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The final question that I would like to address is how soon policyholders will receive payments. I would like to end the plight of policyholders as quickly as possible,
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and I aim to begin making payments in the middle of next year. If we are to achieve this goal, however, it is important to avoid any unnecessary delays. I will do all that I can to make sure we stick to this timetable, and I hope all interested parties will help us to do so. This is, however, a very complex task. We have made much progress since the Government were formed, but there is a great deal left to do. We need a simple, transparent and fair scheme that meets the needs of 1.5 million policyholders who have between them 2 million policies and have made 30 million premium payments. It is in the interests of each of those policyholders to complete this task quickly, but also carefully and thoughtfully.

In the past two months, we have published Sir John's report; set up the independent commission on Equitable Life payments; published the first robust figures surrounding the calculation of relative loss; opened up the process, making it much more transparent; put in place a framework for the payment scheme; and produced legislation to give the Treasury statutory authority to make payments. We have achieved more in two months than the last Government did in the two years since the ombudsman reported. The coalition Government have demonstrated their commitment to justice for Equitable Life policyholders, and I commend this statement to the House.

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): I thank the hon. Gentleman for early sight of his statement and for the opportunity to review Sir John's report in full at the Treasury this morning.

I would like to start by repeating the words of apology to Equitable Life policyholders that I made to the House earlier this year for the failure of regulation of Equitable Life under successive Governments between 1990 and 2001.

I thank Sir John Chadwick for his detailed report, which we commissioned. He has taken on an extraordinarily complex matter, and he has done an admirable job. I also thank officials at the Treasury for the work that they have done over the past six months in getting ready the legislation which I am glad to see that the hon. Gentleman has published today. I, too, thank EMAG. I am grateful for the work done by the all-party Equitable Life policyholders group, chaired by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) and my hon. Friend the Member for Leeds North East (Mr Hamilton).

When I came to the House earlier in the year, I said that there was a clear ethical obligation, even if not a legal obligation, for compensation for Equitable Life policyholders. Equally, however, I knew that case-by-case compensation for policyholders, as suggested by the ombudsman, was not practical. I said that there were two tests for the right solution-speed and justice. I went on to say that we expected the Government to produce a report within two weeks of Sir John's final report, which we wanted to see in May. So here we are in July, and there are a few questions that I should like to put to the Minister this afternoon.

First, is the Minister actually accepting Sir John's recommendation? Earlier in the year he did a good impression of wanting to ditch Sir John's approach and revert to the one set out by the ombudsman. Today, Sir John makes it clear in paragraph 10.17 that the ombudsman's approach

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Can the Minister confirm that Sir John's approach is the right one? He called it one of the building blocks, but will he set out whether he is accepting Sir John's report?

The second question that the House will want to know the answer to is who precisely will be entitled to help. Sir John states in paragraph 6.3 that help should cover new investments made between 1 September 1992 and 31 December 2000. Does the Minister agree with that approach? How many policyholders will be included on that basis, and how many will be excluded?

Thirdly, how much are policyholders actually going to get? Part 6 of the report sets out an approach and a method for calculating losses. Can the Minister confirm that what he has just said is that the maximum compensation will be based on a quarter of the relative losses faced by policyholders, and that that figure will itself be capped at absolute loss? Many policyholders will find that hard to square with what he said in the House earlier this year. What the House will want to know this afternoon is how much, on average, policyholders will actually get.

Fourthly, how quickly does the Minister want to complete this process? I am glad that he wants to get started next year, but the House will want to know how quickly he wants the final payments to be made. Finally, what appeal mechanism will the Government put in place for those policyholders who want to challenge their individual determinations?

It is incumbent on all of us to speed this matter to resolution. I am glad that the Minister has set out legislation this afternoon, and we will support it going through as rapidly as possible, but there are questions that our constituents will want answers to today. I hope that he will be as full as he can in replying to what I have asked.

Mr Hoban: I find the right hon. Gentleman's comments rich, as he was a member of the Government who for nine years sought to frustrate, block and delay investigations into Equitable Life and its regulation; who ignored Lord Penrose's findings of maladministration in 2004; who did everything they could to stop the ombudsman's second inquiry; who bombarded the ombudsman with new documents and comments on her draft report; who took six months to reply to her report when it was published; and who set up a review by Sir John with a report carefully timed to be released after the general election. I will take no lessons at all from him about speed of response.

Sir John's report sets out a range of approaches to calculating loss. As I said in my statement-the right hon. Gentleman had sight of it, as he said-I have not accepted that report. I will reflect on Sir John's findings and think very carefully about them. The amount that policyholders will receive will be determined by a number of factors, and partly by the compensation figure set as part of the spending review process, as I said very carefully in my statement. The independent commission will need to respond to that matter when it designs the payment scheme, which was a key recommendation of the ombudsman that the right hon. Gentleman and his colleagues rejected but we are prepared to accept and put in place. He will have to wait until that scheme
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design has taken place and we have worked through its implications across 1.5 million policyholders, their 2 million different policies and the 30 million transactions that they entered into.

I am determined that the scheme will proceed as quickly as possible and that we can resolve the problems faced by Equitable Life policyholders-problems that the right hon. Gentleman and his party did little to sort out over the course of the past nine years.

Several hon. Members rose -

Mr Speaker: Order. This is a very important statement, and a lot of hon. and right hon. Members wish to take part in the exchanges on it, but there is also very important business to follow, so there are pressures on time. What is now required is brevity.

Mr David Davis (Haltemprice and Howden) (Con): First, I congratulate my hon. Friend the Financial Secretary on achieving so much in two months. He said that he had done more in two months than Labour did in two years, but he underestimates it. He has done more in two months than they did in 10 years.

Nevertheless, there is a great deal left to be done, as my hon. Friend himself said. Halfway through next year is still a long time to wait for many of the more elderly policyholders. Can he give the House an undertaking that he will stick to that timetable so that those policyholders receive their compensation before they die, in many cases? He said that he was still considering Sir John Chadwick's proposals. Will he ensure that not only he but the independent commission takes representations from EMAG, and do so quickly?

Mr Hoban: I am grateful to my right hon. Friend for welcoming the statement. I am committed to the process taking place as quickly as possible. There are some challenges in the design of the scheme that we will need to think about when it comes to payments, but I am determined to ensure that payments start at the end of the first half of next year.

I want EMAG and others to take part in the debate about the scheme, and I am very happy for them to make representations to the independent commission that will help to draw up the detail of the scheme. I think we have a programme that will deliver justice in a way that is more robust, transparent and open than the process set out by the previous Government. I would also say to my right hon. Friend that we would have been in a better place if the previous Government had acted sooner to tackle the problem rather than trying to kick it into the long grass.

Malcolm Wicks (Croydon North) (Lab): I appreciate the difficulties of calculating loss and the complexities of the process that the Minister has set up, but can he give us any idea of the percentage range of compensation that our distressed constituents might receive? That is the question that people want an answer to.

Mr Hoban: I accept that point. It would have been better if this whole process had started much sooner and we could have given policyholders much more assurance. We will not be able to determine how much will be paid to policyholders until we go through the
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spending review process, but I have committed to return to the House in October to say how much will be allocated by way of compensation. That pot of compensation will then be allocated by the independent commission.

Peter Bottomley (Worthing West) (Con): I am a member of EMAG, but I will not take any compensation for my own benefit.

May I put it to my hon. Friend that his statement will be welcomed? However, although no one thought that £4 billion was likely to come, most of my constituents-I probably have more than most who are affected-would regard £400 million as less than they expected. About £1 billion would be far more likely to be acceptable and proper.

Mr Hoban: As I said in my statement, we need to look carefully at Sir John's report and the basis on which he calculated losses, and we will feed that into the spending review process. However, I take on board my hon. Friend's points.

Mr Andrew Love (Edmonton) (Lab/Co-op): The hon. Gentleman's failure to disclose the figure for the likely compensation today is unlikely to reassure Equitable pension holders. What they are looking for is a body to be set up that is both independent of the Treasury and totally transparent in delivering figures that they can trust. They are looking for him to expedite that so that payment will be made as soon as possible.

Mr Hoban: The hon. Gentleman should listen more carefully to statements given in the House. The independent commission is at arm's length from the Treasury and will be responsible for designing the payment scheme. I would have thought his constituents would welcome that independence and transparency, which was not evident in the ideas put forward by his colleagues.

David Rutley (Macclesfield) (Con): Can the Minister provide more detail on the advice and guidance that will be provided to those affected by this sad situation, following his announcement and given the extreme passage of time?

Mr Hoban: My hon. Friend makes an important point. Some of the changes that I want to make to the process of ensuring that Equitable Life policyholders receive justice are to do with speed and transparency. More information will be available to policyholders on the Treasury website, where they will be able to see some of the work that Sir John has done and the letter that Towers Watson provided to us. There will also be questions and answers on the website to help address their concerns.

Mr Kevin Barron (Rother Valley) (Lab): Given that the Financial Secretary said that the cost to the Exchequer will be considered in the light of what is affordable according to the spending review, will the independent commission, which is designing the disbursement scheme, have terms of reference that allow it to challenge or influence the amount in the light of its findings?

Mr Hoban: I may be old-fashioned, but I think that it is up to Parliament to decide amounts that are spent and taxes that are raised. The commission will have a
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role in designing the scheme, but it is important that Parliament takes a view about how much should be spent. I remind the right hon. Gentleman that the ombudsman herself said in her report that we need to take into account the impact of any compensation arrangements on the public purse.

Lorely Burt (Solihull) (LD): My hon. Friend will know that EMAG and many Equitable Life members consider that Sir John Chadwick's remit, which the Labour party set when it was in government, is deeply flawed. I am glad that my hon. Friend says that what he has announced will be only one building block. Why will Equitable Life members get only 20 to 25% of the absolute loss? Can he reassure me that retrospective payments for Equitable Life members who died waiting for justice will be honoured?

Mr Hoban: My hon. Friend makes two important points. She referred to the cap of 20 to 25%, which is Sir John's assessment and proposal. I am conscious that others, including EMAG, have different views about what the proportion should be, but they accept the principle that some policyholders would have stayed with Equitable Life. Her second point, about the estates of deceased policyholders, is very important. I have given the commission wide terms of reference, with two exceptions. First, it must take into account the estates of deceased policyholders-that is fair. Secondly, there should be no means-testing.

Mr Denis MacShane (Rotherham) (Lab): The Financial Secretary's fair and measured statement might be taken more seriously had he not, in opposition, belaboured the Labour Government and made wild promises about paying full compensation to Equitable Life policyholders. Does he understand that people thought-

Hon. Members: Where's your tie?

Mr Speaker: Order. I apologise for interrupting the right hon. Gentleman. The question of his neckwear or lack of it is of no concern to the House. I just want to hear what he has to say.

Mr MacShane: Mr Speaker, I have just had extensive root canal treatment and cannot tighten anything around my neck-I am terribly sorry-but I can open my mouth. Does the Financial Secretary understand that Equitable Life policyholders will feel betrayed? When will the Government stop doing endless U-turns?

Mr Hoban: Whether or not the right hon. Gentleman wears a tie, it does not add to the sense that he makes when asking questions. We made it clear in opposition that we accepted the ombudsman's findings the day she published her report, unlike the Labour Government, who took six months to do that. We accepted the recommendations that compensation should be for relative loss and that account should be taken of the impact on the public purse. We have been consistent in that approach. I do not believe that the Conservative party has U-turned in any way. We have stuck to our commitment and made more progress on the matter in the past two months than the Labour party made in two years.

