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Baroness Michie of Gallanach: My Lords—

Lord Waddington: My Lords, I am sorry, I do not have time. I am sure that it will soon become apparent to everyone that the Liberals apparently subscribe to this ridiculous exercise. I hope that they suffer the electoral consequences as a result. All of those 22 Ministers are served by an extra 1,000 civil servants.

I shall tell your Lordships what regional assemblies will mean: committees in each region wining and dining with other regions in the name of liaison; other committees visiting their regional offices in Brussels to see whether they can screw more out of the Commission than the region next door; and costly visits to the European Union Committee of the Regions and its many sub-committees. Does anyone seriously imagine that any of that will be good for amity or for national cohesion? Will any of it make for a happier country? If anyone believes that, he has taken leave of his senses.

Frankly, I am amazed at the sheer absurdity of most of the arguments put forward for regional government. Some speak as though it is the English answer to Scottish devolution, when we all know that there never has been the slightest chance of powers being devolved to the regions remotely like the powers devolved to Scotland. Some suggest that regional government is necessary to ensure that England receives as fair a share of public expenditure as Scotland, when all that is necessary to right that wrong is an adjustment in the Barnett formula.

Of course the north/south divide exists and there is reason to be worried about it. Of course I want to be sure that people in the north of the country are able to articulate clearly what they need and to get the resources that they deserve. But surely what the burghers of Bootle and Gateshead need is not new regional authorities, but more authority in the hands of the councils that already exist. What the citizens of Newcastle want is not more councillors but more investment.

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Not for the first time I quote the Prime Minister. Not so long ago, and before he found it necessary to give Mr Prescott something to do, he said:

    "We need regional government like a hole in the head".

5 p.m.

Earl Russell: My Lords, the noble Lord, Lord Waddington, reminds me vividly of a 17th century MP who once declared:

    "The Britons are divided from the world".

The figures are quite interesting. The proportion of taxation and spending administered nationally in the UK is 78 per cent. The second highest proportion anywhere in the European Union is France at 44 per cent. Germany is at 29 per cent. I have not observed that either France or Germany is at the point of immediate collapse. So, what is proposed can be done in other places.

If the noble Lord, Lord Waddington, thinks that there is something absolutely peculiar about the British, which means that we cannot do what everyone else can, then I should be glad to know what it is. Furthermore, it has not only been done in other places, it has been done to a large degree within this country in towns.

In the 17th century the majority of government in this country was county government, which, in terms of the geography of that period and the difficulty of travel, was much the same degree of devolving that is now envisaged in regional government. It is only since 1988 that this totally centralised political universe that we now live in has been created. Although that may be a long time in politics, it is not time immemorial in history. So what we have done before we can do again.

The north and, for a brief period, the west of England had regional government. So we have done it before. I do not see why we cannot do it again. The noble Lord, Lord Waddington, observes that that is nonsense.

Lord Waddington: It is nonsense.

Earl Russell: My Lords, if the noble Lord would like to maintain that opinion, I will willingly give way to him. No? Very well, then.

What I wanted to talk about today was our plans for public services. We have just had a working group on that subject on which I happened to be one of the Back-Bench members. Since that concerns both regional government and education, I thought that this was perhaps the proper place in the debate to bring the matter up.

Both the private sector and the public sector are good, but they are good at different things. The private sector is normally better in the production of goods and services, where one needs innovation, change, a variety of experiments and risk and seeing which succeeds and which does not. But there are certain things at which the private sector is not good. It is not good at managing monopoly, because the basic discipline of the private sector is competition. Where

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that is missing the private sector is inappropriate. The private sector is not good at managing anything that cannot be left to go bankrupt because the other basic discipline of the private sector is the need to remain solvent. If that had been understood before the privatisation of NATS or the railways it would have saved us all a great deal of trouble.

The other thing that the private sector is not good at delivering—this is vital for the future of the public services—is universal access. It is not in the nature of a market to have no losers. So if one is trying to bring that about, one is asking a market not to be a market. That is an unfair request. One has only to look at the problem of the supply of school places in the London Borough of Bromley. One has only to look at the 40 million Americans with no health insurance, including, I believe, 64 per cent of American children. That is a frightening figure. So we think that where universal access is needed the public sector is also needed.

Private delivery of a public sector service on the other hand is a different matter. That is not necessarily wrong in principle, but it carries several difficulties. In particular, one must avoid conflicts of interest. Where that has been tried before—mainly in the reign of James I—it led to a conflict of interest almost every time. The nearer the service is to a monopoly the more likely is a conflict of interest, because one creates a situation where one gets a bigger profit by delivering a worse service. That is in my book a conflict of interest, which is to be avoided. The PFI, for example, needs to be far more transparent than it is at the moment before it is to be a really constructive vehicle for investment.

One needs also to look carefully at the public sector comparator, which we believe is fairly heavily biased in favour of the private sector. That needs investigating. We have two general lines of complaint about the public services. One is about funding and the other is about freedoms. The Government seem to think that there is nothing that is not their business.

Mrs Hodge, whom I know and like, spoke recently about government taking decisions about what should be the standard and content and classification of a degree. That is simply not the Government's business. I would no more trust Mrs Hodge to do that than I would trust her to conduct a tonsillectomy on me. I daresay that she would do both with the best will in the world, but she simply does not have the qualifications or the knowledge. But if one gives people absolute power they are tempted to use it.

When people talk about a monopoly in the public service, they are looking in the wrong place. Any hospital competes against any other hospital. Any university competes against any other university. The monopoly is not in the provider, it is in the purchaser. The monopoly is the Treasury. That applies equally whether one's service is being purchased privately or publicly. With the new public sector contract, where one can regulate even the number of paperclips used by the organisations concerned, one perhaps has even tighter central control under privatisation than under public ownership. So, the only way to stop the

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situation where the monopolists can force costs down to below the economic costs so that an organisation cannot work, where the Treasury can meddle with everything that it cannot understand—the Aeroflot system of funding as I always used to describe it—is to break up its monopoly. That is why we want to regionalise the purchase of our public services. We want a guaranteed level of central funding, minimum standards of provision to be worked out by negotiation between the Treasury, the regions and other interested parties and not just decided by the Treasury. We want regional government, with a power to raise local income tax, purchasing the services.

