The Secretary of State for Education (Michael Gove): Innovation, diversity and flexibility are at the heart of the free schools policy. We want the dynamism that characterises the best independent schools to help drive up standards in the state sector. [Hon. Members: "Hear, hear."] Oh, thank you. In that spirit, we will not be setting requirements in relation to qualifications. Instead, we will expect business cases to demonstrate how governing bodies intend to guarantee the highest quality of teaching and leadership in their schools. No school will be allowed to proceed unless its proposals for quality teaching are soundly based. Ensuring that each free school's unique educational vision is translated into the classroom will require brilliant people with a diverse range of experience.
Steve McCabe: I am grateful for that answer. [Interruption.] I am, indeed. My only question is, if we recruit too many untrained and unqualified teachers, does the Secretary of State fear he will end up presiding over the Department for dumbing down?
Michael Gove: That was a brilliantly couched question, which reflects the many years that the hon. Gentleman spent, with profit, in the Government Whips Office. I think that the Department for dumbing down was presided over by my predecessor, the right hon. Member for Morley and Outwood (Ed Balls), during his three years as Secretary of State. As our new schools White Paper will point out when it is published, we will do everything possible to increase the prestige and esteem of the teaching profession. Throughout the House, we all recognise how important it is to get the best people into the classroom.
Michael Gove: We will ensure that everyone who is employed in a free school goes through the appropriate process of ensuring that it is safe for them to be in an environment where children are taught. As the hon. Gentleman will know, the Government are reviewing the current vetting and barring scheme in order to scale it back to common-sense levels, but the balance that we want to strike is between a proper regard for child safety and ensuring that unnecessary bureaucracy is removed.
Kevin Brennan (Cardiff West) (Lab): Where will these unqualified teachers be required to teach? I have here the document containing the Government's list of places where they want free schools to be able to open without any planning permission. It includes hairdressers, travel agencies, sandwich bars, dry cleaners, undertakers and-you could not make this up, Mr Speaker-pet shops. Actually, the Secretary of State and the schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), look a bit like the Pet Shop Boys, but does their vision of 21st century schools really consist of our children being educated in the abandoned premises of "Reptiles R Us"?
Michael Gove: I am grateful to the hon. Gentleman for that well rehearsed question. I know that he is a brilliant musician, but in the words of the Pet Shop Boys, he's got the brains and I've got the looks, and together-I suspect-we could make lots of money.
The Secretary of State for Education (Michael Gove): The Government are committed to reducing the administrative burden on both head teachers and governors. We have already announced that the self-evaluation form will be removed, that the inspection framework will be streamlined and that we will reduce the amount of guidance issued to schools. Today I can announce that we are abolishing the overly bureaucratic financial management standard in schools scheme. We will also simplify school funding, and we are considering how to reduce funding differences between similar schools in different local authority areas. We will continue to work with local authorities and others to reduce the bureaucratic burden, so that schools have more time to focus on raising standards.
Stephen Phillips: I am grateful to my right hon. Friend for that answer. As he is aware, the imposition of school improvement partners by the previous Government led to the senior management teams of many schools spending vast amounts of their time holding meetings, ticking boxes and discussing meaningless strategies, targets and initiatives. Will the forthcoming White Paper bring an end to that aspect of the wasteful bureaucracy created by the previous Government?
Michael Gove: My hon. Friend makes a great point in his characteristically forceful and eloquent way. The Government are looking at how we can ensure that the whole process of school improvement is made less bureaucratic.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Does the Secretary of State agree that head teachers and school governors, as well as teachers, found Teachers TV very liberating in terms of knowledge, improving school administration and teaching? Will he think again about winding up Teachers TV?
Michael Gove: I am grateful to the hon. Gentleman, and I know how committed he is to improving continuous professional development. Our White Paper will say more about how we can do that. Teachers TV will-I think-operate in future on a commercial basis. That is one of the many ways in which outside organisations can attempt to improve education. In that respect, we will allow teachers, governors and heads to make decisions about the type of external support that they buy in to help them to improve the valuable work that they do.
The Minister of State, Department for Education (Mr Nick Gibb): In 2009, 71% of pupils in maintained schools in Dartford achieved level 4 or above in English and maths combined at key stage 2, compared with 72% in England. We want all children, whatever their background, to achieve high standards in reading, writing and maths. That is why we are introducing a pupil premium, which will provide extra funding for those schools with the most challenging intakes.
Gareth Johnson: I am grateful to my hon. Friend for his answer, because despite £2.5 billion spent on national strategies, a third of primary school pupils have not even reached level 4 for reading and writing. To help, will he encourage primary schools that have scrapped spelling tests in Dartford and elsewhere to reintroduce them?
Mr Gibb: Yes. Spelling is key to writing, as is grammar and punctuation. Indeed, we have already asked Ofqual to investigate how spelling, punctuation and grammar can be used in mark schemes for GCSEs other than simply English language.
4. Mr Rob Wilson (Reading East) (Con): What assessment he has made of the likely effect of his proposed pupil premium on children in (a) Reading East constituency and (b) England; and if he will make a statement. 
The Minister of State, Department for Education (Sarah Teather):
We have made no assessment of the effect of the pupil premium in specific constituencies. We are considering the responses to the consultation on
school funding, which ended on 18 October, including the question of which deprivation indicator to use. We expect the effect of introducing the pupil premium across England to be one of raising the attainment of those children who are eligible for it.
Mr Wilson: As somebody who wrote about and championed the pupil premium back in 2005, may I welcome the Minister's answer? The pupil premium will not be enough in itself to break open social mobility, as only 45 pupils on free school meals went to Oxbridge in the last year for which figures are available. What further measures can the Minister promise, and how do the Government undertake to make things better for poorer pupils?
Sarah Teather: I recognise the hon. Gentleman's long-standing interest in this issue. He is right that the pupil premium alone is not enough to break open social mobility, but that is exactly why we extended the free entitlement for early-years education for three and four-year-olds to 15 hours, and why-crucially-we have extended such education to all disadvantaged two-year-olds. By ensuring that we narrow the gap before children get to school, we ensure that they are in a much better position to make the best of the offer that we provide for them when they start primary school.
Andy Burnham (Leigh) (Lab): We are told that the Secretary of State cracked open a bottle or two on the day of the spending review to celebrate the "Schools Protected" headline that was running. His journalistic ability to get a good headline is not in doubt; it is his grip on ministerial detail that we worry about, and whether the reality that head teachers face when they see their budgets in a few weeks' time will match the fine words that he used on that day.
"we will have a pupil premium, a sum of money from outside the existing schools budget which will come on top of what we currently spend on schools, in order to help children in disadvantaged circumstances."
Sarah Teather: The pupil premium will provide £2.5 billion on top of the baseline for schools by the end of the comprehensive spending review period. Let me remind the right hon. Gentleman that that is £2.5 billion more than a Labour Government would have been prepared to put in.
Andy Burnham: I am afraid that the Minister is wrong. The coalition agreement said that the pupil premium would be funded from "outside the schools budget", but the spending review document said that it
"will sit within a generous...settlement".
Whatever the Minister says today, the truth is this: a pupil premium that is on top of a protected schools budget has not been delivered. However-and what is worse-the pupil premium is not what it seems. It will create winners and losers, and scandalously, the biggest losers are set to be schools in the most deprived areas of England. Let me share with the House new analysis from the Commons Library, which states:
"The impact is likely to be-
"The impact is likely to be a shift in funding from generally more deprived to less deprived local authorities."
Sarah Teather: The right hon. Gentleman knows full well that there will be a real-terms increase in school funding over the course of this comprehensive spending review period. I wonder whether it is perhaps the height of his political career to stand in the House of Commons to oppose our spending £2.5 billion extra on the poorest children in this country. Is that really what he came into Parliament to do?
Andy Burnham: The words do not match the reality. The reality of the Government's spending review is this: a pupil premium con, where funding is recycled to the most affluent areas; a real-terms cut per pupil of 2.25%; a whopping 60% cut to the school building programme; Sure Start cut by 9%; and the education maintenance allowance scrapped, despite promises from the Secretary of State to protect it. Is this not the truth: he has made a mess of the education budget and while he celebrates his headlines, children and teachers are counting the cost of the Government's broken promises?
Sarah Teather: Is it not true that the right hon. Gentleman's Government left a legacy of the poorest children doing significantly worse than the wealthiest children right across the country, and of children on free school meals failing at every level to meet that of children from wealthier backgrounds? That is their legacy; that is the truth. His Government would never have implemented the pupil premium, and I am proud to say that we are implementing it.
5. Mr Douglas Carswell (Clacton) (Con): What recent assessment he has made of standards of attainment in secondary schools in (a) Clacton constituency and (b) England; and if he will make a statement. 
The Secretary of State for Education (Michael Gove): In 2009, the most recent year for which constituency-level data are available, just 34.1% of pupils in maintained schools in Clacton achieved five or more GCSEs at grades A* to C or equivalent including English and maths, compared with 50.9% across England as a whole. We remain concerned that nearly half of young people are leaving compulsory education without meeting this basic standard. That is why we are reforming the school system to give schools more freedom and introducing a £2.5 billion pupil premium to support children from disadvantaged backgrounds.
Mr Carswell: The Minister may be aware that as a general rule of thumb standards in schools in Clacton, and indeed in England, tend to be higher the more independent those schools are from his officials. Is there not a danger that any new direct funding through an IPSA-type quango would create the architecture of even greater central control? In order to maintain greater standards, should we not encourage real independence?
Michael Gove: My hon. Friend is an impassioned supporter of independence in all its forms and in all sorts of bureaucratic institutions, and I agree that one would be well advised to steer clear of any quango that models itself on IPSA. It is our intention to ensure that school funding is simplified, that schools exercise more autonomy and independence, and that the system is rendered fairer across the board. In particular, we will not be creating a new body that will have any additional bureaucratic powers.
Toby Perkins (Chesterfield) (Lab): For every one of the past five years specialist sports colleges have had higher levels of attainment than the national average across the curriculum. The Secretary of State's decision to axe the entire £162 million school sports partnership fund will decimate the work of specialist sports colleges. Given the success of school sports partnerships in raising attainment, and if he is interested in the east end boys as well as the west end girls, can he explain why he refused even to meet a recognised world expert in school sport such as Baroness Campbell before deciding to axe funding to the Youth Sport Trust and to decimate school sport?
Michael Gove: I am grateful to the hon. Gentleman for his question. I have had the opportunity to meet Baroness Campbell on a number of occasions; I have had dinner with her and I also met her at a school in the constituency of my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). The crucial question for all schools is, "Do you want more freedom or less?" We are giving schools more freedom. All schools that wish to continue to enjoy specialist status, be they specialist sports, science or technology schools, will have that freedom. What we have done is remove the bureaucratic prescription that went alongside it, and that is because we on this side of the House trust professionals, whereas those on that side of the House continually sought to fetter them.
