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public about its true nature. The first major pamphlet sent out by the trust--I understand that it was sent to all eligible schools--was called "A New Choice of Schools". I have a photocopy here. It is very cleverly put together, with pictures of children on beaches and in school libraries, and it talks in tendentious terms about the problems that schools have faced in the past. Turning to page 10, we read as follows--[H on Members :-- "We?"] Yes, I assumed that Conservative Members could also read--

"The Grant-Maintained Schools Trust has been set up to promote and assist in the development of Grant-Maintained Schools. As a registered charity it is independent of, but fully briefed by, the Department of Education and Science".

That statement--that the trust was and is a registered charity--is a simple, straightforward, bare-faced lie. The Charity Commissioners wrote to me as recently as 28 February this year, saying : "As you know, the current activities of the Trust are carried on through a non-charitable company and that a charity has yet to be constituted."

Yet the statement that it was a charity was made nine months before that letter was written.

Whoever wrote that, and whoever allowed it to go out, must have known that it was not true. I suspect that someone will stand up tonight and say that it was all a mistake, but to suggest that that was a mistake is to ask us to suspend our judgment and our experience of the wholly unscrupulous operation of the present Government over the past 10 years. I will accuse the trustees--including the hon. Member for Epping Forest--of many things, but incompetence is not one of them. Nor is that an accusation that I bring against Field Fisher and Martineau, one of the country's leading firms of solicitors and the solicitors to the trust.

There was no mistake when that claim was made ; just arrogance--an arrogance that led the trust to believe that it was above the law and could get away with making a claim that it probably knew to be untrue. What is more, it was not a mistake. Mr. Andrew Turner, Conservative city councillor and director of the trust, has damned himself out of his own mouth. He was the man who, last summer, issued the document that used the words "As a registered charity". In The Observer yesterday, he said :

"We never thought that all our activities were charitable." That is interesting. The Secretary of State and Mr. Turner must know that one cannot have a charitable trust if parts of its activities are not charitable. That makes the operation of such a trust wholly impossible and bogus. It means that Mr. Turner was party to wilfully misleading the public and parents about the nature of the trust and that it was done for a purpose : that the trust could be presented as independent--to use its word --of the Department of Education and Science and the Conservative party when it was not. Further evidence of the wilful intent to mislead is that, once a fuss was made about it, initially in the education press, no apology was sent by the Department of Education and Science to the thousands of schools that had received the document. It did not say, "We have been referring to this as a trust. By the way, it is not a charitable trust ; it is a political front organisation." All the Department did was to change the word "charity" for "non-profit". There is still the insinuation, with the use of the word "trust", which is customarily associated in people's minds with charity, that this body is a charity.

I asked the Secretary of State twice on the radio this morning, and twice he refused to answer, this question ;

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perhaps he will do so now : does he approve of a body of this kind wilfully misleading the public and parents about its nature? I asked him whether he was aware that those who make false representations that a body is a charity and who collect funds from the public might find themselves in the criminal courts. Is the Secretary of State seriously suggesting that a body such as this, which has fraudulently misrepresented its position, is a proper recipient of public funds? Opting out has flopped. Only a handful of schools have balloted to become nationalised, state-controlled institutions. Most of them are threatened with closure and reorganisation. Most of them are not in Labour-controlled areas. Four weeks ago the Secretary of State tried to revive opting out by some cheap and grubby accusations against Labour authorities and against some of my hon. Friends. He has failed, despite repeated requests, to justify them. Tonight he seeks to breathe life into a flagging campaign by involuntarily invoking the taxpayers' assistance.

This is the Secretary of State who is only too ready to lecture others about morality. We remember his lecture to the General Synod of the Church of England on 1 February about the need for the Church to maintain moral values. Before he next examines the mote in the eye of his brother, or in the eye of local authorities, hon. Members, or the Church, let him examine the beam in his own eye. Let him practise what he preaches, for once. The regulations are an abuse of power. We shall oppose them in the Lobby.

11.13 pm

The Secretary of State for Education and Science (Mr. Kenneth Baker) : He got a bit worked up, didn't he? I welcome this opportunity to explain to the House the merits of the Education (Grants) (Grant-Maintained Schools Limited) Regulations 1989. I find it richly comic to be lectured by the Opposition about the proper and prudent use of public money. The hon. Member for Blackburn (Mr. Straw) certainly overreached himself this time.

