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Lord Elton: My Lords, perhaps the noble Lord will allow me to correct him on one point. My figure was from 1975-76 and 1991-92. I did go back before 1979 and said that the increase was continuous.

Lord Peston: My Lords, I am indebted to the noble Lord. I must have been listening less than attentively, which is not unknown also among other children.

I wish to say a few words on local authorities. The noble Baroness, Lady Thomas of Walliswood, reminded us of this point. I was struck and saddened by the fact that the Motion before your Lordships did not mention them. It is especially upsetting because, if we look at the history of education in this country, most, if not all, of its achievements resulted from individual and local initiatives. I, for one, wish to pay tribute to the LEAs, both elected members and officials, for the contributions they have made and I hope will continue to make. From my recent contacts with them their morale is low. But because they are responsible people they soldier on, despite the disaster of the treatment of the teachers' pay claim and the apparent dominance of the Treasury in education matters rather than the Department for Education.

In that respect the chief inspector's report reminds us of the reduction in the personnel that the LEAs are able to hire, at the same time reminding us of their continued treatment. It refers to all the centrally retained services that they still have and says:

I could quote at much greater length from the document. It is perhaps also helpful to quote what the same chief inspector's report says of GM schools. In my insistence on balance I was surprised that noble Lords did not quote the central proposition in the report which is that

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differences between GM and LEA-maintained schools were insubstantial in most respects, including the standards of achievement of pupils judged against their capabilities, pupils' personal development and behaviour, the quality of teaching, the efficiency of management of schools and links with parents. Why did no noble Lord opposite feel that that part of the chief inspector's report was worth quoting? Perhaps they will tell me why they did not quote those precise words. The noble Lord, Lord Rennell, did not quote those words. As I heard him, he quoted later. Did he quote those words?

Lord Rennell: My Lords, I tried to point that out in the nicest possible way. If the noble Lord looks at the beginning of the quotation, he will see that I did say that.

Lord Peston: My Lords, I thought the noble Lord was emphasising how much better the GM schools were. I must have missed what he said. I am indebted to him. I enter these debates in a spirit of inquiry and open-mindedness, and not in the spirit of daft politicking.

I turn fairly briefly to the question of resources. Typically, the Government refer to expenditure on education in real terms and they are right to do so. What they mean by that is actual expenditure adjusted by using the gross domestic product at the market prices deflater. That is a sensible calculation if one wants to look at the cost of education. However, it is misleading if one's concern is with the volume of resources used in education. That is because the prices of goods and services used in education rise more rapidly than prices in general. It is possible to use published figures to allow for this relative price effect. Indeed, that is what government used to do until the present Government took over. If one looks at education in real cost terms, drawing upon the Government's own publication, expenditure has risen by just over a quarter since this Government took power. Even then, that means that the ratio of expenditure to gross domestic product has fallen.

If we accept my interpretation of what this debate is about, namely, that education is desirable and that it is wanted by the public, a fall in the ratio does not make sense. Education expenditure ought to rise at least as rapidly as income and probably more so. However, much more serious is the volume of resources devoted to education in the lifetime of this Government. The increase is not the 25 per cent. in round figures which I referred to. The true figure on the volume of resources is scarcely half that; it is broadly 12 per cent. to 14 per cent.

With such a significant relative cut it is not surprising that education is in crisis. En passant, the same point applies to health. The volume of resources devoted to the NHS increased by less than half of the 68 per cent. in real terms that the Secretary of State claims has occurred. That of itself is sufficient to explain all the difficulties that have appeared in the provision of healthcare.

As regards Table 3.28 in Social Trends, two noble Lords opposite said that the UK's expenditure on education, as a share of GDP, is higher than that of

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Germany and of Japan. They are completely right, but, in my acerbic mood, let me ask this: why did they not tell us that it is lower than in Canada, Sweden, Denmark, the Netherlands, the United States, Belgium and France and lower than the OECD average? What is there about our debate today that noble Lords, who must know all the figures in order to quote the two, did not feel the need to place them in the correct perspective? My own judgment is that noble Lords have a duty to set a standard of rational discussion especially when debating education.

The question of class sizes has been referred to. It is known that some crude statistical analyses failed to find a correlation between class sizes and improved performance. Many years ago I and others explained why that is so. If resources, notably teachers, are allocated more than proportionally to those most in need and with the greatest difficulties, as they should be, it is obvious that the observed relationship will appear to be one of smaller classes and poorer performance. But what it will also show is a causation from a poorer performance, reflecting need, to more resources rather than the other way around. I am absolutely certain that the Minister's advisers at the department are perfectly well aware of that argument. It has been around for at least 20 years and I am slightly surprised that it does not seem to have entered into anyone's speech on the other side of the House.