Pauline Latham (Mid Derbyshire) (Con): I welcome the fact that the Secretary of State is giving more freedom to schools, because they really do need it, and the fact that there will be a national funding formula. How soon is that likely to be introduced? Many schools, including those that became grant-maintained and foundation schools, have been waiting for it for many years, and I know that academies are looking forward to it as well.
I am very grateful to my hon. Friend, and I want to underline that we have been consulting on moves to a national funding formula. The former Prime Minister and Member for Sedgefield was himself keen to move towards a national funding formula in order to eliminate some of the inequities within the schools system. We want to ensure that, as we move towards
such a formula, schools themselves have their voices heard, so that we can do everything possible to eliminate the inequities that existed under the previous Government.
The Parliamentary Under-Secretary of State for Education (Tim Loughton): As part of the spending review on 20 October, the Government have protected school funding in the system at flat cash per pupil and, in addition, provided funding for a pupil premium from outside the schools budget. We expect to announce the funding allocations for education for 2011-12 by the end of the year.
Stella Creasy: Let me try to shed some light on the issue. Waltham Forest has 27% of its children on free school meals, well above the national average of 16%, and 34% of its parents are in receipt of out-of-work credits, well above the national average of 20%. A real-terms increase in our school funding would mean a rise of more than 1.25% in our schools budget for 2011-12, so can Ministers guarantee that, or are they simply better at music than maths?
Tim Loughton: The hon. Lady will have to wait until we make the full announcements per school. Many of the anomalies to which she alludes are the sort of thing that will be dealt with by the pupil premium in any case, and by fairer funding for individual schools.
The Minister of State, Department for Education (Sarah Teather): We are committed to supporting parents in making sure their children are ready for school. We are maintaining the network of Sure Start children's centres; protecting funding for free nursery education and extending it to disadvantaged two-year-olds; and reviewing the early years foundation stage to look at how young children can be best supported throughout their early years while preparing them for formal schooling.
Kate Green: Save the Children has argued that every parent needs to be able to access family support programmes, which are shown to support children's development and learning. What steps will the Minister take to ensure that a pipeline of evidenced family support programmes is available in order to improve children's attainment?
I am grateful for the hon. Lady's question. She will be aware that we appointed the hon. Member for Nottingham North (Mr Allen) to undertake a review of early intervention. He will publish a report relatively soon on best practice in that area, and it will include many of the issues that she has just mentioned. The best Sure Start children's centres already use a
significant number of evidence-based programmes, and the Secretary of State for Health has also announced an expansion of family nurse partnerships, which are extremely important in supporting young parents and in working with their children. However, we are very keen to encourage more Sure Start children's centres to make better use of the programmes on offer.
Claire Perry (Devizes) (Con): Speaking from experience, I know that there is almost nothing a parent can do to prepare a child for the devastating experience of being bullied at school. Today, on the first day of anti-bullying week, well over 800,000 people are taking part in a groundbreaking online march, organised by Beatbullying. What steps are the Government taking to reduce such bullying, which can have such a devastating impact on children's lives?
Sarah Teather: I thank the hon. Lady for raising this very important issue at this very important time. The Government take it very seriously, and we will speak much more about it, including about homophobic bullying, in the forthcoming White Paper.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): It was good to hear the Minister reciting the successes of the previous Labour Government in providing free nursery places and a network of more than 3,500 Sure Start centres. The fact that Lib Dem Ministers feel the need to resort to claiming credit for our ideas shows how few they are getting from their partners in government.
Despite what the Government spin merchants would have the public believe, Sure Start was far from protected in the spending review. By freezing the grant, removing the ring fence, cutting children's services budgets and removing around £40,000 of the budget from every children's centre to pay for health visitors, the Government have put the Sure Start network under severe pressure. I therefore have a simple question for the Minister: can she guarantee that no Sure Start children's centre will close as a result of choices made by this Government?
Sarah Teather: We will be announcing more details about the funding for Sure Start children's centres shortly, in line with the settlement for local government. Yes, we have removed the ring fence, but we are trying to encourage local authorities to look rationally at what they want to do locally to ensure that they prioritise early intervention. We have rolled this into an early intervention grant, because they tell us how strongly they want to prioritise early intervention. However, every area will be different. Unlike the previous Government, we want to give local authorities the freedom to make decisions on the ground on what matters for them.
The Minister of State, Department for Education (Sarah Teather):
To deliver the Government's commitments on special educational needs, I am publishing a Green Paper later this year to look at the wide range of issues concerning children with special educational needs and
disabilities. To inform this important work, I issued a call for views and have met parents, teachers, local authorities, charities and other groups. I am also considering the findings of recent reviews, including the recent report from Ofsted.
Mark Menzies: I thank the Minister for that answer. However, like many MPs, I have had in my constituency surgeries people who have real concern that their children will not be adequately assessed. That is a great worry for parents. What can she tell us to outline a future approach and take away parents' worry?
Sarah Teather: That is specifically why we are producing the Green Paper. We recognise how many parents feel that they continually have to battle to get the needs of their child recognised, and then battle again to make sure that those needs are catered for. We are looking at how we can make the system more transparent, how we can streamline assessment, and how we can identify need much earlier. We also want to improve parents' choice about the provision for their child and look at transition for young people right across the piece.
Pat Glass (North West Durham) (Lab): Given the huge weight of evidence about the importance of early intervention for all children, but particularly for children with special educational needs-the Minister has talked about that-can she confirm for us today that the pupil premium will be paid for under-fives?
Sarah Teather: I said earlier that, in line with the funding premium, we have spent that money extending it to all disadvantaged two-year-olds to ensure that they have an opportunity to benefit from early education, because that will make a big difference. The hon. Lady mentions early intervention. That is why I asked Dame Claire Tickell to look specifically at how we can use the early years foundation stage and early education to identify needs, specifically special educational needs. I hope that that answers the hon. Lady's question.
Mr Graham Stuart (Beverley and Holderness) (Con): I warmly welcome giving greater autonomy to schools. However, can we ensure that schools are not free to put up classrooms in which children with a hearing difficulty are unable to hear what is going on, and can we make sure that basic regulation is in place to ensure that every classroom, unlike so many of those built in recent years, is suitable for the needs of every child in that class?
Sarah Teather: The National Deaf Children's Society has raised that issue repeatedly. The Government are very sympathetic to this point; acoustics need to be considered when we are thinking about school buildings.
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes):
In reaching the decision to end the EMA scheme, we have focused on the evaluation evidence and other research which indicates that EMA
does not effectively target those young people who need financial support to enable them to participate in learning. It will be replaced by a scheme that does.
Helen Jones: I take it from that that the Minister has not had any discussions with head teachers. When he does, does he think that they will welcome taking on the role of prying into family finances as well as their other duties? What implications does he foresee for the relationship between the young person and their school or college if they are turned down for financial support? Will there be an appeals system to ensure that the process is fair?
Mr Hayes: In my ministerial role, I have conversations all the time with head teachers and college principals. What I know-I am sorry that the hon. Lady does not know this, because she cares about these things deeply-is that such people are almost always best placed to make the sensitive judgments about learners that she describes.
Mr David Ward (Bradford East) (LD): I note the confidence of the Minister's response about the replacement for EMA, but if that replacement-be it the enhanced learner support fund or whatever-proves inadequate, will he commit himself to reintroducing EMA for children from the poorest backgrounds?
Mr Hayes: The hon. Gentleman, again, shares my profound concern for social mobility and social justice. He can be assured that the Government will take the necessary steps to make sure that disadvantaged learners get every help to fulfil their potential. That is at the heart of our mission.
Sir Gerald Kaufman (Manchester, Gorton) (Lab): Is the hon. Gentleman aware that I have today received a letter from the principal of Xaverian sixth-form college in my constituency, 55% of whose student roll are on EMA? The principal says:
"The decision to scrap the Education Maintenance Allowance will cause great suffering"
"those with low achievement levels, those from ethnic minorities and those from single-parent families."
Mr Hayes: The right hon. Gentleman is an experienced Member of the House and he is diligent in studying all these matters. He will be very familiar with the evaluation evidence, which shows that EMA is ineffective at targeting the very people he described. I am reminded of Chesterton, who said:
"It isn't that they can't see the solution. It is that they can't see the problem."
Damian Hinds (East Hampshire) (Con): In replacing the EMA, which had a large degree of dead-weight cost, with something more targeted, will my hon. Friend maximise the freedom of individual schools and colleges to adapt to suit their individual locality, address real need and truly widen access?
Mr Hayes: Absolutely. That is just the kind of discretion that lies at the heart of our policy. I am disappointed that Opposition Members do not share our faith in governors, head teachers and teachers to do their best by learners, whose interests we hold so dear.
10. Natascha Engel (North East Derbyshire) (Lab): What assessment he has made of the likely effects on levels of participation in post-16 education of the withdrawal of education maintenance allowance. 
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): We are committed to making sure that young people participate in education and training until they are 18. We will replace EMA with a fund that can more effectively target young people who actually need the support to enable them to participate.
Natascha Engel: We all know that scrapping EMA, as well as the Government's change of heart on tuition fees, will adversely impact the poorest children. What proper guarantees will the Minister give us that children from poorer backgrounds will not drop out of education just because they cannot afford it?
Mr Hayes: Let us look at the details a little more, because the hon. Lady will wish to do so. The figures and the evidence show that we are spending more than £560 million to pay 650,000 young people to incentivise them. Only 10% of those young people need that to enable them to participate in learning post-16. That means that the Government have spent £9,300 each year for every additional young person whom EMA has supported to participate. We simply want to spend that money more wisely on the very people the hon. Lady champions.
The Secretary of State for Education (Michael Gove): History is a vital part of children's education. We will review the national curriculum to ensure that all children gain a secure knowledge of British history and the key events in world history. We will be announcing further details shortly. We are also exploring ways to encourage the study of history after the age of 14-for example, by giving recognition to pupils studying a broad range of subjects, including a humanity such as history, through the English baccalaureate.
Tony Baldry: We will never have an understanding of, for example, the need for greater religious tolerance if we do not understand the tragedy of why George Napier was martyred simply for being a Catholic or why Cranmer, Latimer and Ridley were burned to death in Oxford. If our children do not have the opportunity of hearing our island's story, they will never learn the lessons of the past. What is my right hon. Friend doing to ensure that history is taught as a connected narrative? Will he expand a bit more on what he is doing to encourage more youngsters to study history at GCSE and A-level?
