HC Deb 06 June 1991 vol 192 cc427-39

  1. '( )—(1) Sections 2(1) and 2(5) above shall have effect subject to the provisions of this section.
  2. (2) Any order made or issued under sections 2(1) or 2(5) above in respect of the remuneration of teachers shall be accompanied by a statement that the Secretary of State is satisfied that the resources available to local education authorities in the financial year concerned are (or, in the case of a subsequent financial year, will be) adequate to enable each such authority to make payment to school teachers in that financial year in accordance with section 2(6)(a) above without consequential diminishment of resources available to it for other expenditure.
  3. (3) Where an order in respect of the remuneration of teachers made in accordance with sections 2(1) or 2(5) has effect in more than one financial year, the Secretary of State shall lay before Parliament a further statement otherwise in accordance with subsection (2) above in respect of each such year before the start of that year:.'.—[Mr. Fatchett.]

Brought up, and read the First time.

4.33 pm
Mr. Derek Fatchett (Leeds, Central)

I beg to move, That the clause be read a Second time.

We debated the Bill at some length in Committee and now on Report, as a matter of normal procedure, the Bill carries the words "As amended in Standing Committee A". It is difficult to recall any amendments that were made to the Bill in Committee or any arguments to which Ministers were prepared to listen in Committee. It must be extremely worrying for people outside, who initially may have warmed to the idea of a pay review body, to discover that Ministers refused to listen to the arguments that were advanced in Committee, especially those on the conditions attached to its work.

The Secretary of State has returned from his visit to Japan. He spoke this morning on the "Today" programme about his pay review body. The way in which he warmed to the National Union of Teachers was an interesting new phenomenon, or was it just in contrast to how he feels about the British Medical Association? It may have been the latter.

The right hon. and learned Gentleman tried hard to sell the notion of the pay review body, perhaps not so much as a principle but in terms of the possible or promised outcomes. On hearing that, I thought that he would warm to new clause 2. I was not aware that he would respond to the debate, but my premonition was well founded because not only has he warmed to new clause 2 but I assume that he will show his ministerial colleagues that concessions can be made on the back of a sound argument. As always, a sound argument will be advanced for the new clause.

New clause 2 deals with the funding of pay review body awards and aims to ensure that local government does not find itself in the untenable position of having to meet an award that is not fully funded by the Government. The problem changes substantially as a result of the creation of the pay review body. The Secretary of State will recall the Green Paper that was published in October 1987, when the Government opposed a pay review body. Paragraph 7.18 said that the other groups covered by pay review bodies differ from teachers as, For all these groups, the Government is the employer or direct paymaster. That is not true of teachers. The direct employer may now be a school, and the local education authority. The paymaster will be the local education authority and, for a few grant-maintained schools, the Department of Education and Science.

New clause 2 aims to avoid the pay review body facing one or two problems, or perhaps both. The pay review body may make an award higher than the financial support that is made available to local government under the revenue support grant system. If so, local government faces a problem: does it pay teachers in full—presumably it has a statutory responsibility to do so—and be forced to cut other services, including education? That is one consequence.

The other consequence has worried many teachers and their organisations. Under the Bill, it is possible for the Secretary of State to impose conditions on the way in which the pay review body works. Will one of those conditions be preset in terms of the revenue support to local government? If so, the notion of a free and independent pay review body does not bear close examination. The pay review body would be similar to the interim advisory committee, and it would operate in a financial envelope. It may have come as no surprise to teachers and their organisations when the Minister of State—I think that it was a slip of the tongue but nevertheless a not unimportant one—referred in Committee to the pay review body following on and being similar to the interim advisory committee, which worked with a pre-determined financial envelope. In that event, there is danger that the pay review body will not be independent and be able to make the same kind of expansive commitments that the Secretary of State seemed to hint at in his radio interview this morning. Instead, the pay review body will be constrained and limited.

