Let us remind ourselves of what has been achieved over the past 10 to 15 years. Between 1990 and 2005, the poverty rate fell from 46% to 27%—that is 400 million people lifted out of extreme poverty. As my hon. Friend the Member for Edinburgh North and Leith said, the mortality rate for children under five has fallen dramatically, from 12 million in 1990 to 7.6 million in 2010, but we must continue the effort to keep reducing that number. This year, we reached the millennium development target of halving the number of people without access to clean water, but further work remains to be done. Millions more children, particularly girls, in the developing world

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are going to school and getting the education that will help them to create a better and more prosperous future for themselves and their families. Reminding ourselves of those achievements is important, particularly when some people would prefer to imply that development assistance is not making a difference. Development assistance clearly has made and is making a difference, and those of us who believe that we must continue that effort need to continue to make those arguments.

We have also made great strides in improving aid effectiveness. We did so when we were in government, and I know that this Government have spoken a great deal about the importance of aid effectiveness and transparency. I encourage the vigorous pursuit of that agenda. We need to be able to have public confidence in the way public money is being used when, rightly, more and more questions are being asked about how that money is used to achieve the goals that we all seek.

There are economic pressures here at home and in other donor countries, and as my hon. Friend said, we see that budgetary pressure in the reduction in aid money for particular countries. That is why it is crucial that the UK, which has been seen as an international leader on those issues, makes the most of its position to put the case for continued commitment to the millennium development goals, learning from the things that have been successful and identifying the areas that we need to prioritise. That means that we need to see the Prime Minister carrying out a strong international leadership role through his position as chair of the UN committee that is developing the post-2015 millennium development framework.

As my hon. Friend and other hon. Members said, that is an important opportunity to build a genuine partnership between donor and recipient countries to ensure that development is being done not to countries or to people, but with those countries. We must keep the focus on sustainable development, not philanthropy and charity. There are great concerns that the emphasis on charity through Departments is not what developing countries and the people of the developing world need or want. They want development and self-sufficiency, and we need to play our part in ensuring that happens.

We call on the Government and the Prime Minister to ensure that the focus on empowerment, human rights and labour standards is maintained. It is worrying that one of the first things the Government did in their reviews was withdraw funding from the International Labour Organisation, which does a great deal of work to improve labour conditions in developing countries.

We also hope that the Government will continue to prioritise the other rights agendas, particularly women’s rights, which are integral to the post-2015 millennium development goals, and that there is a strong voice for women. In conflicts, we know that women face a great deal of violence and that rape is used as a weapon of war. It is important that UN Women and other such agencies are supported so that they are strong advocates for speaking up about human rights violations against women, both in conflict zones and, more generally, in developing countries. I ask the Minister to ensure that that is central to the Government’s response and to the Prime Minister’s work as chair of the UN committee, and that gender, equality, human rights and labour standards issues are not neglected or ignored.

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Sir Tony Cunningham: Does my hon. Friend accept that there is an interconnection with, for example, education? If we are to get more and more children into school, we need to address gender and disability issues.

Rushanara Ali: I totally agree. As my hon. Friend the Member for Edinburgh North and Leith mentioned, we need to highlight that issue. We also need to recognise that disability rights are anathema in many countries. We have a responsibility to share the learning on some of the things that have been successful in our country. The rights agenda goes beyond one group and includes those with disabilities and other groups that are particularly marginalised.

Despite economic growth in middle-income countries, we know that in countries such as, say, India there are still some 400 million people living on less than $1.25 a day and more than 800 million people living on less than $2 a day. There are important questions to explore on how we can enable countries such as India to do more for themselves while ensuring that we do not pull out our aid efforts, which would leave large numbers of people in more challenging, difficult circumstances.

We should continue to support efforts to lift those people out of poverty and, over time, allow those countries to take more responsibility. Although there are pressures on such middle-income countries, we need to ensure that our efforts and focus remain on the poorest. Even if the Governments of those countries do not act and respond to those challenges in the immediate future, we should work with them to enable them to do so.

Martin Horwood: I am grateful to the hon. Lady for giving way a second time. Rather than whether Britain should be giving aid to India and how many poor people we could help there, is not the important lesson from the Indian experience that, as Institute for Government studies emphasise, distribution is quite an important part of the sustainable development goal process?

India has achieved remarkable economic growth, but that has not benefited the whole population. As the hon. Lady points out, there are vast numbers of poor people still suffering in poverty in India. That is one reason why we should not hook the new sustainable development goals in too narrow-minded a way to economic growth. Instead, we should consider issues such as social justice and distribution, too.

Rushanara Ali: I agree. We should consider things more broadly and do more to overcome some of the simplistic critiques that those countries are doing well in some respects but are not addressing poverty and growing inequality. That is why we believe that the post-2015 millennium development goals should place greater emphasis on inequality. As the United Nations Development Programme stated, the lack of focus on inequality should be of great concern, because understanding the drivers of inequality can sometimes indicate whether a situation might lead to conflict, so the focus on inequality should be as important as that on poverty.

In countries with greater economic growth, there is a big question whether that growth is pro-poor. That is where the Department for International Development is making interventions through, for example, private-sector funding. The Minister must answer the question whether

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those interventions will create jobs and opportunities and generate income for the poorest. Does the DFID funding that is being channelled into countries such as India through the private sector meet the same accountability standards that we expect of non-governmental organisations and other recipients? Are the same kinds of standard applied and is there clarity on the monitoring of those measures? I hope the Minister can address that point as well.

If, in future, there is greater emphasis on channelling aid funding through the private sector—we are not averse to that in principle, but we need to know whether such investment is going to be about development and addressing poverty—that has to be looked at closely, and the monitoring arrangements have to be as rigorous as they are, or should be, in other sectors.

I want to focus on questions about what happens next. A key thing that needs to be looked at is how the post-MDG goals are developed. They must be considered in co-operation and consultation with the developing nations, and they need genuinely to be in the form of partnerships. We need to ensure that we are ambitious about tackling inequality as well as poverty, and the focus on economic development must be pro-poor. We have already seen that, even in countries where there has been a great deal of growth, not enough effort has been made to ensure that some of the poorest people are not left behind. More attention must be paid to that by ensuring that those countries play a bigger role in addressing the economic inequalities that have arisen, as well as by ensuring that we play our part to address those challenges.

The Opposition believe it is vital that, as we look to the post-2015 millennium development goals and what replaces them, we should not only recognise what has been achieved, but identify where the big challenges remain and ensure that we stay ambitious and aspirational about what can be achieved in the coming decades. We do seek to eradicate poverty over those coming decades, and if the international community has the will and there is international leadership—I hope the Prime Minister will take that role seriously—there is no reason why we cannot address and tackle poverty. It is important that we keep that momentum and maintain our efforts to tackle poverty and inequality.

