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Reference was made to the ethnic minorities in Hong Kong. In total, I believe that about 7,000 people could be stranded and stateless after 1 July 1997. In response to an intervention, the Foreign Secretary said that the matter had been decided but Earl Ferrers, who was a Home Office Minister, said on 15 July 1993 that"if, against all expectation, members of that group"--
the ethnic minority--
"were to come under pressure to leave Hong Kong and had nowhere else to go, the government of the day"--
I assume that he was referring to his own party although it might well be mine--
"would be expected to consider, with considerable and particular sympathy, their case for admission to the United Kingdom."--[ Official Report, House of Lords , 15 July 1993; Vol. 548, c. 415.] That matter needs to be cleared up in the next two years because thousands of people in Hong Kong come into that category. There is, of course, uncertainty about the future leadership of China. The right hon. Member for Old Bexley and Sidcup and others referred to what is termed the "impending succession" question. The Chinese ambassador said yesterday at a meeting in the House that there was no problem and that the matter had been settled but, clearly, when someone as significant as Deng dies, it is bound to have an enormous influence on China and Hong Kong but not, I suspect, on the future of these particular negotiations.
Similarly, the role played by the United States of America has been exaggerated. It clearly wants to trade in the huge Chinese market. It is rather interesting to note that a headline in this week's International Herald Tribune stated:
"Trade threat removed, human rights situation worsens". There is a telling contradiction in the two phrases. The European Union is hardly better. Germany, for instance, is anxious to trade with China and Chancellor Kohl visited China in 1993.
Some believe, then, that the prospects over the next two years and beyond could be bleak, that an elected assembly, which would by then have been working for two years, will come to an end, that we shall be at constant loggerheads with the People's Republic of China, that difficulties will occur with human rights and citizenship, and that trade between this country and China will worsen. I do not think that that scenario is likely. There are grounds for optimism.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) referred to the airport which is well under way. It is one of the most significant economic developments in not only China or Hong Kong but the world. The right hon. Member for Mid-Sussex referred to the thriving Hong Kong economy. It is still the eighth largest trading economy on earth, still the world's busiest container port, Asia's main destination for tourism and one of the world's largest financial centres.
In March this year an opinion poll conducted by the Hong Kong Government found that 62 per cent. of respondents believed that the colony would remain stable. One can add to that the fact that some moderate voices are emerging in China itself. In a speech on Hong Kong and its relationship with China, a member of the Chinese politburo, Li Ruihan, said:
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"When you do not understand something you may damage it, by trying to improve it."Things are changing in China itself.
The right hon. Member for Old Bexley and Sidcup talked of the need to be positive in the next 800 days. Last night the Chines ambassador talked of co-operation and consultation replacing confrontation. We must all ensure that our efforts are aimed at bringing about stability and harmony after 1997. That must be the most important single objective of all hon. Members and of those who govern Hong Kong.
9.34 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Alastair Goodlad): I begin by welcoming the hon. Member for Torfaen(Mr. Murphy) to the Front Bench. I congratulate him on his appointment and on his speech --the first of many that, I hope, we shall hear him make from the Opposition Front Bench.
The debate has been a true reflection of the range and diversity of Britain's connections with China and Hong Kong. Having participated from the Back Benches in most of the debates on Hong Kong in years gone by, I welcome the deep knowledge and understanding shown by right hon. and hon. Members, especially members of the Select Committee so ably chaired by my right hon. Friend the Member for Guildford (Mr. Howell).
I have been greatly encouraged by the support from both sides of the House for the thrust of the Government's policies on China and Hong Kong, which was reflected in some extremely knowledgeable and, in some cases, distinguished speeches. That broad measure of bipartisan support is an important source of legitimate strength for Ministers and the Governor in their dealings with the Chinese Government and all shades of opinion in Hong Kong.
My right hon. Friend the Member for Guildford spoke eloquently of the dramatic changes in east Asia and their consequences for the United Kingdom. China, of course, is at the heart of those changes. In opening the debate, my right hon. Friend the Foreign Secretary described the strategic importance for Britain of our relationship with China. China has opened its doors to international trade and investment; it has allowed in the free market. It is now reaping the benefits of a booming economy. Of course there are problems and there will be more changes, perhaps to the system of government in China, but I do not share the fashionable pessimism that China may disintegrate, nor do I believe that anyone can turn back the clock on the reforms initiated by Deng Xiaoping.
