in rural areas there are different pressures surrounding transport from those, typically, in urban areas. In other circumstances, depending on what people are studying, there may be particular pressures to do with the equipment that is required for people to fulfil their studies. There needs to be sufficient flexibility to take account of, and address, different needs, but that does not mean that coherence should not be established in what we say from the centre. I hope that that goes a considerable way down the road towards the destination of widespread agreement that is at the heart of all we do as a Government and I do as a Minister.

The hon. Member for Scunthorpe spoke about enrichment activities. I thank him for the opportunity to discuss this important and valuable aspect of young people’s education. I know that he was a distinguished principal of John Leggott sixth-form college before coming to this House and brings that understanding here. I also know, however, that he does not support the reductions that we have had to make to the funding for enrichment activities. This does not mean that we do not understand their significance or value. The context in which we debate these matters today, as we debate all our considerations on the funding and management of education, is one of financial pressure. The Government are in the business now of having to make tough decisions about value for money and priorities, and of ensuring that the money that is spent delivers the fairness that the hon. Member for Wigan articulated.

Because we agree that such activities can be valuable for young people, we have protected funding for tutorials for all 16 to 18-year-olds. Our commitment to vulnerable groups is demonstrated by our increasing by £150 million to £750 million the amount of funding to support students from disadvantaged backgrounds and those who need additional support. We expect that additional funding to be used to provide the additional support that disadvantaged students need, including enrichment activities if they are appropriate.

I would like to have spoken about the apprenticeship entitlement, but it is sufficient to say that in the evidence sessions, it was clear from the witnesses that the arrangements that prevailed under the previous Government were not widely agreed to be effective. I think it was Martin Doel of the Association of Colleges who said he never felt that those arrangements were really operable. I think that our changes will mean that we can deliver on our commitment.

I will say no more about that, because I want to say a word about careers guidance, which has been spoken about a lot. It is a subject dear to my heart as it is vital. Let me make it clear that I fully appreciate the relationship between good advice and guidance and subsequent progress. Furthermore, it is fundamentally important for social mobility and social justice that that advice and guidance is available to people who would not get it by other means. As the right hon. Member for Bermondsey and Old Southwark suggested, such advice and guidance is usually available to more advantaged people through social networks or familial understanding. That is not always the case for people with less wherewithal who are trying to navigate their way through the system. This is not about aspiration. Let us once and for all kill off the bourgeois, left assumption that working-class people do not aspire to the same things as their middle-class contemporaries. Their ambitions are the same; what they lack is the wherewithal. My mission is to provide that wherewithal, so let us discuss some of the detail.

[Julie Hilling]

Will the Minister give way?

[Mr Hayes]

I will not, because I do not have time. I am terribly sorry.

The hon. Member for Hartlepool (Mr Wright) is right to say that he initiated the idea of the IT system. We implemented what he initiated. He is right that he set up the taskforce. We have considered those recommendations and taken them seriously. We will put in place a state-of-the-art, comprehensive, all-age IT system, which will be available to young people and to other people who want to upskill or reskill. To support that, we will have a telephone service, as he intended.

We will deliver, for the first time, a coherent set of professional standards, training and accreditation for careers professionals. The work that has been done on that over the past six to nine months is of profound importance. It has been led by Ruth Spellman and was inspired by Dame Ruth Silver—there are many Ruths in this business. They have been involved in a series of activities to bring together the disparate elements of the careers profession around a common set of objectives.

Furthermore, it is right that we exemplify best practice. That is bound to involve face-to-face connections—that word was not used advisedly—with the people seeking advice. We want people to have the maximum possible opportunity to gather the advice that is available from the professionals whom I have described in a way that is appropriate for them. I find it inconceivable, or at least unlikely, that best practice will not include face-to-face provision.

Furthermore, new clause 9 suggests that the Government would not be able to issue guidance, but it is clear that that provision is superfluous; I have checked the facts, and the Education and Skills Act 2008, which is unaltered by the Bill, means that the Government can issue guidance on the subject if and when necessary. We are determined that schools, colleges and other bodies should be able to provide the best possible advice. I have written to local authorities, as I promised I would, to remind them of their continuing duty to promote participation. I have instructed schools that they need to put in place the transitional steps in September, ready for the full steps later, and—

18:00

Debate interrupted (Programme Order, 8 February).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

Question negatived.

The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 9

Requirement to achieve specified standard: suppliers of careers guidance

‘(1) EA 2002 is amended as follows.

(2) In section 29 (additional functions of governing body), after subsection (5) insert—

“(6) The governing body and head teacher of a maintained school shall comply with any standards prescribed by the Secretary of State in securing that all relevant registered pupils at the school are provided with independent careers guidance under section 42A (Provision of careers guidance in schools in England) of the Education Act 1997 including the opportunity for pupils to meet at the premises of the school the person providing independent careers guidance.”.’.—(Mr Iain Wright.)

Brought up.

Question put, That the clause be added to the Bill.

18:00

Division 269

Ayes: 212

---

Labour: 209
Democratic Unionist Party: 1
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 304

---

Conservative: 254
Liberal Democrat: 46
Democratic Unionist Party: 2

Clause 2

Power of members of staff at schools to search pupils

Amendment made: 30, page 6, line 15, at end insert—

‘( ) In section 569 of EA 1996, in subsection (2A) (regulations subject to affirmative procedure), for “550ZA or 550ZC” substitute “550ZA(3)(f) or 550ZC(7)”.’.—(Mr Gibb.)

Clause 13

Restrictions on reporting alleged offences by teachers

Amendments made: 31, page 20, line 38, at end insert—

‘( ) The restrictions in subsection (3) also cease to apply if—

(a) the Secretary of State publishes information about the person who is the subject of the allegation in connection with an investigation or decision under section 141B (investigation of disciplinary cases by Secretary of State) relating to the same allegation, or

(b) the General Teaching Council for Wales publishes information about the person who is the subject of the allegation in connection with an investigation, hearing or determination under Schedule 2 to the Teaching and Higher Education Act 1998 (investigation of disciplinary cases by the General Teaching Council for Wales) relating to the same allegation.’

Amendment 32, page 21, line 4, at end insert ‘, or

(b) a document published by the regulator of a profession of which the person who is the subject of the allegation is a member in connection with disciplinary proceedings in relation to the person.’

Amendment 33, page 22, line 12, at end insert—

‘( ) Schedule 4 (offence of breaching reporting restrictions: application to providers of information society services) has effect.’—(Mr Gibb.)

Clause 34

Duties in relation to school admissions

Amendment proposed: 13, page 33, line 14, leave out subsection (3) and insert—

‘(3) For section 88J (changes to admission arrangements by schools adjudicator) substitute—

“88J Implementation of decisions by adjudicator

(1) This section applies where the adjudicator has made a decision (‘the primary decision’)—

(a) under section 88H(4) on whether to uphold an objection to admission arrangements, or

(b) under section 88I(4)(b) or (5)(b) on whether admission arrangements conform with the requirements relating to admissions.

(2) If the admission authority has not amended its admission arrangements within a period of 14 days of being notified of the primary decision, the local authority for the area in which the school is situated may direct appropriate changes to any aspect of the admission arrangements in consequence of the primary decision.

(3) Following the amendment of the admission arrangements by the admission authority following a primary decision, the local authority for the area, if it considers that the changes to the admission arrangements are not consistent with the primary decision, may direct appropriate changes to any aspect of the admission arrangements in consequence of the primary decision.

(4) An admission authority which is subject to a direction under subsections (2) or (3) may ask the adjudicator to set aside the direction on the grounds that the changes to the admission arrangements contained in the local authority’s direction are not consistent with the primary decision.”.’.—(Kevin Brennan.)

Question put, That the amendment be made.

18:15

Division 270

Ayes: 211

---

Labour: 210
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 305

---

Conservative: 255
Liberal Democrat: 46
Democratic Unionist Party: 3

Clause 51

Academy arrangements: post-16 education and alternative provision

Amendments made: 34, page 42, line 34, leave out from ‘not’ to end of line 36 and insert

‘otherwise receive suitable education for any period,’.

Amendment 35, page 42, leave out lines 40 to 42 and insert—

‘(2) “Suitable education”, in relation to a child, means efficient education suitable to the child’s age, ability and aptitude and to any special educational needs the child may have.’.—(Mr Gibb.)

Clause 65

The apprenticeship offer

Amendments made: 36, page 51, line 5, leave out ‘sections 83B and 83C’ and insert ‘section 83B’.

Amendment 37, page 52, leave out lines 26 to 35.—(Mr Gibb.)

Clause 76

Commencement

Amendment made: 38, page 57, line 9, at end insert—

‘(f) section [Charges at boarding Academies].’.—(Mr Gibb.)

Schedule 14

Academies: land

Amendment made: 39, page 112, line 24, at end insert—

‘() in the opening words, for “subsections (4) and” substitute “subsection”;’.—(Mr Gibb.)

18:28

[John McDonnell (Hayes and Harlington) (Lab)]

On a point of order, Madam Deputy Speaker. As a result of the programme motion and the flow of debate, we have failed to reach the final batch of amendments, which deal with the education work force. About 13,000 workers will have their employee organisations abolished as a result of this legislation and will be insecure in their future employment. Tens of thousands of others will also be affected by the Bill. This batch of amendments was designed to deal with those issues and give those education workers some form of security for the future.

Now that we have failed to reach those amendments, may I through you, Madam Deputy Speaker, ask Mr Speaker to bring together the party leaders to discuss again the preparation of programme motions so that we do not again fail to reach important amendments—I accept that we did under previous Governments—that affect so many of our constituents and members of our communities. It is also critical that the rights of Back Benchers who do not serve on Public Bill Committees are protected, because this is the only opportunity we have to move and debate amendments.

[Madam Deputy Speaker (Dawn Primarolo)]

I understand why the hon. Gentleman is frustrated by his inability to participate in debate on the amendments that were not reached, but the timetable motion was agreed by the House, and is completely outside any responsibility of the Chair. However, the hon. Gentleman has put his points on the record, and he may wish to catch my eye briefly during the Third Reading debate—if we reach it.

[Kevin Brennan]

Further to that point of order, Madam Deputy Speaker. My hon. Friend the Member for Hayes and Harlington (John McDonnell) is right in saying that we did not reach the last group of amendments, which would have enabled us to discuss the Government’s proposal to allow teachers who are not qualified to teach in taxpayer-funded schools. That was part of a sequence of events over the last few days which did not allow the Opposition sufficient time to table amendments, or even to discuss some of those that had been tabled. The timetable was changed at the last minute on Thursday. Is there anything we can do to ensure that the Opposition are given more notice of the time at which the Government intend to bring a Bill to the House, not least when it changes at the last minute?

[Madam Deputy Speaker]

I think I understand the gist of the hon. Gentleman’s point of order. As he well knows, and as I made clear in response to the point of order raised by his hon. Friend the hon. Member for Hayes and Harlington (John McDonnell), the House voted on the timetable. As for discussions between the parties, that too is not a matter for the Chair. I feel that we are continuing the debate via points of order rather than embarking on the Third Reading debate, but I am sure that Members will find other ways in which to make their points during that debate.

Third Reading

18:31

[Mr Gibb]

I beg to move, That the Bill be now read the Third time.

Let me begin by thanking all Members on both sides of the House who served on the Bill Committee. As with all the best Bill Committees, it was always good-humoured and good-natured, and it included thorough scrutiny of each of the Bill’s 79 clauses and 17 or 18 schedules. In barely a month we had 22 sittings, even more than the Committee considering the mammoth Bill that became the last Government’s Apprenticeships, Skills, Children and Learning Act 2009, which, with 270 clauses, was well over three times the size. We also reached the final clause with time left over to debate new clauses as well, which is rare for any Bill Committee. It is therefore only right and proper for me to pay tribute to the Minister for Further Education, Skills and Lifelong Learning, as well to officials in the two Departments and officials of the House.

Having spent 13 years in opposition, I know from first-hand experience how demanding a Committee stage can be for Opposition spokesmen, so let me also thank the hon. Members for Hartlepool (Mr Wright) and for Cardiff West (Kevin Brennan) for the professional way in which they fulfilled their responsibilities.

The Education Bill has four principal aims: to help schools improve behaviour in the classroom, to remove bureaucratic burdens from schools and, in particular, from teachers by restoring trust in professionals, to ensure that schools are properly accountable to parents and local communities for what they do, and to ensure that the resources that we have are distributed fairly and targeted towards those pupils that need them the most.

[Kevin Brennan]

May I ask whether the Secretary of State’s absence is authorised or unauthorised?

[Mr Gibb]

I find it upsetting when people complain about my presence in debates. Frankly, I think that the hon. Gentleman has secured a very good deal.

There is no bigger barrier to the recruitment and retention of good teachers than poor pupil behaviour. Figures published last month showed that in nearly one in five secondary schools, behaviour is judged as being no better than satisfactory. In the latest year for which we have figures there were over 363,000 fixed-period exclusions, of which 80,000 were issued for threatening behaviour or verbal abuse against an adult. Recent polls by the Association of Teachers and Lecturers found that two in five teachers had dealt with physical aggression during that year, and that a quarter had been subjected to a false allegation by a pupil. That underlines the fact that too many teachers have been hindered in doing their jobs because of poor behaviour. I fully understand why teachers have felt that the system, and the Government, have not always been on their side. The Education Bill will ensure that the pendulum swings back in their favour by strengthening teachers’ powers. They will be able to issue same-day detentions, and to search for, and confiscate, items such as mobile phones and video cameras. We considered these measures in detail in Committee. I hope they are used only very rarely, but I would rather teachers were able to decide for themselves whether to use them and I am confident that they will help protect the rights of all children to learn in an environment free from disruption and bullying.

Just as importantly, the Bill will also extend better protection to teachers from false and malicious allegations. Teachers will now have pre-charge anonymity when faced with an allegation of an offence by a pupil, to prevent false accusations being used to undermine teachers’ authority. Teachers have campaigned for that for years, and it has been delivered by this Government in our first year. Of course, we will continue to listen to those who seek to extend these provisions to other staff in schools and colleges, but we also need to tread carefully in relation to cherished rights of free speech in a free society.

Discipline is just one area in which teachers have not been afforded the trust and respect they deserve. Over the past decade, for every step forward, there have been three steps backwards as yet more targets and diktats were issued to schools from the centre. Understandably, much of the debate in Committee was about whether to retain the legislation that piled up under the previous Government. I do not doubt that much of that was well-intentioned, but it has clearly failed to address the performance gap this country faces, especially for those from disadvantaged backgrounds.

We are determined to raise the professional status of teachers by giving them the space and flexibility they need. Since the Academies Act 2010 the number of academies has more than trebled, from 203 to 658. All those schools are able to decide what is best to raise standards for their pupils, free from red tape and political interference. That is why it has attracted not only Toby Young, but Peter Hyman, Tony Blair’s former director of strategy and author of the autobiographical book, “1 out of 10: from Downing street vision to classroom reality”. Peter Hyman is setting up a free school in Newham. Newham School 21 will teach children between the ages of four and 18 and aims to be open in September 2012. The Bill provides for two new types of academies: alternative provision academies, and 16-to-19 academies, which will extend the benefits of the programme even further.

The Opposition have complained that the Bill centralises power, yet at the same time they complain when we strip back the layers of instruction and guidance telling schools and colleges how to co-operate, which they put in place. Similarly, they protest when we end the requirement on every local authority to set up forums, irrespective of their actual needs or unique circumstances. The Bill will help us bring an end to the perpetual revolution that has been inflicted upon schools, by allowing professionals—not the Qualifications and Curriculum Development Agency or the General Teaching Council—to do what is best for them.

Just as we are liberating professionals from bureaucracy, so we are ensuring that there is stronger accountability to parents. The Bill will sharpen school accountability by reducing the number of areas in which Ofsted inspects to just four—pupil achievement, quality of teaching, leadership and management, and behaviour and safety—with outstanding schools and colleges also being freed from routine inspection, so that more focus can be diverted towards those that need it most.

The independent regulator, Ofqual, will ensure that our qualifications stand comparison with the best in the world by measuring our relative performance. Because we are prepared to take action where schools and local authorities fail to give children their one chance of a good education, the Bill strengthens the Government’s power to intervene in poorly performing schools, which often have higher proportions of disadvantaged pupils. The Minister for children, my hon. Friend the Member for Brent Central (Sarah Teather), is introducing an entitlement to free early-years provision for 130,000 disadvantaged two-year-olds across the country. The scrutiny in Committee has allowed us to set out clearly that we will maintain the free entitlement for all three and four-year-olds at 15 hours, and that we will ask Ofsted to review the impact of the two-year entitlement.

We are also ensuring that more resources are targeted at the education of the poorest through the pupil premium, which will be worth £2.5 billion every year by 2014-15, and the Bill will ensure that funding for apprenticeship training takes priority when young people have a place, so that we deliver on our ambitions to expand the programme and make it the primary work-based learning route for raising the participation age. Thanks to the vigilance and scrutiny of the Chairman of the Education Committee, we have now removed a reserve power to suspend this offer, which underlines our commitment further. In addition, the scrutiny provided and arguments put forward by my hon. Friends the Members for North Cornwall (Dan Rogerson) and for Wells (Tessa Munt) on the issue of school governors and the proposals in clause 37 have allowed us to improve our policy in this area. We have retained the principle of governor appointments based primarily on skills, while also meeting their desire to reflect stakeholder groups with an interest in schools, in particular staff and local authorities.

The schools White Paper, “The Importance of Teaching”, set out a pathway to close the attainment gap between those from the poorest and wealthiest backgrounds, and to reverse this country’s decline in international performance tables, so that all who are educated in our state schools have the opportunity to compete with the school leavers and graduates of countries with the best-performing education systems. This Education Bill will allow us to take important steps on that journey, and I commend it to the House.

[Mr Speaker]

May I gently point out to the shadow Secretary of State, as I equally could to the Minister, that there are Back Benchers who would also like to contribute and that would help the House?

18:41

[Andy Burnham]

Thank you, Mr Speaker.

The Secretary of State’s first Bill was rammed through with unseemly haste, under procedures normally reserved for counter-terrorism measures, when the odour in the rose garden was still pleasant and Labour leadership candidates were still on the hustings, so we can at least say that this Bill has had a more thorough airing. I therefore thank the members of the Public Bill Committee for their work on it, and I thank the Officials, Officers and other staff of the House who have enabled the Committee’s work to take place. I also pay tribute to my hon. Friends the Members for Cardiff West (Kevin Brennan) and for Hartlepool (Mr Wright), who have done an excellent job.

