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Lord Carlisle of Bucklow: My Lords, can the noble Baroness explain to the House, either as an academic or a Member of the Government, how she equates the pursuit of excellence in education with the abolition of the assisted places scheme and the continual attack on grammar schools?

Baroness Blackstone: Yes, my Lords. The assisted places scheme involved the expenditure of large amounts of public money on very small numbers of

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pupils who were taken out of the public sector on the assumption that private schools were automatically better than schools in the public sector. I do not for a moment accept that. Moreover, the money that has been saved from the abolition of that scheme will be used to reduce class sizes in our primary schools. I believe that is something that most parents greatly welcome. This is a Government committed to education for everybody, not just the privileged minority.

Lord Davis of Oldham: My Lords, perhaps I may declare an interest as chairman of the Further Education Funding Council, although that is not directly relevant to this Question. During the very large number of transformations of the status of grammar schools in the 1980s under the administration of the noble Baroness, Lady Thatcher, was there any evidence at all that examination results suffered?

Baroness Blackstone: My Lords, I am most grateful to my noble friend for reminding us of the fact that more grammar schools were changed to comprehensive schools when the noble Baroness, Lady Thatcher, was Secretary of State for Education than under any other education Minister since the war. I can also confirm that that had no impact on examination results. Indeed, throughout the 1980s and into the 1990s, examination results in secondary schools improved.

Baroness Platt of Writtle: My Lords, the noble Baroness refers to educational standards and I agree with her on that point. However, does she agree that teachers in grammar schools base their experience on very bright children who are doing very well, and that because of the current insecurity such teachers will take that expertise out of the public sector and into the private sector, which will not be to the advantage of public sector standards?

Baroness Blackstone: My Lords, I do not believe that that is the case. I do not believe that the professionalism of our grammar school teachers is such that they will feel insecure as a result of a change of this kind. I believe that many of them will see this as an important new challenge. My own daughter went to a school that had been a grammar school and became a comprehensive. None of the teachers left. They were all able to make the adjustment extremely well and found it most challenging.

Duty-free Sales

3.25 p.m.

Lord Skelmersdale asked Her Majesty's Government:

    Whether, in view of Commissioner Monti's opposition to their decision to seek a reversal of the agreement to abolish duty-free sales, they will continue to co-operate with Commission attempts to reduce "unfair" tax competition in the European Union.

Lord McIntosh of Haringey: My Lords, decisions on unfair tax competition are a matter for member states,

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not Commissioner Monti. The work on tackling unfair tax practices in the EU is being taken forward under the code of conduct on business taxation. The code was agreed by member states, not the Commission. It is a political commitment, not a legally binding one. The UK supports, and will continue to support, the code and the need to tackle harmful tax practices.

Lord Skelmersdale: My Lords, how schizophrenic can this Government get? On the one hand, they sign up to the new European way and tax harmonisation; on the other, they try to destabilise a long-standing EU policy on the abolition of duty-free sales. Which of those is an example of what the Prime Minister calls "being a leading player in Europe"?

Lord McIntosh of Haringey: My Lords, the Government are consistent on both matters. As the noble Lord well knows, the Prime Minister and Chancellor Schroder yesterday signed a statement of common position in which they confirmed that they regard unfair tax competition as damaging, but that they do not favour a unified system of corporate taxation. As for duty-free sales, a number of noble Lords on the Opposition Benches have been arguing for its continuation for a considerable time. The opportunity to raise the matter will arise in Vienna tomorrow and the day after and it is up to any head of state, including our Prime Minister, to raise it one last time.

Lord Grenfell: My Lords, with reference to the Anglo-German joint statement to which my noble friend has just referred, is he not encouraged by the fact that that statement says, and I paraphrase, that exceptions to initiatives designed to combat unfair tax competition should be granted where a member state can demonstrate that the competitiveness of Europe is in jeopardy? Does he not agree that that could protect our Eurobond market from the proposed withholding tax and render totally unnecessary any use of the British veto against such a tax measure?

Lord McIntosh of Haringey: My Lords, my noble friend's paraphrase is very close to the original, which I have with me. Yes, I can confirm that that is indeed what the common position means. I confirm that we will not sign up to any change which would damage the Eurobond market.

Lord Higgins: My Lords, is it not clear from the Prime Minister's exchange at Question Time yesterday that the Government are weakening as regards tax harmonisation? Is it not also clear from the letter signed with the German Chancellor that that is so? Can the Minister give us an assurance that in the discussions he mentioned a moment ago, the Government will be absolutely categoric in saying that they are opposed to the withholding tax, which would damage the City, and that they will oppose further harmonisation on savings taxes generally?

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Lord McIntosh of Haringey: My Lords, I am sorry to say that the noble Lord has followed the interpretation of the distinguished political editor of the Financial Times, which is wrong. We have always said that as a last resort we would veto any unsatisfactory agreement. We now think, as a result of the common position taken up by the British and German Governments, that it will not be necessary; in other words, avoiding damage to British financial institutions, combined with the benefit of action against unfair tax practice, is now possible.

Lord Razzall: My Lords, does the Minister agree that, far from the conclusions we are asked to draw from the remarks of the Conservative Opposition, the remarks of Commissioner Monti refute recent scare-mongering on tax harmonisation? Does he not agree also that tax phobia can now be added to Europhobia as a political and economic illness to be avoided in your Lordships' House?

Lord McIntosh of Haringey: My Lords, in setting out the respective responsibilities of member states and the Commission, I did not intend in any way to criticise Commissioner Monti, who was perfectly entitled to say what he did.

Lord Elton: My Lords, to save the noble Lord great embarrassment when he reads Hansard's account of his reply to the first supplementary question, will he confirm that it was an entirely accidental and not a Freudian slip which led him to refer to the Prime Minister as head of state rather than head of government?

Lord McIntosh of Haringey: My Lords, the noble Lord is strictly correct. I apologise for any unintended mis-statement.

Lord Marlesford: My Lords, does the Minister agree that it is a great deal better to allow market forces to put pressure on governments to harmonise taxes, because that would harmonise them downwards, rather than to allow the Brussels Commission to harmonise them, which would almost certainly harmonise them upwards?

Lord McIntosh of Haringey: My Lords, we do not know the result of the deliberations of the group on the code for business taxation. We do not know what the result will be or in which direction harmonisation will occur. Clearly it has been a proper and a valuable initiative. I think the noble Lord should wait to see what comes out of it.


3.31 p.m.

Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Hayman will, with the leave of the House, repeat a Statement that is to be made in another place on tobacco.

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I recently announced that, subject to progress of business, the House would be asked to return from the Christmas Recess on Thursday 7th January. I have to tell your Lordships that there has been a change to these arrangements. Following further negotiations with the usual channels, it will now not be necessary for the House to be asked to return until Monday 11th January. As previously announced, the House will sit on Thursday 17th December at 11 o'clock and rise at the end of that day's Sitting.

Freedom of Information Bill [H.L.]

Lord Lucas: My Lords, I beg to introduce a Bill to extend the right of access to information held by public authorities; and for connected purposes. I beg to move that the Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Lucas.)

On Question, Bill read a first time, and to be printed.

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