Teachers Pay

Tuesday 18th September 2012 Westminster Hall

[Mr Philip Hollobone in the Chair]

14:30

[John Pugh (Southport) (LD)]

I congratulate the Minister for Schools on his new role, and I welcome him to that post. One downside of having such a role is ending up on a Tuesday afternoon, when he probably has better things to do, for over an hour and a half in a half-empty Chamber answering a debate. Fortunately, I have prepared a Castro-like peroration that should adequately fill that time, and more, should we need it.

I apologise in advance, Mr Hollobone, because you will also have to put up with my presentation not being as seamless as I would wish and with my being more discursive than I ordinarily am. That is largely a product of the fact that, having extensively prepared for this debate, I e-mailed myself my thoughts and considered analysis, only to discover about half an hour ago that the e-mail had not actually arrived. I therefore had to reconstruct everything from the beginning all over again. However, I broadly know what I want to say, and I genuinely want to put it on the record. It is worth while to discuss what will soon be a topical issue, particularly at the Liberal Democrat conference, where we will debate regional pay.

Teachers pay has always been subject to national negotiation, and most teachers have been paid on the same scales across the country. There have always been independent schools. Some, such as Eton, have paid a lot more than the state’s going rate; some—the poorer ones—have paid a lot less; and some have shielded themselves behind the state system. It was quite common for independent schools to have a pay spine that adequately reflected the state system, which enabled an easy interchange of teachers between the state and the independent systems. However, most independent schools had arrangements that allowed them some of the benefits of the state system as well as additional opportunities—for example, to give people particular allowances or perks for coaching sports and the like. Independent schools had real advantages from that arrangement, partly because teachers could obviously retain their pension arrangements when they moved from sector to sector.

There was a halcyon day long ago when the particular scales and positions on offer at an individual state school were determined by the local authority. Certainly, in my early days on a local education authority we discussed whether this or that school should have, for example, further scale 4 posts or deputy head or senior teacher posts. Those days disappeared when schools argued quite vocally for more control over such matters. The tendency started in Cambridge, with local management of schools, and it spread rapidly through the country and was eventually enforced by the Government.

The whole picture of teachers pay is one of increasing flexibility. One flexibility offered recently has been the ability of head teachers to be remunerated irrespective, almost, of the size of their school. At one time, a head teacher’s wage was entirely fixed by the number of pupils in their school. In their wisdom, the previous Government saw fit to give governing bodies some discretion over that. Not surprisingly, right across the country, head teachers salaries went up very appreciably, regardless of the size of their school.

In the previous Government’s education policy, the thinking was that teachers who wished to stay in the classroom and were good classroom teachers should be remunerated more flexibly. Yet again, a new offer was put on the table and it was taken up avidly in many schools, in which pretty well everyone, regardless of the quality of their teaching, was given additional funds. Historically, there was a real identification of the need to remunerate teachers in areas of appreciable stress, particularly inner-city areas. That goes back a long way. I think that, under the previous Conservative Government, teachers working in areas of identifiable deprivation were given an additional salary for remaining there. The net effect was not quite what was intended: in some cases, such teachers simply stayed there, because to move anywhere else would normally have resulted in a loss of income. They were to some extent beaten into submission over a period, and they remained for decades in the same school, ploughing the same furrow.

Recently, people have thought of bringing performance management into teachers remuneration. That is clearly reflected in the current scales and the arrangements whereby teachers can move between different scales. It has to be said, however, that the research is mixed on the actual benefits, and I have seen research from the OECD that raises some questions. Locale has obviously been another determinant of teachers pay. Historically, for as long as anybody can remember, there has been a London weighting that reflects the difficulties that teachers sometimes experience in acquiring affordable housing in the London area. Finally, another flexibility that can be identified is that Governments have periodically put extra funding on the table to attract teachers in particular shortage subjects or to welcome into schools those who had not previously been teachers.

There have been variations over time. I accept that such variations will continue and will have different effects, and that some of the intended effects will be wholly successful and some will not. However, the bulk of the changes that I have outlined have been relatively uncontentious, because they were seen as clear and necessary and they recognised adjustments to schools’ needs. The picture resulting from those various manoeuvres has not been a big political difficulty for anyone. It is quite clear that there are different degrees of teacher turnover throughout the country—teachers find it hard to move out of some areas and hard to move into other areas.

The profile of teachers to some extent varies across the country, in different places at different times. I suggest that the profile of the teacher work force in London represents a younger cohort than, for example, in the north-west, where I live. However, the teaching force of England, under the arrangements for teachers throughout the country, has by and large subscribed to the argument that it is a good principle to have equal pay for equal work.

[Kevin Brennan (Cardiff West) (Lab)]

For the record, will the hon. Gentleman acknowledge that in the context of national pay scales for teachers, we are talking—this is rare these days—about England and Wales?

[John Pugh]

I am happy to do so. Historically, however, equal pay as a principle has not been adhered to, because there was a phase—long before the living memory of anyone in the room—when female teachers were paid less than male teachers. There has been a recent drive in local authorities to equalise pay in schools, for, say, people working in catering establishments. Previously, manual workers in local authorities were usually female and were paid less than their male equivalents.

[Kevin Brennan]

I am glad that the hon. Gentleman has mentioned that. On that basis, does he regret as much as I do the Government’s decision to abolish the support staff body that was trying at least to set some guidance on pay scales for such staff?

[John Pugh]

I am aware that most local authorities have had to dig deep into their coffers to adhere to a principle, which, at the time at least, was thought to be largely uncontentious but entirely necessary. In fact, it was prohibitively expensive for a large number of councils.

The principle of equal pay for equal work is not peculiar to teaching or to the public sector. Many national employers—I shall not bother to list them now but I can provide the details if Members are interested—are not aware of where their workers live and, by and large, wish to pay people the same amount for the same job. As this is such an obviously transparent principle, we do not want to depart far from it or we would require a good reason for doing so. That is where my argument takes off. I am suggesting that equal pay for equal work is a sound principle and that to depart from it requires a solid reason.

