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Despite the Secretary of State’s speech betraying to a large extent his origins in the Treasury, given its focus on public expenditure and other matters, we have not heard much so far about the issue of child poverty and its centrality to the Government’s objectives. The pre-Budget and spending statement yesterday included some large items of expenditure and revenue-raising, on inheritance tax and non-domicile tax, and the Chancellor gave the impression that something significant was happening on child poverty. But, as ever, the documents show an enormous gap between what the Government say they are doing on the child
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poverty agenda this year, next year and the year after, and what they are actually doing. The additional expenditure in the pre-Budget and spending statement amounts only to about £30 million in the coming year and £60 million beyond that. Will the Minister therefore indicate to what extent the Government retain a genuine commitment to meet the 2010 child poverty target, which the current policy steps do not come close to matching?

Will the Minister also confirm which Department is taking a lead on the issue? Many of those who are concerned about the children’s agenda, particularly the child poverty lobby, are worried about the apparent lack of a lead Department on child poverty. In the documents released with the spending review and the pre-Budget report yesterday, I read that the Treasury is now taking a lead role on the matter. How will the Department for Work and Pensions and the Department for Children, Schools and Families integrate with the Treasury?

Ms Angela C. Smith: In Sheffield, the capital investment budget for the next three years is more than £80 million, which is a long way from the single figure investment in 1996 for the whole city. Does the hon. Gentleman not acknowledge that investment in our schools and creating decent places for children to learn in are an important part of raising attainment and tackling poverty?

Mr. Laws: I am grateful for the hon. Lady’s point, which takes me on to the next section of my speech: funding issues. Before I address that question, I remind the Minister that we seek clarification of which Department is taking the lead on child poverty, and how his Department will work with that lead Department.

I accept the hon. Lady’s point that capital expenditure in schools has been transformed since 1997, and there is not a head teacher in the country who would say anything else. Again, however, there is a gap between the Government’s spin on the issue and the reality. We heard from the Chancellor in his statement yesterday that the additional capital expenditure would mean a new primary school in every local area. My heart leapt at the possibility that south Somerset or perhaps even Yeovil might benefit. Only when we look at the detail of the statement do we discover that “local area”, for me, means Somerset. Therefore, out of the 250 schools, Somerset will get one additional one.

Jim Knight rose—

Mr. Laws: Is the Minister going to announce that he has Yeovil in mind?

Jim Knight: I could talk about the 490 per cent. increase that Somerset will have received by the end of the spending period, compared with 1997, or the £88.6 million that that represents over the period. Is the new building that I am about to open in Yeovil in a few weeks reality or spin?

Mr. Laws: My point was about the statement made yesterday, and I think that the Minister is agreeing with me by trying to shift the ground of the debate. One new primary school in each county is not quite the same as
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one in every local area. He is always welcome in my constituency, both to open new schools—I did not appreciate that he was coming, and I hope that he was going to give me good notice; he has now—and at other major establishments. The Secretary of State would also be more than welcome.

The Secretary of State, who has been intimately involved in the Treasury and public expenditure matters for a long period, will want to appreciate that although funding has seen an enormous step change since 1997—or, more accurately, 1999, but I will not revisit earlier arguments—which has led to a big improvement in school funding, as all head teachers recognise, the schools budget is now entering a much tougher period. The figures for the rate of increase in the schools budget were tweaked a little yesterday, and those of us who are suspicious about such matters will notice that they were increased to the extent of the last decimal point to allow the Government just about to deliver on their pledge to increase the share of education spending in GDP—we were dangerously close to a period in which that would contract. Education expenditure will, none the less, grow far less rapidly—perhaps half as rapidly as it has since 1999—which will lead to a much tougher position for schools, especially in catering for the pay increases that will necessarily take place.

We have also had the rather ludicrous and meaningless pledge from the former Chancellor, now the Prime Minister, on schools funding—to increase the level of per pupil funding in the state sector to that in private schools. That sounded fantastic until many of us discovered in the small print that it meant that the Government would manage in 2021 or 2022 to get state school per pupil expenditure to the level of that in the private sector in 2006, or 2005. At virtually all times in the history of our country, it must have been the case that those who were reliant only on the state sector were funded at the same level as those in the private sector 20 years earlier. [Interruption.] The Secretary of State mutters from a sedentary position. If he wants to correct me, I shall give way, but my understanding is that the Government are saying that it will take until 2021 for pupils in the maintained sector to have the same level of real funding as the private sector had in 2005-06. That is the rather meaningless pledge that they made.

I make that point not only to demonstrate the weakness of the commitment but to urge a policy on the Secretary of State and the Minister. The Secretary of State has talked a lot about consensus today, and it might be possible to have some consensus about how school funding should be focused in the years ahead when the system has less money. There is quite a lot of magpie-ism in politics today, because three or four years ago my party proposed a pupil premium that would target the most deprived pupils and give them additional money that would follow them through the school system. Over the summer, the Conservative public services working group report proposed something initially called an advantage premium, which sounded quite like the pupil premium but was nothing like as generous in the details. Not only has the hon. Member for Surrey Heath had the good sense to
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try to pinch our policy, but he has shifted the name of his policy from advantage premium to pupil premium. I assume that he is aligning himself completely with Liberal Democrat policy on the matter.