The hon. Gentleman said at the end of his speech that the grant-maintained schools movement had flopped, but the debate is not just about the Grant- Maintained Schools Trust--it is also about the position of grant-maintained schools. The regulations cannot be discussed without grant-maintained schools also being discussed. Behind the hon. Gentleman's self-righteous pose is the unmistakable sound of wailing and gnashing of teeth. The debate is about the Opposition's rage and frustration that yet another of the Government's policies has proved both popular and successful. That success leads directly to these regulations and to the Opposition's mingled pain and grief.

The speech of the hon. Member for Blackburn has only illustrated his penchant for what I might describe as the Billy Bunter school of oratory. Hon. Members will recall Bunter's words :

"I didn't eat your jam, you rotter ; and anyway, it tasted awful".

The hon. Gentleman's version is that grant-maintained schools will ruin the state education system, but that no school will want to be grant maintained. He is wrong on both counts. The hon. Gentleman said that the whole system has flopped, but I have already approved four schools for grant-maintained status from September this year. Eighteen more have published formal applications to

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me, which I shall consider and determine as soon as possible. Parents at 12 more schools have voted yes in secret postal ballots, and will publish proposals in due course. Eleven more schools are committed to holding ballots shortly, and another three have just embarked on the statutory procedures. I should add that a further 12 have held ballots and voted no to pursuing grant-maintained status. I have no trouble with that at all. If parents are given choice, they can choose not to change.

Mr. Patrick McLoughlin (Derbyshire, West) : Is my right hon. Friend aware that one of the schools to which he has just referred is in Chesterfield? We can imagine how embarrassing it would be for the Labour party if a school in Chesterfield opted out. Is my right hon. Friend aware that there is a lot of jiggery-pokery going on and that the county council allocated money to teachers to campaign against opting out? Is my right hon. Friend aware of any other local authorities which have used public money to obstruct parents' democratic choice?

Mr. Baker : My hon. Friend raises a case about which we have documentary evidence. [Hon. Members :-- "Publish it."] It has already been published by Derbyshire county council, which voted £500 to be given to teachers to campaign against opting out. That is not fair because it is money for one side only.

Mr. Straw : Will the right hon. Gentleman give way?

Mr. Baker : In a moment. The money that has been used for that campaigning is public money. [Hon. Members :-- "So is this."] The money that we are debating in the regulations will not be used for campaigning. Not a penny of public money has been spent by the Government on campaigning for grant-maintained schools.

Mr. Straw : That may be so, but £22,700 has been spent on 100,000 pamphlets, copies of which have been sent to every school governor asking them to opt out. Was that not campaigning?

Mr. Baker : It did not ask them to opt out. The leaflets that we sent out were an explanation of the law relating to grant-maintained schools. I am always being asked to explain the law. That is perfectly legitimate. Derbyshire county council produced the leaflet that I am holding up now at ratepayers' expense. I believe that 50, 000 copies were produced.

The hon. Member for Blackburn alleges that grant-maintained schools have flopped. More than 60 schools--

Mr. Nicholas Bennett (Pembroke) : On a point of order, Madam Deputy Speaker. The hon. Member for Rhondda (Mr. Rogers) has just walked into the Chamber and is now accusing my right hon. Friend the Secretary of State of being the biggest hypocrite in politics. Will you ask the hon. Gentleman to withdraw that comment?

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. I am listening to the Secretary of State.

Mr. Baker : I was trying to remind the House that the Labour party cannot stomach the order because, so far, 60

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schools have opted out. That is a confirmation of the importance of parental choice, which the Labour party does not like and will not have.

Mr. Bob Dunn (Dartford) : Does my right hon. Friend agree that the Opposition's approach tonight has been motivated by their fear of the success of the Government's policy? Does he further agree that within a few months the Opposition will probably reincarnate the policy and claim it as their own? They may even go so far as to claim that they invented it in the first place.

Mr. Baker : I hope that there will be such a conversion, but I am not optimistic. My hon. Friend is absolutely right that our policy has proved popular. Last year, during the long proceedings on the Education Reform Bill in Committee and in the Chamber, I was told that there would be a low turnout in the ballots, that parents would take no interest and that small handfuls of parents would take schools away from local education authorities. What actually happened? In the 46 ballots so far, the average turn out has been 71 per cent. of those eligible to vote, some schools have had turnouts of more than 80 per cent., and the average vote in favour has been 68 per cent.

Mr. Derek Fatchett (Leeds, Central) : The Secretary of State seems to be having some difficulty with his statistics. He told us that 60 schools had opted out, then he said that four had been approved, and now he is saying that 46 schools have held ballots. Which is the correct figure?

Mr. Baker : I said that four schools had completed the process. So far, 46 of the 60 schools have reached the ballot. I remind the hon. Gentleman, who likes these figures, that in the 46 ballots so far, 71 per cent. of those eligible have voted, so the measure is proving very popular with parents.