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Heather Wheeler (South Derbyshire) (Con): I am delighted with the Financial Secretary's announcement. The largest postbag that I receive as a south Derbyshire MP is about Equitable Life. It is disgraceful that the matter has been going on for so long. I therefore congratulate my hon. Friend and greatly look forward to the announcements next April.

Mr Hoban: I am grateful to my hon. Friend. She is not the only Member with a bulging postbag as a consequence of the issue. I am surprised at how many more of my constituents have announced that they are Equitable Life policyholders since I became the Minister responsible. I believe that there is good news in the statement, and I hope that hon. Friends will contact their constituents who have policies to let them know about the coalition's progress.

Mr Fabian Hamilton (Leeds North East) (Lab): I think that my right hon. Friend the shadow Chief Secretary deserves some credit for his work on the issue. However, I thank the Financial Secretary for his helpful statement. Will he attend a meeting of the all-party group when it is re-formed so that a more detailed discussion can take place, given the shortage of time here and all hon. Members' interest in the issue?

Mr Hoban: I pay tribute to the hon. Gentleman's excellent work as one of the joint chairmen of the all-party group. I note that the shadow Chief Secretary spoke to its members early this year, and I am happy to do the same. We have a good story to tell and I will not turn down any opportunities to tell it.

Mr Mark Field (Cities of London and Westminster) (Con): Does the Financial Secretary feel bound by the 20 to 25% cap that Sir John seems to have plucked from the sky, or does he share my view that that flies entirely in the face of the transparency that the Government are trying to achieve for Equitable Life policyholders?

Mr Hoban: The debate is one of proportion rather than principle. In its representations on the matter, EMAG accepted that some policyholders would have stayed with Equitable Life or invested in it, despite knowing that it was not properly regulated. Indeed, several people joined Equitable Life quite late on, when its problems were well known, so there is some sense to the approach. The debate is about proportion, and I am prepared to take representations on that.

Paul Flynn (Newport West) (Lab): It is unfortunate that the Financial Secretary has omitted any word of gratitude to Tony Wright and other members of the Public Administration Committee, who pursued the matter with great energy and intelligence. Perhaps the hon. Gentleman wants to make the issue a political football. My constituents will ask what alchemy reduced £4.8 billion to a maximum of £650 million. Why do they have to wait another year? Were they not deceived by the Conservatives' exaggerated claims in their election propaganda?

Mr Hoban: Given that the hon. Gentleman was meant to be seeking a bipartisan spirit, it did not last much longer than his first sentence. I paid tribute to the hon. Member for Leeds North East (Mr Hamilton), and I
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know from discussions with hon. Members of all parties that all Members of Parliament want to get the matter resolved. We all have constituents who have been involved, and the Public Administration Committee was one of many routes whereby the previous Government were pursued to deliver justice for policyholders quickly.

Tessa Munt (Wells) (LD): I thank the Financial Secretary very much indeed for his comments about the speed with which he will deal with the matter, particularly on behalf of my 80-year-old constituent, Jim Barratt, who said that, at his age, time was not on his side. Given that the coalition has declared that it will apply transparency to the matter, has EMAG received the information on "Head A" calculations, which it requested, but was not forthcoming under the previous Administration?

Mr Hoban: I have made it my duty to maintain a good and open relationship with EMAG. I met its members again earlier this week and I spoke to the chairman, Paul Braithwaite, this morning to advise him that I was making the statement. Today, I am publishing 2,500 pages of material that help underpin Sir John's work and I hope that people who are interested will examine that in detail and respond to his findings and the actuarial advice that he received.

Mr Dennis Skinner (Bolsover) (Lab): When the policyholders realise just how much they will get, they will think that it is a far cry from all the statements by the then Tory Treasury spokesman, who has somehow landed up as Secretary of State for Transport, and the Liberal spokesman, who promised the moon and to pay everything in full. The small print indicates that those policyholders will now realise that the Tory party and the coalition are in full retreat on the payments that they should receive.

Mr Hoban: I know that the hon. Gentleman is concerned about pension arrangements, but in all the debates in which I participated on the matter, whether in Westminster Hall or Opposition day debates, I do not think that he spoke up once for Equitable Life policyholders.

Mr Sam Gyimah (East Surrey) (Con): I thank the Financial Secretary for the speedy and decisive action that the Government have taken in the past two months. However, my constituents will ask whether, given that Sir John's report is supposed to be a founding block, there is any likelihood of moving towards fuller compensation. Secondly, my hon. Friend mentioned the spending review. How fixed is the £400 million to £500 million? Could the figure be lower?

Mr Hoban: Sir John's report presents a range of numbers, which we need to look at in the context of the spending review. My right hon. Friends the Chancellor and the Chief Secretary will hear Members' representations on the matter, but we need to ensure that we put this matter in the context of the other spending commitments that the Government wish to make.

Albert Owen (Ynys Môn) (Lab): I have been consistent in my support of the parliamentary ombudsman recommendations, and I welcome the Financial Secretary's statement as a building block. He has been very clear that he wants payments to begin in the middle of next
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year, but may I press on him an appeals procedure, because if we do not have one or a timetable for appeals, the matter could drag on for many years?

Mr Hoban: The hon. Gentleman makes a sensible point and I am grateful for his welcome of today's statement and the progress that I announced. He is absolutely right about an appeals mechanism, and the Treasury are looking at that proposal at the moment. Policyholders who question the data that are used-some data are quite old and policies are complex-will want a mechanism by which they can appeal, so that is important. However, I am keen to ensure that the appeals process is quick and thorough, so that people are comfortable with the outcome they get.

Stephen Hammond (Wimbledon) (Con): I congratulate my hon. Friend. As someone who took part in the Equitable Life debate in March, I do not recognise some of the wilder accusations that are being levelled against him. May I press him on the key point of his statement, which is the capped figure? I think he confirmed to my hon. Friend the Member for Cities of London and Westminster (Mr Field) that he will review the figure when he reflects on Sir John's report, but will he confirm that he will publish, and make a statement on, his methodology as to how he reaches it, whether or not he agrees with the report?

Mr Hoban: As part of the spending review process, I have already committed to publishing not only the amount of compensation the taxpayer can afford to pay, but the final loss figure. My objective is to be as transparent as possible on that calculation.

Dr Sarah Wollaston (Totnes) (Con): Although I congratulate the Minister on the undoubted speed and transparency of the process, many of my constituents will be seeking reassurance that it is safe to save in future. Will the cap of 20 to 25% be sufficient in giving them that reassurance? If not, what other measures will be taken?

Mr Hoban: I welcome my hon. Friend's comments. Many people's confidence in saving has been shaken as a consequence of what happened at Equitable Life, but she will recall that last month, my right hon. Friend the Chancellor announced reforms to the regulation of financial services, which will include a new consumer champion-a consumer markets and protection authority. That is one way to help to improve regulation and to give people confidence about saving for their future.

Andrew Bingham (High Peak) (Con): I congratulate the Minister on the speed with which he has dealt with this matter compared with the previous Labour Government. He is looking to make payments in mid-2011, which is a great deal better than the other lot led us to believe, but winter is coming up-winters tend to be a bit colder in the High Peak than in other constituencies-so is there any opportunity to make interim payments?

Mr Hoban: That suggestion has been made on a number of occasions, and I thought very carefully about interim payments. It is difficult to make an interim payment before the scheme is designed. Such payments would add complexity and delay to the creation of the
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scheme. When the commission considers its findings, I hope it may well decide that certain groups should receive payments in priority to others.

Rehman Chishti (Gillingham and Rainham) (Con): Policyholders in my constituency were pushed from pillar to post and had to get judicial review to get some accountability, but the previous Government did absolutely nothing. With regard to the timeline of making payments by the middle of May next year, what criteria will be applied as to who gets their money first?

Mr Hoban: That will be a matter for the independent commission. One key point for EMAG and the ombudsman was the setting up of that commission. I want to give it the maximum latitude to decide its priorities for payment and who should be paid first.

Mr Brian Binley (Northampton South) (Con): The Financial Secretary has intimated that he aims to begin to make payments by the middle of next year. Thirty thousand policyholders, including a sizeable number in my constituency, have already died, and I urge him to rethink the question of making a pro rata, interim payment based on his cap figure. Will he please think about that more seriously than his previous answers suggest, because I am fearful that more people in my constituency will die and not receive fair treatment?

Mr Hoban: Many hon. Friends have raised that issue with me in debates in recent weeks, and I have asked my officials to look carefully at it. I have also thought through very carefully how we could make such a proposal work, but I am yet to be persuaded that we can do so in a way that is fair to policyholders who might not receive an interim payment.

Nicky Morgan (Loughborough) (Con): I congratulate my hon. Friend on his announcement. Many of my constituents will be delighted at the speed with which he has tackled the matter. I noted the shadow Chief Secretary to the Treasury's apology, but also that it was limited to Equitable Life policyholders. He did not apologise for the fact that the economic situation left behind by the previous Government has limited necessarily the payments that my constituents and others will receive. Should his apology extend to that?

Mr Hoban: I am not going to refer to the letter that the former Chief Secretary left for his successor, but I must say that I did not get one from him on Equitable Life.

Mr Aidan Burley (Cannock Chase) (Con): Does the Minister agree that it is important that the compensation scheme is seen to be administered by an independent commission, and that it was wrong of the previous Government to ignore many of the parliamentary ombudsman's recommendations?

Mr Hoban: My hon. Friend makes an important point. It is important that the scheme should be designed to be independent. That is what will give maximum credibility to the scheme, and that will get maximum transparency for, and maximum support from, Equitable Life policyholders.

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Mr Graham Stuart (Beverley and Holderness) (Con): Equitable Life was a poisoned pill left by the previous Government, even if no note accompanied it. As my hon. Friend the Member for Northampton South (Mr Binley) rightly said, 30,000 people have died waiting for justice. Conservatives, who have long pushed for justice for policyholders, recognise that there will be an element of rough justice no matter what happens. Will the Financial Secretary ensure that the process is speedy? Even if interim payments are not possible, will he bring the matter to a close quickly, so that people can have certainty, because they did not get that from the previous Government?

Mr Hoban: I accept my hon. Friend's point about speed, but I also accept the point made by the hon. Member for Ynys Môn (Albert Owen) on the need for appeals mechanisms, because rough justice works both ways, and we need to ensure that people are treated fairly under the scheme.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I welcome the fact that the Financial Secretary has recognised that the 25% cap will probably be the greatest concern of many of our constituents. He said that he will receive representations, but what is the deadline for those? People will want to influence him on that decision.

Mr Hoban: As I said, the process for deciding on the maximum compensation that is payable will conclude at the spending review, and we will publish the results on 20 October. I encourage the hon. Gentleman's constituents to write sooner rather than later in that process. There are a range of views on that number and people will have their opinions on whether it is appropriate, but of course, we must set the overall position in the context of what the public purse can afford.

Nadhim Zahawi (Stratford-on-Avon) (Con): We have heard a non-apology from the shadow Chief Secretary for the previous Government's obfuscation. Will the Minister write to the Independent Parliamentary Standards Authority to ask for a special communications allowance for Labour Members, so that they can write and apologise to the families of the 30,000 people who have died and the 1.5 million policyholders who have had to wait 10 years?

