HC Deb 06 July 1995 vol 263 cc517-33 3.31 pm
The Secretary of State for Education and Employment (Mrs. Gillian Shephard)

With permission, Madam Speaker, I will make a statement about pre-school education.

In October last year, my right hon. Friend the Prime Minister made a commitment to provide a pre-school place for all four-year-olds whose parents want to take it up. The places would be of good quality, reflect parental preferences, and not crowd out the private and voluntary sectors. He said that the first places would become available in the lifetime of the present Parliament. I can now tell the House how all four-year-olds will be enabled to have a pre-school place for three terms before compulsory school age. Copies of this statement will be available from the Vote Office.

Many parents do excellent work with their children at home, but the United Kingdom also has a long history of pre-school education: in state schools, in private establishments, and in a lively and vigorous voluntary sector led by playgroups. We want to build on that strength in diversity.

My plans will extend the entitlement to pre-school education to three terms for all four-year-olds. Some children already have that. My intention is to give that choice to the parents of all four-year-olds.

Parents know that good-quality pre-school education yields dividends in later educational life, but parents and their children have widely varying needs. Parents—better than Governments or councils—can judge which type of place suits them and their children best. That is why the plans that I am announcing today put power where it best belongs—in the hands of parents.

I intend that the parents of all four-year-olds should be given a voucher worth around £1,100 that they can exchange for pre-school education. The voucher will be exchangeable for: a part-time place—five half days a week—in any independent, voluntary or state sector institution, whether grant-maintained or LEA, providing nursery education; or a full-time place in a reception class in a state school where this is on offer; or up to a full-time place in a playgroup; or a combination of those.

Parents will be free to top up the voucher in the private and voluntary sectors, but not in state schools, where all education will continue to be financed by the taxpayer. Local education authorities and grant-maintained schools will be able to spend more than the value of the voucher on four-year-olds in their schools if they wish.

I fully expect that giving parents purchasing power through a voucher will stimulate the private and voluntary sectors to provide new places. I am sure that innovative partnerships between the public and private sectors—perhaps led by the private sector—will emerge where none existed before, to satisfy the range of parental demand. This will add to choice and diversity in pre-school places.

I intend the issue and redemption of vouchers to be undertaken by a private sector company under contract.

I should emphasise that these plans relate to pre-school education for four-year-olds alone. There are no plans to alter the funding mechanisms for the compulsory years of school.

In England, the total cost of pre-school education vouchers for four-year-olds will be about £730 million. The vouchers will be funded by a combination of some £165 million of new money for places for those 150,000 or so four-year-olds not already in some form of place in the state sector in England, and recouping some of the money local authorities already spend on pre-school places. Local authorities will continue to be able to provide full-time nursery school and nursery class places.

To ensure that the places are of good quality, I shall require each institution which wants to exchange vouchers to make a commitment to offer education appropriate to a set of desirable achievements for children's learning—including, for example, the areas of language, mathematics, art, and working with others.

I have today asked the School Curriculum and Assessment Authority to consult and advise on the detail of what those achievements should be, and whether one can or should set out the activities likely to lead to such achievements. I do not wish to impose uniformity, but I must be satisfied that the vouchers—which are, of course, taxpayers' money—are being exchanged for education.

I also propose a light-touch inspection framework to ensure that standards are maintained. Together with my right hon. Friend the Secretary of State for Health, I shall consult on the detail of an inspection framework which ensures as consistent an approach as possible across all establishments, taking account of the existing role of Ofsted, and of the local social services departments in establishments registered under the Children Act 1989.

We will also take into account existing registration and accreditation systems in the independent and voluntary sectors. In the spirit of the Government's commitment to deregulation, we shall also examine the case for revisiting existing requirements on child-adult ratios, premises and equipment and planning.

In the same spirit, I have it in mind to remove the requirement to publish statutory proposals to establish nursery places at grant-maintained and local authority schools. All those with an interest in pre-school education are being invited today to give their views. I shall produce a more detailed document in the autumn. Some of these changes will require legislation, and plans will be brought forward in due course after listening to views.

I intend that the policy should start in some areas in England as soon as April 1996. I estimate that about 150,000 four-year-olds in England do not have a pre-school place in the state sector. In the first phase, I intend to cover areas which account for up to 10 per cent. of those new places. Those areas will also cover a proportion of existing places.

I shall invite local councils to volunteer their areas for this first phase, and I aim to choose areas which are representative of the country as a whole. It will be for the independent, voluntary and state sectors in the chosen areas to offer new places to parents in exchange for their vouchers.

My right hon. Friends responsible for Scotland and Wales, and right hon. and learned Friend with responsibility for Northern Ireland and I intend that we shall have full kingdom-wide coverage a year later. My right hon. Friends and my right hon. and learned Friend will make separate announcements in due course.