That will mean that standards of services will not be the same in one place as in another. That must be accepted. It is the way that competition works. It will lead to a competition to make services better, to counteract the competition the Treasury always builds up to make them cheaper. It will produce what I referred to as the "Cubie effect". The day after Cubie was published, one of my pupils came in through my door and said:

    "Why can't we have this here?"

To which my answer was:

    "Yes, if you are prepared to pay for it".

So voters will be able to choose whether they want to pay the extra money for better services. If they do not, they will have to do without them.

I hope that that will produce competition to improve services, instead of competition to continue to worsen them. As I remember once saying to the noble Baroness, Lady Blatch, when she was a Minister: efficiency is not efficient. We end up by reducing costs to the point at which nothing works. If we do not try something such as I described, soon we will not have any public services. This is urgent.

5.10 p.m.

Baroness Warwick of Undercliffe: My Lords, I shall speak on education—in particular, the future of higher education. I declare an interest as chief executive of Universities UK. Although there is to be no higher education Bill this Session, I welcomed Her Majesty's reference to the on-going review of higher education. Indeed, if a White Paper emerges after all, it may well lead to future legislation, so this is an ideal time to shape the results of the review.

I am quite clear what I want to see in the review and any future legislation. It is a vision that will safeguard our world-class university system, a system that has strength in diversity, delivers world-class teaching and research, and to which there are no financial barriers to participation for those from less well-off sections of society.

Your Lordships may rest assured that I do not in this short speech intend to deal with all the aspects of higher education policy that may be covered in the Government's review. I shall concentrate on one key issue: resources. There is little disagreement—this was said during Questions earlier today—that our universities have been seriously underfunded for more

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than 20 years. I am sure that all noble Lords agree about that. Indeed, in a paper published on the department's website only yesterday, the Secretary of State acknowledged the funding deficit. He stated:

    "there is a funding gap which needs to be filled. I accept the case for filling it".

Evidence shows that the sector now faces a major investment backlog. The bill to clear that backlog is huge. If we are to meet government targets, the 10 billion identified must be found. However, I fear from ministerial statements that the bill cannot be fully met from public funds. Of course, it is for the Government to decide whether that is the case and whether part of the bill will be met from increased private contributions. But such increases in private contributions will not, on their own, meet the bill. Public funding must remain central to the delivery of excellence in higher education.

So what can we expect in the review? There has been much speculation about where the Government are heading and talk of so-called top-up fees, of a graduate tax, or even of a return to grants. We clearly need a full debate about what will strengthen our universities and what unforeseen dangers may lie ahead. I hope that my noble friend agrees that it is vital to consult widely and genuinely across the whole higher education sector about any proposed changes to how universities are funded. I hope that he further agrees that detailed modelling of any proposals is vital to insure against unintended consequences of any reform.

Whatever new system the review leads to should be based on a number of key principles, which have been enunciated by Universities UK speaking on behalf of all universities. They are essential to the successful implementation of any reforms.

First, any recommendations must generate sufficient additional funds so that the sector is placed on a sound financial footing. If the Government decide to increase private funding for universities, that must be truly additional, not offset by reductions in existing taxpayer support.

Secondly, any changes in the level of private contributions must be judged by their impact on the participation of students from lower socio-economic groups, so that universities' efforts to widen participation are not compromised.

Thirdly, if a more market-based fee system were to be introduced, as has been suggested by the media, a transparent national bursary scheme would be needed to meet the cost of fees for those who were not liable to pay them from their own resources. It certainly cannot be left to individual institutions to create their own schemes. That would be unaffordable for many universities and could create a confusing mess.

Fourthly, a new funding scheme for universities will need to be accompanied by revised arrangements for maintenance support for students based on the principles of clarity and consistency.

Fifthly, any funding solutions must address the financial problems of all universities, not just of some. It would be iniquitous to create what would in effect be a two-tier system. That would betray the promise that

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the Government want to make to talented but disadvantaged young people: that they will be guaranteed a first-class higher education that will open up great opportunities for their future; nor would it solve the financial problems of the sector, and it could seriously damage the reputation of British higher education at home and abroad.

Sixthly, we must ensure that standards are maintained as a result of the review, with universities maintaining their control over the award of degrees. That is vital to safeguard the attractiveness of UK higher education in the international market-place.

I realise that my noble friend will not at this stage be able to state which path for increased funding the Government may eventually choose. As I said, a White Paper is expected on that in January. So does my noble friend agree that, despite all the problems of past funding faced by universities—and acknowledged by the Secretary of State—universities across the board have maintained the world-class reputation of British higher education? Does he further agree that the maintenance of a wide range of institutions across the country—all different but all with their own strengths—is vital to achieve targets to widen participation and promote high quality research and involvement in local communities?

Finally, will my noble friend confirm that the Government are committed to maintaining high standards and quality across the higher education sector by providing new investment that benefits the sector as a whole and does not draw artificial boundaries between different institutions?

Perhaps I may ask for the indulgence of the House and take advantage of the wide-ranging nature of the debate to raise an entirely different issue that has been raised with me: the common agricultural policy. Commissioner Fischler has called for change to the common agricultural policy. Earlier this year, the Curry commission set out a clear way forward for farming and the food chain that involved farmers in fundamental change. Can my noble friend tell us how much progress will be achieved at UK and European level to achieve what the Secretary of State has referred to as a new settlement for agriculture, respecting the environment and, in particular, meeting consumers' needs?

5.18 p.m.