Mr Speaker: Order. That question may be amusing, but I am afraid that it is irrelevant to the Minister's responsibilities, and he must not answer it.

James Morris (Halesowen and Rowley Regis) (Con): May I welcome the Minister's announcement and the speed with which he has come to the House to outline the next steps in the process? Further to an earlier question, will he clarify the time scale in which he wants to receive further representations from interested parties? He said that he wants to reflect on Sir John's findings, but can he give us an indication of the time scale for receiving those representations?

Mr Hoban: I have not set a formal deadline or time scale, but I am sure that over the summer recess, my hon. Friends will talk to policyholders in their constituencies and gather their views. The Leader of the House today
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announced a debate on 14 September, I believe, on Second Reading of the Equitable Life (Payments) Bill, which might give my hon. Friends the opportunity to make an oral representation.

Sajid Javid (Bromsgrove) (Con): Earlier this month, I held a public meeting in my constituency on Equitable Life, and I heard directly from many policyholders how they suffered, especially because of the inaction of the previous Government and their callous disregard for their rights. Will my hon. Friend assure me that the coalition Government will do all they can to end the long suffering of the Equitable Life victims?

Mr Hoban: Indeed I can give that commitment. I am also very mindful that at points over the previous nine years, the previous Government could have acted to bring justice to policyholders but chose not to do so. I am afraid that that is another aspect of that Government's legacy that the Conservatives have to sort out.

Mr Dominic Raab (Esher and Walton) (Con): I welcome the fact that the Minister has moved so swiftly. Equitable Life victims in Elmbridge, like those across the country, were subject to the most shabby treatment by the last Government and no amount of synthetic outrage now can hide that. They feel raw and their trust in government is almost totally undermined. May we have further reassurance that there will be close consultation with the victims in the weeks ahead, especially on the vital issue of quantum and the mooted cap?

Mr Hoban: My hon. Friend makes an important point. Confidence in this process was significantly eroded by the previous Government. I hope that what I have announced today will enable policyholders to turn a new page and recognise that we are determined to be much more open and transparent in our approach, and that will help to build the credibility of the process.

Andrew Percy (Brigg and Goole) (Con): Policyholders in my constituency are not interested in apologies that come nine years too late: they want justice. The Financial Secretary has outlined the start date for payments, but will he set a concluding date for the completion of this whole saga?

Mr Hoban: I am conscious that this is a very complex business. There are 1.5 million policyholders with 2 million policies and 30 million transactions. The policies are not straightforward and the data are old and difficult to access. I want to do as much as I can to make the process as quick as possible, and my hon. Friend has my commitment that I will do everything that I can to ensure that the date is speeded up.

Dr Julian Lewis (New Forest East) (Con): Dozens of my constituents affected by the scandal, and a cousin who lives abroad, were favourably impressed by what was said in opposition creditably by Conservative and Liberal Democrat MPs. Will my hon. Friend accept that the experience of root canal surgery by the right hon. Member for Rotherham (Mr MacShane) will be as nothing compared with what those MPs will suffer if we fail to live up to our promises? I welcome the speed with which my hon. Friend is taking action, but the content of that action must live up to the speed.

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Mr Hoban: My hon. Friend is right. Each of us who signed a pledge at the general election will want to ensure that we deliver on that pledge, and no one takes that more seriously than I do.

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Points of Order

1.2 pm

Mr Pat McFadden (Wolverhampton South East) (Lab): On a point of order, Mr Speaker. Yesterday at Prime Minister's questions, the Deputy Prime Minister, when trying to justify the recent decision by the Government to refuse the proposed loan of £80 million to Sheffield Forgemasters said that the decision taken by the last Government had been made knowing the funds were not available. He said:

But I am in possession of a letter sent to me a few days ago by the permanent secretary at the Department for Business, Innovation and Skills commenting on the financial controls in place during the time that the decision to approve the loan was taken. That letter says that

In other words, the permanent secretary, an official for whom I have the highest regard, is clear that it was not the case that the previous Secretary of State approved financial decisions for which funds were not available. The Deputy Prime Minister has already got his facts wrong on the directors' shareholdings. We also have the news that a major Tory donor wrote to the Government specifically on this point and appealing for the loan not to be granted. Now the permanent secretary's letter shows that the Deputy Prime Minister has got his facts wrong again, this time on the issue of financial approval of the loan itself.

I ask you, Mr Speaker, how can we ensure that when the Deputy Prime Minister next speaks at the Dispatch box, he does not simply spray around unfounded accusations but gets his facts right on this crucial issue?

Mr Speaker: The straightforward answer to that point of order is that-if memory serves me correctly-there will be an opportunity to question the Deputy Prime Minister on Tuesday next week. If hon. Members wish to put questions to the Deputy Prime Minister on the matter to which the right hon. Gentleman has just referred, they will have an opportunity-not least in topical questions-to do so.

So far as the wider comments the right hon. Gentleman made are concerned, I can only reiterate what I have already said about the correction of errors and underline the importance of Members using their own devices to pursue those matters. I cannot be drawn into the debate. The right hon. Gentleman has stated his position and I have indicated what opportunities there are for the pursuit of the matter.

Mr Gordon Marsden (Blackpool South) (Lab): On a point of order, Mr Speaker. Earlier this week I raised a point of order with you about the Secretary of State for Communities and Local Government saying in the House
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that he would not make any announcement about the abolition of Government offices and he was currently discussing that with interested parties-despite the fact that he had written to the contrary to the Deputy Prime Minister nine days previously. On that occasion you said that you had had no indication that the Secretary of State would come to the House to make a statement.

This morning, a written ministerial statement by the Secretary of State has announced that 1,700 posts in 10 Government offices are to be abolished. That follows a meeting that he had last night with trade union representatives when he said that he would reflect on the issues and discuss them. That is the second time in a week that the Secretary of State has indicated one thing and done another. Is it not reasonable that he should now come to the House to make a formal statement on an important issue that will affect governance and on which he has ducked and dived by making that written ministerial statement this morning?

Mr Speaker: The Secretary of State has chosen to disclose his policy through a written ministerial statement and it is open to any Minister from any Department to do that. The hon. Gentleman and others may be dissatisfied with that, and it is open to them to interrogate the Secretary of State about whatever contradictions they believe that his course of action has embodied or caused. But it is not for me to rule on whether there should be a written ministerial statement or an oral statement. The hon. Gentleman has aired his concern and I have a feeling that he will continue to air it.

Chris Skidmore (Kingswood) (Con): On a point of order, Mr Speaker. On Monday, the shadow Education Minister, the hon. Member for Gelding (Vernon Coaker), who is in his place, told the House:

I believe that he was referring to an article in The Sunday Mirror on 30 May 2010. However the Swedish education Minister Bertil Ostberg said the next day in a Swedish publication Varldenidag:

The shadow Minister's statement on Monday was therefore inaccurate. Will there be an opportunity for the hon. Gentleman to come to this House and correct that inaccuracy?

Mr Speaker: First, I think that I am right in saying that the hon. Gentleman is referring to the hon. Member for Gedling (Vernon Coaker). Secondly, I have no responsibility for Swedish Ministers, Swedish schools, Swedish policies or Swedish newspapers.

Huw Irranca-Davies (Ogmore) (Lab): On a point of order, Mr Speaker. I am genuinely sorry to have to bring this point of order to your attention and to seek your clarification and guidance. I had hoped to receive
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clarification from the Leader of the House earlier, but did not do so. It is a fundamental point, not about individuals or personalities but about the procedures of this place. As a shadow Minister, when I step up to the Dispatch box I speak for the shadow ministerial team and I speak collectively. I did the same as a Minister when I spoke with the authority of Government and I had a responsibility to speak on behalf of the Government.

It seems this week that we have had several situations in which statements that have been made have not been prefaced with the phrase "I speak in a personal capacity", but spoken as the Deputy Prime Minister or other Minister. Can you provide guidance on that point, for both the shadow Cabinet and the Government? Alternatively, can you show us how we can trust that statements made at the prestigious and honoured position at the Dispatch Box are Government statements, not individual views? If we wanted to give our individual views, we could go on "Thought for the Day" on Radio 4.

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. Ministers speak from the Dispatch Box as Ministers, not as individuals or on behalf of parties. Ministers are responsible for what they say, and I must assume that they speak in the House on behalf of the Government.

Geraint Davies (Swansea West) (Lab/Co-op): On a point of order, Mr Speaker. At a recent Prime Minister's Question Time, the Prime Minister suggested that Lord Mandelson was going around the country with a cheque book giving out tens of billions of pounds. I now understand, from research in the Library, that the figure is hundreds of millions of pounds-a factor of 100 times less. What steps will you take, Mr Speaker, to ensure that this grotesque misleading of the nation and Parliament is corrected on the Floor of the House?

Mr Speaker: The short answer to the hon. Gentleman is: none. That is for the simple reason that he is seeking, and has sought, to continue a debate.

Alison Seabeck (Plymouth, Moor View) (Lab): On a point of order, Mr Speaker. I would welcome your clarification, not least in the light of the debate that was held here on Tuesday about the pre-release of statements prior to the Minister coming to the Dispatch Box. I do not have Superman's X-ray vision, and I stand to be corrected on this, but I saw a Government Parliamentary Private Secretary come to the House and distribute among Government Back-Bench Members a document that looked very much like the statement that the Minister then went on to read. Can you offer your guidance, Mr Speaker, so that that sort of thing does not happen in the future, if indeed it happened today?

Mr Speaker: When a statement is made and has been delivered, copies are made available to all Members. That is the proper way in which to proceed. I hope that is clear.

Alison Seabeck: Further to that point of order, Mr Speaker.

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Mr Speaker: I am not sure it requires it, but we shall see. We shall give the hon. Lady another bite of the cherry.

Alison Seabeck: The document in question, which may or may not have been a statement, was distributed during business questions, although it might have been something else.

Mr Speaker: What I have already said in response to the hon. Lady's point of order stands. I am happy to reflect further on the point, but I am not sure I want to get into the issue of precisely at what point these statements are distributed. If anything further is required on that matter, no doubt she will come back to me, and I will be happy to seek to respond. But that will do for now.

Dr Julian Lewis (New Forest East) (Con): Further to the point of order by the hon. Member for Plymouth, Moor View (Alison Seabeck), whom I much admire, may I, through you, Mr Speaker, reassure her that the pieces of paper to which she referred contained nothing more noxious than a few helpful suggestions of questions that might be asked-a practice that, while not entirely to be praised, is not unknown on both sides of the House, whether in government or opposition?

Mr Speaker: I am sure that the House is enriched as a result of that point of order. We are grateful to the hon. Gentleman.

David Wright (Telford) (Lab): On a point of order, Mr Speaker. I have been reflecting on your guidance to my hon. Friend the Member for Ogmore (Huw Irranca-Davies) about the position of the Deputy Prime Minister in relation to remarks attributed to him on a personal basis. Given your guidance to the House, Mr Speaker, do you think it appropriate that the Deputy Prime Minister should now come back to the House to clarify his statement yesterday during Prime Minister's questions that the war in Iraq was an "illegal" war?

Mr Speaker: My response to the hon. Gentleman is that he is pushing his luck. I have ruled on this matter, and I have nothing to add.