Michael Gove: Top historians such as Niall Ferguson, Simon Schama and even the hon. Member for Stoke-on-Trent Central (Tristram Hunt) have all pressed on the Government the need to ensure that history is taught as a connected narrative. I agree with them.
Tristram Hunt (Stoke-on-Trent Central) (Lab): May I congratulate the Secretary of State on attracting the likes of Simon Schama and Niall Ferguson to advise the Government, although quite when they last saw the inside of a British classroom is open to debate? However, is the real issue not the syllabus, but the fact that the average 13-year-old has only one hour of history a week for 32 weeks a year, thanks to the growth of citizenship and other well-meaning additions to the syllabus that surely need to be pulled back?
Michael Gove: I enjoyed the hon. Gentleman's searing attack on curriculum changes introduced under the last Labour Government, appreciate his commitment to the better teaching of history and note, also, the mildly envious tone in his remarks about Simon Schama and Niall Ferguson. However, I can assure him that a copy of "The Frock-Coated Communist" is on my shelves as well, so his sales will certainly be improving-although, whether they can match Niall's and Simon's remains to be seen.
Philip Davies (Shipley) (Con): I welcome the Secretary of State's commitment to the teaching of British history, and I hope it will be done in a way that allows us to be proud of our country, rather than always apologising for our history. Does he agree that that can be done only if history is taught as a single subject? In many schools, it has been merged with other subjects such as geography. What can he do to ensure that history is taught as a single subject, so that people can learn properly about British history?
Michael Gove: My hon. Friend makes a good point. The changes we are making to the national curriculum and to accountability, through the English baccalaureate, will ensure that history is taught as a proper subject, so that we can celebrate the distinguished role of these islands in the history of the world, from the role of the Royal Navy in putting down the slave trade, to the way in which, since 1688, this nation has been a beacon for liberty that others have sought to emulate. We will also ensure that it is taught in a way in which we can all take pride.
The Minister of State, Department for Education (Mr Nick Gibb): It is for schools to plan their own budgets. The Department will ensure that a full range of tools and information is available to schools on its website.
Head teachers in my constituency have told me that the uncertainty they have in planning their budgets means that they have grave concerns about staff numbers and their ability to offer certain subjects to
students. Will the Minister put those head teachers' minds at rest by saying whether schools face a budget increase or a budget cut?
Mr Gibb: The overall settlement was clear: over the four years, there will be a real-terms increase in schools funding. How that is allocated will be announced later this year at a local authority level. Then it will be for local authorities to allocate that funding to schools in the new year.
Patrick Mercer (Newark) (Con): The budget for the Grove school in Newark has been thrown into complete disarray by the fact that last week, owing to flooding, the collapse of boilers and external exams, key stage 3 teaching had to be suspended for 600 children on Thursday and Friday. What is the Minister's vision for both the budget and the school itself?
Mr Gibb: It is tragic when schools are faced with the sort of problems my hon. Friend talks about. It is, of course, up to head teachers to decide whether to close a school in the face of such problems, and if the closure continues for a period, the school should provide work for those key stage 3 pupils to do at home, so that they do not fall behind in their work. However, I am happy to meet him to discuss measures to avoid such flooding problems in the future.
The Parliamentary Under-Secretary of State for Education (Tim Loughton): We believe that publishing serious case review overview reports will help to restore public confidence and improve transparency in the child protection system, and ensure relevant lessons are learned and applied as widely as possible. I have received only a very small number of representations since the Government's announcement on publishing serious case reviews on 10 June. I also considered comments received from relevant parties prior to publishing the SCR overview reports relating to Peter Connelly on 26 October.
Meg Munn: I know that the Minister is genuinely committed to improving child protection. In that spirit, will he give a commitment to examine the process of publishing serious case reviews in full so that in future we can, if necessary, amend the system better to protect families' privacy and enable professionals properly to learn from mistakes?
Tim Loughton: I am grateful for the hon. Lady's comments. She has great experience in this area. What she asks has already happened, and we commissioned Professor Eileen Munro on 10 June to undertake a review of how child protection works in this country. That will include how to improve serious case reviews to ensure that they are the genuine learning tools that we all desperately need them to be.
The Minister of State, Department for Education (Mr Nick Gibb): No representations have been received on standards of attainment in secondary schools in Tamworth. However, we have received many representations about standards in secondary schools nationally. In 2009, 38.9% of pupils in maintained schools in Tamworth achieved five or more GCSEs at grade A* to C, including English and maths, compared with 50.9% in England as a whole.
Christopher Pincher: I am grateful for that answer. Is my hon. Friend aware that after 13 years of a Labour Government, children are still going to secondary school in Tamworth at the age of 11 with a reading age of eight or lower, which puts them at a disadvantage? What proposals do the Government have to enhance vertical integration between primary schools and secondary schools so that children have the best chance of high attainment when they go into those secondary schools, and do not have to play catch-up?
Mr Gibb: It is important for primary and secondary schools to work closely together, particularly at that transition point. Getting the fundamentals right is crucial to a child's success in secondary education and throughout their adult life. The Government are committed to getting all children reading and writing to a high standard, which is why we are promoting the use of systematic synthetic phonics in primary schools and introducing a short reading test for six-year-olds, so that we can identify those who need extra help. We will say more about the age six reading test shortly.
Fiona Mactaggart (Slough) (Lab): If the Minister is committed to increasing attainment, does he agree that children in secondary schools learn from each other, as well as from their teachers? If so, why will children in places such as Wokingham receive around twice as much pupil premium as children in places such as Slough?
Mr Gibb: Of course, we are still consulting on how the pupil premium will be allocated, but a problem with the current system is that 50% of funding that is allocated on the basis of need does not reach the school. The advantage of the proposed pupil premium-it will be £2.5 billion a year by the final year of the spending review period-is that every penny will reach the schools attended by those pupils.
15. Mary Macleod (Brentford and Isleworth) (Con): What recent assessment he has made of standards of attainment in secondary schools in (a) Brentford and Isleworth constituency and (b) England; and if he will make a statement. 
The Secretary of State for Education (Michael Gove): In 2009, 59.7% of pupils in maintained schools in Brentford and Isleworth achieved five or more GCSEs at grade A* to C or equivalent, including English and maths, compared with just 50.9% in England as a whole.
Mary Macleod: I thank my right hon. Friend for that answer. Given that girls often perform better than boys at GCSE level, will he publish performance data by gender so that schools such as Isleworth and Syon school for boys are assessed fairly against other boys' schools?
Michael Gove: One of the coalition Government's commitments is to ensure that more data are published about attainment at every level to ensure that meaningful comparisons can be made between schools, and that we can learn from the best.
16. Hazel Blears (Salford and Eccles) (Lab): What assessment he has made of the effect on the number of young people in the north-west who remain in further education of his decision to end education maintenance allowance. 
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): Where young people in the north-west are facing financial barriers to participation, schools and colleges will be able to agree whether they should benefit from the enhanced learner support, which will enable closer targeting of resources to individual student need.
Hazel Blears: I thank the Minister for that reply. The pupil premium is supposed to help the poorest children to succeed in education. How does that sit with the decision to abolish the education maintenance allowance, which currently supports 3,000 young people in Salford to stay on at 16? Is it a case of confused policy making, or is it really a matter of robbing Peter to pay Paul?
Mr Hayes: The right hon. Lady will know that the evidence that I described in answer to an earlier question is clear about the ineffectiveness of EMA. That is supported by a letter that I received recently from north-west England from a teacher with 12 years' experience in her area who said:
"I would like you to withdraw EMA"
The Parliamentary Under-Secretary of State for Education (Tim Loughton): The planned changes in the Department's expenditure on school sport, beginning in 2011-12, will enable us to deliver on our coalition Government commitment to create an annual Olympic-style school sport event to encourage more competitive sport in schools.
Ian Austin: Just because the Secretary of State hated sport when he was at school, that is no reason to deprive today's youngsters of the opportunity to take part. When we came to power, just two out of 10 youngsters did two hours of sport a week; today the figure is nine out of 10, as a result of the extra funding and support that we put in. How many will it be as a result of the Government's cuts?
Tim Loughton: I welcome the hon. Gentleman's new-found interest in sport from the Opposition Front Bench, because he had not asked any questions about it in his five years in the House previously. Since 2003, when the school sports partnership was introduced, £2.4 billion has been added to expenditure on sport in schools, and yet still, barely one in five students in secondary schools are involved in competitive sports against other schools. We think that we can get a much better deal by adjusting the way we do things.
The Minister of State, Department for Education (Mr Nick Gibb): No representations have been received on standards of attainment in secondary schools in Great Yarmouth. We have, of course, received many representations about standards in schools nationally. In 2009, 46.8% of pupils in maintained schools in Great Yarmouth achieved five or more GCSEs at grades A* to C, including English and maths, compared with 50.9% in England as a whole.
Brandon Lewis: I thank the Minister for that answer. Can he give some reassurance to the head teachers and teachers in Great Yarmouth? Those I have spoken to have expressed huge frustration over the past decade or so at having to manage tick-box, centrally controlled systems, rather than being able to focus on their pupils. The new freedoms and choices that this Government are giving will allow teachers to go back to focusing on pupils' needs.
Mr Gibb: My hon. Friend is absolutely right. Indeed, evidence from the OECD shows that the most successful education jurisdictions in the world are those with high levels of autonomy combined with clear external testing and accountability. Reducing the bureaucratic burden on teachers and heads is part and parcel of delivering that autonomy, as is the expansion of the academies programme. We are determined to push ahead with both.
The Secretary of State for Education (Michael Gove): In an effort to ensure that the coalition Government's commitment to greater transparency is fulfilled in every Department, my Department has published a full structural business plan. Later this week, it will also be publishing all expenditure incurred over £25,000, as well as the expenditure that has gone to the voluntary and charitable sector, charity by charity, on behalf of the Department and its arm's length bodies.
I am grateful to the Secretary of State for that answer, but can he say how Miss Rachel Wolf moved seamlessly from being his adviser in opposition to setting up the free schools network, then receiving a
£500,000 grant from the Department for Education without any tendering process? If he cannot answer that question right now, will he undertake to write to me and explain why there was no advertisement or open tendering process for a contract of that size?
Michael Gove: I am grateful to the hon. Gentleman for his question. Rachel Wolf and those who work with the New Schools Network are doing a brilliant job. They are joined in doing that job by people from every party, including Paul Marshall, who is a supporter of the Liberal Democrats, and Sally Morgan, who used to work as a political secretary for the Labour party. [ Interruption. ] The right hon. Member for Leigh (Andy Burnham) will know that there were more than five organisations-there were eight, I believe-that were funded by the previous Secretary of State on the basis of no competitive process, including the Specialist Schools and Academies Trust, and the Youth Sports Trust. We have ensured that the best person is paid the going rate for doing a fantastic job.