A further cause for concern is the Government's record, if one takes the interim advisory committee as the model. They may say that that is not a fair model, but the Conservative party's own brief asks its Back Benchers to sell the pay review body on the basis that it was developed from, and is a continuation of, the IAC.

It is clear that the Government have not been prepared fully to fund pay awards recommended by the IAC. In 1988, the then Secretary of State for Education and Science, the right hon. Member for Mole Valley (Mr. Baker), replied to a written question of typical originality from the hon. Member for Rugby and Kenilworth (Mr. Pawsey). It asked the Secretary of State when the report of the interim advisory committee on school teachers' pay and conditions would be published. With his usual perception, the hon. Member for Rugby and Kenilworth just happened to arrange for his question to appear on the day that the report was about to be published.

Mr. James Pawsey (Rugby and Kenilworth)

If the hon. Gentleman looks at the Order Paper for yesterday, he will see that I tabled no fewer than eight specific and individual questions, all relating to teachers' pay—a matter in which Conservative Members display considerable interest.

Mr. Fatchett

It is not my intention to criticise the hon. Gentleman's diligence. I was merely praising his ability to plant questions at the right time, to ensure that they receive the right answers. I am sure that the hon. Gentleman in that way performs a very valuable service to the machinery of Government.

The Secretary of State's reply to that written question set out the details of the IAC report, and stated in paragraph 7: Nor is it intended to revise the RSG"— that is, rate support grant— settlements for 1988–89 on account of the proposals set out in paragraph 2 to 6 above."—[Official Report, 19 April 1988; Vol. 131, c. 398.] In other words, the IAC's recommendations were not met in full. There was a 10 per cent. overload in the money going to local government, which had to be met by cutting education and other services.

A year later—and this must have been a mistake on the part of the Department—a question came from the hon. Member for Southwark and Bermondsey (Mr. Hughes). I am sure that the relationship between him and the Government is not so good that his question was planted, but in any event it received a reply from the then junior education Minister, the hon. Member for Coventry, South-West (Mr. Butcher). It stated: The salary Bill for school teachers in England will rise by some £440 million in the financial year 1989–90. This is £80 million above the England element of the original limit proposed. He added that the effect of the reduction in the cost of employers' contributions to teachers superannuation will be to reduce the school teachers salary bill by about £25 million. The remaining £55 million to be borne by local education authorities represents less than 0.4 per cent. of local authority education provision."—[Official Report, 16 May 1989; Vol. 153, c. 127.] As in the previous year, the award was not met in full by the Government and could be honoured only by cuts in local authority expenditure.

In the subsequent two years, the Government adopted a new tactic—not one that has excited teachers tremendously. Instead of meeting the award in full—or at least ordering its payment in full—they have said that it should be phased in over the financial year. That means teachers do not receive the full amount. The Government may argue that the rate support grant covers the full amount of the two phased increases. If that is the case, it has been done at the cost of teachers and their salaries. If—as local authorities would argue—that is not the case, it is at the cost of the jobs of teachers and others, and of services.

We need to know what are the Government's intentions in respect of funding pay review body awards. Do they intend to meet those awards in full, or simply to tell local government, "This is what teachers should be paid—but we are not prepared to make the full amount available."? If that is all that the Government can offer, it is a very bad deal for teachers. They will have a legitimate right to feel concerned about their security, their jobs, investment in the education service and its future, and about other local government services. There is no point in having a pay review body if teachers have to pay the cost, and suffer the consequences, of the awards that it makes. I hope that the Secretary of State will take this opportunity to confirm that it is the Government's intention to meet the full cost of any future pay review body award.