Lord Jenkin of Roding: My Lords, by its nature, this debate tends to range widely. I shall pursue the question of education and, although she is not in her place, follow up the point made about citizenship by the noble Baroness, Lady Massey. Those who have spoken about education have already cited a sentence from the Queen's Speech:

    "Raising educational standards remains the Government's main priority for Britain's future prosperity".

There are two aspects to that. There is the question of educational standards and of its link—which I entirely accept—with our prosperity. In my few minutes, I shall draw attention to one important aspect of that aspiration and connection: the serious situation affecting science education in our secondary schools.

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I declare an interest as this year's president of the Association for Science Education, although I hasten to add that what I shall say represents my view, not necessarily that of the ASE.

The House may remember that, two to three years ago, I chaired the Select Committee inquiry Science and Society. Our report, published in March 2000, drew attention to the need for science in schools to,

    "adapt itself to a dual role: it must maintain its traditional and vital focus on preparing the most interested and talented pupils for science courses at university; at the same time, it must equip all"—

we stressed "all"—

    "students for what has been called 'scientific literacy' or 'science for citizenship'".

Both aspects of that dual role are vital, and, three years on, I am depressed to realise just how far the country is from achieving those aims.

More recently, the Select Committee on Science and Technology in the other place held an inquiry, which reported in July this year. The report was called Science Education from 14 to 19, and that committee went into the subject in much greater detail than we had two years earlier. The Government's reply was published last month, and I must say to Ministers that it largely failed to reflect the dual aim that the Select Committees in both Houses had identified. I was not in the least surprised, therefore, to read in the short commentary that the Select Committee in the other place made that it found the Government's reply "unsatisfactory" and intends to ask the School Standards Minister to appear before it. That may, in fact, not be the noble Baroness, Lady Ashton of Upholland, so she may escape that; it will be one of her colleagues.

Our main complaint—certainly my main complaint—is about the curriculum and the examinations that are based on it. Science became a core subject of the national curriculum for all children aged 5 to 16 as long ago as 1989, but the syllabus has not changed fundamentally since the days when it was designed primarily for the 10 per cent of students going on to do science at A-level and at university, rather than the 90 per cent that had other ambitions. Some of the most compelling evidence that my committee received argued that that needed to change, if what is taught and learnt is to equip all students with scientific literacy.

Witnesses called for less emphasis on imparting facts and more on the nature and processes of science. People need to know more of the history of science, so that they can begin to understand that a scientific theory is valid only until it is displaced by later work leading to a new theory. One distinguished scientist told us that the present way of presenting science as facts,

    "leaves people unprepared to encounter as adults the uncertainties of much current science".

Others blamed the emphasis on facts for,

    "a profound misunderstanding of the whole scientific process amongst the general public".

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Three years later, the same points were made by the Select Committee in another place. It said:

    "What is important is not that citizens should be able to remember and recall solely a large body of scientific facts, but that they should understand how science works and how it is based on the analysis and interpretation of evidence. Crucially, citizens should be able to use their understanding of science, so that science can help rather than scare them".

I mention, in passing, that one of our science centres advertises one of its exhibitions as "Science for the Terrified". We must recognise that that reaches out to part of our public.

There is no lack of advice to Ministers as to how the matter should be tackled. My Committee drew attention, three years ago, to the report Beyond 2000: Science Education for the Future by Professors Robin Millar and Jonathan Osborne. Since then, there has been a new, experimental AS syllabus, from the same stable, called "Science for Public Understanding". The SPU course aims to do just those things that we identified three years ago as likely to make science more enjoyable and more relevant to students' lives and help them to develop an understanding of scientific knowledge as the product of sustained work by scientists over time. There is much more, but time does not allow me to go into it.

Six hundred students sat the SPU examination in 2001 and 800 in 2002, and it is still in its early days. However, the course is not even mentioned in the Government's reply to the Select Committee in another place. It was not referred to in any way in Ministers' replies. Why is there no reference to that ground-breaking work? A few weeks ago, I attended a Nuffield seminar on a survey of the SPU syllabus. The survey was entitled Breaking the Mould?, and its main conclusion was as follows:

    "this course does offer an educational experience about science that is significantly different from traditional science courses and is engaging and interesting for students. In that sense, this course has broken the mould and framework which has structured science education for the past 40 years and is to be welcomed".

Do the Government share that assessment? If not, why not? If they do, why do they not refer to it? Why do they not applaud it? Why do they not say that they want to see the course expanded? The importance of the SPU course is not so much at AS-level, although it is valuable at that level; it is in the influence that it will have on the development of GCSE syllabuses for the 14 to 16 age group, on which work is going on at York University.

I recently chaired a Foundation for Science and Technology seminar on the Sir Gareth Roberts report on the supply of scientists and engineers for the future. Towards the end of that evening, discussion focused entirely on the question of science in schools. One participant said:

    "If students had not been persuaded from the age of 14 that science or engineering was a good choice, that science would give them a better chance than other subjects of getting to the university of their choice and be 'fun', the battle was lost".

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That is a sobering reflection, and it indicates the importance of the subject. We need to know whether Her Majesty's Government really understand and welcome the new work on the curriculum and will help it forward.

Like the noble Baroness, Lady Warwick of Undercliffe, I have a related question to ask. I hope that I will get an answer. It concerns the science centres and the contribution that they make to scientific citizenship. Last July, Mrs Estelle Morris received a delegation from the centres and invited them to explore with the DfES how they might move forward in harmony with the department's objectives. I hope that the noble Lord, Lord Whitty, will give me a clear assurance that there will be continuity in that consultation process under the new Secretary of State, Mr Charles Clarke.

There is a great deal of wisdom in the science and education communities. I hope that the gracious Speech means that Ministers will start to listen to their advice.

5.29 p.m.