We must continue to develop the profound and realistic relationship with China for the 21st century for which my right hon. Friend the Foreign Secretary called last November. Nothing less would do justice to the interests and responsibilities that Britain and China share as leading players on the world's political and economic stages. I am grateful for the endorsement that the House has given our efforts to maintain the momentum of that relationship.
When I visited Peking last July, I took part in the ministerial dialogue with China, which is an important part of our policy. I was able to see for myself, as have other hon. Members, the benefits that the open-door policy has created for the Chinese people and the
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opportunities that it has opened up for British traders and investors. I can assure hon. Members who have not been to China recently that if the statistics of China's recent economic expansion are impressive, the reality is even more startling.I believe that there is no sensible alternative for Britain to a policy of engagement with China across the range of our common interests, to which right hon. Friend the Foreign Secretary referred in his opening speech.
Several right hon. and hon. Members, including the hon. Member for Livingston (Mr. Cook), in his very thoughtful speech, echoed the concern about human rights expressed by my right hon. Friend the Foreign Secretary. I agree with my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) that we do not seek to lecture or impose extraneous values on the Chinese people, but we are deeply concerned about the abuse of basic human rights which have been accepted as universal. The protection and advancement of those rights must be a cornerstone of our policy.
The hon. Member for Rotherham (Mr. MacShane) seemed to think that the Opposition care more about freedom and human rights in China than others. I assure him that nothing could be further from the truth. We regularly raise those matters with the Chinese authorities. My noble Friend Lord Howe and his delegation visited China and made practical proposals for improvement that we urged the Chinese authorities to implement. We joined our European Union partners in raising those matters with the United Nations Commission on Human Rights.
Mr. MacShane: Can the Minister name the last Chinese citizen about whom human rights matters were raised?
Mr. Goodlad: My right hon. Friend the Foreign Secretary gave four names to Mr. Qian Qichen last week, and I did the same last year. That is a continuing process.
We aim not at confrontation but at establishing a calm and serious dialogue with the Chinese authorities. Only through dialogue can we hope to influence their practices and to encourage reforms. Several hon. Members referred to Tibet, where everything is extremely unsatisfactory. We are deeply concerned about human rights abuses in Tibet and threats to Tibetan identity. My right hon. Friends the Prime Minister and the Foreign Secretary have met the Dalai Lama, who is a most distinguished spiritual figure. We have urged the Chinese authorities to commence a dialogue with the Tibetans, without preconditions. I urge them again to do so--I am sure with the support of the House.
I do not want to give the House the impression that all our contacts with China are confrontational. I am grateful to my right hon. Friend the Member for Mid-Sussex (Mr. Renton) for drawing attention to the valuable co- operative work of the British Council in China and Hong Kong, which is making an important contribution to our trade and cultural objectives. I assure my right hon. Friend that that work will continue to have our full support.
I assure the hon. Member for Workington (Mr. Campbell-Savours) that we are conscious of the importance of promoting knowledge of China among young people. Many British universities already run
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Chinese courses, often including time spent in Chinese institutions such as Peking and Shanghai universities and Taiwan. As China's economic and political importance grows, more students will be attracted to acquire a deeper knowledge of China.My hon. Friends the Members for Corby (Mr. Powell) and for Romsey and Waterside (Mr. Colvin) made powerful pleas to consider our links with Taiwan. Like my right hon. Friend the Member for Guildford, my hon. Friend the Member for Corby drew attention to Taiwan's impressive economic success, high education standards and high savings rates. Equally welcome is Taiwan's steady development of democratic structures. I agree that those achievements deserve to be better known in this country.
Although we have no diplomatic relations with Taiwan, we actively promote economic, cultural and educational links. Eight British Ministers have paid private visits to Taiwan to pursue those objectives. British organisations in Taiwan have expanded and reorganised in the British trade and cultural office, which was until recently directed by Mr. Philip Morrice--to whom my hon. Friend the Member for Corby paid generous tribute. That office now has seven front-line commercial staff dedicated to helping British business men.