A reason that has emerged in recent days, which no one would put as blatantly as I will, is that we do not need to pay equal pay for equal work because we can get away with not doing so. Most people would not generally announce such an argument in all its gory detail because if we follow it through, we would probably end up paying women less than men and migrant workers less than native workers, and do a whole series of things that would be regarded as poor industrial practice. None the less such practice may be implied by some talk about market-facing pay.

Another reason why teaching can depart from the principle of equal pay for equal work is that it can be applied to an individual employer. It could be argued that state independent schools—academies and the like—cannot differentiate within their work force, but they can differentiate between their work force and other people who work for other institutions. In that case, teachers are seen not as a national work force but as an individual work force assigned to a particular school. We are, therefore, accepting the principle that each individual school can make up its own mind. I am told that 35% of academies have, to some degree, departed from national pay and conditions. The majority of them, for quite sound reasons, have not done so because it creates more ructions than people need or welcome. Even independent schools that are not in the state sector prefer, for quite solid practical reasons, to abide by the national pay schemes. If our employers play fair by all their employees, I cannot argue with them and say that they are not offering equal pay for equal work.

There are two other arguments that I want to attend to and dwell on. One argument for paying teachers differentially in different areas, which has been put quite forcibly in recent times, is that it will have other non-educational benefits for those areas. We might refer to that as the crowding out theory, which is quite well analysed in the document “Crowding out: fact or fiction?” Notwithstanding that it is prepared for Unison, it contains a lot of pretty solid research in and around the subject. It insists that if teachers in a low-wage area are paid less—in other words closer to the average wage for those areas—more people would seek work in the private sector and fewer would seek work as teachers.

It is not obvious to me that we want fewer people seeking to be teachers in areas of disadvantage, or that more people seeking work in the private sector where jobs are scarce and oversubscribed would be a good thing. There is no real shortage of vacancies in the private sector in those areas where teachers are paid above the average wage for that area. Certainly, the idea of getting more teachers to drift in that direction would not necessarily solve any problems, nor would it make a difference to the number of jobs available in either sector. I simply do not follow the logic presented there. It is quite clearly the case that in the private sector, there is a real dearth of jobs.

[Kevin Brennan]

Just to keep the hon. Gentleman going on that point, is it not also perfectly possible that, as a result of his argument, there could be fewer jobs in the private sector as a result of such a policy, because its net effect would be to reduce the spending power in that locality? That would impact on the availability of private sector jobs, as the demand for labour is a derived amount.

[John Pugh]

The hon. Gentleman could almost be quoting from this excellent document on regional pay, which is submitted by more than 20 Liberal Democrat MPs. The point is that the one thing that we will do if we repress the amount of money going into the areas of less advantage is to reduce demand for private sector opportunities, services and goods. That is demonstrable. If we want to balance out the economy, as the Government do, and so they should, that is not a part of doing that. We could argue that as a result of public sector jobs being that little bit cheaper, we will get more public sector jobs in those areas, so the total amount of money will not diminish. However, I am not aware that it is the Government’s current intention to increase the number of public sector jobs.

[Kevin Brennan]

Would not the whole point of such a policy be to bring about a fiscal transfer away from those areas in order to be able to pay a greater salary to public sector workers in other areas?

[John Pugh]

Yes, I do not dispute the hon. Gentleman’s analysis. We could assume—this would be the sole salvation of the theory—that there are lots of people currently teaching or in other public sector areas who have the in-demand skills that cannot easily be found in the private sector in the less advantaged areas. However, I see no evidence that that is the case. It rather goes against the general view that we need to attract science graduates into schools and away from better paid jobs in industry, which both Governments have endeavoured to do. The theory baffles me and it is incapable of intelligent presentation. A confirmatory bit of evidence that might lead us to think that there is something seriously flawed about this theory is that it is rarely voiced by people who are genuinely engaged with the business of regenerating disadvantaged areas. I have been to many events where the main topic has been the regeneration of the north and I have not come across anyone who has ever said, “What we want is for somebody to take public sector wages down a slice. That would do it.”



Curiously, the only people whom I have heard put those sentiments are bright young men in think-tanks in London; people who have their feet firmly on the ground, particularly the ground in the north, tend not to say those things, if ever. As an argument for regional pay for teachers, that does not seem to be sustainable.

I want to look at another argument for having variations in teachers pay across the regions that has emerged very recently. It is a different type of argument and, frankly, it is one that, when I put together the analysis for the Liberal Democrat submission on regional pay, we did not really take on board. The regional pay submission deals quite adequately with issues such as crowding out, and so on, but what we did not expect was an argument that public services themselves would improve if teachers were paid differentially across the country.

The new argument emerged from some research carried out by the university of Bristol—by Carol Propper and her team, I think—into the benefits of a regional pay system, or, to put it the other way round, the disadvantages of a national pay system. Members will recall that the research was covered quite extensively in the press, and it seemed to have the consequence of leading people to believe that if pay in London or the south-east was markedly better than pay in Humberside or the midlands, not only would that be “a good thing” or make it easier to get teachers to London, but it would improve the performance of schools in London; and that a national pay system actually disadvantaged educational outcomes in the south-east and other areas of high average wages. The research received an enormous amount of media coverage about two weeks ago, and it paralleled previous research by the same body at the university of Bristol which argued that similar sorts of effects could be observed in the health service—that, for example, people in certain high-demand or high-wage areas were more likely to die as a result of a heart attack than people in other areas, simply because there were national pay scales.

Looking briefly at that research, it is based on an examination of pupil progress between key stage 2 and key stage 4 and of average professional wages in different parts of the country. It notes that pupil progress, as measured by class data in a value-added way, does not seem to be as significant or as appreciable in high-wage areas as it is in low-wage areas—in other words, those who live in a wealthy part of the country are less likely to see the same degree of value-added progress in their school as others elsewhere do. I will explain that in a little more detail. We are not talking about attainment here, as attainment by pupils in wealthy areas is better than that of pupils in poorer areas. We are talking about the difference from key stage 2 to key stage 4, and in particular whether key stage 4 replicates or improves on key stage 2.