The Schools Minister has been assiduous in his replies, and I thank him for that, but his courtesy has not extended to the production of the essential documents, such as the draft admissions code, that are needed to give this Bill the fullest possible scrutiny. That is highly regrettable—it is insulting, even, to Members of this House—and I trust that the same discourtesies will not be repeated towards Members of another place. Talking of discourtesies, it is a shame that the Secretary of State could not dignify us with his presence this evening. He made a cameo appearance earlier, but he obviously has something more important to do than be here to see his own Bill through. I do not know whether he has a good reason—perhaps he does—but we should have been able to expect him to be here.

Like the Health and Social Care Bill, the Education Bill threatens a free-for-all in our public services. It is a reckless gamble with standards and with the life chances of our children, with no evidence to support it. That is why we will vote against it tonight. Our principal objection to it is based on the fact that it takes power away from parents and pupils and hands it back to providers and to the centre, in the form of the Secretary of State. That is the flaw at the heart of the Government’s vision for public service reform. If they give more freedom and autonomy to providers, be they general practitioners or hospitals in the health sector or head teachers and schools in the education sector, they have to balance that with a corresponding empowerment of the public—parent and patient guarantees—and more ability for service users to hold providers to account. That is what is completely absent from the Government’s vision: this is a provider-led reform with an accountability deficit.

The health reforms have been paused, partly because of fears that the system being created lacks moderating checks and balances. Many people working in education, who will be watching these proceedings, have exactly the same fears about these schools reforms, but sadly the House, in its votes this evening, has failed to respond to them. This is a right-wing reform of our education system, a ripping up of the fabric and frameworks that have stood our services and our children in good stead for years.

Tory Cabinet Ministers are now boasting about this radical right-wing agenda. Iain Duncan Smith has said:

“We’ve got a lot—my welfare reforms, the education reforms…all of these are big, big Conservative-driven themes.”

I believe he said that today. William Hague went as far as admitting that the Lib Dems were crucial—

[Mr Speaker]

May I say to the shadow Secretary of State that he is quite an experienced Member, and he should not refer to serving Members of the House by name?

[Andy Burnham]

You are absolutely right, Mr Speaker, and I apologise.

The right hon. Member—I am struggling to remember his constituency now—[Hon. Members: “Richmond.”] That is it; I was going to say for North Yorkshire. The right hon. Member for Richmond (Yorks) (Mr Hague) said:

“A Conservative government with a very small majority or in a minority would have been massively constrained in what we could take through parliament.”

There we have it: this is a right-wing agenda propped up by the Liberal Democrats.

We heard today a bid from the hon. Member for Altrincham and Sale West (Mr Brady), supported by 35 colleagues on his side of the House, to extend selection to our state education system. We know that the Secretary of State, although he could not be here this evening, attended a reception in Parliament—I think it was just before Christmas—where the hon. Gentleman asked him whether he would extend selection through his free school movement. The Secretary of State said:

“My foot is hovering over the pedal; I’ll have to see what my co-driver Nick Clegg has to say”.

Those of us who read Mrs Gove’s entertaining columns in the newspaper know what happens when the Secretary of State puts his foot on the pedal: utter chaos and disruption ensues for anybody in his vicinity. In this case, I think the co-pilot would be better off getting out of the car before the Secretary of State puts his foot down on the pedal—but as we know, the co-pilot is still unfortunately locked in the boot.

We were expecting a bit of muscular Liberalism today—indeed, we were promised it—but sadly there was none. It was just as we suspected. Parents watching this debate want to know that their child has a fair chance of getting into the school that they choose, that they will have good teachers, and will be able to get good careers advice to support them in their choices. Instead, they are getting a free-for-all with no guarantees, a weakening of the admissions system, unqualified teachers in state schools and a withering away of face-to-face careers advice.

I am sorry that we did not get the chance tonight to move an amendment, which my hon. Friend the Member for Cardiff West was going to take on, about the need to have qualified teachers in our state schools. I hope that Members of the other place will return to that issue to stop this risky gamble with standards in our schools.

The Bill exposes a curious contradiction in this Secretary of State’s approach to school reform. He has not decided yet whether he truly believes in freedom and really wants local people to get on and do the job that they want—as the Minister just said he did—or whether he wants to dictate to them what they must do and how they must do their jobs. We have an Education Secretary who preaches freedom, but then wants to dictate the books that children read in primary school. He says that teachers know best, but then demands that they use synthetic phonics to teach reading. He lauds professional autonomy, but makes it clear which subjects he approves of in his English baccalaureate and which are second best. That is not good enough: he needs to decide. If he wants teachers to get on with their job, he should let them do it. We should not have this contradiction at the heart of policy that is causing people across the country to lose patience with him.

I gather that the Secretary of State is downstairs at a function or party this evening. I find it hard to believe that he is not here to speak up for his own Bill, to defend it and to tell us why I am wrong and why he has the right vision for our schools. The fact that he is not here means that he cannot face this House to ask for the 50 powers that he is taking in the Bill. We might have thought—might we not?—that he would have the courtesy to come and ask the House for those powers. It is a sorry state of affairs, and shows something of the arrogance that increasingly characterises the Government.

I believe that the Secretary of State is failing to take the education profession with him. They need stability and he is providing chaos. He is losing the confidence of head teachers and teachers. The Education Bill will now move to the other place and I know that their lordships will seek to moderate it, protecting fairness and promoting high standards in every school for every child. I urge them to do so and to give the Bill the fullest possible scrutiny, because this House of Commons, as it has shown today, is in danger of sleepwalking towards an elitist two-tier education system that will be good for some children and some schools, but not all children and all schools.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There are 11 minutes to go and several Members who wish to participate. Extreme brevity would facilitate the maximum number of Back-Bench contributions.

18:49

[Stephen McPartland]

I will be very brief, Mr Speaker—two minutes or less, I promise. I was a member of the Public Bill Committee, which was my first such Committee, and I was pleased by how robust its scrutiny of the Bill was, and by the good humour shown by Opposition and Government Front Benchers throughout its mammoth 22 sessions. There was certainly cross-party consensus that we wanted our children to have access to the best education system in the world. That is why I believe the Bill is important—because it promises to raise educational attainment for the poorest children in my constituency. The gap in educational attainment between poorer pupils and their peers simply is not acceptable. We know that by the age of seven the highest early achievers from deprived backgrounds are overtaken by lower-achieving children from advantaged backgrounds, and that that gap gets wider as they get older. That traps children in a cycle of poverty. We cannot measure poverty solely in monetary terms; there is real poverty of education in many parts of the country, which leads to a lack of opportunity and aspiration.

The Government’s commitment to expanding early years learning for disadvantaged children is a welcome step in reducing that poverty of education, and that commitment is firmly reinforced by the pupil premium, which means an investment of more than £815,000 this year in the most disadvantaged children in my constituency. That money can be used by schools to provide additional support such as one-to-one tuition, which I know from my wife’s experience as a primary school teacher makes a dramatic difference to young children. I support the Bill because I believe it will deliver a massive boost to the education of the most disadvantaged and vulnerable children in my constituency.

18:51

[Julie Hilling]

Given the time, I shall speak very briefly about the Bill, which is bad in so many ways. The Government talk about giving power to parents and teachers, but at every turn they remove powers from parents and communities and give them to the Secretary of State. The Bill does not build, but destroys. It encourages schools to be islands rather than resources in the community that can bring agencies together for the benefit of children and young people. The Bill also misses opportunities. It is good that it provides for the anonymity of teachers, but why does it not extend that anonymity to other school staff, who are often more vulnerable than teachers to accusations?

There are three other areas in which the Bill misses opportunities. First, by getting rid of the School Support Staff Negotiating Body it does a real disservice to 500,000 generally low-paid workers. That body has been working on job descriptions and job gradings for 100 strands of work within schools, from the work of classroom assistants to that of school bursars and caretakers. Its work was stopped last year when the Government pre-empted the Bill by saying that the body was going to be removed. I seriously hope that they will reconsider their decision and allow the body at least to complete its work, and support it in doing so.

Secondly, my hon. Friend the Member for Walthamstow (Stella Creasy) and I tabled an amendment that would have given schools a duty to facilitate positive activities for young people. There have been some fantastic examples of youth work in schools, usually in partnership with youth services and other agencies, but cuts in youth services and central funding streams have made that work difficult. I hope that the Government will consider how they can support youth work, either through the Bill or elsewhere.

Finally, the Government have missed a real opportunity to save lives. It is not often that any Government get the opportunity to do something simply, easily, cheaply and immediately that would save lives, but this Government have that opportunity. If they introduced emergency life skills into the national curriculum they could make a real difference. ELS is a set of actions that save lives, including cardiopulmonary resuscitation and dealing with choking and bleeding. Every year 150,000 people die in situations in which first aid could have made a difference. Each year in the UK 30,000 people have a cardiac arrest outside the hospital environment, of whom fewer than 10% survive. Children are often present at accidents and emergencies, and by learning emergency life skills they can be as effective as any adult in saving lives. If someone has a cardiac arrest in Seattle they have a great chance of surviving, because children there are taught ELS as part of their national curriculum. Indeed, people cannot graduate from school or pass their driving test unless they learn ELS. If any Member is going to have a cardiac arrest they should have it in Seattle, because they would rarely be more than 12 feet away from someone who could save their life. Why can we not have that situation in the UK? If we did, we could save lives. I hope that the Government will reconsider that and put ELS into the national curriculum.

18:55

[Stephen Phillips]

I shall keep my contribution extremely brief. I speak as a former chair of governors at a special school for the deaf—one of the only remaining sign bilingual schools in the country. The issue that I particularly want to address is school discipline. That is so central to the learning environment and to outcomes that it is a great shame that it has not been dealt with by previous Administrations. It is for that reason, if for no other, that the Bill will receive my full support.

As anyone who chaired a governing body under the previous law knows, the difficulty with the regime that existed was that when a head teacher excluded a pupil the exclusion was often overturned by the governing body, because it knew that if it did not overturn it, the exclusion would subsequently be overturned by the extensive appeal mechanisms that are amended by the Bill. It is for that reason that I welcome the amendments that the Government are introducing in that respect.

18:56

[John McDonnell]

The Bill abolishes a number of bodies—the General Teaching Council for England, the Training and Development Agency for Schools, the Qualifications and Curriculum Development Agency and the Young People’s Learning Agency.

In the past the Transfer of Undertakings (Protection of Employment) Regulations were applied when bodies were abolished and staff were transferred from the public sector to the private sector. They would be protected, together with their conditions of work, the recognition of their trade union and their basic employment rights. Because that does not apply to transfers of staff within the public sector, the Cabinet Office introduced the Cabinet Office statement of practice—COSOP—which in the past has been included in legislation so that TUPE principles applied to staff as if they were being transferred out of the public sector. The previous Government stated on the face of the Bill that that was the situation when the Learning and Skills Council was abolished. The present Government have done the same thing in the Localism Bill, but not in the Education Bill. As a result, the staff are feeling insecure about their future. That affects morale and recruitment and retention—

[Mr Gibb]

We are committed to applying the principles of the Cabinet Office statement of practice, which has been agreed with the trade unions. I hope that helps the hon. Gentleman.

[John McDonnell]

It is incredibly helpful to have that on the record. It would be valuable if the Minister could see whether it could be put on the face of the Bill when it goes to another place.

18:57

[Mr Robert Buckland (South Swindon) (Con)]

In supporting the Bill on Third Reading, I want to put particular emphasis on clause 13 and the restrictions that will be imposed on the reporting of the identity of teachers between arrest and charge. I welcome those provisions and I read with interest the debate in the Public Bill Committee, where the Government rightly pointed out the lack of evidence to support an extension to other classes of person who work within the school environment.

However, I urge the Government to keep that position under review. I remember a debate that we had in the House some months ago on a private Member’s Bill about the wider application of reporting restrictions for people arrested but not charged, with particular reference to teaching assistants and other people who come into the school environment. It is important that we bear that mind.

Finally, I ask the Government to bear in mind the problem that arises when a pupil who has left the school, perhaps only very recently, makes a complaint against a teacher. I urge my colleagues on the Front Bench to work with other Ministers, particularly the Under-Secretary of State for Justice, the hon. Member for Reigate (Mr Blunt), in reviewing the application of the law of contempt of court to sensitive issues relating to press freedom and the interests of professionals and all those who work in school and college environments.

18:58

[Meg Munn]

This is a disappointing Bill. It will not do what an Education Bill should do—put children and their education first. That means every child. The mantra, “We must trust the professionals,” is not balanced by respect for children and parents. The powers of search are at best misguided and at worst dangerous. No-notice detention is a potential nightmare for hundreds of young carers throughout the country, and it is unnecessary.

The approach to exclusions is unbalanced, putting at risk the education of many children with special educational needs. No attention has been given to child protection issues in the Ofsted framework that is out for consultation. While Ministers are publishing the welcome Munro review on child protection and looking to strengthen that, the Bill makes matters worse.

17:44

Debate interrupted (Programme Order, 8 February).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

19:00

Division 271

Ayes: 305

---

Conservative: 253
Liberal Democrat: 48
Democratic Unionist Party: 3

Noes: 204

---

Labour: 201
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Green Party: 1
Independent: 1

Bill read the Third time and passed.

[Kevin Brennan]

On a point of order, Mr Speaker. You will have noted that the Secretary of State was not present for the Third Reading of the Education Bill. I wonder whether you can give any advice as to whether, when a Secretary of State does not turn up for the Third Reading of their own Bill, which I think is quite unusual, any information should be given to the House, or possibly as a courtesy to the shadow Secretary of State or Opposition Front Benchers, as to why they are not here. We understand that the Secretary of State, who is apparently now standing somewhere nearby at the Bar of the House, was available to come here. Are there any procedures by which it would be normal for the Secretary of State to give notice that he is not going to participate on Third Reading?

[Mr Speaker]

The short answer to the hon. Gentleman is no. Any Minister can provide a rationale or an explanation for presence or absence if he or she so chooses, but there is no formal procedure for so doing. The question of who appears on behalf of those on the Treasury Bench is purely a matter for them, not a matter for the Chair. The hon. Gentleman has nevertheless registered his point.

Common Consolidated Corporate Tax Base

Wednesday 11th May 2011 Commons Chamber

[Relevant document: The Twenty-seventh Report from the European Scrutiny Committee, HC 428-xxv.]

19:14

[The Economic Secretary to the Treasury (Justine Greening)]

I beg to move,

That this House considers that the Draft Directive to introduce a Common Consolidated Corporate Tax Base (European Union Document No. 7263/11) does not comply with the principle of subsidiarity, for the reasons set out in chapter 2 of the Twenty-seventh Report of the European Scrutiny Committee (HC 428-xxv); and, in accordance with Article 6 of the Protocol on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the presidents of the European institutions.

I am pleased to have the opportunity to discuss this European Commission proposal, which, as the House is aware, is potentially significant. I will highlight a few general points before turning to the specific legal and treaty issues which the European Scrutiny Committee has raised in its report and which are the subject of the motion.

I want to start by reiterating the Government’s commitment to ensuring that there is no further transfer of sovereignty or powers to the EU over the course of the Parliament. I also stress that the Government have made it clear that we will not agree to a proposal that might threaten or limit the UK’s ability to shape its own tax policy. I know that the motion focuses on whether the proposal complies with subsidiarity and proportionality, which are both important questions that I will address in turn.

[Mr John Redwood (Wokingham) (Con)]

This is extremely good news from the Minister. Will she confirm that the UK will not consent to the so-called six-pack measures on economic governance, of which at least three clearly apply to non-euro members and represent a transfer of powers?

[Justine Greening]

As my right hon. Friend will be aware, important discussions on economic governance are under way and are being resolved. I assure him that we have no intention, as I have said, of seeing any further powers transferred to Brussels. We keep a watching brief on not only the topic that we are discussing, but across the board. I am sure he is aware of a number of areas in which we are expressing concerns to the Commission, because we are concerned that further powers may be taken by Brussels.

[Mr Peter Bone (Wellingborough) (Con)]

Has my hon. Friend noticed that Her Majesty’s official Opposition do not seem to care much about this matter? I cannot see anybody other than the shadow Minister on the Labour Benches.

[Justine Greening]

Perhaps the actions of Labour Members demonstrate how ashamed they are that their Government gave away much of the rebate that the Conservative party, which is now part of the coalition Government, had achieved for our country.

[Mr James Clappison (Hertsmere) (Con)]

I am tempted to remind my hon. Friend that the rebate that the Labour party gave away cost more than £9 billion. I think that this question follows from what she has said: do the Government take the view that the draft directive would amount to a substantial transfer of power and sovereignty to the EU, if it were implemented?

[Justine Greening]

At the moment, the directive is in such a rough draft that it is not exactly clear in what shape it will end up. Important questions are already being asked not only by the UK but by countries such as the Netherlands and Sweden, and by some smaller and newer member states such as Lithuania. They are asking whether there is a problem that needs to be solved in the first place and whether the European Commission’s hypothesis about why a common consolidated corporate tax base is required is correct. The second debate that is starting to happen in earnest across Europe is about whether this solution is the best solution to solve that problem. The Government’s position is that we do not believe that the problem exists in the form that the European Commission articulates, and that this solution would not be the right solution to that problem, even if it did exist.

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Justine Greening]

Perhaps if I make a little more progress, it will help hon. Members to understand the Government’s position in a little more detail and where we are in the proposal’s development, which it is important to understand. It is also important to understand Parliament’s role in the process, which is the whole point of this debate.

A number of issues need to be addressed in the policy substance of this proposal. Those issues will have to be discussed among all 27 member states. That is why we have committed to engage in the ongoing EU discussions on this proposal. It is important that the UK participates fully in the negotiations, so that we can seek solutions that meet the interests of the UK and the EU as a whole. Although the issues of subsidiarity and proportionality are fundamental, we need to be ready to engage fully in the negotiations that are starting in Brussels. We need to engage not only in Brussels, but with our fellow member states to ensure that we influence them.

For example, member states will need to consider the implications of the proposal for companies operating across the UK, particularly if it were taken forward through enhanced co-operation. We should also seek to ensure that a common consolidated corporate tax base does not undermine UK competitiveness or create opportunities for tax avoidance.

Such considerations will involve examining some of the specific issues raised in the European Scrutiny Committee’s helpful report, such as the potential implications for the tax treaties and the risk of creating additional administrative burdens on business. Of course, one of the European Commission’s arguments is that the proposal will reduce burdens and provide simplification, but, like the Committee, the Government simply do not accept that argument.