The Government already review links with Taiwan. We are determined to take all practical steps to expand our cultural and commercial interests there, and the record speaks for itself. Expanding exports, 9,000 students, and nine out of 10 manufacturing investments in Europe from Taiwan come to the UK: all that is impressive and welcome progress.
My right hon. Friend the Member for Guildford referred to the issuing of visas. One consequence of our policy of not recognising Taiwan as a state is that we cannot recognise the travel documents issued there as passports. Our practice, which is by no means unique, is to place our visas on a separate certificate of identity. I do not think that that can be seen as a serious impediment to the growth of our commercial links with Taiwan, which are flourishing, as are Taiwan's links with Japan, which has the same practice on visas. That practice in no way retards the issue of visas through the British trade and cultural office in Taipei, which is normally done within 72 hours. In view of the interest in the House tonight, I can assure my right hon. Friend that our minds are not closed. We keep the matter under review, particularly in the light of practice elsewhere. Hong Kong is, of course, at the heart of our relations with China. I have known Hong Kong well for most of my adult life and have a deep and abiding affection for the territory and its people, as have--as we have seen tonight--many other hon. Members. We are very alive to our continuing responsibilities towards the 3.5 million Hong Kong people who will continue to be entitled to a British passport. For reasons of self-interest and of decency and honour, the Government's first priority will continue to be to do their best by Hong Kong. Hong Kong's continued prosperity and stability are also very much in the interests of the People's Republic of China. We do not always see eye to eye on all aspects of the future of Hong Kong. Sometimes we have disagreed quite sharply, but we both share a strong interest in Hong Kong's success beyond 1997, on the basis of the joint declaration, to which we are both committed.
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Many right hon. and hon. Members referred to the development of representative government in Hong Kong. Nearly all, including, notably, the hon. Member for Livingston, approved of what we had done. The hon. Gentleman suggested, as have others, that the development may have been a little too late. I was not a member of the Government between 1974 and 1979, or, indeed, between 1970 and 1974, but I am sure that those who were responsible in those days had good reasons for their decisions.My right hon. Friend the Member for Old Bexley and Sidcup was sceptical about the development of representative government, but I cannot help noting that he has not always been so. When the House debated the joint declaration in December 1984, on the development of representative government within Hong Kong, he said:
"I agree with the right hon. Member for Leeds, East that we must do our utmost to achieve proper, working representative government there by the time the handover takes place, but I cannot agree with the right hon. Gentleman's comments about not rushing things. With only 12 years to develop representative government, the question of rushing or not rushing does not arise. What I believe will do more harm than anything is the suggestion, as the tone of the White Paper implies, that we are doing this rather grudgingly."
My right hon. Friend went on to say:
"Far greater than any danger of haste is the danger of not having fully representative working government with experience by the time the handover takes place."--[ Official Report , 5 December 1984; Vol. 69, c. 405.]
In fact, since we started negotiating with the Chinese early in the 1980s we have always proceeded in developing representative government in Hong Kong, in line with Hong Kong opinion. As the hon. Member for Livingston said, that opinion has been shaped by two major events: the negotiation of the joint declaration and what happened in China in 1989. The joint declaration provides that the Legislative Council shall be constituted by elections. The Basic Law is clear about the pace of increase in directly elected Members--20 in the first legislature, 24 in the second and 30 in the third--but, as my right hon. Friend the Member for Guildford made clear, we are now where we are.
There is no good reason for China to dismantle the electoral arrangements, which so clearly command the confidence of the Hong Kong community--as the turnout in elections hitherto has shown--the confidence of this House and the confidence of the Foreign Affairs Select Committee, which went into the matter thoroughly.
My right hon. Friend the Member for Old Bexley and Sidcup referred to the 1990 exchanges on constitutional development. The exchanges between Britain and China in early 1990 did not add up to an understanding about political developments in Hong Kong. We released the texts of the relevant exchanges in 1992. They showed that there was no such agreement, that we were dissatisfied with China's proposals for the number of directly elected seats on LegCo and that there was no consensus between us on the composition of the election committee.