The changes that I have just announced are a radical new departure. Giving parents vouchers that can be exchanged for three terms of good-quality pre-school education for all four-year-olds is a significant step forward. My proposals demonstrate that what we promise, we deliver. They will widen opportunity for many families, without taking away anything that parents and their children enjoy now. More children will benefit from pre-school education. Purchasing power in the hands of parents will stimulate a market in the supply of places that parents want. Above all, parents will have real choice.

Mr. David Blunkett (Sheffield, Brightside)

My congratulations to the Secretary of State for Education and Employment on holding and expanding her brief. After Prime Minister's questions, she will probably call for a recount.

This proposal is a con trick on children and on parents. It is an experiment in offering a paper promise without providing a single extra place in a nursery class in this country. In a single move, the Secretary of State has created a new bureaucracy—perhaps this afternoon, she will tell us how much the new quango will cost. How much will the administration of the scheme involve? Why is £545 million to be recycled from local authorities supposedly back to local authorities? We understand that the transaction costs are well over £10 million.

Does not the Secretary of State agree that such an internal market, reminiscent of what happened in the national health service, creates the same transaction costs that have bedevilled the provision of health service and will now bedevil the provision of nursery education and care for children under five? Does the right hon. Lady agree that her right hon. Friend the Prime Minister has redefined nursery education so that it no longer has to include education?

This afternoon, the right hon. Lady announced that the voucher would be available for everyone, whether in a nursery class, a reception class or voluntary or private provision. [Interruption.] Given that Conservative Members are shouting, "No," will the Secretary of State tell me whether vouchers will be redeemable in private day nursery provision that does not provide education on the premises, and, where it does, which part of the provision will be eligible for the subsidy? How many people will be eligible for that public subsidy who are currently not receiving state education provision?

Will the right hon. Lady confirm that 500,000 children aged four are currently in either a nursery or a pre-school place in an infants school?

The Minister of State, Department for Education and Employment (Mr. Eric Forth)

A very good record.

Mr. Blunkett

A very good record, by Labour authorities across the country. Until we wiped out Tory authorities in May, children stood three times the chance of getting a nursery place in a Labour authority as in a Tory authority.

Instead of spending money directly on meeting the needs of those children who do not currently have nursery places, has not the Secretary of State capitulated to an ideological experiment in creating an artificial market that would exist only in circumstances where private providers are prepared to come forward and compete with the public sector? Is not recycling £545 million the most disgraceful way imaginable of using public money?

Will the right hon. Lady confirm what she said on 19 October last year, when she showed that she understood and agreed with the point that I have just made? I ask her to agree or disagree. She said: The machinery must not be allowed to overshadow the policy. We are very conscious of the unwieldy nature of vouchers. Has she not this afternoon revealed that she has been overruled and ruled out once again in her arguments with the Prime Minister and the Cabinet Office and with the right wing of her party, who have never been in favour of nursery education and are prepared to sacrifice the education of four-year-olds on the dogma of creating a new internal market? Does not this statement also spell the end of quality standards? Did the right hon. Lady not say—perhaps she would clarify what she meant—that she was going to "revisit" the issue of pupil-teacher ratios for nursery education with a view to diluting them? Is this not an abandonment of years of struggle to get high-quality nursery education to provide standards, achievement and opportunity for all children for the future? Does that not contrast with our clear pledge to set targets for all three-year-olds as well as four-year-olds to have properly and appropriately provided nursery education, openly and freely provided without bureaucracy?

Is this not a disgraceful day, on which the Secretary of State has capitulated to her opponents, and her credentials as an Education Secretary who cares have been desperately tarnished in her desire to placate the right wing? Is it not a disgrace that the many have been sacrificed for the few—the few who will be subsidised at the expense of everyone else?

Mrs. Shephard

I thank the hon. Gentleman for beginning with congratulations. It is unfortunate that he did not listen to a word of the statement. He was obviously concentrating on something that he had prepared earlier. In answering some of his questions, I shall begin with those on quality.

He clearly did not hear me say that I am today asking the SCAA to consult and advise on the outcomes or achievements that we should expect from three terms of pre-school education. It will publish a draft consultation document early in September, with a view to publication in December. I have asked that particular attention be given to the development of early literacy and numeracy, and other abilities—social, physical, moral, spiritual, scientific and technological. Each provider will receive an early educationally related inspection visit in order to be given permission to be registered to receive vouchers.

This afternoon, the hon. Gentleman might like to know, I have discussed those quality proposals with representatives of the teachers' unions, who are well satisfied. I am sorry that he has shown yet again that he is fixated on providers and not consumers. He has also not taken in the fact that we shall examine the way in which the whole system works in phase 1.

It is a pity that the hon. Gentleman has been so ungracious in his reception of what is a real extension of educational opportunity for all four-year-olds: an entitlement to three terms of pre-school education of good quality, with choice for parents, and with a substantial injection of new public money.