Echoing the noble Baroness, Lady Thomas, one ought to use one's common sense. If smaller classes do not matter, then why not save even more money by reducing class sizes further? Surely the Government ought to be proudly saying that they have discovered how unproductive teachers are and that they propose to reduce their numbers more and more. Possibly, in failing to fund the agreed pay rise, that is what they are really setting about without admitting it.

But we can go further. If additional teachers are so unproductive of education, why do independent fee-paying schools go for such small class sizes? Why do they emphasise the merits of teaching in small groups when they seek to influence parental choice? Fees are high and rising. Some schools are finding it difficult to survive. Independent schools are businesses operating in a competitive market environment. Why do they not compete by cost cutting, getting rid of teachers and charging reduced fees? The answer is that no serious person believes that reducing teacher numbers is a good thing. As I pointed out to the Minister last week, serious research allows for the difficulties I have mentioned and shows that reducing classes is helpful. I was going to quote all the research to your Lordships, but I suddenly realised that I am so enjoying my own speech it has already taken 16 minutes, so I must get a move on.

In the end I agree with the Minister that it comes down to money. We must not delude ourselves and say that a relative cut in resource provision does not matter. Instead we must ask how we want to spend our money. Since we are discussing public expenditure we have to ask ourselves this question: what is the taxpayer willing to pay for?

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I go further. If we believe in the value of education—and I believe that that is the one thing we all have in common—our task is not, and cannot be, the passive one of just listening to the electorate. It must also be an active one of persuading the electorate of the merits of education and how valuable it is to use public money for that purpose. I wait to hear the Secretary of State say precisely that. Maybe the noble Lord himself, in replying to the debate, will say it.

I also wait to hear from noble Lords opposite who sometimes act as apologists for the independent schools. I wait to hear from them an echo of Tawney's dictum that what is good enough for our children is good enough for all children. It should be a special moral responsibility on the part of those who support independent schools to speak out for more resources for maintained schools.

Noble Lords have heard enough from me—I certainly have—but I conclude as I started. I did not and do not believe that this is the most useful debate on education we have ever had, but having said that I really am looking forward to the Minister's reply.

8.59 p.m.

Lord Lucas: My Lords, we are all most grateful to my noble friend Lady Perry for having moved this Motion and for having given us the opportunity for this debate. She made an eloquent and powerful speech which it is going to be very hard for me to follow with anything like the clarity which she employed. My noble friend Lady Blatch repeats her apologies to noble Lords opposite in particular for having to attend a Select Committee immediately after her speech. That gave me the time to concentrate on answering the questions which noble Lords have asked and also on getting my grammar right, not that I, as a physicist, shall manage it particularly well.

As my noble friend said, achievement is what education is all about. We all have a great deal to celebrate—pupils, parents, teachers (perhaps teachers most of all) and, indeed, the Government—because of what has happened over the past 16 years. Looking back to Victorian times, we thought that we did not need mass achievement. We thought that an educated elite was enough. But that is not true now. As the noble Lord, Lord Addington, and my noble friend Lord Beloff pointed out, that long legacy has left us with substantial elements of the population who do not really believe in education or its importance. That is a difficult background against which to work. We need understanding, flexibility and skills in most of our workforce.

The noble Lord, Lord Callaghan, summed it up memorably in his Ruskin Speech of 1976, in which he said:

    "Let me repeat some of the fields that need study because they cause concern. These are the methods and aims of informal instruction"—

I think that is the first reference to what has been called the "trendy orthodoxy" that had developed in teaching—

    "the strong case for the so-called core curriculum of basic knowledge; next, what is the proper way of monitoring the use of resources in order to maintain a proper national standard of

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    performance. Then there is the role of the inspectorate in relation to national standards and there is the need to improve relations between industry and education".

The noble Lord also mentioned the examination system, school governance and management, and the closer involvement of parents with schools. That was an agenda which the Labour Party did not have a great deal of time to put into effect, but we have done so. One thinks particularly of the late Lord Joseph in that respect, under whom education reform made a great deal of progress—and, as my noble friend Lady Young said, the Labour Party opposed us every step of the way.

I do not want to dwell on the past too much, but we should not be shy of listing what has happened. In 1979, only 24 per cent. of the school population got five grades A to C; now it is 43.3 per cent. The staying-on rate, which the noble Lord, Lord Parry, mentioned, was 58.5 per cent. in 1979; it is now 80 per cent. Things are a great deal better than they used to be, but we have a great deal left to do.

I should like to concentrate on what is being done now and on what we intend to do in the future to continue the trend of improvement that we have seen. Perhaps I had better pause briefly to deal with the present. When one thinks of the present one thinks of the Labour Party—partly because not many Labour Members are present. It is difficult to make a speech when one faces such empty Benches opposite.

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