The exchanges were inconclusive and, therefore, left us free to make our own proposals, consistent with the Basic Law, the joint declaration and the agreements and understandings between us--and that we did, for discussion. It is a matter for regret that after 17 rounds of talks it was impossible to reach agreement.
There is no hard evidence of China discriminating against British business interests. British exports to China increased by 72 per cent. in 1993 and by a further 14 per
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cent. in 1994. This country is the largest European Union investor in the PRC. Vice-Premier Qian Qichen only last week underlined to us the value of our bilateral trade links and the complementarity of the two economies. Chinese leaders have continually emphasised in public that there would be no discrimination against British business. To do so would be outside the terms of the China-European Union co-operation agreements and the spirit of China's World Trade Organisation application. I hope that no one in the House will accuse those Chinese leaders of bad faith when they continually repeat that there will be no discrimination against British business. The hon. Member for Rotherham suggested that the Governor should be here for this debate, as the Minister for Hong Kong. My right hon. Friend the Foreign Secretary and, I suppose, the Government would be surprised to hear the Governor described as a Minister; indeed, he might have difficulty gaining access to the House. However, I want to take this opportunity to join in the tributes paid to the Governor from both sides of the House. He is an enormously distinguished Governor of Hong Kong--the best whom we could possibly have. The Government fully support the Governor in carrying out his important task. I know that the House joins me in extending support to him. He has been performing his duties in Hong Kong with the skill and the energy that we would all expect of him. Indeed, earlier today he was doing his democratic duty by answering questions in LegCo. My right hon. Friends the Members for Old Bexley and Sidcup, for Mid-Sussex and for Guildford and the hon. Member for Livingston all mentioned the Court of Final Appeal. We have always said that we want to establish it on the basis of agreement with China. Expert talks on the Bill are under way in Hong Kong, both today and tomorrow. We continue to urge China to give its early support to the Bill, which would implement the 1991 agreement. We are going the extra mile in an attempt to reach agreement, but we and Hong Kong cannot wait for ever for it to be enacted.The hon. Member for Livingston expressed concern about wastage in the public services. My hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) expressed concern about corruption in Hong Kong, as did my hon. Friend the Member for Eastbourne (Mr. Waterson) and others. I know that the whole House will join me in paying tribute to the integrity and efficiency of the public services in Hong Kong, especially the civil service and police. I reassure the House that wastage rates are low, but a number of officers may leave the civil service before 1997 owing to localisation, and others in Hong Kong will be entitled to retire before 30 June 1997. The Hong Kong Government have made plans to ensure that any vacancies that arise are filled by capable and experienced officers.
The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) rightly urged us not to leave behind in Hong Kong emergency powers that a future regime could abuse. He will be pleased to know that the Hong Kong Government are reviewing their emergency powers as part of the on-going review of laws that might affect press freedom. Those laws involve complex issues and need careful study, but the Hong Kong Government are committed to completing the exercise before 30 June 1997.
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Several right hon. and hon. Members, including the right hon. Member for Tweeddale, Ettrick and Lauderdale, and the hon. Members for Rotherham and for Ilford, South (Mr. Gapes), raised the application to Hong Kong of the international covenants on civil and political rights, and on economic, social and cultural rights. We are clear that China has an obligation under the joint declaration to ensure that provisions of the international covenants, as they apply to Hong Kong, remain in force after 1997. The obligation includes the requirement to report to the United Nations.We have made our views clear to China. In November, we explained our position to the committee on economic, social and cultural rights. One way to implement the reporting obligations would be for China to accede to the covenants in respect of the whole of its territory. We would welcome Chinese accession and we have said so to China. Alternatively, it would be feasible for China to assume the reporting obligations under the covenants in respect of Hong Kong only. We shall continue to work for a satisfactory resolution of that issue.
As my right hon. Friend the Foreign Secretary said, the Hong Kong Government are committed to an on-going programme to amend laws that affect press freedom. We support that commitment, as do my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) and others. Nine provisions of three Ordinances on broadcasting have been amended. One provision of the summary offences Ordinance has also been amended. A Bill has been introduced in LegCo to amend seven more provisions in two Ordinances. Out of 41 legislative provisions that needed amendment, the Hong Kong Government have already acted on 17, and amendments to a further 11 provisions in seven Ordinances will be introduced in May.