4.45 pm
Mr. Merlyn Rees (Morley and Leeds, South)

My question arises out of some of the changes to the structure of education announced by the Government in recent weeks—though I recognise that the relevant legislation has yet to be introduced. My hon. Friend the Member for Leeds, Central (Mr. Fatchett) asked about the Government's plans for funding review board pay awards. What will be the position in respect of teachers in sixth form colleges or in the sixth form of a high school—in which case they may also teach in lower forms as a result of the changes of recent years. In the case of someone working at a tertiary college that is run directly—and I accept that there are to be trusts, and all the rest of it—will the title "teacher" still be used generically, and refer also to those who are paid as lecturers at grades I and II, and at all the other grades that exist in sixth form and tertiary colleges?

Mr. Michael Carr (Ribble Valley)

New clause 2 draws attention to a serious problem confronting local authorities and the governing bodies of locally-managed schools. Many governing bodies in my own county of Lancashire and in many others throughout England and Wales face serious decisions because the salary budgets for their schools do not allow them to meet the full cost of paying their existing staff. That will inevitably result in redundancies, have a consequent effect on the schools' curriculums, and further seriously damage teacher morale—which is already at a low ebb, and which has been caused entirely by Conservative Administrations.

It is essential that any future pay award recommended by the review body should be sanctioned and met in full by the Secretary of State. It should be fully funded by the Government, and not left to LEAs or to individual school governing bodies to make teachers redundant so that they can balance their books.

I hope that the Secretary of State will agree this afternoon to fund in full any pay increases recommended by the statutory review body. I wholly support the sentiments behind new clause 2, though its wording may leave a little to be desired in achieving the desired effect.

Mr. George Walden (Buckingham)

I do not think that the new clause is necessary. I have great confidence in my right hon. and learned Friend the Secretary of State when it comes to the appropriate treatment of teachers. Having said that, however, I want to pick up one of the points made by the hon. Member for Leeds, Central (Mr. Fatchett).

The hon. Gentleman talked of the danger that any future need for the fulfilment of a pay obligation on the part of local authorities might lead to a reduction in the number of teachers. That leads me to the question of class sizes. We do not merely need better-paid teachers of higher quality—although the head of the National Association of Head Teachers has recently drawn attention to the current poor quality of teachers, judged by academic standards We also need a lower teacher-pupil ratio.

I am familiar with the figures, and I know that they do the Government credit. My constituency and many others, however, contain primary schools with classes numbering more than 30 pupils. We shall not be able to fulfil the requirements of the national curriculum with classes of that size; nor shall we be able to raise educational standards throughout the country to match some of those on the continent.

I hesitate to give Opposition Members any crumb of comfort. As I have said, I have abounding confidence in my right hon. and learned Friend, and entirely recognise that he cannot buy a pig in a poke and announce that the Government will meet whatever requirements the pay review body may come up with, regardless of the economic contingencies. He is bound to wish to maintain reserves, as would the Labour party if—God forbid—it were in government.

Our record on class sizes is good, but it must become much better. Certainly there must be no question of larger classes resulting, however inadvertently, from the operation of the pay review body.

Mr. Edward O'Hara (Knowsley, South)

I support new clause 2. Knowsley had to cut its budget by £4 million this year to contain its poll tax within the cap, thus ending up with a budget £7 million lower than—according to its calculations—was necessary to maintain services at the appropriate level. Obviously, given the proportion of the budget that is allocated to education, the cuts fell heavily on that service.

The education cuts resulted in 100 teacher redundancies, including a number of enforced redundancies, and cuts in schools' delegated budgets. Schools now cannot afford experienced staff, and are forced to hire the cheapest teachers whom they can find—which is not necessarily the best way of supporting the curriculum. As schools shed staff, classes become larger; at the same time, increasing demands are made on teachers in connection with testing. Non-teaching staff numbers are also being cut, which removes the necessary classroom support from the hard-pressed teachers who remain.

Knowsley has an excellent record in nursery provision, but the nursery schools can no longer be staffed. Swimming lessons are, I trust, high on the Government's agenda, but the authority has had to close one learner pool, and another is under threat. I understand that "parents in partnership" and community education are also high on the agenda, but Knowsley's programme, into which it has put considerable effort and resources, is now in jeopardy.