Mr. Fatchett : Whether by mistake or deliberately, the Secretary of State has misled the House. His original claim was that 60 schools had opted out. The right hon. Gentleman must come clean. Although 60 schools may have approval by resolution of their governors to hold a ballot, they have not opted out. Will the Secretary of State now correct the record?

Mr. Baker : I have no wish to mislead the House, but 61 schools are in the process of opting out-- [Interruption.] The number has increased since I have been in the Chamber--

Madam Deputy Speaker : Order. I remind the Secretary of State that the scope of the debate is very narrow. It relates to the desirability of paying grant to the company for the specified purpose. I hope that we shall contain the debate within its scope.

Mr. Baker : May I clear up the point that I was asked to clarify? [Interruption.]

Madam Deputy Speaker : Order. I require the Secretary of State to adhere to his responsibilities and to talk within the scope of the debate.

Mr. Baker : I am delighted to do that.

With regard to the purpose of the regulations, the governors and senior staff of a school approved for grant-maintained status will obviously need to prepare for their new and important

responsibilities. Particularly in the early days, grant-maintained schools may well wish to

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have access to sources of expertise and advice in a number of areas--for example, on financial matters, such as proper budgeting and accounting practices, on effective use of computer hardware and software to collect, store, retrieve and use management information on the purchase of goods and services, on the making of contracts with staff and suppliers and on legal, architectural, health and safety and other matters.

The Grant-Maintained Schools Trust has submitted a proposal to my Department to make advice on each of these areas available to schools approved for grant-maintained status. It also intends to provide training for governors and staff. In the longer term, it will seek to build up a group ethos in this new sector of maintained schools and to ensure that they share good practice.

These are all worthwhile objectives, the pursuit of which it is entirely right and proper for my Department to finance. The regulations empower me to do so. The trust has made a good case. It has thought hard about what its potential customers' needs will be and how it can best help to meet them. I have therefore concluded that my Department should make a pump- priming grant of £25,000 to the trust for the remainder of the 1988-89 financial year and a further sum of the order of £150,000 in 1989-90.

Mr. Simon Hughes (Southwark and Bermondsey) : Will the right hon. Gentleman give way?

Mr. Baker : I must finish this point as it is germane to the issues that have been raised.

Let me make it absolutely clear. I shall make grants to the trust, in the words of regulation 2(1),

"in respect of expenditure incurred or to be incurred by it for the purposes of, or in connection with, the provision (or proposed provision) of educational services in grant-maintained schools (or proposed grant- maintained schools)".

The hon. Member for Blackburn raised this point.

Mr. Straw : The Secretary of State has talked about the need for good practice. What about the issue that I raised in relation to sharp practice on the part of the trust? It has said that it is a registered charity when it is not. When will the Secretary of State say whether he regards that as acceptable conduct by a public body?

Mr. Baker : I shall come to that.

I shall continue with the point that I was making because the hon. Member for Blackburn asked me about the important phrase, "proposed provision". He suggested that money will be made available by the trust in the future for schools contemplating opting out as opposed to those whose applications have been approved. It is important to realise that only four schools have gone through the process of being approved. The hon. Gentleman found it hard to grasp the fact--he made the same mistake on radio this morning-- that my intention is to provide grant only to support the trust's educational services to schools which have gone all the way through the procedures and been approved for grant-maintained status. That is a clear statement. The phrase "proposed provision" applies only to schools which have gone right through the process. I wish to make it clear to the House that no money will be provided by the trust for schools which are applying for grant-maintained status.

Mr. Simon Hughes : The Secretary of State might consider altering the wording of the regulations to prevent that happening. If the Secretary of State is claiming that

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the justification for the trust is to provide expertise, why is it that it neither employs nor has as trustees people with recognised educational expertise but instead has Tory party nominees and known Tory party activists?

Mr. Baker : I shall deal with the political nature of the trust shortly. I must finish the important point that I was making. As I have said, I wish to make it clear that the money will be provided only for the educational services of schools that have opted out. The trust will be subject to the same sort of financial controls as other bodies grant-aided by my Department. In particular, it will be required to set up a bank account solely for the handling of grant from my Department, to ensure that grant is used solely for the purposes for which it is payable, and to publish annual, audited accounts and make such other returns as I request demonstrating that all grant has been spent for the purposes for which it was intended. My Department's accounting officer, the permanent secretary, is satisfied that those conditions of grant can be met by the trust and checked by the Department. I shall be accountable to Parliament in the usual way for the public funds expended, which means that the National Audit Office or the Public Accounts Committee will be able to examine the spending of every penny of the money for which I am asking the House.