I want to highlight a few key issues. First, I hope that the Government continue to keep to their commitment and start to deliver on increasing aid to 0.7% of GNI. I hope that that promise will be maintained. Media reports of the new Secretary of State’s comments about her belief, or lack of belief, in development have been worrying for many people in the developing world, as well as in the communities that work on those issues. I hope the Minister can reassure us that the new Secretary of State is still absolutely committed to this agenda and that the promise will be kept—[Interruption.] If I can have the Minister’s attention, I hope that the promise will be kept on that agenda.

Secondly, there has been a great deal of focus on issues such as tax avoidance, which the Government have said a great deal about, but we need to see action, because billions of pounds of public money and potential tax revenue are lost to developing countries, so I would welcome a response from the Minister on what his Government are doing practically to address that issue.

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My final point concerns climate change. The Government and the Prime Minister have said that they want to be the greenest Government ever. We need action, not just rhetoric. I hope that the Minister can shed more light on what will be done, both domestically —[Interruption.] If he will stop heckling, I hope he can shed more light on what will be done both domestically and internationally on the issue.

We introduced the 2008 Act. We hope that the Minister will work with his coalition partners to step up the effort on climate change. If we do not do more to support developing countries in the face of what is likely to be catastrophic for many sections of the population in some of the poorest countries, our efforts in development will be undermined. I hope that he can take this issue seriously and answer the questions seriously.

3.25 pm

The Minister of State, Department for International Development (Mr Alan Duncan): I thank the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) for securing a debate on such an important topic.

Securing global agreement on a framework that updates the millennium development goals is a priority for the coalition Government as we approach 2015. I welcome the broader parliamentary engagement that is occurring. The Government are pleased that an independent inquiry into the post-2015 development agenda has been launched by the International Development Committee. The Department for International Development is keen to work with the House on this topic. The inquiry provides an opportunity for key players to contribute their views on the post-2015 agenda, and I look forward to reading the final report.

The eight MDGs launched in 2000 have generated an unprecedented degree of global consensus on development and have also worked well as a communication and advocacy tool, both with the UK public and internationally. The framework has helped to focus people’s minds and efforts on tackling global poverty in terms of real, practical action. It has channelled actions logically and consistently and released the full effort of the world on the issues covered by the eight goals. As a focused set of targets and indicators, the MDGs have encouraged better availability and quality of data in developing countries, making it easier to increase the focus on results. We now need to build on that success.

In terms of how the world has done against the MDGs, the picture is mixed, as we heard earlier. We have seen unprecedented reductions in poverty rates, and achievement of the targets on increased access to safe drinking water and primary education. Progress has been slower, however, for nutrition, basic sanitation and child mortality rates, and maternal mortality is lagging a long way behind. The MDG framework itself has its doubters. One criticism is that the MDGs’ focus on results at the global level has masked uneven progress both between and within countries. The degree to which the set of goals has fitted closely with countries’ own development strategies has varied, and a number of critical issues were not covered, such as growth or conflict.

In some cases, the framework’s focus on quantitative results has skewed incentives—for example, the focus on measuring school attendance rates rather than the

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quality of education actually received by those who attend the school. As we approach the 2015 deadline for the targets set just over a decade ago, there is a big question to be answered about what should happen next. Unsurprisingly, there are a number of different views. An updated framework for development needs to build on success so far, while also addressing the weaknesses of the current MDGs. The world has changed significantly since 2000, so it is vital that any new international framework for development is able to reflect the new challenges and opportunities that we face both today and in the future.

Agreeing a development framework to replace the MDGs will be challenging. There are a number of intellectual challenges and debates around them that are both technically and politically complex. First, there are clear questions around what should be included in a post-2015 framework for development and how each issue should be measured. Given that some of the MDGs under the current framework are unlikely to be reached by 2015, some argue that the goals should simply be rolled forward post-2015. However, that would collide with the fact that a number of important issues such as conflict, corruption, poor governance and climate change were not included in the MDGs in the first place. Simply rolling forward the current goals would ignore the importance of quality as well as quantity in the development process.

Secondly, although this is covered in part by MDG 7, there is a view that the MDGs should be replaced by a framework focusing much more on environmental sustainability and not just on poverty eradication. Our ability to manage environmental risks and use natural resources sustainably is critical to increasing the living standards of the poorest people in the world, but would such a shift risk losing the sharp focus of the current set of goals?

Thirdly, there is an argument for adopting development goals that apply to emerging and rich countries as well as the poorest countries. The actions of the rich—for instance, on carbon emissions, which have been mentioned—should not perhaps be allowed to damage the interests of the poor.

Those debates are crucial for the poorest people in the world and must be addressed in any new framework for development. The UK is an intellectual leader on international development issues, and we have an important role to play. The Department for International Development has set up a new team dedicated to thinking about those issues and to engaging with international Governments, civil society, business and individuals.

More broadly, the process for debating many of the issues and deciding on an international development framework post-2015 is well under way. The UN Secretary-General has launched a high-level panel on the post-2015 development agenda; the panel will deliver a report by May 2013, making

“recommendations regarding the vision and shape of a post-2015 development agenda”.

I am pleased that the Prime Minister has been asked to co-chair the panel alongside the Presidents of Indonesia and Liberia.

The panel met in New York on 25 September. Subsequent meetings will be in London imminently, on 1 November, and in Monrovia and Jakarta early next year. The

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meetings will focus on development challenges at three levels. The London meeting will focus on poverty at the individual level, while the following meetings will tackle national challenges and international issues—in other words, people, then countries, then global.

The panel’s overall aim is to set out an ambitious new agenda for ending poverty in the years beyond 2015 while maintaining the simplicity contained in the current MDGs. The panel is clear that it does not want the new framework to focus on aid only. A new framework should focus on helping the poorest people get out of poverty and stay out of it. It should apply to very poor countries as well as to countries where aid plays a less important role, but where large numbers of poor people still live. It is not simply about handouts from rich countries. The panel wants its outcome to reflect a new global consensus on how development works and what matters in practice for success.

Alongside the panel’s London meeting next week will be a series of discussions with civil society, business and young people. It is a critical part of the panel’s work and is vital if its conclusions are to be taken seriously by the international community when the panel reports at the end of May next year. I reassure the hon. Member for Glasgow South (Mr Harris) that the process to support the Prime Minister in Whitehall involves a cross-ministerial team, with DFID, the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs all working together to enable coherence with the Rio+20 follow-up and the climate change agenda.

Mr Harris: While the Minister is on that subject, can he touch on the two-year delay so far in the Government’s setting up of the network of marine conservation areas? It has not received an awful lot of Government attention and I am extremely concerned about it, as are other Members. It offers a poor example to other developing nations when we lecture them on how to conserve marine areas.

Mr Duncan: I do not think that that is immediately relevant to the topic on the Order Paper for this debate, but it is an important issue, so I am happy to write to the hon. Gentleman with as much information as we have on that question.

The hon. Member for Bethnal Green and Bow (Rushanara Ali) discussed jobs and economic opportunities. I assure her that the issue will be addressed through a dedicated session during the panel’s meeting here in London next week. That panel will draw on this year’s comprehensive world development report by the World Bank, which deals specifically with jobs.