However, I know that the hon. Gentleman's attitude is time-limited. Let us not forget that he and his colleagues bitterly opposed the introduction of the national curriculum, testing for seven, 11 and 14-year-olds, the Ofsted inspection system and grant-maintained schools, only to perform U-turns on all of them, and latterly to try to claim credit for themselves.

We know that the hon. Gentleman's opposition today will melt away when he and his colleagues perceive that parents welcome this extension of choice for their children, that providers, including local authorities, will respond to the innovative challenge, and, most importantly of all, that children and their education will benefit. How long will the U-turn take to appear? Who can say—but appear it will.

Mr. James Pawsey (Rugby and Kenilworth)

May I congratulate my right hon. Friend on assuming new responsibilities for learning and training. Conservative Members certainly welcome her announcement? We believe that the idea of placing in the hands of parents an additional £1,100 that they can spend on their child's pre-school education will be widely welcomed, despite the carping and ill-informed criticism by the Opposition. We look forward to April next year when the first phase will begin.

Mrs. Shephard

I thank my hon. Friend for his congratulations and for his welcome of the new policy. Parents will indeed widely welcome the new opportunity to exercise choice in respect of their children's education.

Mr. Don Foster (Bath)

The Secretary of State talked about quality, but why did she say nothing about the qualifications of the people who will be responsible for delivering high-quality early years provision? Will she also confirm that the administration cost for each voucher will be about £16, and that there will be no new money for new buildings or new equipment, or for the training of the new teachers that will be required? Will she not admit that the proposal is a con trick perpetrated by the Conservative party to deliver votes for the next election, at the expense of pupils' education?

Mrs. Shephard

The hon. Gentleman raises the important question of qualifications. We shall not impose new rules at this stage, because a wide range of qualifications are currently held by those who work with the under-fives—nursery nurse qualifications, accreditation through playgroups and, importantly, a growing number of national vocational qualifications—[HON. MEMBERS: "Teachers?"]—and not forgetting teachers, either.

Level 2 and 3 child care and education NVQs will be reviewed this autumn, followed up by further work on a possible level 4. The Teacher Training Agency will have representatives on the steering group for the review, and full account will be taken of the new policy in the work on teacher training.

I am confident that a combination of inspection and parental preference will encourage high-quality provision, but it is important to note that each provider will be required to publish details of the number of staff, the qualifications they hold and the proposed activities, premises and equipment. Each provider will have to provide certain outcomes based on activities that will be defined by the SCAA, so I think that the question of qualifications can be left for the time being.

Mr. Alan Howarth (Stratford-on-Avon)

Does my right hon. Friend accept that, provided we invest sufficiently and find effective means to insist on quality, her policy will prove of immense benefit to children and parents—and, in due course, to employers and the taxpayer? Will the value of the vouchers be taxable, and will it be disregarded for the purposes of income support and family credit?

Mrs. Shephard

The voucher will not be taxable.

Mr. Nigel Spearing (Newham, South)

Is the Secretary of State aware that, on 19 November 1993, I presented a petition signed by more than 106,000 people asking for genuine nursery education? Does she not agree that, unless she maintains the present statutory definitions of premises and of qualifications for teachers, she will give an equal subsidy to existing genuine nursery education and to playgroups of a lesser type?

Will that not destabilise and undermine our whole nursery school provision, which has been built up over 60 years, thus prejudicing 4,000 families in Newham who now depend upon it? Does she realise that her statement did not deliver on the promise made by one of her predecessors, Baroness Thatcher, who issued a White Paper in the 1970s?

Mrs. Shephard

I do not accept the hon. Gentleman's premise. I believe, and I am certain that professionals will agree, that the safeguards put in place for quality, and what I have already said about qualifications, will certainly deliver an excellent standard of pre-school education.

Sir Alan Haselhurst (Saffron Walden)

Is my right hon. Friend aware that many grant-maintained primary schools are flourishing in their new status and are seeking to expand into the field of nursery education? What impact will my right hon. Friend's statement today have on them?

Mrs. Shephard

Grant-maintained schools will have the same opportunities as LEA schools, and a grant-maintained school which does not at present cater for four-year-olds but which wants to attract voucher holders will no longer have to publish statutory proposals for a change in character to extend its age range. My hon. Friend will know that the grant-maintained sector was encouraged by the fact that we were recently able to approve eight proposals for nursery classes in grant-maintained schools.

Mr. Greville Janner (Leicester, West)

May I join in the congratulations to the Secretary of State for Education and Employment? Today is my 40th wedding anniversary, and I offer her my warm personal greetings.