When that research was reported, the press coverage was fairly stark and fairly crude. I have to say that the press release for the research was also fairly stark and fairly crude. I do not believe that the report is wholly warranted by the data as presented by the Bristol team, but the quality of the research is pretty hard to judge, because the correlation established is not based on raw data; it is arrived at after data have been manipulated and tweaked in a very complex way. The description of what was done to the data is a little opaque for the faint-hearted and for journalists, and perhaps also for policy makers. I wanted to terrify the Hansard writers by reading out the equation, or set of hieroglyphics, that is presented in the research. It is enormously formidable, I am afraid. It says that it is:

“A simple education production function…which considers the importance of controlling for alternative labour market opportunities when examining the degree to which teacher wages affect student outcomes”.

I can only illustrate this visually, but there follows a line of hieroglyphics containing so many variables that it would take a brave man to say what each individual one means. I must say that there is an opacity to this equation—the way that the variables are treated—that makes it rather difficult for all but the most resolute to understand how the data have been treated, and consequently we have seen nothing so far in the way of peer review. The equation is described as being relatively “simple”, but anybody who has looked at page 9 of the Bristol research will have been terrified by what they saw and may not have ventured any further; consequently they will be reluctant to engage in intensive peer review.

The theory claims to establish only an association between being in an area where average professional wages are high and not seeing an enormous amount of value-added effect between key stage 2 and key stage 4. That is not the same as a causal connection. As far as I can follow it, the research does not claim that national pay causes lesser progress in wealthy areas, although of course that could be claimed and in fact many of the press reports read into that research exactly that claim. Furthermore, the research does not necessarily imply any clear policy response even if a causal connection were to be established. After all, regional pay along the lines anticipated by the researchers might actually widen the differences in attainment between richer and poorer areas. We might argue whether or not that would be a good thing.

There are other associations that we could talk about, which show the difference between establishing association and establishing a causal link. It is generally the case that in areas of wealth, the behavioural challenges presented by pupils tend to be less, and in areas of deprivation the behavioural challenges presented by pupils tend to be greater than those found elsewhere, but it would not be safe to draw the conclusion that pupils in the wealthy areas need to play up a bit in order to get better results. That would be a wholly inappropriate conclusion. As I say, establishing association is not establishing a causal link; that is the first point.

My second point is that it could be said that research by the university of Lancaster into value-added, which Members may be familiar with, shows that there is only a loose connection between what a school does and value-added measures. There is a lot of research on this subject, which brings into question what value-added data actually tell us. Also, it is interesting to note that selective grammar schools that teach their pupils well score comparatively poorly on value-added measures. We may not be assessing the school in the way that we believe we do with the current value-added measures.

I do not want to be counter-intuitive and suggest that teachers’ salaries in areas of high cost make absolutely no difference, but I am sceptical that they make the difference that the Bristol research suggests. Obviously, if a teacher moves to an area such as London, a lot of their salary will be used to pay the mortgage; people have always recognised that and the need for a London weighting—it has added to an already overheated market, but I think people can see a broad case for it, none the less. Housing aside, however, living in the capital is not necessarily more expensive than living in Yeovil or Norwich. Certainly transport in London is a lot cheaper than in those places, and utilities and consumables are at least as cheap, if not cheaper, in London.

I do not dispute that high house prices have an influence on staff turnover; they clearly do. Often when a young couple want to start a family, they have to move to areas of cheaper housing to find family-sized accommodation. Therefore, quite naturally, London’s teacher profile tends to have a disproportionate number of second wage-earners, many of them female, and young teachers who have not yet got to the stage when they want to start a family. That may be a good thing; it is not necessarily a bad thing.

The Propper thesis, however, is that national pay schemes lead to worse outcomes and experiences. That is the nuts and bolts of it—the heart of it. It is fundamentally what Propper is leading us to believe, and it is the conclusion that some people are inclined to draw. How does one respond to that?

[Kevin Brennan]

Is it not also part of the theory that much of what teachers do is—I think Propper used this word—discretionary, and therefore there is a wage disincentive effect that means that teachers are, in effect, lazier in certain areas than in others?

[John Pugh]

From the value-added data, there is an implication that in high-value areas—wealthier areas, where housing costs are higher and where we may want to make some adjustments in teachers’ salaries—something is happening in the teaching force that explains the difference in the value-added data between such areas and others.

My response to that is to set Propper against Popper, by whom I mean Karl Popper, author of “The Logic of Scientific Discovery”. I am sceptical about economics as a science—certainly as a predictive one—but the one hallmark the philosopher Karl Popper taught us to look for in any theory was: how might it be falsified? If a theory cannot be falsified and yet is potentially falsifiable, it is a good theory and worth sticking to. The question one has to ask is: if the theory holds water, or if the data stand the interpretation given, how would one know that?

I would like people to ask themselves this question: what ought not to happen if Propper’s theory is true? I will suggest just one thing. What ought not to happen—what we ought not to find—is that lessons in wealthy areas, where the teaching pool is smaller, are as good as those in less wealthy areas. That is easily testable by looking at not the data, but Ofsted reports and the number of lessons that the reports say are satisfactory and less than satisfactory. I presume—I have not checked this, although I have tabled questions—that those reports show nothing that will confirm the Propper hypothesis, and that lessons in Barnet are just as good as those in Salford. I expect that to be the case, so I do not think that we need to be over-detained by the theory, despite the publicity it has received. We should put the theory rapidly to a clear test and see whether what the theory leads us to anticipate in fact happens. I suggest that it does not, and we probably know that.

Why is all that important? Why have I gone out of my way to criticise both the crowding out theory and the Propper data? It is because there is an important issue concerning the debate on regional pay that is probably bigger than that debate itself. Politically, it is stupid for any Government to antagonise the teaching profession, which normally thinks, in a communitarian spirit, that regional pay is not necessary and which will not be persuaded by the need, rationale and motives behind the regional pay push. I think it is unnecessary to antagonise a group that is already sufficiently involved in asking questions of the Government regarding policy on pensions, pay freezes and the like.