On charitable status, I have seen the document to which the hon. Member for Blackburn referred and I have also seen the amended document. I understand that the trust believed that it would receive charitable status for its activities and advertised itself on that basis. I agree that that was regrettable. However, within one month of the facts being drawn to the trust's attention, the revised document was printed with the amendment. The trust took steps to correct the impression made by its literature. The trust tells me that it is now discussing with the Charity Commission charitable status for the educational services that I have described, which are the only activities for which I shall pay it grant.

Mr. Straw : It is more than regrettable--it is reprehensible. How could the trust have believed that it would receive charitable status when, according to the Charity Commissioners, a charity has yet to be constituted, even at this date, and no charity or charitable trust was in existence at the time when the trust wrote those words?

Mr. Baker : I said that I considered it to be most regrettable. However, the trust corrected the mistake within a month.

The question is whether money for educational services should be passed to a body which does not have charitable status. I have checked carefully the various bodies for which I provide grants for educational services. The majority are charities, but a large minority are not charitable bodies. Money is provided to them for the educational services that they provide, which we consider worth purchasing.

Mr. Straw : The Secretary of State says that the mistake--not to say complete inaccuracy--was corrected. Did the Grant-Maintained Schools Trust send to all recipients of the original document a correction pointing out that the trust was not a charity?

Mr. Baker : I am not aware that a correction was sent out to every recipient. The trust showed the corrected

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document to schools that approached it. That is the important point. I should make it clear that it is legitimate for my Department to provide money for educational services to bodies which are not charities. I looked carefully through the list and I found that one of the largest grants for educational services given to a body that is not a charity is to the Trades Union Congress, which has received more than £750,000 in the current year. There are many other bodies in that position.

The accusation has been made that the trust will receive public money for campaigning. I emphasise that the trust will not receive money for campaigning in favour of grant-maintained schools. So far, not a penny has been provided to the trust out of public money for any purpose. In future, the trust will not receive money for public campaigning, but only for the substantial provision of educational services.

Mr. Tony Marlow (Northampton, North) : As I am sure my right hon. Friend is aware, the regulations say that he may pay grants for "the provision (or proposed provision) of educational services in grant- maintained schools".

The regulations say, "in grant-maintained schools". When schools are going through the process, they are not grant-maintained schools, so my right hon. Friend cannot pay the money until a school is a grant-maintained school. What the hon. Member for Blackburn (Mr. Straw) has said is either a red herring or he cannot understand plain English.

Mr. Baker : I am delighted to have the support of my hon. Friend. He has confirmed the advice that I received from the Clerks of the House this morning. The fact that the hon. Member for Blackburn cannot understand plain English is no surprise to me.

We shall not provide money for campaigning purposes--it will be for educational services. On that basis, I am perfectly entitled to be concerned at the heavy expenditure which some local authorities have apparently used in campaigning, or in enabling others to campaign, against grant-maintained status. That was the point raised by my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin). We know that substantial sums have been made available by certain local authorities. An article in The Guardian --the hon. Member for Blackburn must agree that it is true if it has appeared in The Guardian --states :

"Rochdale Council spent £5,414 on its campaign to persuade parents at Queen Elizabeth High School to vote against opting out." The article also refers to Rochdale spending

"£6,165 on a similar campaign at Siddal Moore high school". Whether or not that money has been properly spent is not a matter for me, but reference has already been made to the money that Derbyshire county council has approved for campaigning. That is a direct use of public money for campaigning. Tonight the hon. Member for Blackburn has again accused the Government of using such money for party political purposes. Does he not realise that

grant-maintained schools are nothing to do with party politics? If he does not agree with that, perhaps he will recognise that 24 schools in Labour areas have asked to

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opt out, compared with only 21 schools in Conservative areas. That shows clearly that a great many Labour parents and councillors are in favour of opting out.

The hon. Member for Blackburn has referred to political pressure, so I shall remind him of what happened to a Labour councillor in Bolton--

Madam Deputy Speaker : Order. I regret that the Secretary of State is going wide of the debate. I remind the House that this is a short debate and will finish at 12.28 am. Short speeches will be welcome and speeches that go beyond the scope of the debate are out of order.

Mr. Baker : The Government have been accused of using public money for party political purposes, so surely I am allowed to answer that point--

Mr. Elliot Morley (Glanford and Scunthorpe) rose

Mr. David Young (Bolton, South-East) rose--

Madam Deputy Speaker : Order.