Although the high-level panel report is an important input into the international debate on the post-2015 framework, it is not the only one. The UN Secretary-General will produce his own report for the special session of the General Assembly next September. Numerous other forums are discussing the post-2015 development framework, but the UK Government will work hard to maintain coherence among the different processes.

To reply to some of the comments made earlier, the hon. Members for Edinburgh North and Leith and for Workington (Sir Tony Cunningham) both mentioned

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climate change. The Rio+20 meetings have established an open working group specifically to propose sustainable development goals, as that is another strand of the activity in play at the moment. On inequality, we must focus on the poorest and not just measure average success, which can disguise a lot of facts beneath a simple headline figure.

My hon. Friend the Member for Cheltenham (Martin Horwood) gave us a master class on how the MDGs might be broadened after 2015 by the introduction of some more thoughtful concepts of sustainable development. He said that they might include planetary boundaries and zones of ecological stress. [Laughter.] Although some might laugh, I assure him and the House that the team at DFID are very familiar with planetary boundaries, and particularly with the idea of doughnut economics, as it is described, which combines planetary boundaries with social minimums—in other words, the constraints of the environment with some of the basic needs of human life. I have to say that when it comes to doughnut economics, I prefer to keep it simple.

The hon. Member for Bethnal Green and Bow mentioned our withdrawal from the International Labour Organisation. I urge her to stop repeating her party’s mantra. Let me say it one more time so that she understands the decision that we took after the multilateral aid review. Our conclusion after considering the ILO was that its main activity does not coincide sufficiently with DFID’s prime objectives, so it is true to say that we have terminated our core funding, but we work with the ILO on a case-by-case basis in countries and on programmes where its work is useful for the elimination of poverty.

Rushanara Ali: On labour conditions, a number of people were killed in an accident at a factory in Pakistan, to use a recent example. There is a role for organisations such as the ILO or domestic organisations to campaign for basic human rights and working conditions to be maintained in garment factories, for example, in Pakistan, Bangladesh and many other countries. Does the Minister agree that development funding should support such organisations to ensure that people can go to work and expect to leave in safety without their lives being at risk? Surely he ought to agree that our efforts should support organisations that campaign to ensure decent labour conditions and labour rights and challenge companies to do the right thing and protect the lives of people at work.

Mr Duncan: No one questions the objectives that the hon. Lady has just outlined, which is why they are contained in the programmes and actions of DFID, and in all the bilateral programmes relative to such issues. That is why we have a pioneering initiative called RAGS, the responsible and accountable garment sector challenge fund, which covers employment conditions. Where the ILO can contribute to helping us in the field, we will work with it. However, where we get better value for taxpayers’ money working with other people, we will work with other people. It is on that case-by-case basis that we are happy to work with the ILO. Core funding given centrally does not represent value for taxpayers’ money.

Let me finish by saying a few words about what we hope the panel will achieve on the main topic of the debate. The three co-chairs of the panel believe that

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ending absolute poverty should still be the primary objective of any new framework for development. We hope that the panel can agree on that key message and rally support from Governments, citizens, civil society and business around the world.

The UK also believes that there are five principles that a new framework needs to uphold. First, poverty eradication should remain at the centre of a new global framework for development. Secondly, any new framework needs to speed up efforts to reach the targets in the current MDGs, and hold Governments to account for the promises that were made to achieve them. Thirdly, it should tackle the root causes of poverty, not just the symptoms. Fourthly, it must be based on, and take account of, the views of the poorest people in the world. Finally, simplicity is essential. The new framework should be bold and ambitious, but must maintain the clarity of the current MDGs.

I conclude by once again thanking the hon. Member for Edinburgh North and Leith for securing the debate. It is interesting, stimulating and important, and I am sure we will come back to it in the months ahead.

3.42 pm

Sitting suspended.

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Fuel Poverty

4 pm

Mr Frank Field (Birkenhead) (Lab): Some of our poor souls may be waiting for tomorrow for the big debate on fuel poverty. I hope that we will prove that they have missed the boat and that the real debate took place this afternoon, when the Minister announced precisely what the Government will do. Indeed, the Government need to announce what they are going to do after the difficulties into which the Prime Minister threw himself the other week. All of us who listened to or read what the Prime Minister said accepted that he was on to not only an important issue but the worry that most of us as consumers have that we have no idea what we are buying, let alone whether it is the best buy. In my parliamentary experience, that is very similar to the position that people face when trying to buy a pension. We could argue that buying a pension is somewhat different from heating our own homes, but there are certainly similarities between the industries, which make it difficult to understand what is the best and safest buy.

Today’s debate could not be better timed as a dry run for the Government, and I hope that the country can hear how they will respond to the Prime Minister’s special initiative. The day after he announced what he thought should happen, Ofgem in its wisdom responded—always well behind the curve—suggesting that if only people had enough information they would be able to make the right decisions. We all know, however, that merely providing people with information does not necessarily mean that they are informed or that, when informed, that information helps them to make the right decisions.

I want to sketch the size of the problem, what previous Governments have done to tackle the issue of people being cold in winter and what the Government could do today to make a break with the past, to extend a helping hand to some of our most vulnerable constituents and to get an issue behind them. The Government, among many other things, inherited a definition of people in fuel poverty—where the definition came from, which Mount Sinai it came down from, I do not know—which is those who spend more than 10% of their income on keeping warm. If we look at the detailed Government analysis of consumer expenditure, about 4.7 million people are technically in fuel poverty and, of those, 4 million are actually vulnerable.

In this debate and in the slightly bigger debate tomorrow, we need to look at how we have protected that group from dying unnecessarily in winter or from being unnecessarily cold. There were two previous schemes, of which the first was the voluntary social agreement, which ran from 2008 to 2011. Not much was wrong with it, except for three main disadvantages: people could be covered by the agreement but not on the cheapest rate, so they could be confused consumers and think they were getting the best deal, while being far from actually getting the best deal possible; the companies were allowed to decide who could apply, so they were the gatekeepers to their own scheme; and there was no link to an idea such as a social tariff, whereby people who were on it got the best deal that the company was offering. I want to return to the concept of a social

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tariff, because it is important if we are looking at how to move to the next stage of the debate and, moreover, how to help people.

The current scheme—to be charitable to the Government, I think that they inherited it—was to run from 2011 to 2015 and is called the warm home discount scheme. Under it, the companies again act as tax masters; they can put a levy on each of our bills and use the money to persuade people that they are helping them. Again, it is a brilliant scheme, except that we might expect a company paying a rebate to which the rest of us as consumers had contributed to give those people their lowest rate—far from it. Which? tells us that 75% of us—the figures are not broken down for vulnerable and other consumers—are not on the cheapest rate that we could be on, given the companies from which we buy our power. It is reasonable to suggest that the vulnerable might constitute 75% of that total. Therefore, probably 75% of those households, families and individuals who are helped by the warm home discount scheme are, on the one hand, getting a rebate paid for by the rest of us consumers and, on the other, paying it out in fuel bills that are unnecessarily high.