22 July 2010 : Column 594

Bills presented

Fixed-term Parliaments Bill

Presentation and First Reading (Standing Order No. 57 )

The Deputy Prime Minister, supported by the Prime Minister, Sir George Young, Mr Mark Harper and Mr David Heath, presented a Bill to make provision about the dissolution of Parliament and the determination of polling days for parliamentary general elections; and for connected purposes.

Bill read the First time; to be read a Second time on Monday 26 July, and to be printed (Bill 64) with explanatory notes (Bill 64-EN).

Parliamentary Voting System and Constituencies Bill

Presentation and First Reading (Standing Order No. 57 )

The Deputy Prime Minister, supported by the Prime Minister, Sir George Young, Mr Mark Harper and Mr David Heath, presented a Bill to make provision for a referendum on the voting system for parliamentary elections and to provide for parliamentary elections to be held under the alternative vote system if a majority of those voting in the referendum are in favour of that; to make provision about the number and size of parliamentary constituencies; and for connected purposes.

Bill read the First time; to be read a Second time on Monday 26 July, and to be printed (Bill 63) with explanatory notes (Bill 63-EN)

Equitable Life (Payments) Bill

Presentation and First Reading (Standing Order No. 57 )

Mark Hoban, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Mr Secretary Iain Duncan Smith, Danny Alexander, Mr Francis Maude, Mr David Gauke and Justine Greening, presented a Bill to provide finance for payments in cases where persons have been adversely affected by maladministration in the regulation before December 2001 of the Equitable Life Assurance Society; and for connected purposes.

Bill read the First time; to be read a Second time on Monday 26 July, and to be printed (Bill 62) with explanatory notes (Bill 62-EN)

22 July 2010 : Column 595

Academies Bill [ Lords]

[2nd Allocated Day]

Further considered in Committee (Progress reported 21 July)

[Dawn Primarolo in the Chair]

Clause 2

Payments under Academy agreements

1.15 pm

Vernon Coaker (Gedling) (Lab): I beg to move amendment 70, page 2, line 26, at end insert-

'(1A) Payments may be made in respect of capital expenditure under an Academy agreement to an additional school only where the Secretary of State has first consulted with-

(a) local parents and children,

(b) the relevant local authority,

(c) any other persons deemed appropriate.

(1B) The purpose of the consultation under (1A) shall be to establish whether there are outstanding requirements for capital investment for existing schools in the area where the school is (or is proposed to be) situated.

(1C) Where a need is demonstrated the Secretary of State may not make payments with respect of capital expenditure under subsection (1).

(1D) A school is an "additional school" for the purposes of this section if-

(a) it does not replace a maintained school that has been or is to be discontinued, and

(b) it is not a school in respect of which an Academy order has effect.

(1E) For the purposes of subsection (1D)(a) a school does not replace a maintained school if it provides education for pupils of a wider range of ages than the maintained school.'.

It is a privilege to be back standing here as the hon. Member for Gedling-

Mr David Evennett (Bexleyheath and Crayford) (Con): We will never look at the shadow Minister in the same way again.

Vernon Coaker: I know. Perhaps it is the way I speak. Anyway, it is a delight to be back here. It does not seem long ago that we were finishing the debate last night- [Interruption.] No, it was not long ago. I am sure we have all had plenty of opportunity to enjoy ourselves in the intervening period and not think of anything but the Academies Bill and all the other relevant papers and documents.

Amendment 70 is an important amendment, particularly given the fiasco-frankly-of the past few weeks with respect to the Building Schools for the Future programme, the cuts to it, the reassessments and the other problems with the list. I will not rehearse those problems, but the relevance of and the need for the amendment are even more acute than they would have been had it not been for what has happened over the past few weeks. Schools up and down the country were expecting capital moneys to be provided for them to improve schools and tackle problems with school buildings. Many of those proposals were developed by local authorities, and many hon.
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Members on both sides of the Chamber will have helped to work up those plans over a number of months and, sometimes, one or two years, because the school-building programme was linked to school reorganisation for school improvement. But of course that was all dashed by the lists published and the review announced by the Secretary of State for Education in order to prove that he could cut budgets.

The Government are now looking to create new schools using money from their budgets. Their defence is: "Don't worry, this isn't coming from Building Schools for the Future money. It's actually coming from cuts to low-priority computer programmes", and they talk about £50 million. However, neither the Secretary of State nor the Schools Minister ever add that the £50 million is up until March 2011 only; and neither do they mention that there have been, I understand, 38 expressions of interest to the New Schools Network, which has since sought to talk to the Department. Is it 38? When he replies to the amendment, will the Minister tell us how many free schools he expects to open? I understand that the first is due to open in September 2011. How many such expressions of interest have there been so far? How many of those have changed from expressions of interest to applications? How many does he expect to open in 2011? Alongside that, how many does he expect £50 million will pay for? What will that £50 million mean for those 38 schools?

Derek Twigg (Halton) (Lab): Has my hon. Friend seen the podcast on the Department for Education website by the Secretary of State, where he says that all schools will get more money, more efficiently and more cheaply? How is that possible, given that he has just cut the BSF programme?

Vernon Coaker: Frankly, the reality is that it is not possible. What we are getting from the Secretary of State is an explanation for what he has done on the grounds that the money was not there in the budget for the Building Schools for the Future programme, when the letter from the permanent secretary to the shadow Secretary of State quite clearly points out that the money for BSF was set aside in the proper way. The school rebuilding programme in my hon. Friend's constituency has not been cut; it has been absolutely massacred. That money was there, and the permanent secretary-this is an extremely important point that will bear repeating on a number of occasions-said in the letter to the shadow Secretary of State that if the proper procedures had not been followed according to Treasury rules, the permanent secretary would have required a ministerial direction to proceed with the policy, as my hon. Friend knows. The permanent secretary at the Department for Education has confirmed that, in fact, no such ministerial direction was given, so my hon. Friend now knows the reality.

As for this £50 million, we are now being told, "Don't worry, it's not going to affect school budgets. It's not going to be a problem with respect to school buildings." However, free schools are already being affected across the country.

Mr Mike Hancock (Portsmouth South) (LD): I am grateful to the hon. Gentleman for giving way. He was very generous yesterday too, and the Committee appreciated the answers to some of the questions. However, he is talking now as if, under Labour's proposals, the money
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for Building Schools for the Future was already in the bank-that is, already in the Department. However, it was made clear time and again that the money for Building Schools for the Future would be made available from savings made elsewhere. He talks as if the money was already in existence and had been earmarked, but that is complete and utter nonsense. It is now being spread about that schools would have been assured of that money, but the previous Government gave no such assurance.

Vernon Coaker: The hon. Gentleman and I often agree on education matters, but on this particular matter I do not agree with him. He will know-not only from his experience in the House, but from his local authority experience, which he had on a local education authority, as he reminded us yesterday-that when we talk about money being available, that means money being accounted for in the proper way, so that proposals to do certain things in the future are made according to the rules laid down by the Treasury. The Treasury will not allow anyone to say that they will involve schools in various waves-for example, in Building Schools for the Future-unless they conform to certain rules. The point that I was making to my hon. Friend the Member for Halton (Derek Twigg) is that the then Secretary of State-now the shadow Secretary of State-conformed to all the Treasury rules to ensure that when those schools became ready for rebuilding, the money was there in the proper way.

I was also making the point that free schools, which are the Secretary of State's preferred route forward, are already saying they are feeling the consequences of the changes that the Government have made. In the Yorkshire Post on 9 July-I will not read out the headline, in order to save the Secretary of State from embarrassment-it was reported that free school pioneers are worried about the impact of the changes that the Government are making and feel that they have "dealt a blow" to their proposals to establish a free school in Kirklees. Whether it is right or wrong to have a free school in Kirklees, it is not just those on the Opposition Benches who are saying that the position with respect to Building Schools for the Future has caused problems for existing schools. People whom one would have expected to support the Government-indeed, to come out dancing on the streets about what they are doing-are now turning round and saying, "Actually, the route the Government are pursuing is causing a problem."

One of the good things about being in Committee is that it gives us the opportunity to look at things in detail. When the Minister replies to this debate, I wonder whether he will comment on the terms of reference for the capital programme, which I want gently to share with the Committee. I do not know whether my hon. Friends or other members of the Committee have had a chance to look at the terms of reference for the allocation of capital funds-they might want to refer them to their constituents, because they are contained in one of those papers that gets tucked away, but which has huge significance-but there are five of them. The second is:

that refers to free schools or additional schools, or whatever we want to call them. The fifth is

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I do not know about my hon. Friends, but the Minister might need to tell us how the Government can reassure us on that. He has turned round and said, "Don't worry, the Building Schools for the Future money has nothing to do with free schools or additional schools." However, we then read in the terms of reference for the review group that the Department has established that two of the five criteria by which decisions on how to allocate capital funds are made refer to how capital funds are to be allocated to these new schools. Anybody looking at that would say, "What's going on there?"

When we look at the criteria under the heading "Distribution of capital investment", we read the following:

When we read more about the review, we see why amendment 70 is so important, especially as it talks about allocating capital money. At the moment, there will be no consultation with local parents, the local authority or anybody else about what will be done; it will just be the Secretary of State determining that a free school in an area would be a great thing to have. A few people will get together, write out a bit of an application-a few hundred words here, a few hundred words there-and then go the Secretary of State, who will say, "Oh, what a good idea! We'll set the free school up." However, I would again like to share with hon. Members what the document that I have quoted says. I look at this with incredulity, especially after the great fanfare with which the Secretary of State made his announcement. In that document, the Secretary of State says:

What that actually means is as follows-and this is why amendment 70 is so vital.

When the Secretary of State and the Schools Minister talk to parents about establishing schools and so on, they should make things clear. Perhaps the Schools Minister's constituents are different from mine, but I do not get many parents coming to me and saying, "Can I be on the fifth floor of a tower block?", "Can I be in a disused Tesco?", or, "Those portakabins are pretty good-can I pop round there?" Most people I speak to want to get rid of the portakabins. However, the Secretary of State's vision of this new school world-this free school nirvana-is this: "It doesn't matter where you establish schools; it's fine."

We all know-my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) often makes this point, and quite rightly so-that, at the end of the day, what really turns a school around is not its structure, and often not the buildings, but the quality of teaching and learning, and the quality of leadership. However, there is no one here who would not also point out to each and every one of us-there was a survey about this a couple of days ago-that the quality of school buildings is an essential part of how we, as a civilised society, provide the standard of education that we would want in our schools, for ourselves, our teachers and our children.

1.30 pm

When we came to power in 1997, the quality of school buildings in general across this country was, frankly, an absolute disgrace. Does that mean that we have reached the point now, in 2010, where every single school is at the standard and level of quality that we
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would want? No, it does not. But I can stand here as a proud member of the previous Government and say that our record on capital investment and school building transformation was second to none, and I am proud of that. People from Liverpool, the north-east and elsewhere in the country are talking to us about this Government's attack on the school building programme. Conservative and Liberal Democrat Members will have the same problems. Even at this late stage, however, we hope that the attack on the programme can be reversed.

The amendment proposes consultation with "local parents and children", and with "the relevant local authority", as well as with any "other persons deemed appropriate". If those people were consulted and told that a free school was going to be built, other parents in the area might ask where it was going to be. They might well then be told, "Oh well, it's going to be in some disused building." To be fair to the Secretary of State and the Minister and the Schools Minister, I agree with some of the things they say and I would not castigate them for everything, but I think that this proposal is completely beyond the pale. I find it astonishing.

