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Lord Northbrook: My Lords, the Home Secretary stated that he wishes for decreased spending. The Prime Minister has asked for higher taxation. This is very confusing. Can I ask which approach the Minister favours?
Lord McIntosh of Haringey: My Lords, we have never pretended that public finances in this country are immune from economic changes, either in our own economy or in the world economy. When we come to the Pre-Budget Report next month the noble Lord will have an answer to his Question. What I shall not do is to give a running commentary on the public finances of this country.
Lord Taverne: My Lords, if the so-called war leads to extra expenditure which may be a temporary strain, do the Government agree that the key answer will be borrowing at the lowest possible terms? Will the
Lord McIntosh of Haringey: My Lords, I have great pleasure in agreeing with the noble Lord, Lord Skidelsky, in his absence. The general theory has a good deal to be said for it and I believe that the noble Lord, Lord Taverne, referred to it in the introduction to his question. Of course borrowing is one of our options, but it would depend on what kind of expenditure is involved as regards both military and humanitarian aid for Afghanistan.
Lord Peyton of Yeovil: My Lords, can the noble Lord reflect on the contribution or otherwise made to national productivity by the Inland Revenue? The noble Lord, Lord Rooker, referred to the Revenue in a response to the previous Question.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Peyton, has couched his question in uncharacteristically neutral terms and thus I do not know whether he is referring to the malign influence of the Inland Revenue or its benign influence. Perhaps we should discuss this point at some other time because it does not follow on from the Question tabled on the Order Paper.
Lord Stoddart of Swindon: My Lords, if we were to enter a serious recession, would the Government feel constrained by the 3 per cent rule imposed under the Maastricht Treaty, which would prevent our public borrowing from exceeding 3 per cent of GDP?
Lord McIntosh of Haringey: My Lords, the Stability and Growth Pact, to which I believe my noble friend Lord Stoddart has referred, requires that the United Kingdom, as a member of ECOFIN, should submit a convergence programme. We are committed to avoiding excessive deficits. In return for that commitment, we take part in the surveillance programme, both at official meetings and in ministerial meetings at ECOFIN. Furthermore, the commitment that our public finances should be held close to balance or in surplus would be our policy whether or not we were members of the European Union.
Lord Peston: My Lords, can I ask my noble friend to remind noble Lords that the Chancellor is committed to a fiscal policy which balances current expenditure with current income over the cycle? That means that, in a recession, the finances can go into deficit as long as an equivalent surplus is achieved during a boom. Incidentally, that is precisely Keynes's view of the matter.
Lord Saatchi: My Lords, perhaps I may offer the Minister a slightly different interpretation of the public finances. During the Government's first term of office, when they largely followed the inherited economic plans of the previous administration, they generated a surplus of around £34 billion. However, is it not right that during the Government's second term--the current term--they are planning to borrow £34 billion? Those plans were made before the events of 11th September. Does the Minister agree that that is a good definition of boom and bust?
Lord McIntosh of Haringey: My Lords, I do not accept the premise set out by the noble Lord, Lord Saatchi. During the first two years of our administration, we did not follow the previous government's economic plans; rather, we followed their spending plans. That is quite different. Over that time, we made plans for and began to increase expenditure on essential public services, paying particular attention to capital expenditure and investment, which had been so sadly neglected by the Conservative government.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, a telephone survey of 1,500 schools taken in September indicated that there were about 2,000 vacancies in maintained nursery, primary and secondary schools.
Baroness Blatch: My Lords, I am grateful to the noble Baroness for that Answer. Does she agree that the situation is rather worse than that indicated by her response? A large number of vacancies have been filled by teachers who are being asked to teach subjects for which they are not trained. Ultimately, that will not help to raise standards and certainly is not good for children.
Baroness Ashton of Upholland: My Lords, I should make it clear that the definition we used for this purpose covered full-time appointments that had been advertised for at least one term. That should be put on the record so that the point is made absolutely clear.
Baroness Sharp of Guildford: My Lords, can the Minister confirm that the survey conducted during September showed that there are over 1,000 teacher vacancies in primary schools? In view of that, and in view of the continuing problems regarding the retention of teachers in primary schools, can she explain to the House why this year the department has seen fit to cut by 600 the number of training places available for primary education?
Baroness Ashton of Upholland: My Lords, the figure for primary school teacher vacancies is indeed 1,000, which represents 0.6 per cent of the places available for teachers. We are not complacent. Some 6,000 more teacher training places are now being provided than was the case 10 years ago. Furthermore, we have introduced a raft of measures, including school-based training places for mature graduates who wish to change careers. The number of such places available has been trebled to 2,250. We have funded 1,800 refresher courses per year to cater for returning teachers. We have put in place welcome-back bonuses, we have changed the rules on pension schemes and we are allowing more time for teachers trained overseas to study for their UK qualifications. All of these measures form part of the strategy to attract and retain teachers.
Lord Pilkington of Oxenford: My Lords, has the Minister given any consideration to the enormous problem of teacher vacancies in London, in particular as it relates to housing? Teachers cannot afford housing in London. Has she considered whether the old tied house system might be a help in London? The tied house system helped 19th century education. Teachers cannot afford to live in London and it is no use simply employing Australians.
Baroness Ashton of Upholland: My Lords, the teacher vacancy rate in London currently stands at 4.3 per cent. I agree with the noble Lord that that is above the average and is thus a matter for concern. We have put in place the starter home initiative for teachers. I am not sure whether the teachers I know well would fancy the idea of a tied house, but certainly
Baroness Walmsley: My Lords, does the Minister agree that reducing the burden of bureaucracy would help to attract more people into the teaching profession? Over 70 documents have been issued to schools since teachers returned after the summer holidays. In view of that, does the Minister further agree that the burden of paperwork is still far too heavy? The department has not yet succeeded in appropriately reducing that burden.
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