Anne Marie Morris (Newton Abbot) (Con): Has the right hon. Gentleman taken on board the issue of those who simply do not or cannot have a choice? I am thinking in particular of those on prepayment meters. Consumer Focus research has shown that, on average, those on prepayment meters pay £1,306 a year, whereas those on direct debit pay £1,222 a year. Many of those individuals are undoubtedly poor and have no choice, because they are rental tenants and do not have the opportunity to take up the Government schemes. Has the right hon. Gentleman given some thought to how to help those vulnerable people?

Mr Field: Indeed I have, but, sadly, what is important is not whether I have but whether the Minister has, because he is in a position to do something about it. The proposals that I will outline shortly cover that group as well, because they put the onus on the company, not on the individual or the landlord, thereby shifting the responsibility and, in that sense, the subsidy from us as consumers paying energy companies that oversell or overprice their products to companies having responsibility to offer everyone the cheapest rate if we fall within the vulnerable groups, which includes many of the people mentioned by the hon. Lady. The problems with the current scheme include the rebate on a bill that might not be the lowest possible bill. The core group of people who qualify for such help—there is also an extended group—is narrowly defined, and my guess is that many of the core group would not include those whom the hon. Lady was thinking about, because many of them are in their own properties, whether owner-occupied or rented, and have control of their meters, so they would not be subjected to the landlord practice of which she spoke.

Under the current scheme, we have a core group that qualifies and then an extended group that is still defined by the company—not by us or the Minister, and not approved by Parliament as one might expect, but by the companies themselves. They are still in the driving seat.

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The problems with the warm home discount scheme include getting a rebate but not necessarily qualifying for the lowest rate or being trapped in how to buy our energy and therefore paying through the nose. Although the bulk of the funding for the rebate comes from us, many of those who are vulnerable are outside the core group, even though the core group gets 75% of the money in the scheme.

I have a plea for the Minister, and I will give him piles of time to reply, so that we can probe him further. It is a proposal that he could adopt, that would give the Government credit and that would dig the Prime Minister out of the hole that he is in, thereby perhaps earning the Minister promotion. The other day, we saw his skill in defending what the Prime Minister said on the Floor of the House. How much easier life would be for the Prime Minister if he had a proposal that the Minister thought was workable and might carry some weight in the country!

My proposal is that the Government should insist that companies do not have a licence to sell fuel unless they offer their most vulnerable consumers their lowest rate, not an artificially lowest rate, but the lowest rate at which they sell fuel. Unless they have a loss leader, one assumes that they will make a profit on that lowest rate, so they would not be asked to act in denial of Mr Scrooge. They would even make money, although perhaps not as much as they might make from other people. That would cover the group to which the hon. Member for Newton Abbot (Anne Marie Morris) referred and about whom she is rightly very concerned, in that those in the vulnerable group—I will come to that in a moment—would have the right to be sold fuel at the lowest rate. Account would have to be taken of the fact that some people have meters and receive their fuel in various ways, but such a scheme would be simple, and everyone would understand it.

It is important that people understand whether they qualify. In another role, in another place, Mr Weir, you have often referred to cold weather payments and who is eligible and who is not. We could spend a lot of time having great fun thinking about other people who should be added to the groups that are defined as being eligible for cold weather payments. Most of us would admit that they cover the most vulnerable in our society, if not all the vulnerable. They cover 4 million of those who are likely to suffer fuel poverty.

Switching back to the beginning of my speech, I said that the Government’s own data show that 4.75 million people are in fuel poverty but that some of them, like some people on higher incomes, spend more than 10% of their income on fuel because they want to be ultra-warm, or do not think about it, but 4 million households in fuel poverty are vulnerable and would be covered by the cold weather payment definition.

My suggestion is that the Government could win applause in the House tomorrow by being the first Administration to introduce proposals that effectively deal with our constituents who, particularly during winter, are cold because they cannot afford to heat their homes properly—those who are most likely to die during the winter because they are cold and those who are simply waiting for the Government to act. Ofgem, in its brilliance, said yesterday or today that nothing in the regulations, the law or anywhere in this land could stop the Government announcing that scheme and compelling

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companies to operate it. With 17 minutes to go, I hand over to the Minister, who could put us all us out of our misery within a minute or two.

4.13 pm

The Minister of State, Department of Energy and Climate Change (Mr John Hayes): It is a delight to speak in this debate under your chairmanship, Mr Weir, and a delight to respond to the right hon. Gentleman, whom I congratulate on securing it. He is right that it is a trailer for tomorrow’s debate on the Floor of the House, but it is more than that because it is an opportunity for us to rehearse some of the important arguments. I do so mindful of the fact that he is an authority on these matters, whereas I am new to energy. However, like him, elevation of the people is central to my political mission, and I go further than many of our colleagues because I believe in the redistribution of advantage in society, as he does.

Redistribution of advantage requires knowing when the Government should act and when they should not, knowing when the Government need to step forward in some of the ways he described and knowing when stepping forward might obscure or limit opportunities to achieve that goal. Chesterton, whom I hope the right hon. Gentleman admires as much as I do, said:

“The honest poor can sometimes forget poverty. The honest rich can never forget it.”

I hope to be rich—I am certainly not at the moment—but I aspire to be honest, and I hope that I can deal honestly with some of the issues he raised.

The right hon. Gentleman is right to divide his remarks. Similarly, half of my remarks will dwell on what we can do to support the most vulnerable in respect of the cost of fuel, but it is also appropriate to talk about how we can change the character of demand and consequently deal with the other part of the equation. The big debate about energy sometimes neglects how to attune people’s demand for energy more precisely to their circumstances. That is the other part of what the Government can do.

I will deal with some of the specific points that the right hon. Gentleman raised. I often think that Ministers do not do so sufficiently, and I do not want to be accused of falling into that camp. He spoke about when the definition of fuel poverty emerged, and he will probably recall that it emerged in formal terms in 2001 as part of the UK fuel poverty strategy.

Before that, the definition came from a series of academic studies that began to look at how being fuel-poor was defined in relation to the average or aggregate spend on fuel in households. That was deemed to be around a median energy spend of 5%, which meant that if someone was spending 10%, the median would be doubled and they would be deemed to be fuel poor. The average spend on energy may have changed over time, and perhaps that is why we need to update our understanding of fuel poverty. However, that is the history.

I will say a bit more about the core group of poorest pensioners who lie at the heart of the warm home discount, which the right hon. Gentleman spoke about at some length. He was right to say that the measures we put in place must not be just about the provision of information, for provision of information alone is not enough. Some people with simpler minds than his believe

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that the provision of information and the exercise of choice are not only virtues in themselves, but automatically lead to virtuous outcomes. I have never believed that, never having been preoccupied with the concept of choice in those terms. The right hon. Gentleman may want to read “The Paradox of Choice”, which argues that sometimes not only does it not lead to a virtuous outcome, but it can positively inhibit virtue.