The youth service has been decimated, and instrumental music provision is also in danger. A school of which I am a governor has had its peripatetic music-teaching allocation cut by 50 per cent. Knowsley, although a disadvantaged authority, has a proud record in instrumental music: its youth orchestra and choir annually fill the stage of the Liverpool Philharmonic hall to overflowing, and fill the auditorium to capacity with supporters. The Knowsley youth orchestra and choir are the only such pair to have been invited in recent years to perform at the National Festival of Music for Youth, and the youth orchestra is one of the few to have been invited a second time this year.

That proud programme is now jeopardised. I understand from correspondence that I have received this week that the National Foundation for Educational Research in England and Wales is to include Knowsley in a group of authorities that it will examine closely to assess the affect of school budget cuts on instrumental music teaching.

Cuts in school building maintenance have also been made. I believe that there is a national shortfall of £4 billion in maintenance funds; according to the professional estimate, £8,397,000 is needed to maintain Knowsley's school buildings, but the authority can afford to allocate less than £2.5 million.

Knowsley could not cope with a shortfall in rate support grant funding without doing further serious damage to education. If the Government believe that the extra money could be raised through their sanctioning a levy of poll tax revenue, I can only say that the Secretary of State should read some of the correspondence that I am now receiving from my constituents, who ask me how on earth they can be expected to pay their bills.

The Secretary of State for Education and Science (Mr. Kenneth Clarke)

The hon. Member for Leeds, Central (Mr. Fatchett) began by saying that he had done me the courtesy of listening to what I said on this morning's "Today" programme. Although I am flattered to learn that he may have paid some attention to my remarks, I realise that he did not switch on his radio to listen to me. To prepare his case on new clause 2—and, no doubt, his case on the whole Bill—he listened, dutifully and attentively, to the words of Mr. Doug McAvoy, general secretary of the National Union of Teachers, who was sitting opposite me. I hope that the hon. Gentleman dutifully stood to attention as Mr. McAvoy's dulcet tones went over the air.

Mr. McAvoy is of course the real opposition spokesman on the Bill; it has nothing to do with the official Opposition. When we observe the extraordinary spectacle of Opposition Members trying, on Report, to find arguments such as those contained in new clause 2 to justify their continued opposition to the idea of a review body, we realise that they are completely in the pocket of the NUT. That is the only explanation for their continued advocacy of the right to take industrial action, the right to engage in free collective bargaining, and all the trappings of industrial relations to which they still adhere—contrary to the advice of the other five teachers' unions and, I believe, that of most sensible members of the public.

The Opposition's scratching around for reasons to oppose the review body proposals is becoming rather pathetic. This morning, I discussed with Mr. McAvoy the extraordinary advertisements that the NUT has decided to use. It appears to think that pictures of me walking down the steps will sell newspapers. That is very nice of the union, but it has nothing to do with what we are discussing. Similarly, the hon. Member for Leeds, Central has had to table new clause 2, and has had to scrape the bottom of the barrel in his search for arguments to justify his continuing resistance to the Government's resolve to give teachers proper professional status, and to settle their pay in a sensible fashion by heeding the advice of an independent review body unless there are clear and compelling reasons not to do so, which is what Governments have always recommended.

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I must draw to the attention of the Secretary of State the fact that he has so far not referred to the new clause. I very much hope that he will get to it soon.

5 pm

Mr. Clarke

I have referred to the new clause in exactly the same terms as the hon. Member for Leeds, Central (Mr. Fatchett). If I may, I will continue to deal with the arguments that you earlier ruled in order, Mr. Deputy Speaker.