Baroness Walmsley: My Lords, in my contribution, I shall talk about the link between the Government's stated intention to "promote opportunity and choice" in education and their other proposals in the gracious Speech about how to deal with truanting and anti-social behaviour. There is a strong link between those two things, but, sadly, the solutions to anti-social behaviour and truanting that are being proposed by the Government are nothing to do with education.

That is hard to understand from a government who purport to want to be tough on the causes of crime and to be enthusiasts for joined-up government. There is a whole raft of research showing that many of those who offend have been failed in one way or another by our education system, so why not start there? That is the cause of much of the crime on our streets, and it can certainly be the solution.

Most medical practitioners will tell you that prevention is far better than cure; most economists will tell you that it is cheaper; and most social scientists will tell you that it is much better for the fabric of society that we prevent the alienation and dysfunction that leads to offending behaviour than to have to deal with the damage to both offender and victim after it has happened.

It is therefore hard to understand the Government's emphasis on crackpot ideas such as on-the-spot fines for parents of truanting children when the same idea for yobs on the streets was laughed out of court. I should like to see effective measures to stop offending behaviour, but on-the-spot fines are not an effective solution.

Many young offenders are truants or have been excluded from school. Let us be clear about the damage that truanting and exclusion do and put the emphasis on preventing them rather than punishing the children or their parents. At a time when the Government are introducing citizenship into the curriculum—presumably in order to foster a sense of

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responsibility and inclusion among our young people—is it not ironic that the only substantial mention of young people in the gracious Speech was about punishing them when they reject what the state has to offer them? Real inclusion, like real drug rehabilitation, has to be voluntary. It cannot be imposed. Punishment of the parent will not lead to the inclusion of the child. Identification of the problems and putting resources into tackling them will.

One of the major causes of crime is exclusion from school, according to a Home Office report by Berridge, Brodie et al in 2001. Let us consider the extent of the problem. Every year 8,500 children are permanently excluded, with 12,000 out of school at any one time. There are also 65,000 fixed-term exclusions from school each year. Unless all of them are very rapidly found alternative provision, which they are not, that is an awful lot of children roaming around the streets getting into mischief.

Research shows that excluded children feel alienated because the criteria for exclusion are inconsistent and often perceived to be unfair. Their attitude to society is coloured by a sense of injustice, failure, and lack of belonging, and this affects their educational attainment and long-term employment prospects, and vastly increases the likelihood that they will get on to the wrong side of the law. Many of them have parents who cannot cope with them. Often they have a long history of truancy. Does it make sense to fine or imprison those parents for their inadequacy, or would it make more sense to support them and help them to cope?

Just because we are biologically capable of being parents does not mean that we all know how best to bring up children in the society of today, which is very different from the one in which we grew up. We all need help, but those parents facing multiple social problems are the ones needing most help. Social workers tell us that they can identify as much as 80 per cent of the future prison population before the children are 10 years-old. Why do we not heed these warnings and put resources into changing the factors which lead to such a situation?

There are many common denominators among children who truant and children who are subsequently excluded. Most children who are excluded from school come from backgrounds of extreme social and economic disadvantage. Children with special needs are six times more likely to be excluded; children in public care are 10 times more likely to be excluded; and 40 per cent of them come from single-parent families. There has been a 400 per cent increase in exclusions since 1998. Does this indicate that the Government are coping with the problem? I do not think so.

Does excluding the child solve the behaviour problems that arise in the classroom? I do not think that it does. It also leads to other agencies going into a crisis response when they could have been positively involved in preventive and restorative work instead. Would it not be better for teachers, parents, school managers, LEAs, social workers and specialist

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voluntary agencies such as INAURA to work together on a zero exclusions programme to prevent the situation reaching crisis point in the first place, but then, if it appears that remaining in the school is wrong for the child, to manage the transfer of the child to alternative provision that meets his or her needs?

My noble friend Lady Sharp of Guildford referred earlier to the NEET group of young over-16s—those that are neither in education and training nor in employment. These young people who have dropped out of the system are more likely to be the ones who have found the education offered to them to be so inappropriate to their needs that they either truanted or behaved so badly that they were excluded from school. The system has failed these young people. The horse has bolted and all the Government are now trying to do, with the proposals in the gracious Speech, is to close the stable door.

If asked what would be my solution to truanting and anti-social behaviour, I would give the Irish answer to the person asking directions, "I would not have started from here". But where should we have started? First of all, with high quality nursery education and care for the very youngest children. The Government must be given credit for the progress that they have made in this sector, but there is still a long way to go. Without more investment in early years, the changes to secondary education which the Minister announced earlier are just fire-fighting. The issue of the curriculum has already been covered by my noble friend Lady Sharp of Guildford and I shall not say any more about that.

There is a need to treat young people as individuals, to look at why they are rejecting school and to deal with their underlying problems. That way is better for the child, better for the other children in the school, better for the teachers, better for the parents and better for society. We in this country lock up more children than does anywhere else in Europe. That is more an indictment of our society than the fault of the children themselves. British children have as much innate ability and character as any in Europe. It is how we treat them that is different. It is time that we took a very critical root and branch look at that issue. Sadly, I regret that I did not find that in the Prime Minister's programme for government in the forthcoming Session.

5.37 p.m.

Lord Morgan: My Lords, this is a miscellaneous debate, which has certain advantages. It enables those of us engaged in regional policy to reflect on the great success of the Government's policy in regard to devolution. I am sorry that the noble Baroness, Lady Blatch, is not in her place. Her observations on the subject—the stern, unbending unionism which she expressed—might explain why the Conservative Party scored zero in Scotland and zero in Wales.

The noble Lord, Lord Waddington, threatened dire electoral consequences for the Liberal Democrats. Whether they would score less than nought I do not know, but it is a rather dire prospect. Devolution has been a great success, and I hope that it will be extended

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to regional government in England. Although I gather that the noble Lord is not in total agreement on that, he at least spared us the details of the Anglo Saxon Heptarchy which we heard about from another speaker on a previous occasion.