T2.  Amber Rudd (Hastings and Rye) (Con): Although 23.3% of our pupils at primary school in Hastings are on free school meals, against an average of 15%, our head teachers are still concerned that the number of children eligible for free school meals is under-represented in my town and that some people are simply not signing up. We hope that the Secretary of State will be able to consider other ways of deciding who will be in receipt of the pupil premium, in addition to free school meals.
Michael Gove: We are consulting on a number of ways to ensure that the pupil premium can go to those children who are most in need. One advantage of using free school meals as a measure of eligibility is that they are clearly linked with household income, although I take my hon. Friend's point that no measure of poverty is perfect. In particular, I would encourage all schools to ensure that those children who are eligible for free school meals take up that offer.
T5.  Derek Twigg (Halton) (Lab): The Minister used to be fond of giving quotations about the education maintenance allowance and saying that we were not listening to heads of colleges and schools or governing bodies, so let me read him a quotation from the principal of Halton Riverside college, who is one of the most respected principals around. He says:
"I believe that the Department for Education has made the wrong decision and that disadvantaged young people in Halton will suffer as a result of this decision".
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes):
The hon. Gentleman will understand that the Government are acting on the basis of evidence. I assure him that our determination is to ensure that disadvantaged learners are protected. He will know that the evidence conducted for the Department and for the Institute for Fiscal Studies suggested that
the deadweight costs of the current arrangements were at 90%. That is not acceptable; he must understand that.
T3.  David Mowat (Warrington South) (Con): The comprehensive spending review has set out that we intend to spend £16 billion on about 600 schools during the spending period as a replacement for the Building Schools for the Future programme. The Secretary of State will be aware that a number of initiatives, pursuant to BSF, were lost in Warrington. When does he expect to be in a position to announce the results of his capital review?
Michael Gove: I expect to be able to announce later this year the findings of the capital review on how we can better allocate capital. My hon. Friend is absolutely correct to say that we are spending more than £16 billion on school buildings over the next four years, which is just under twice what was spent in the first eight years of the Labour Government.
T8.  Mrs Linda Riordan (Halifax) (Lab/Co-op): Will the Minister join me in condemning the presence of the British National party on any school governing body? Will he outline what plans the Government have to prevent this from happening?
Michael Gove: I am grateful to the hon. Lady for that question; she has a distinguished record as an anti-racism campaigner. She will be aware that the last Government looked at how to prevent members of the British National party from teaching in the classroom, and decided in the end that the current legislative framework was sufficient. We do not take that view. We are now looking to ensure that we do everything possible to prevent BNP members from being teachers. I very much take her point about the need to ensure that governing bodies and other organisations related to schools are not populated by people with a racist or extremist agenda. We will do everything in our power, consistent with commitments to basic civil liberties, to ensure that racists cannot poison the minds of young people.
T4.  Matthew Hancock (West Suffolk) (Con): The Secretary of State may be aware that over the last month there has been a double dose of good news in Haverhill in my constituency, where Castle Manor school has been awarded outstanding status for the first time and the Samuel Ward school has now become an academy. Will he visit these two schools with me so that he can learn about how they have achieved these improvements and also see how to ensure that those achievements will continue?
Michael Gove: I would be delighted to visit West Suffolk. It is striking that in the six months since the coalition Government were formed-and my hon. Friend took his seat-educational standards in that particular part of East Anglia have significantly improved.
T10.  Mr Jim Cunningham (Coventry South) (Lab): I noticed that in his reply to the question of my hon. Friend the Member for North East Derbyshire (Natascha Engel) about the education maintenance allowance, the Minister said that the Government would spend the money more wisely. Will he now tell us what he intends to replace it with and stop dodging the question?
Mr Hayes: I made it clear that we intend to replace EMA with the enhanced learner support fund, which will target money at the most disadvantaged learners. The problem with EMA-forgive me for repeating myself, Mr Speaker, but I think it is necessary to amplify the point-is its dead-weight costs and its ineffectiveness at reaching the people whom it is designed to help. We will put in place a more effective scheme. The hon. Gentleman must wait and see- [Interruption.] He must simply wait and see.
T7.  Robert Halfon (Harlow) (Con): Only this morning, I opened an enterprise centre in Harlow, which is desperately needed because unemployment there is among the highest in west Essex. What plans does the Minister have for supporting young people to develop enterprise and business schools? Does he agree with me that our economy would benefit enormously if schoolchildren were encouraged by teachers to become young entrepreneurs and-
Mr Hayes: In his short time in this House, my hon. Friend already has a proud record of championing practical learning, including entrepreneurship. He can be assured that practical learning in our schools will, under this Government, be treated with the seriousness that it simply did not enjoy under the previous Administration.
Paul Goggins (Wythenshawe and Sale East) (Lab): I join my hon. Friends in telling the Minister that his policy on the education maintenance allowance is an absolute disaster for my young constituents. The Manchester college has opened a new sixth-form centre in Wythenshawe. It has taken on 180 young people this year and it aims to have 800 people on roll by September next year. Currently, 85% of them are eligible for EMA, yet he wants to take away that important financial support.
Mr Hayes: The hon. Gentleman will know that EMA is also being paid to many more advantaged young people than those whom he commends to the House. There is no determination on these Benches to add to disadvantage, but there is an absolute determination to ensure that the money goes to those who need it most.
T9.  Bob Blackman (Harrow East) (Con): Krishna-Avanti primary school, which is in my constituency, is the first state-sponsored school for Hindus in the country. The school, which has won an award for sustainable design, has just had an Ofsted inspection resulting in an excellent review. Will the Secretary of State agree to visit that community-led school, see it at first hand, and conduct its official opening?
Michael Gove: In this pre-Diwali season, I think we should pay tribute to the significant success of that Hindu school, and to the significant commitment of many Hindu parents to ensuring that our state education can provide respect for their faith along with a perfect preparation for the world of work and further study. I should be delighted to visit that outstanding school.
Alex Cunningham (Stockton North) (Lab): What message has the Minister for the young disabled people in Abbey Hill special school, and in other schools in my constituency, who have enjoyed taking part in sport through the school sports partnership, but will no longer be able to do so because he has withdrawn the funds?
The Parliamentary Under-Secretary of State for Education (Tim Loughton): The hon. Gentleman has only half the story. We will introduce a competitive sport ethos in schools which has been missing. We need to get much better bang for our buck than we get by spending £2.4 billion so that one in five secondary school age students can indulge in competitive sport against other schools. We want them to be doing much more, but we are not getting that at the moment.
Annette Brooke (Mid Dorset and North Poole) (LD): What advice would Ministers give someone wishing to apply to become a trainee educational psychologist, bearing in mind not only the current freeze on recruitment, but the great need for an adequate supply of educational psychologists to improve education for those with special educational needs?
The Minister of State, Department for Education (Sarah Teather): I am well aware of my hon. Friend's interest in this issue. As I said to her a couple of weeks ago when she raised it in a debate on the Floor of the House, the current system for funding educational psychologists is just not working. Unfortunately, only 16 out of 150 local authorities have paid their contribution, although the money went into their baseline funding. That is not good enough, and the Department could not take such a risk. However, I am absolutely determined to ensure that the system changes, because I agree with my hon. Friend that educational psychologists are critical to our reform of special educational needs.
Michael Gove: I am grateful to the hon. Lady for her question and, indeed, for her commitment to this cause. As a result of the coalition Government's careful stewarding of the nation's finances, we are able to ensure that more disadvantaged two-year-olds will enjoy access to pre-school learning. We have also ensured that children of three and four will enjoy 15 hours of pre-school learning free, something of which the last Government were incapable. All that is against the backdrop of an historic deficit for which no one on the Opposition Front Bench has yet had either the courtesy or the bravery to apologise.
Andrea Leadsom (South Northamptonshire) (Con): While I truly welcome the decision to provide 4,200 more health visitors, surely my right hon. Friend recognises that if the pupil premium does not start until a child is two years old, a valuable opportunity is being missed to build, in those first two critical years of life, the relationships between parents and children that have such a strong effect on those children's subsequent ability to learn.
I have a huge amount of sympathy with what my hon. Friend has said. The work that we are doing with the right hon. Member for Birkenhead
(Mr Field), in alliance with the Minister of State, Department for Education, my hon. Friend Member for Brent Central (Sarah Teather), who is the Minister responsible for children and families, will ensure that we intervene early, particularly in order to help the most disadvantaged children to achieve their potential.
Mr Chuka Umunna (Streatham) (Lab): My constituency is in the 19th most deprived local authority area in the country, and I can say with absolute conviction that the education maintenance allowance has been hugely effective in increasing participation rates there: 3,800 young people benefited from it last year alone. Can the Secretary of State guarantee that the more focused, targeted support that has been talked of will help a similar number, and may I also ask him what exactly it will involve? I am not very clear about that.
Michael Gove: I am grateful to the hon. Gentleman for his question, and I know that his commitment to improving educational standards in his constituency is absolute, but I should point out that this Government are increasing education spending by £3.6 billion more than the baseline we inherited. Moreover, we are doing that against the backdrop of a catastrophic economic inheritance. Our commitment to ensuring that educational spending goes- [Interruption.] The hon. Member for Cardiff West (Kevin Brennan)- [Interruption.] The hon. Member for-
Mr Speaker: Order. The Secretary of State is naturally a great enthusiast for debate. He must not be put off by sedentary chunterings, which should not take place. He should proceed uninterrupted with the full flow of his eloquence.
Michael Gove: I am not put off by these chunterings, Mr Speaker. What I want to hear from the hon. Gentleman and every single member of the Opposition Front-Bench team is one word: "sorry" for leaving this country in a desperate economic mess; "sorry" for leaving our poorest children falling behind the richest; and "sorry" for ensuring that our coalition Government have to clear up the mess that the crew of wreckers on the Labour Benches left behind.
Elizabeth Truss (South West Norfolk) (Con): Following the introduction of modular mathematics GCSE this September, which is down to the previous Government and is widely thought to be a worse preparation for A-levels than previous courses, what steps is the Secretary of State taking to ensure that the twin maths GCSEs are going to be rigorous, linear and observed by academics and learned societies?
Michael Gove: Our White Paper will reveal several steps that we will be taking to improve the learning of mathematics, and one of the key questions we will be asking at GCSE level is how a Government who left a £155 billion deficit can have the temerity to ask for more public spending.