The big game for all of us is to improve educational standards in the country. We need teachers to buy into the Government’s agenda and to make it theirs. In my experience of education policy, nothing much is achieved without teachers embracing, endorsing and involving themselves in it. We have seen Secretaries of State over the years come forward with initiative after initiative, and only some of them have had an impact. Those have been the ones that teachers have been able to believe in themselves, such as local management of schools, which I mentioned earlier and which I think is widely believed in. The ability to build a consensus across the piece, which is necessary, will be hampered if we get into a debate about regional pay apropos teaching. It is simply not worth the candle for the limited dividends it potentially can bring, even for those whose support it, and it will produce only tears at the end of the day.

Improving education is a long and collaborative process. Yesterday in the Chamber, the Secretary of State introduced quite significant reforms that we need to examine. Not all teachers have necessarily bought into them straight away—they have concerns about them, and they wish that they had been consulted in advance as well as post hoc—but it is possible to get everyone behind the same agenda, and if we do not do that, we simply do not get any results. We saw elements of that yesterday in the Chamber. I was watching the debate on the monitor, and I noted significant contributions from the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and the former chair of the Select Committee on Education, the hon. Member for Huddersfield (Mr Sheerman). Both said exactly the same thing to the Secretary of State: if we are going to make progress—the kind of progress that no one disputes should be made—there must be a prevailing consensual atmosphere.

[Kevin Brennan]

Does the hon. Gentleman agree that the problem with the way in which the Secretary of State has gone about reform in this area—an area in which we all believe there should be reform—is that he has chosen to do so in order to make a political point about rigour and standards, not an educational one? If he had wanted to make that point, he would have shared his approach with the Opposition, teachers and the devolved Administrations, rather than ridden roughshod over everyone.

[John Pugh]

I think the Secretary of State said, at the end of his statement yesterday, that he was offsetting the 10 years of drift and confusion—frankly, I think that was a rather schoolboy remark. Teachers listening to it will have recognised that there have been difficulties in exams, that changes have been made and that we need to make further changes, and teachers will get behind further changes, but to say that 10 years has achieved nothing and that today we will start on a new venture in which everything will be that much easier, is to mistake what has always happened throughout the history of British education. When things work well and progress is made, everyone has their shoulder behind the wheel because everyone can see the sense of it. When we try to appropriate success or schemes that other people either do not acknowledge, do not understand or do not appreciate, we hamper the degree of progress, even by our own lights, that we intend to make.

I have gone on long enough and my Castro-like peroration is now at an end. There is not an intelligently defensible case for regional pay—certainly, neither the Propper hypothesis nor the crowding out theory provides such a case, although I am happy to debate them ad nauseam—but even if there were, it would be a political minefield that, judging by the extent of the political opposition, is not likely to lead to beneficial results but is likely to lead to a scarring debate that will hamper progress in significant areas of education.

15:11

[Kevin Brennan (Cardiff West) (Lab)]

I thank the hon. Member for Southport (John Pugh) for his speech and congratulate him on securing this debate. His peroration was not Castro-like at all; it was considerably better argued than a Castro speech and considerably shorter, although it was perhaps long for this Chamber. As usual, his extremely well argued speech was a philosophical trot through the issues.

I also welcome the Minister for Schools, the right hon. Member for Yeovil (Mr Laws), and wish him good luck in his new role. As he knows, his job is very important. This is the first time I have faced him since the reshuffle. We came into the House at the same time. In fact, we made our maiden speeches on the same day, so I have watched his progress with great interest; obviously, I will watch his progress with even greater interest in the months to come. In the reshuffle, a number of Education Ministers have gone: the hon. Members for Brent Central (Sarah Teather), for Bognor Regis and Littlehampton (Mr Gibb)—whom the Minister replaces—and for East Worthing and Shoreham (Tim Loughton). One other Education Minister wanted to go but was unable to do so. If, as often happens after a reshuffle, training is offered to Ministers, the Schools Minister might want to suggest an assertiveness training course for Lord Hill for the next time he tries to resign from the Government.

The Schools Minister takes his post at a time when teacher morale is at a pretty low ebb, and he needs to do something to try to improve that situation, because low teacher morale is not good for learning or for standards and outcomes. He may be aware that I was a teacher in a previous period of low morale in the 1980s, which sadly resulted in a great deal of disruption because of an approach to pay and conditions that led to a great deal of unhappiness among teachers. In the context in which we meet today, at a time of low morale with the Government considering the whole issue of national pay and conditions, it would be a welcome step if the Minister took a grip and rejected, for many of the reasons outlined by the hon. Member for Southport, the approach to teachers pay to which the Secretary of State seems philosophically wedded.

The Minister may be aware that the School Teachers Review Body is currently considering teachers pay at the Secretary of State’s behest. The other day, I read with interest the Secret Teacher’s contribution to The Guardian on teachers pay, which summed up quite well some of the teaching profession’s anxieties. The Secret Teacher’s birthday is on 28 September, which is the deadline the Secretary of State has given Patricia Hodgson, the chair of the School Teachers Review Body, to return her recommendations on teachers pay. I hope the Minister does not use that information to try to ascertain the secret teacher’s identity, but the Secret Teacher points out just how anxious teachers are about the steps the Secretary of State is taking to consider market-facing pay, regional pay or whatever we call it in the end. The Secret Teacher also points out that one of the common features of high-performing jurisdictions, which, by the way, we are too in this country—perhaps the Secretary of State should say that more often—is long-term investment in pay to attract a higher quality of applicant to the job. The Labour Government tried to emulate that.

The hon. Member for Southport mentioned that teachers pay is now linked more to classroom performance, and I make no apology for that. Certainly when I was a teacher, often the only way for a teacher to get paid more, apart from through the incremental points for experience, was to take on a responsibility outside the classroom. Some of the best teachers ended up doing administration rather than what they should have been doing, which was standing in a classroom and using their excellent teaching skills to help young people to achieve their potential.

