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Mr. Willis: The Minister said that I was twitching earlier. Is he saying that a school can use its budget share, or part of it, to set up a company and that, if it fails, it will be the LEA that will be subject to the liabilities under the new arrangements?

Mr. Miliband: Yes. That is why a safeguard has been set up for LEAs, in that they will need to approve the setting up of the companies.

Chris Grayling: The Minister did not answer a question I asked him a moment ago. Will a company have the right to enter into leasing agreements and other off balance sheet arrangements, and would the LEA ultimately be liable if the company failed, despite having had no sanction over whether it should be set up?

Mr. Miliband: I do not think that the off balance sheet question arises. Opposition Members are asking us to prescribe every conceivable detail of innovation that a school might exercise in relation to setting up a school company. We are saying that we have an exciting avenue for development here, and we want to give schools wide discretion to avail themselves of it, with safeguards built in.

The question of enforcement was raised by various hon. Members. This would involve an ordinary civil action in the courts, and recovery would be by debtors in the normal way, as is the position now for all purchasing by schools. The power to innovate, for which we are legislating, has no impact on that. The hon. Member for Stone also mentioned undesirable people being brought into schools to run the companies. The Government have

15 Jul 2002 : Column 68

made it clear that they will regulate to prevent undesirable people from being members of a company; we have said so in correspondence. All categories of persons who are prevented from being school governors will also be prevented from joining school companies.

The hon. Member for Harrogate and Knaresborough asked whether we would be distracting schools from their core function. The answer to that is no. These proposals are about encouraging co-operation between schools to help them to perform their roles more effectively, serving their own pupils and other pupils in the locality. Allowing teachers the professional development benefits of sharing their expertise with other schools can benefit both the providing and receiving schools. The hon. Gentleman asked whether that was not being done already. A certain amount of co-operation does already take place, but the power will provide clarity that the school's governing body can form a company to do more than it is able to do at the moment. Without such a power, there would be considerable doubt that a governing body could participate in a company that did more than oversee or carry out functions in relation to an individual school.

Mr. Andrew Turner rose

Mr. Miliband: I have been extremely generous in giving way, and I think it is about time that we finished this debate. There are some big issues still to be debated, and I am sure that we should be attacked later for not giving enough time to them, if we did not get on and get through this part of the debate.

The amendment tabled by the hon. Member for Harrogate and Knaresborough seeks to remove the option for companies to be limited by shares. I do not think he has made a strong case for that. When school companies choose to deliver services to other schools, they may well find being limited by shares rather than limited by guarantee a better, easier structure in which to work. I do not see why they should be denied that choice. For example, if a private sector body generated some innovative curriculum materials, it would make a profit from them. If one of our best schools did so, I see no reason why the school itself should not benefit. It is not true that a company limited by guarantee could not distribute any operating profit to its members. It is not the normal type of company structure adopted for paying profit to members, but there is scope for that to happen.

I hope that I have answered in full all the points that have been raised. This is an important provision and I urge the House to support the Government.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 320, Noes 168.