The right hon. Member for Tweeddale, Ettrick and Lauderdale and the hon. Member for Ilford, South
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mentioned ethnic minorities in Hong Kong. I assure the House that the position of ethnic minority British dependent territory citizens who have the right of abode only in Hong Kong is secure. The joint declaration on the Basic Law provides for their right of abode in Hong Kong after 1997. The Government have given the commitment that if, against all expectations, members of the non-Chinese ethnic communities ever come under pressure to leave Hong Kong and have nowhere else to go, the Government of the day would consider with considerable and particular sympathy any request for admission to the UK.Other hon. Members raised the issue of the wives and widows of ex-service men in Hong Kong. The Government recognise the special contribution made by ex-service men; hence the special arrangements made to allow their spouses, to whom the Home Secretary has written individually, unrestricted access to the UK. No scope exists under nationality legislation to grant them citizenship while they remain in Hong Kong.
The next few years will be momentous ones for China and Hong Kong. For both, they will be years of transition. In China, there will be political and economic changes that will determine that country's course and character in the early decades of the next century. The world will be watching to see how the high promise of "one country, two systems" is turned into reality.
I have no doubt that Hong Kong's continuing prosperity and stability are there to be secured, but it will be for the present and future sovereign powers, separately and jointly working more closely together, to achieve that. Her Majesty's Government intend to co-operate fully with China in bringing about a smooth transition. We intend to stick by Hong Kong through the next 800 days and beyond. We shall remain committed to Hong Kong, as my right hon. Friend the Member for Guildford has said, up to and beyond the transfer of sovereignty.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
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Education (Staffordshire)
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Lightbown.]
10 pm
Mr. William Cash (Stafford): The issue of education is of critical importance to the future prospects of our children and to the quality of our national life for generations to come, both economically and culturally. It should not be used as a political football. I have asked for the debate because we need to set the framework of a balanced analysis of the state of education in my constituency. Because it is a function of Staffordshire county council, the circumstances of my constituents are determined by the education policy decided by the Labour county council in the broader national education context.
There are many excellent teachers and schools in my constituency, and we must do all in our power to offer pupils the best education that can be provided, with the help of parents, teachers, head teachers and governors.
I do not disguise my concern, which I have made clear in the past, about the way in which standard spending assessments and area cost adjustments work to the disadvantage of some counties such as Staffordshire. The 1994 new earnings survey suggests that average overall earnings in the south- east are 24 per cent. higher than they are in the west midlands. Within the south-east, earnings are higher still in Greater London, but, even excluding London, earnings in the rest of the south-east are 12 per cent. higher than in the west midlands.
One of the factors used in calculating the standard spending assessment is the area cost adjustment, which assumes that authorities have to match the rates of pay in competing occupations if they are to recruit and retain the staff whom they require. For example, the standard spending assessment for Surrey, whose population is about the same as that of Staffordshire, is increased by £60.7 million.
It seems reasonable to point out that there is a common pay spine for teachers throughout the country, and there is little competition between their employers and those in the general labour market. Similarly, people pay about the same in interest rates and mortgages, although houses generally are less expensive in the west midlands than in the south-east. I cannot suppose that food and other such items cost less in supermarkets and shops in the west midlands than in the country as a whole.
According to an independent analysis that I have received, details of unit cost expenditure in schools for 1992-93 suggest that teaching staff costs in Staffordshire are no lower than in the counties outside London that benefit from the area cost adjustment. It seems that the balance between counties such as Surrey and counties such as Staffordshire needs to be corrected.
There is also the question of the broad link between the public sector borrowing requirement and the SSAs. While we were suffering the worst effects of the exchange rate mechanism, to which I was so opposed, our PSBR rose to £50 billion. As the Government wish to reduce the PSBR, they also seek to limit public expenditure. Hence, control of public expenditure is mirrored in a tight settlement for local authorities. However, I was heartened
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to note that the Secretary of State for Education recently gave a strong hint that there will be extra money for schools in the November Budget, so things seem to be looking brighter.Staffordshire county council recently gave us a final comparison for SSA per secondary pupil in 1994-95. That gave a figure of £2,679 for Surrey, including an additional area cost adjustment of 11.6 per cent., whereas the figure for Staffordshire was £2,398 per secondary pupil. Staffordshire has no area cost adjustment, and has a capping limit of only 0.11 per cent. above its SSA. It concluded that spending more than its SSA on education could be achieved only by spending less on other services--or, crucially, the council admits that it could spend more on education by using reserves and balances.