There is a great deal of unhappiness among the teaching associations and unions on teachers pay, and I hope the new Schools Minister will take an approach of dialogue, consensus and working in partnership with the teaching profession to work through some of those issues, rather than taking the more confrontational and “impositional” approach that the Secretary of State tends to take from time to time.

On regional pay in education, the hon. Member for Southport gave a fairly comprehensive presentation on the arguments. The argument seems to be that, where local pay and costs of living are below average, the Government can get away with saving money by paying less. That is certainly one reason why the Government could go for local and regional pay. Another argument is that relatively high pay in the public sector makes it harder for the private sector to recruit, which he referred to as the “crowding-out” argument. He also referred to research from Bristol university, which I will come back to towards the end of my remarks.

Why would the imposition of local and regional pay on teachers be the wrong approach? Well, there are a number of reasons, both educational and economic. Earlier, we discussed the potential damage if spending power is taken out of the economies of more deprived areas. Economics is a dismal science, as the hon. Gentleman hinted in his remarks, and it would be a big mistake simply to take a micro-economic argument in isolation from the macro-economic argument, which is exactly the mistake the Government are making in their overall economic policy on the deficit. On regional pay, if a significant amount of spending power is taken out of those areas of the country by reducing the wages of reasonably well paid public servants in the hope that that would make the private sector more attractive to them, the Government would have to posit a huge increase in private sector productivity for that to have a positive economic impact. Those of us with our feet on the ground know that, in practice, cutting fairly well paid jobs in such areas would take spending power out of the local economy, thereby damaging the provision of public services and damaging the private sector by suppressing demand for goods and services, so there is a strong economic argument against going down that road. It would also make it harder to recruit good teachers in more deprived areas. As the hon. Member for Southport suggested, the job is often more challenging in such areas, which are not necessarily seen as the most desirable places to live in.

The hon. Gentleman also raised the basic philosophical issue of equal pay for equal work. Yes, we could take a purely laissez-faire approach and pay different people at different rates for the same work; but we still have a national education system, despite the increased number of academies, and it seems to me that we should try to hold on to that basic principle.

As to the overall impact on teacher morale—I referred earlier to the Secret Teacher article—there is no doubt that it is at a low ebb at the moment. Introducing relative pay, or reducing it in some areas, especially in the current context of pay freezes, would have a major impact on teacher morale. The question would arise, I guess, of how to stop schools paying what they wanted to. The only way would be to reduce the funding available in areas where it was intended that pay should be reduced. There are thus also huge implications for school funding, which are not being planned for.

Bureaucracy is also an issue. What structure would be required to determine the rates that would apply; or would that be left purely to the market? There is no real evidence that relatively high public sector pay damages the private sector. At a time such as now, when there is high unemployment, including graduate unemployment, there is, if anything, an excess supply of labour available for the private sector to recruit from. Regional pay variations in similar jobs are relatively small. Large organisations in the private sector typically tend to have national pay structures as well, with limited variation, except, of course, for the same variation that has existed for some time in the teaching profession, for London and the south-east. Of course, the TUC recently gathered evidence about regional pay. Its research found that very few large private sector employers use local pay. That was attributed to the wish to have some sort of control over labour costs, and to avoid a duplication of the bargaining process, with the time and resources that that would entail. The complexity of regional or local differentiation outweighs the possible gains for those employers.

[John Pugh]

The hon. Gentleman is surely also aware that what is envisaged may be more complex than was at first thought even by those who support the concept. The Department of Health, under the previous Secretary of State, made a submission suggesting regional pay—but only at a certain level of the hospital structure. As to facing the market, in the higher reaches of the hospital structure the market was national rather than regional; so even within one institution regional pay might not be right. Equally, it is recognised that there are hot spots within regions, where it would not be desirable to pay much less than London rates.

[Kevin Brennan]

The hon. Gentleman puts his finger on the point that I was making, which is that the policy introduces a level of complexity that leads to cost—the opportunity cost, and the time that people will have to spend on resolving anomalies and complexities in the system, unless the Government intend to take a laissez-faire approach to public sector pay. As far as I know, that is not what they propose, but the costs, otherwise, cannot be ignored.

There are good reasons why regional pay is not common practice among large private sector employers. A lot of the commentary about regional pay seems to be based on poor knowledge of private sector pay systems, and of the existing flexibilities within the public sector pay system, including those affecting teachers. A recent “Today” programme on Radio 4 posed the question why a teacher should be paid the same in Sunderland as in Surrey. Well, those teachers are not paid the same. The pay system has four bands or zones, and teachers in Sunderland are in a different band from those in Surrey. It seems there is not enough knowledge generally about the current system; people do not understand that it is sufficiently flexible to remove any need for a much more laissez-faire approach to teachers pay.

The teaching unions have made a joint submission to the pay review body, and as its report is imminent I shall summarise some of their points. In their view, local pay in teaching would not contribute to the raising of standards, because schools in disadvantaged areas already face the greatest challenges in recruiting and retaining teachers, and in providing opportunities for the most disadvantaged students. Local pay would create even greater obstacles to overcoming inequality and raising standards of attainment for all—an objective that I think all hon. Members share.

The unions believe that local pay would be likely to inhibit teacher mobility and create long-term teacher shortages in areas where pay was reduced. There is no particular reason why it should assist with teacher supply problems elsewhere. It also offends against the principle that we discussed earlier: the rate for the job and equal pay for equal work. The unions believe that pay cuts would be likely to fall more heavily on women teachers, so there is an equality aspect to the issue. The Government would, I think, need to carry out a full equality assessment of any proposal to introduce a regional or market-facing pay system.

The approach would also make determination processes costlier—something that we have already discussed. Other interrelationships with pay flexibility should be considered, because the limited use of existing pay flexibility for recruitment and retention suggests that schools do not believe that the pay structure should develop further in that way. Increasing the scope for variations in pay could lead to schools competing for staff—at local level anyway—through wages. Another issue is reconciling the introduction of local pay with a clearer and more transparent funding system for schools, and more effective financial planning by schools. The unions echo the points that I made about private sector employers and the local economy.