The hon. Gentleman's first argument was to raise again the idea that the new clause was needed because of the pre-determined financial envelope within which the review body might have to operate. The hon. Gentleman knows perfectly well—because we said so in our first announcement and on Second Reading and it was said repeatedly in Standing Committee—that one of the principal differences between the interim advisory committee and the new review body is that the new body will not operate within a predetermined financial envelope. To raise that argument yet again is to return to a wholly failed and false argument and to try to arouse people's suspicions of the review body proposals.

Mr. Jack Straw (Blackburn)

Does the Secretary of State understand this point? It is not a question of challenging directly the veracity of the words that he used. Those of us who have been on the Opposition Benches for some time—a time that will shortly come to an end—have had too much experience of being promised from the Dispatch Box things which are then not delivered or are overturned by successive Ministers.

I give two examples. The first involves a categorical undertaking given during the passage of the Education Reform Act 1988 that no grant-maintained school's character could be changed within five years. The Minister said that there was no need to accept amendments when the Government had given an undertaking in the House that a provision would not be changed. The second example involves the statement made this time last year on the Floor of the House by the Minister for Social Security and Disabled People, the right hon. Member for Chelsea (Mr. Scott), about the students' vacation hardship allowance—

Mr. Deputy Speaker

Order.

Mr. Straw

I am illustrating a point, Mr. Deputy Speaker. The right hon. Member for Chelsea said that the Government justified the withdrawal of housing benefit—

Mr. Deputy Speaker

Order. The hon. Gentleman is talking about grant-maintained schools and housing benefit. There is no reference to them in the new clause.

Mr. Straw

That undertaking was also broken. My question to the Secretary of State is this: given the track record of Ministers giving undertakings to the House and then breaking them, why should we accept his undertaking now without it being written in the Bill?

Mr. Clarke

On Second Reading the hon. Gentleman did not once mention the words "pay review body". Surely he cannot have come here again merely to launch into a series of interventions and speeches not remotely related to the subject that we are discussing. He is ashamed of opposing the Bill and he does not want to talk about it. He will not dare to give his opinion on a review body for teachers, but he is backing up his hon. Friend's feeble efforts to find reasons for undermining a policy that he knows is popular with teachers. He knows that the Bill states plainly that the review body will not operate within a predetermined financial envelope.

The hon. Member for Leeds, Central said that I was misleading the House by suggesting that teachers might do quite well under the new arrangements and he wished to challenge that claim. Of course, no one can predict what the independent review body will recommend. The Government are submitting themselves to the objective judgment of a body which will recommend the right pay, terms and conditions for teachers.

We are moving towards the review body from a background where the funding of education and teachers has already done very well under this Government. During the lifetime of the Government, funding for pupils has increased by 40 per cent. and teachers' pay has increased by 30 per cent. in real terms. During the lifetime of the last Labour Government, it increased by 6 per cent. in real terms. During the lifetime of this Government, the 30 per cent. real terms increase in teachers' pay has been significantly exceeded by that of doctors and dentists as the Government have acted on the recommendations of the review body for those professions. The same has happened for nurses and midwives as the Government have acted on the recommendations of their review body. On that basis, some teachers—those in shortage subjects, those with good classroom performance and those who commit themselves to a life-long career in teaching—have every reason to be confident in their expectations about the recommendations that a review body would make.

The new clause suggests that the recommendations might somehow be jeopardised by the failure to certify that express sums of money should be made available to finance an award of which the Government approve. The new clause deals with that in a curious way. There is no such thing as a hypothecated revenue for any particular part of local government expending. At no time do the Government separately identify a sum of money which is available only for teachers' pay and nothing else. However, the Government now identify each year in the standard spending assessment that part of the block grant for local government which they believe should be made available for education. Within that, there are many variables which those responsible for managing schools at the moment—mainly the local authorities—must take into account. Expenditure on staff costs is only a part of the total costs in education and those responsible must judge the priorities among staff, buildings and other services.

