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Lord McNally: We are taking the advice of the Bar Council and the Law Society. Nobody has suggested that the issue should wait. Lord Justice Jackson has

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produced a 500-page report which even due courtesy would suggest should be studied before the Government proceed to action.

Lord Phillips of Sudbury: Would my noble friend look more widely at the conditional fee situation now prevailing? As he may know, there are large commercial purchasers of cases from the public-they are not subject to any Law Society or Bar Council rules-who then sell them in bulk to solicitors for a fee per case plus a proportion of the conditional fee gathered in the course of it. Would he not accept that that is a gross problem for justice today?

Lord McNally: The way the conditional fee regime has grown up has produced a number of abuses and anomalies. Right from the beginning, from those Benches across there, I raised some of the actions of the companies to which my noble friend referred. I know that Lord Justice Jackson has looked at the actions of those companies in his report and has made some recommendations. I think that right across the House, there is a general feeling that there are abuses in the conditional fee system. We have to get the balance right between the access to justice that conditional fees give and some of the anomalies and, indeed, abuses that have grown up in practice. We will do so after consideration of Jackson, but with all due urgency.

Economy: Eurozone


3.14 pm

Asked by Lord Trimble

The Commercial Secretary to the Treasury (Lord Sassoon): The Chancellor of the Exchequer and Treasury Ministers attend regular meetings of EU Ministers, including the Council of Economic and Finance Ministers-ECOFIN. These discussions cover a wide range of issues, including the ongoing situation in sovereign debt markets.

Lord Trimble: My Lords, I thank my noble friend for his Answer, and I draw attention to my entry in the register of interests. I have two points to raise with him. Funds have been established to try and help countries in the EU that are in difficulties, but one of the underlying causes of those difficulties is the loss of competitiveness. Is that likely to be solved before the money and time run out? If it is not solved by then, what then happens?

Secondly, I draw my noble friend's attention to the alternative investment fund managers directive that is currently being imposed on us. The European Parliament estimated that that directive would cost the European Union as a whole roughly 0.2 per cent of its GDP, but, as most of the alternative investment funds are in the

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United Kingdom, the potential cost to us is much greater. Have the Government managed to draw any of this directive's teeth? If not, how much is it likely to cost the United Kingdom?

Lord Sassoon: My Lords, I will deal first with the question of competitiveness. The UK Government, the European Council and the Union well recognise that competitiveness must be improved in parallel with steps that are being taken to deal with the immediate financial situation of a number of member states. I draw my noble friend's attention to the EU economic taskforce under the leadership of the President of the European Council, Herman Van Rompuy, which will report to the October Council. As well as dealing with crisis resolution matters, it has competitiveness indicators very much on its agenda. Indeed, it considers competitiveness absolutely in parallel with crisis resolution issues, as well as more broadly as part of the Europe 2020 exercise.

On the alternative investment fund managers directive, the European Council and the European Parliament have each taken positions that do not agree with each other, so the UK Government and the industry have a short window up to the end of July in which to make final representations and attempt to make sure that we get the best deal for what is a very important industry for the City of London out of this trialogue process.

Lord Barnett: My Lords-

Lord Pearson of Rannoch: My Lords, does the noble Lord agree that a good way in which to protect the British economy would be to refuse to underwrite massive sums for Brussels, such as the £8 billion mentioned by his noble friend Lord De Mauley on 8 June, which are illegal under the treaties? How many billions are we going to be exposed to through the illegal breach of Article 125, which forbids member states to bail out others?

Lord Sassoon: I thank the noble Lord for his questions. First, to be clear, it is the view of the UK Government that no illegal action has been taken under Article 125 or any of the other relevant articles. On the UK's exposure, we have not as a country participated in the €440 billion special purpose vehicle for assistance. We do, however, participate in the €60 billion finance facility, which is available to any member state under Article 122.2 and which we think strikes an appropriate balance between the eurozone taking primary responsibility for stabilisation within the eurozone and the important part that we have to play as part of the wider EU 27. For completeness, we participate in the IMF standby facilities.

Lord Myners: Can the Minister confirm categorically to the House that the Government will in no circumstances divulge to European institutions the thinking behind or the detail of proposed Budgets or the work of the OBR? Does he agree that if that categoric assurance cannot be given, there are grounds for a referendum?

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Lord Sassoon: My Lords, I can give an assurance that any request to submit the UK Budget to Europe will not be completed until the Budget has been submitted to and approved by the UK Parliament.

Lord Forsyth of Drumlean: My Lords, does my noble friend agree that we want to see growth in Europe and businesses growing, expanding and being given the opportunity to borrow money from the banks? Is it therefore a sensible time to think about taxing the banks and reducing their ability to make that money available?