Should not the Secretary of State also make a statement about the abolition of the sole Department that looks after the interests of unemployed people, which is now to be absorbed—at least in part—in her Department? Is she proposing to make such a statement? If so, when? If she is not proposing to make such a statement, who will—

Madam Speaker

Order. The hon. and learned Gentleman may have been married for 40 years, but he has been in the House for many years as well, and should know that he is not questioning the Secretary of State's statement. I understand his interest in the other matter, and if he saves himself, he might be lucky enough to catch my eye on his 40th wedding anniversary and put a question to the Leader of the House. But I cannot ask the Secretary of State to respond to his questions, as they do not deal with the statement.

Mr. Janner


Madam Speaker

I am sorry, but the hon. and learned Gentleman is quite out of order.

Mr. Graham Riddick (Colne Valley)

May I congratulate my right hon. Friend on her new responsibilities, and also on introducing the voucher scheme to extend choice to parents and give new opportunities to children? Should she not pay tribute to the ideas of people on the right of the political spectrum for what she has described as a radical new departure? May I express the hope that the Government, who have enjoyed something of a renewal this week, will continue to embrace ideas from such people in future?

Mrs. Shephard

I wonder if it is my hon. Friend's wedding anniversary. I was sorry to be denied the opportunity to congratulate the hon. and learned Member for Leicester, West (Mr. Janner), who looks as if he has been celebrating his 40th wedding anniversary.

I thank my hon. Friend for his congratulations, and I am glad that he is interested in and approves of the proposals. Many groups were involved in forming the proposals, and one of our principal concerns was to make sure that this innovative approach would work smoothly and well. That is the reason for introducing the scheme in two phases. I am sure that my hon. Friend will want to be certain that the practical details, as well as the ideas underlying them, are all in order.

Mr. D. N. Campbell-Savours (Workington)

Presuming that the pilot scheme is the first phase and that the cost of that first phase amounts to some 10 per cent. of the total, as the Secretary of State has said, will the total net cost to the Exchequer of the proposal until the next general election be £16 million?

Mrs. Shephard

No. We think that the general election will be further away than that. The total cost of the scheme is £730 million, taking into account the money available from LEAs. The new money available in total is £185 million, and all stages will be in place by April 1997.

Lady Olga Maitland (Sutton and Cheam)

May I congratulate my right hon. Friend on her promotion, which will undoubtedly be widely welcomed by parents? Does she agree that LEAs which do not take advantage of this excellent scheme and put in a bid for it will be denying parents choice and diversity? Should not questions be asked of such LEAs, as to whether they are putting politics before children's interests?

Mrs. Shephard

I hope that many local education authorities will offer to take part in phase 1. Indeed, judging from my discussions with education professionals this afternoon, I think that many will find themselves under pressure to do so.

Mr. Edward O'Hara (Knowsley, South)

Will the Secretary of State admit that this statement merely amounts to an undermining of state provision in local authorities such as Knowsley, which has shown its commitment to pre-school education by spending scarce resources and building up an excellent system in the state schools? It is not a question of considering the interests of the provider.

The scheme penalises consumers in my constituency, who will not be able to top up the £1,000. Will she come clean and admit that it is a bribe in the back pockets of disgruntled ex-Tory voters, who are already spending their money on pre-school education in the private sector?

Mrs. Shephard

No, I do not accept that. Perhaps I can reassure the hon. Gentleman by telling him that all local authorities will continue to be funded for the under-fives whom they are educating. If they continue to educate the same number, they will receive the same amount of funding. If, as a result of parental choice being exercised—I imagine that the hon. Gentleman is inimical to that at the moment—they increase the numbers being educated, the places will be funded from vouchers. This will give more opportunity and choice to his constituents—what a pity that he is condemning it in advance.

Mr. David Lidington (Aylesbury)

As the father of two pre-school-age children, may I tell my right hon. Friend from the heart that her statement will be warmly welcomed by parents throughout the country? Will she confirm that, during the summer, she will consult all interested parties to ensure that any difficulties over implementation can be identified and ironed out in advance, so that, when phase 1 of the scheme comes into operation next year, it will deliver smoothly the good-quality pre-school education that she outlined to the House today?

Mrs. Shephard

The consultation starts today. In any case, the work that has resulted in this statement is based on a great deal of consultation and discussion with all the parties involved. There will be a very thorough examination of all the issues involved, and I can assure my hon. Friend that good-quality places will be available for his children when they are ready.

Ms Estelle Morris (Birmingham, Yardley)

The Secretary of State will be aware that, in some areas of our country—especially on new, large estates—there are insufficient nursery places for every four-year-old. Will she be providing any new capital money to secure more places? May I be the third Opposition Member to ask how much money she has allocated for administration of the voucher scheme, and can I be the first to get an answer?

Mrs. Shephard

I have given the answer. I said that we expect the administration costs to be 1.5 per cent. of the total, but that may well be pushed downwards by competitive tender.