None the less, information matters to some degree. For example, there is a strong case for being clear about what information people should receive, and for making that information comprehensible so that instead of being presented with all kinds of different options and having to navigate a system that is ever more confusing, simplified information is provided to people about energy costs and bills.

A strong argument that has been put to me, and is part of what the Government have and will continue to consider, is that there should be some obligation, and that is consistent with what we have already done in our voluntary arrangements on energy suppliers. I wholly agree with the right hon. Gentleman that provision of information is not a sufficient end point, but it is part of the package, and we might agree that it is appropriate to address the issue.

By the way, none of my comments has been prepared for me by my officials. I would not want to be limited by that.

The other important point made by the right hon. Gentleman was that the mechanisms we devise to identify those with the greatest need must be as sensitive as possible to circumstances. Of course, that is partly because need is dynamic. People’s needs change—by their nature, they are not static—and to that end, there is a real opportunity to engage with some organisations that are experts in particular areas.

As the right hon. Gentleman will know, Age UK prepared a briefing for the debate and there are organisations that represent the interests of chronically sick people, who have profoundly significant energy needs, in terms of both heating and light. Disabled organisations and charities also need to be engaged in the process, and we need to be open-minded enough to draw in a number of sources to identify need. That is also true of Departments, and I shall cover that in more detail in a moment or two. It is important that we learn from the policy levers used by other Departments to alleviate poverty and that we share good quality information.

I turn to the warm home discount, which the right hon. Gentleman spoke about. We want to provide immediate assistance to those who need help with their energy bills and to help energy companies find vulnerable people so that they can be offered longer-term support. The four-year warm home discount scheme provides that help. Launched in 2011, it requires energy companies to provide help with energy bills to about 2 million low-income households a year, and it is worth about £1.1 billion over four years.

The energy suppliers are required to provide the majority of that support to pensioners on the lowest income. As a group, such people are particularly vulnerable to the ill effects of a cold home over winter, as the right hon. Gentleman highlighted. The characteristic of that group—I have also mentioned other groups to which

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this point relates, such as housebound disabled people and the chronically sick—is that, by nature, they tend to spend more time at home. They are often in poorly insulated homes and may be using energy highly inefficiently, as well as which, put simply, very old people, like the very young, need to be kept warm, so a coincidence of factors make that group particularly vulnerable.

To return to the point about information, it is also true that the most vulnerable often have the greatest difficulty with complex forms and the provision of information in an insensitive, over-complicated way. They may find it hard to navigate the system and, as a result, become relatively undiscerning consumers through no fault of their own. Therefore, rather than having to apply for the warm home discount, most receive it automatically without needing to claim. The right hon. Gentleman has spoken about that matter in the broader context of welfare reform many times, and I am hesitant even to address—I will not say “lecture about”—the matter in his presence, because he knows so much about it and I know my limits.

However, further to my remark about sharing information, I would advertise that through innovative work we have developed good systems to match data between the Department for Work and Pensions customer records for those on pension credits and the information held by energy companies. Although it is true that energy companies play a key role in the process, we have engineered an appropriate level of co-operation between Departments and the energy companies to identify the target group. This winter alone, that means that 1 million pensioners will receive an automatic £130 discount by 31 December, providing them with the certainty that they need about heating their home over the coldest months.

Mr Field: One million is about a quarter of those who would get cold weather payments and are in what I would define as the vulnerable group.

Mr Hayes: Yes, the right hon. Gentleman is correct. It is, of course, true that a number will not be found through such mechanisms so we have set up a dedicated line and a call centre will be established for people to make a simple claim. All those who we believe may be eligible will also receive a letter telling them whether they receive an automatic discount or need to claim by the end of January.

The warm home discount also provides help to other low-income and vulnerable households who may be struggling to heat their homes, including those on a low income with children under five and those on a low income who are disabled. I accept that the eligibility for that broader group is determined by each energy supplier, but it is against criteria that must be approved by Ofgem. There is, therefore, an independent voice in that process, and it is not entirely a matter for energy suppliers.

A further 230,000 homes have benefited in that way from those discounts. The big six energy suppliers are all offering those schemes, which I encourage every hon.

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Member to advertise to their constituents. They should broadcast the availability of the schemes and work with local community organisations, voluntary groups and charities in their areas to ensure that we get the best value from that work.

We could discuss fuel payments, cold weather payments and so on, but we do not have time; the other part of what we are working on is the Warm Front scheme, which is about demand and dealing with the consumption of energy in a way that reduces costs. The scheme provides assistance, as the right hon. Gentleman knows, to low-income, vulnerable households through the installation of a range of heating, insulation and energy efficiency improvements to private sector households. We have recently made changes to the Warm Front regulations to broaden the eligibility criteria and allow even more fuel-poor households to access the assistance available under the scheme, which has assisted more than 2.3 million households vulnerable to fuel poverty. It is, however, the scheme’s final year, so we again urge people who are eligible for assistance to apply to Warm Front.

The obligations on energy companies are an important part of addressing the problems. I share the right hon. Gentleman’s view that it is simply not enough to stay where we are in respect of tariffs. That is precisely why the Prime Minister addressed that matter last week and why I was able to say the next day that we would use the energy Bill to facilitate change in that area. A strong case can be made around the kind of proposals set out by the right hon. Gentleman and others, which essentially are about creating greater obligation in the system. I want energy companies, consumer groups and other organisations that I have described to help shape that, so that it is deliverable. The imposition of such an arrangement now, without a proper discussion, would be inappropriate, but the Bill will come before the House in weeks rather than months. As the right hon. Gentleman knows, the Prime Minister has made it clear that the Bill provides a great opportunity for us to address this issue.

Like one of my political heroes, Joseph Chamberlain, I am in favour of tariff reform. They may be different tariffs and different reform, but if it was good enough for Joe, it is good enough for me.

Mr Field: Mr Chamberlain split his party on tariffs; what I propose today would unite the Minister’s party.

Mr Hayes: I am a unifying figure. I bring together all the elements of my party and the coalition around an absolute, undiluted, unabridged determination, as I have described, to redistribute advantage, address poverty and elevate the people; my party and I regarded Disraeli as a hero before it became fashionable. To that end, we will address the issue of fuel poverty in a new way, mindful of the right hon. Gentleman’s comments. We are determined to make it work; the response will no longer be supine, but proactive, and it will assist those in the greatest need.

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School Funding (Worcestershire)

4.30 pm

Harriett Baldwin (West Worcestershire) (Con): It is a pleasure to speak under your chairmanship, Mr Weir. I should start by placing on record my interest in this matter as a governor and associate governor of Hallow primary school in my constituency for many years.