These regulations are called "Reducing the burden on schools", but they should be called "Putting kids in substandard buildings". I am glad that my hon. Friend the Member for Halton is still here, because he and I have always taken a keen interest in these matters. At the end of the regulations, we find out that they deal with not only building school premises regulations and design requirements, but "playing field regulations". I cannot remember a time when Members on both sides of the House have not become incandescent about the selling off of school playing fields- [ Interruption. ] If the hon. Member for Burnley (Gordon Birtwistle) wants to intervene, that is fine.

Gordon Birtwistle (Burnley) (LD): The Labour party was famous for selling off school playing fields. To return to Building Schools for the Future, the majority of those building programmes were carried out under private finance initiative schemes. They were never put on the Government's balance sheets. They are all off the capital account, and are being paid for out of the revenue of the next 25 years. So how can the hon. Gentleman say that he had the money for those programmes, when he did not know whether he would have that money over the next 25 years to pay the rent on the schools that he built?

Vernon Coaker: I have already answered the point about money for schools. I suggest that the hon. Gentleman goes round to the schools being built through PFI schemes and tells them, "We don't want you in here building a school through PFI." The programmes delivered through PFI, through local authority funding or through Building Schools for the Future have transformed the quality of school buildings, and over the next decade they would have transformed the whole of the secondary school estate, either through rebuilding or refurbishment. This is a choice that we have to make: the hon. Gentleman can oppose the programme, and that is absolutely fine. He can stand up and oppose it-

Gordon Birtwistle rose -

Vernon Coaker: Not now! This is one of the good things about being in Committee-we can get excited and nobody really minds.

22 July 2010 : Column 600

The hon. Gentleman can oppose the Building Schools for the Future programme and say that what the Government have done over the past few years has been a waste of time, but I would say to him that we have a tremendous record and that Building Schools for the Future would have delivered that transformation.

Returning to the point about playing fields, it was our Government who introduced regulations to ensure that there was agreement, including from sporting bodies, on any such land that was sold, and that the money was reinvested in the school. In one or two instances, I supported the sale of playing fields in my area when schools were being rebuilt with gyms and all-weather courts as a consequence of the money that was realised from the sale. Often, land that was labelled as playing fields was nothing more than waste ground. Numerous Members from across the country asked whether it would be possible to sell off such land as long as the money was reinvested in sports facilities in the local area. I would have thought that the hon. Member for Burnley would have supported the amendment because it would introduce consultation with local people, the local authority, parents and children on any activities where capital expenditure is moved to fund the free schools.

However, my point is that tucked away inside "Reducing the burden on schools" is the fact that the capital review will cover not only school premises regulations and design requirements but also playing fields. Does the Minister therefore envisage some free schools being set up with no access to playing fields or other outdoor sports facilities? I have heard him quite rightly highlighting the essential role in the curriculum played by sport. How on earth is that to be delivered in the light of these regulations? I know that he will get up and say that they do not mean that at all, but I can tell him that that is exactly what they mean. This is exactly what the Secretary of State said when he was talking about capital moneys being made available for free schools. He wanted the schools to be able to be set up very quickly and cheaply, and that would involve changing the regulations that local authorities would normally have had to abide by. He wanted to reduce the central requirements so that a huge number of free schools could be set up as quickly as possible, funded by moving money from one departmental pot to another. Our amendment would ensure that that choice was made apparent to local people, and I know what their decision would be if they were asked those questions.

Mr Mike Hancock rose -

Geraint Davies (Swansea West) (Lab/Co-op) rose -

Vernon Coaker: I shall give way first to my hon. Friend the Member for Swansea West (Geraint Davies).

Mr Hancock rose-

Vernon Coaker: Oh, okay, that's fine-

The Second Deputy Chairman of Ways and Means (Dawn Primarolo): Order. This is an interesting and important debate, but it would help the Speaker and the Hansard writers enormously if we knew who was rising and who the hon. Member for Gedling (Vernon Coaker) was giving way to.

22 July 2010 : Column 601

Vernon Coaker: I apologise. I shall give way to my hon. Friend the Member for Swansea West.

Geraint Davies: Given the Government's strategy for the use of disused sites, does my hon. Friend agree that there will now be a perverse incentive to let schools on valuable sites fail, so that they can sell off their land and use the funds to set up other schools in disused premises? Under Labour, certain schools on good sites had difficulties, but their infrastructure was supported. They might now be asset-stripped to pursue the new strategy involving free schools on disused sites.

Vernon Coaker: That is certainly a possibility. If we change the regulations, anything is possible. The Minister will no doubt say that that will not happen, but the thrust of our argument is our desire to place certain statutory requirements in the Bill to protect the quality of educational provision, including the provision of playing fields. Any weakening of the regulations or of the findings of the capital funding review could be very damaging.

Mr Mike Hancock: I am grateful to the hon. Gentleman for giving way. With your indulgence, Dawn-[Hon. Members: "Ooh!"] I have a problem saying your surname, because I have a problem with Ps and Rs. Sometimes when I have addressed you in Committee, it has disturbed the Hansard writers. They wondered who the hell I was talking about. With your indulgence, I would like to make a couple of points. The first is about private finance initiatives in schools. Any local authority that has a PFI school building programme will know of the huge impediment that that brings, as well as the restrictions on developing anything in the school without enormous knock-on costs. I hope that no one is running away with the idea that everything about PFI is perfect, because that is far from the truth.

My second point is the more important, however. I agree with most of what the hon. Gentleman is saying, but so far he has not raised the question of what happens if a local authority is forced into the invidious position of allocating certain resources from LEA funding, limited though it is, and one of the schools then fails. Who will pick up the pieces? Nothing in the Bill suggests the existence of a fail-safe system enabling those pieces to be put back together once the whole has been torn apart by the establishment of a free school.

Vernon Coaker: I was not trying to suggest that PFI was a panacea for all ills, and I know that it has sometimes led to problems. I was merely suggesting that it was one of the options that had allowed some local authorities to build new schools that might not have been built otherwise.

I was going to deal with the question of what will happen if a school fails, but the hon. Gentleman has made the point well enough to save me the trouble of making it myself. I entirely agree with him. As we discovered yesterday, one of the main drawbacks of the Bill is the huge amount of detail that it contains. In relation to one clause, we were told not to worry because a committee-I cannot remember what it was called-would be set up to examine all the issues that had been
22 July 2010 : Column 602
raised, as the Government did not know the answers yet. We as a Parliament, however, are being asked to pass the Bill.

Some of the problems with the Bill were illustrated very effectively by the comments of the hon. Member for Portsmouth South (Mr Hancock), and other Members will doubtless make similar comments later. Moreover-let me make this point again to the Schools Minister-we cannot amend it. We can table amendments, but for a number of reasons the Government do not want it to be amended.

Does the hon. Member for Bradford East (Mr Ward) wish to intervene?

Mr David Ward (Bradford East) (LD): I am sorry. I was simply trying to catch Miss P's eye.

The Second Deputy Chairman: I do not think that my name is all that difficult to pronounce. It is Pri-mar-olo. "Dawn" or "Miss P" will not do, I am afraid. I call Mr Coaker.

Vernon Coaker: Thank you, Ms Primarolo. [Laughter.]

The Government are seeking to save money by cutting the Building Schools for the Future programme, but they say that this expenditure is nothing to do with those cuts. They say that they are economising on low-priority IT projects. That will provide £50 million, and they have already received 38 expressions of interest.

I do not think any of us believe that that really adds up. The £50 million is only until March 2011, and because of the comprehensive spending review, no one has any idea what will happen after that. On 20 April 2010-apparently everything has changed since then, but I think it useful to draw attention to this- The Independent quoted the Secretary of State as saying:

of new free schools, that is-

I know that when a party gets into power things change a little, but the Secretary of State cannot really have believed that there was not a budget for him to use if he wanted to fund his free school experiment. He did not say that last year; he said it on 20 April 2010.

Pat Glass (North West Durham) (Lab): Is not one of the saddest aspects of the debate on Building Schools for the Future the fact that it is being portrayed as simply a capital programme? It was never intended to be that. It was intended to bring about a transformation of secondary education. It was intended to improve the curriculum, improve inclusion and raise standards. Nothing that I have seen suggests to me that that will happen as a result of the free school programme. The Bill is being pushed through the House at great speed, and we are being given no evidence or details.

Vernon Coaker: My hon. Friend made a number of valuable contributions yesterday, and she is absolutely right to remind us of those facts. As I pointed out at the beginning of my speech, Building Schools for the Future was not just about school buildings; it was about transforming opportunities for young people.

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1.45 pm

I have visited some of the most run-down and socially disadvantaged areas in the country-as other Members on both sides of the Committee will have done, and as the Minister will no doubt be doing-and seen the transformation that can be created by the building of a new school, at a cost of perhaps £30 million. Local people have told me, "This is the first time for years that the state has invested any significant sums in our community." We tend to say, "Perhaps we can save a bit of money here and save a bit of money there", but the symbolism of those schools in those areas cannot possibly be underestimated. That, I think, is what my hon. Friend meant when she said that Building Schools for the Future was not just about buildings, but about transformation and improving opportunities and life chances.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): The fact that 26 of our schools in Liverpool missed the boat and had their BSF projects cancelled was not due to the bureaucracy to which Government Members keep referring. A detailed reorganisation ensured that we now have the right number of schools for the right number of students in the right areas. We do not need any more schools in Liverpool, but we do need schools with suitable buildings in which young people can learn. It is an absolute disgrace that young people in Liverpool will miss out on those suitable premises on the whim of this untested, untrialled free school process on which there has been no consultation.

May I ask my hon. Friend-

The Second Deputy Chairman: Briefly.

Luciana Berger: May I ask my hon. Friend, very briefly, whether he agrees with what was said the other day by the hon. Member for Bermondsey and Old Southwark (Simon Hughes)? The hon. Gentleman said:

Vernon Coaker: My hon. Friend is right to draw attention to the devastating impact of the cuts in the Building Schools for the Future programme on Liverpool, although, of course, it can be seen throughout the country. She is also right to draw attention to the comments of the deputy leader of the Liberal Democrats, who asked why money should be withheld from perfectly adequate existing schools to create new schools. That is a question that the Minister responsible for schools will have to answer.

Gavin Shuker (Luton South) (Lab/Co-op): The budgets of three schools in my constituency-among others-have been cut: Stopsley, Putteridge and Denbigh. Does my hon. Friend agree that it is a question not just of new school buildings, but of capacity? In the Luton local authority area, 11 new schools have been cancelled-and, unlike the constituency of my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), my constituency does need more schools. Is not the free schools policy a perfect storm for areas such as mine which need new capacity? The building of free schools is the only option for us now.

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Vernon Coaker: That is exactly the point. If free schools are to be built, the money must be found somewhere, and the Government are struggling at the moment. They have raised £50 million by scrapping a few computer projects, which were described as low-capacity but would have been important to the people who would have benefited from them, but where will the money come from after that?

A week or two before the election, the Secretary of State said that funding the free schools programme would require cuts of 15% in the Building Schools for the Future programme. That is a direct quotation. It has not been corrected, and I have not heard it claimed that it was taken out of context. As I have said, that is really where the money will come from.