On capital costs, local education authorities have access to capital, we expect grant-maintained schools to have access to private finance, and other providers will be able to borrow capital for premises against the value of voucher income, or, alternatively—certainly in the setting the hon. Lady described—interesting new partnerships between local education authority and independent, LEA and playgroups and so forth might well be created. I hope that the hon. Lady, who knows a lot about these matters, will welcome the formation of such partnerships in the interests of children and their parents.

Mr. Tim Rathbone (Lewes)

Does my right hon. Friend accept that anyone who is genuinely interested in expanding nursery education provision will be thankful to her and the Prime Minister for carrying this plan forward? On both sides of the House, however, there is shared concern about the quality of the educational content. I must ask my right hon. Friend for a reassurance on that matter, because of the mention in her opening statement of the availability of these vouchers for use in playschools, which do not have the educational content or the ability to deliver it.

Mrs. Shephard

My hon. Friend makes a valid point. I repeat again that today I asked the SCAA to consult and advise on the activities and outcomes that we expect providers to put in place if they are to qualify for registration under the voucher scheme.

I have to tell my hon. Friend that the Pre-School Learning Alliance, which is what the playgroup organisation is now called, is extremely enthusiastic about the educational opportunities that the new scheme offers it. For several years, it has been gearing up the educational input in what is provided in playgroups. Indeed, many places provide all-day activity with an educational content.

I am sure that the Pre-School Learning Alliance will make proposals to provide a playgroup setting with the quality education content that it will have to include if those places are to qualify to receive vouchers under the scheme. I hope that that reassures my hon. Friend.

Mr. John Fraser (Norwood)

May I assure the right hon. Lady that, in my constituency, the cost of a half-day nursery place is substantially in excess of £1,100 a year? Does not her announcement therefore open up the prospect that there will be parts of the country where people can take advantage of the scheme only where they can top up, and other parts of the country, where free school places are provided, where people can take full advantage of the scheme? Will not that divisiveness get worse as the right hon. Lady withdraws money from local education authorities, leaving more people to rely on top-ups?

Mrs. Shephard

I can reassure the hon. Gentleman. There may indeed be a need to reflect in the value of the voucher regional variations in the cost of providing a place, and we shall examine that during phase 1.

Mr. Eric Pickles (Brentwood and Ongar)

When my right hon. Friend prepared her statement, did she consult the "Conservative Campaign Guide"? If she did, did she notice a figure of 90 per cent., so approvingly quoted by the Leader of the Opposition? Is she aware that, until this afternoon, that figure has always been hotly disputed by the Labour party? Does she agree that what the Leader of the Labour party quotes from the "Conservative Campaign Guide" today will be the Labour party's policy tomorrow?

Mrs. Shephard

I agree with my hon. Friend. We did all notice that little inconsistency, but there is another little inconsistency—parental choice seems to be okay for some but not for others.

Mr. Alex Salmond (Banff and Buchan)

The right hon. Lady says that she would never extend a voucher system into the compulsory years of education—but then she comes, to use her own words, from the "hard centre" of Tory politics. What about Scotland and Wales, which were tossed aside as consolation prizes to the right wing in the Prime Minister's reshuffle? Can the right hon. Lady guarantee that the new Secretary of State for Scotland will not extend the voucher scheme into the compulsory years of education, as that is one of the many barmpot ideas that he has espoused in the not-so-distant past?

Mrs. Shephard

What a customarily gracious contribution from the hon. Gentleman. I am sure that he will be interested in what is planned for Scotland.

My right hon. Friend the Secretary of State is setting in motion immediately discussions with providers in the voluntary, private and public sectors about how best a voucher scheme might work in Scotland. His aim is to put in place arrangements that meet the distinctive needs and circumstances of Scotland's education system and to make a further announcement in the autumn.

Mr. Harry Greenway (Ealing, North)

May I join in the congratulations to my right hon. Friend on that admirable achievement? [HON. MEMBERS: "What achievement?"] Achieving the scheme. Will she accept from me that vouchers will give parents maximum opportunity to choose, and that education that is chosen by parents is the most effective, because they are behind the children wherever they take them or send them?

On costs, bearing in mind what my right hon. Friend has said about the possibility of nursery education costing much less to provide in, say, deepest Scotland or deepest Wales, than it does in Ealing or other parts of London, will the voucher that she provides start at £1,100 and be topped up, or will it be less than £1,100 in regions where nursery education is much cheaper than it is in London? May we have an answer for guidance for my constituents?

Mrs. Shephard

I am glad that my hon. Friend welcomes the extension of parental choice. I repeat what I said to Opposition Members: that, because of regional differences in costs, we may need to look at a regional variation in the value of the voucher. We shall examine that matter in phase 1. I hope that that reply reassures my hon. Friend.