I turn to some of the specific concerns that the Committee raised in its report. First, I will address the proposal’s legal base. Article 115 of the treaty on the functioning of the European Union provides for EU legislation that directly affects the single market. In strict legal terms, it is possible to make a case that that article is an acceptable legal base for a proposal such as that which we are discussing, but the Government have broader reservations. We do not believe that a common consolidated corporate tax base is necessary for the internal market to function effectively, and we do not accept the assumptions that appear to underpin the Commission’s proposal. At present, we are therefore not convinced that the proposal is consistent with either subsidiarity or proportionality. In this instance, we think it difficult to separate the two, because both centre on whether such an EU mechanism is necessary to achieve the objectives set out by the Commission.

[Jacob Rees-Mogg]

Establishing the legal base is absolutely crucial before the Government engage in negotiations about the form of the directive. May I draw the Economic Secretary’s attention to conclusion 2.12 of the European Scrutiny Committee’s report? It clearly states that the ability for the single market to have taxes refers to turnover taxes and VAT, and not to the type of tax included in the directive. If there is no legal base for the tax, is there any point in having further discussion?

[Justine Greening]

Our assessment is that it is possible to make the case that because article 115 of the TFEU relates to the effective functioning of the single market, it is relevant to consider whether the proposal would affect the single market. There is also the question whether there is any problem that needs to be addressed. We do not accept that there is, but if there were, we would have to ask whether the proposal was the right solution. That is what I mean when I talk about proportionality. We must also consider subsidiarity, and we do not believe that the two can simply be separated, because they go hand in hand.

For the Government to be reassured that the proposal complies with the fundamental principles of proportionality and subsidiarity, we would require far stronger justification from the Commission. We would need evidence that the existence of 27 different tax systems is a significant barrier to the functioning of the single market—we do not believe it is, or that the evidence is there to support such a conclusion—and directly results in all the specific tax obstacles that the proposal claims to address. We would also need evidence that the proposal is the only, or the best, way to address those tax obstacles. We will continue to raise those points with the Commission during our discussions, and we will continue to engage proactively and constructively with other member states on the important issues of policy substance, including those highlighted in the European Scrutiny Committee’s report.

As I have said, we are not the only member state that has raised significant concerns about the proposal, and we will continue to talk to others about their concerns and ours.

[Mr Redwood]

Is it not rather easier than that? We have always been assured by previous Ministers of the Crown that we have an absolute veto on tax matters, so do we not just have to say to the EU, “We have a veto, and the answer is no”?

[Justine Greening]

My right hon. Friend is absolutely right to say that we can say no for ourselves, but the problem, as he is aware, is that under the treaty, a smaller group of nine or more member states—

[Mr Redwood]

Fine.

[Justine Greening]

My right hon. Friend says that that is fine, but there is a danger for our country that even that would have an impact on the tax planning that we could undertake with corporations as member states choose whether to opt in or out. We want to ensure that we are in those discussions at this earlier stage, before we get to that part of any future process. We do not know whether we will get to that stage—many member states might share our concerns—but we absolutely need to be in there now, making our case, because we do not want to end up with a smaller group of member states going down that route, which could, depending on their decisions on tax loopholes and avoidance, which are complex, lead to negative unforeseen consequences for the UK tax system’s competitiveness, which might happen even if the UK were outside any possible future proposals.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

That was a lucid explanation—irony, of course, sometimes does not work in Hansard. The right hon. Member for Wokingham (Mr Redwood) has hit the nail on the head. Why does the motion not say no to the consolidated corporate tax base proposal?

[Justine Greening]

At the moment, there is no proposal on the table. A proposal is being worked up, but things are at an early stage. Member states have had, I believe, two working group meetings with the Commission to talk about how any proposal might operate. Fundamental questions are still being developed on, for example, how the formula will work, and a host of other issues. As I have said, part of the challenge is how any avoidance loopholes might work in practice, and whether they would be substantial. We are at a very early point in the process. Today’s debate allows Members of our Parliament to have their say, which we can then add to the Commission’s process.

[Mr William Cash (Stone) (Con)]

The Opposition Benches are virtually empty, but there are also no Liberal Democrats in the Chamber—there is a sort of let-out under the coalition agreement.

The Minister seems to be referring to enhanced co-operation, which the agreement says is the basis on which the Government will be engaged in discussions to help to shape a corporate tax base that does not undermine the competitiveness of the EU or the UK. She has made it clear that enhanced co-operation would have that effect, so clearly, we will not under any circumstances accept it. Therefore, the answer can only be no. Why do we not say so?

[Justine Greening]

As I have said, we need to manage risks, and it is unclear at this point where the process will end up. However, there might be risks posed by enhanced co-operation. We need to be part of the discussions to ensure that our arguments carry weight. Our arguments will not carry weight if we are not part of those discussions from the beginning, because we say that we never want to be involved. That is not a sensible approach. In addition, I do not agree that it is as simple as saying, “We don’t want to be in it,” because the proposal might go ahead in a different form involving a limited group of nations, which could still affect us, even if indirectly. I want to make it absolutely clear tonight what the Government are fundamentally seeking to achieve. We will not agree to any proposal that will threaten or limit our ability to shape our tax policy.

[Mr Clappison]

I support the course that my hon. Friend the Minister is taking this evening with the motion, as far as it goes, and the Opposition have revealed via an intervention that they do not understand the treaty to which they signed up. However, following what my hon. Friend the Member for Stone (Mr Cash) and my right hon. Friend the Member for Wokingham (Mr Redwood) have said, is not the fear of what others may do by way of enhanced co-operation robbing us of our right to a veto and the requirement for unanimity? Is that not a new doctrine? If we do not agree with the proposal, let us say no rather than robbing ourselves of the veto by worrying about what others may or may not do.

[Justine Greening]

As has been pointed out already this evening, we ultimately have the ability to say no, but rather than having to do so, we want to ensure that we carry the majority of member states in the first place. That is precisely what we are doing now, and we want to ensure that we are in a position to do it as effectively as possible.

I assure the House that we are putting our points across. Tonight’s debate is a key part of that, because it is an important opportunity for the House to put on record its concerns and views as these proposals develop. The proposals are at an early stage, but they are shaping up to be important and fundamental.

[Nigel Mills (Amber Valley) (Con)]

We are inviting the Minister to say whether she agrees that, as I believe, no form of consolidated tax base will ever be acceptable. It is vital to our competitiveness that we can attract business here with a more competitive way of calculating the tax base, so any proposals under which we would not have that competitive edge must be bad for our nation. It is all right saying that this is a draft, but I cannot think of any form of this proposal that could ever be in our interest.

[Justine Greening]

My hon. Friend might well be right, but I want to make clear the rules and the processes going forward. No member state can unilaterally block the use of enhanced co-operation. Of course we can decide whether we want to be part of that—I have clearly set out the Government’s concerns about the proposal—but I am saying to the House that we need to participate in the debate and ensure that we influence the underlying proposal. We do not want to end up being unable to stop enhanced co-operation simply because it was a proposal that we fundamentally did not want in the first place. We need to make our case, with other member states, in order to influence the proposal as it develops, and that is precisely what we want to do.

[Mr Cash]

The Minister is always well informed, so I am sure that she knows that the Tax Commissioner has already said that if there is a veto—if, in other words, the Commission does not get unanimity—it will go ahead with enhanced co-operation. If we know that to be the case, why do we not just say no and be done with it?

[Justine Greening]

The Commission might, as my hon. Friend has said, take a view, but we need to understand what other member states think about the proposal. This evening is a chance for us, as a member state, to allow our Parliament to voice its concerns. The European Scrutiny Committee, which he chairs, has produced a helpful report that will no doubt form a basis of this debate.

I shall now finish my remarks so that other Members can put on record their views on the report.

19:32

[Chris Leslie]

The Minister has essentially enunciated a continuation of the policy advocated by the previous Administration. In fact, this common consolidated corporation tax base proposal has been around for a decade or so. In that time there has not been a massive change in policy, which is interesting, because I had anticipated that, in her quasi-Thatcherite mode, the Minister would say, “No, no, no!” to this proposal—but she did not.

As I said, it is interesting that the motion is quite carefully worded. It specifically mentions “reasoned opinion”, “subsidiarity and proportionality” and so forth, but if passed it would not actually instruct the House of Commons to reject the directive as drafted. I suspect—on this point I was considering intervening on the hon. Lady, but I thought I would let her finish—that it might be more to do with the Liberal Democrat position on this issue. [Interruption.] The Minister rolls her eyes, but there are no Lib Dems here so it is difficult to put them on the spot.

Hon. Members will be interested to hear the Lib Dems' official policy on a common consolidated corporate tax base. In their 2009 document, they stated that they would “address the variability issue” on cross-border corporation tax

“by developing a medium and long-term statement of business tax policy, covering a minimum two parliament timeframe. This statement would…identify areas for greater international co-operation on tax policy. A clear area for co-operation is in the movement towards a harmonised tax base in the EU, often referred to as a Common Consolidated Corporate Tax Base”.

So, there is a loud voice—muscular and visible, as we now know—in the coalition arguing vociferously in favour of a common consolidated corporate tax base. I say that for the benefit of the House, because it is important that hon. Members know the facts. Given that the motion was published only this morning on the Order Paper—hon. Members did not really have notice of exactly the Government’s proposition, which is quite ridiculous—and that all 298 pages of the supporting papers were published only yesterday, I am not surprised that many hon. Members have not yet woken up to the opinion being taken of the Government on this matter.

[Mr Cash]

In this new guise of the Pym or Hampden of the British Parliament, am I to imagine, beyond the wildest speculation, that the Labour party is about to announce that it will vote against these proposals on the grounds that it does not veto the Commission’s proposals?

[Chris Leslie]

I am very tempted by the hon. Gentleman’s invitation to do so. As I said, we have not changed our policy from when we were in office, and the Government have decided to pick that up. We do not wish to see the harmonisation of corporation tax rates; nor do we believe that this CCCTB proposal is justified, although there are legitimate cross-border issues that we need to discuss. For example, the CBI has raised the important issue of how businesses operate and the compliance costs that companies working on a cross-border basis can sometimes incur. It is legitimate to listen to those points, although there may be other, non-EU ways of addressing them. For example, we could make bilateral, country-to-country arrangements—through some of the double taxation treaties, and so on—to deal with those issues. Indeed, I would like the Minister to address the issue of bilateral discussions, which I understand the Treasury says in the reasoned opinion it might wish to pursue. It would be very helpful indeed if she could tell the House what negotiations the Government have already entered into along those lines.

[Mr Redwood]

Does the shadow Minister, like me, find it democratically distasteful that a 102-page draft law governing the whole of our corporation tax regime, along with supporting papers amounting to 298 pages, should get only one and a half hours of debate, and that this is all the scrutiny that we are allowed?

[Chris Leslie]

Yes, I agree with the right hon. Gentleman on that. We need to begin to readdress entirely the accountability deficit. I know that this Parliament already tries valiantly to address it—in Scrutiny Committees and elsewhere—but this is a debate about serious proposals. The Treasury is often an intermediary these days when it comes to new regulations and policy changes. It is important that we should think about the design of our Government and our Parliament in tackling proposals as they come along.

As I said, I am interested in the Government’s line. We will not take issue with them on this proposal this evening, but we want to watch where they go with it. All I am asking of the Minister is whether coalition policy is taking into account the Liberal Democrat official line.

[Justine Greening]

We are one Government and this is a Government motion. The hon. Gentleman can take it from the motion that it has the support of the coalition Government, who include two parties.

[Chris Leslie]

That is very helpful, and it means that the Liberal Democrats must have undergone a de facto change of opinion. I suppose that we can ask the Liberal Democrats. [Interruption.] The hon. Lady says, “Ask them,” but we cannot. Anyway, I do not want to intrude on private grief, one Government or not—although probably not—and neither do I want to take up too much more of the House’s time.

The hon. Lady has said that she is anxious that, if we are not careful, a smaller group of states might just go ahead with the enhanced co-operation procedure in any case. What assessment has been made of the potential impact on UK businesses, tax revenues and so forth? Which other member states does she think are most likely to go ahead? What role could we play in ensuring that we are not sidelined or excluded from those discussions, but instead have an impact on them?

Those are the key points that we need to address right now. I am generally worried about the Government’s disengagement from those European issues that really matter to this country. As we know, the Minister has a habit of signing Treasury memorandums about European matters that are perhaps not always agreed to by others in her party. I am referring to the European stability mechanism documentation that she signed, when she agreed that cross-party consensus was gained between the previous Government and her Administration. We will obviously be debating that on another occasion, but, for the time being, we will be keeping a watching brief on where the Government stand on this matter.

19:40

[Mr William Cash (Stone) (Con)]

This is of course about direct taxation, and I welcome the Government’s limited stand against the draft directive, for the reasons given in the motion endorsing the European Scrutiny Committee’s report on the points that the Minister has just summarised. I remain concerned, however, about one matter still hanging over the debate. The Minister might be able to guess what I am about to say. It goes back to a motion that was before a European Standing Committee which asserted, in the name of the Government, probably for the first time since 1640—I mentioned Pym and Hampden just now—that the British Government, as a sovereign Government, were only primarily responsible for direct taxation, whereas in fact our Parliament is exclusively responsible for it. That motion was put to a deferred Division in the House and passed, which is pretty alarming. I invite the Minister to be rather clearer than she was the last time I put this point to her, because it must be made absolutely clear that this House is exclusively responsibility for direct taxation.

The Minister has been at pains to describe the context of this measure in the light of the questions of subsidiarity, but some Members might recall that it was on 27 April that I raised this matter with the Prime Minister, together with the proposed increase in the European budget and the Portuguese bail-out, not to mention prospective Greek bail-outs and whatever else. I said that we expected the answer to be no to each of those proposals. His reply referred only to the increase in the EU budget, and I hope—for reasons that have been expressed in interventions, including my own—that we are unequivocal in reserving to ourselves the absolute determination, and not merely the right, to say no to these proposals, because they infringe a number of important principles. I shall come to those in a moment.

I want it on record that the coalition agreement states that there should be

“no further transfer of sovereignty or powers”

to the EU. Our Committee report looked at that and found it wanting in relation to the EU referendum Bill. The Government have also said that they would reject any proposal that

“might threaten or limit our ability to shape our own tax policy.”—[Official Report, House of Lords, 16 February 2011; Vol. 725, c. WA172.]

I have the greatest respect for the Minister, as she well knows, but she left out the next bit, which was the word “but”. That word “but” is represented by Banquo’s ghost, who is not sitting on the Liberal Democrat Front Bench tonight—[Interruption.] Ah! My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) is there, acting as a surrogate, which is extremely unlikely in the circumstances, although I am delighted to see him and I hope that he will contribute to the debate at some point.

I want to continue with the words that come after the word “but”. They are that, “under enhanced co-operation” the coalition Government will

“engage in discussions to help shape a CCCTB that does not undermine the competitiveness of the EU or the UK”.

Now that is a monumental exception, because it is obvious, for reasons that I shall explain, that the proposal will undermine the competitiveness of the EU and the UK ab initio—and the Government know it. It follows from that, as light follows day, that there is no reason for us not to put our foot down now and say no. We know that the Tax Commissioner is saying that this is going ahead under enhanced co-operation, and this it not something magicked out of the air, as he knows perfectly well that that is what Germany, France and other countries are intending to do. When I provide the figures on the number of member states engaged in the process, as I shall in a moment, perhaps matters will fall into place.

The proposals before the European Scrutiny Committee are, for reasons set out in our conclusions, all profoundly objectionable, but the draft directive falls down particularly on four main issues: one, the sovereignty of this House; two, the insufficient legal base; three, an inadequate and unconvincing impact assessment; four, grounds of proportionality, making the doubling of tax regimes in the EU, the cost of establishing 27 new regimes and the apportionment formula excessively disadvantageous for certain member states.

I add that the Oxford university centre for business taxation says in its policy briefing that

“it is unlikely that the introduction of the CCCTB would bring significant benefits to the EU in aggregate in terms of employment, GDP or efficiency, although some individual countries could benefit significantly.”

I make that point because, under the formula of Roland Vaubel of Mannheim university, it is well known that there is such a thing as regulatory collusion and that, by the clever use of certain majority voting systems, through negotiations in the case of unanimity as in this instance or by enhanced co-operation, it is possible to arrive at a point where some countries benefit to the disadvantage of others. The Oxford university think-tank has its finger on that issue.

It is quite clear that the objective of this tax base—this is the important part that needs to be borne in mind on the big landscape—is to raise money to pay for the profligate, incompetent and failing European project. Countries such as Greece, Ireland and Portugal are either on the verge of or in danger of bankruptcy or are actually going bankrupt because of the systemic failure of economic policies. The stability and growth pact does not work: as I have said before, there is no stability, no growth and no pact.

The creation of a two-tier Europe will merely exacerbate these problems, as was noted when we debated the European Union Bill, and will lead to ever-greater German domination over the European economy. The economic predominance of Germany in east and central Europe might be a good thing from its point of view, but we now have a transfer Union and a massive redistribution of resources. What we are also witnessing as a result of the failure of this project are riots and protests as Germany repatriates its profits at the expense of cheap labour unit costs from the countries in which it has put investment in the centre of Europe, as Portugal, Greece and even Ireland have found to their cost. The pumping of money supports not so much the member states as the French and German banks, which have lent money indiscriminately to suit themselves—and we are expected to engage in the bail-out procedure, the covert mechanism for which is the stability mechanism, coming into effect in 2013.

As the European Scrutiny Committee insists, this whole proposal is in breach of the principle of subsidiarity. I remind the House that this principle is intended to ensure that decisions are taken as closely as possible to the citizen. Direct taxation is such a policy. The national Parliaments are able to use the procedure under the treaties to challenge breaches of subsidiarity. At present, there are only six countries whose parliamentary Chambers propose to, or have, issued a reasoned opinion. We have, but, interestingly enough, the House of Lords has not. I think that we should note that.

In passing the motion, the House will challenge the breach of subsidiarity. I suspect that the Minister has figures that are even more up to date than mine, but as far as I know, of the 27 member states, the five that are on our side are Ireland, Malta, Netherlands, Poland and Sweden. I am told that Cyprus, Greece, Hungary and Slovenia have no plans even to scrutinise the proposal, that those yet to decide include Austria, Bulgaria, the Czech Republic—the lower chamber and the senate—Denmark, Estonia, France, Lithuania, and Luxembourg; that Romania, Portugal, Italy and Spain believe that the draft directive complies with the principle of subsidiarity; and that the German Bundesrat is considering it only on the basis of content.

The picture is very uncertain. There is no guarantee that the accumulated number of reasoned opinions will be sufficient to meet the threshold requiring the European Commission to review the proposal, and because that will be known somewhat in advance, the tax commissioner will say that he has already received a demand to proceed with enhanced co-operation.