Although new clause 2 is not relevant to local government spending as it is now organised—there are no such hypothecated sums—I shall deal with the fear expressed by my hon. Friend the Member for Buckingham (Mr. Walden) that underfunding may set back yet further his proper desire to see a reduction in class sizes in primary schools. I shall also deal with the speech made by the hon. Member for Ribble Valley (Mr. Carr) about cuts in Lancashire and that made by the hon. Member for Knowsley, South (Mr. O'Hara) by explaining what happened this year. This year has not been mentioned by any of the members of the Opposition who have spoken so far except in terms of cuts and difficulties.

This year's standard spending assessment total for the forthcoming financial year will be increased by 16 per cent. compared with that for 1990–91. That is in a year when inflation, as we know, is falling rapidly. We are talking about inflation of approximately 5 per cent. during the course of the year, so the increase in real terms will be about 10 per cent. When that standard spending assessment was set, I do not think that it was clear to what extent inflation would fall by the end of the year, but the Government set it to reflect what we properly anticipated would be the salary costs of teachers.

The assessment was set to allow for three elements. First, it was set to allow for a pay award reflecting the remit given to the interim advisory committee last September. The decision that we have taken in the light of the advice given by the IAC is within that remit. Secondly, there was an element for pay discretions on which the Government are very keen—we allowed £140 million for expenditure on discretionary pay awards in England. Thirdly, there was an element for the follow-through costs of last year's pay award, which was phased. An allowance was built into the standard spending assessment to cover the full year's costs of an end-loaded settlement last year.

It is quite clear that there is no question of any authority not being able to afford the consequences of the Government's decision to fund the IAC's recommendation.

Mr. Fatchett

rose—

Mr. Clarke

I shall give way in a moment.

This is not the occasion to start debating the individual problems of schools in Knowsley or Lancashire, or even the prospect of reductions in class sizes in Buckingham. However, it is absolute nonsense to recite, as two members of the Opposition did, a litany of complaints this year and to imply that they have something to do with a failure to increase the standard spending assessment to cover teachers' pay. If there are difficulties in some areas—I realise that there are some in Knowsley—it is a reflection on the capacity of councils to manage their education budgets, and the consequences of past overspending in areas other than education. It is a red herring to say that the Government do not finance their own decisions.

Of course, it is implicit in our proposals that, given that it will be the Prime Minister's review body, the Prime Minister will receive advice, consult with his Cabinet colleagues and then make a decision. Of course the Government must take decisions for which they know that resources are reasonably available in a well managed authority to be able to provide for the consequences of that decision.

Mr. Fatchett

Will the Secretary of State confirm that the standard spending assessment for 1991–92, as against the budget for 1990–91 for local authorities, shows an 8.8 per cent. increase? The interim advisory committee's report recommendation for teachers' pay for 1991–92 shows an increase of 11.3 per cent. Will the Secretary of State now give the real figures to the House?

Mr. Clarke

The comparison with the budget, which is about 9 per cent., I do not accept. That would be to accept that the overspending contained within many of those budgets—for education and a wide range of other matters—is absolutely fixed. We all know that within an education budget there are a wide range of variables. The figures that I have given are accurate. It is simply not the case that the Government's funding of local government has failed to match the Government's decisions on the interim advisory committee. If local authorities have recklessly drawn on reserves, overspent in the past and taken decisions which have nothing to do with teachers' pay, it is complete nonsense, in a year when SSAs are up by 16 per cent., to say that the cuts that they are now imposing on their schools because of their incompetence are a result of a Government decision and a result of the independent advisory committee's recommendation.

Mr. Fatchett

The logic of the Secretary of State's argument is that he is supporting imposed cuts in local authority budgets and expenditure on education. The reality is that the increase as against budgets is only 8.8 per cent. In the circumstances, the Secretary of State's only resort is to argue that local authorities are overspending on education. If that is his argument and his case, he should spend more time talking to thousands of parents who see the shortage of funding in our schools. He should spend a little time talking to his hon. Friend the Member for Buckingham who, with some ministerial experience in the Department of Education and Science, understands the shortfall in education expenditure and the implications of it.