As for agriculture and rural affairs—and I live in the country—this debate gives the Government an opportunity to say something about DEFRA, and to explain how the department is ensuring that rural areas receive their share of prosperity and access to public services. Perhaps the Minister could tell us about the progress being made in relation to the excellent rural White Paper which was published two years ago.

I wish, however, to talk primarily about education—to which the Government have given priority, and in which, as the noble Baroness, Lady Sharp, said, the Government have scored considerable successes in literacy and numeracy. I almost feel that I should declare an interest as I was the moral tutor of the person who was mainly responsible for that strategy, Professor Barber. He was my pupil, as was one of his Downing Street colleagues. At one stage, I was also in charge of the supervising arrangements for Mr Adonis. I take some reflected pleasure from the achievements of these distinguished former pupils.

Higher education, however, has not been a success. It has been a sad story, from the failure fully to implement the Dearing report, to the failure as yet to announce higher education funding in the Comprehensive Spending Review. Too often, we have taken the approach—which I do not believe is part of the progressive or democratic socialist tradition in this country—of regarding university education as something for the middle class, something for an elite. That is not the tradition with which I grew up in Wales, where universities were thought of as people's universities.

There has not always been such sympathy, or even respect. The term "elitism" has been appallingly misused and misunderstood, and I hope that, now that Charles Clarke has exposed it, it will finally go into the dustbin of history. There have indeed been signs of a welcome departure so that, rather than use the abused term "elitism", we are talking about institutions of excellence and international quality. I hope that we will have no more talk of "elitism", no more cases such as that of Laura Spence, and no more insults to university institutions.

The Labour Party has a proud record in higher education. The much criticised Wilson and Callaghan governments of the 1960s and 1970s—and my noble friend Lord Jones was a member of one of those Governments—fulfilled the Robbins report and promoted higher education. In many ways, the years 1964–79 were a golden era for our universities. I am sorry that the noble Baroness, Lady Thatcher, is no longer in her place. She was Minister of Education in that period, and she saved the Open University. I do not know whether she would agree, but I regard that as one of the great achievements of her career. The Open

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University benefits our society enormously. That was perhaps the only period in which we took our education as seriously as other countries do.

As we have heard, there has been positive action from the Government, particularly in scientific funding. The Science Research Investment Fund, in 2000, was one important initiative. Nevertheless, there are some well-known problems—as we discussed not long ago in our debate on the encroachments on university autonomy and academic freedom. Free universities are everywhere in chains, albeit paper chains, because of excessive assessment and auditing. Now, however, those bureaucratic encroachments show welcome signs of diminishing.

It appears that the role of the Qualifications and Assessment Authority is to be scaled down in terms of both intensity and frequency. Moreover, the RAE—the research assessment exercise, which has done enormous damage to scholarly and intellectual life in this country—will also be conducted less frequently. It is welcome that Charles Clarke and the Prime Minister have made a priority of defending academic independence and saying that it should not be jeopardised.

My noble friend Lady Warwick clearly and admirably explained the funding situation; she did so much more expertly than I could. However, we know the problems. We know that many great universities are in debt but are without the power to raise additional finance. The problem is therefore getting worse, particularly for many universities which, socially, are doing a valuable job. Universities in the London area, for example, that cater for ethnic minorities and poorer people are in particularly dire straits. The problems that that causes for students, and particularly for mature students, are well known. I believe—speaking from memory—that mature students comprise approximately one fifth to one quarter of the student population at the University of Wales. Their percentage has not increased as it should, and that demonstrates a serious social weakness.

Speaking as a former member of the AUT—where my noble friend Lady Warwick was our admirable "shop steward"—I know that university staff are dreadfully underpaid. Since the 1980s—when I ceased to be a university teacher—pay has increased by just 6 per cent, whereas pay for comparable professions has increased by 44 per cent. We are losing not only teachers, but, alarmingly, the graduate students who supply the teaching profession in many key areas such as modern languages.

The remedies will undoubtedly be unveiled in January, and not before time. Although we shall debate this topic next week, I should like to consider a few possibilities now. Top-up fees would be better than what we currently have, as they would allow some of the more prosperous universities to survive, but they are a poor option. Not only are top-up fees opposed by many vice chancellors, including, as I said, every vice chancellor in Scotland; they divide even the famous—or notorious—Russell group. They would be very harmful to some of our newer universities whose

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students simply could not begin to afford such fees. It is an illusion to imagine that they can be made up by bursaries. The figures simply do not add up.

I am still a teaching member at Oxford, and what has been done there is excellent. However, although some colleges there could add to the sum, they could not supply the necessary 4,000, 5,000, 6,000 or whatever is worked out. Such fees would lead to impoverishment and social exclusion, and they would also damage the sciences.

I prefer the graduate tax, which is based on fairness. However, more important than my own views is the fact that, today, Clare Short expressed support for it. I believe that Charles Clarke also supports it. Such a tax would be based on fair principles. Collection of the tax might initially be slow, but, as we know, Gordon Brown is very interested in university access. The amount of time which can elapse before the tax is collected will be an important test of the Treasury's resolve on higher education.

Scotland presents an excellent example—indeed, devolved Scotland seems to be a model community. One previous speaker was not too keen on Scotland, but I believe that there is a great deal to be said for it—particularly in respect of higher education, the absence of fees, and the way in which its graduate tax makes special provision for mature students, single parents and the disadvantaged.

I hope and believe that the advent of Charles Clarke will mean a new deal. Yesterday, in the Independent on Sunday, he wrote about protecting "and even celebrating" diversity. The present system talks about diversity, but it does not celebrate or help achieve diversity. The current funding system promotes uniformity in a way that damages the stronger universities without helping the weak ones. If Charles Clarke amended that system, he would amend 20 years of erroneous policy in university funding.