I am trying to be helpful to the Government and the Committee. We oppose the Bill, but we recognise that the Government will probably push it through. Even if that is the case, however, the whole point of the Committee stage is to try to improve the Bill by amending it, and to raise issues of great importance. That is why it is so disappointing that Members-on both sides of the Committee-cannot amend the Bill. I recognise that the Bill has come from the Lords, but it is astonishing that we will have spent three days debating it on the Floor of the House and not one amendment will have been allowed. I am not a political or legislative historian, but I cannot imagine that many other Bills can have spent three days on the Floor of the House without amendment. I say in all honesty to the Minister that I will not be surprised if we find sneaked into the Bill that will be coming in the autumn a couple of little measures tweaking and putting right one or two things in this Bill, because that is what usually happens when Governments rush through legislation-afterwards they think, "Oh dear, there is a problem."

The Minister of State, Department for Education (Mr Nick Gibb): The hon. Gentleman will know that there are 75 amendments and five new clauses on the amendment paper, and the Committee is perfectly entitled to pass any of them.

Vernon Coaker: The hon. Gentleman and I have debated other Bills-indeed, we have served on Bill Committees together-and on those occasions he has made one or two good points to which I have said, "That's quite a good point, and I'll come back to it on Report," and then a Government amendment is introduced. That is the usual process in the House, and when it happens everyone tells this joke: "If it was such a good amendment and the Government have come back with their version of exactly the same proposal, why did you not accept it when it was moved by the Opposition?"

The situation with this Bill is totally different from how the Minister has just described it. Not all the amendments on the amendment paper are in my name-some have been tabled by his hon. Friends, and comments have been made by other Members as well-but we are totally unable to amend the Bill. Let me say to any new Members on the Government Benches who might be tempted to strike out in a spirit of independence by organising to make a change to the Bill through proposing an amendment and seeking to press it to a Division that it would not be very long before those who traditionally sit on the far end of the Treasury Bench came to see
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them to explain that that was probably not the best thing to do. I just say in all honesty to the Minister that I think it is deeply disappointing that we cannot amend the Bill in the way that many of us would want.

Mr George Mudie (Leeds East) (Lab): I understand my hon. Friend's surprise, but the Government have form on this. We have just completed our debates on the Finance Bill, all of which were taken on the Floor of the House, which never happens, and not one amendment was accepted-although, to respond to what the Minister has just said, there were many proposed amendments to the Finance Bill as well. There are two major Bills, therefore, that did not go upstairs to Committee for detailed scrutiny and to which not one amendment was made, because the Government are determined to steamroller both through the House.

Vernon Coaker: My hon. Friend makes an extremely good point. I was going to say that what is happening in respect of the Academies Bill is a one-off, but he has pointed out that this happened in respect of the Finance Bill as well. One would hope, however, that it is not a precedent of how other Bills will be dealt with.

I have tabled amendment 70 in order to try to be helpful. The amendment does not say that no capital moneys can be paid to free schools. In fact, it says capital moneys can be paid to free schools, but before that money is paid there has to be the agreement of "local parents and children", the "local authority" and

I thought that we were all in favour of the new localism and local decision making, and the point of the amendment is to allow the local people and communities along with the local authority to determine whether the capital moneys proposed to be used to set up a free school-that will be agreed by the Secretary of State-should be spent in that way, when it might have been used for the benefit of other schools in, for example, Liverpool, Halton and Luton.

I am trying to be helpful to the Government, therefore. I am saying to the Government, "You establish the free schools-the 'additional schools' as the Bill calls them-but if you're going to take capital moneys away from other schools in the community to establish the free schools, then let's see whether the local people and the local authority agree." Given the furore we have seen over the cuts to Building Schools for the Future, with communities throughout the country seeing their new school buildings taken away from them, I wonder what they would say when asked whether they would wish to see their new school buildings sacrificed on the altar of a school experiment that is unproven and supported by no evidence one way or the other. I know why the Government will not accept this amendment, therefore: because they would be frightened of the answer they would get from local communities, who would turn around and say, "We want capital moneys spent for the benefit of the whole community, not for the benefit of a few."

I have some questions linked to the amendment for the Minister. How many free schools does he expect there will be? How much money does he expect to spend on each free school? What do the changes in the review of capital expenditure actually mean? Are there going to be any regulations or are we going to allow children to go on the 13th floor, let us say? I note that the head of
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Tesco property offices is one of the advisers to the capital review group, and we will see what happens there. Can the Minister confirm that he expects the first free schools to open in 2011? Does he expect to spend all of the £50 million? Does he expect that to be enough money to develop the 38 schools in September 2011?

While we are talking about Building Schools for the Future, may I also ask the Minister to confirm how many academies have been affected by the BSF cuts? Looking at the list, it appears that while many local authority-maintained schools have had their BSF money stopped, lots of the academies are listed as under review. Will the Minister take this opportunity to explain to us exactly what is happening in that regard?

How much does the Minister expect the free schools to cost not only over the next six months or year, but over the next five years? How much money will the Department for Education be trying to get from the Treasury in the next spending review? What evidence does he have that the moneys to be invested in free schools is a policy worth pursuing and that it is worth taking money from the vast majority of schools to fund what I regard as an educational experiment?

We look forward to hearing the Minister's response, and the comments of other Members who may also want to contribute to this important debate. At the heart of the debate on all the amendments, including amendment 70, is the fact that there are those of us who wish to try to ensure that opportunity and excellence for all is made a reality in every single community. There is a difference between the Government and the Opposition on this. Sometimes we are characterised as wanting to pull down those who can excel. Far from it: we want all children to achieve, including those who have talents and ability. We want all children to have school buildings of which they can be proud. The amendment before us seeks to ensure that, where the Government want to divert capital moneys from one set of priorities to another, that is done on the basis of local support-the support of local parents and the local authority-and not done at the whim of the Secretary of State.

Mr Ward: May I say how much I, as a new boy, have enjoyed the Committee stage and how useful I have found it as a mechanism for at least asking questions and trying to clarify points? Yesterday's proceedings were long, but very useful to me in trying to understand how this process works.

There is value in this amendment. It is always important to spend public money as wisely as we possibly can. There will be disputes about policy initiatives and priorities, but whatever the priority, we need always to get the best value for the money we spend. If that was ever important, it certainly is now. In the spirit of the Committee, I shall not go into why we are in the difficulties that we are in, but most people accept that we are in a time of great austerity where we face cuts, tax increases and spending decisions that require careful thought.

2 pm

Priorities are the real issue, and they are well highlighted in the amendment. We have a good opportunity to find out where hon. Members' priorities lie. It is very difficult for some to hold the line on the Building Schools for the Future programme, although not in terms of reviewing
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the BSF process. Many of us have been critical of that process for a long time because of its bureaucracy and value-for-money elements. It is useful to consider that this is an existing proposal, because although we have been told by the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), that the BSF parrot is very definitely dead, we have also been assured that the investment in school buildings is not. One of the purposes of the BSF review is to examine where we can still spend money, although probably in a better way. That issue touches many hon. Members from all parts of the House, because we have local schools that are caught up in the BSF programme and whose funding has been frozen.

We cannot have everything that we want in life, particularly when times are hard, so the question becomes one of what we actually spend and the priorities we make. The amendment proposes that a new subsection (1B) to clause 2 should state:

I know of 19 schools in the Bradford district that are part of the BSF programme and have outstanding requirements, six of which are located in my constituency. Two of those are special schools that most certainly have outstanding requirements for capital investment. I am using the amendment to find an answer to the question: where do the priorities lie?

In a recent interview with "Channel 4 News" the Secretary of State said:

It came as somewhat of a shock to me that at this time of austerity, when we are rejecting many other worthwhile proposals, such as the extension of free school meals, because we have not got any money, all of sudden £50 million could be conjured up to support an initiative. He went on to say that that allocation would be

The crucial bit came when he went on to say:

That relates to my question. We may not be able to afford all the projects that are included within the BSF programme, and we need to carry out the review, but where do the schools involved in that programme stand in the pecking order against this proposal to put new money into the new schools that are being created? We have had the debate on the principles, the philosophy and the ideology of this thing, so this thing is likely to happen. This is not simply about rushing through legislation, but about its implementation. Where does the funding for these particular proposals stand in relation to the huge expectation and demand that has been created by the BSF programme? Where does it come in the pecking order?

That will be crucial when we have to go back to schools at the end of the review and say, "I am sorry. We carried out the review and we have not got any money for you." How will they receive that response if, at the same time, we are investing in other schools-in new schools that are being opened? Such schools may be in areas with surplus places-in other words, there may not be a demand for a new school. The value of the
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amendment is that it allows us to discuss our priorities and where this particular initiative stands in that list of priorities.

Derek Twigg: My hon. Friend the Member for Gedling (Vernon Coaker) will recall that we both made our maiden speeches on Labour's flagship Bill in 1997. He will also recall the optimism that existed in the country then for education and for the incoming Government. How different the mood is today. My constituency, which has been devastated -[Interruption.] The hon. Member for East Hampshire (Damian Hinds) might laugh, but he is laughing at the fact that 11 schools have been taken out of the project, with three under review, and at the impact that that has had on more than 7,000 children in my constituency. Frankly, I say to him that this is no laughing matter and I shall ensure that my constituents understand that the coalition thinks that it is.

As the shadow Minister said, what has happened in constituencies such as mine has resulted in absolute devastation. The amendment is very interesting because it allows us to discuss the capital programme and how we should see that in relation to what has happened to the BSF programme and how we spend capital in the future. What is also interesting is that this Government are having a review of capital expenditure, yet they are pressing ahead with the Bill. Both have an impact on each other, so this is a remarkable situation.

Let me deal with what is being done and what is being spent. In yesterday's Westminster Hall debate, the Under-Secretary of State for Education talked about lavish expenditure on schools. I think that our schools deserve lavish expenditure. When he tried to say that somehow this was inefficient, I pointed out to him that last year's National Audit Office report said that the cost of BSF schools was no more than any other programme and, in fact, was cheaper than the original academies that were built. It is not the case that these schools were in any way inefficient or that the money was not available.

Mr Mike Hancock rose-

Derek Twigg: I will certainly give way to a member of the coalition.

Mr Hancock: I am slightly curious about the hon. Gentleman's comment that our schools deserve lavish expenditure. What on earth was going on during the past 13 years, when so many schools were allowed to be neglected and none of the resources that were needed were coming from the Government?

Derek Twigg: I am surprised at that intervention, although I suppose I should not be. In the past 13 years, £24 million has been spent on schools in Halton. Let me give the hon. Gentleman one example. Ditton primary school waited years for a new school building, and once Labour came into power it got one built. A number of schools have had major building programmes and major improvements made, so it is not the case-it is plain incorrect-to say that Labour did nothing until the BSF programme. In fact, significantly more was done under Labour than was done in 18 years of a Tory Government. His party now supports such a Government.

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Pat Glass: I am sure that I am not the only person in the House who worked in education during the time of the previous Tory Government. I remember what it was like in those school buildings, where I was putting out buckets in the hall when it rained and excluding children from the hall because it was dangerous. I said that BSF is not about a capital building programme-it is a transformation programme. Our school buildings say what we think about our young people. To have children in office blocks, disused buildings and old schools-

The Temporary Chairman (Martin Caton): Order. I have been indulgent, but interventions should be a lot shorter than that.

Derek Twigg: My hon. Friend makes an important point, which I shall come to when I ask the Minister how his handling of the amendment will affect that specific point, which is very important.