Mr. Baker : None of the money that will be provided under these regulations will be used for campaigning purposes, although other money has been used for such purposes by LEAs. Indeed, pressure has been put on Labour councillors. The hon. Member for Blackburn knows of a Labour councillor in Bolton who has had to resign the whip because he is in favour of grant-maintained schools.

In conclusion--I know that other hon. Members wish to speak--we know that the hon. Member for Blackburn is implacably opposed to grant-maintained schools. [ Hon. Members :-- "This week."] If that is so, perhaps the hon. Member for Blackburn will come to the Dispatch Box and tell us what he intends to say in the next Labour manifesto about grant-maintained schools. Will he keep them or abolish them?

Madam Deputy Speaker : Order. This debate is not about grant- maintained schools. I ask the Secretary of State to keep to the scope of the debate.

Mr. Baker : I shall, of course, observe your ruling, Madam Deputy Speaker. I shall not press the hon. Member for Blackburn to answer that question tonight.

Madam Deputy Speaker : Order. I am not concerned about that. I am concerned that the Secretary of State should keep within the scope of the debate.

Mr. Baker : I conclude by repeating the point that I have already made. The money that we are asking the House to approve today is not for campaigning or for party political purposes--it is to provide educational services to grant-maintained schools, which have proved popular. I am sure that the Opposition are opposing this regulation not because of its terms but because they are fundamentally opposed to the concept of grant- maintained schools. I ask the House to approve the regulations.

11.38 pm

Mr. Denis Howell (Birmingham, Small Heath) : We have heard a sordid speech that matches the sordid proposals before the House. It is a disgrace --

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Mr. Dunn : On a point of order, Madam Deputy Speaker. Will you please direct the right hon. Gentleman to confine himself to the regulations before the House?

Madam Deputy Speaker : The debate must remain in order. I am sure that the right hon. Gentleman will refer to the scope of the debate. If he does not do so, I shall call him to order.

Mr. Howell : In all my years of refereeing football matches-- [Interruption.]

Mr. John Marshall (Hendon, South) : On a point of order, Madam Deputy Speaker. I clearly heard a Labour Member make a disgraceful comment and I suggest that the hon. Member for Rhondda (Mr. Rogers) be brought to book.

Madam Deputy Speaker : Order. I call Mr. Howell.

Mr. Howell : I shall of course do my best to comply with your injunction, Madam Deputy Speaker, but I am bound to say that in all my years of refereeing football, this is the first time that I have been told to observe the laws before I have even taken to the field of play.

This is a sordid business. In accordance with your line of thought, Madam Deputy Speaker, I wish to illustrate the activities of a trust in Small Heath school in my constituency. It is a disgraceful state of affairs. From day one, the trust, whether or not it has yet received money from the Government, has been involved in a collusion between the head teacher, certain governors and Conservative councillors. Two judicial reviews have now been granted by the courts. It would be wrong for the House to discuss them. All those activities--

Mr. Harry Greenway (Ealing, North) : On a point of order Madam Deputy Speaker. What is sauce for the goose is sauce for the gander. The right hon. Gentleman's speech is not within the terms of the order. [Interruption.]

Madam Deputy Speaker : Order. I have no intention of naming any hon. Member. I can deal with the matter without naming the right hon. Member. Does the right hon. Member understand that the scope of the debate relates to the desirability of paying grants to the company for specified purposes? I am sure that the right hon. Gentleman, who is a considerable parliamentarian, will confine himself to the guidelines that I have laid down.

Mr. Howell : I assure you, Madam Deputy Speaker, that every word of my speech will deal with the activities of grant-maintained schools and the company. [Interruption.] I am sure that Madam Deputy Speaker will tell me if I am out of order. She does not need any assistance from the rabble on the Conservative Benches.

I wish to deal with the activities of the trust in that school in my constituency. An unfortunate situation arose. Of the governors who were elected as a result of the Secretary of State's activities in a Labour constituency, only one Conservative governor attended once in 10 years. That is what happened. Suddenly, and in spite of their record--

Mr. Harry Greenway rose --

Mr. Howell : The hon. Gentleman should keep quiet and not get upset. There is no need to get excessively agitated.

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I make it clear that, suddenly, and under the influence of that trust in an area in which, in 10 years, not one Tory governor had ever attended a meeting, because of the Secretary of State's activities, the governors were transformed and a multiplicity of Tories appeared. It would be out of order--

Mr. Spencer Batiste (Elmet) : On a point of order, Madam Deputy Speaker. I seek your guidance. If the Secretary of State has said that the money under this Bill will be provided to an organisation only for the purpose of helping schools which have already opted out, how can it be in order to deal with schools which are contemplating opting out?

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