Julie Hilling (Bolton West) (Lab):
As youth services nationally have already been cut by 30 to 40%, the cuts to the National Youth Agency are so severe that it will no longer be able to carry out the annual audit of youth
work, and Ofsted is no longer to inspect youth work, how will the Secretary of State ensure the quality of youth service provision in future?
Tim Loughton: The hon. Lady underlines the great importance of engaging the young people of this country as proper citizens, which is why we are carrying forward the national citizen service programme, which will give an offer to every 16-year-old in this country to come forward so it can help their transition to adulthood by enabling them to do worthwhile things in the community, and it will therefore offer a positive message about the good things-the great things-young people in this country do. In the past, we have been too much down on young people. I want to see a Government who are committed to being positive for youth, and this Government are.
Jessica Lee (Erewash) (Con): National adoption week took place in the first week in November, highlighting the plight of the many children in care who require a permanent home. What steps are this Government taking to address this pressing issue, not least when many children have to wait many months, if not years, to be matched with parents?
Tim Loughton: Adoption is a vital component in giving often deeply damaged children a second chance of a good, stable, loving family, and it is very worrying that recent figures showed a 15% fall. I am determined that we get rid of the political correctness and bureaucracy in the system that has meant that many children are waiting too long in care, often never getting the chance of a place in an adoptive family. We need to speed up the process and do away with political correctness and bureaucracy forthwith.
Alison McGovern (Wirral South) (Lab): Evidence from the Royal Shakespeare Company, Arts Council England and others has shown the very real impact access to live theatre can have on the attainment of young people in schools. What specific discussions is the Secretary of State having with the Secretary of State for Culture, Olympics, Media and Sport to ensure that all young people can still access live theatre, especially those from low-income backgrounds?
Michael Gove: Shall I compare her to a summer's day? [Interruption.] I am very grateful that appreciation for Shakespeare is something that unites both Front-Bench teams. I had an opportunity to talk to the RSC before the general election and I am committed, along with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport, to ensuring that access to live theatre, and, indeed, to the very best of English literature, is at the heart of learning. I hope that the shadow Education Secretary, the right hon. Member for Leigh (Andy Burnham), will join me in that. I know he studied English at university, which is why I hope he will withdraw his recent comments against John Dryden, suggesting that that figure should not feature in the national curriculum.
The Prime Minister (Mr David Cameron): With permission, Mr Speaker, I would like to make a statement on my visit to China and the G20 summit in Korea. First, however, I am sure that the whole House will want to join me in welcoming the liberation, at last, of Aung San Suu Kyi. Her tenacity and courage in the face of injustice has been truly inspiring. I spoke to her this morning to pass on the congratulations of everyone in this country on her release and her remarkable stand on democracy and human rights. We must now work to ensure that her release is followed by freedom for more than 2,000 other political prisoners in Burma and that this becomes the first step towards the people in Burma genuinely being able to choose the person whom they want to run their country.
In China and Korea, my main focus was on jobs and growth. In China, I led one of the biggest and most high-powered British business delegations ever. This helped to win new business for Britain worth billions of pounds, involving businesses all over the UK and cities across China. We strengthened our ties on trade, education and culture, all the while raising our concerns with China on issues such as human rights where we have a difference of view.
In Seoul, Britain had four priorities, the first of which was to continue to win recognition for the importance of fiscal consolidation, with those countries with the greatest deficits taking the fastest action. The second priority was to get a clear commitment from all countries to fight protectionism and take the steps necessary to boost global trade. The third priority was to help move development issues up the G20 agenda, and the fourth was to address the global imbalances that were at the root of the global financial crisis and which still hold back growth in the world economy.
I believe that we made good and important progress on all four of those priorities and I will now take each in turn. First, on fiscal consolidation, it is now perfectly clear what the consequences are if we ignore the dangers of large deficits-we see markets questioning our economy, interest rates rising, confidence falling and the economy back in the danger zone. That is where Britain was only a few months ago, but because of the measures we have taken that is no longer the case. Countries with larger deficits need to act on them and do so now. That was exactly the view of the G20. In Seoul, we agreed that
"failure to implement consolidation would undermine confidence and growth."
"formulate and implement clear, credible, ambitious and growth-friendly fiscal consolidation plans".
Secondly, on trade, as the world comes out of recession with some countries moving more slowly while others, including the new emerging powers, forge ahead, there are inevitable pressures in some quarters for protectionism. The G20 has been a vital forum in fighting to keep markets open. Increasing trade is the biggest boost and the biggest stimulus we can give to the world economy. It does not cost any money, it is not a zero-sum game and it creates wealth and jobs. So, against a background
of rising protectionist pressures, the G20 reaffirmed its determination to learn the lessons of the past and avoid the trade barriers and beggar-my-neighbour policies that wrecked the economy in the 1930s. It refreshed its commitment
"to keeping markets open and liberalizing trade and investment as a means to promote economic progress for all",
"roll back any new protectionist measures that may have arisen".
On the Doha round, let me say that it is incredibly frustrating that this trade round is almost 10 years old and that world leaders say again and again that it is going to be completed, but that the situation still remains stalled. The longer it has gone on the more difficult it has got, because the world economy has changed so fast that the deal has become outdated. Both developed and developing countries are looking for more from the round. I do not want to raise hopes artificially but I think that some real progress was made in Seoul.
The language of the communiqué refers to 2011 as the "critical window of opportunity" and crucially refers to the "end game" of the negotiations. As I proposed at the Toronto summit, we have to make the deal bigger by having a wide, across-the-board negotiation. What changed at this summit is that the US said that if a good and fair deal comes forward it will be taken to Congress, so we all instructed our trade negotiators to put more on the table so that a deal can be done. I am determined that Britain should do everything it can to push this agenda forward.
Thirdly, on development, it is right that the G20 is now playing a bigger role in this issue. As well as the very richest nations, the new emerging powers have a huge role to play in helping some of the poorest people and countries. There is a real recognition of the importance of trade, infrastructure and finance in the Seoul agreement. I also raised the importance of continuing our aid programmes. Britain is keeping its promises on aid and I pressed others to do the same.
"the vision of a free trade area"
for Africa. Only 10% of Africa's trade is within the continent of Africa, so knocking down the trade walls between African countries can help unleash economic growth, which will benefit them and us, too.
Fourthly, on imbalances, there are huge trade surpluses in some countries and deficits in others. According to the IMF, such balances are forecast to get worse, not better. Alongside protectionist pressures, we have seen the sign of so called "currency wars". The G20 agreed the Seoul action plan, which included agreeing to move
"towards more market determined exchange rate systems"
and to refrain from "competitive devaluation of currencies". However, the issue of trade imbalances goes beyond currencies. Just as countries with big budget deficits must cut public spending, which is right for them and for the world economy, so countries with big trade deficits need to save more, consume less, and export more. If that is not accompanied by higher consumption by surplus countries, world growth will be lower and protectionist pressures higher and we will repeat the mistakes of the past. In the end, it is as simple as that.
By acting together, we can maximise world growth and cut world unemployment. Imbalance is not some obscure economic issue; it is about jobs.
Trade imbalances have also led to an imbalance of funds-a wall of money in the east and a wall of debt in the west. That was part of the problem that helped pump up some of the bubbles that led to the crash that affected us all. As part of the Seoul action plan, we agreed that we would
"pursue the full range of policies to reduce excessive external imbalances and maintain current account imbalances at sustainable levels."
On other issues, the summit also delivered important progress on financial regulation and the reform of global institutions. To those who say that the G20 is not effective, I say that the last Basel accord on capital ratios, Basel II, took nine years. With the G20 behind it, Basel III has been done in just 18 months. Reform of the IMF to make it more representative of the global economy has been discussed year after year. The G20 has finally got the deal done.
This summit delivered important progress in managing the tensions that are present in the global economy. In my visits to China and the G20 summit, we have protected and promoted our national interests. We have taken vital steps towards the strong, balanced and sustainable global growth that we need. We secured recognition for acting on the deficit, support for more action on trade and development and agreement on working to rectify the imbalances that threaten global economic stability. Ultimately, this will win more jobs and growth for Britain, and I commend this statement to the House.
Ms Harriet Harman (Camberwell and Peckham) (Lab): I thank the Prime Minister for his statement and advance notice of it. We should all agree with what he said about Burma. As we celebrate the freedom of Aung San Suu Kyi, we must remember that there is still a long journey before there is a free and democratic Burma. I also welcome the release of Paul and Rachel Chandler. I am sure that the whole House wants to send them its best wishes. I welcome the Prime Minister's work on his visit to China.
Turning to the G20 summit, I welcome the South Korean Government's success in keeping development on the agenda. Development aid is important for the lives it saves, but, as the Prime Minster says, it makes an important contribution to global growth. I also welcome the fact that he pressed the G8 countries that were in Seoul to keep their promises on aid, as we are.
Turning to climate change, will the Prime Minister tell us how the promises made at Seoul will be turned into action at Cancun? We welcome the continuation of work to reform the financial regulatory framework that was set in motion at previous G20 meetings. The increased stringency of the Basel committee's capital requirements is a welcome step in making banks across the world more stable, but further work is needed to implement
those reforms, and we recognise that that is difficult. Will the Prime Minister tell us how to balance the need for financial stability with the need for economic recovery and growth?
We all know that, for the UK, global economic growth is always important. We are a trading nation. Jobs in this country depend on strong exports, which in turn depend on a growing global economy. Will the Prime Minister acknowledge that that dependence is even greater because of the decisions that he has taken on the economy here at home? Cutting public spending and increasing VAT will dampen domestic demand, and that will hit jobs. The Office for Budget Responsibility has shown that because of the cuts that he is making, Britain must increase exports by more than £100 billion just to sustain growth and jobs. How can that happen if our export markets are failing to grow?
Does the right hon. Gentleman recognise that the global economy on which we are now even more reliant is fragile? That is why this G20 was so important. The most recent figures show that growth in our largest export market, Europe, has halved and that the US is still facing high unemployment and slow growth. Does he acknowledge that with growing disagreements between major economies about currencies and trade restrictions, co-ordinated action through the G20 is more important than ever? Does he recognise that this G20 was a missed opportunity?
No one expected the problems to be solved overnight, but it is a problem that the summit provided no co-ordinated action to support jobs and growth worldwide, little progress on reaching agreement on currencies, particularly between China and the US, little assurance by way of anything practical to prevent a resurgence of protectionism, and no concrete action to restart the Doha round of trade negotiations.
This was the fifth G20 summit since the global financial crisis hit in 2008. During that time, the UK provided leadership for co-ordinated global action. Why did the Prime Minister fail to offer that leadership in the run-up to and at Seoul at such a crucial time for jobs in this country and for the global economy? The question that everyone is left asking is, what was his strategy? What was he aiming to achieve? Did he have any proposals for jobs and growth? What were they?