Michael Gove: I hate to make the discussion an incestuous love-in between the two Opposition parties and exclude the Secretary of State, but I fear that he is excluded, because the policy in which we believe is indeed close to the hon. Gentleman’s, to that outlined by Professor Julian Le Grand, who advised the former Prime Minister—we used to have a reforming Prime Minister on education—and to that outlined by the right hon. Member for Darlington (Mr. Milburn) after he resigned from the Cabinet. There is a great deal of consensus; it is a pity that the Government are not part of it.

Mr. Laws: I am grateful to the hon. Gentleman for that comment, but before the love-in goes too far, I want to observe that I am not sure that his policy is quite the same as ours if it is the same as it was in the working group, which published its work over the summer months. My understanding of the Conservative party’s proposal is that extra funding for needy pupils would be supplied on the basis of pupils in “failing” schools. That would be a much smaller number than we have in mind and also appears to be funded by redirecting other moneys in the budget.

Mr. Graham Stuart: Does the hon. Gentleman agree that as well as having a pupil premium, the additional money that goes into an area because of increased deprivation should come with a pupil if he or she crosses a boundary—for example, when a pupil in Hull, near my constituency, comes to an East Riding school? Although the Secretary of State is not listening, I hope he will look again at the need to ensure that money that has been properly attributed to a pupil travels with that pupil if he or she moves out of the local authority area in which he or she resides.

Mr. Laws: I am sure that is right. I hope that the Government will develop their own policy on that. A deprivation review by the Government is considering how schools and pupils are funded. If the Government do not have any new money, it will be difficult for them to do anything radical, which is why we identified a new source of funding for the pupil premium by taking people out of the tax credit system.

Although there is a deprivation-related aspect in the existing formula, the way in which it is passed on to schools is opaque and inconsistent. Some schools with a large number of pupils with high levels of needs and deprivation are getting a lot of additional money to help them with the extra challenges involved, but many schools, especially in rural areas and in communities that do not have the deprivation that some of our other communities sadly have, do not have anything like the funding that they need to deal with the serious challenges that they face from pupils with high levels of deprivation, which is closely linked to poor educational performance.

Andrew Gwynne (Denton and Reddish) (Lab): The hon. Gentleman raises an important point about funding. Why does he think that Stockport
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metropolitan borough council, one of the local education authorities under his party’s control, is so reluctant to spread a greater share of the resources that it has at its disposal to the more socially deprived areas of the borough, such as Reddish?

Mr. Laws: Given that Stockport is a Liberal Democrat-controlled local authority, I am sure it is doing the best that it can with the money given to it by the Government. My argument is that additional sources of funding should go into the pupil premium and that it should target deprivation wherever it is. Given that there appears to be the possibility of a consensus, that the Secretary of State has a review of deprivation-related funding, that his Department is making it an even more explicit policy objective to narrow the gap between pupils with high deprivation characteristics and the rest of the school population, and that the major effect of increasing expenditure in terms of its impact on results seems to be felt by those pupils with high levels of needs and deprivation, I hope he will widen the review to do something a little more ambitious.

I also hope that in the context of funding, the Secretary of State and Ministers in his Department will continue to do what they have been seeking to do over the past couple of years and address the continuing funding gap between the schools and further education sectors. Some modest progress has been made towards that, but there is still a long way to go.

Andrew Gwynne: I do not wish to press the point too much, but the issue is not that Stockport, a prosperous borough, should have more; it is that Reddish, which is a more socially deprived part of Stockport, should get a greater share of the resources that Stockport has at its disposal. Stockport constantly says that it should have equal funding with Manchester city council and Tameside metropolitan borough council, two more-deprived neighbouring authorities. That is nonsense. Does the hon. Gentleman not agree, however, that Reddish and other socially deprived parts of the borough should get a greater share of Stockport’s very generous allocation?

Mr. Laws: As the hon. Gentleman makes his point in a serious way, I will reply in a serious way. He would not expect me to be an expert on the level of per pupil funding in Reddish, but if he and his colleagues adopt the policy that I am trying to persuade them to adopt in their magpie-type mode, it would deal with the problems that concern him.

Ms Angela C. Smith: The hon. Gentleman seems to be arguing for an overall increase in the Department’s budget nationally. How would his party pay for that?

Mr. Laws: We published proposals on that in July. We would take more people who are higher up the income distribution scale out of the tax credit system. The tax credit system is ludicrous. Tax credits are designed to help those in the greatest need, yet they go to people 90 per cent. up the income distribution scale. I am sorry to say that our proposals have not been given enough publicity to attract the hon. Lady’s attention. I am happy to send them to her. Our proposal would take money, within a tight and
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constrained public expenditure round, from those people who should not be the priority of a Labour Government and give it to those who should be in terms of educational opportunities.