I am not sure how the Bill or, to some extent, the amendment will address the problem of school places and provision. The cancelling of the BSF project caused major problems for schools such as St Chad's Roman Catholic school and the Heath specialist technology college in Runcorn in my constituency, which were going to expand. How will they now expand? They are popular and successful schools that have seen increases in their GCSE results-the Heath had a success rate of more than 82% last year. Problems were also caused for the likes of Bankfield in Widnes, which is my old school and has been told this week that it has an outstanding report from Ofsted. How can that school expand?

Wade Deacon school has a 100% pass rate in GCSEs at A to C and serves both an affluent area and a disadvantaged area. The previous school, Fairfield, is now being closed down and will amalgamate with Wade Deacon. They were going to be built on one site. How will that happen now? It will mean a split site and all sorts of difficulties, with 400 pupils displaced. That is the consequence.

I am not sure how the Bill and this clause will help the situation in my constituency, and that is a consequence of the decision that the Government took. This amendment is about ensuring that parents' and the LEAs' views are known and taken into account. Parents and LEAs will take account of the sorts of buildings that schools need, and that was what BSF was delivering. They were consulted on the buildings, they had a lot of say, and the buildings were designed to suit the ethos of the school and what it wanted to deliver. In particular, they were designed to suit other parts of the community's involvement in them.

Toby Perkins (Chesterfield) (Lab): Just last week, I was able to visit Springwell community school, a school that is being rebuilt in Staveley in Chesterfield, which is quite a deprived area that, at one time, had terrible problems. On 1 November, it expects to receive the keys to its new Building Schools for the Future school and all involved are incredibly excited about the facilities that they have there. I have been around the new facilities and they are not in any way lavish, but they will be taking delivery of a high-quality establishment. What was important to me was that they said that the whole BSF programme enabled them to reassess not just what buildings they wanted, but the whole way they did
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education. Is that something that my hon. Friend has found? The BSF process was about much more than just getting buildings up.

The Temporary Chairman: I call Stephen Twigg.

Derek Twigg: Derek, even, Mr Caton. I am happy to be associated with my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), but I must say that we are not from the same branch.

My hon. Friend the Member for Chesterfield (Toby Perkins) makes an important point, as he has before. For instance, all the schools discussed with other bodies in the area, such as the health authority, how they could improve the provision of health care and how community involvement could be increased. In areas such as mine, although we have seen significant improvements in education over the past 10 years, the average school gets more than a 72% pass mark at grades A to C, which is above the national average. For a borough that is the 30th most deprived in the country, that is some achievement, which has been given no recognition by the Government in the Bill. That has been an important part of the process. Getting the community involved and getting adults involved to improve the educational ethos and get parents and families to take an interest in their young people-many do, but many more need to-was an important part of the involvement with the schools, too.

Health is particularly important in Halton because we have some of the worst health problems in the country. We have the highest teenage pregnancy rates. That would have been an important part of the programme. These schools were not just educational establishments; they were community establishments that would have dealt with some of the problems that affect the communities in their localities. How will the Government deal with that through this Bill?

2.15 pm

The important part of the point made by my hon. Friend the Member for Gedling is that, if we are for localism and getting people and communities to make their own decisions, why would the Government object to local parents and children, the relevant local authority and other appropriate persons being involved before decisions are made? That was exactly what BSF did. Why would the Government object to that? The amendment seems perfectly reasonable.

Parents and communities as a whole can best make a judgment about whether what has been delivered under BSF could be delivered under this Bill and this clause. I am interested to hear the Minister's explanation, because parents will not be consulted in the same way, and neither will schools or LEAs. How is that an improvement on what was there previously?

The Government seem to suggest that standards were falling. They should come to Halton. I know that the Minister is very thoughtful. Why not visit my constituency and see some of the problems on the ground? He could see the inability to expand unless we put in mobile classrooms, the problems with amalgamations, and the problems with special schools that would have been placed in the same buildings as secondary schools, offering a more inclusive education. I know that he is a big Simon and Garfunkel fan, so while he is there he
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can visit Widnes station, where Paul Simon composed "Homeward Bound" and see the plaque next to my plaque at that station. I offer that invitation to him.

In seriousness, I cannot describe in words the devastation caused by this decision. I have mentioned lots of schools, but not St Peter and St Paul, a very important Roman Catholic comprehensive school in my constituency, or the primary schools on which these decisions have an impact. The consequences are devastating and the amendment, although it is not perfect and will not get us all the way to where some of us want to be, is a message to the Government and gives them the opportunity to roll back a bit and to consult on BSF, which they should have done in the first place, and to think again about how they approach the system of school improvement and ensuring that we have capital invested in our buildings.

Let me finish with this point, which I raised before. The Secretary of State said on his website that schools would get "more money". How will that happen when the Government are saying that the money is not there for BSF in the first place? Those schools that follow his line will get more money and the rest will be left with none.

Dan Rogerson (North Cornwall) (LD): It is a pleasure to serve under your chairmanship again, Mr Caton, as we debate in a little more detail the Government's proposals on additional school provision. I have made it clear, both yesterday and in earlier debates, my position of being sceptical-

Mr Ben Wallace (Wyre and Preston North) (Con): Is that a personal view?

Dan Rogerson: Personally-yes, absolutely-I am sceptical about this sort of additional provision. However, the coalition agreement sets out our intention to explore avenues to make these opportunities available to communities where there is demonstrable demand for them. The Secretary of State has made it clear that he has received proposals from people in certain areas of the country who want to explore this idea and move forward, so it is sensible to make provision to do that.

Yesterday, I asked for clarification whether, in areas where such schools are to be brought into existence, the facilities will be of a high enough standard that any young people enrolled in those institutions will have the same sort of protections as other young people. I hope that any providers that wish to enter the market will make sure that, as far as possible, they provide sufficient resources for that rather than seeking to draw down moneys that might otherwise have gone elsewhere. That is the sort of provision that people might expect.

My hon. Friend the Member for Bradford East (Mr Ward) has laid out some of the political realities of the situation and the difficulties that some have in understanding where the money might come from in the current situation. Given some of the comments and remarks that Opposition Members have been making, one would have thought that everything was perfect under the previous Government and that everyone was getting all the resources they wanted in both capital and revenue terms. The school funding in my constituency was about £300 or so below the national average, so people there feel strongly that they have not had those resources. I expect that you will rule me out of order, Mr Caton, if I continue down that line, but it is important
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to get on the record that although some hon. Members might have experienced huge investment in their constituencies and although I welcome the fact that the Government put resources in when the money was available to do so, that money did not reach all people and not everyone was satisfied with the deal they had.

Toby Perkins: I am interested in the hon. Gentleman's comments because we in Derbyshire are also campaigning for more funding for our schools. He says that north Cornwall did not benefit from Labour's investment; is he saying that education funding has not increased dramatically in north Cornwall in the past 13 years?

Dan Rogerson: I am talking about the funding formula. As we have been talking about different parts of the country benefiting in different ways, I thought it important to get on the record that my students were disadvantaged by that formula.

The amendment is useful in that it has prompted a discussion on these issues, but there are problems with it. I note in passing the phrase in proposed subsection (1A)(c):

In yesterday's debate, the Opposition argued that it was not sufficient to deem people appropriate and that the list should have been much longer, and included staff, for example, so a little inconsistency is apparent.

Putting that point aside, the problem with the amendment is that it is a little vague. Essentially, it relates to situations in which anyone in the local community might think that their school needs a bit more investment for a project, but no level of investment is specified. I can see how the amendment could kick in when a school has been identified by Ofsted and everyone else as needing drastic investment, but it talks about

Presumably, the consultation would leave it up to those who responded to a request to define what they deem to be "outstanding requirements", so the amendment would effectively mean that if anyone said, "We want a bit more in our existing school for this", no money would be provided. The amendment is intended to toughen up the criteria governing such requests, and I am tempted by that, but it is flawed because, in practice, it would act as a block.

I am sympathetic to some of the issues that have been raised, and I hope that the Minister will respond to them and clarify how local people may be reassured that the Government's proposed capital programme will meet as many demands for improvements to existing schools as possible.

Ian Mearns (Gateshead) (Lab): I want to support the amendment and I am concerned about the implications of the Bill on the review of expenditure on capital programmes into the future. In my borough, five Building Schools for the Future secondary school projects have been cancelled very recently. The first one that I want to talk about is the proposed amalgamation between two schools, Ryton and Hookergate, which are on the western fringe of the borough and in the constituency of my hon. Friend the Member for Blaydon (Mr Anderson). That proposed merger was the result of prolonged negotiations regarding those two schools, and the cancellation is a matter of grave concern.

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Hookergate-a school that has long served the communities of Chopwell, Rowlands Gill, High Spen and Greenside, as well as many smaller, isolated rural settlements-is sadly subject to a declining pupil population, and it was set to be amalgamated with a school a few miles to the north, in the town of Ryton, on a site that the local authority was negotiating for with several landowners in the area.

Ryton school serves a very broad catchment area, including Ryton and Crawcrook. It also serves communities on the western fringe of Blaydon such as Stella, and the areas of Clara Vale, Stargate and Emmaville. Indeed, the formal part of the consultation on the local authority's proposal for amalgamation was due to start the day after the Secretary of State made the announcement in the House cancelling the programme.

Another school affected by the cuts proposal is Whickham comprehensive, a large, successful school with some 1,500 pupils in the town of Whickham. It serves surrounding villages such as Marley Hill, Byermoor and Sunniside. It is very popular, but it is in grave need of renewal, as it is in a 1960s CLASP-style building, CLASP being the consortium of local authorities special programme. It is also bursting at the seams, having suffered a fire in one of its blocks several years ago.

St Thomas More Catholic comprehensive school is very popular and successful, with high levels of academic achievement, despite the poor and cramped conditions on its site. The Joseph Swan school, named after the inventor of the incandescent light bulb, who lived in Low Fell in Gateshead, is a successful school serving the community of central Gateshead and Low Fell, where there are three Liberal Democrat councillors. It was to have its dining block and humanities area rebuilt, on the back of the highly successful rebuild of the school's main body through the traditional capital programme of the late 1990s.

Government Members have criticised us for not investing enough in schools during the 13-year tenure of the Labour Government. In my borough, we had the five schools that I mentioned left to do, but Lord Lawson of Beamish school was rebuilt using the private finance initiative; Kingsmeadow comprehensive was completely rebuilt using PFI; and the Heworth Grange and Thomas Hepburn schools are at the on-site stage. I have to declare an interest: I am still nominally the chair of governors of Thomas Hepburn school. The steelwork is now being erected so that the school can be rebuilt. Numerous primary schools were rebuilt or refurbished through combinations of old-style capital spend and PFI.

The £80 million that was due to come to us as part of Building Schools for the Future included the opportunity to adapt four schools to ensure that they were able to offer inclusive education for children with special needs, where it was the choice of parents to include youngsters with SEN in mainstream schooling. That was part of the transformational aspect of BSF to which my hon. Friend the Member for North West Durham (Pat Glass) referred. That additional SEN money that BSF talked to us about recognised the SEN review in our borough, and our ability to deliver; we could generate, according to the ready reckoner, approximately £10 million to invest in special schools, thereby completing our secondary school investment programme.