"at the centre of all the big discussions. Producing the ideas."
So what were his ideas for the G20 and what did he say in those big discussions? Is it not the case that because he has not taken action on jobs and growth in Britain, he cannot lead in the debate about jobs and growth internationally? Is it not the truth that because he refuses to recognise that the economic crisis was global, he cannot engage with international efforts to tackle it? Britain needed to send a statesman to that summit, but all we sent was a spectator. By watching from the sidelines of the G20, the Prime Minister has let Britain down.
On the Chandlers, I very much agree with what the right hon. and learned Lady said. I spoke to Paul Chandler this morning. It is hard to imagine what that family has been through, and it is great that they are now safely in Kenya and are soon to fly home. I am sure the whole House will want to wish them well.
Let me try to answer all the right hon. and learned Lady's points. On development, which is something that Britain very much puts on the agenda at such meetings-I spoke up very firmly about the pledges that we had made-she is right in one sense. We talk about global imbalances. There is a huge imbalance between the rich world and the poor world, and if we can get people in the poorest parts of the world to join the world economy, we will all benefit.
On climate change, the key point is we are prepared to sign up to another Kyoto-style period, but we have got to have global agreement where others agree to sign agreements as well. That is the point that we will continue to push. The right hon. and learned Lady raised a point about the introduction of the Basel III accords and how we balance wanting safety in our financial institutions with an increase in bank lending. That is one of the reasons why Basel III is phased in the way it comes in.
The right hon. and learned Lady raised the issue of the deficit and made the usual accusation that, in Britain, we are acting too fast in dealing with it. I just think that Labour is completely wrong about this. The alternative to dealing with the deficit would not be some beautiful period of uninterrupted growth; it would involve putting ourselves in the same category as countries in which interest rates are rising and confidence is falling. That is the alternative, and that is where she and her party would have landed us.
The right hon. and learned Lady said that there were great disagreements over currencies, but if she looks at the language of the communiqué-perhaps next time she will read it before writing her script-she will see a lot of agreement on not having competitive devaluations over imbalances. She is right to say that this issue is not going to be solved overnight; I said that in my statement. We are asking different countries to do different things in order to achieve a maximum global outcome. That is tough and difficult, but there was progress at the summit. I also heard direct from the Chinese about their plans to rebalance their own economies.
The right hon. and learned Lady asked what we had brought to the table. The idea of a pan-African trade deal was not on the G20 agenda; we put it on the G20 agenda. The idea of pushing further ahead on Doha by making the deal bigger was a French, German and British initiative that we did at Doha and that pushed the Americans and others to go further. On the issue of imbalances, the key compromise to get the Americans and the Chinese together was again something that was pushed very much by the Germans and the British.
I think that the right hon. and learned Lady is completely wrong about this. If Labour had been at this G20, it would have been completely isolated over the issue of the deficit. Everyone else in the room was signing a communiqué on how we have to take early action on deficits. That is the consensus, but Labour is completely outside the consensus. One group of people represented
at the meeting was the International Monetary Fund, and I suspect that if she had been there, she would have been locked in a room with them.
Sir Peter Tapsell (Louth and Horncastle) (Con): Did the G20 discuss the situation of the Irish banks which, because of the potential knock-on effects, could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008? If so, what view did the Prime Minister's colleagues take of Chancellor Merkel's stated determination not to allow her taxpayers to bail out the gamblers who made great fortunes by taking the risks that have created the present crisis, even if that led to the default of national banks?
The Prime Minister: My hon. Friend asks an important question. The issue of Ireland was not specifically discussed at the G20. A statement was issued by a number of European Finance Ministers, including my right hon. Friend the Chancellor of the Exchequer, about the mechanism that will be put in place in the eurozone, because there was a concern that what had been thought about was having a negative impact on Ireland. Obviously, eurozone and European Prime Ministers and Finance Ministers at these gatherings always meet and discuss the health of the European economy and the eurozone. I do not want to speculate about another country's finances. I recognise that the Irish are taking very difficult action to try to get their own fiscal situation under control. Like the United Kingdom, they obviously have very large banks that have got themselves into difficulty and that have to be managed out of the process. We very much hope that all that will take place.
Mr Denis MacShane (Rotherham) (Lab): I welcome the Prime Minister's warm words on the release of Aung San Suu Kyi, but, a little to the north and east, in China, a fellow Nobel peace laureate, Liu Xiaobo, is rotting in a communist prison. Why did not the Prime Minister have the guts to mention his name and call for his release in public?
The Prime Minister: What I did, which was the right thing to do, was to have a very frank exchange about human rights with the Chinese in the meetings that we had, and I can tell the right hon. Gentleman that nothing and no one was off the agenda.
"resilient financial system by reining in the past excesses of the financial sector and better serving the needs of our economies."
The Prime Minister:
There is very strong agreement that we need to deal with the issue of tax havens. My right hon. Friend the Chancellor made an announcement about that while he was in Seoul. We can see real progress in the G20 on the nuts and bolts of regulation, particularly of levels of capital through the Basel accords, but also progress covering the issues that the hon.
Gentleman mentions. National steps should also be taken, and I know that he very much supports the bank levy that we have put in place, which is raising serious money. In a way, it is saying to the banks that it is right that they should now be making a contribution as we deal with our fiscal deficit.
Industry and manufacturing remain at the heart of the Welsh economy. With the pound having weakened against a basket of currencies-it is down 25% since 2007-we should really be looking for an export-driven recovery. What has the Prime Minister been able to secure, through the recent trade mission and the G20 talks, that will aid that recovery and hopefully help Welsh and English manufacturing and industry?
The Prime Minister: A series of deals were agreed while my ministerial colleagues and I were in China, including a very large deal involving Rolls-Royce. It is also worth remembering that the trade mission that President Sarkozy spoke of included a very large Airbus deal, which I know has very positive effects for Britain and indeed Wales.
The hon. Gentleman is right to say that our export performance needs to improve. Obviously we have seen a change in the level of our currency, but I am focusing on ensuring that all the things that UK Trade Investment and the Government can do to help our exporters are in place. I will go on leading missions to fast-growing parts of the world. So far, in six months, I have been to Turkey, a very fast-growing economy that some people call "Europe's BRIC"-a reference to Brazil, Russia, India and China. I have been in the largest trade delegation ever taken to India, and now in the largest one to China. I am going to keep up with that. I think it is important that we get behind our exporters and help them to create jobs in our countries.
Mr Peter Lilley (Hitchin and Harpenden) (Con): Can my right hon. Friend confirm that, should there be a rescue operation for any eurozone member under the European financial stability pact, the only reason why there is a danger that Britain may be required to contribute under qualified majority voting is that the last Labour Chancellor of the Exchequer shamefully signed up to that requirement after the election but before the coalition Government were formed?
The Prime Minister: My right hon. Friend is entirely right. The European financial stability mechanism, which was established just before this Government came to office, was established on the basis of qualified majority voting. It allows money to be spent with a budget that lies between the European budget and the own resources ceiling is, and yes, that money could be distributed in the way that he says.
That is not to be confused with the European financial stabilisation facility, which does not involve the UK. I also point out to my right hon. Friend that the treaty amendment that the European countries are looking at will not affect Britain's potential contributions. However, he is right that the financial stability mechanism was established before this Government came to power and very much against our advice.
Keith Vaz (Leicester East) (Lab): Did the Prime Minister have an opportunity to discuss with President Obama and others the situation in Yemen? After the bomb was discovered at East Midlands airport, the Prime Minister rang President Ali Abdullah Saleh, and he knows that the situation is absolutely desperate there. What help can we give countries such as Yemen?
The Prime Minister: The right hon. Gentleman makes an extremely good point. I did discuss that with President Obama. What is happening in Yemen should be absolutely at the top of the list, because of the al-Qaeda threat that is coming out of that part of the Arabian peninsula. President Obama and I agreed that we have to take a mixture of steps. One of the problems is encouraging President Saleh to see that the al-Qaeda threat is a threat to his own country and needs to be top of the list of what he wants to address. Obviously Yemen also faces problems with rebels in the south and Houthi rebels in the north, but we have to convince it that the al-Qaeda threat is a threat to all of us and to the security of the world, and that is what we will do through aid, through the Friends of Yemen process and through every other means at our disposal.
Mr Edward Leigh (Gainsborough) (Con): The deputy leader of the Labour party asked my right hon. Friend what his agenda is. Is his agenda that when he returns in triumph from his 10th or 20th G20 conference, he can tell the House that he has turned round our economy by creating a small-government, flat, low-tax and privatised economy?
The Prime Minister: My hon. Friend gives me an extremely good script. My agenda at such gatherings is to stand up for Britain's national interests. Above all, as a trading nation, that is about keeping the markets of the world open, and making sure that British business can create wealth and jobs around the world. That is the agenda we should have. When we are trying to get our economy growing at home, it is very important that we focus on those things that most help us back here in Britain.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I listened carefully to what the Prime Minister had to say about competitive devaluation and rebalancing the Chinese economy. Will he say precisely what the Chinese agreed to do about the renminbi, and what he thinks is the most desirable action?
The Prime Minister:
There are two points, the first of which is on what is in the communiqué. Everybody signed up to avoiding competitive devaluations and moving towards market-led exchange rate systems. I accept that those are words, but they are positive. The fact is that China and America are discussing their differences and issues in a multilateral agenda. The second point is that it is in the interests of China itself, and indeed in its five-year plan, to see a growth of
domestic demand as the next driver of its economy. That is good news for Britain, America and the deficit countries, but it is also in China's own national interest. We should try to flag that up whenever we talk to the Chinese about that.
Mr William Cash (Stone) (Con): Will my right hon. Friend accept my enthusiastic applause for his principle of free trade, the growth of small businesses and all that goes with that in international affairs? Will he explain how he will achieve that without achieving competitiveness in the European Union-the imperative competitiveness to which he has referred in the past-and deregulation, including the repatriation of social and employment legislation from the EU to the UK?
The Prime Minister: I thank my hon. Friend for his question. My point-this is perhaps the point of difference between us-is that although I think the EU has taken too many powers and become too federal, as it were, I believe that at the moment quite a lot of like-minded EU Governments are on the centre and centre right of politics. They want deregulation, competitive markets and an agenda that means that we can reform the structures of our economies and get growth. That is true of the Germans, the Dutch, the Swedes, the Danes and many others. They are natural allies for us and we should push forward the deregulation agenda in Europe. I intend to do so.