Worcestershire is one of the lowest-funded counties in the country for education. It is 147th out of 151 for per pupil funding and a long-standing member of the f40 group. According to the National Governors Association, the guaranteed unit of funding for pupils in Birmingham is £5,689, yet in neighbouring Worcestershire it is only £4,601—a difference of 20%. That has been going on for years. Mrs Susan Warner, head teacher of Lindridge primary school, said to me in one of the many letters that I have received on the subject:

“There is very little reasoning behind this unfair distribution and it appears to be purely historic, with no-one really understanding how the allocations were made in the first place.”

Last year, my right hon. Friend the Secretary of State signalled his intention to deal with the national unfairness of the school funding formula with “Consultation on School Funding Reform: Proposals on a Fairer Funding System”. That was welcome, but in an environment in which the overall school budget is only rising with inflation, it apparently will not be implemented this side of 2015.

In the meantime, the Department has decided to simplify the allocation formula for the direct schools grant, replacing the outdated and unfair national formula with a clearer one by reducing the number of allowable factors from 40 to a maximum of 12. The principle of a single flat amount per pupil in each stage of education from primary to sixth form makes sense. It is intuitive and, given that 80% to 85% of the cost of each school place relates to the salaries of teachers whose rates are set nationally, it makes sense to have a per pupil amount of funding that is broadly the same nationally.

Mark Garnier (Wyre Forest) (Con): I congratulate my hon. Friend on securing this important and useful debate for the county of Worcestershire. She talks about the ratio of staff costs being 80% to 85%, but in Wyre Forest we see that rising as high as 95% as more experienced staff go up the internal pay scale. That puts even more pressure on schools locally to try to perform with these very limited budgets.

Harriett Baldwin: I thank my honourable constituency neighbour for that observation. Staff costs certainly form by far the largest part of a school budget. It makes sense to have money follow the pupil, as that gives a clear signal to schools that they will do better if they can attract more pupils. The pupil premium, which has been welcomed at £600 per pupil on free school meals, will be even more welcome in Worcestershire when it is increased from 2013 by 50% and set at £900 per pupil. As the pupil premium now links to the pupil level the concept of income deprivation, it stands to reason that the main pupil funding allocation should be set more equally at national level as well. If the pupil premium is a national amount, why should not the main per pupil amount be more equal, too?

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Neil Carmichael (Stroud) (Con): I thank my hon. Friend for securing this very important debate. I want simply to strengthen her case by pointing out that Gloucestershire has the same argument as her own county. We, too, are underfunded compared with, say, Bristol. That is obviously unfair, and we need a national approach to the matter.

Harriett Baldwin: I thank my hon. Friend for highlighting the examples in Stroud.

If, as the formula seems to do, we move closer to a per pupil amount across the county of Worcestershire without making any correction to the national unfairness, we shall run into a crucial problem. Small, mainly rural primary schools form an integral part of the fabric of county life in a dispersed constituency such as mine. Where distances are large and sparsity is high, we find that the village school is the focus and beating heart of the village. Rural schools are likely to have fewer children on free school meals, for a couple of reasons. There is a lower chance of meals being served and a much higher chance of the possible social stigma being known, and there is therefore lower take-up. Those schools thus miss out on the pupil premium, as can be seen from the fact that Worcestershire has just over 1% of the pupils on roll in England, but less than 0.75% of the pupil premium for 2012-13.

Mr Robin Walker (Worcester) (Con): I congratulate my hon. Friend on securing the debate. She has made the case admirably for the small rural schools in her constituency, but she will be aware that some of the smaller schools in my constituency, which are urban schools and receive quite a lot of pupil premium, are also negatively affected by the changes. Does she agree that for the Government’s pupil premium policy to work and for their funding reforms to work really well, we need fairer funding on an underlying basis to make progress?

Harriett Baldwin: I do agree. How lucky my hon. Friend’s constituents are to have such a tireless champion and voice for fairer funding for Worcestershire.

Today, I ask the Minister to allow the county council to have more sector-variable lump sums that can be set locally. Some flexibility at local level is essential. Small rural primary schools are a priority for Worcestershire county council and it has a democratic mandate to take that approach. In addition, it is in its interest to do so, as travel and building costs would rise sharply if there were a consolidation of the smaller local primary schools. Furthermore, parts of Worcestershire support a middle school system, and the local authority should have some flexibility to reflect that.

I welcome the Minister’s letter of last week, confirming that there is a minimum funding guarantee extended out to 2015—a per pupil guarantee of minus 1.5%—which will help to moderate the impact of the changes up to 2015. However, Worcestershire needs more flexibility—it needs more money. More flexibility over a lump sum from the local authority could insulate small rural schools from too much fluctuation. Even after that guarantee, a school such as Eldersfield primary in my constituency would have a 5.5% fall in its budget by 2015, despite educating each child to an excellent standard for a frugal £3,523 per child.

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I have so far been contacted by primary schools in the villages of Castlemorton, Martley, Broadwas, Grimley and Holt, Clifton-upon-Teme, Astley and Hallow, Great Witley, Eldersfield, Lindridge, Kempsey and Pendock, many of which have asked whether the funding formula is a deliberate attempt to close or merge village primaries and move towards a system of larger urban primary schools. Will the Minister please assure the dedicated teachers and governors and the parents of children at those rural primary schools that there is no such policy and that the value of village primary schools to their communities is fully recognised by the Government?

I hope that the Minister can also resolve the funding problem. Village schools should be considered unviable only if they do not attract pupils on a sustainable basis. Allowing local authorities, such as Worcestershire county council, to have a larger amount to use as a flexible lump sum to support those valuable schools would allow them to continue to serve the large rural areas that still make up such a large part of Worcestershire and, indeed, England.

4.38 pm

Peter Luff (Mid Worcestershire) (Con): I rise to take part in the debate with the consent of my hon. Friend the Member for West Worcestershire (Harriett Baldwin), and my first duty is to congratulate her on securing it and expressing her case so clearly and compellingly. I associate myself with everything she has said and that my hon. Friends have said in interventions.

I rise primarily because the schools in the Evesham pyramid in my constituency would be most seriously affected were the policy to proceed unamended. The schools in the Evesham pyramid would lose about £1.3 million, and that, as my hon. Friend the Member for West Worcestershire made so very clear, is against the backdrop of a very unfair funding formula. They cannot afford to lose that amount of money. No school could, but certainly not schools that are in a badly funded authority to begin with. I say in parenthesis that even the minimum funding guarantee, with a maximum reduction of 1.5% per pupil, threatens the viability of some smaller schools. A cumulative two or three years at 1.5%, against a very low base, is threatening for many schools.

There are a number of reasons why in Evesham the situation is particularly serious. There are more smaller schools perhaps, and also a middle school arrangement, which is not always understood by officials at the Department for Education. I understand why—middle schools are not very prevalent these days—but they are an important part of the education landscape in Worcestershire, and certainly in Evesham, and their particular needs must be taken account of in funding arrangements.