Division No. 307
[6.27 pm


Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Alexander, Douglas
Anderson, Rt Hon Donald
(Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Rt Hon Ms Hilary
Atherton, Ms Candy
Atkins, Charlotte
Austin, John
Bailey, Adrian
Baird, Vera
Banks, Tony
Barnes, Harry
Barron, Rt Hon Kevin
Bayley, Hugh
Begg, Miss Anne
Bell, Stuart
Benn, Hilary
Bennett, Andrew
Benton, Joe
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Borrow, David
Bradley, Rt Hon Keith (Withington)
Bradley, Peter (The Wrekin)
Brennan, Kevin
Brown, Rt Hon Nicholas
(Newcastle E & Wallsend)
Browne, Desmond
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burnham, Andy
Caborn, Rt Hon Richard
Cairns, David
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Casale, Roger
Caton, Martin
Cawsey, Ian
Challen, Colin
Chapman, Ben (Wirral S)
Chaytor, David
Clapham, Michael
Clark, Mrs Helen (Peterborough)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Rt Hon Charles
(Norwich S)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Cohen, Harry
Coleman, Iain
Colman, Tony
Cooper, Yvette
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cox, Tom
Crausby, David
Cruddas, Jon
Cryer, Mrs Ann (Keighley)
Cryer, John (Hornchurch)
Cunningham, Rt Hon Dr Jack
Cunningham, Jim (Cov'try S)
Dalyell, Tam
Davey, Valerie (Bristol W)
David, Wayne
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davis, Rt Hon Terry
(B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Dhanda, Parmjit
Dismore, Andrew
Dobbin, Jim
Donohoe, Brian H
Doran, Frank
Dowd, Jim
Drew, David
Drown, Ms Julia
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Ellman, Mrs Louise
Ennis, Jeff
Etherington, Bill
Farrelly, Paul
Field, Rt Hon Frank (Birkenhead)
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flynn, Paul
Follett, Barbara
Foster, Rt Hon Derek
Foster, Michael (Worcester)
Foster, Michael Jabez (Hastings)
Foulkes, George
Francis, Dr Hywel
Gapes, Mike
Gardiner, Barry
George, Rt Hon Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Goggins, Paul
Griffiths, Jane (Reading E)
Griffiths, Win (Bridgend)
Grogan, John
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, David (Midlothian)
Hamilton, Fabian (Leeds NE)
Hanson, David
Harris, Tom (Glasgow Cathcart)
Havard, Dai
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Heppell, John
Hill, Keith
Hinchliffe, David
Hodge, Margaret
Hoey, Kate
Hope, Phil
Hopkins, Kelvin
Howarth, Rt Hon Alan (Newport E)
Howarth, George (Knowsley N)
Hughes, Beverley (Stretford)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Iddon, Dr Brian
Illsley, Eric
Ingram, Rt Hon Adam
Irranca–Davies, Huw
Jackson, Glenda (Hampstead)
Jackson, Helen (Hillsborough)
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Jones, Jon Owen (Cardiff C)
Jones, Kevan (N Durham)
Jones, Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Jowell, Rt Hon Tessa
Joyce, Eric
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Keen, Ann (Brentford & Isleworth)
Kelly, Ruth
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
Knight, Jim (S Dorset)
Ladyman, Dr Stephen
Lammy, David
Lawrence, Mrs Jackie
Laxton, Bob
Lazarowicz, Mark
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Liddell, Rt Hon Mrs Helen
Linton, Martin
Lloyd, Tony
Love, Andrew
Lucas, Ian
Luke, Iain
Lyons, John
McAvoy, Thomas
McCabe, Stephen
McCafferty, Chris
McCartney, Rt Hon Ian
MacDonald, Calum
McDonnell, John
MacDougall, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
Mackinlay, Andrew
McNamara, Kevin
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
McWilliam, John
Mahmood, Khalid
Mahon, Mrs Alice
Mallaber, Judy
Mandelson, Rt Hon Peter
Mann, John
Marris, Rob
Marsden, Gordon (Blackpool S)
Marshall–Andrews, Robert
Martlew, Eric
Meacher, Rt Hon Michael
Meale, Alan
Merron, Gillian
Michael, Rt Hon Alun
Miliband, David
Miller, Andrew
Mitchell, Austin (Gt Grimsby)
Moffatt, Laura
Mole, Chris
Moonie, Dr Lewis
Morley, Elliot
Morris, Rt Hon Estelle
Mountford, Kali
Mudie, George
Mullin, Chris
Munn, Ms Meg
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Norris, Dan
O'Brien, Bill (Normanton)
Olner, Bill
Organ, Diana
Osborne, Sandra (Ayr)
Owen, Albert
Palmer, Dr Nick
Pearson, Ian
Perham, Linda
Picking, Anne
Pickthall, Colin
Pike, Peter
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pope, Greg
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Primarolo, Rt Hon Dawn
Purchase, Ken
Purnell, James
Quin, Rt Hon Joyce
Quinn, Lawrie
Rammell, Bill
Rapson, Syd
Reed, Andy (Loughborough)
Robertson, John
(Glasgow Anniesland)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie
Roy, Frank
Ruane, Chris
Russell, Ms Christine (Chester)
Ryan, Joan
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Sheerman, Barry
Sheridan, Jim
Shipley, Ms Debra
Simon, Siôn
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, Rt Hon Chris (Islington S)
Smith, Geraldine (Morecambe)
Smith, Llew (Blaenau Gwent)
Southworth, Helen
Squire, Rachel
Starkey, Dr Phyllis
Steinberg, Gerry
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stuart, Ms Gisela
Sutcliffe, Gerry
Taylor, Ms Dari (Stockton S)
Taylor, David (NW Leics)
Taylor, Dr Richard (Wyre F)
Thomas, Gareth (Clwyd W)
Thomas, Gareth (Harrow W)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Tynan, Bill
Vaz, Keith
Vis, Dr Rudi
Walley, Ms Joan
Ward, Claire
Wareing, Robert N
White, Brian
Williams, Rt Hon Alan
(Swansea W)
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wood, Mike
Woodward, Shaun
Worthington, Tony
Wright, David (Telford)
Wright, Tony (Cannock)

Tellers for the Ayes:

Mr. Ivor Caplin and
Mr. Phil Woolas.