The Prime Minister: Obviously, we will not benefit from pressures between America and China over trade and currencies. They are the No. 1 and No. 2 economies in the world, and it is in our interests to anchor them in the G20 where we can discuss those things rationally, rather than see the eruption of trade and currency wars. No doubt there are big protectionist pressures in the world today, but they are very much against our interests, because we export more per head of population than most other countries in the world. We must therefore keep those markets open. That is why we must work so hard through forums such as the G20 to make sure that that happens.
In answering other hon. Members' questions on the currency issue, the Prime Minister has repeatedly referred to positive progress between China and America. Will he take every opportunity to ensure that the voice of this Government is felt keenly in those discussions?
The Prime Minister: I thank my hon. Friend for his question. I was worried for one minute that he was about to build the Great Wall of China along the Tamar river. For those of us who still enjoy holidaying in Cornwall, that would be a bad step-we might not be allowed in!
We should not overstate our influence, but nor should we understate it. Britain is an economy and country that is listened to in such forums. We are always in the vanguard of arguing for free trade and against protectionism, and we try to bring countries together, as we did with the Germans, to try to help to broker agreement on imbalances, and to make sure that the G20 can move forward.
David Simpson (Upper Bann) (DUP): I understand the Prime Minister's point on protectionism and the imbalance. There has been good news about exports and we need to keep that market open, but how do we protect British industry from imports from countries such as China that have very low-wage economies?
The Prime Minister: I think that would be a mistake; I do not believe that protectionism works. If we took the view in this country that we should raise some trade barriers to Chinese goods, we would just be putting off the day when we have to be more competitive, work out how to get up the value chain and produce goods that the Chinese want to buy. I am more optimistic; I think that when we see the Chinese economy develop and we see a growing Chinese middle class, we will find that they will want the goods, brands and services that we produce in this country. I think that we should be more confident, recognising that free trade has been a great growth motor for the world economy and is not something we should fear.
Mark Pritchard (The Wrekin) (Con): Although nobody in the British Government is suggesting bailing out the Irish economy, is it not the case that 40% of UK trade takes place within the eurozone and that a stable Ireland and a stable eurozone is very much in the UK national interest?
The Prime Minister: My hon. Friend makes an extremely good point. Not only that, but Ireland is an enormously important trading partner for Britain. It is a fact that we export more to Ireland than to Brazil, Russia, India and China combined. That is a rebuke to us, because we have to do better with those other countries, but Ireland is an extremely important trading partner, and stability and success in the Irish economy is very much in Britain's interests.
Valerie Vaz (Walsall South) (Lab): I thank the Prime Minister for making representations to free Aung San Suu Kyi. He said that nothing was off the agenda. Will he say whether he discussed Iran in general and, specifically, the case of Sakineh Ashtiani?
The Prime Minister: I did have discussions about Iran, particularly with the Chinese, but also with other world leaders at the G20. The point we are continually pushing is the importance of maintaining the sanction regime and making sure it holds, because it is potentially having a huge impact on the Iranian regime and we should keep it up. I did not raise the specific case that the hon. Lady mentions, but I have raised it in other ways with others.
Stephen Metcalfe (South Basildon and East Thurrock) (Con):
Does my right hon. Friend agree that as part of our plan to rebuild the broken economy left to us by the
Labour party, supporting science and technology-based companies, of all sizes, is vital? What practical measures are in place following the confirmation of the free trade agreements that he got at the summit?
The Prime Minister: First, we are not making reductions in the science budget. It is being frozen in cash terms, and that is absolutely right. Secondly, the next group of Ministers to go to China will include my right hon. Friend the Minister for Universities and Science. He will go out there for specific talks, because the Chinese want to examine the specific areas where they can link up with us. In terms of scientific research, Britain already does more partnering with Chinese scientists than many other countries.
Chris Williamson (Derby North) (Lab): Two years ago, the then British Prime Minister galvanised world leaders to prevent a worldwide recession from turning into a worldwide slump. Because of this Prime Minister's cuts in public spending, companies in my constituency will rely more on the export market and his policies will throw at least 1 million people out of a job. Can he explain to the House how his being a spectator at this year's G20 summit will assist the companies in my constituency to secure the foreign orders that they desperately need?
The Prime Minister: If the hon. Gentleman wants to help businesses in his constituency, he should stop talking the British economy down. Whatever he says about the previous Prime Minister, who is not here today to join in the discussions, the fact is that the right hon. Gentleman left Britain with the biggest budget deficit in the G20. When we looked at the countries around that table, which included those such as Argentina, we found that we had a bigger budget deficit than they did. That is why we are having to deal with the deficit-the mess that the previous Prime Minister left behind.
Charlie Elphicke (Dover) (Con): My constituents in Dover and Deal will find the Prime Minister's focus on jobs, money, the national interest and sorting out our house refreshing. Will he tell the House more about how his work with India and China and trade missions there has helped our economy? Did it strengthen us at the G20?
The Prime Minister: Some people say that it is quite old-fashioned to pile an aeroplane full of business leaders and fly them off to India, China and the rest of it. I do not agree. It is important to try to bash down the door in order to secure trade in different countries, and the enthusiasm and energy that you show does actually have an impact, because you want to make sure that Indian universities are looking to link with British universities and Indian firms are looking to link with British firms. So, yes, making a bit of noise and taking a good team of business leaders over does make a difference, and I think that we will see trade, jobs and two-way investment as a result.
Chris Bryant (Rhondda) (Lab): One of the inequalities in the world is the tax haven status that many territories enjoy. It has a profoundly deleterious effect on the economies of some of the poorest countries in the world, so does the Prime Minister believe that Cayman should maintain its tax haven status, or will he take action to prevent it from retaining that status?
The Prime Minister: We do work hard to try to deal with the issue of tax havens, because every pound not paid in tax to the UK is a pound that we have to raise from somewhere else, and we have been working hard on that agenda. We have just done a very good agreement with Switzerland, and that will result in a huge amount of extra tax revenue being collected.
Julian Smith (Skipton and Ripon) (Con): May I congratulate the Prime Minister on the billions of pounds' worth of deals done on his recent trip? Will he pay tribute to UK Trade & Investment's role and please ensure that it keeps replicating that improved performance for British business and, particularly, Yorkshire business over the coming months?
The Prime Minister: My hon. Friend is right to speak up for UKTI. It does an incredibly important job linking British businesses with businesses the world over. One of the things that I have found in the past is that, while other Ministers visiting this country have always had a very clear list of the bilateral deals on which they have wanted to see progress and action, we in this country have not been as good at that. It is about time that we were, and I am making sure that that happens.
Chris Leslie (Nottingham East) (Lab/Co-op): The Chancellor has been promising international progress on the financial activities tax since way before the summer. Why did the Prime Minister fail to make more progress on that issue at the G20?
The Prime Minister: That issue is being discussed, but it is a difficult issue on which to get agreement from all G20, or even all EU, members. That is one reason we pushed ahead with the bank levy. The previous Government took the view that a bank levy could not be introduced until everyone agreed, but we would not have that revenue, and we would have to find it from somewhere else, if we had not taken the right, unilateral and brave action to put in place a bank levy.
Joseph Johnson (Orpington) (Con): Will the Prime Minister join me in welcoming to Westminster today the large delegation of Indian chief executives, many of whom he met on his trip to India in July, who are here to discuss ways of deepening trade and investment ties between the UK and India?
The Prime Minister: There is a very impressive team of Indian CEOs, some of whom are here to discuss climate change, green-tech jobs and how we can exchange technology and investment between our economies. That is an incredibly promising agenda. We have a very good green-tech sector and a lot of expertise in technology, and many other countries-India, in particular, perhaps-would like to see that technology brought to bear in their own countries, which, again, means jobs for them, jobs for us.
Alison McGovern (Wirral South) (Lab): Keeping the economies of low-income countries open is one thing, but growth is quite another. What agreements was the Prime Minister able to make on infrastructure investment for low-income countries?
The Prime Minister: One of the things that we are able to do, by having an aid budget that is rapidly growing and meeting our 0.7% target, is to make infrastructure investments in developing countries, and we will go on doing that. It gives Britain some leverage in the world, because you are able to look around that table and ask others to step up to the mark and meet the promises that they have made.
Andrew Selous (South West Bedfordshire) (Con): Does my right hon. Friend think that this country might export more to China if more of us spoke Chinese? If so, does he think that the matter should be looked at in the education system?
The Prime Minister: I do. My hon. Friend is entirely right, and that is why the Education Secretary, who was on such robust form earlier, was in China with me, signing an agreement with the Chinese Government on the teaching of English in China, but also the teaching of Mandarin in our schools. It is extremely- [ Interruption. ] The Education Secretary speaks perfect English; I do not know what hon. Members are talking about. However, I think that the agreement is a very important step forward.
Toby Perkins (Chesterfield) (Lab): For much of the past decade, Ireland was held up by Conservative Members as an example of the direction in which we should have been taking our economy. Now, because Ireland has followed a strategy that largely involves having the same medicine that the Prime Minister is recommending for this country, it is seeing markets questioning its economy, interest rates rising and confidence falling. What lessons has the Prime Minister learned from the situation in Ireland?
The Prime Minister: I think that the biggest lesson is that the Irish followed one key new Labour policy, which was to join the euro. Fortunately, new Labour did not have the courage and bravery to follow through its own manifesto and listened very carefully to my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), who fought a very strong campaign to keep us out of the euro.
Matthew Hancock (West Suffolk) (Con): I welcome the language in the communiqué on imbalances and the recognition that more needs to be done. Given the clear language in the communiqué and the support for dealing with deficits, can the Prime Minister think of any credible group that now opposes action on the deficit?
The Prime Minister:
It is difficult to find a group that is against dealing with deficits. I think that even Cuba has now recognised that we need to take action-and that is the point. The G20 is united in the fact that we
need to deal quickly with large and excessive deficits. That was the conversation around the table, and that is what is in the communiqué. There is only one group of people I can think of who would have been in the deficit denial corner: the Labour party.
Damian Hinds (East Hampshire) (Con): On aid, does my right hon. Friend agree that, as well as the altruistic aim, there is also self-interest, both in reducing the number of lawless places in the world and increasing gross world product, which benefits everybody? Does he agree that in these difficult times the case must be made repeatedly to the public that such investments are perfectly rational, when well-targeted and, crucially, when the G20 is acting in concert?
The Prime Minister: My hon. Friend is right. We have to make this argument, because there is no doubt that a lot of people in our country look at a growing aid budget and think that that is money not well spent; they think that that money should be spent elsewhere. We have to make the argument that this is not just a moral argument about relieving poverty in the poorest parts of the world; it is also about avoiding conflict and about investing money upstream so that we do not end up with the Afghanistans and other broken countries. When we look at places such as Yemen and Somalia, it is quite clear that we need to have active aid programmes to try to help stitch those countries back together before we reach more serious problems.