We have a serious problem on our hands; however, we have another card up our sleeve. Unbeknown to some, although I am more than happy to share the information with the House, under article 8 of protocol 2 the United Kingdom Parliament can go to the European Court of Justice, which has jurisdiction to determine our claim as the House of Commons—which is regarded as a separate Chamber—that the principle of subsidiarity has been breached. That gives us the basis for a challenge.

I believe that if the Government are not prepared to say no—which, for the reasons that I have already given, I think that they should have done already—the House of Commons should take the matter to the European Court of Justice; but would it not save an enormous amount of time and trouble if we simply recognised that the House is sovereign, that it has the right to take the action that it has taken, that the European Scrutiny Committee has done its job at this stage in the proceedings, and that the Minister is profoundly on our side of the equation? I know her sentiments, and I also know her Parliamentary Private Secretary. He was a member of the European Scrutiny Committee with me for years. He would be jumping about all over the place about this if he were still a member of the Committee, and agreeing with every word that I am saying.

Leaving aside the attack on Thatcherism, of all things, by the Deputy Prime Minister immediately after the disastrous showing of the Liberal Democrats in the polls, which is probably why no Liberal Democrat Members are present today—and, for that matter, the let-out that they have been given in the coalition agreement, which I think I have now shot to pieces—I would say that there is every reason for the Liberal Democrats to back down and not veto our Conservative party veto simply because of the coalition arrangement, and for the Prime Minister to do what I asked him to do at Prime Minister’s Question Time only a few weeks ago and say “No, no, no.” That would save a great deal of time and argument.

The UK corporate tax director of a major European bank has said that this proposal would increase our corporation tax and drive investment away, reduce our GDP by £73 billion over 10 years, increase the administrative burden, and lose the UK an estimated total of £58 billion, again over 10 years. We know that Mr Sarkozy and Ms Merkel are in favour of the competitiveness pact, which affects us although it is presented as a eurozone matter. I believe profoundly that, whether the proposal involves enhanced co-operation, the creation of a two-tier system, or whatever other means or machinations may be produced by the Faustian pact that is being devised in Europe, we should put our foot down, lead from the front, and say no. I am prepared to admit that the opportunity to do that exists, but I want to hear it from the Prime Minister’s own lips. He will then be able to enjoy as much success in this context as he, and we, enjoyed in the context of the alternative vote the other day, when the Liberal Democrats got their come-uppance.

19:54

[Nigel Mills (Amber Valley) (Con)]

It is a privilege to follow my hon. Friend the Member for Stone (Mr Cash), although I shall not follow his lead by addressing European law in forensic detail. In these debates, we run the risk of getting lost in the detail of legal technicalities and forgetting to look at why the whole idea before us is bad for Britain and bad for Europe. Although I understand why the Government have put forward this proposal, I want at the very least to try to improve it and to make the final agreed measure the least bad it can possibly be. More than that, however, I think we must explain why the whole idea is so bad for all European Union member states and try to persuade them to kill it off and not run with a slightly improved version.

My hon. Friend set out some of the reasons why this is bad for Britain. There is great concern that it would lead to tax revenue disappearing from Britain and going to other member states. We should consider the three proposed allocation keys: the number of employees and the wage bill; the value of tangible assets, but not intangible assets except in some limited circumstances; and the level of sales. Those keys will greatly favour economies that have high employee-intensive and asset-intensive industries, and I am not at all sure that that is how we would describe our economy, or whether it would accord with our vision for our economy in the future. The amount of profit, and therefore tax revenue, could be skewed, with the extra sums going to the nations with high numbers of employees and high-value tangible assets. As a result of this measure, multinational groups would be able to allocate certain activities and thereby place their corporate tax bills in territories that would result in their getting a lower rate than we might want. We must thereore be very careful.

From my experience as a tax adviser for 13 years, I can say that what we want is choices. It would be a great start if we could choose whether or not to be in the regime, or if we could choose to be in, and then try to have a completely different allocation key if we can find one that gets us a lower bill. The draft directive allows that. The aim must be to get every possible chance to choose. If I can choose where to base and allocate certain activities, I can come up with some clever ideas on how to reduce my tax base. In these days of internet sales, where we recognise a sale to have been made is an interesting exercise. Is it where the server is based, for instance? It could be set anywhere we like, I think.

For some, there is an attraction in such Europe-wide measures. If I were an American finance director I might think, “I have 27 EU subsidiaries, and sorting out all the tax returns and compliance issues is horribly complicated, but now I can just do one nice and simple tax return. Great!” In the US system however, there is a federal corporate tax, but also a load of different state systems. I do not think anyone would say its system is at all simple, or would choose to adopt that model.

We should be looking to take away some of the tax barriers across Europe. Frankly, the EU has led to the creation of some unnecessary tax obstacles. The idea that the EU involves a tax simplifying arrangement is somewhat laughable. About seven years ago, we had to extend transfer pricing rules to apply between UK resident companies of the same group because we were concerned that the European Court would otherwise throw out the transfer pricing rules that only applied on cross-border transactions. That increased the compliance burden on almost every corporate tax group in the UK. Ideally, we would allow our large groups to have a consolidated tax filing in the UK of all their UK entities, and thus take away the need to keep separate records and make separate transactions. We cannot do that because we fear European law would strike it out for no particularly good reason, yet we can try to have this complex arrangement for the whole EU.

We would think that the EU would be taking away withholding taxes, yet its directives allow withholding taxes on certain transactions between member states. If we are going to spend a lot of time and money looking to simplify tax across the EU, let us look to take away the barriers that are already there, and not create whole new levels of complexity we do not need. This whole agenda is a complete blind; this has to be seen as a drive towards a single European Union, a single federal state and a single tax system. If we want to be competitive, we are making exactly the right moves in reducing our tax rate, but there is more to a competitive tax system that attracts overseas investment than just the rate; there is the tax base, and the stability and simplicity of the system. If there is one message for the Government coming out of this, it is that we need to simplify our tax regime to make these ideas, which are superficially simple but which would not turn out to be so, seem less attractive.

I took the time to look through the draft directive on a common consolidated corporate tax base and I could see a few things in it that will attract some multinational directors. Its level of tax depreciation or capital allowances allowed for fixed assets is somewhat higher than we are reducing ours to. As I recall it, the EU is allowing 25% on a reducing balance basis, rather than the 18% that our level is now down to. Various other things in the directive may also be found attractive. We should focus our energies on trying to simplify our tax system to keep our competitive advantage, which arises from some of the reliefs we offer. We should also try to take away the tax barriers around Europe and not create a whole new complex system. We should not waste loads of time and money and miss the big picture.

20:01

[Mr John Redwood (Wokingham) (Con)]

Tonight’s debate should be a vital one because, after all, it is about sovereignty; it is about power. The might of this House of Commons in its great years was based on one very simple proposition: that only a vote of the House of Commons could impose or remove a tax on the British people. It was that power which our predecessors fought for and achieved, and it was that power which was crucial to grant the supply to the Government, who could then choose how to spend it, on the advice and with the votes of the House of Commons.

We have been assured and reassured by countless Ministers of the Crown since we joined the European Economic Community in the 1970s that taxation was always a matter for unanimity; that we would always have a veto over any tax matter; and that there was no question of the European Union interfering and choosing taxes for us or running our tax system. Under the previous Labour Government, tax was said to be a defensible red line, which they always told us they had always protected. Under previous Conservative Governments, Ministers could rightly then say that it was always a matter entirely for the jurisdiction and decision of this House of Commons.

Yet tonight, in this small and short debate, we are presented with a 102-page draft law which is a comprehensive new corporation tax system for the European Union, including the United Kingdom. Worse still, we have been warned in a friendly way by the Minister that if this country disagrees with it, a group of countries may go ahead under some other procedure and create it anyway, and they will then exert extraterritorial jurisdiction over the UK because they will try to tempt our companies away from our system to their system. As my hon. Friend the Member for Amber Valley (Nigel Mills) has just said, tax advisers and accountants will be able to play all sorts of games under this complicated system so that companies that have some activities in Britain could be tempted into the European Union opt-in system. That would mean that the British Treasury and British Ministers would no longer have jurisdiction over them; we would get back only what the sharing formula allowed, which the European Union would be in charge of.

I assume that it is because the Minister is worried about that eventuality that she has not come here with a straightforward proposal just to veto the whole thing. My advice to the Government is that this should be the issue we fight over. This proposal is so outrageous, it is such a comprehensive violation of subsidiarity, as they call it, and it is such a U-turn from the proposition that a member state has control over its own tax affairs that surely we should veto it. If we vetoed it and other countries still wanted to go ahead as a lesser group than the European Union, we should follow things through and say that it therefore does not apply to the United Kingdom and we will not operate it in respect of companies that are properly domiciled here and should be taxed here under our rules. We should set the rules for organisations and companies undertaking activity in Britain, making money in Britain and employing people in Britain. If we cannot do that, what is the point of this House of Commons? I think the Minister is in a stronger position than perhaps her officials and advisers have suggested.

We have heard, I think rightly, from my hon. Friend the Member for Stone (Mr Cash) that the legal base is not correct. In order to justify all the statements that this is a matter for unanimity, it must come under that measure in the treaty that states that other proposals can be produced but that they require the unanimous consent of all member states. It must come under a unanimous base. Once it is a matter to be decided under a unanimous base, we can then save the European Union a lot of time, trouble and money because we can simply say that we do not wish to have a collective corporation tax system and that Britain is going to use her veto. For once, surely, the United Kingdom could have some influence over the agenda of the European Union and we could show that we mean it when we say that taxation is for national decision—that it is a matter for subsidiarity, in the EU’s language, or a matter of sovereignty, in my language.

I would like to ask my ministerial friend what the point was of this House solemnly legislating to maintain, uphold or reaffirm the sovereignty of the British Parliament if we cannot even choose our own corporation tax regime. What is the point of our going along with the negotiations to try to ameliorate, improve or abate the severity of this draft law if we are doing so in the spirit that we will end up with a law of sorts anyway? We will then hear from the Minister that instead of it being something that we have vetoed, it is something we have taken the worst out to make it a bit more tolerable so that we can go along with it. It will not be necessary for the other member states who want the measure to use a special procedure to get it, and there will be no need for us to say to them that we refuse to go along with it or comply with it.

[Mr Cash]

Does my right hon. Friend recall the words of Chancellor Kohl, who, only 10 or 15 years ago, made it clear that, on the question of the speed of the convey, which is what this is all about, he would want the front of the convey to go ahead, led by Germany, and for the other Member states to be left in such a parlous condition that they would eventually, in his words, have to catch up?

[Mr Redwood]

My hon. Friend is quite right. That also explains why the European Union is so keen to try to get the Irish rate up, because if it is to have a common system such as this, it would not want a weak link. The EU would see a weak link as a state that dared to set a more realistic and lower rate in order to attract business.

[Steve Baker (Wycombe) (Con)]

As ever, my right hon. Friend makes his points with incredible force. Does he agree if the European Union follows the policies of bail-outs and political interference with business all the time, we will keep seeing measures like this one again and again until we head towards a single centralised economic system of government?

[Mr Redwood]

My hon. Friend is right. The EU believes that imposing more complex and higher taxes is the answer to the deficit problem, whereas the answer to the deficit problem is growth, more business, more activity and more jobs. Everything the EU does by way of higher tax rates, more regulation, more interference and more layers of government prevents that from happening. That is the Greek tragedy that we are witnessing as we debate today.

The latest figures on the Greek Government website imply that the Greek deficit got a lot bigger in the first part of this year because tax revenues plummeted, because the economy is in worse recession, and because spending has gone up, both because they are not controlling it and because spending goes up in a recession. That is the tragedy of the European model—of the bail-out model and of “extend and pretend”, whereby we extend the credit and pretend it will be all right. It is not going to be all right and that approach is causing disaster, unemployment and tragedy.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

The right hon. Gentleman has mentioned several tragedies and I note with some interest that the Treasury team includes this Minister, the Economic Secretary, whose views on Europe are well known, the Chancellor, whose views are very well known, and the hon. Member for Chelsea and Fulham (Greg Hands), whose views are also very well known. Perhaps the real tragedy is that the Liberal Democrats in the Treasury team, who are not even here tonight, have forced this policy on the Government.

[Mr Redwood]

I am not sure I believe that. We have heard from the Minister that they are a happy and united team and that she is proud of the work she has brought to us. I am saying that I would like her to improve the work and to go back and make that happy team one that can perhaps make us happier. The simple answer is veto. She should say, “No, this cannot work. It is a dreadful constitutional intrusion on a country that desperately needs its own economic recovery to accelerate, that needs lower tax rates and greater tax simplification and that needs to promote economic growth.” My right hon. Friend the Chancellor is beginning to do that, but I think more measures are needed to secure the deal and make sure it works.

I am quite sure that this huge deal—the 102-page draft law—is not the way forward. My hon. Friend the Minister says that there is no proposal, but I regard a 102-page draft law as a very serious proposal. Experience has taught me never to underestimate the power and persuasion of the European Union when it wants to do something. I think that it is now on a great push to establish all the central powers it needs for the economic governance of a single-economy, single-country model, and that this is part of it along with the economic six-pack. My strong advice to my hon. Friend is that Britain can do better, Britain needs to say no and Britain needs to exempt herself from all this, as we are entitled to do, so that we keep a sovereign Parliament and a growing economy.

[Madam Deputy Speaker (Dawn Primarolo)]

I call Jacob Rees-Mogg.

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Chris Ruane (Vale of Clwyd) (Lab)]

He’s up off his chaise longue.

20:10

[Jacob Rees-Mogg]

Indeed; thank you so much for that sedentary intervention.

It is very interesting that, as my right hon. Friend the Member for Wokingham (Mr Redwood) was saying, between 1688 and 1972, taxation could not be levied without the permission of the House. Since 1972, tax rates have been changed at the whim of the European Union. What is more, it happens to use duties levied on imports in exactly the way that James II would have been familiar with—it takes the same anti-parliamentary approach. James II called them tonnage and poundage; the European Union calls them anti-dumping measures but it changes them with arrogance as it sees fit.

I want to talk about the legal aspects of this issue, because they are the absolute crux of it. I raise this point with my hon. Friend the Minister because there is no point in negotiating for months if there is no legal basis in the first place. The Government should be very clear and rigorous about this and should take it, if necessary, all the way through to the European Court of Justice. That might be a Court in which many of us do not have a great deal of confidence and it might be a Court that is in principle a federalist Court, but none the less it is there and its procedures should be used.

Let me read out paragraph 2.12 of the European Scrutiny Committee’s conclusion on this issue:

“The draft Directive is concerned with direct taxation. The legal base cited for it is Article 115 TFEU. This article allows EU legislation to approximate national legislation which directly affects the operation of the single market, but”—

this is the key point—

“this provision is expressly ‘without prejudice to Article 114’. Article 114(2) TFEU provides that Article 114(1) TFEU ‘shall not apply to fiscal provisions’. Article 113 TFEU, the only provision referring to the harmonisation of taxation, is limited in its scope to ‘turnover taxes, excise duties and other forms of indirect taxation’. There is therefore no express provision in the Treaty for the harmonisation of direct taxation.”

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

In that quote, my hon. Friend used the word “approximate”. What is the legal import of the meaning of “approximate”?

[Jacob Rees-Mogg]

My hon. Friend leads me away from the essential point, which is that the EU does not have any authority over direct taxation, whether it is approximating it or not, so the approximation is irrelevant in relation to direct taxation because the treaties do not provide for that. If the treaties do not provide for it, then the EU cannot provide for enhanced co-operation without a specific treaty amendment, which would of course be a separate veto-able activity under the treaties as they exist.

We often complain about European law, and I do not like the fact that laws made by this Parliament can be overturned by the European Court, but as that is the world in which we live, when European law is on our side we ought to use it. So I reiterate my plea to the Minister in the European Councils to say that we are uncertain of the legal base and that we would like a clear legal judgment from the European Court of Justice before we proceed with further negotiations.

Now there is also a fall-back position, as my hon. Friend the Member for Stone (Mr Cash) said. If the European Court of Justice were, as a federalising court, to invent a legal base, we could then come back to the point of subsidiarity, where this debate is so relevant and important. We are putting the argument to Europe and saying, “You have put these fine protections into the treaties. You have used these grand-sounding words—not as clear as the 10th amendment to the United States constitution, but none the less words that are supposed to protect the rights of sovereign member states. Let’s now see if you mean it. Let’s now see if you, the Commission, will accept the argument for subsidiarity, and if you won’t, whether the court will back it up and whether the proposals will fall on that basis.”

If all this fails, then I accept the Minister’s position. I must confess that it is a reassurance to those of us on the Eurosceptic wing of the party that it is the Minister who will be conducting the negotiations, because at least we know that it is not, as some on the Opposition Benches would have said, a woolly Liberal negotiating. It is somebody who wields a handbag in as fine a way as the great lady—[Interruption]—the blessed lady, so we have confidence that the Government’s negotiations will be tough.

It is fair enough to go through a process, if that is where we end up, but ultimately the response must be no, not least because tax competition is a thoroughly healthy thing.

[Chris Ruane]

If the Chief Secretary to the Treasury has forced the Minister’s hand, and has forced a veto, should he be known as Danny DeVeto?

[Jacob Rees-Mogg]

I heard that joke when it was made from a sedentary position. I thought it was funny five minutes ago, and it has got better by being shared with the whole House. It is a shame that all the sketch writers have gone home, or the hon. Gentleman would have had a lead in the papers tomorrow.

Let me conclude on this point: tax competition is healthy. It is good for nations and benefits Europe, companies and, ultimately, Government tax revenues. So we have a Minister battling for us who has three things that she can say. First, the draft directive is illegal under the treaties as they stand; secondly, the House of Commons believes that it does not meet the requirements of subsidiarity; and thirdly, it is a dreadful idea anyway and it ought to be binned.

20:17

[Mr David Nuttall (Bury North) (Con)]

It is always a great pleasure to follow my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who sets out with such great clarity the grounds for my opposition to the measure. We have heard tonight a number of reasons why the proposal for a common Euro corporation tax, as I would like to call it, is wrong. This is yet another stage towards what the eurocrats are determined to proceed with—ever closer union.

We are here on a regular weekly or fortnightly basis, looking at the latest directive that comes before the House. Sometimes the directives could be described as dealing with relatively minor matters. This one most certainly cannot. The harmonisation and the Europeanisation or European Unionisation of the corporation tax base is a step too far. We have heard that its legal basis is unsound. It would, in my opinion, fall foul of the principle of subsidiarity. I believe that it is economically wrong.