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In Gateshead, we have built the angel of the north, a millennium bridge, and the Sage Gateshead concert hall and music complex, at which many Members from across the House have attended conferences. We have completed many capital projects, but what I am most proud of is the improvements in education for the children of our borough, and I hate the prospect of that improvement coming to a halt.

When the Secretary of State announced the axing of BSF, and when hon. Friends and I first raised the issue, Government Members accused us of feigning anger and outrage. After 27 years as a local councillor in Gateshead, and after a decade as the lead member on education serving the Gateshead community, I can reassure all Members of the House that I am not feigning anything. In particular, there is no pretence in my profound sadness that the much-needed continued investment in schools in my borough has been snatched away from the children who we all seek to serve.

I welcome the undertaking given by the Deputy Prime Minister yesterday to meet the borough's MPs and discuss this issue. I hope that at that meeting he will reassure us that the Building Schools for the Future programme for Gateshead has a future and has not been sacrificed on the ideological altar of investment in academy school buildings or new free schools for other, more favoured parts of the country.

In that vein, I was struck by the suggestion made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes), the deputy leader of the Liberal Democrats, on the BBC last week that he would use his influence to lobby on behalf of places such as Liverpool, Sheffield and Newcastle-all places where the Liberal Democrats have had a significant foothold in local government representation. I hope that the Government will demonstrate transparency and that such decisions on school funding are made on the basis of fair criteria rather than behind-the-scenes deals.

2.30 pm

The Temporary Chairman: I call Mike Hancock. [Interruption.] Mike Hancock?

Mr Mike Hancock: I am sorry, Mr Caton; I was rather taken aback. It must be something to do with men with beards.

I hope that the amendment is pushed to a vote because I, for one, will support it, and for a number of reasons. First, however, I shall address some of the comments made by Labour Members. In the past 13 years, one or two Bills went through the House for which no amendments were taken.

The hon. Member for Gedling (Vernon Coaker), the former Minister, said that the futures of Conservative and Lib Dem Members who tabled amendments might be harmed because people with the position in this Government that the hon. Member for Leeds East (Mr Mudie) held in the last Government would be emotionally attached to them for some time, trying to persuade them not to do it. Interestingly, the hon. Member for Leeds East made an intervention on that point; I could see a smirk on his face that broke out into a full grin. It brought back those lovely moments when he was able to exercise his persuasive powers; Members might have weakened, taken the advice of the Labour Front Benchers and tabled amendments.

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I say to my coalition colleagues, particularly those in the Cabinet, how sad it is that these two debates have been so intertwined and what a mistake it was to link the Building Schools for the Future fiasco and its associated problems with an idea that might have got greater support if the two issues had been divorced. Nearly every contribution during yesterday's and today's debates has linked both issues.

Dr John Pugh (Southport) (LD): Earlier, I was listening carefully to the hon. Member for Halton (Derek Twigg), who suggested that a school could not henceforth get capital funding unless it was prepared to be an academy. Under the last Government, it was known that if the local authority was not interested in having an academy, there would not be much in the way of BSF funding. The issues have always been connected, by both parties.

Mr Hancock: My hon. Friend is absolutely correct. It is strange how things can change and memories can lapse in a short time. I am disappointed that Labour Members have not been more forthright in apologising. The hon. Member for Halton (Derek Twigg) suggested that we were laughing at what he was saying, but that could not have been further from the truth. Certainly nobody on these Benches was laughing; we were nearly in tears over what was happening.

Derek Twigg: It was the Member sitting behind the hon. Gentleman who was laughing, but he has now left the Chamber.

Mr Hancock: If any Member laughed, I would be angry. I feel that in the past 13 years we have wasted opportunity after opportunity. Like the hon. Gentleman, I was full of enthusiasm when we heard the words "Education, education, education" coming from No. 10 -not once, but umpteen times. What did that really mean? Why did it all go so manifestly wrong? Why were schools in my constituency that were desperately in need of help not given it? Why did the city council go cap in hand to Ministers on three occasions begging for the resources to build a new King Richard school-not in my constituency but in that of the then Labour Minister? It was not given the resources that the school desperately needed.

I am sad that this debate is intertwined with the awfulness over what has happened to our schools as regards Building Schools for the Future. I agree with the hon. Member for North West Durham (Pat Glass) and others who have spoken that this is not just about the quality of education. Schools provide a cocktail for children. As well as a good education, they provide a safe haven and a structure and buildings which give a community a sense of being. That is particularly true of large comprehensives. I have comprehensives in my city with close to 2,000 children in some of the most densely populated areas of Europe, let alone Great Britain. A school is seen very much as a focal point and an important aspect of community life, and it is very sad not to have the resources to rekindle its ability to serve several more generations.

The amendment is correct because it does more than probe. It spells out the inadequacies of the Bill, which does not talk about failure, but about taking resources
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from other areas. It presents a threat. If the idea of free schools gets off the ground, then fine-if that is what people want, let people choose to have it. I do not support it, and I cannot believe I ever will. However, I do not want to see resources taken from the schools I represent, which are desperately in need of new buildings and more equipment. I do not want those kids or those parents to be persuaded to go to a school that will not have science labs or outside space, and will not allow children to develop to their full potential. There is nothing in the Bill that says a free school will have to ensure that every child who goes there will have every opportunity to fulfil their potential in whatever direction they want to go in educational terms. That is a fundamental failure of the Bill.

I admire the Secretary of State enormously for his gung-ho approach to things. It was long overdue that we had Ministers who were prepared to fight their corner in the way that he does. Even when he is wrong, he comes out fighting. He is prepared to take a few blows, but he also likes to deliver a couple back. His deputy Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), has done an excellent job on this Bill, despite the fact that he must understand, like many of us, that the extreme frustrations felt in this House are mirrored a million times over around the country. There is a lot of uncertainty in the education family, whether teachers, governors or whoever, about where the proposals will lead. In many ways, it is a mistake. That is why I will be supporting the amendment, which I commend to the whole Committee.

Stephen Twigg (Liverpool, West Derby) (Lab/Co-op): I strongly echo the closing remarks of the hon. Member for Portsmouth South (Mr Hancock), and I welcome the amendment.

The Government's announcements on Building Schools for the Future and the progress of this Bill, which have happened roughly at the same time, are very much related to each other. As my hon. Friend the Member for North West Durham (Pat Glass) said, Building Schools for the Future was not just about new buildings- it was about school improvement and educational transformation. I understand that that is the Government's thinking on the Bill.

These developments are having significant impacts in schools in communities up and down the country. On Second Reading, I mentioned three examples of schools in my constituency in Liverpool. De La Salle Catholic boys' school in Croxteth, an outstanding school that was due to become an academy under the Building Schools for the Future programme, now does not know whether it is going to get the extra investment, which it desperately needs. Another school, St John Bosco, also in Croxteth, and also an outstanding school that was due to be rebuilt under Building Schools for the Future, also needs that investment. Last weekend the head teacher asked me, "Should we now apply for academy status?" That is not because those at the school have a new plan in addition to their previous plans on educational transformation, but simply because they think that might be the way to secure the extra investment that they were going to get under Building Schools for the Future.

Dan Rogerson: Does the hon. Gentleman not feel that there were people who thought exactly the same when the previous Government were in office? There
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were conversations such as that. I know that the current Government will be listening closely to what he says, and I am sure they will want to underline the fact that there will be a wider capital programme but, as other Members have said, what the hon. Gentleman describes was surely sometimes the perception under the last Government.

Stephen Twigg: The difference on this occasion is that the schools affected have worked for years on a programme for their own improvement, and they came together in Building Schools for the Future. Now that has all been stopped, except for schools that will potentially have academy status. The problem is the uncertainty. I want schools to make the decisions that are best for them. The head of De La Salle wants his school to be an academy and sees the educational advantages, whereas the head teacher and chair of governors of Holly Lodge, another school that was due to be rebuilt under Building Schools for the Future, have decided that they do not want that for their school. I do not want schools to make such decisions simply on the basis of whether the extra money is available.

I wish briefly to make a point about where we go from here. Although there is a real sense of loss and devastation in Liverpool that we are not getting Building Schools for the Future funding, there is also a hard-headed pragmatism. We recognise that there will be a new show in town, and we are starting to consider what the alternatives might be for securing the much-needed capital funding for the city.

Mr Graham Stuart (Beverley and Holderness) (Con): Is it the hon. Gentleman's understanding that Building Schools for the Future would have carried on precisely as originally envisaged had Labour been in power, and that the 50% reduction in capital spending that the last Government had pencilled in, in broad terms and with no details given, would not have had an impact on it?

Stephen Twigg: That is absolutely my understanding, and the figures that the Department for Children, Schools and Families gave under the previous Government were those signed off by the Treasury.

Dr Pugh rose-

Stephen Twigg: I am being tempted to take a lot of interventions, but I understand that Members of all parties may want an early vote because they need to be somewhere else a little later this afternoon. I will give way to the hon. Gentleman, but this will be the final intervention that I take.

Dr Pugh: The hon. Gentleman is not naturally credulous, but did he not see what happened to Building Colleges for the Future under the last Government? Why does he think anything different would have happened with Building Schools for the Future?

Stephen Twigg: The hon. Gentleman ought to see that the answer to his question has been given in the debate. The Government are already indicating that there will be extra money for free schools. They could have said, "We don't think Building Schools for the Future can be afforded, so we're going to do this in a different way over a longer period." They could have
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gone ahead in the form that we had proposed, but spread over a longer time. That would have meant that the type of work that we had done in Liverpool, and that had been done in Durham and elsewhere, would not have been wasted, and we could have moved forward on that basis.

I was making a point about where we can go next. It would be useful if the Minister could inform the Committee of what the key factors will be when the capital review team considers the criteria for schools such as Holly Lodge, St John Bosco and De La Salle in my constituency. Will it be to the advantage of a school if it is willing to seek academy status? Will deprivation be a factor in whether a school is given priority, and will educational improvement be a significant factor, as it was under BSF? Will the Government consider links to the wider economic policy in a region? If Liverpool is to get the private sector growth that is crucial to our economic future, we need investment in our education. Will the capital review team consider that factor?

I urge the Committee to support this sensible amendment, which would enable local voices to be heard as important decisions are taken about the spending of large amounts of public money.

Mr Gibb: The amendment would require the Secretary of State to consult local parents and children, local authorities and others before making payments in respect of capital funding for any additional free school.

We have been clear that we want to improve choice in education. A free school proposal will be required to demonstrate parental demand and support, and where there is such demand for a free school in an area, we will not turn down a proposal simply to protect other local schools. However, I reassure hon. Members who are concerned that money from BSF will be used to fund free schools that that is not the case. We have reallocated £50 million from the harnessing technology fund to restart the standards and diversity fund established by the previous Government in 2008 to promote new schools. That fund will provide capital funding for free schools until the end of next March. Any free school projects that require up-front capital outlay will have to demonstrate a compelling and strong value-for-money case to support the investment and provide evidence of genuine parental demand.

2.45 pm

Let me deal briefly with some of the issues that the hon. Member for Gedling (Vernon Coaker) raised. He asked how many expressions of interest had been shown in new free schools. We have not announced figures for free school applications or expressions of interest, although the New Schools Network has done so, but we have made it clear that all proposals for free schools will be published on our website.

The hon. Gentleman asked about the terms of reference for the capital review, which are there for all to see on the departmental website. I shall read briefly the review's opening purpose. It is:

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