I hope, finally, that the Government will not make too much of a target of 50 per cent of pupils at university by 2010. Targets can, as we have seen on hospital waiting lists, lead to fudging. I believe that such a target would diminish quality, or, alternatively, lead to false accounting. I hope that the advent of Charles Clarke means not only a new departure, but that, for the first time, "education, education, education" includes higher education.

5.48 p.m.

Lord Pilkington of Oxenford: My Lords, I rise today to ask the Government if they will consider giving some attention to the problems that are facing our examination system, particularly the difficulties facing A-level. Please forgive me for reminding your Lordships of a little history—a little less distant than that mentioned by the noble Earl, Lord Russell, but a little history nonetheless.

A-level was designed 40 years ago to assess those who wanted to do demanding—and I emphasise demanding—academic courses at university. As such it worked well for about 30 years. It is true that only 10 to 20 per cent of the ability range took this

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examination. However, because it was such a defined group it meant that examining was much easier. The patterns of performance changed little from year to year when dealing with a group as narrow as 10 to 20 per cent of the ability range. Therefore, it was possible to use the method of assessment known in the trade as "norm referencing". That sounds more technical than it is. It simply meant that a certain percentage were awarded As, a certain percentage awarded Bs, and so forth. It continued in the same way from year to year.

I have never opposed the desire of this Government and previous governments to extend the number of those who go on to further education. I acknowledge that in a more technical and developing world it is valuable that more and more of our citizens go on to higher education. However, the point I am making today is that it is a mistake to use only A-level as a method of assessing a larger and more varied group. One is deciding whether students in such a group are accepted by, say, Imperial College for a demanding course in pure science or mathematics or are accepted by another and different kind of university for a vocational course.

Germany and France share the desire of this and previous governments to expand the number of citizens who participate in higher education. However, it is interesting that neither of them use one examination to assess who should go on to further education. For example, France has the academic baccalaureate which bears comparison with A-level. Germany has the Abitur which also bears comparison with A-level. However, each has evolved a separate, more vocationally based examination. France has the professional baccalaureate and Germany has a number of vocational examinations.

Our attempt to use A-level, which was designed for a particular academic group of the age range, as an assessment of the wider group led to the disasters of this year. As we all know, one examination group suddenly and in panic decided to use a crude method of norm referencing, like that of the past. And of course it was a total failure. I gather from the Observer on Sunday that there is much more to be revealed. It was a problem which everyone in the trade could see coming.

Norm referencing cannot be used for such a varied group. What has been used is "criteria referencing" where examiners are told that each candidate must have certain points. They must tick that he or she has covered this, that and the other. It is a little like saying that 10 per cent of the apple is red and fruity, forgetting to say that a bit is discoloured at the bottom. Criteria referencing plus modules and course work, if not carefully controlled, can lead to grade inflation. Grade inflation, like monetary inflation, means that the examination loses its value.

Therefore, is the Minister in reply today prepared to give us a clue as to whether the Government are examining the problems in education and will he delight my heart by saying that he might even look at the French and German experience and not be dogmatic as regards the UK? But I urge him to beware

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of those siren voices which urge him to opt for the international baccalaureate. It has set subjects and it would suit the brilliant—I emphasise brilliant—all-rounder. However, for those who are dedicated scientists but not so good at modern languages, and for other dedicated specialists it could be a disaster. In many ways, the English pattern of specialisation has been more beneficial to such people.

One could of course turn to the French baccalaureate, which is very different. The French have a series of set menus, some with a science base, some with a humanities base, some with a classics base and so forth. It has much to recommend it; for instance, a wider range of subjects. But I think that Ministers' hearts will tremble when they realise that every baccalaureate on the Continent demands four-year university courses. I do not know whether they are prepared to consider that, but if so Mr Brown will have to open the Exchequer much more than he has hitherto.

My purpose today is to ask the Government to try to avoid dogma: let us not have the argument that there are two examinations, one of which is elitist and the other is not. I agree with the noble Lord, Lord Morgan, that the word "elitism" ought to be banned from public debate. It has caused more harm in English education than almost anything else. I hope that in reply the Minister will find time to give a little thought to the problems I have outlined.

5.54 p.m.

Lord Ezra: My Lords, I want to turn to environmental issues. The gracious Speech, in referring to the Johannesburg World Summit, states that the Government,

    "will focus on tackling climate change and finding new ways to meet our energy needs".—[Official Report, 13/11/02; col. 4.]

I will concentrate my remarks on that, which is particularly appropriate in view of the forthcoming White Paper on energy policy.

There are two interlinked issues of energy policy. They are the need to reduce emissions and the need to provide energy security. The two are indissolublely linked. It would be unacceptable to deal with the emissions problem and risk security, just as it would be to deal with the security problem but not with emissions. The trouble is that if we go on as we are, we are unlikely to achieve either objective. Emissions are currently rising and are likely to rise more. Security is imperilled by the substantial prospective imports of gas which, far from the self-sufficiency we now have, could reach 90 per cent of our requirements by 2020. Therefore, the need for positive policies in the White Paper is urgent.

The electricity generating market is crucial in all this. The major emissions savings in the 1990s were achieved by the increased use of gas in power stations and the reduction in the number of coal-fired power stations which in fact produced greater savings than anywhere else in the economy. However, we are now going to face a reverse situation. With the progressive

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withdrawal of nuclear plant and the increased use of gas or other fossil fuels, we are likely to see an increase in emissions in the power sector and elsewhere too. The way in which electricity is to be generated in the future is therefore crucial to the whole debate.

The Government have put a major emphasis on renewables, with which most people would agree. In practice, that presently means wind power. But the Government's modest targets—a 5 per cent contribution to electricity generation by 2003 and one of 10 per cent by 2010—are most unlikely to be met, let alone fill the gap left by the nuclear withdrawal. In fact, the contribution of wind power to electricity generation in 2000 was less than 0.5 per cent. We all know the planning difficulties which stand in the way of the expansion of wind power.