Lord Sassoon: My Lords, I think that we will probably come back to the question of bank levies tomorrow after my right honourable friend the Chancellor of the Exchequer's Budget. He has made it completely clear that the UK supports bank levies. We will take unilateral action, but we want to seek international agreement to make sure that the bank levies are, as far as possible, introduced on a common basis.

Lord Barnett: My Lords, the noble Lord will have noticed that he did not answer the Question on the Order Paper. Does he recognise that there are serious consequences for the UK if there is any major collapse in the economy in the eurozone, not least to the UK banks which have large numbers of debts owing from many countries within the eurozone? In those circumstances, should we not seek to help rather than hinder them and gloat over their difficulties?

Lord Sassoon: My Lords, I am grateful for the reminder that not only are 40 per cent of the UK's exports exposed to the eurozone-so we want to see a stable eurozone-but that through financial linkages the whole financial system, including the banking system, is exposed. That is why we believe that the forthcoming publication of bank stress tests is an important part of the support going forward.

Allhallows Staining Church Bill [HL]

Kent County Council (Filming on Highways) Bill [HL]

Revival Motions

3.20 pm

Moved By The Chairman of Committees

Motions agreed.

Works of Art Committee

Membership Motion

3.21 pm

Moved By The Chairman of Committees

Motion agreed.

Business of the House

Timing of Debates

3.22 pm

Moved By Lord Strathclyde

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, in moving the Motion, it may be helpful if I say a few words about the scheduling of business in the next few weeks. The Motion on the Order Paper today seeks leave to bring forward from next week to tomorrow the debate in the name of my noble friend Lady Verma on progress towards meeting the millennium development goal on universal primary education. This proposed change has come about as a result of discussions on the Academies Bill, which the House will begin considering in Committee today.

Last Wednesday, the Chief Whip published Forthcoming Business, which set out three consecutive days for Committee stage on the Academies Bill. I must confess that there was a misunderstanding as to how this came about, which led to some feeling that this was not the optimum way to proceed. As a result, there were further and very constructive discussions between the usual channels, which led to the republication of Forthcoming Business. This revised edition sets out three days for Committee stage on the Academies Bill-today, Wednesday 23 June and Monday 28 June. I am sure that these revised dates will be welcomed by all sides of the House. Furthermore, the usual channels have agreed to take Report stage on Wednesday 7 July.

The usual channels are a vital part of self-regulation in this House and we remain committed to ensuring that they work effectively on behalf of the whole House. I beg to move.

Baroness Royall of Blaisdon: My Lords, I warmly welcome the statement and the clarification from the Leader of the House. The usual channels provide a very important function for and within this House, although sometimes some noble Lords think that

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perhaps the system is too opaque. However, I believe that it works very well. For the smooth running of business and the well-being of the House as a whole, it is crucial that the whole House has confidence in the system. The noble Lord's statement demonstrates that we agree on the importance of a fair system which respects the role of the Government and the Opposition. I thank the noble Lord.

Motion agreed.

Arrangement of Business


3.25 pm

Baroness Anelay of St Johns: My Lords, at a convenient point after 4 pm today my noble friend Lord Hill of Oareford will repeat an Urgent Question as a Statement on the free schools policy, followed immediately by my noble friend Lord Strathclyde, who will repeat a Statement on the European Council.

Academies Bill [HL]

Bill Main Page
Copy of the Bill
Explanatory Notes

Committee (1st Day)

3.26 pm

Clause 1 [Academy arrangements]:

Amendment 1

Moved by Baroness Morgan of Drefelin

1: Clause 1, page 1, line 3, leave out "Academy" and insert "Direct Maintained School"

Baroness Morgan of Drefelin: We begin today the first scrutiny in Committee of the first Bill from the new coalition Government. The Government have tried to present the Academies Bill now before us as non-controversial, as an extension of Labour policy on academies, and so as something that should be easy for reasonable people on this side of the House to support. It is to be a decentralising measure, devolving more power to local people to run their schools and making a contribution to improving the quality of teaching and learning in schools, with all the benefits to children's life chances and to our wider society that that implies. This Bill is also being presented as a contribution to the big society-the idea which the Conservatives promoted a little in the general election. I suspect that we will hear less about that as we go forward, but nevertheless it is a very interesting idea.

I believe that the Bill is nothing of the sort. We on this side recognise it for what it may well turn out to be-highly centralising, potentially damaging to children's education, damaging to communities, and a device more to establish free schools by the back door. The Bill does not seek to improve our education system. Instead, it may well be shown that it seeks to make fundamental and damaging changes to it. The Government would not increase the number of Labour-designed academies, designed when we were

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in government; rather they seek to create a new class of school with a motive which is entirely different from the laudable aims behind the Labour academies. The schools that they would create are not necessarily appropriate to bear the name "academy". That is why we seek to deny that name to these schools. They should be called what they will be: direct maintained schools.