That leads me on to the Bristol research, which the hon. Member for Southport spoke about. As he said, in August a study by the centre for market and public organisation at the university was published, under the somewhat non-academic title of “Wage Regulation Harms Kids”. It claimed to show that pupils’ performance at GCSE is affected by how teachers pay compares with pay generally in the area. As the hon. Gentleman said, it suggested that where pay is generally high compared with teachers pay, pupils do worse, and vice versa. The conclusion that is drawn is that there should be more variation in teacher pay, and, in particular, that teachers in high-wage areas should be paid more.

[John Pugh]

I think the hon. Gentleman used the phrase “do worse”, but I believe the conclusion is that those pupils improve less: in high-wage areas, generally speaking, attainment is better, or higher.

[Kevin Brennan]

I think improving less probably is doing worse; but I take the semantic point, and those who want to perform a textual exegesis on our deliberations this afternoon can take a look at it later, when they consult Hansard.

The argument runs that where teachers have low pay compared with others in their area, teacher recruitment will be more problematic, and teachers will be less motivated. That relates to the point that I was discussing earlier with the hon. Gentleman. “Wage Regulation Harms Kids” says:

“The nature of teaching is that a large proportion of the work is discretionary (lesson planning, after-school programmes, time invested in individual children) so there is scope for reductions in effort in response to relative wages.”

The case is based on the contention that teachers in more affluent areas are lazier than teachers working in other areas, because the ratio of their wages to wages for other jobs in the area is lower than that of teachers in other areas of the country. The study offers no real objective evidence to support that contention. The hon. Member for Southport has gone through the methodology used; it is almost entirely an exercise in statistical correlation, and relies less on causation than on an association of numbers from the evidence that it considered. No evidence is offered that the amount of teacher pay compared with pay in the area generally has a causal relationship to pupil performance, despite the report’s title.

Nor does the document consider any alternative hypothesis for the statistical link that it claims to have identified, which seems strange. It makes no attempt, for example, to consider Ofsted ratings for teaching, as the hon. Gentleman suggested could be done in different areas, to see whether there is inspection evidence that teaching is worse or teachers lazier in more prosperous, high-wage areas. It does not consider whether the challenges of teaching in less well-off areas require more of teachers and, conversely, whether a lot of schools in more prosperous areas are coasting and not being challenged by the nature of the task. It might have nothing to do with pay. That explanation is at least worthy of some investigation by such a study.

The case of London is especially relevant, as the hon. Gentleman said. London has high and rising standards, certainly in recent years, but also the largest gap in the country between teacher pay and pay generally. It does not seem to make a great deal of sense. Much of the analysis is based on dividing the country into just two areas and comparing them. That is a very broad-brush approach that can miss many local variations. I will not go on, but there are also problems with the report’s grasp of how teacher pay works and some confusion about external tests at key stages 1 and 3, which no longer exist. That did not inspire much confidence in me either.

The Secretary of State has been known from time to time to take pieces of research such as the programme for international student assessment tables, ignore the parts that he is not keen on and highlight only the bits that he is keen on, or even to ignore completely some pieces of research, such as the pupil achievement research on trends in international mathematics and science study. I am not suggesting that he will necessarily do so, but if he is planning to use this piece of research to justify the introduction of regional pay on the basis that teachers in areas such as his constituency are lazier than teachers in other parts of the country, without any real evidence for doing so, he is on extremely shaky ground.

I end with a couple of questions for the Minister. What is the Government’s current position on regional pay? We have heard conflicting voices from within Government in recent months; one minute it is on, the next minute it is off. Will he give us an update on the latest position? Does he think that Yeovil teachers should be treated differently from teachers in Surrey for doing the same job, and paid a different rate? Does he grasp how demotivating this debate is for the teaching work force that he now has the privilege of serving, in addition to the pupils and parents of this country, in his role as Schools Minister? What assurances can he give us that all of this is not just a softening up for the ultimate privatisation agenda that some of us think the Secretary of State has in mind in the longer term?

15:35

[The Minister for Schools (Mr David Laws)]

I thank my hon. Friend the Member for Southport (John Pugh) for the kind comments that he made at the beginning of his speech, and I congratulate him on securing this important debate. As he mentioned a number of times, the issue is incredibly important for many people across the country, particularly in the north and in his constituency, and he will understand that it is an issue throughout much of the country beyond the south-east, including the area that I represent in the south-west of England. The Government acknowledge how sensitive it is for many people who work and do extremely important tasks within the public sector.

My hon. Friend has raised the issue at an important moment. As the shadow Minister, the hon. Member for Cardiff West (Kevin Brennan), mentioned, the School Teachers Review Body is considering the issues and will report relatively shortly. I think the shadow Minister said that he was expecting the response on 20 September. The latest information available to me indicates that it is more likely to be published towards the end of October. The shadow Minister will be aware from his own experiences in Government that the report will be made initially to the Secretary of State, who will then have to decide when to publish the evidence, alongside the Government’s response to the recommendations. I have no doubt that my hon. Friend and the shadow Minister will be assiduous in considering the evidence base and the response and following up with any issues and observations they have.

Before I go into the detail of my response to my hon. Friend, I should say that I agree with him on two strategic observations that he made about this debate. It is incredibly important that measures should be evidence-based. There is a lot of prejudice on different sides of the debate about issues of flexibility in pay, regional pay and local pay, but there is complete agreement between my hon. Friend and the Government that it must be evidence-based. He mentioned that he published his own report on the issues, bringing to the surface some of the evidence available on the issue of regional and local pay, even though it is not uncontested territory.

My hon. Friend referred earlier to having tabled a question to the Department about the regional variations in quality of teaching measured by the Ofsted framework. From my recollection of the last few days, he can expect a letter from the chief inspector on that issue pretty soon. I will be interested to hear his analysis after he has looked through the information, which I think will be quite detailed. It will perhaps take the debate further.

He and the shadow Minister made an important point. We acknowledge that education is an area in which the Government cannot simply press a button in Westminster or Whitehall and create particular policy responses across the country. There are 23,500 schools in this country, and education is delivered not by Ministers but by the people who teach in schools, head teachers and all the others who contribute in educational settings. Motivating and inspiring those people, and supporting them in the common aspiration of improving the education of young people, involves a partnership between the Government and those who serve in education. We are conscious of the need to keep them motivated and to make them understand that the Government want to support them in doing their job as effectively as possible.