Therefore, a more broadly based approach is required. This could be provided by promoting the production and use of clean energy of which renewables could form a part. There are other important contributors to clean energy; for example, combined heat and power. That is a way of producing electrical energy but making use of the waste heat by using smaller plant than the conventional stations. The Government fully support that concept, but unfortunately CHP is going through a bad time. Having increased by 800 megawatts of new capacity in 2000, it increased by only 38 megawatts last year and is now declining in its contribution. That is due partly to the fall in wholesale prices, to which I referred earlier in a Question, and to the way in which the balancing mechanism operates in NETA, the new electricity trading arrangement.

There is also micropower, which is a very small form of CHP—and in which I declare an interest. This is a technological breakthrough. These appliances, which would fit into domestic premises to produce heat and electricity, would provide a degree of security hitherto unknown. How many people in various parts of the country suffered as a result of the recent storms? If they had had a combined heat and power installation in their homes, they would have been quite secure.

There is clean coal technology, which has long been advocated by supporters of the coal industry. Now, apart from clean coal technology, if CO 2 is extracted by known methods, in environmental terms coal could in the future compete with renewables.

There is methane from abandoned coal-mines—of which, unfortunately, there are now a large number. This too, if converted into electrical power, could reduce emissions substantially. If methane enters the atmosphere, it is very harmful.

All these aspects of clean energy should be treated on all fours with the way in which government are presently treating renewables. Unless some such major effort is made, it is difficult to see how present trends can be reversed.

There is the question of the future of nuclear power. But, as the PIU report indicated, this raises enormous financial, environmental and security problems. The

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Government are taking a first step to deal with these issues by means of the proposed legislation on the management of nuclear liabilities.

But all this will take time to sort out. Meanwhile, more immediate steps must be taken to widen the scope of the efforts to achieve reduced emissions as well as energy security. I have made certain suggestions to that end.

6.2 p.m.

Lord Sawyer: My Lords, decent affordable housing provided in sustainable communities for people on modest or low incomes is a particular concern of mine. I declare an interest as chairman of the Notting Hill Housing Trust.

Earlier this year, we heard from the Deputy Prime Minister in his July Statement that radical action is needed to reform the planning system. It was a good speech. It was an admission of failure by all governments, including his own. He talked about a step-change in attitudes.

This issue will require more than a step-change. It will require a wake-up call to all those involved in planning and housing: local government, the Civil Service, housing associations, developers and builders. Everyone involved will have to take one giant step, think differently, work in a new paradigm, if we are to make a difference to the housing problem in this country.

We are all acutely aware of the failures in housing provision. We see an increase in demand for housing, but we are building 150,000 fewer homes today than we were 30 years ago. That is not good enough. Regional planning guidance aimed for 23,000 new homes a year in London and 39,000 in the rest of the South East. These goals are clearly not being met. It is obvious that our regional planning policies have no teeth. Will the new planning legislation enable regional bodies and central government, if necessary, to take quick and effective action if local planning authorities do not deliver? That is a key point.

Housing is not just about legislation or numbers; it is most of all about communities. Good housing that is sustainable has the support of local communities. Too often, our planning process fails local communities and falls victim to loud and often powerful interests or pressure groups, with communities being sidelined or not being considered at all.

We need to speed up the planning process. I applaud the proposals to help with the training of staff in local planning authorities. However, we must look at the processes themselves, and particularly at the democratic element in the processes.

We have to ensure that everyone in the community has his or her view taken into account. We must listen not merely to our own peer group and to the movers and shakers in the industry, but to the next generation of young people who will have to be housed in villages and towns in the future. We must answer their question: where will the affordable housing be built to meet their needs? We must listen to local businesses.

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How can they attract the investment that will produce jobs and allow communities to grow and develop successfully?

Radical reform of the consultation process is needed to make it community driven in the widest sense. The narrow background of local development control is a dreadful waste of energy, and leads to fewer and fewer houses being built.

Where in the forthcoming legislation shall we see fundamental improvements providing facilities, resources and back-up for local communities that want to be involved in the process of local consultation—the processes and involvement that will lead to sustained development being welcomed and understood in communities, rather than being unwelcome and misunderstood, as it often is, through a lack of proper consultation, support and advice within those communities?

Good housing that is sustainable provides for a mix of incomes. I am afraid that even under this Government too much of our housing is segregated in terms of income groups, most of it going to the wealthy rather than to the poor. Yes, there are many more examples now of affordable housing being provided alongside higher cost homes that are for sale; but examples of affordable housing to meet the needs of the less well-off are still relatively few and far between.

The Notting Hill Housing Trust has been a pioneer of mixed tenure development and we are proud of the positive results. A recent survey indicated that 87 per cent of our customers were satisfied or very satisfied with their neighbourhood. However, in our experience, the majority of house-builders and developers want to segregate one housing type from another. Some go to great lengths to put the affordable housing on the other side of brick walls or even on separate sites. That does not provide for mixed, sustainable communities.

The lesson that we have learnt is that better results come from having control over the land. In this way, we can design better for sustainability; we can provide the amenities that the community has sought; and, most importantly, we can cross-subsidise from housing that is for sale to make affordable housing truly affordable for those on modest incomes.

I ask my noble friend what measures we shall see in the new legislation to make sure not only that affordable housing is built in mixed tenure communities, but that its availability reflects the gain in land values that is so often generated by the granting of consent to build. We must capture the land value gained for the benefit of the community, not merely for the developers and builders.

The surest way of doing that is to use compulsory purchase orders. Without these, we have to wait not only for the painfully slow planning process, but for house-builders to decide at what point to release part of their land bank. A wider use of compulsory purchase orders could help to ensure that the outcomes for our communities are those that they seek.