It would be interesting to know how many FTSE companies in this country would be in favour of this crazy proposal. It seems that the only people who would benefit if it ever came into force would be those companies and tax jurisdictions that were outside such an arrangement. I accept that in the early days they could arrange their affairs in such a way as to make it attractive in order to encourage companies to come into the euro corporation tax area, but I am absolutely certain that before long, because of the bureaucratic and regulatory burden, they would have to increase their corporation tax rates to such a level that any companies that were ensnared within such arrangements would quickly wish that they had never become involved.

[Mr Cash]

Does my hon. Friend also accept that the objective at the heart of this is to move towards a harmonised tax system for one reason: to complete the circle of political union that will enable this to be one country, driven by fiscal direction, and at the same time to fill the belly of the European Leviathan with the money that will enable it to continue to create circumstances that will inevitably lead to more turmoil, implosion and a greater disaster than we already have?

[Mr Nuttall]

My hon. Friend hits the nail on the head. I see this as the thin edge of the wedge. It is the opening of a whole new war, and a whole new phase of European harmonisation. In fact, it is almost the final frontier, because it is the step towards a euro-wide sales tax and, ultimately, a euro-wide income tax that we would all be subject to. It is extremely difficult indeed.

I heard the Minster’s opening remarks, and it is to be welcomed that we will at least go back to our European partners and state our reasoned opinion for not proceeding with this. I am slightly concerned, to say the least, that we are not saying no outright, which would be a far simpler way of dealing with it. It reminds me of the message of the drugs campaign run when I was at school: “Just say no”. The simplest solution to the problem facing the House tonight would be just to say no. I see no great danger if other countries want to get together and operate a common corporation tax system—that may be ultimately what they want to do—but this EU proposal for a common corporation tax throughout Europe could be described as nothing other than giving away sovereignty, which, to come back to our national politics, is specifically outlawed in the coalition agreement, which states that there is to be

“no further transfer of sovereignty or powers”

to the EU over the course of this Parliament. If this would not be a transfer of sovereignty and powers, I do not know what would.

When the Minister responds to this short debate, will she give an estimated time scale for when she is likely to be able to come back and report on what success there has been in persuading other countries to adopt our position on this matter, and will she give an absolute confirmation that there will be no signing up to the proposal in any way, shape or form without the matter being brought back to the House for further consideration?

20:25

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I am most grateful for the indulgence of the House in allowing me to take part in this debate, despite the fact, which I regret and for which I apologise, that I missed the speeches by the Economic Secretary to the Treasury and the hon. Member for Nottingham East (Chris Leslie), who speaks for the Opposition. I heard my hon. Friend the Member for Stone (Mr Cash) and the subsequent speeches, and I get the tenor of the objections that have been raised to the draft directive and the concerns, which have been very well expressed.

I wish to speak not so much about the substance of the directive as about the matter that is so germane to this debate: the nature of subsidiarity—what it is, and what we mean by it. That is the issue on which the debate hangs: a plea for subsidiarity.

We should remind ourselves what article 5 of the Treaty on the European Union says about subsidiarity:

“Under the principle of subsidiarity…the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”

Back in 1992-93, when the Maastricht treaty was being debated, a great deal of Hansard ink was devoted to reporting the discussion of that principle, and I might say that I majored in the topic.

The advisory part of article 5 relates to the objectives of the proposed action, and subsidiarity is a purely relative concept if it relates to the objectives of the proposed action, so what are the objectives in the case before us? They are set out at the start, and this speech is, I am afraid, about the futility of depending on subsidiarity. Subsidiarity is a futile defence of the national interest.

Article 1 of the preamble to the draft directive states:

“Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence of 27 diverse corporate tax systems. These obstacles and distortions impede the proper functioning of the internal market.”

The proposed directive refers to “disincentives for investment”, to the complexity in article 3 whereby the

“network of double taxation conventions between Member States does not offer an appropriate solution,”

and to the need for

“a single market for the purpose of corporate tax”.

[Mr Redwood]

I am delighted if a case can be made under subsidiarity, but surely there is a much simpler case: taxation of companies and incomes was never part of the deal for the powers of the European Union. What it is trying to do is quite illegal, and all we need to do is to say so.

[Mr Jenkin]

But that was always the danger with article 5 and the subsidiarity clause. There are some very general objectives set out in the treaties, and subsidiarity is one of those catch-all arrangements that can justify stretching the meaning of other articles, as we have already seen.

How does the European Union justify the bail-out mechanism that the previous Chancellor of the Exchequer approved under article 122 of the Lisbon treaty, which was designed for natural disasters? How can a crisis in the euro possibly be classified as a natural disaster? The mechanism has, however, been allowed to go through by default.

The arrangement before us is another that will go through by default if we do not challenge it. Indeed, article 26 of the draft directive, the penultimate paragraph of the preamble, states:

“The objective of this Directive cannot be sufficiently achieved through individual action undertaken by the Member States because of the lack of coordination among national tax systems.”

It goes on to justify the objective as being

“in accordance with the principle of subsidiarity”—

and in its own terms that is very difficult to argue with.

I appreciate the European Scrutiny Committee’s points about the direct legal base, but the European Union is going for an indirect legal base. That demonstrates that subsidiarity was always a deceit. It was always something that could be a centralising, as opposed to a decentralising, concept, and if we rest our case against the proposal purely on the principle of subsidiarity we will allow the EU, rather than what we want ourselves, to determine what is imposed upon this country. If we rest our case against this proposal purely on the principle of subsidiarity, we are allowing the European Union to decide what shall be imposed on this country rather than deciding what we want for ourselves.

[Mr Cash]

I know that my hon. Friend was able to come in only somewhat late in the debate, but the arguments that we have been presenting show that there are a whole series of weapons that we can employ. Subsidiarity happens to be a procedural device that is available to us by way of a reasoned opinion, which is what the motion is about. We are critical of the Government’s position in that they have not exercised their political will, for all the reasons that my hon. Friend and others have explained. This whole business is an infringement not merely of the word “sovereignty” but of the practical requirements of the people of this country to tax themselves by consent. That is what it is all about.

[Mr Jenkin]

There is absolutely no difference between me and my hon. Friend on that point.

To echo my right hon. Friend the Member for Wokingham (Mr Redwood), the Budget moment in the calendar of this House is the most important political occasion of each year, when the Chancellor comes to this House to deliver his Budget judgment and it is for the House to determine what the levels of expenditure, taxation and borrowing should be. That is absolutely fundamental not only to the mechanics of our democracy but to the culture of our democracy and the culture of this House. This proposal is a very direct challenge to government by national democratic consent.

The only, rather lame and late, point that I might be adding to the debate is a very simple one, and I do so for the same reason as that which led my hon. Friend the Member for Stone (Mr Cash) to lambast the concept of subsidiarity when it was first proposed in the treaty on the European Union back in 1992—the Maastricht treaty. It is, very simply, that subsidiarity is not sovereignty. Subsidiarity is subservience; it is submitting to the jurisdiction of the European institutions instead of the sovereign judgment of the British people as expressed in this House. Subsidiarity is no substitute for Government saying no, particularly where the veto is in their hands. I urge my hon. Friend the Minister to exercise that veto, knowing that she will have the confidence of the British people behind her, because they do not want her to say yes in this case.

20:32

[Justine Greening]

With the leave of the House, I would like to sum up the debate. We have had a full and constructive discussion on this proposal, which is, as we have heard, an important one. I want to close by reiterating a few key points, but also by doing my best to respond to the comments that have been made by Members—I was about to say across the House, but that is obviously not the case, given that the Opposition spokesman turned up with very few other people from his party.

First, I should address a couple of the points that the hon. Member for Nottingham East (Chris Leslie) made about the work that we do as a country with other member states. I can assure him that the UK has, for example, double tax treaties in place with all EU member states that set out mechanisms for allocating taxing rights to prevent the double taxation of companies, and structures for reaching agreement on double taxation relief and the exchange of information. He will be aware that there is also a mutual agreement procedure framework for resolving cross-border disputes about tax, including transfer pricing. It is because such mechanisms and frameworks are in place that we believe that the proposed approach is necessary.

The hon. Gentleman asked about the views that we have heard from business. We have heard a range of views, and discussions between business and Government are ongoing. In general, it is fair to say that business has not been actively calling for this proposal. It is also fair to say that some businesses have welcomed it—in particular, the prospect of allowing for cross-border loss consolidation. However, some companies are stressing that their support depends on the optional nature of the proposal. An awful lot of others, as we heard from my hon. Friend the Member for Amber Valley (Nigel Mills), have expressed concerns about the potential compliance and administrative costs, which are likely to be large for many companies, and the lack of certainty about how many aspects of the system would work—a concern that is shared by the Government.

My right hon. Friend the Member for Wokingham (Mr Redwood) rightly raised the issue of the veto, and I want to provide absolute reassurance to all Members that we will not agree to any proposal that might threaten our Government’s ability to shape the UK’s tax policy. We are prepared to use our veto.

As my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) pointed out, subsidiarity is the basis of one of the arguments that we can make, but that is not the only argument we can make. We should challenge the substance of the proposal, as well as raising our objections to the fundamental principles underlying it. That is precisely what we are doing. I emphasise to the House that we should continue to challenge the substance of the proposals as they develop, even if we do not necessarily want to be part of them.

I disagree slightly with my hon. Friend the Member for Bury North (Mr Nuttall), because I think it is in our interests to understand what the proposals are in which a smaller group of nations may participate and whether they may have any direct or indirect impact on us as a member state. That is one reason why we want to be engaged in the discussions as they unfold. We also want to engage, because other member states are keen, as we are, to have their say on this matter. I do not accept that member states have reached a final position. The parliamentary debates and the development of those views are ongoing.

[Mr Nuttall]

I am conscious of time, so I will be brief. Will the Minister explain what line the Government will take in the negotiations? If the understanding is that we will not join at the end of the day, would it not be to our advantage to make the tax as difficult as possible, so that our companies have an advantage?

[Justine Greening]

We need to be careful to ensure that we understand the complexities of the proposals. For example, we need to understand how companies that also operate in the UK may use any avoidance loopholes, and whether that will impact on the way in which they operate in the UK and structure their corporations. We need to be smart about understanding the breadth of the proposals. Whether we want to be in them is one thing, but we must be conscious that they may have an impact on us even if we are not part of them.

[Mr Cash]

Will the Minister be kind enough—and be smart enough—to make it clear that we will not do anything that the Liberal Democrats had in their manifesto? I have a suspicion bordering on certainty that the wording in the coalition agreement is taken straight from their manifesto commitments.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I know that there is a terrible pull for the Minister to turn around and face the Benches behind her, but I remind her that she should be looking forwards, or towards me, so that we can hear clearly what she is saying.

[Justine Greening]

I will of course do that, Madam Deputy Speaker. Your observation demonstrates that there have been few questions from any part of the Chamber other than behind me. That shows which Members of this House are prepared to stand up for our national interest and scrutinise proposals that affect our national interest, and which Members would rather go home and watch TV than represent their communities as they should.

We are committed to pursuing our national interest. My hon. Friend the Member for Amber Valley was right to raise the issue of complexity in regulation and the need for simplification. The Government set up the Office of Tax Simplification because we understand why those issues are important in helping business domestically. We are taking those very same arguments to Europe.

When I look at the proposal that we have been debating tonight, I find it hard to see how it can be reconciled with, for example, the Europe 2020 document and strategy that have been launched, which are all about stimulating growth. The impact assessment of the current proposal gives rise to grave concerns that it will do the exact opposite of that. It could hinder growth, investment and employment. We will focus our arguments not just on whether the proposal complies with subsidiarity and proportionality but on the important issues of policy substance that have been highlighted. That is the best way to ensure that we get the right outcome for the UK and for our UK businesses operating across Europe. I can assure the House that the UK will continue to participate fully in the EU negotiations on the proposal, and I will, of course, as I have been asked, keep the European Scrutiny Committee updated on the progress of those negotiations.

Question put and agreed to.

Resolved,

That this House considers that the Draft Directive to introduce a Common Consolidated Corporate Tax Base (European Union Document No. 7263/11) does not comply with the principle of subsidiarity, for the reasons set out in chapter 2 of the Twenty-seventh Report of the European Scrutiny Committee (HC 428-xxv); and, in accordance with Article 6 of the Protocol on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the presidents of the European institutions.

Charter for Budget Responsibility

Wednesday 11th May 2011 Commons Chamber

20:41

[The Economic Secretary to the Treasury (Justine Greening)]

I beg to move,

That the Charter for Budget Responsibility, a copy of which was laid before this House on 4 April, be approved.

I welcome the opportunity to bring forward the charter for budget responsibility for the approval of the House. The charter sets out the Government’s new fiscal framework following the passage of the Budget Responsibility and National Audit Act 2011. I will start by setting out the context for the reformed framework.

Following the general election last year, the coalition Government inherited the largest budget deficit in our peacetime history, which was forecast to be the largest in the G20. Our structural deficit was the largest in Europe. The fiscal situation that we inherited was unprecedented, so on coming into office, the challenge that we faced as a new Government of two parties working together to resolve the problems left by the Labour party was to bring order back to our nation’s finances. The new fiscal framework contained in the charter is at the heart of that task. We published a draft of the charter in November last year, which provided time for substantial scrutiny. Indeed, it was considered at all stages of the passage of the 2011 Act. Perhaps before I get into the details of it, it would be helpful if I set out the Government’s broader fiscal aims.

We believe that fiscal policy should restore sustainability to the public finances. That is essential so that we can reduce our vulnerability to shocks or a loss of market confidence, underpin private sector confidence, support growth and avoid an irresponsible accumulation of debt at the expense of the next generation. We have taken tough and decisive action since taking office, and of course last May, the immediate reduction of in-year spending brought us much-needed breathing space given the acute sovereign debt concerns across Europe.

The emergency Budget in June was the moment when credibility was restored to Britain’s public finances, and in the 2010 Budget my right hon. Friend the Chancellor set out the Government’s fiscal mandate, which is now, for the first time, included in a statutory document, which is the charter that we are debating tonight. That mandate requires the Government to balance the structural current deficit by the end of the rolling five-year forecast period, and it is supplemented by a target for the public sector debt ratio to be falling at a fixed date of 2015-16.

The measures that we set out in the emergency Budget, alongside the departmental allocations that we set out in the spending review, represent a comprehensive four-year plan to meet that fiscal mandate. The 2011 Budget reaffirmed the Government’s consolidation plans set out last year, and reinforced them by implementing a balanced set of tax and expenditure policies. In the assessment of the Office for Budget Responsibility, we are currently on track to meet the mandate and the supplementary debt target one year early, in 2014-15.

[Mr John Redwood (Wokingham) (Con)]

Does the Minister recall that the decision was taken in the March Budget to increase both spending and borrowing by £34 billion over the following four years? Will she remind the House why we did that?

[Justine Greening]

We are introducing a series of measure that will, over time, tackle our underlying structural deficit. My right hon. Friend makes the point that in the meantime we need to borrow to pay off the structural deficit, which the country will continue to have until we have been through the process of fiscal consolidation. Until our nation’s finances are in balance, we face a challenge, because debt interest payments will continue to increase. If we had not taken the action that we are taking, we would have the added problem that the rate of interest on that debt would also increase. It is important that we get a grip on the debt interest rate that we are paying, that we tackle the problem now and that we do not leave the problem of debt and the fiscal deficit to future generations. We need to get into a position in which the debt is affordable, because it is currently squeezing the availability of money to spend on the public services on which we all depend. It is critical that we continue with that plan.

Angel Gurría, the secretary-general of the OECD has urged our country to “stay the course”, which is precisely what we will do. Our plan has been praised by the international community and welcomed by the financial markets. As I have said, that will hopefully enable us to keep those interest rates lower for longer. Both the International Monetary Fund and the OECD went from issuing warnings and cautions to the UK regarding economic management under the previous Government to calling this Government’s measures essential and courageous. This Government’s decisive action has therefore taken Britain out of the financial danger zone, and the crucial first step in that process was restoring the credibility of our fiscal policy by replacing the fiscal framework. The charter sets out the new framework before Parliament and for the public.

Perhaps I should remind the House why the Government set up the Office for Budget Responsibility. The previous Government’s forecasts for economic growth over the past 10 years were, on average, out by £13 billion, and their forecasts of the budget deficit three years ahead were, on average, out by £40 billion. Those forecasting errors were almost always in the wrong direction. In fact, all the previous Government’s forecasts for borrowing for more than two years ahead since Budget 2000 underestimated the eventual figure. It is vital for credibility and confidence that the forecasts for the economy and public finances are produced independently, which is why we established the OBR.

In June 2010, the interim OBR produced an independent assessment of the economy and public finances ahead of the emergency Budget. Then, at the Budget, the OBR produced a revised forecast on the basis of the consolidation measures announced by the Government. In November, the OBR produced its economic and fiscal outlook under the leadership of Robert Chote, whose appointment last year was scrutinised and confirmed by the Treasury Committee.

We have moved the OBR on to a permanent status that is underpinned by primary legislation. The 2011 Act establishes in statute the provisions necessary to secure the OBR’s independence, and it received Royal Assent on 22 March. The permanent budget responsibility committee led on the production of the OBR’s March economic and fiscal outlook, which was published alongside the Budget 2011.

The origin of the charter lies in the 2011 Act, which requires the Government to prepare a charter relating to fiscal policy and the management of the national debt, just as with the previous code for fiscal stability. However, the 2011 Act enhances the requirements for the charter compared with the code, because it provides that the charter must formally set out the Government’s fiscal objectives and mandate. The charter must in addition specify the minimum contents of the Budget report. The 2011 Act states that the charter may include guidance to the OBR on how it should perform its duties. Finally, the 2011 Act requires the Government to lay the charter before Parliament. The charter fulfils all those requirements, consistent with the 2011 Act and the remit of the OBR.

The first part of the charter covers the Government’s fiscal framework. It sets out that the Government’s two fiscal objectives are first to ensure sustainable public finances that support confidence in the economy, promote intergenerational fairness and ensure the effectiveness of the wider Government policy, and secondly to support and improve the effectiveness of monetary policy in stabilising economic fluctuations.

As we have heard, the Government’s fiscal policy mandate is a forward-looking target to achieve cyclically adjusted current balance by the end of the rolling five-year forecast period. At this time of rapidly rising debt, that mandate is supplemented by a target for public sector net debt as a percentage of GDP to be falling by a fixed date of 2015-16. That will ensure that the public finances are restored to a sustainable path.

Crucially, the charter cannot simply be ripped up and rewritten whenever is convenient for a Government. Instead, if the Treasury wishes to alter the mandate, it must follow the formal process set out in primary legislation and return to the House for approval, which enhances the Government’s accountability to the House for their fiscal targets. The charter reiterates the Government’s intention also to adopt as the official forecast the OBR’s economic and fiscal forecast, and if the Treasury wishes to disagree with the OBR’s forecast, it will have to explain why to Parliament. Finally, the charter sets out the Government’s debt management objective and how they will set and report on their financing remit. The charter covers each element of the Government’s fiscal policy framework in a statutory document that the House has the ability to approve, enhancing the Government’s accountability for their fiscal policy.