Mr. Clarke

The relevant figure is the 16 per cent. that I have described. I shall give an example which I know well because it has been raised with me. In Derbyshire, councillors are making serious cuts in their education provision this year. For some curious reason, they are cutting out the county orchestra. They are cutting staff numbers. As the hon. Gentleman knows, the Labur party in Derbyshire is freezing school meal prices at their 1981 level. If it were to go back on that daft decision, it would be able to afford most of the cuts that it is making in its music provision and in staffing levels.

Warwickshire is increasing its spending on education—[Interruption.] Yes, it is. Warwickshire is increasing its education spending by £1 million. I have been over this matter with the chief education officer of Warwickshire. The situation is presented in the most obscure way by county councils when they present their figures. They are switching spending from some heads to spending on other heads. They have created difficulties for themselves by drawing heavily on reserves in the past without knowing whether they would be replaced in future, and what they are switching money from is now described as a cut. It is not a consequence of the implementation of the interim advisory committee's recommendations on pay.

My own county of Nottinghamshire made a tremendous performance of making cuts of £7 million. After trying for seven months, I have been able to discover what the million reduction is. Nottinghamshire is increasing its real terms spending on education, admittedly by a small amount. It is switching from one head to another and it is describing what it is cutting as cuts. Again, on the back of a 15 per cent. to 16 per cent. increase in the standard spending assessment, that has nothing whatever to do with an alleged underfunding of the teachers' pay settlement.

The Labour party advocates with more vehemence than I sometimes do the principle of local authority control of education. If we are to have local authority management of education we should have proper accountability. People should actually take responsibility for their decisions. It is quite pathetic that, every time one county council or another makes an extraordinary decision to cut parts of its teaching profession, the official Opposition give credibility to the crazy claim that it is something to do with teacher's pay not being funded by central Government. That is not the history. If in future the review body were to make recommendations which had not been anticipated by the Government, the Government would have to face the fact that when a Government take a decision, particularly on the authority of their Prime Minister, that Government must consider carefully whether that decision can properly be funded. Normally, I would expect the standard spending assessment to cover it, but it might not. One then must ask whether efficiencies in other areas are reasonably possible. One may have to phase the award, or the Government may have to face the fact that it is reasonable to make extra provision above that originally planned in order to provide the necessary funding which the Prime Minister has authorised.

5.15 pm

The very act of setting up a review body, as we have shown in other services, is a commitment by the Government to take independent advice unless there are clear and compelling reasons to the contrary. It falls to the Government to find the major part of the funding for those decisions. Now that we finally have the local government contribution down to a smaller proportion of the overall cost of local government, and have committed ourselves to keeping the community charge and, ultimately, the council tax share down to a lower proportion, the Government must of course have regard to the funding consequences of decisions. However, for the reasons that I touched on earlier, we do not need this new clause or anything like it to give effect to that.

If any undertakings need to be given about implementing review bodies or about funding consequences, they should be made by the Opposition. As we set up the review body, we still do not know whether the Labour party is committed to it or whether it would repeal it. Could teachers be allowed to know whether a Labour Government would abolish the review body or, if they would not abolish it, whether they would fund its recommendations in full? Do Labour Members reject the constant reserve that clear and compelling reasons justify a Government modifying it? Frankly, the Labour party will not come to power if it plays the games that it has played in relation to the review body so far and commits itself to backing a policy being forced upon the National Union of Teachers by all the militants at the conference at Easter and forced upon the Labour party—

Mr. Deputy Speaker

Order. I do not see how those matters can conceivably arise under the new clause. The Secretary of State will stick to the new clause.

Mr. Clarke

I always have the greatest respect for your decisions, Mr. Deputy Speaker, but my remarks seem to have some bearing on resources and the funding of awards, which is what new clause 2 is all about.