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In addressing the ills of our planning system we should re-examine the role of compulsory purchase orders: to assemble sites and bring forward housing supply; to ensure that the essential infrastructure is put in place; and to deliver the financial leverage that makes a sensible proportion of the new housing affordable housing. When will we see effective measures to make that happen? When will we see compulsory purchase orders used as a more effective tool in housing and planning policies? When will we see effective measures that lead to genuine community consultation supported and financed by government, and when will we see effective measures to ensure that regional planning targets for housing have really been achieved?

Finally, I see in the newspapers that the Deputy Prime Minister has taken issue with IKEA about the development of its superstores. I do not know the arguments on either side—the newspapers rarely provide such information—and I will be careful. Affordable furniture is as important as affordable housing, and no one does it better than IKEA. I have no interests in this regard. It combines high-quality design with fair prices. If as many people queued to get into the meetings of my party on a Sunday morning as queued to get into an IKEA superstore, we should have a flourishing democracy.

We want affordable furniture. IKEA is one of the companies that provides it successfully for those on low or modest incomes. Whatever happens, we must ensure that we do not obstruct its ability to deliver that. We should help it to serve the community in the same way as the Government should be so doing.

6.10 p.m.

Lord Prior: My Lords, I am tempted to speak on rural affairs but I had better leave that in the very capable hands of our Front Bench spokesman, who made an absolutely outstanding contribution in the previous Session, as in every Session, in relation to the horrendous problems that rural affairs and agriculture now face.

Instead, I shall say a few words on education, which is a subject on which I believe I have not spoken in either House for more than 40 years. I shall focus on one small but vital part of education; that is, the subject of learning to read.

About 18 years ago, a constituent got in touch with me to say that she was having considerable success at teaching phonics in a primary school in Lowestoft, which was in a rather depressed area, and the children would normally perhaps have been rather behind. I looked into the matter and found that she was having great success. As a result, I wrote to the local education authority and the then Secretary of State, my noble friend Lord Baker, asking them what they were doing about it and whether they had notification and experience of what my constituent was able to do. I had a very polite reply from the local education authority saying that it was aware of what was going on in that school and of its success but that phonics

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was only one of a number of ways of teaching to read and that this particular lady was obviously an extremely gifted teacher who was so good that she could probably teach her children to read by using any method. The reply from my noble friend was much along the same lines but perhaps even more anodyne.

I am afraid to say that I did nothing further but now, some 18 years later, I return to the attack. During that time, various others have joined in the attack to try to get something done about phonics teaching. Some very intrepid teachers, who now form the Reading Reform Foundation, have managed, by sheer persistence, to persuade teachers in all parts of the United Kingdom to adopt what is now known as synthetic phonics. That is also being done in Canada, New Zealand, Australia and parts of the United States.

I turn to my first question for the Government Front Bench, although it is not for the Minister who is currently sitting there; I hope that the noble Baroness, Lady Ashton, will write to me. My question is: why does the DfES keep ignoring the available research on phonics? I refer to the Clackmannanshire research, the classroom findings of the exemplar synthetic phonics schools and the classroom findings of many schools that report a rise in standards since using phonics and other synthetic phonics programmes. Even Conor Ryan, who I gather is Mr Blunkett's former education adviser, is asking similar questions.

I apologise for giving a brief lesson on phonics. We all know that "C", "A", "T" spells "cat" and so on; basically, that is phonics. I suspect that it is the method on which most of us in this House were brought up when we were learning to read. Broadly, I advocate returning to that.

Where has it all gone wrong? Following the war, new ideas began to emerge, including that known as "look and say": whole words were shown on flash cards. Fifty per cent of children succeeded quickly, 30 per cent struggled and 20 per cent failed altogether. After that came the "real book" method, whereby teachers would read an exciting book to children, which would encourage them to pick up naturally how to read for themselves.

However, by the late 1980s concern was growing about poor standards of reading. Phonics was therefore put back in the curriculum but, unfortunately, "analytical" phonics was involved; it is based on the sight of a whole word rather than simply the sounds of an individual word. In essence, by putting back analytical phonics, those involved tried to please everyone by recommending a bit of everything without proper research. That is really the basis of the national literary strategy. I welcome the emphasis that has been placed on learning to read and the energy with which that has been done. It is having some beneficial results but they are nothing like as good as they could be, particularly for the bottom 20 per cent. For them, we now have early literacy support. That is not necessarily for the bottom 20 per cent who are the most stupid; it is for those who find particular difficulty in learning to read. That is very

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cumbersome in the classroom, because generally the class has to be split into a number of groups, which involves difficulties for the teacher and requires other people to take the groups, so it is expensive.

The whole scheme—the NLS and the ELS—was introduced without scientific testing and it was not tested or compared to other approaches. Why? What really worries me is that head teachers and others, including teacher training establishments, appear to accept the Government's programmes without question or investigation, even when alerted by the Reading Reform Foundation. What are LEAs and Ofsted, which has an advisory role, doing about that? Even more worrying, those who have questioned the NLS and its programmes have been made to feel professionally compromised. They are actively discouraged from teaching any programme that is not part of the NLS. That is very distressing for young teachers, who fear for their careers if they adopt synthetic phonics. Surely it is overdue that the DfES produced research statistics to support the NLS and which contrasted it with synthetic phonics.

I say in parenthesis that in trying to research my short speech I have been appalled to learn of the frustration caused to teachers by constant bureaucratic officialdom demanding tests, reports and so on: a veritable avalanche of electronic mail pouring forth from the DfES. That really does need to be looked at. Teaching children to read early and fluently is the most important contribution that education can make to the future success and well-being of our nation.

To coin a phrase, it is time to get back to basics. The Reading Reform Foundation must be listened to. It is made up of teachers at the coal-face of learning. That is a real challenge for the new Secretary of State. His constituency is only 20 miles from where my former constituent lives. I suggest that they get together for the benefit of the country.

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