I turn now to the second part of the charter. It is an important part of the charter that provides guidance to the OBR on its role and duties. The OBR’s main duty, as set out in the 2011 Act, is to examine and report on the sustainability of the public finances. The OBR has complete discretion over how it carries out its statutory duties, and the 2011 Act makes it clear that in all its work the OBR must be objective, transparent and impartial. As part of this independence, the OBR has the freedom to decide the methodology that it uses, the forecast judgments that it takes, the contents of its documents and its work programme for future research and analysis. This independence is delivered through the 2011 Act and therefore protected in primary legislation.

The purpose of this part of the charter is to set out extra detail on the OBR’s statutory responsibilities within the scope of the legislation. The charter requires the OBR to produce forecasts that cover at least five financial years, that provide sufficient information to allow the Government to use them as a basis for policy decision and that include all the Government’s announced policy decisions. The OBR must also set out the key assumptions that underpin its forecasts. In fact, it has already published far more detail in its assumptions and judgments than previous Budget and pre-Budget reports. The 2011 Act ensures that this will continue in future publications, while the charter provides further detail on the set of economic variables and fiscal aggregates that the forecasts should include.

Of course, at this time of heightened uncertainty, the charter also sets out that the OBR must be clear about the risks that it has factored into its forecasts. The OBR forecasts result in an assessment whether the Government are on track to meet their fiscal mandate, and the charter also sets out that the OBR independently scrutinises and certifies all the policy costings that feed into its fiscal and economic forecasts. Importantly, the 2011 Act ensures that the OBR has a right of access to all Government information it requires to deliver its remit.

As well as medium-term forecasts, the OBR will look to the longer term. As we have heard, the OBR has a duty to report on the sustainability of the public finances. It will therefore produce an annual fiscal sustainability report that will include long-term projections of the public finances covering the next 50 years. The first report is due out on 13 July. The charter sets out that as well as those projections, the report will include an assessment of the public sector balance sheet. The OBR will also analyse its forecasting performance, drawing lessons for future forecasts from the inevitable differences between its forecasts and out-turn data.

Finally, the charter provides guidance on a number of administrative questions on the timing of interaction between the Treasury and the OBR. These are necessary to ensure that the complex Budget process runs smoothly while preserving the OBR’s freedom to act independently. There is also a memorandum of understanding agreed between Robert Chote, as chair of the Office for Budget Responsibility, and other Departments to support their working arrangements. The charter restates and reinforces the independence of the OBR, and none of the guidance undermines its impartiality or objectivity.

This charter lies at the heart of our reformed fiscal framework. It strengthens institutional arrangements, reinforces the independence of the OBR and restores credibility and confidence to the public finance forecasts.

20:54

[Kerry McCarthy (Bristol East) (Lab)]

I will bypass the first eight minutes of the Minister’s speech, in which she reiterated the usual mantra about everything being Labour’s fault—she usually resorts to that when questioned about the Government’s policy, but today she started her speech with it—and instead focus on the charter.

The Budget Responsibility and National Audit Act 2011 was passed with consensus, at least on the principle of setting up the Office for Budget Responsibility and introducing the changes to the national audit process that the previous Government had already floated and that we would have implemented had we been re-elected in 2010. There was consensus on the principle, if not on all the details that we discussed in Committee. We welcome the fact that the House is debating the charter in Government time, as we received assurances in the Public Bill Committee that it would do so. Indeed, that formed a central part of our debates on the Bill and it is a central facet of the Office for Budget Responsibility’s functioning and relationship with the Government.

However, I note that the Government have on previous occasions attempted to get this motion through on the nod at the end of the day’s business. Only after efforts made by the Labour Opposition to secure a debate do we now have the opportunity to talk about the charter, which rather goes against the spirit of the reassurances that were given in Committee. Indeed, I questioned the Minister repeatedly in Committee about what was meant by the phrase “laid before Parliament” and whether such a promise would mean—not just on this occasion, but on future occasions—a proper debate on the Floor of the House or the measure being put through on the nod. However, at least we are here now, with the opportunity to discuss the issue.

Debates on the Bill in Committee were, as I pointed out at the time, slightly hampered by the fact that we could discuss only the draft charter. I repeat my observation that it would have been better for the Committee—and for the House on Report when we approved the Bill—to have a finalised form of the charter for consideration. I note, however, that the final version laid before Parliament has not changed substantially, which is somewhat unfortunate, as it has not been improved as much as we had either been led to believe in Committee or had hoped for.

Chapter 1 of the charter refers to section 6(2) of the 2010 Act and confirms that

“the Charter may not make provision about the methods by which the OBR is to perform its duty,”

which is an additional provision. That is important and crucial to the OBR’s independence. However, we pressed for the final version of the 2010 Act or the charter to guarantee complete discretion on what the OBR can consider, as well as how. Regrettably, as I shall set out later, that has not been included. Chapter 2 has not been changed substantially, although we welcome the inclusion of other Departments in the memorandum of understanding with Mr Robert Chote, on behalf of the OBR, and the Treasury, which recognises that the work of Her Majesty’s Revenue and Customs and the Department for Work and Pensions in particular is similarly pivotal to responsible fiscal policy and sustainable public finances.

Given the importance of the memorandum to the transparency, objectivity and impartiality of the OBR, it is only right that the House should consider it. We therefore welcome the Treasury’s publication of the memorandum. The document refers to the forecast liaison group. Given the Government’s professed commitment to guaranteeing the transparency and independence of the OBR, will the Minister confirm that the Treasury will publish the minutes of the group meetings? If a dispute is escalated to the chair of the OBR or the permanent secretaries, will a Minister report to the House on the cause of the dispute and how they intend to solve it? Finally on the memorandum, it states:

“Analysis of the direct impact of Government policies on the public finances will be provided to the OBR for independent scrutiny which will state whether the OBR agrees or disagrees with the Government’s costings”.

Such analysis is one of the fundamental roles of the OBR, yet neither the memorandum nor the charter explains the consequences of the OBR’s assessment contradicting the Government’s own report. I will come later to the worrying implications if the Treasury were to disregard the OBR’s verdict.

We also discussed in the Public Bill Committee the possibility of duplication and inconsistencies in OBR and Bank of England forecasts. Neither the charter nor the memorandum addresses that, and the Minister has previously advised that it would be for the two organisations to formalise their relationship in this respect. Perhaps she could update us on any discussions that the Treasury has had with the two organisations on their roles, and indeed on how the Chancellor intends to proceed in the event of a disagreement between the two.

[Mr Redwood]

Perhaps it would be a good idea if there were such a disagreement, because the Bank of England has been so bad at forecasting inflation, and we hope that the OBR will be a bit better at it.

[Kerry McCarthy]

The Bank of England’s forecasts have not always been as accurate as one might have hoped, but that proves my point: there could well be conflict between the Bank’s forecasts and the OBR’s forecasts. It is therefore right to ask what the Government would do in such circumstances. Would such a disagreement discredit the Bank of England’s forecasts? Will the OBR be seen as the ultimate arbiter on such matters, or will the Government be able to pick and choose whichever forecast suits their purposes?

Chapter 3 of the charter and the Government’s objectives for fiscal policy are obviously at the core of the document. Some of the provisions in the charter might not be entirely necessary, however. For example, it places the Treasury under a duty to prepare a Budget report for each financial year, which one would hope would happen without it being told to do so. We acknowledge, however, that including the Government’s fiscal mandate in the charter and consequently requiring any modifications to be laid before the House is a welcome step. We hope that it will enhance Government accountability, although that should not be taken as an endorsement of the Government’s economic policy or of their fiscal policy objectives.

Regrettably, given that economic growth has flat-lined under this Government and that forecasts have repeatedly had to be downgraded, it remains to be seen whether the Government are meeting their stated objectives—particularly that of supporting confidence in the economy. Nevertheless, we approve of the idea of working towards maintaining confidence in the economy. The charter rightly acknowledges that achieving that must be the responsibility of the Government and not of the OBR.

The second objective, that of promoting inter-generational fairness, is much more contentious, and it has been challenged here and in the other place. It is not at all clear from the document what the Government mean by the term, although from the Minister’s comments tonight and on previous occasions, I assume that it refers to passing debt from one generation to another, rather than to passing on wealth, advantage and opportunity from one generation to another. If that is indeed the case, and the objective refers simply to inherited debt, it would appear that the Government under this Chancellor’s leadership have an exceptionally narrow conception of fairness which does not chime with most people’s understanding of the world.

We should not be surprised by that, however, given the Government’s record on fairness to date. A Government who choose to take £7 billion of much-needed support from children in their first Budget and comprehensive spending review—three times the amount that they thought appropriate for bankers to pay—who choose to target women for spending cuts, who choose to penalise people on lower incomes, and who choose the regressive measure of increasing VAT can hardly be considered fair.

Earlier today, many of us met constituents supporting the Hardest Hit campaign for people with severe disabilities and chronic illnesses, and I would ask the Government to explain to them how making people with disabilities and chronic illnesses pay the price for the financial crisis is fair. One of the constituents I met today is registered blind and has a guide dog, but she has been told that she is not eligible for the higher rate of disability living allowance. She used to work for a bank, and she wants to know why she is paying a bigger price for the financial crisis than her former bosses in that industry.

[Steve Baker (Wycombe) (Con)]

I am surprised that the hon. Lady does not realise that the financial crisis is the product of deficit, debt and debasement—in other words, Government policy.

[Kerry McCarthy]

The financial crisis was global and it started in the US. Is the hon. Gentleman suggesting that the banks did not play a role in creating that financial crisis and that people such as my constituent, who are struggling to get by on disability living allowance and a modest income, were responsible for it?

[Steve Baker]

I know that the crisis originated in the banks, but it did so because of currency debasement, which was a result of deficit spending—a Government policy.

[Kerry McCarthy]

We cannot get into a whole debate about macro-economic policy. Needless to say, I disagree with the hon. Gentleman’s analysis of how the financial crisis occurred. The point I was making—the intervention was not particularly relevant to it—was that this Government’s action in reducing the deficit too far and too fast is hitting people at the bottom end of the income scale far harder than it is hitting people such as bankers. If the Government were to adopt our suggestion of introducing a banking bonus tax again this year, as we did last year, they would not have to make cuts that hit people at the bottom so hard.

[Justine Greening]

I find the hon. Lady’s comments ironic in a debate welcoming a charter that sets out some guidelines on the operation of the Office for Budget Responsibility—an independent group of forecasters who have looked at and then provided input into distribution analysis showing that the richest people have borne the greatest burden of deficit reduction. I do not understand how we can have that debate on the one hand, yet hear the hon. Lady saying on the other hand that the burden has fallen on the most vulnerable. This Government have worked hard to protect the most vulnerable.

[Kerry McCarthy]

I shall come in a few moments to some of the Government’s measures that have done precisely the opposite of what the hon. Lady claims. Will the Minister explain why thousands of people with disabilities—people in wheelchairs, people with chronic illnesses and so forth—were protesting outside Parliament today under the banner of the Hardest Hit campaign, supported by reputable charities? Is she saying that being hit by what the Government are doing is a figment of their imagination?

[Chris Ruane (Vale of Clwyd) (Lab)]

Does my hon. Friend think that those blind people and deaf people and the people in wheelchairs who were protesting today are ungrateful to the Tory Government for what they have done?

[Kerry McCarthy]

That certainly seems to be the suggestion. For some, it seems that they should be thankful as they do not realise how well off they are. The Minister has come close to saying that they have “never had it so good” under this coalition Government.

We talked in Committee about the Child Poverty Act 2010, and the Government have since published the child poverty strategy. We pressed for a wider remit for the Office for Budget Responsibility to include scrutinising the Government’s progress under the Act. Although the Government rejected our amendment in Committee, I hope that the Office for Budget Responsibility will consider the proposals again in due course, as tackling child poverty is a crucial element of inter-generational fairness. It is disappointing that the Government do not seem to recognise that. I hope that the OBR will be afforded the necessary discretion to include this aspect in defining its role.

It is highly disputable whether the Government have any mandate from the country for their fiscal policy, especially given that the Deputy Prime Minister led his party into the general election on an entirely different approach. Although setting out fiscal objectives has its advantages, it is clear that the Government are bringing in their targets far too early and cutting spending far too fast, as is demonstrated in the forecast that they will need to borrow £46 billion more than was planned last year because of their failure to promote economic growth successfully. That should prove to the Government that their fiscal mandate is not appropriate to the current economic climate and that a different approach is needed to secure the economy on a sustainable footing. That explains why it is key for the OBR to make wider reference to still fundamentally important economic determinants such as employment and growth.

Ensuring a responsible fiscal policy is clearly beyond the OBR’s remit; instead, it is this House’s responsibility to try to make the Government take heed of its advice. For that reason, the charter’s assertion that the Government

“retains the right to disagree with the OBR’s forecasts”

is a serious concern, especially when reliable forecasts will be so crucial to the forward-looking targets. The Government have made a great song and dance about how the OBR will enhance the credibility of fiscal forecasting because of its independence from the Treasury, and the charter itself states:

“The OBR is designed to address past weaknesses in the credibility of economic and fiscal forecasting and, consequently, fiscal policy”.

However, enabling the Treasury to disregard independent official forecasts would make a mockery of the fundamental purpose of the OBR. It would also lead to dangerous uncertainty about which official forecasts we can and cannot believe, and which should inform fiscal policy. That is relevant to a point raised earlier by the right hon. Member for Wokingham (Mr Redwood). I urge the Minister to clarify the status of the OBR and its forecasts.

According to chapter 4 of the charter, the role of the OBR is to

“examine and report on the sustainability of the public finances.”

During the passage of the Budget Responsibility and National Audit Act, a number of attempts were made to secure a broad definition of sustainability, and to persuade the Government to acknowledge that it was not enough to focus on the deficit in an insular way while ignoring the impact on economic growth, employment, inflation, and other factors that are central to sustainable finances and responsible fiscal policy.

Although the Government rejected our amendment which sought to guarantee a multi-dimensional approach to sustainability, arguing that the OBR should be able to define the concept, the Minister reassured the Public Bill Committee that she intended

“to amend the charter to require the OBR to set out how it will approach sustainability in each of its reports.”––[Official Report, Budget Responsibility and National Audit Public Bill Committee, 1 March 2011; c. 48.]

We therefore welcome the addition of paragraph 4.7 in the final charter, which confirms that

“The OBR will consider a wide range of factors and dimensions relating to the sustainability of the public finances and will be transparent in its approach. More generally, in each report published under its main duty, the OBR will explain the factors taken into account when preparing the report, including the main assumptions and risks.”

That reflects many of the concerns raised in both Houses. The reference to risks is important, given that the Government appear to be blinkered when it comes to the risks that are inherent in their deficit reduction plan.

We are also pleased that chapter 4 refers to projections of GDP, inflation and the labour market. However, the absence of any complementary references in chapter 3 to the Government’s role, or indeed the Act, remains highly disconcerting. It suggests that the Government do not consider such fundamental considerations to be part of their role. I assure the Minister that promoting employment and growth are part of the Government’s responsibilities. Perhaps, in time, the OBR will help them to understand that. More positively, we welcome the inclusion of paragraph 4.13, which confirms the Office’s access to Government information, and the omission of the definitions of “objectively”, “transparently” and “impartiality”, which are terms that the OBR is best placed to define.

We are slightly concerned about the inclusion of paragraph 4.12, which is an additional provision and which states:

“The OBR should not provide normative commentary on the particular merits of Government policies.”

There is a fine line between giving an impartial and informed assessment of the effectiveness of Government policies in achieving the declared objectives, and being seen to pass judgment on their merits. How does the Minister think that such a provision will be policed, and who will be the arbiter of whether the OBR has overstepped the mark?

There is no reference in the charter or the memorandum to the funding of the OBR, which we argued in Committee was critical to its independence, but the charter does refer to the office’s discretion in regard to the timing of its publications, although that seems to be weakened by the requirement for

“a regular and predictable timetable”.

The fact that there have already been doubts about whether reports have been published in time for Prime Minister’s Question Time reinforces the need not only to ensure that the wording of the charter is sufficient but, more important, to ensure that it is followed in both the letter and the spirit.

Our key reservation is that neither the Act nor the charter includes any means of ensuring enforceability. I have already mentioned the get-out clause that allows the Chancellor to ignore the OBR’s reports, but there is also no indication of the consequences of the Chancellor’s failing to meet his obligations under the charter. Will the Minister commit the Chancellor to reporting to Parliament following OBR publications? Most important, will she commit the Treasury to listening and responding to OBR reports in its actions as well as its words?

It is not enough for the Office for Budget Responsibility to tell us whether the Chancellor is acting responsibly—we know that he is not—and it is certainly not responsible to disregard its advice or forecasts, but neither the OBR nor the charter can do anything about that. Only the Chancellor can, and he must realise that a charter that proclaims the credibility of economic forecasting does not remedy the damage caused by the Government’s policies, and does not automatically translate into credible policy.

21:14

[David Rutley (Macclesfield) (Con)]

It is an honour to speak in this debate. It may not be the best attended debate, but I believe that in future years we will look back at the charter and the creation of the Office for Budget Responsibility as a major step forward in the way we manage this country’s fiscal policy.

Mark Twain once said that prophecy—or, in this case, economic forecasting—is

“a good line of business, but it is full of risks”,

and in respect of certain Governments it is sometimes said that statistics, and even forecasts, can be used in the same way as

“a drunken man uses lamp posts—for support rather than illumination.”

I therefore welcome the creation of the OBR, as I believe it will bring far greater transparency to the forecasting process and the management of our public finances.

I want to refer back to what my hon. Friend the Economic Secretary said in her opening remarks, and to talk a little about why the charter and the OBR needed to be set up. The sheer scale of the recent economic crisis led many people to recognise the need to rethink how forecasting is conducted. It was also clear that Governments can be tempted to indulge in wishful thinking, and there was too much of that in the run-up to the credit crunch. Even Lord Turnbull in evidence to the Treasury Committee spoke about how it had existed during successive quarters of economic growth. Despite what has been claimed, it is the case that promises were made about an end to boom and bust, yet there was a boom and there certainly was a bust. As a result, we clearly need to improve our approach to forecasting.

In the current digital age, there is greater demand for transparency in many areas, and that must include in the development of forecasts for our economy and public finances. I therefore welcome the Chancellor’s bold and important move to transfer the power to create such forecasts to the OBR. That will bring greater objectivity to bear, and the forecasts will hold Governments of all shapes and sizes to account, which is definitely in the long-term interests of our economy.