Mr Geoffrey Robinson (Coventry North West) (Lab): The House will have admired the Prime Minister's evasive action on the issue of Ireland. He must be aware that it was the very strong view of the previous Government that we should not go into the euro and we were successful in that respect. What lessons, apart from that, can he now draw from the Irish situation? The Irish have been exemplary in every respect in pursuing the course that he has embarked on, and they have ended up in the mess they are in at the moment.
The Prime Minister: I do not want to make life difficult for the Irish at a time when they are trying to take difficult decisions about their own economy. However, they had a consumer boom, a property boom and badly regulated banks-some of the mistakes made by the Government of whom the hon. Gentleman was briefly a member-and they added to that the issue of euro membership. I always think that the great lesson from the exchange rate mechanism is that the euro is the exchange rate mechanism without an exit, and that is the problem.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke): With permission, Mr Speaker, I wish to announce today proposals for the reform of legal aid in England and Wales, and proposals for the reform of civil litigation funding and costs in England and Wales.
I have today laid before Parliament two documents, "Proposals for the Reform of Legal Aid in England and Wales" and "Proposals for the Reform of Civil Litigation Funding and Costs in England and Wales", which consult on these issues; copies will be available in the Vote Office and on the Ministry of Justice's website. The changes will require primary legislation and, subject to consultation, I hope to include proposals in a Bill as soon as parliamentary time allows.
I would like to apologise to the House, Mr Speaker, for the well-informed although not wholly accurate leaks of my proposals that appeared in the newspapers at the weekend, which caused me to bring forward this statement. I was hoping to abide by the convention of announcing this to Parliament, but it was obviously going to run for the week if I left it until Thursday to make the announcement.
Legal aid forms a vital part of a system of justice of which we are rightly proud. The Government strongly believe that access to justice is a hallmark of a civilised society. However, I believe that there is now a compelling case for going back to first principles in reforming legal aid. The current system bears very little resemblance to the one that was introduced in 1949. Legal aid has expanded, so much so that it is now one of the most expensive such systems in the world, costing the public purse more than £2 billion each year. It is now available for a very wide range of issues, including some that do not require any legal expertise to resolve. It cannot be right that the taxpayer is footing the bill for unnecessary court cases that would never have even reached the courtroom door, were it not for the fact that somebody else was paying.
The previous Government made many attempts to reform legal aid, conducting more than 30 consultations since 2006. However, successive changes have been of a piecemeal nature and have failed to address the underlying problems. I have gone back to basic principles to make choices about which issues are of sufficient priority to justify the use of public funds, subject to people's means and the merits of the case. I have taken into account the importance of the issue at stake, the litigant's ability to present their own case, the availability of alternative sources of funding and alternative routes to resolving the issue, as well as our domestic and international legal obligations.
My proposals have also been designed with the aim of achieving significant savings. No other Government in the world believe that the taxpayer should pay for so much legal aid and litigation as we do in the United Kingdom. We have made clear our commitment to reducing the fiscal deficit to encourage economic recovery. Last month's spending review set out the scale of the challenge. My Department's budget will be reduced by 23% over four years. Legal aid needs to make a substantial
contribution to that reduction. I estimate that the proposals in the consultation paper, if implemented, will achieve savings of about £350 million in 2014-15.
I do not propose any changes to the scope of criminal legal aid. However, I propose to introduce a more targeted civil and family scheme that will discourage people from resorting to lawyers whenever they face a problem and instead encourage them to consider more suitable methods of dispute resolution. Legal aid will still routinely be available in civil and family cases where people's life or liberty is at stake, or where they are at risk of serious physical harm or immediate loss of their home. For example, I plan to retain legal aid for asylum cases, for debt and housing matters where someone's home is at immediate risk and for mental health cases. It will still be provided where people face intervention from the state in their family affairs that may result in their children being taken into care, and for cases involving domestic violence or forced marriage. I also propose that legal aid should remain available for cases where people seek to hold the state to account by judicial review and for some cases involving discrimination that are currently in scope. Legal assistance to bereaved families in inquests, including for deaths of active service personnel, will also remain in scope.
However, prioritising those areas requires that we make clear choices about the availability of legal aid in other areas. Therefore, we propose to remove from the scope of the scheme issues that are not, generally speaking, of sufficient priority to justify funding at the taxpayer's expense. I therefore propose to remove private family law cases, unless domestic violence, forced marriage or child abduction is involved. I will continue to provide funding for mediation, which can benefit those involved in family disputes by avoiding long, drawn-out and acrimonious court proceedings.
Other cases that I am proposing to remove from the scope of the civil legal aid scheme include clinical negligence, where, in many cases, alternative sources of funding are available, such as no win, no fee arrangements. The cases I am proposing to remove from scope also include education, employment, immigration, some debt and housing issues, and welfare benefits, except where there is a risk to anyone's safety or liberty, or a risk of homelessness. In many of these, the issues are not necessarily of a legal nature, but require other forms of expert advice to resolve.
I recognise that there will be some cases, within the areas of law I propose to remove from scope, that international or domestic law will require to be funded by the taxpayer. I therefore propose a new exceptional funding scheme for excluded cases. I want to ensure that those who can pay for or contribute to their legal costs do so, so that we ensure continued access to public funding in those cases that really require it for those who have little or no funds of their own. On eligibility, therefore, I propose that all clients with £1,000 or more of disposable capital should make a minimum £100 contribution to their legal costs, and that the capital of any prospective legal aid clients is taken into account when considering eligibility.
I also looked at how best to reform the way in which we pay lawyers who provide legal aid services. I want to ensure that criminal cases are resolved quickly and cost effectively, and that legal aid fee structures support that aim. In the long term, I propose to fulfil the recommendation that Lord Carter of Coles made to the
previous Administration to move towards a competitive market to replace the current system of administratively set fee rates. It will not be possible, however, to fulfil that aim in the short term. I am therefore proposing some more immediate changes to the current fee structure.
I propose to ensure that in Crown court cases that could realistically have been dealt with in the magistrates courts, a single fixed fee for a guilty plea will be paid based on fee rates in the magistrates court. I also propose that the same fee should be paid in respect of a guilty plea in the Crown court regardless of the stage at which the plea is entered, and to do more to contain the costs of very high-cost criminal cases. These proposals complement other reforms to the justice system that I will be bringing forward designed to encourage cases to be brought quickly and efficiently to justice, so sparing the victim the ordeal of giving evidence in court unnecessarily, and sparing the justice system significant but avoidable costs.
It is important to strike a balance between the need to ensure that legal aid provision is innovative, efficient and good value for taxpayers' money on the one hand, and ensuring that people can continue to access legally aided services where necessary on the other. I believe that more can be done to strike the balance. I propose to reduce fees paid in civil and family cases by 10% across the board, and to make similar levels of reductions in rising experts' fees. I also propose to extend telephone access to advice through the Community Legal Advice telephone helpline, which has a high rate of public satisfaction, to help people find the easiest and most effective ways to resolve problems.
I am also consulting on proposals to make better use of alternative sources of funding for legal aid. In particular, I would welcome views on making use of the higher rates of interest generated on money invested in a pooled account used by solicitors to hold their clients' money, and on making use of a supplementary legal aid scheme. Lastly, I seek views on how to make the administration of legal aid less bureaucratic for solicitors and barristers doing legal aid work. I recognise that processes have become overly complex, and I want to do what I can to simplify these, while remaining consistent with the highest standards of accounting practice.
Furthermore, on 26 July, the Government announced their intention to consult on implementing Lord Justice Jackson's recommendations on the reform of civil litigation costs and funding arrangements. Sir Rupert Jackson's independent and comprehensive report, published in January 2010, makes a clear case that the costs in civil cases in England and Wales have become too high, and he makes a broad range of recommendations for reducing those costs. I am convinced by Sir Rupert's argument that achieving proportionate costs and promoting access to justice go hand in hand. I believe that the consultation proposals for the reform of civil litigation funding and costs presented today would help to rebalance access to justice with proportionate costs in civil cases.
In particular, Sir Rupert's proposals would reform the operation of no win, no fee conditional fee agreements. CFAs are funding agreements under which lawyers are not paid if they lose, but may charge an uplift or a success fee of up to 100% on their base costs if they win. CFAs, as they currently operate, allow claims to be
brought at no financial risk to individual claimants, but the other side of that coin is that CFAs impose substantial additional costs on defendants. The Government have already accepted the recommendations of my right hon. and noble Friend, Lord Young of Graffham's recent report on health and safety and the compensation culture, entitled "Common Sense, Common Safety". His typically cogent report endorses Sir Rupert's proposals.
The key proposal is to abolish recoverability of high success fees and the associated after-the-event insurance premiums in CFA cases. Under the current regime, defendants must pay those additional costs if they lose, and they may be substantial, as the success fee may be double the base legal costs. In addition, significant costs may arise from claimants' purchase of after-the-event insurance. ATE insurance may be taken out by parties in such cases to insure against the risk of having to pay their opponent's costs and their own disbursements if they lose. We are proposing that claimants should have to pay their lawyer's success fee. They will, therefore, take an interest in controlling the costs being incurred on their behalf. That will also reduce the disproportionate costs burden on defendants.
We are also seeking views on implementing other recommendations by Sir Rupert, which are designed to balance the impact of these major changes, and in particular to assist claimants. The recommendations include a 10% increase in general damages to help the claimant to pay the success fee, and a mechanism of qualified one-way costs shifting. That would protect the vast majority of less well off claimants from having to pay a winning defendant's costs and therefore reduce the need for ATE insurance.
We also propose to allow damages-based agreements or contingency fees in litigation before the courts. These are another form of no win, no fee agreement, under which lawyers may take a proportion of the claimants' damages in fees. This would increase the funding options available to claimants.
Other proposals would further encourage parties to make and accept reasonable offers, and introduce a new test to ensure that overall costs are proportionate. We also propose to increase the modest costs that can be recovered by people who win their cases when they represent themselves without lawyers.
Taken together, my proposals complement the wider programme of reform that I will bring forward to move towards a straightforward justice system: one which is more responsive to public needs, which allows people to resolve their issues out of court using simpler, more informal remedies when appropriate, and which encourages more efficient resolution of contested cases when necessary. I commend this statement to the House.
Mr Speaker: Order. I have been hanging on almost every word of the right hon. and learned Gentleman for at least the past 13 years, if not for some time before that. Today, his statement was a little in excess of the usual required time, and I shall allow for that, of course, in the shadow Secretary of State's response.
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