We have talked about small village schools, but I must emphasise that it is smaller schools that are affected, not just village schools. There are two high schools in Evesham, which would both lose money under this arrangement. One—the smaller of the two—would lose £250,000. It cannot afford to lose £250,000. So, it is not only the small village schools that are affected, but, surprisingly, some significantly larger schools.

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I have reluctantly come to the conclusion that perhaps the Government were wrong to attempt this welcome reform—I entirely agree with the reform itself, because it is absolutely right in principle—before they had digested the underlying problem in relation to having a fairer funding formula at national level. Change in distribution in a badly funded county is fraught with danger, and I fear that it will be difficult to find any arrangement that prevents some significant loss for some schools unless we first have the fairer funding that the county so desperately needs.

However, I am confident that a solution can be found that mitigates the effect. I am encouraged by the attitude that the Government have taken so far, and I have reassured head teachers and governors in my constituency that I believe that the Government’s heart is in changing this policy and ensuring that it does not have the devastating impact that it would have if it proceeded unamended.

I am grateful to the extent that there is a minimum funding guarantee, for example, for a third year, but a higher lump sum does no good in Worcestershire—we cannot afford it and do not have the money to fund a higher lump sum. However, a variable lump sum, certainly between sectors, could lie at the heart of a solution that I believe would reduce the devastating impact of this policy and give smaller schools some hope of survival in the face of what would otherwise be a very arbitrary and unfair policy.

4.41 pm

Karen Lumley (Redditch) (Con): Thank you for allowing me to speak, Mr Weir. It is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for West Worcestershire (Harriett Baldwin) for securing the debate. I must also declare an interest as a governor and trustee at Vaynor First School academy.

This year, although the number of students receiving good GCSEs fell across the nation, in Redditch we had nothing short of an exams boom. Despite funding challenges, three secondary schools in Redditch gained results that placed them in the top tier of the most improved schools across the country. Two schools, Arrow Vale and Trinity high, are recently converted academies, and that has had a hugely beneficial effect on the way that they run and operate, and ultimately on the success that they have had.

More importantly, from speaking to the head teachers it is clear that those schools now have greater ambition and, crucially, believe that they can compete with the best. However, while the structure, with the rolling out of academies, is finally in place for our county to achieve, funding is not. On funding, my hon. Friend the Member for West Worcestershire pointed out that the county is ranked nationally 147th out of 151. Worcestershire is more affected than other counties by this funding arrangement because we are at the bottom of the schools funding league.

The way out of that is a fairer national funding formula, which this Government have promised following 13 years of a Labour Government who completely failed to address the issue. It is absolutely vital for the children of Worcestershire that we receive a fair deal. The crucial point is that the recent exam results from a few schools in Redditch are on the back of unfair

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funding, so imagine what we could achieve if we had fairer funding. The truth is that in the age of an ever more competitive national and global work force we cannot continue unfairly to disadvantage the future of our children, whose only fault is that they were born in Worcestershire.

4.42 pm

The Minister for Schools (Mr David Laws): Thank you very much, Mr Weir, for calling me to speak.

I congratulate my hon. Friend the Member for West Worcestershire (Harriett Baldwin) on securing this debate on an issue that is extremely important for her constituency and that is obviously also important throughout the country. Once again, she is proving to be a most effective champion of her constituency interests.

My hon. Friend warned me before the debate started that the MPs from Worcestershire have a tendency to hunt in packs and her pack is behind her today, if I may say so, in the form of my hon. Friends the Members for Mid Worcestershire (Peter Luff), for Redditch (Karen Lumley), for Worcester (Mr Walker) and for Wyre Forest (Mark Garnier), who have all backed up the points that she made in a very effective way. We have other Members from Gloucestershire and Devon, who are clearly also taking an interest in this debate.

As the Minister for Schools, I am very well aware of the strength of feeling in Worcestershire schools and in schools in some other parts of the country. There is concern about some of the changes that we are seeking to make to the school funding system, and my hon. Friend the Member for West Worcestershire has set out some of those concerns very clearly today. I have received a number of representations from other hon. Friends, and from concerned local head teachers and governors throughout Worcestershire.

Therefore, I am grateful for this opportunity to address some of those concerns and to offer a reassurance that, as we move to a fairer funding system, we will do so very carefully and at a pace that enables proper consideration, consultation and sensitivity about the issues that are being rightly raised today by local MPs.

Our aim is for every child to succeed in school, regardless of their background. That is why the Government, despite having to make difficult decisions elsewhere in public spending, have made school spending a priority and protected school funding over the course of the spending review period, as my hon. Friends will be aware.

We have also introduced, as my hon. Friend mentioned, the pupil premium which, by the end of the Parliament, will have targeted an additional £2.5 billion to disadvantaged pupils. My hon. Friend mentioned that sometimes the take-up of the pupil premium is a concern in rural areas. She might be interested to know that the Department will publish in a few weeks’ time some interesting national figures showing the take-up of the pupil premium and free school meals in different parts of the country, and highlighting the challenge there is in some of the more rural areas to ensure that take-up is as high as it should be.

The Government need to work with local councils, schools and MPs to ensure that in some of the areas where there is a low take-up we address that, to ensure not only that youngsters get the free school meals to

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which they are entitled but that the extra funding we are making available gets through to the schools that need it.

We also need a system to support the investment that we are putting in through the pupil premium and to ensure that pupils are not disadvantaged as a result of a school funding system that, as my hon. Friends have indicated, does not distribute funding fairly. Sadly, under the previous Government, when there was a much bigger opportunity to increase education spending, the opportunity was missed to bring in a more rational formula. The current system for funding schools is in need of reform. It is based on an assessment of need that dates back to at least 2005-06, and that has not kept pace with changing demographics and the needs of pupils across the country. It is very complicated, meaning that head teachers, governors and parents are often unable to understand how their school budgets have been calculated and why.

That outdated funding system has meant that Worcestershire, as hon. Friends have already mentioned, is one of the relatively lowest funded authorities in England, ranking at 147 out of the 152 authorities. It is not right that schools with very similar circumstances can receive, without good cause, vastly different levels of funding for no clearly identifiable reason. Data taken from the 2010-11 section 251 returns, which set out local authority budgets, show that funding between similar secondary schools can vary by up to £1,800 per pupil, which is an enormous amount and clearly not fair.

It is also not right that the system is so complex that school leaders are often unable to understand how their budgets have been calculated. My right hon. Friend the Secretary of State for Education made a statement on 26 March 2012 announcing the Government’s clear intention to introduce a new national funding formula during the next spending review period. I appreciate that hon. Friends would like that to be as soon as possible, but there are obviously a lot of constraints that I will discuss in a moment on the introduction. However, the commitment is clear and is something I feel strongly about, as does the Secretary of State.

A new national funding formula would distribute money fairly across the country, targeting need properly and getting rid of some of the anomalies that make the current system so opaque. However, dismantling a system that is so entrenched and complicated is far from easy. It is important that we introduce full-scale reform at a pace that schools can manage. The last thing that we want, as my hon. Friend the Member for West Worcestershire said, is to cause destabilising changes to school budgets that cause anxiety in schools and among parents and distract schools from delivering high educational standards for their pupils.