The creation of the OBR has also strengthened the credibility of the Government’s efforts to tackle the current deficit and bring the UK economy back to sustainable economic growth, and I have been encouraged by the comments of some highly respected bodies in this field. The Institute for Fiscal Studies says:

“The decision to transfer responsibility for official economic and public finance forecasts from ministers to economic experts is a very welcome one. It does not guarantee that the forecasts will be accurate, but it will reassure people that they reflect professional judgement rather than politically motivated wishful thinking.”

That is important. The OECD says:

“The OBR will support the consolidation process, improve the quality and credibility of information and lay a sound basis for the forward-looking framework.”

Finally, the International Monetary Fund says:

“The OBR complements the government’s commitment to fiscal discipline by enhancing the transparency and credibility of the budget process and helping inform policy decisions.”

The “credibility” that is mentioned in just about each of these quotes is a vital commodity. It will build confidence in the debt markets and help to address the costs of funding our enormous burden of debt, and it will build confidence in businesses, and in their investment decisions. It will be vital in helping to bring about significant and sustained growth.

As a former member of the Treasury Committee, I was fortunate enough to have been able to participate in the appointment of Robert Chote as chairman of the OBR and the other members of the budget responsibility committee. Giving the Treasury Committee the power of consent over appointments and dismissals was another welcome move by the Chancellor, and has given Parliament a far greater say in these all-important matters.

The good news is that there has been very encouraging initial progress. The OBR has created thorough forecasts and supporting analysis, which has been welcomed on both sides of the House. It has become an important reference point in a very short period of time. It is vital that it builds on that reputation. I am pleased to see that more forecasts and reports are planned, including, as the Economic Secretary mentioned, the fiscal sustainability report that will be published later this year to give a truly long-term view of the future of our public finances. That is most welcome.

In conclusion, I hope that these short remarks have conveyed my strong support for this charter, and for the creation and clear processes of the OBR. It is a vital achievement which will bring about greater transparency, credibility and confidence in the forecasting process, and it represents a structural change in the management of our fiscal policy. The OBR will play a vital role in helping to bring the deficit back under control and to move this economy to sustainable growth. I wish the OBR every success in its endeavours, and I trust that the Treasury Committee will ensure that it gets the support it needs to carry out its important tasks and hold future Governments to account for many decades to follow. I fully support the motion.

21:20

[Mr John Redwood (Wokingham) (Con)]

Like all those who have participated in this debate, I welcome the four principal aims identified in chapter 3 of this document. It is exactly right when it says that we need to

“ensure sustainable public finances that support confidence in the economy”.

We see all too many examples within Europe of what happens to countries that lose the confidence of world markets and the world’s bank managers. We see that far from being able to sustain high and rising public spending, such countries end up with far worse cuts, which can be deeply damaging to their public services and social fabric. The Greeks seem to be getting into ever bigger difficulties the more money that is lent to the country on soft terms and the more that their Government fight to contain the deficit. We want to avoid getting into that vicious circle in which a Government raise taxes and cut spending, and the deficit grows because the economy plunges again and the revenues dry up even more. I think that hon. Members on both sides of the House now agree that it is most important that we undertake the work to ensure sustainable public finances.

When I listen to the debate in this House, I sometimes feel that very few people have read the numbers in the Red Book. The Government’s pathway is to borrow more than £480 billion extra over the five years for which they are planning. That is more than the total state debt 10 years ago; it is a massive sum. Some people think that we are going to be paying off the debt or paying off the deficit, but we are not.

This Government have, for understandable reasons, decided that they need to increase public spending in each of the five years of this Parliament so that the impact of their decisions on public services can be gentle—I hope that in many cases it will not be felt in any bad way. As a result of that understandable decision, this massive borrowing has to be undertaken and the public debt will be so much greater at the end of the period. That makes it very important that we stick to the pathway of getting the deficit down, so that each year we borrow a bit less extra than the year before. That is the aim of the strategy. Some people seem to describe it in rather different and more draconian or alarmist ways, but the Government are simply trying to cut the rate of increase in the debt. If all goes well over five years, we will still end up making a far bigger increase in the debt than the total state debt just 10 years ago.

I am delighted that the second aim given in this document is to

“support and improve the effectiveness of monetary policy in stabilising economic fluctuations.”

It is my view that the boom and bust were primarily created by a very badly managed monetary policy over the previous seven to eight years. We had the boom phase, when money was too easy, interest rates were too low and credit expanded too rapidly. Even worse, we had the bust phase, when the market was cleared of liquid funds, when interest rates were too high, and when the then Government were far too tight and jeopardised the financial system itself by pursuing a ridiculously tight money policy at the very point when it was obvious that banks were at risk and the system was in danger of collapse.

[Chris Ruane]

Will the right hon. Gentleman refresh the House’s memory on his advice to the previous Government on the regulation of the banks?

[Mr Redwood]

I can indeed and I am glad that the hon. Gentleman did not dare to repeat the normal falsehood that has often been put about. The advice we gave was that they did not have enough regulatory control over the cash and capital of the banks, that they needed tougher regulation of cash and capital and that their mortgage regulation of process and customer was worthless and would not prevent disasters in the mortgage market. I rest my case: that is exactly what happened. The mortgage banks were not protected by their regulation—it probably made things even worse—and the then Government failed to regulate the things that did matter that could have prevented the crisis. I hope that the hon. Gentleman is put right on that now and will no longer read out the stupid spin lines from the Labour party created by people who clearly had not read the economic report to which he is referring. I was trying to keep this non-partisan, but he has decided to spoil the tone—

[Chris Ruane]

So was I. I was giving the right hon. Gentleman an opportunity.

[Mr Redwood]

I am grateful then. I did not realise that the hon. Gentleman was being so generous.

If we are going to support and improve the effectiveness of monetary policy, I hope the Government will think through how that will work. It is one thing to have a charter to say that we will do this, which is something about which I am very relaxed—it is a laudable aim—but it is another to ask how it will occur. The problem with the conduct of monetary policy—this applied to the previous Government as well as to this Government—is that it is not entirely in the hands of the Treasury. I happen to believe that it is ultimately the responsibility of the Chancellor and the Treasury to conduct an honest money policy that avoids undue booms as well as bankruptcies and busts. That requires judgment.

The main elements of that policy, however, are conducted at the moment by the Financial Services Authority, which determines how much banks can lend and admits it got it wrong in the boom period. I think that the FSA also got it wrong in the bust period and managed to go with the cycle, thereby reinforcing it, rather than leaning against it as it should have done. We also have the Bank of England setting interest rates and having some involvement, but not sole control, over how much money is printed. The Chancellor and the Treasury do not run the whole policy and that could become a problem again in the future if the independent bodies make a mess again, as they clearly did in the boom and bust phases we have recently lived through.

I hope a little more thought will go into how the charter can be implemented. I am sure that my hon. Friend the Minister will agree that whatever the theory about independence might be, as far as the electorate is concerned the people responsible for the state of the economy and therefore the conduct of monetary policy are the elected officials—the Ministers. If Ministers wish to delegate that responsibility to an independent body, they are entitled to do so and the public will be happy with that all the time it works but extremely unhappy if the independent body gets it wrong.

That brings me to my third point. Although I am happy with the aims and principles of the charter, I would caution the Minister that we should not place too much confidence in independence as the only virtue that is needed to get these things right. We have had an experiment with a so-called independent Bank of England for more than a decade now and that has been our worst decade for boom and bust since the 1930s. That is not entirely the responsibility of the Bank of England but it was part of the team that managed to preside over too much boom, too much credit and too much inflation and then over too little credit, too little liquidity and bankruptcies on a scale that none of us in this House had ever seen before. That shows that independence is no guarantee of success.

We also see from the Bank of England that its inflation forecasts have been way out for quite some time—

[Chris Ruane]

What about the growth forecasts?

[Mr Redwood]

I am coming to the growth forecasts, if the hon. Gentleman will be patient. The Bank’s inflation forecasts might perhaps have helped to mislead the previous Government as well as the present one. Those forecasts assumed that we would be somewhere around 2% when of course we have reached 5% or more on the retail prices index and 4.4% on the consumer prices index. Today, we have had another revision to the inflation forecasts from the Bank of England saying that there might be more inflationary pain to come over the summer of this year before we start to see progress back to somewhere near the 2% target.

I wish the Office for Budget Responsibility every success and hope that it will be more successful in its forecasts than the Bank of England has been in recent years. Today, the Bank had to announce not only an upward revision to this year’s inflation but a downward revision to this year’s growth. The OBR has already had to revise down its near-term year’s growth forecast in March of this year compared with its autumn forecast last year.

My worry about the current forecasts is that the assumption that we are going to have three years of above-trend growth over the balance of this Parliament after next year could be optimistic if the world economic slow-down, which is likely next year, continues for any length of time. If the euro crisis gets worse and creates more financial and economic turmoil among our major industrial trading partners on the continent or if there are unforeseen problems with the rate of slow-down in the emerging market economies, which are currently applying tough monetary medicine to try to curb their inflation, it could be that much more difficult to hit those Budget targets. That is all important, because we have as a third aim the laudable idea of a forward-looking target to get the current balance or deficit down and to get a better balance between revenues and expenditure.

I have explained that the five-year strategy assumes a very substantial cash increase in total public spending—around £94 billion from memory—and higher public spending on current account in the last year, compared with Labour’s last year, over this five-year Parliament. The way in which the deficit comes down in the official forecasts is mainly through a big increase in tax revenue. That big increase partly reflects the higher VAT rate and other higher tax rates that have already been imposed, but it mainly reflects the very good growth prospect in which we have three years of well-above-trend growth in the last three years of the period, accelerating from now onwards to that good performance. If there is any disappointment or need for downward revision by the OBR, that is going to throw out the tax revenues and we will therefore be faced with a bigger deficit that will require handling. We hear much debate in the House and in the media about whether the Government are trying to reduce the deficit too quickly, but the House should understand that there are risks the other way as well. If growth and tax revenue do not come through at the scale anticipated, we will be faced with rather more invidious issues to resolve about how to get the deficit down without that great super-boost from the revenue.

The objective for debt management is to minimise over the long term the cost of meeting the Government’s financing needs, taking into account risk. This is exactly the point I am trying to stress in this short debate. So far, the markets like the Government’s strong stance. They are pleased that the Government have regarded deficit reduction as the No. 1 thing they have to do and they are pleased with the OBR’s independent forecast showing that the rate of increase in debt drops off quite nicely over the five-year period. However, they will not be pleased if there is major slippage or if the OBR has been too optimistic, so it is most important that we have the right people in the OBR, that it has good fortune with its forecasts and that it has taken into account the possibility, for example, of a deterioration in the international background, which could have an impact.

In conclusion, I welcome the aims but I hope that the Treasury will consider the following important points. First, we must understand that just because a body is independent, that does not mean it gets things right. The Treasury will have to operate its own scepticism about the forecasts. If the OBR were too optimistic, it would be wise of the Treasury, at least privately, to have done some work on what might happen if the forecasts were too optimistic. One should not always assume that the OBR forecast is the worst case and that life is likely to be better. The Treasury should be very careful about that.

Secondly, the Treasury should do some contingency planning in case the world economy is worse than anticipated and has an impact on growth rates. Thirdly, it should take the opportunity that will be presented by the new regime for controlling the banks, which will be introduced when many powers are passed to the Bank of England, to say that the Treasury and the Chancellor must have a role in all that because it was definitely the regulation of banks and the bad conduct in monetary policy that gave us the huge pain of the past six or seven years. We probably need more intervention from the Treasury and more accountability to the Treasury to try to get the system to work in the future.

The Opposition love to say that the crisis was a global crisis and that therefore one should not blame any particular part of the UK governing establishment. I do not take that view. It was a largely western crisis and there were some advanced economies that were not affected by it. Australia had a particularly good period, China had a pretty good period, and India sailed right through without any problems. There were small and big economies that were not affected by the world crisis, even though global activity was hit, because American, British, Spanish and Irish activity was hit in a very predictable way.

It was a rather limited number of countries that had gross mismanagement of their money supply and their banking systems. As the election is well behind us, we should, in a non-partisan spirit, analyse what went wrong, admit that things went wrong in Britain, and make sure that the new architecture, of which the charter is just part, functions much better than the old architecture. That means questioning the assumption that independent people always get it right. It means understanding the ultimate accountability of the senior elected officials, and it means understanding that sometimes we need to be more pessimistic, at least in our private forecasts, so that we do not discover that our plans do not work.

21:36

[Justine Greening]

With the leave of the House, I shall sum up the debate and respond to some of the points that have been made. I thank hon. Members for their contributions. As I said at the start of this evening’s proceedings, it is essential that we restore the sustainability of the public finances. My right hon. Friend the Member for Wokingham (Mr Redwood) set out clearly the challenges that we face in doing that, the steps that we are taking and why they are so important.

The hon. Member for Bristol East (Kerry McCarthy) asked about the relationship between the OBR and the Bank of England and their ongoing discussions. Ultimately, it is for the OBR to decide how it wants to work with the Bank of England. It must make those decisions on its own and carry them out independently. The OBR’s forecast will be used as an official forecast for the Government. As the hon. Lady knows, that is provided for in the Budget Responsibility and National Audit Act 2011 and in the charter. She asked what would happen if the Chancellor of the day did not agree with the OBR forecast. He would have to come to the House and explain why not, and he would be accountable. That is one of the safeguards that we put into the Act, and it will strengthen the OBR’s role.

The hon. Lady raised concerns about paragraph 4.12, about the OBR not providing “normative commentary”. We had the debate in Committee and as the Budget Responsibility and National Audit Bill passed through Parliament. It is critical that we preserve the OBR’s impartiality by ensuring that it never gets dragged into political debate on specific policy measures. Paragraph 4.12 puts that beyond doubt.

I take this opportunity to reassure my right hon. Friend the Member for Wokingham. He spoke about ensuring that the OBR does its job, not just in terms of what it is meant to be doing, but in terms of the quality. As he knows, the Act—the relevant schedule—provides for the OBR to have non-executive members. It will periodically have an external review of its effectiveness. Aside from the normal scrutiny mechanism, the House can ask the Treasury Committee to examine the effectiveness of the OBR. So those safeguards will be in place to make sure not only that the OBR operates as intended and operates independently, but that there will be scrutiny of the quality of its work. One of the reports that it must publish periodically is its own assessment of how effective it is at forecasting.

With those safeguards in place, the charter, along with the Act, restores confidence and credibility to the public finances. It sets a reformed fiscal framework before Parliament and the public and complements the Act by providing extra detail on the OBR’s duties within the scope of it.

My hon. Friend the Member for Macclesfield (David Rutley) talked about his role on the Treasury Select Committee. I think that he was wise to point out that the Committee has a unique role, in relation to other Select Committees, because it will have a role in appointing members to the budget responsibility committee. That is an important role that will also strengthen the OBR’s organisation and its evolution over time.

The OBR has complete discretion over how it performs its statutory duties. It will make its own judgments on the economy and public finances and will use its own methodology to produce forecasts. It will make its own assessment of the Government’s performance against the mandate. The charter reinforces that independence and, by providing greater clarity on the interaction between the Treasury and the OBR, sets out the OBR’s key relationships and how it will work with the Treasury and other Government Departments. The charter reiterates our intention to adopt the OBR’s economic and fiscal forecasts as the official forecasts, as we have done since last May.

The hon. Member for Bristol East asked whether the Chancellor will respond to those forecasts as they come out. He has in fact responded with an oral statement to every forecast the OBR has published to date. Compared with the code for fiscal stability introduced by the previous Government, the charter provides a greater degree of accountability before Parliament for the fiscal framework. It requires us to set out formally our fiscal objectives and mandate before Parliament and specifies the contents of the Budget report. The hon. Lady said that it is obvious that there will need to be a Budget report, but I still think that it is important to have that clearly set out. Many people expected the previous Government to get on with the ordinary course of business by having a comprehensive spending review, but of course that was cancelled. Therefore, I think that it is important to put what seem to be normal assumptions about how a Government should approach things into the charter, which is precisely what we have done in relation to the Budget report.

In conclusion, the charter reflects our commitment to restore order to the public finances. It sets out our fiscal objectives and mandate for parliamentary approval. It strengthens governance arrangements and institutions and reinforces the independence of the OBR.

Question put and agreed to.

Resolved,

That the Charter for Budget Responsibility, a copy of which was laid before this House on 4 April, be approved.

Back to Work Agenda

Wednesday 11th May 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

21:42

[Chris Ruane (Vale of Clwyd) (Lab)]

Great changes have been introduced in the back to work agenda over the past year and many more will shortly follow. I believe that many of this Government’s decisions have been taken in haste and without a proper assessment of what does and does not work in the back to work agenda.

I have been involved in the back to work agenda in my constituency for the past nine years. In 2002, I noticed that 50% of the unemployed people in my county, Denbighshire, lived in just two of the 34 wards: the west ward of Rhyl, a traditional seaside ward with many houses in multiple occupation, and Rhyl South West, a ward with a large council estate. Indeed, that is the council estate on which I grew up and spent 26 years of my life.

In 2007, after I had convened a back to work agenda in my constituency, we heard that the Labour Government were introducing a national pilot scheme to get people back to work. It was called the city strategy. Along with Gareth Matthews of Working Links, I lobbied Work and Pensions Ministers to include Rhyl in the pilot. Rhyl was not a city—only 27,000 people lived in it—but it did have city-type unemployment problems on a small scale, as thousands of unemployed people had fled the inner cities of Manchester, Liverpool and Birmingham and come to such seaside towns. We have concentrated areas of deprivation and unemployment. I asked whether Rhyl could be the pilot for the unemployment initiatives in seaside towns, and my wishes were granted, with Rhyl becoming one of just 15 areas accepted into the city strategy.

Since 2009 Rhyl City Strategy has gone from strength to strength. It administered one of the most successful future jobs funds in Wales, putting 450 long-term unemployed people back to work, and it won a bid to become a national pilot for the fit for work scheme.

Rhyl City Strategy is supported by a consortium of more than 180 people from 70 different organisations in the public, private and voluntary sectors, and there is a management board of 25 organisations that deals with the nitty-gritty of putting people back to work. Those two parts of the organisation meet four times a year, and the consortium now meets to deal with different themes relating to the back to work agenda. Best practice is swapped, initiatives are shared and support is given. Co-operation is maximised and duplication and ignorance are minimised. It is one of the most successful organisations that I have been involved with in the past 25 years of my public life.