The shadow Minister indicated that he is concerned about morale in some areas of the teaching profession. I have no doubt that there are various different propositions to make in this area. From my own visits to many schools across the country, particularly in my own constituency having taken on this role only recently, I think a lot of teachers and head teachers acknowledge that the Government, in difficult financial times, have put in place a good financial settlement for schools, given the pressures on other areas, including the pupil premium, which is ensuring that schools, particularly in disadvantaged areas, have the funding needed to tackle some of the challenges they face.

Before I respond to my hon. Friend, I would like to say that I am grateful to the shadow Minister for his kind comments about me taking up this role. I look forward to working with him as co-operatively as I can, and as the usual cross-party niceties allow. I would also like, as I did when I spoke a few days ago in the House, to pick up on his comments about the three Education Ministers who left in the reshuffle. I think he was indicating and hinting that those three individuals were passionate about their work and were regarded as very strong in the areas they championed. I think all hon. Members wish them all the best for the future, whether they agreed with every one of their policy proposals or not. I have no doubt that all three will go on contributing to the debate about education and children’s services.

In preparation for the debate, I read with interest my hon. Friend’s recent paper on the subject of regional and local pay. As I indicated, it is an important and timely contribution to a timely and topical debate. I will address some of the points he raised in that paper, as well as the points that came up in his speech. First, however, it is important and useful to set out, to some extent, the approach the Government are taking on reforms to teachers pay and the debate about regional and local pay across the public sector.

In the autumn statement in November 2011, the Chancellor said that pay review bodies would be asked to consider how and if public sector pay could be made more responsive to local labour markets. He then wrote to pay review bodies in December 2011. His letter to the School Teachers Review Body said:

“there is substantial evidence that the difference between public and private sector wages varies considerably between local labour markets. This has the potential to hurt private sector businesses that need to compete with higher public wages; lead to unfair variations in public sector service quality; and reduce the number of jobs that the public sector can support for any given level of expenditure.”

Those are some of the suggestions that my hon. Friend was commenting on in the debate and in his paper.

As my hon. Friend will be aware, there are already four geographical pay bands—the shadow Minister commented on this—that apply to teachers pay: inner London, outer London, the London fringe, and the rest of England and Wales. The current pay bands have rigid boundaries, which at the point they were devised took account of areas that historically had higher teacher vacancy rates and costs of living. The starting salary for classroom teachers is £21,588 in the England and Wales pay band and £27,000 in the inner London pay band. I think I am right in saying that all parties across the House, and my hon. Friend, acknowledge that there are some areas where there are very high costs, and where not having a degree of flexibility in pay would mean that it would be very difficult to recruit people who worked in those areas. Many of us are very passionate about ensuring that young people, particularly in areas such as inner London where there are big challenges in many schools, should have very high quality teachers and they should not be penalised as a consequence of teachers not being able to live and teach in those areas. The debate, then, is not whether there should be any element of regional variation within the system of teachers pay, but whether we should have different or greater variation.

The single most important determinant of a good education is for every child to have access to a good teacher. The available evidence suggests that the main driver of variation in student achievement at school is the quality of the teachers. The effects of high-quality teaching are especially significant for pupils from disadvantaged backgrounds, and research from the Sutton Trust has suggested that poor pupils may lose out on a whole year’s worth of education if they spend a year in a class with a poorly performing teacher, when compared with the education that they would have received from a very good teacher. International evidence shows that the top performing school systems consistently attract more able people into the teaching profession, leading to better pupil outcomes. That is a reason why the pay incentives and the overall levels of pay have to be right, as my hon. Friend would agree. Competitive salaries, in line with other local graduate professions, help to ensure that high-quality graduates are attracted into and retained within the teaching profession across the country.

[John Pugh]

The Minister is suggesting, and I agree, that teachers in disadvantaged areas have probably greater potential to make a difference to children’s lives. It is relatively unsurprising, then, that value added is identified in those areas of relative deprivation, as the Propper data show.

[Mr Laws]

That is a good point, but it is perhaps not the whole debate. I will explain why as I proceed through the comments that I have to make.

Recent research from the OECD showed that our teachers are amongst the best paid of all OECD countries. There was an improvement under the previous Government, which we welcome—that is good news. However, alongside ensuring that salaries are competitive we need to consider the case for arrangements for teachers pay that drive up the quality of teaching by rewarding good performance; giving schools as much freedom as possible to spend their money sensibly as they see fit to meet their pupils’ needs; ensuring the best teachers are incentivised to work in the most challenging schools, as my hon. Friend has acknowledged; and ensuring—an important point both for and against the argument for regional pay—the best value for money for the taxpayer in the money that it is allocated. That is why the Secretary of State, responding to the Chancellor, has asked the experts, the School Teachers Review Body, to consider how reforms to the teachers pay system might support schools and head teachers to recruit and retain the best quality teachers. That is in line with the approach being taken for other public sector work forces and will ensure that any changes that are made—this is my hon. Friend’s concern—must be based on the best evidence available.

In his remit letter to the STRB, the Secretary of State asked it to consider a number of factors: first, how we might reduce rigidity within the pay system so that it best supports the recruitment and retention of high quality teachers in all schools; secondly, how teachers pay could be better linked to performance and whether there are existing barriers to that within the current system; and thirdly, whether to make teachers pay more flexible following the commitment in the 2011 autumn statement to ask pay review bodies to consider how public sector pay can be made more responsive to local market conditions. The question of how teachers’ pay can be made more responsive to local labour markets is only one of the things—an important point that I want to draw out from today’s debate—that the Secretary of State has asked the STRB to consider, and it is important that I set out all of the issues on which the Secretary of State has asked for recommendations.