Ainsworth, Peter (E Surrey)
Allan, Richard
Amess, David
Arbuthnot, Rt Hon James
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Bacon, Richard
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, John
Barrett, John
Bellingham, Henry
Bercow, John
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Brady, Graham
Brake, Tom
Breed, Colin
Browning, Mrs Angela
Burns, Simon
Burnside, David
Burstow, Paul
Burt, Alistair
Butterfill, John
Cameron, David
Campbell, Rt Hon Menzies
(NE Fife)
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Clarke, Rt Hon Kenneth
Clifton–Brown, Geoffrey
Collins, Tim
Cormack, Sir Patrick
Cotter, Brian
Cran, James
Curry, Rt Hon David
Davey, Edward (Kingston)
Djanogly, Jonathan
Duncan, Alan (Rutland & Melton)
Duncan Smith, Rt Hon Iain
Evans, Nigel
Fabricant, Michael
Field, Mark (Cities of London)
Flight, Howard
Forth, Rt Hon Eric
Foster, Don (Bath)
Francois, Mark
Gale, Roger
Garnier, Edward
George, Andrew (St Ives)
Gibb, Nick
Gillan, Mrs Cheryl
Goodman, Paul
Gray, James
Grayling, Chris
Green, Damian (Ashford)
Grieve, Dominic
Gummer, Rt Hon John
Hague, Rt Hon William
Hammond, Philip
Hancock, Mike
Harris, Dr Evan (Oxford W)
Hawkins, Nick
Heald, Oliver
Heath, David
Heathcoat–Amory, Rt Hon David
Hendry, Charles
Hoban, Mark
Holmes, Paul
Horam, John
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Johnson, Boris (Henley)
Keetch, Paul
Kennedy, Rt Hon Charles
(Ross Skye & Inverness W)
Key, Robert
Kirkbride, Miss Julie
Kirkwood, Archy
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lamb, Norman
Laws, David
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Liddell–Grainger, Ian
Lidington, David
Lilley, Rt Hon Peter
Llwyd, Elfyn
Loughton, Tim
Luff, Peter
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Malins, Humfrey
Maples, John
Marsden, Paul (Shrewsbury)
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Moore, Michael
Moss, Malcolm
Murrison, Dr Andrew
Oaten, Mark
O'Brien, Stephen (Eddisbury)
Öpik, Lembit
Osborne, George (Tatton)
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Portillo, Rt Hon Michael
Price, Adam
Prisk, Mark
Pugh, Dr John
Randall, John
Redwood, Rt Hon John
Reid, Alan (Argyll & Bute)
Rendel, David
Robathan, Andrew
Robertson, Hugh (Faversham)
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion
Rosindell, Andrew
Ruffley, David
Russell, Bob (Colchester)
Sanders, Adrian
Sayeed, Jonathan
Selous, Andrew
Shephard, Rt Hon Mrs Gillian
Simmonds, Mark
Simpson, Keith (Mid–Norfolk)
Smyth, Rev Martin (Belfast S)
Spelman, Mrs Caroline
Spink, Bob
Stanley, Rt Hon Sir John
Streeter, Gary
Stunell, Andrew
Syms, Robert
Tapsell, Sir Peter
Taylor, John (Solihull)
Taylor, Sir Teddy
Thurso, John
Tonge, Dr Jenny
Tredinnick, David
Trend, Michael
Turner, Andrew (Isle of Wight)
Tyler, Paul
Viggers, Peter
Walter, Robert
Waterson, Nigel
Watkinson, Angela
Webb, Steve
Whittingdale, John
Wiggin, Bill
Wilkinson, John
Willetts, David
Williams, Hywel (Caernarfon)
Williams, Roger (Brecon)
Willis, Phil
Wilshire, David
Winterton, Sir Nicholas
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Noes:

Mr. Desmond Swayne and
Mr. Julian Brazier.

Question accordingly agreed to.

15 Jul 2002 : Column 72

Lords amendment disagreed to.

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