There are a number of reasons for that success. The board is headed by the private sector: the chair is Barry Mellor, the north Wales manager of Arriva buses. The organisation views the issues from the perspective of the employer as well as the employee. Rhyl City Strategy is a community interest company, which gives it tremendous flexibility, and decisions do not have to be referred back for months of county council committee meetings.

There is a good blend of the public, private and voluntary sectors. As the work has been going on for almost 10 years, there are bonds of trust and co-operation between and within all three sectors, each reinforcing the other and often coming together informally, outside set meetings, to help in developing initiatives. There is good feedback from the overseeing bodies at the Department for Work and Pensions and the Welsh Assembly Government, and from within our own organisation. Success is celebrated and failure is fixed.

The strategy has used a number of novel schemes to connect with the unemployed. It is not simply about sending a man or a woman in a grey suit with a big stick from the Government to tell the unemployed that they have to get back to work. In my constituency, the strategy has dealt with those furthest away from the jobs market—unemployed people who may never have succeeded in school, who have lost confidence in themselves and faith in society, who have many problems with drugs and alcohol, and who lead chaotic lives and change address regularly.

In order truly to connect with people who face such multiple barriers, we have developed a number of novel projects in conjunction and co-operation with many diverse local groups. I wish to mention a few of them. Rhyl football club operates football in the community, using unemployed people’s interest in football to sign them up for skills training and job placements in the local sports sector.

Coastal Hawks is a project to train local young people in the art of falconry. They use those skills to keep seagulls and pigeons, which blight town centres and cause damage, away from Rhyl town centre. They dress up in medieval costume while doing this, engage with the public, and are in effect a tourist attraction. They were the subject of a TV programme—but now, because of cuts, they may be disbanded.

The Hub, a youth project in Rhyl with 1,000 young people on its books, is located in the heart of the poorest community not only in Wales but, probably, in the whole country. It is self-financing, and in the past three years it has had two extensions that have been built by the local unemployed youngsters who use the centre. It has been part-financed by the 10 back to work organisations that want to gain access to those 1,000 young people. They rent office space from the Hub, and the money is then reinvested in the Hub.

A local market has been established in Rhyl town centre, and the organisers are training 10 local unemployed people to take stalls on it. The organisers provide professional training through North Wales Training and give the trainees a stall to turn that theory into practice. Some of the people on the training scheme have multiple problems and are making a valiant attempt to recover from alcoholism. A separate TV programme is being made about that project.

The Government say that they want to encourage enterprise, and I share their goal. We are doing it, and doing it successfully in Rhyl, the home of Albert Gubay’s Kwik Save and also of Iceland—two supermarket chains that changed the face of UK and world trading. We wish to rediscover that spirit of enterprise.

[Jim Shannon (Strangford) (DUP)]

It is important that young people have the opportunity of a job at the end of the day, and the hon. Gentleman says that that is happening. It is also important to instil confidence and to provide opportunities. Is it also important to have a Government who are committed to the public sector, so that the job opportunities in that are there, too, for the young people?

[Chris Ruane]

I entirely agree with the hon. Gentleman, and I shall come to that point shortly.

The Dewi Sant centre in Rhyl works with dozens of people who have massive drug and alcohol problems, some of whom have literally been taken off the streets. Its clients are then given training away from the urban centre on a 7 acre farm donated by a local business man. They are being trained in the art of bee-keeping and other rural skills. They are organising a community harvest collecting unwanted apples, pears and berries from local people and turning the fruit into preserves.

A week on Monday, I will be the master of ceremonies at the opening of a Jamie Oliver-type training restaurant called Taste. The building was empty for five years and has now been refitted to the highest standards by a top-class designer called Jamie Alcock. It will train young people how to cook, wait on tables, and generally run a restaurant. Those young people will then gain work in our local hospitality sector.

Three weeks ago I was at the first presentation night for a back to work scheme aimed at 70 unemployed young men and women to improve their child care skills. This has a double benefit in that those skills will be used by them in bringing up their own children, but will also help to increase the quality and quantity of the child care work force. The presentation evening was highly emotional, as each young person got up to give a brief personal history and then went on to say how the scheme had rebuilt their confidence, returned their pride and helped them to gain employment. Of the first 10 who had been through the scheme, eight had gained employment and two had gone back to college.

The training for many of the initiatives is supplied by a range of private sector trainers and also by Rhyl college, which was established by Labour 10 years ago. This £10 million college has had two extensions in four years—a further £7 million investment—and has won a UK beacon award for widening participation. It is located in the heart of the fifth poorest ward in Wales, and its outreach work, through many of the organisations I have mentioned, has helped virtually to eliminate the category of NEETS—those not in education, employment or training.

Our local schools have also turned themselves round under the political leadership of an independent, Councillor Hugh Evans—I give credit to him—and a new chief executive, Mohammed Mehmet. The private sector, too, has played its full part. Tesco has said that it will take 50% of its new employees from the dole register. Serco, whose Welsh chief executive, Gareth Matthews, has driven our local back to work agenda for nearly 10 years, has located a regional office not in a leafy business park, but in the middle of the street with the greatest social need in the whole of Wales, creating 35 jobs. I am proud of our local back to work agenda.

I now turn to my concerns about the Government’s back to work agenda. I am concerned that their new proposals will not recognise the good practice and progress that has gone before. They want to start from year zero and do away with all that Labour implemented—as much out of political spite as any desire to help the unemployed—and believe that any “lefty-sounding” package, such as the new deal, must be disparaged. The future jobs fund was viewed by seasoned practitioners as the best back to work scheme that has been created, because it recognised the dignity of the individual and dealt with people as individuals. It raised their confidence, gave them meaningful employment and, most of all, gave them a wage at the end of the week. The FJF was not like the skivvy schemes introduced by the Tories in their 18-year reign—but it was ended within weeks of the Government gaining power, without any independent assessment of its contribution to the back to work agenda.

I am worried by the language, tone and philosophy of the Government. They look on unemployed people as feckless scroungers who should be chased back to work with a big stick even when no work is available—even when it is the Government themselves who are laying off those people. They are putting 500,000 workers on the dole and then stigmatising them. The voluntary sector and the public sector will walk away from Government initiatives that stigmatise people. The voluntary sector has no interest in that approach.

I am worried about the directives coming from the DWP instructing local benefit advisers to trick people out of their benefits. They give advisers targets of two to three clients a week to punish by taking away their benefits. The Minister described those allegations made in The Guardian as claptrap—until he was shown the e-mail evidence that it was happening.

I am worried that the Government have no policy for dealing with areas such as mine, with nearly 50% of its workers—13,000—in the public sector. The Government want to sack between 10% and 27% of these workers, pushing them on to the dole queue. Seaside towns such as mine, with many public sector workers, could end up like the coal and steel towns of the 1980s—the towns the Tories decimated. The Government say they want private enterprise to take on those workers. But when I tabled a parliamentary question on the budgets that the Government have allocated for enterprise clubs, the answer came back that £3 million had been allocated—£3 million for 3 million workers, or £1 each.

My biggest worry is that nationally there is no growth strategy and no jobs strategy. Recent emergency meetings have been held in government to try, belatedly, to correct that, but the comprehensive spending review and the Budget did nothing to help create jobs and growth. As a result the economy, which was recovering under Labour, has flatlined for the past six months.

It is not just me, a Labour Back Bencher, who is making these points; this is also what the experts are saying. The director of the National Institute of Economic and Social Research said that we should be seeing quite a sharp recovery, but that looking back over the past six months we have had no growth in output at all, and it is very disappointing. The chief economist at the Office for National Statistics said:

“we have an economy on a plateau”.

The Office for Budget Responsibility has revised down its growth forecast for 2011 from 2.6% to just 1.7%. That will have a devastating impact on jobs and growth.

The gains in the private sector proclaimed by the Government were achieved largely as a result of what was done in the dying days of the Labour Government. The Government boast of an extra 350,000 jobs in the private sector, but most of those were created in the first quarter of their Administration.

Unemployment in my constituency was 4.7% in December 2009. It fell dramatically, to 3.9%, in the six months to June 2010 under Labour. Under the Tories it has gone back up to 4.4%—and that is before the Government sack thousands of public sector workers in my constituency. I fear particularly for the unemployed young people in my constituency. There were 735 in December 2009, and that went down by nearly 30% in the six months to June 2010, to just 530, under Labour. Under the Tories, youth unemployment in my constituency has shot back up to 730. That happened as my local FJF took 450 young people off the dole. If those people were added on, the figure would be nearly 1,200 young people on the dole. Political spite has its price.

“Panorama” is making a programme on the back to work agenda in seaside towns. It came to my town and presented me with a stick of rock, through which is written, “A JOB TO GET WORK”. It is a job to get work, because of many of the policies that the Government have introduced. The intricate web of employment opportunities that we have created in Rhyl over the past 10 years is in danger of being swamped if the Government’s plans are not properly introduced.

The Government need to end their targets to force and trick people off benefits. They need to work co-operatively with the public and voluntary sector, especially where there is a proven track record. They need to change the language through which the back to work debate is being conducted. They need to ensure that those who are furthest from the jobs market are not left behind while the more able are cherry-picked by private sector companies. They need to put aside party politics, accept what was good practice under the previous Government and carry it on. They need to develop a strategy to deal with areas with huge numbers of public sector workers, so that we do not have coal and steel town-type unemployment in the next decade. If they are serious about the private sector providing jobs for sacked public sector workers, they need to give specific help to promote enterprise among the unemployed; £3 million is not enough. Most of all, the Government need to develop a coherent strategy to promote growth and jobs across the board, not as an afterthought but as a key component of getting the country back to full employment.

21:58

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

For at least the last five minutes of the hon. Gentleman’s contribution, that was a really disappointing speech. He spent 10 minutes setting out very eloquently the benefits of localism in Rhyl and the work that has been done by the local community to help young people and people of all ages into work. I listened with care, and he was actually making a good argument for the approach that we are taking in the Work programme. In a moment, I will set out how we hope that the Work programme will address some of the challenges faced by towns such as his.

I am well aware of the excellent work that has been done on the ground in Rhyl. It is a good example of how a partnership between providers, local authorities, local business and other organisations to help people into employment can be fruitful. He referred to Working Links, and he will be aware that it is one of the preferred bidders for the Work programme across Wales. It has certainly built experience in Rhyl that can be used in the rest of Wales. However, that was where it stopped, and for the last five minutes of the hon. Gentleman’s speech, one would have believed that we were back to the rhetoric of the 1980s and the Morning Star. We heard a rather outdated view of class war and an apparent belief that Conservative Members and the Government have no interest in helping employment. He could not be more wrong. He needs to understand, first and foremost, the legacy that we inherited.

One would have believed from listening to the hon. Gentleman that the past 15 years were a period of great employment success, but nothing could be further from the truth. We have gone through a long period in which we have consistently had almost 5 million people on out-of-work benefits. Although there have been increases in employment, such as the growth by almost 4 million in the past few years, we know thanks to the assiduous work of the right hon. Member for Birkenhead (Mr Field), who spent a lot of time in the previous Parliament teasing out of the previous Government the reality of the labour market, that far too many of those jobs—indeed, the majority—went not to unemployed people in this country but to people coming to the UK from overseas. That was a great tragedy and a great failure. Billions of pounds were spent on nationally organised back to work schemes that did not deliver the change that we needed.

The hon. Gentleman made a good point when he said that he did not want to see the man or woman coming from Whitehall with a big stick to try to get people into work. I agree with him, but that was the failing of the previous Government’s policy. Programmes were designed in Whitehall, to a template designed in Whitehall and on a contractual basis designed in Whitehall, and they did not deliver the improvement that we needed. That is why we are determined to change things and have brought an entirely fresh approach to back to work programmes. I believe that that approach will help and harness the expertise that has been built up in his town of Rhyl over the months and years.

Let me explain to the hon. Gentleman how the Work programme is designed to work. He will be aware that the contracting of the programme has involved not only individual prime contractors such as Working Links but a network of private small businesses, voluntary organisations, local charities, local groups with expertise on the ground in dealing with unemployment challenges and local public sector bodies. A number of local colleges are also involved in delivering the Work programme. We have decided to say to those providers that it is not the Government who know best how to get people into work, and who are best placed to design the programmes that will work in various parts of the country, it is the professionals on the ground.

We have said that we will leave it to the providers to design what works. We want to encourage them to form excellent local partnerships such as the hon. Gentleman describes as having worked well in Rhyl. The only thing that we ask of them is that they succeed. We have put in place a payment-by-results regime, in which the prime contractors are investing £580 million over the next 12 months. We have confidence in their ability to build consortia of organisations and local partnerships, and in their capability to transform the lives of unemployed individuals around the country. We will reward them when they succeed in getting the unemployed into work. The scheme is designed to deliver the type of localism that he described in Rhyl. We believe that localism can work well around the country, and it is the essence of the Work programme and the black box approach.

[Chris Ruane]

We’ve been doing it for 10 years.

[Chris Grayling]

No, the tragedy is that the Labour Government did not do that for 10 years. There were one or two isolated pockets where there were very good local partnerships, and the hon. Gentleman has described one in Rhyl which was clearly very good, but in too many places that did not happen. Individual communities did not have the type of support that he described. They had top-down programmes designed in Whitehall. The man or woman from Whitehall with the big stick did indeed go down and tell people how things should be done.

I remember that when I held the work and pensions brief in opposition, I used to receive regular e-mails and letters from people who had been referred to the employment programmes that the previous Government had put in place and were hugely frustrated. They were being referred for a 13-week period, more often than not to sit in a classroom for the entire time, with a few lessons on how to fill in a CV and do interviews and the occasional work placement. However, they absolutely did not get the type of diverse programme that the hon. Gentleman described.

I am all in favour of some of the initiatives that the hon. Gentleman mentioned, although I do not know the details of every one. He described young people setting up their own market stalls and unemployed young people rebuilding community centres to gain the skills that they need. I applaud such valuable initiatives.

One thing that excites me when I look at the ideas of Work programme bidders is that we have challenged them to move beyond where they were before. We set a minimum performance standard in excess of what previous national programmes had achieved, precisely because we wanted to drive innovation, new ideas and much more tailored provision. I do not want one-size-fits-all provisions, because, as the hon. Gentleman knows, they do not work. A wide variety of individuals have been on benefits for the long term. He referred to young people who grew up in households in which their parents and grandparents did not work, and who had no experience of a working environment as they grew up. We must help those people back into an understanding of what they can achieve in the workplace. Some older people find that the profession that they spent 20 or 30 years in is no longer available to them. We need to help them to find something different to do with the remainder of their working years.

The Government have actively sought new ideas and a new approach. The exciting thing about the Work programme bids is that there have been real signs of innovation that move beyond that 13 weeks in the classroom and the structure of past programmes.

[Kerry McCarthy (Bristol East) (Lab)]

I appreciate the need to recognise that unemployed people are individuals with individual circumstances, to which the Minister has referred. My concern is that Jobcentre Plus does not always recognise that at a local level in respect, for example, of the new requirement that lone parents seek work when their youngest child is aged seven—the age is eight at the moment. I hear tales of people being told that they are regarded as not looking for work, because they say that they cannot work in the evenings because babysitters are unavailable, or because they turn down a job that starts at 9.30 am and they have to drop the kids off at school on the other side of town at 9 am. Will the Minister reassure me that such people will not be penalised?

[Chris Grayling]

I can absolutely give the hon. Lady that reassurance. She will know that there is a definition of reasonableness in deciding whether somebody should be required to take a job. We only expect lone parents with a child at primary school to take up a job that is consistent with school hours—it would be absurd to expect a lone parent to work a night shift, for example. I absolutely assure her that that is the case.

While we are on that point, I will pick up the point that the hon. Gentleman raised on targets. The truth is that we discovered that problem, were horrified about it and put a stop to it immediately. However, is he aware of the roots of the problem? The roots are in a set of benchmarks that were introduced by Jobcentre Plus regions to judge whether appropriate sanctions were being achieved in each area, why there were differences, and whether policy was being applied uniformly. In an organisation that is, in my view, too target and detail-focused, the consequence was that in some areas, that was interpreted as a need to apply the individual target of which the hon. Gentleman is now aware.

However, the hon. Gentleman might be unaware that the those benchmarks were introduced in 2006 under the previous Government. Jobcentre Plus is much too focused on targets and goals. Benchmarks are turned into individual targets for front-line staff, and the organisation’s culture does not appreciate the fact that we want front-line individuals to use discretion. We are going through a long change process after 13 years. Jobcentre Plus is used to taking diktats from the top, but this Government are saying, “We want you to use discretion in the front line and to take the right decisions in the interests of individual with whom you are dealing. We do not want you constantly to look back over your shoulder to ask what the centre is saying.” That is an important development, but it will take us time to feed through the whole organisation.

Ironically, given what the hon. Gentleman said about targets, that policy dates back to changes made by the Labour party when it was in power. Indeed, last April it changed the rules actively to encourage an increase in the number of sanctions—again, something that we inherited. It is easy to look at the current Government and say, “What are you doing?”, but actually it is a problem which we inherited, which has grown and which we are now trying to unpick.

The hon. Gentleman referred to the future jobs fund. I know that Labour Members are wedded to it, but in truth it cost four times as much per job outcome as the previous Government’s other scheme, the new deal for young people. At the end of the day, given that we have inherited the biggest budget deficit in Britain’s peacetime history, we have to take some hard decisions and look for value for money. The problem with the future jobs fund was that it was a six-month work placement in the public or voluntary sector with no clear pathway through to a long-term career. We took the view that it was much better to invest our money in apprenticeships, where the young person spends an extended period with a private sector employer gaining skills that will provide the foundations of a lifetime’s career and that will not simply lead to a shutter coming down at the end of six months.

We are pretty early on in our apprenticeships programme, but we are already having considerable success in getting employers to take up apprenticeships. I was delighted to go to Newcastle earlier in the week and see the front page of The Journal announcing a great success for the paper’s campaign to encourage small employers to provide apprenticeships for young people. That is the kind of partnership that I really like. I absolutely agree with the hon. Gentleman about the importance of local partnerships. I want local employer groups, papers and public sector organisations working together to encourage young people to take up apprenticeships and to encourage local employers to provide apprenticeships. He will know that we are focused on ensuring that we provide work experience places for young people, but above all we are trying to ensure that decisions are taken locally. In the context of what is being done in Rhyl, there is nothing in the Work programme that prevents that work from continuing. Excellence will flourish in the Work programme. The whole system is designed to give local communities, providers on the ground and local organisations the freedom to do what works for the individual, which is what is important.

In conclusion, I regard unemployment, particularly youth unemployment, as among the most important of this Government’s challenges. I am relishing the chance—

22:12

House adjourned without Question put (Standing Order No. 9(7)).