We are given to understand that in Staffordshire there are reserves of about £60 million. Those are uncapped, and it seems that they could be used for education. Why are the reserves so high, and why are they not used to prevent the prospective loss of teachers from the schools in my constituency?
The director of education recently wrote a letter saying that £7.5 million from the reserves would be used. Why is more not being used? He sent me a table showing the schools in my constituency which he says are likely to lose staff. Those include the loss of 1.9 teachers at St. Lawrence, Gnosall, 1.6 at Tillington Manor county school, 1.3 at Blessed William Howard and as many as 5.3 in Sir Graham Balfour. Those and other losses seem avoidable.
Staffordshire's education standard spending assessment for 1995-96 has been set at £348.79 million, which is 1.2 per cent. higher than the equivalent figure in 1994-95, in line with the national average increase. Under local management of schools, Staffordshire is obliged to delegate control of much of the money that it allocates for schools to the governing bodies of those schools. That is done under the general schools budget. In 1994-95, Staffordshire's GSB was the worst of any county. This is unacceptable.
We also find that we have the third lowest amount of money delegated to school level of any county, with an aggregated schools budget per pupil of £1,570, compared to £1,700 in Surrey. It seems that the county council is allocating too much for non-teaching matters. Is it possible that the county is putting money into reserves for transfer to Stoke-on- Trent when local government reorganisation takes place? Does it not still have a wholly disproportionate amount of money allocated to nursery school education in Stoke-on-Trent compared to the rest of the county put together?
Some years ago, I raised that matter with the district auditor, and I discovered that the differential is as much as 5:1, which he strongly criticised as unfair to parts of the county such as my constituency. I hope that taking Stoke out of the county, for which I have long campaigned and which is due to happen thanks to Government policy, will help to redress the unfairness that was revealed. Even allowing for the problems posed by the SSA and the area cost adjustment, there can be no excuse for the deplorable results and pupil-teacher ratios in Staffordshire. In 1994, only 38.1 per cent. of 15-year-olds in Staffordshire obtained five or more GCSE grades A to C, compared with the national average of 43.3 per cent.
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The performance at A-level was also below the national average. We have the second worst pupil-teacher ratio of any county, which in January 1994 was 19.75.In the latest survey of counties showing those who have left school with no results at all, Staffordshire ranked the fifth worst. For class sizes, Staffordshire is below average. Its primary schools have an average class size of 27.7 children, whereas in England as a whole it is 26.9. In secondary schools, the average is 22.1 children, whereas for the whole of England it is 21.4. Is it the case that the county pursues a policy of hardly ever, if at all, sacking bad teachers?
The Labour county council has much to answer for. It simply is not possible for it to explain all that away by reference to the SSA and area cost adjustment. The local government elections on 4 May may be elections for boroughs and districts, but it should be remembered that the county, the Labour county council, is responsible for 90 per cent. of the council tax bill which is demanded of our ratepayers and our voters.
The voters should not overlook that, especially as the excellent Conservative Stafford borough council is reducing its share of the amount that it calls on for the council tax, whereas the county, the Labour county council, is increasing its amount of precept by £17, and the education costs of the county are approximately 70 per cent. of its overall budget.
I am seeking meetings with the county education officers, parents, teachers and heads to address the crucial issues affecting my constituents and to try to work out a balanced and objective solution based on facts and analysis. I well remember that, in the run-up to the 1992 general election- -my colleagues and other Conservative Members of Parliament in Staffordshire remember it extremely well too, because some of them received as many as 2,000 letters--Opposition parties created great fear throughout my constituency and elsewhere about school budgets and loss of teachers.
Yet, at the end of the financial year in question, the county had £10 million left over in its education budget. It cannot be allowed to do that again. It must use the money it has in reserves and otherwise to better effect. I await its response with interest, and that of the Minister.
