I assure the hon. Gentleman that I was extremely excited when he said that in Committee.
Lord Baker of Dorkinga figure who should bring cheery smiles to the faces of Conservative Membersdescribed these proposals as "a very welcome development", and he was right. I do not want to scare off too many of my hon. Friends by continuing that litany, but there has been cross-party and Cross Bench support for these proposals. The issue is: do we now trust our schools to make a reality of the freedoms that we wish to give them?
Do we allow them the opportunity to decide for themselves; or do we prevent them from doing so now, before we have even given them a chance? The Government say, yes, we should give them the freedom; the Opposition say no, even though they claim to say yes. I hope that the hon. Member for Altrincham and Sale, West and other hon. Members will join the House in voting to trust schools today.
I think that the Minister is perhaps in danger of misleading himself a little bit. For example, these proposals have been rejected twice by the House of Lords for extremely good reasons. I pay tribute again to the shadow Ministers in the House of Lords and, indeed, to my noble Friend Lord Kingsland, who came in and buttressed our arguments. This is not just a matter exclusively for the Conservative party because we have had significant support from the Liberal Democrats. Indeed, the arguments that have been developed have further endorsed those that we have put forward over a prolonged period.
I have to say that, yet again, I am disappointed by the Minister's response. He is not dealing with the mechanics; he generalises and says that this is what the Government would like to try to achieve. He talks about trust; but, in fact, the Government are not telling us why we should trust them. Why should we trust a Government who are clearly hiding behind the Bill, to which they have proposed to make changes without coming clean? For example, the Minister still has not answered the question that I asked with regard to clause 2.
It is absolutely crystal clear that, under clause 2, the Government propose to make exemptions and disallow the statutory liabilities that currently apply to schools, including all qualifying schools and local education authorities, and to enable them to be exempted by statutory instrument from their statutory requirements relating to education, and the Minister knows that. He has just referred to the question of what would happen in the
24 Jul 2002 : Column 1027
future, but he also knows that he has given me no answer at all about whether the question of the application of those statutory instruments would apply to school companies.
Furthermore, the Minister may be aware of the article in The Observer. [Interruption.] This Minister is very extraordinary; when he comes up against something that he does not like, he either smiles disingenuously or he waves his hands in an extraordinary fashion. The fact is that in an article headlined, "Blairite blueprint to turn schools into companies", Gaby Hinsliff dealt with a very substantive issue. She said:
"The plans for a range of new non-profit-making companies across public services have been drawn up by Trade and Industry Secretary Patricia Hewitt with three other Cabinet Ministers."
I should like to ask the Minister whether he will deny that. The articles says that
"Hewitt is working with . . . the Education Secretary . . . and the Home Secretary on a consultation paper to be drawn up".
The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis):
A secret plan.
It is not a secret plan; it is out in the open now.
The Minister for School Standards knows perfectly well that such proposals apply not only to the Bill, but to Network Rail, the tube and hospital contracts as well. The bottom line is that the article says:
"It is seen in Downing Street as a 'third way' between part-privatisations that have infuriated trade unionists, and the old model of a public sector too closely run by Whitehall."
The fact is that the Bill is intended to try to allow people to dodge their educational liabilities, as laid down by statute up to and including the Bill, and to try to create what we regard as perfectly reasonable proposals if only they could be made to work.
Commercial freedom for school companies would be proper only if they could overcome the obstacles that we have already described. I set out those obstacles in the debate last week, and they include the problems of over-regulation, the problems of companies having to employ accountants and lawyers and the problem of liquidation when a company goes bust. Neither the Minister nor anyone in the other House has yet addressed those questions.
I should be grateful to the Minister if he would address the points that I made last week with regard to what happens when a company goes bust. We have had no answers to those questions. No answer has been given by the Government to explain how LEAs will carry out their obligations to support any school that goes bust. There is no indication whatever about how the redundancy will be dealt with, about whether the creditors will be paid out or about the impact on small businesses.
We have asked the questions, but we have received no answers. The plan fact is that the Minister and the Government are incapable of answering those questions; otherwise, by nowthis must be the third, fourth or fifth time that we have put themthey would have come to the House and attempted to explain them.
There has been no explanation. When the Minister talks about the meaning of the words in the Bill, he should be reminded of Lewis Carroll, whose character Humpty
24 Jul 2002 : Column 1028
Dumpty said to Alice that words mean what we choose them to mean, and that the question is who is to be master, that is all. That is what lies at the root of this problem. The Government have a Bill, they have a majority, and they will, one might assume, get the Bill through this afternoon. It will then go back to the House of Lords, where they have been defeated twice. The schools company provisions go to the heart of the manner in which the Government intend to carry through this Education Bill. We accept that it applies to groups of schools, but the bottom line is that it is an inadequate way of dealing with the problems that have arisen, as expressed repeatedly in both Houses in previous months. The Government have not given us any answer whatsoever. No answers have been given to me, to my noble Friends Lord Kingsland and Baroness Blatch, or to the Liberal Democrat spokesperson in the House of Lords, Baroness Sharp.
In her answer to the proposal in another place that this matter should be considered again, Baroness Ashton of Upholland said:
"I shall make the positive case for allowing schools the freedom to join companies. The argument is simple and one in which another place sees considerable merit. It is that this is another way of giving schools more freedom, more opportunities for partnership and more room to share good practice."
That is what the Minister said just now. The problem is in relation to Baroness Ashton's comments that the general powers are already contained in the School Standards and Framework Act 1998, and that companies can already be created to facilitate the running of schools. What the Minister completely fails to understand is that the change that the Bill introduces does not simply allow groups of schools to join together. The combination of clause 2 and clause 20, which is prefaced by the words,
"Subject to any other statutory provisions",
leaves a hole with which the Government are not prepared to deal. They cannot and will not tell us how in futureto use the Minister's wordsthey propose to use the powers to exempt local authorities from their current statutory liabilities. Were the Bill to go through with these clauses in it, a new regime, of course, would arise. The Minister has a responsibility, however, to explain to the House exactly how clause 2 will work, and to put that in the framework of these provisions.
Turning to the objections that were raised in debate in another place, Baroness Ashton said that
"there is nothing in the creation of a limited liability company that would increase the liability for the public sectorquite the opposite."
Again, the Minister referred to that in embryo. The problem is that it is not the creation of a limited liability that would increase the liability for the public sector necessarily but the consequences of going bust. That is our point. Baroness Ashton continued:
"Schools may not transfer assets to any other body or person without receiving proper consideration."
If a company has gone into liquidation, however, it will not, of course, transfer its assets. It will be dealt with by the consequences of liquidation. The Minister owes us an explanation on that account, too.
In relation to a school company failure, Baroness Ashton stated:
"If a school company fails, the liability of the company member is, in the case of a company limited by shares, limited to the unpaid amount on the sharesif anyor to the nominal amount of the guarantee, in the case of a company limited by guarantee."
24 Jul 2002 : Column 1029
"During our debate, there seemed to be a sense that there was something surprising about that. There is nothing in any way unusual about it".
What she completely failed to appreciate, howeverI shall ask the Minister to respond to thisis the impact on the schools. That is the real difficulty. She went on:
"Noble Lords will know that, to minimise the likelihood of a company's getting into difficulty, we said that the LEA would have a role as supervising authority for the companies."
Again, that does not deal with the fact that it is not a question of minimising the likelihood of a company getting into difficulty; it is a question of whether we can prevent the company from getting into difficulty by taking appropriate action at the right time.