Mr. Deputy Speaker

Order. The Secretary of State talked about the policy of the Labour party. That subject does not arise under the new clause. It might be relevant on Third Reading. Perhaps he will defer it until then.

Mr. Clarke

On the condition that, if I am making good progress, you will still declare me to be in order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. There will be no conditions. I hope that the right hon. and learned Gentleman will now address the new clause.

Mr. Clarke

I think that I am entitled to ask. Mr. Deputy Speaker, within the terms of new clause 2, in exactly what way the Labour party is putting it forward and what commitment it has behind it. The hon. Member for Leeds, Central has been advocating that the new clause is required to oblige the Government to fund their decisions. I have explained how the Government have funded decisions in the past and will fund their decisions reasonably in future. The only time the review body system has been in serious difficulties of a kind relevant to the new clause was not in this Government's period of office. In 1970, the doctors' and dentists' review body resigned when the then Government refused to implement its recommendations and referred the matter to the then pay policy body—or whatever it was called, which I cannot remember. This Government have implemented in full the review body recommendations. People have received the benefits because the funds have been available to pay them. The Labour Government reneged on a review body arrangement and broke their word to the doctors. For that reason, on Third Reading the Opposition should clarify their policy and, as they continue to oppose a review body, they should explain what they would put in its place.

Mr. Fatchett

It is always clear when the Secretary of State has a weak script and a weak argument because the quantity of red herrings increases and the volume of the bluster increases at the same time.

I want to correct the record in respect of three points made by the Secretary of State. First, he came out with his normal red herring about the right to take industrial action. Anyone who served on the Standing Committee or who has had more than a passing knowledge of or interest in the Bill will realise that there is no reference to industrial action in the Bill. It is a shame that the Secretary of State has not had time to read his own Bill.

Secondly, the Secretary of State said that the Labour party was stuck in a position of supporting collective bargaining. The Secretary of State has a very short memory. Only a few weeks ago, he brought a Bill to the House that was based on the principles of collective bargaining. He said that that was the best way to make progress. He was either right then, in which case he has now shifted his argument, or he was wrong and was misleading the House about his views. The simple fact is that back in November he told us that he supported collective bargaining. On that same evening, he proudly announced that each of the candidates for the Tory party leadership also supported the principle of collective bargaining for teachers.

Finally, the Secretary of State tried to shift the argument on to a predetermined financial envelope for the review body. That was not the argument. As I made clear, the argument was about funding local authorities so that they can pay teachers.

The Secretary of State's most interesting comment was that the standard spending assessments may not cover all the costs of the pay review award. That is the message that will go to local government from this debate.

Mr. Kenneth Clarke

No.

Mr. Fatchett

That is what the Secretary of State said.

Mr. Kenneth Clarke

My recollection is that I said what the Government would have to do if we found that the previously determined set of SSAs did not meet the costs and I described a variety of options. I have made it clear that a Government who take decisions must have regard to the funding of those decisions. I stuck to that throughout my speech. The hon. Member for Leeds, Central (Mr. Fatchett) did not say what decision the Opposition would take on any of those aspects.

Mr. Fatchett

The Secretary of State is again trying to shift his ground. We were not arguing that Governments do not have to take account of financial considerations. The Secretary of State can check the record. He said that there will be occasions when the SSAs might not cover the full cost of the pay review award. He did not make it clear that the Government would meet the difference. The message to local government and teachers from this debate is that there is absolutely no guarantee that the Government will meet the costs of a pay award from the pay review body. That is worrying.

That is the record of the IAC and the record that has led to the problems in educational expenditure to which my right hon. and hon. Friends referred. Those problems were also mentioned by the hon. Member for Buckingham (Mr. Walden).

We realise that the new clause does not and cannot persuade the Government to fund to local authorities the full extent of the pay award. We needed a short debate to discover the Government's intentions. We have done that and I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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