What none of us wants, and what must not be allowed to occur, is a spate of unnecessary and damaging strikes. I appeal to all those in my constituency to look at the facts, weigh up the arguments and press the Labour county council to release more money from its reserves.
I shall continue to press the Government to revise the standard spending assessment, and I appeal to the teachers to repudiate strike action or similar activities that would damage education in my constituency.
10.10 pm
The Parliamentary Under-Secretary of State for Schools (Mr. Robin Squire): My hon. Friend the Member for Stafford (Mr. Cash) has donea service to his constituents and to everyone living in Staffordshire in drawing the attention of the House to his concerns about education in the county. He was supported, albeit in the silent role befitting his senior Government Whip position, by our hon. Friend the Member for Staffordshire,
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South-East (Mr. Lightbown), although I could sense that my hon. Friend the Member for Stafford was drawing great strength from that strong, brooding, silent presence.In particular, my hon. Friend the Member for Stafford did well towards the end of his speech to remind the House of the track record of Staffordshire some few years ago. In the words of one or more of my Home Office equivalent Ministers, it has "previous" in this respect, and it was wise of my hon. Friend to have put that on record.
My hon. Friend expressed concern about the level of resources made available by Government for education, so I make it clear from the start that, as far as education expenditure is concerned, Staffordshire county council, like every other local authority, is responsible for setting its own budget and deciding its priorities between, and within, services. The council has the final say on how much is spent on education and how much is spent elsewhere. My hon. Friend said that Staffordshire has been forced to cut millions of pounds from its education budget in the current financial year. There is no reason why that should happen. The Government have provided for Staffordshire's education standard spending assessment to increase by 1.2 per cent. this year and, under the capping rules, it can spend 0.5 per cent. more in 1995-96 than in 1994-95. In total, Staffordshire is able to spend more than £582 million on all its services.
What does talk about cuts mean? The county council is not cutting what it is spending: it is drawing up a shopping list of additional spending and then cutting back on what it would ideally like to spend, if it could buy all the items on that list. Everyone in the public sector and in business faces the same problem, and the solution is to become more efficient. To say that there must be cover for all salary, price and volume changes is as inappropriate as to say that there is no scope for efficiency gains.
It is not unreasonable for Ministers to expect authorities to help fund education by becoming more efficient. Authorities continue to spend vast amounts of money on running their education departments. The recent Audit Commission report found scope for saving more than £500 million on the pay bill of local authorities' administrative and clerical staff. In addition, in a previous report, it found scope for saving more than £30 million by rationalising special schools. It is also not unreasonable for the Government to expect schools to use their balances or reserves, as my hon. Friend said, where appropriate, to help to offset the cost of providing education.
No information on individual school balances at the end of 1994-95 is yet available, but at the end of 1993-94, primary schools in Staffordshire had balances that amounted, in total, to 5.03 per cent. of their budget shares, while secondary schools had balances of 3.07 per cent. Although I accept that those are lower than the national averages in each case, in total they are still substantial amounts. Schools need to consider what they should sensibly hold as a result of planning, not simply by chance. They cannot easily complain that they were underfunded during that time.
If reserves are not available for particular schools, they need to pay special attention to their management of resources. They may, however, also wish to suggest to the authority that its local management of schools scheme might be amended for future years in order to change the distribution of funds.
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Authorities have scope for efficiency savings by seeking a better balance between supply and demand in school places. The level of surplus capacity across the country is still too high, and there is therefore still scope for authorities to remove surplus places. In Staffordshire's case, the authority reported more than 20,000 empty places in primary schools in January 1994. That is nearly one fifth of the total number of primary places in the authority. I accept that in Staffordshire, as in other authorities, not all of those places are removable. Some are needed for rising pupil numbers; to allow for parental preference; and to ensure that schools are accessible, particularly in rural areas.Even allowing for those factors, however, the level of surplus in Staffordshire is projected to remain high. On that basis, we are discussing with the authority what scope there might be to reduce surplus capacity, and to do so in ways that could release funds to be spent on pupils and not on unnecessary buildings. I know that my hon. Friends who represent Staffordshire understand and accept that approach.