To support the STRB’s consideration of its remit, the Secretary of State submitted written evidence. The STRB has also taken into account evidence from bodies representing employers of teachers, school governors, and teacher and head teacher unions. The Secretary of State’s evidence raised concerns that under the current system the rate at which teachers are paid is more closely associated with the time they have served as a teacher than it is with their performance in the classroom. Almost every teacher on the main pay scale progresses to the next spine point each year, and almost half of qualified teachers across all pay scales are on a higher spine point than the previous year.

Our analysis of vacancy rates shows that some schools find it more difficult to recruit and retain teachers than others. There are different vacancy rates between different regions, between local authorities in the same region, and between schools in the same local authority. There are also differences in vacancy rates between subjects, as my hon. Friend is aware. For example, there are above average vacancies in English and mathematics posts, but below average vacancy rates in the arts and humanities. Where vacancies are filled, some subjects are significantly more likely to be taught by non-specialist teachers, which is a major concern. For example, 21% of physics lessons are taught by non-specialist teachers, compared with 10% of history lessons.

The Secretary of State’s evidence to the STRB suggested five options for reform that it may wish to consider, illustrating the range of approaches that are available to it when making its recommendations. In late October, following careful consideration of all the evidence submitted, the STRB will make its recommendations to the Secretary of State. The Secretary of State has stated his intention to then issue a second remit to the STRB that may ask it to produce more detailed recommendations, or to consider further issues on which it has not yet reported. Hon. Members will be pleased to know that no decisions have been made and the Government remain open-minded about these reforms.

My hon. Friend’s paper and his speech clearly set out a number of key arguments made in the recent debate about regional pay for public sector workers. I should like briefly to touch on some of the issues that he highlighted. I remind him that issues relating to how public sector pay reflects the local labour market will be considered alongside other priorities, which I mentioned earlier.

[John Pugh]

Will the Minister consider the following point? We have used the expression “responsive to the local labour market” all the way through, as though we know in every case what the local labour market or the pool of workers is that we are pulling from. It would be useful to have an additional piece of research figuring out, when, say, a school head teacher or head of department post is advertised, the actual field of applicants. Where do they come from and how do people move between one area and another? In teaching, people at a certain level are prepared to move appreciable distances. Often in an advertisement in the paper, a school is appealing to the labour market of the whole nation, not just the local labour market. We cannot talk as though the local labour market is a fixed thing that we always understand.

[Mr Laws]

My hon. Friend makes a good point. He will also appreciate that the reasons that motivate people to take on particular posts or to stay within geographic communities are based not just on pay, but on other connections that individuals may have with an area.

The first of my hon. Friend’s arguments was that the private sector might be disadvantaged in local labour markets where public sector workers are relatively highly paid. He referred to this as the crowding-out hypothesis. As the Secretary of State’s evidence to the STRB showed, there is variety in supply and demand within the teacher labour market, including in the relative pay of public and private sector workers. This appears to be reflected in vacancy rates, with schools in some regions finding it more difficult to attract candidates into vacancies. However, as the Secretary of State’s evidence also shows, there is variation between regions, between local authorities and between schools in the same local authority. Schools also appear to experience greater difficulty appointing specialists in some subjects compared with others. Stakeholders have submitted a large amount of evidence to the STRB and the other pay review bodies in this regard and detailed representations have been made on crowding out. I am confident that the experts will therefore have all the information they need to consider this specific issue carefully when making its recommendations.

My hon. Friend’s paper also considers whether the Government could make savings by reducing the pay of public sector workers in line with local labour markets. Increasing autonomy for schools is central to the Government’s education reforms. Although of course we wish to achieve value for money in all public spending decisions, we have clearly prioritised autonomy for head teachers to allocate the funds available to them in the way that they think is most appropriate to provide for the needs of their pupils, subject to the disciplines that any of us would expect in the public sector. Where pupils from disadvantaged backgrounds attend school, we have made sure that there is additional money through the pupil premium, which my hon. Friend strongly supports, for head teachers to spend on the additional support that they think is necessary. However, there are always advantages and disadvantages in such an approach—my hon. Friend set them out carefully—and those matters will be carefully considered by the STRB in its deliberations.

The final point mentioned by my hon. Friend was public sector pay in other countries. He specifically mentioned in his paper the experience in Sweden. As is well documented, the Secretary of State and the Government wish to learn carefully the right lessons from all education systems that perform most strongly in international comparisons. We have considered the Swedish system, but we are interested in all public education systems where pupils perform well compared with their counterparts in other countries, particularly where the attainment gap between the least and most advantaged children is small compared with the large gap that still exists in this country. We trust that the STRB will take into account systems employed in Sweden and elsewhere in the world. These will inform its recommendations to the Secretary of State.

Regional pay has been at the forefront of recent debates about public sector pay reform. However, my honourable Friend will recognise that, although we have asked the STRB to consider how teachers pay could be made more flexible locally or regionally, there are issues other than regional pay under consideration when it comes to teachers specifically. Increasing the flexibility that head teachers have to determine the pay arrangements suited to their school could be a key element of the drive to increase autonomy from government. We want head teachers, particularly in the most disadvantaged schools, to be able to use the additional funding that they have through the pupil premium to attract and retain top quality teachers to work where the pupils need them most. We need carefully to consider whether the current system enables them to do that.

Our approach all along has been to provide the STRB with the evidence that we think is most relevant to its deliberations and to encourage others to do the same. We are encouraged that contributions to the debate are being made by organisations and individuals who are not among the statutory consultees of the STRB. My hon. Friend has made his case clearly and publicly.

In setting out the Government’s approach after the Chancellor made his statement last year, my hon. Friend will be aware that the Chief Secretary to the Treasury made a speech at a union conference in June, saying:

“Despite some of the more excited press reporting, the only thing we have decided is to look at the evidence…before we decide anything, we want to hear from everyone with a contribution to make to this debate—employers, academics and, yes of course, the Trades Unions. There will be no change unless there is strong evidence to support it and a rational case for proceeding.”

I thank my hon. Friend for his contribution to this important debate. I am sure that, like me, he looks forward to reading the STRB’s report and the Government’s response, and I have no doubt that he will respond again in detail to those.