That is why we are trying to move gradually towards introducing a new funding system, at a pace that gives us sufficient time to agree the construction of a new formula and to allow schools enough time to adjust to changes in their funding arrangements. Making the local system simpler and more transparent will mean that, when we do come to address the national system, there is far less complexity for us to untangle.

The first step we are taking is to ensure that within local areas pupils begin to attract similar levels of funding regardless of where they go to school. At present,

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local authorities can use up to 37 factors and countless sub-factors when distributing money to schools. I understand that in the past there has been a tradition of funding schools based on the facilities that they offer, the pay scales of their teachers, the size of their buildings and, even in some cases, the number of trees and ditches on their estate.

Our view is that the majority of money that we spend on education should be based on the pupil, not on the school characteristics. If a pupil chooses to go to a particular school then the funding is available to fulfil that choice, and it is not locked in to the school down the road because it happens to have more expensive teachers or a swimming pool to maintain. Rather than giving money to schools based on their size or other circumstances, local authorities will now have to distribute the majority of funds based on pupil numbers and characteristics. That is very much in keeping with the aims of a funding system that is pupil led and that is fair and transparent.

The new arrangements will mean that funding will be distributed differently, and there will be some shifts between school budgets as we move towards a more consistent way of funding schools. Our aim is to start to iron out inconsistencies and unfairness, which pupils in schools are currently experiencing, to create a fairer system. We remain committed to ensuring that good, small schools are able to thrive under the new arrangements.

We know that small schools often play a vital role in communities, not least in rural areas, and it is not our intention that any good school should be forced to close as a result of these reforms. That is a commitment that my hon. Friend asked for in her speech, and I hope that she will take that as a commitment from the Government. There is no secret agenda to close small, successful schools. I hope that she and her hon. Friends will take that message back to their constituencies.

We are allowing local authorities to allocate a lump sum of up to £200,000 in their formula. The intention of the lump sum is to cover the fixed cost of a small school—for example, a head teacher, a caretaker and some administrative support—and no more. It is not intended to protect the historic grants that were given to some schools and not others to pay for things such as floor space, specialist teachers and so forth.

We have heard a number of concerns—we heard them from my hon. Friend today—about the requirement to have a single lump sum for primary, middle and secondary schools. Although I recognise that the curriculum costs are different in each phase, I reiterate the point that the lump sum is not intended to pay for the curriculum costs. The lump sum should pay for fixed costs, and the per-pupil funding should pay for the curriculum costs. We will, however, review those arrangements, and I will explain more about that review shortly.

The reforms will require local authorities and school forums to break out of historic approaches and to think radically about the way in which money is distributed to schools in their areas. I realise that it is the implementation of the new simplified arrangements that is causing anxiety among schools in Worcestershire, and that there

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are particular concerns about the impact the changes will have on small and middle schools in rural areas such as Evesham, Pershore and Upton.

Officials in the Department have been in contact with staff at Worcestershire county council to understand why the concerns have arisen and to offer advice. I understand that Worcestershire county council has already agreed to the new funding formula—it did so on 18 October —but it has done so for one year only. I am informed that Worcestershire county council will review its local formula in light of the issues raised during its recent consultation, and in line with any changes made by the Department for 2014-15.

As I said, our main priority is stability and certainty for schools, which is why these reforms will be implemented carefully and with great consideration, as my hon. Friends have requested. The Secretary of State already announced in June that schools will continue to have planning certainty through the minimum funding guarantee, which means that, in most cases, no school will lose more than 1.5% of its budget per pupil in 2013-14 and 2014-15.

In addition to that and in response to concerns raised by my hon. Friend, her colleagues and other hon. Friends, the Department has confirmed within the past few days that a minimum funding guarantee will continue to operate beyond 2014-15. We cannot confirm the exact value of that guarantee as it covers the next spending review period; we need to know our budget for that period and to have Treasury approval before giving any such guarantees. None the less, we are absolutely committed to protecting school budgets from unmanageable falls, and I hope that that will also be an assurance for my hon. Friend.

Peter Luff: Is that an extension for one year or for longer than one year?

Mr Laws: At the moment, we have made it clear that we will continue it beyond the period of 2014-15. Although we are not in a position to make an announcement yet, given that we are seeking to move to a national funding formula, it is highly likely that we will need some form of protection for a considerable period. I will be happy to update my hon. Friend when we are in a position to say more.

Mr Robin Walker: The minimum funding guarantee is excellent, and I am sure we all welcome its extension, but is it not the obvious answer to the turbulence of moving towards a national formula? Therefore, is there any reason for the Government not to move towards a national formula, using the minimum funding guarantee, before 2015?

Mr Laws: Moving straight to a national funding formula without the transitional arrangements would be even more challenging and would create an even larger departmental postbag. I understand my hon. Friend is doing his best to push Worcestershire’s case, but the Secretary of State is right to be going about this in a measured way as we are seeking to bring about a complex change.

In any case, the extension of the minimum funding guarantee beyond 2015 should reassure the several Worcestershire schools—including the Hanley Castle

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pyramid, Prince Henry’s high school and Evesham high school—that have contacted me to express concerns about a potential cliff edge in funding from 2014-15 if the minimum funding guarantee were to end. I have no doubt that my hon. Friends will take that message back to other schools concerned about a cliff edge. The last thing we want is for parents not to send their children to those schools because of fears that are not well grounded.

I also reassure my hon. Friends that we have decided to carry out a thorough review in early 2013, starting now effectively, of the impact of simpler formula factors. We will work with local authorities to explore the effect of the different factors that we have, including the lump sum, which is a key element of Worcestershire’s formula, as well as those that we have eliminated.

We have made it clear that we want to prevent the changes from having unacceptable consequences for good schools. That is why a review will be so important in evaluating the effects and will enable us to make any necessary adjustments in the following year, 2014-15. As a consequence of the representations that have been made today by my hon. Friend the Member for West Worcestershire and her colleagues, I will ask officials to add Worcestershire to the shortlist of authorities that have been particularly assiduous in making representations to the Department and that I would like officials to talk

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to over the period of the review, which we hope will report back in the springtime—spring being a slightly flexible season.

I am enormously grateful to my hon. Friends for drawing attention to the concerns of Worcestershire schools about our school funding reforms. I hope I have been able to provide some reassurance that our aim in making the reforms is ultimately to ensure that England has a fair and transparent funding system in which funding follows pupils and there is consistency within and between different areas of the country. I know that Worcestershire shares that ultimate aim with the Department. I also hope that my hon. Friends understand that we are listening carefully to their concerns and, where necessary, are responding to them.

I commend my hon. Friends for making their representations so effectively to the Department that the Worcestershire file is probably the largest of any county. I look forward to maintaining contact with Worcestershire in the run-up to the decisions, which we will make and announce next year.

Question put and agreed to.

4.59 pm

Sitting adjourned.