Mr. John McWilliam (Blaydon)

Does the Secretary of State accept that there is now some confusion over her figures? She said that the cost will be about 1.5 per cent. Is that a percentage of the £730 million, which works out at about £100 million? [HON. MEMBERS: "What?"] I am sorry—about £1.5 million. It is obvious that, given the number of figures that the Secretary of State has thrown around, it is difficult to get a grip on them.

Let us use some accurate figures. The right hon. Lady said that, of the £730 million, £165 million is new money. That is to be welcomed. However, that leaves £565 million. At the last count, two thirds of the money being spent was spent by Labour local authorities. Is that sum to be redistributed among all local authorities? If so, how can she assert that the net result in excellent councils like Gateshead, which makes good provision, will not be a reduction in the overall real money available for pre-school education?

Mrs. Shephard

I thought that I had already reassured hon. Members about the position of local authorities that currently provide pre-school education. They will not lose money, and may well gain it, if, as a result of parental choice, parents choose a place in an LEA setting. The figures are simple: £545 million is currently with LEAs; £165 million will be new money for places; and £20 million will be for inspection and a little bit of administration. I suggest that the hon. Gentleman goes away and learns about percentages.

Mr. Richard Tracey (Surbiton)

I applaud my right hon. Friend on this cost-efficient-sounding initiative. Does she agree with many people that there is even more scope for improvement in primary education? Will she underline her guarantee that no resources will be lost to primary education as a result of this initiative, and will she fight the Treasury for even more resources for that area?

Mrs. Shephard

I assure my hon. Friend that the sums that I spoke of are new money for this initiative. He will agree that good-quality pre-school education makes a good contribution to primary education.

Mr. Roy Beggs (Antrim, East)

I congratulate the Secretary of State, and welcome today's announcement of her commitment to provide nursery education for all four-year-olds throughout the United Kingdom, although I regret that we in Northern Ireland will have to wait for another year.

When discussing provision in Northern Ireland with the Secretary of State for Northern Ireland, will she draw his attention to the fact that the main provision in Northern Ireland is state provision, and that, for all four-year-olds to benefit equally, he would need to look at the possibility of providing capital funding to area boards to ensure that there was inclusive provision for all four-year-olds?

Mrs. Shephard

As the hon. Gentleman will be aware, my right hon. and learned Friend the Secretary of State for Northern Ireland will bring forward proposals in due course. Of course, I shall draw the hon. Gentleman's concern to his attention.

Mr. Anthony Coombs (Wyre Forest)

I warmly welcome what I am sure will be an increase in nursery education, which is presumably why the Opposition so vehemently oppose it. Does my right hon. Friend agree that the principal benefit of competition is that it is likely to ratchet up standards in both the private and public sectors? Will she ensure that the system of inspection that she puts into place ensures that that happens?

Mrs. Shephard

Yes. The purpose of ensuring that everything is inspected before registration is granted is precisely to ensure high-quality provision. High quality is the key. We are spending a lot of money, and we must have good educational provision in return.

Mr. Harry Barnes (Derbyshire, North-East)

Will the £565 million to be taken away from local authorities come back to all local authorities for use, or will it go into a general pot for wide distribution in other areas? According to the Audit Commission's performance indicators for Derbyshire, for instance, 78 per cent. of three and four-year-olds are provided with nursery education. Will Derbyshire be in the same position to make that provision while being topped up from the voucher system? I doubt it.

Mrs. Shephard

I repeat to the hon. Gentleman that all local authorities will continue to be funded for the children under five whom they are educating. If they continue to educate the same number as at present, they will receive the same amount of funding as they do now. Four-year-olds will be subject, of course, to the voucher system, and it will be up to LEAs whether they feel that they can afford, or wish, to continue to provide education for three-year-olds.

Mr. Patrick Nicholls (Teignbridge)

I congratulate my right hon. Friend on this most excellent statement. Does she agree that the public can draw two conclusions from today's exchanges? First, if people really want choice and diversity in education, this policy shows that the Government will deliver them. Secondly, if they think that new Labour would develop them, they could do worse than look at the way that the Labour Front-Bench spokesman contemptuously dismissed people's hopes and aspirations for nursery education for their children as nothing more than "pandering to an artificial market."

Mrs. Shephard

My hon. Friend puts the point well and strongly, as is his custom. I think that it will seem to the general public that extra new money totalling £185 million, and a total of some £730 million in all, is generous funding for this initiative. I believe that they will be delighted at the fact that spending power and choice are in the hands of parents, where they should be. I imagine that, in due course, and probably sooner rather than later, we shall see the normal U-turn by the Opposition parties.

Mr. Michael Connarty (Falkirk, East)

On my calculations, £165 million has been made available for new provision for England and Wales. There should be, pro rata, £16.5 million available this year for nursery education in Scotland. While the consultation goes on, is the Secretary of State aware that, in Scotland, 95.4 per cent. of children are educated in schools run by local education authorities on the comprehensive system?