Ministers have spent so many years attacking local government that they have forgotten something about which their own Conservative-controlled Local Government Association has reminded them:

"Councils don't run schools and haven't done for many years".

That is a quotation from an LGA Bill briefing. Schools run themselves, which is how it should be, but councils do have a range of statutory duties to protect the welfare of children in their area, including a duty to promote,

Councils make sure that there are enough school places for all the children who need them, and their top priority is to make sure that the same high standards of education are offered to all students, whether they are taught in a community school or an academy. Councils make sure that the admissions process operates fairly so that every child gets a chance to go to a good local school. They oversee the distribution of funding in conjunction with local schools in a cost-effective way. They provide support for children with special educational needs, something I know that the Committee is concerned about, and they are the champions of children in care.

3.30 pm

Far from being non-contentious, there are many issues in the Bill which deserve full scrutiny by the Committee. As the Bill progresses through your Lordships' House, I hope we will be able to demonstrate how potentially retrograde it could be. For now, this group of amendments concentrates on only one issue. It is not a superficial or symbolic point but a very substantive one-that the schools established under the Bill will not be academies but something else entirely, and what they are called should reflect that fact.

The academy scheme put forward by this side of the Committee when we were in government was intended as a means by which schools which were failing too many pupils could be supported quickly, directly and effectively. Some Members of this Committee believe that the schools created under the provisions of the Bill will be comparable to Labour's academies. Nothing could be further from the truth. We need a discussion on terminology in order to highlight what is proposed in the Bill. Is it so new? In reality, it could represent a return to something remarkably similar to the grant-maintained schools of the mid-1990s. So we must first establish what we mean by an academy.

Academies are all-ability, state-funded schools which have sponsors from a wide range of backgrounds, including universities, colleges, educational trusts, charities, the business sector and faith communities. I pay tribute to the contribution that the sponsors have made; it has been absolutely key. Sponsors establish a charity trust which appoints the majority of governors to the academy

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governing body. The academy's programme targets areas of inadequate educational attainment and opportunity. Most academies replace existing weak or underperforming schools, and others are brand new schools in areas which need extra school places. They were a key element of the national challenge and took us to a position-from a very low start-where only one in 12 schools fell below the 30 per cent grade A to C benchmark, which half of all schools failed to do under the previous Conservative Government.

Academies are required by law to cater for children of all abilities. The school admissions code which came into force in 2007 applies to all maintained schools and academies when setting their admissions arrangements. Academies must also have regard to the SEN code of practice and statutory guidance on inclusion. An academy is established in collaboration, not confrontation, with the local authority as a means by which extra resources can be freed up to support the most disadvantaged and the weakest. Academies are given new leadership, and some of the best heads in the country have been attracted to run them.

Outside expertise brought in new ideas, new ways of working and a new focus on the best ways to change the culture of learning. Importantly, a role for innovation was acknowledged and, for this reason, academies were obliged to follow the national curriculum only in core subjects such as English, maths, science and information technology. With academy status came a new ethos, perhaps with a renewed focus on discipline, a new uniform and new ways of organising the school day. New buildings frequently provided the focus for this change of ethos and helped to deliver excellent discipline and the best facilities. However, just as important, academies helped to deliver to children a sense of pride in their education; that they should be proud of themselves and proud of their school in return.

The 63 academies which have been open long enough to produce results in both 2008 and 2009 have seen, at the end of key stage 4, an increase of 5 percentage points-up to 34.9 per cent-in pupils gaining five or more A* to C grades at GCSE and equivalent, including English and maths. On the five-plus A* to C measure, the 63 academies improved by 11.7 percentage points, compared with an improvement of 5.4 percentage points nationally. The Minister has recognised the importance of that achievement. A comparison of the 101 academies that had results in 2009 and predecessor results in 2001 shows a 16.4 percentage point improvement in the number of pupils achieving five-plus A* to C, including English and maths, from 17.8 per cent in 2001 to 34.2 per cent in 2009. This compares with an average 11.9 percentage point improvement nationally, from 38.8 per cent in 2001 to 50.7 per cent in 2009. The 101 academies and their predecessor schools have also more than doubled the percentage of pupils achieving five-plus A* to C, from 26.3 per cent in 2001 to 65.2 per cent in 2009. Nationally, the increase is 22 percentage points, from 47.8 per cent in 2001 to 69.8 per cent in 2009. It is important to put these figures on the record. We on this side of the Committee are proud of what was achieved through our academies

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programme, but to compare this with the free-for-all that is on the table is disingenuous and potentially misleading.

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