I know that Staffordshire schools, like schools in other areas, will be concerned about meeting the cost of the teachers' pay award. The Government accepted the teachers' award of 2.7 per cent. on the recommendation of the independent School Teachers' Review Body. The review body acknowledged the fact that financial provision had been set on the basis that pay increases should be offset, or more than offset, by efficiency gains and increased productivity. For instance, authorities that make savings on some services can spend more on others without infringing the capping criteria.
The Government have acknowledged that the current settlement is a tough one, but many authorities have been able to achieve an increase in their budgets--including all Conservative ones--which matches or outstrips the teachers' pay award. They have said that they are meeting the pay award in full.
It is worth making the point that, although a number of local authorities claim that they cannot afford the teachers' pay award, they reached a voluntary pay settlement of more than 2 per cent. for clerical and manual staff. Of course I acknowledge that the award will place local authority budgets under pressure. The House will recognise, however, that local authorities are large and financially complex organisations, and they have a variety of means to realise the efficiency gains that are needed.
The Government consider that teachers thoroughly deserve this increase, in recognition of the excellent work they carry out in raising standards in our schools. Governors, teachers and parents, as well as the Government, are entitled to look to local authorities to give priority to front-line services, such as schools. I hope that Staffordshire county council and all others will do so.
During the consultations on teachers' pay for this year, many people expressed anxiety about the level of funding for schools next year--1996- 97. As my right hon. Friend the Secretary of State for Education has said, that is an issue that Ministers collectively will be considering in the next public expenditure round, leading up to decisions to be announced in November.
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It is, of course, not possible to predict the outcome, and inevitably there will be many competing claims. I can only repeat what my right hon. Friend said recently: she has listened carefully, and will take account of all the arguments and representations made to her about the funding of schools against the background of the Prime Minister's public assurance that education will continue to be at the top of our priorities as the economy delivers further growth. My hon. Friend properly highlighted Staffordshire's SSA, and I would be failing in my duty if I did not refer to it. I am certainly aware that Staffordshire's SSA per pupil is lower than the national average. As my hon. Friend will be aware, the SSA system sets out to provide funding for a standard level of service nationwide. Simple comparisons with other LEAs--even the LEA of my birth, Surrey--are not appropriate, because the costs of providing a standard level of education throughout the country vary.Some of the factors that need to be taken into account are the costs of educating children in sparsely populated districts, the costs of educating children in districts that are socially or economically disadvantaged, and the large labour costs in London and the south-east. It is inevitable, therefore, that not all authorities will have such large costs, or indeed special circumstances, as other LEAs. Therefore, the poundage per pupil varies from LEA to LEA. My hon. Friend referred specifically to the area cost adjustment. Coincidentally, as I told the House last week in a debate of some similarity, that is perhaps the most controversial aspect of the SSA system, although it allocates only about 4 per cent. of the national total of education SSAs.
None of the local authority associations questions the need for an area cost adjustment; only the way that it works is at issue. It is intended not to favour, so to speak, specific authorities, but to compensate them for the necessary additional labour and other costs that they must meet in delivering a common standard of service. That means not only teachers' salary costs, but all staffing costs. In addition, the costs of rates are greater in the south-east and in London, and LEAs in those regions have even argued that there should also be an uplift for greater rental costs.
If it is any consolation to my hon. Friend and his constituents, as he will have gathered from that last comment, the area cost adjustment is as unpopular in London and the south-east on the ground that it delivers less than it should, as it is obviously unpopular in regions such as my hon. Friend's for the reverse reason.
My hon. Friend is also rightly worried that standards of education should be maintained and improved. There is no evidence that a small SSA per pupil affects the standard of education or the ability of an LEA to deliver that education. For example, in Stockport, which receives less per pupil in its SSA than Staffordshire, 48.6 per cent. of 15-year-olds gained five or more GCSEs at grades A to C--that is the 11th highest result nationally. Staffordshire, by comparison, as my hon. Friend said, is ranked 58th, with 38.1 per cent. of 15-year-olds gaining five or more A to C grades.
There is a similar pattern with post-16 results. In Stockport, the average point score for pupils taking two or more A or AS-levels is 18.8, which is the third
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