The last time that we were consulted, on water, 95 per cent. of people who replied rejected the proposals. If the Scottish people reject these proposals, will the Cabinet accept that the extra money for pre-school children should go to local education authority establishments in Scotland?

Mrs. Shephard

I am sure that the hon. Gentleman could not begin to be implying that Scottish parents should not have the same choices available to them as English parents have. If he is, all I can say is, good luck when he gets back to Scotland.

My right hon. Friend the Secretary of State for Scotland, as I made clear earlier, is setting in motion discussions with providers in the voluntary, private and public sectors about how best a voucher scheme might work in Scotland. It is clear that the hon. Gentleman does not want Scottish parents to have choice. I know that my right hon. Friend will wish them to have choice.

Mr. David Tredinnick (Bosworth)

May I, too, congratulate my right hon. Friend on her extended responsibilities, and ask her to share in my happiness, as tomorrow will be my 12th wedding anniversary? She referred in her statement to the partnership between public and private sectors being very important, and the way that she hoped it would expand the number of places available. Does she have any specific initiatives in mind?

Mrs. Shephard

We seem to be having a lot of anniversaries and disclosures from all over the House. I note that my hon. Friend is not decorated for his wedding anniversary as the hon. and learned Member for Leicester, West (Mr. Janner) is for his.

I expect interesting and innovative ideas for partnerships to develop out of the proposals that are put up for phase 1 of this scheme. I know from the discussions that I have already had that they will be of a kind to please my hon. Friend.

Dr. Lynne Jones (Birmingham, Selly Oak)

May I, as the parent of two children only one of whom had the benefit of nursery education, say that there is every difference between that and a place in a playgroup, the value of which, I acknowledge, was useful for one of my children? What consultations have taken place with parents and parents' representatives to ask them which they would prefer: this bureaucratic voucher scheme or simply more places in their local nursery schools, and nursery classes in local primary schools?

Mrs. Shephard

The hon. Lady will have heard, although not perhaps have absorbed, the points I have made about quality assurance in all this. My hon. Friend the Minister of State spoke to Margaret Morrissey of the National Council of Parent-Teacher Associations this morning, and she warmly welcomed the initiative.

Mr. Nick Hawkins (Blackpool, South)

In joining in the congratulations to my right hon. Friend on her wider responsibilities, may I say that, as someone who campaigned for the expansion of nursery education for many years before coming into the House, I especially welcome her announcement today?

Will my right hon. Friend pay tribute to the moves that the Pre-School Learning Alliance has made to introduce more educational content into its work? Will she commend the fact that many constituencies, of which mine is but one, already have a wide choice in the private sector, with private playgroups and private nursery schools? All those will benefit, and the parents and children will benefit most, from my right hon. Friend's welcome announcement today.

Mrs. Shephard

I welcome the fact that my hon. Friend has drawn attention to the diversity in pre-school provision that exists in many areas of England. That is a diversity we welcome, and wish to enhance by means of my announcement today. I join my hon. Friend in congratulating the Pre-School Learning Alliance on the magnificent contribution to early years learning and experience it has made for many decades. I hope that it will want to contribute to this initiative in its own inimitable way.

Mr. Hugh Bayley (York)

Will private nursery schools be able to pick and choose the children they admit? If so, how can parents have equal choice in terms of where their children will go? Has the Secretary of State considered the possibility that there may develop an illicit trade in vouchers, whereby poorer parents sell their vouchers to others, who can then buy full-time rather than part-time nursery education? What does the Secretary of State intend to do to prevent the children of the poor from being yet more disadvantaged than they are already?

Mrs. Shephard

We envisage an audit system to combat fraud.

Mr. Peter Luff (Worcester)

Given that I expect there to be a great deal of competition for phase 1 of the scheme, and bearing in mind Hereford and Worcester's relatively low level of education expenditure—and, indeed, of children of four years of age enjoying pre-school education at present—will my right hon. Friend give me an assurance that, should she receive a bid from the county council for phase 1 of the scheme, she will look at it with the utmost possible sympathy?

Mrs. Shephard

I hope that there will be a lot of competition for phase 1. Hereford and Worcester represents an interesting mix of urban and rural areas, and we shall want to have a representative group in the first phase. I should say to Hereford and Worcester, "Hurry along."

Ms Glenda Jackson (Hampstead and Highgate)

As there are thousands of families who cannot and will never be able to top up the voucher system, will the Secretary of State give an assurance that their local authorities will not suffer if families who can afford to top up choose to place their children in alternative nursery education? Will she give an assurance that local authorities will not suffer either a reduction in funding or a lowering of standards and services?