Ms Smith rose—

Mr. Laws: I shall give way to the hon. Lady, assuming that she is about to make a serious point.

Ms Smith: Only to say that there is a big black hole in the hon. Gentleman’s spending plans, which would not help children to raise their levels of attainment.

Mr. Laws: I think that the hon. Lady thought up her supplementary question before listening to my answer. I am happy to send her all the documents. If she wants to criticise our proposals on tax credits, that is legitimate, but she cannot claim that there is a black hole, because there is not.

May I also press the Minister for Schools and Learners to say a little more about standards and structures, which the hon. Member for Surrey Heath touched on? There clearly has been a significant change in Government policy. As the hon. Member for Surrey Heath indicated, in one of his last education speeches the former Prime Minister, Tony Blair, said that

In the Secretary of State’s first statement, he turned the situation around and said that it would all be about standards rather than structures. He went back to 1997, 1998 and 1999. That has left people rather baffled about what message the Government are trying to send out.

Does the Department have a clear and coherent policy on whether it is in favour of reform and changing structures to drive up standards? On the one hand, the message that it is sending out is that there has been a change—a break from the Blairite years, more focus on standards, and less obsession with structural change. Indeed, the Minister’s reply in July contradicts the Labour party’s manifesto position on wanting every maintained secondary school to become an independent school.

On the other hand, we have all these nods and winks from Ministers to those that they want to keep onside that there are no changes. On the day before the Secretary of State’s first statement, an article in the Financial Times, a reputable newspaper, said that it had been briefed that the academies programme would be cut back and throttled— [Interruption.] It was not members of the Conservative party who said that; I fear that it was members of the Secretary of State’s Department.

There are nods and winks to the unions and others indicating that the position is changing; yet when the Secretary of State is challenged on the Floor of the House, he says, “No, no, no. We haven’t changed anything at all.” Are the Government trying to keep the same policy, but pretend to their Back Benchers and others that there is a change? Have we got the old policy, or are we moving to a new policy that goes back to the standards issue?

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Ed Balls: Does the hon. Gentleman not recall that in that statement to the House I announced a series of reforms that will mean that we can go faster and have more academies?

Mr. Laws: I do, but I recall a lot of other people telling me at the same time that the messages coming out of the Department, with a nudge and a wink— [Interruption.] The power of the hon. Member for Surrey Heath may be great, but it is not that great. It does not extend to some of the people that I have been talking to.

I think that the Secretary of State is maintaining that there is no change in policy, and he has loyally signed up to the Labour party manifesto position on independent secondary schools, despite the fact that the Minister for Schools and Learners has contradicted him in parliamentary answers.

I invite the Secretary of State to tell us why he chose, in his very first statement as Secretary of State, to say something about the standards versus structures debate that appears completely to contradict what the former Prime Minister, after his long experience, said was his belief about the way in which the education system should develop.

Ed Balls: I am happy to do so. It is good to have a serious debate about education policy.

In that statement I announced a series of changes, or reforms. I changed the £2 million funding requirement and the national curriculum requirement. I also said that the goal of structural change was not reform as an end in itself, but that reform was justified when it drove up standards. I believe the academies programme is doing that, which is why I support it.

Mr. Laws: That helps me to some extent, but the fact remains that the Secretary of State chose to say in his very first statement that he was going to put standards before structures. He is bright enough—easily bright enough—to know that what he was doing was contradicting the former Prime Minister. The former Prime Minister would never have said that structural change was an end in itself in which he believed for the sake of it. He said that he wanted structural change because it was the only way of driving up standards without flogging the system from the centre. The Minister for Schools and Learners nods, but the Secretary of State retains his slogan about putting standards before structures, so we are still a bit baffled.

If the policy is really unchanged, will Ministers make clear today what it is in the academy model about which they are so passionate? Is it simply that the Secretary of State wants to keep various people in the Department and retain the academy model so that he does not appear to be an anti-moderniser, or does he really believe in it?

Ed Balls: It is raising standards.

Mr. Laws: Ah! In that case, my supplementary question to the Secretary of State is this: what aspect of it is raising standards? Is it the flexibility that academies have, or some other aspect of the academy model? And when we have an answer to that question, may we know whether the flexibilities and freedoms
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that academies have perhaps—in the view of the Secretary of State—used to drive up standards will be extended to other schools or gradually throttled back, as some people, legitimately or illegitimately, fear?

The Minister pretends not to understand, although he understands very well. I am asking him, when he sums up the debate, to put clearly on the record why he is in favour of academies, whether it is their flexibilities that he welcomes, and whether he agrees with me that if those flexibilities are a good thing they should be extended to more schools.

Ed Balls: Will the hon. Gentleman give way?

Mr. Laws: Of course.

Ed Balls: I apologise for intervening on the hon. Gentleman again. I took only two interventions from him, and he has now taken three from me. But if he looks at a leaflet produced by the Newington Liberal Democrats in the summer of 2007, the Newington ward “Focus”, he will see this quotation from a Liberal Democrat councillor:

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