Mrs. Shephard

I can give the hon. Lady an unequivocal assurance on that point. There will be no need for LEAs to suffer; they will continue to receive funding as they do now.

Mr. John Gunnell (Morley and Leeds, South)

The right hon. Lady has given a number of guarantees that local authorities will not lose through the scheme. Do those guarantees extend to the administrative costs, which will almost certainly fall on local authorities, in addition to the costs about which she has already spoken? Will the right hon. Lady guarantee that the same arrangement will be available for local authority social services day nurseries?

Mrs. Shephard

I will give an assurance that there need be no extra costs for LEAs as a result of my announcement. On the hon. Gentleman's point about day nurseries, an important distinction is involved. What we are talking about here is educational provision. If day nurseries wanted to become providers of education, they would have to satisfy the conditions for activities and outcomes, laid down by the SCAA after consultation, as purely educational settings.

I would have no objection to that being the case, provided that the conditions of quality, outcomes and activities were met in full. In some cases, it may be convenient for parents to have education provided in a setting that also has day care. The point of these provisions, however, is education.

Ms Margaret Hodge (Barking)

Will the Secretary of State give an assurance, because Opposition Members are rather muddled on this, that local authorities will not have their grant cut as money is transferred from the grant to fund the voucher scheme? Will her current proposals do anything to ensure nursery provision in, for example, the London borough of Bromley, which has no local authority-provided nursery places in schools or classes?

If the right hon. Lady is interested in quality, why has she not used money more effectively to restore some of the grant for education and training funding that has been cut for people working in early years? Will she give an undertaking to reintroduce better quality, including child development, for people who are undergoing teacher training, and ensure that we have more qualified nursery teachers?

Mrs. Shephard

As I have said many times, all local authorities will continue to be funded for the under-five children they are educating. If they continue to educate the same number as at present, they will receive the same amount of funding as they do now.

As for the London borough of Bromley, it would be up to it to provide education that was attractive to the holders of vouchers. That is entirely a matter for it.

On grant for education support and training funding, the hon. Lady should understand that I take very seriously the whole question of quality in education. She might be aware that we recently launched an initiative on improving schools. The important thing is that the activities and outcomes are inspected, as they will be, and that the quality is kept right up to the mark for this new pre-school provision.

Mr. George Mudie (Leeds, East)

I knew that I would be last, as my wedding anniversary is not until September.

Will the Secretary of State confirm that, in the first financial year in which the scheme operates, only 10 per cent. of the 150,000 children will be covered, at a new cost of £16.5 million, but that in the next financial year—the one that follows the general election—the full cost of £165 million will take effect? Will she reassure the House that that is not the first pre-election spending promise?

On a more serious point, however, why does the right hon. Lady regard it as a triumph to cover only 10 per cent. before the election? Why could she not have got more money to ensure better phasing than 10 per cent. of the children one year and 100 per cent. the next?

Mrs. Shephard

I think that the hon. Gentleman is missing the point a bit, but I will excuse him, given that it is not his wedding anniversary.

The 10 per cent. the hon. Gentlemen mentioned, whom we aim to cover with phase 1, will be piloting and testing the arrangements, ensuring that the practical arrangements are in place. It is a question of viability and efficiency, and getting the whole thing effectively into place. That is the point. Equally, the point is that this represents a huge investment of public money in the education of that age group. I hope that the hon. Gentleman, wedding anniversary or not, will find it in him to welcome it.

Mr. Blunkett

I have three points of clarification for the Secretary of State. First, in her statement, she used the figure of £165 million, but in the press release it is £185 million. She has used the two figures interchangeably this afternoon.

Secondly, my hon. Friend the Member for Blaydon (Mr. McWilliam) raised an issue that requires clarification—if four-year-olds are to be safeguarded, in terms of local authority spending not being withdrawn from those who have nursery places, is that not the case also for the 42 per cent. of three-year-olds who currently have a local authority nursery place? This is a crucial issue in terms of whether three-year-olds are to have their provision withdrawn at the expense of maintaining or expanding the provision for four-year-olds.

Thirdly, will the Secretary of State confirm that choice exists only where supply exceeds demand, and that the least new money will be directed to those areas which have the greatest provision? Is it not therefore a fact that the scheme and the vouchers fail to provide new choice, because, where choice was possible as a result of supply exceeding demand, those resources will not be available?

Mrs. Shephard

I can clarify the matter for the hon. Gentleman. The figures to which he refers are as follows: £165 million for the new places, plus £20 million, making a total of £185 million. The £20 million is for inspection costs and a little for administration. As I have made perfectly clear, the scheme is to cover four-year-olds. The position of three-year-olds will continue to be a matter for the individual choice of local education authorities.

The hon. Gentleman has demonstrated yet again that he and his party simply do not understand the purpose of choice in this respect. He does not understand, as he has made clear again, that choice will stimulate supply.